FILED BY NORANDA INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT
OF 1933
SUBJECT COMPANY: FALCONBRIDGE LIMITED
COMMISSION FILE NO.: 33-95280
NEWS RELEASE TRANSMITTED BY CCNMATTHEWS
FOR: FALCONBRIDGE LIMITED
TSX SYMBOL: FL
March 9, 2005
Falconbridge and Noranda Agree to Combine
TORONTO, ONTARIO--(CCNMatthews - March 9, 2005) - Falconbridge Limited
(TSX:FL) -
A conference call to discuss the proposed merger will be held today,
Wednesday, March 9, 2005 at 8:30 a.m. EST. To participate, dial (416)
641-6449 for local and overseas and 1-888-740-1975 toll-free in North
America. To participate in the live broadcast on the internet, sign on to
www.falconbridge.com.
Falconbridge Limited ("Falconbridge") (TSX:FL) today announced that it has
entered into an agreement to combine (the "Merger") with its major
shareholder, Noranda Inc. (TSX:NRD, NYSE:NRD) ("Noranda"). After the
Merger, Noranda will be renamed NorandaFalconbridge. The Merger will create
one of North America's largest base-metals companies.
The Merger will be completed by way of a share exchange take-over bid under
which Falconbridge common shareholders (other than Noranda) will be offered
1.77 Noranda common shares for each Falconbridge common share (the
"Offer").
Highlights
- The Boards of Noranda and Falconbridge have unanimously agreed to combine
the two companies by way of a share exchange.
- Each Falconbridge shareholder will receive 1.77 Noranda shares for each
Falconbridge share, which represents a 15% premium to the 20-day average
share price.
- Prior to the Merger, Noranda will repurchase approximately 63.4 million
of its common shares in exchange for three series of junior preferred
shares with an aggregate stated value of US$1.25 billion (the "Issuer
Bid").
- Brascan, the owner of approximately 41% of Noranda common shares, has
indicated that it will tender its common shares to the Issuer Bid. On
completion of the Merger and Issuer Bid, Brascan's ownership position will
decline to between 16% and 26% of the new entity.
- The merger of the companies by way of a share exchange will allow
Falconbridge shareholders to continue to participate in the new entity.
Falconbridge shareholders, other than Noranda, currently own approximately
41% of Falconbridge. After completion of the two transactions, they will
own approximately 36% of the combined company.
- The transaction simplifies the ownership structure and Falconbridge
shareholders will benefit from an increase in the new company's public
float and share liquidity.
- The increased size, diversification and financial capability of the new
combined company will facilitate future growth.
- The larger market capitalization and simplified corporate ownership
structure is expected to attract a greater institutional investor base for
the combined company.
Noranda currently owns approximately 59% of the outstanding Falconbridge
common shares.
Commentary by Falconbridge CEO
"The proposed merger is an excellent opportunity for Falconbridge and its
shareholders to improve the value of the Company and how it is reflected in
the capital markets," said Aaron Regent, President and Chief Executive
Officer. "This transaction addresses and eliminates a number of structural
issues that have affected our share price performance. In addition, the
large production base of the new company, combined with an attractive
pipeline of new projects, results in a well-positioned base-metals company
which will be a major beneficiary of the strong industry outlook and
continued high metal prices."
"NorandaFalconbridge's investment profile will be significantly improved,
which positions the company to be a major beneficiary of the continued
increase in investor interest in the mining sector," Regent added.
Special Committee Recommendation
A special committee of the independent directors of Falconbridge (the
"Special Committee") has:
- reviewed the proposed terms of the Merger;
- received a formal valuation of the Falconbridge common shares and the
consideration offered under the Merger from TD Securities Inc. ("TD
Securities"), independent financial advisor to the Special Committee;
- received the opinion of TD Securities that the consideration payable
under the Merger is fair, from a financial point of view, to Falconbridge
shareholders other than Noranda; and
- unanimously concluded that the Merger is fair to minority Falconbridge
shareholders and recommended that the Board of Directors of Falconbridge
approve the Merger.
After receiving the Special Committee's recommendation and the formal
valuation and fairness opinion of TD Securities, the members of the Board
of Directors of Falconbridge (who are not related to Noranda or Brascan)
voted unanimously to approve the Merger and recommend that Falconbridge
common shareholders tender their shares to Noranda's share exchange offer.
Noranda and Falconbridge Merger
If the Merger is completed:
- each Falconbridge common shareholder (other than Noranda) will own 1.77
NorandaFalconbridge common shares for each Falconbridge common share held
prior to the Merger; and
- each Noranda common shareholder, after the Issuer Bid, will continue to
own one common share of NorandaFalconbridge for each common share of
Noranda held prior to the Merger.
Completion of the Merger will be subject to:
- completion of the Issuer Bid;
- a majority of the minority Falconbridge shareholders tendering to the
Noranda Offer; and
- other customary conditions, including the absence of any material adverse
change in respect of Falconbridge and the absence of any material
disruption in the financial markets.
Noranda expects to mail a share exchange take-over bid circular to all
Falconbridge shareholders shortly. Falconbridge's directors' circular
(including the recommendation of the Falconbridge Board of Directors that
Falconbridge shareholders tender their shares to the Noranda Offer and a
copy of TD Securities' valuation and fairness opinion) will be mailed to
Falconbridge shareholders with Noranda's take-over bid circular.
Noranda currently anticipates that the Issuer Bid will be completed on or
about April 27, 2005 and that the Offer will expire on or about May 4,
2005.
Among the factors taken into account by the Falconbridge Special Committee
and Board of Directors in arriving at their decision to recommend that
Falconbridge shareholders tender to Noranda's offer were:
- Continued ownership in the combined company - Falconbridge shareholders
will own approximately 36% of the Merged company, compared with an
approximate 41% ownership in Falconbridge today;
- Premium paid to shareholders - The Merger represents a 15% premium over
the average price of Falconbridge shares for the 20-day trading period
ending on March 7, 2005;
- Fairness opinion - The opinion of TD Securities Inc. that the
consideration offered under the Merger is fair, from a financial point of
view, to the shareholders of Falconbridge other than Noranda;
- Valuation - The formal valuation prepared by TD Securities that concluded
that the value of the consideration offered under the Merger is in the
range of the fair market value of the Falconbridge common shares as
determined by TD Securities;
- Financial strength of merged companies - NorandaFalconbridge will be a
financially and operationally strong company with the ability to compete
globally in the copper and nickel businesses;
- Absence of competing offers - Because Noranda owns 59% of Falconbridge
and has indicated to Falconbridge that it does not intend to sell its
Falconbridge shares, the prospect of an offer for the Falconbridge common
shares from a third party is remote;
- Improvement in trading liquidity - The merger should result in increased
trading liquidity for Falconbridge shareholders due to
NorandaFalconbridge's larger market capitalization and greater
institutional investor following.
Issuer Bid
Noranda also announced today a share exchange Issuer Bid pursuant to which
Noranda is offering to purchase up to 63.4 million common shares from
Noranda's current shareholders in exchange for three series of junior
preferred shares of Noranda with an aggregate stated capital of US$1.25
billion.
Under the Issuer Bid, Noranda shareholders tendering to the Issuer Bid will
be invited to exchange up to 63.4 million common shares for three series of
junior preferred shares with an aggregate stated capital of US$1.25
billion. The attributes of the preferred shares are more fully described in
"Schedule A". Brascan has agreed to deposit its common shares of Noranda to
the Issuer Bid, subject to its right to withdraw such shares in certain
circumstances.
A balance sheet and income statement of NorandaFalconbridge pro forma the
completion of the Issuer Bid and the Merger is outlined in "Schedule B".
Conference Call and Webcast
A conference call to discuss the proposed merger will be held today,
Wednesday, March 9, 2005 at 8:30 a.m. EST. To participate, dial (416)
641-6449 for local and overseas and 1-888-740-1975 toll-free in North
America. To participate in the live broadcast on the internet, sign on to
www.falconbridge.com.
Falconbridge Limited is a leading low-cost producer of nickel, copper,
cobalt and platinum group metals. It is also one of the world's largest
recyclers and processors of metal-bearing materials. The company's common
shares are listed on the Toronto Stock Exchange under the symbol FL.
Falconbridge is owned by Noranda Inc. of Toronto (58.8%) and by other
investors (41.2%). The company's website can be found at
www.falconbridge.com.
Noranda is a leading copper and nickel company with investments in
fully-integrated zinc and aluminum assets. The Company's primary focus is
the identification and development of world-class copper and nickel mining
deposits. It employs 16,000 people at its operations and offices in 18
countries and is listed on The New York Stock Exchange and The Toronto
Stock Exchange (NRD). The company's website can be found at
www.noranda.com.
Investor Information
This communication is being made in respect of the proposed combination
(the "Merger") involving Noranda Inc. and Falconbridge Limited. The
proposed Merger will be completed by way of a share exchange take-over bid
under which Falconbridge common shareholders (other than Noranda) will be
offered 1.77 Noranda common shares for each Falconbridge common share. In
connection with the proposed Merger, Noranda will prepare and file with the
U.S. Securities and Exchange Commission (the "SEC"), if required, a
registration statement on Form F-8 containing a share exchange take-over
bid circular to be delivered to the shareholders of Falconbridge. Noranda,
if required, will be filing other documents regarding the proposed Merger
with the SEC.
INVESTORS ARE URGED TO READ CAREFULLY THE OFFER OF SHARE EXCHANGE TAKE-OVER
BID CIRCULAR WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain THE documents filed with the SEC free of
charge at the SEC's website (www.sec.gov). In addition, documents filed
with the SEC by Noranda may be obtained free of charge by contacting
Noranda at 416-982-7111.
Note: This press release may contain "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The words
"believe", "expect", "anticipate", "intend", "estimate" and other
expressions which are predictions of or indicate future events and trends
and which do not relate to historical matters identify forward-looking
statements. Reliance should not be placed on forward-looking statements
because they involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements of
the company to differ materially from anticipated future results,
performance or achievement expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
from those set forward in the forward looking statements include general
economic conditions, interest rates, availability of equity and debt
financing and other risks detailed from time to time in the companies'
Annual Reports and 40-F filed with the Securities and Exchange Commission.
The companies undertake no obligation to publicly update or revise any
forward looking statements, whether as a result of new information, future
events or otherwise.
"Schedule A"
Noranda Inc.
Series 1, 2 and 3 Junior Preference Shares
Issuer:
Noranda Inc. (the "Corporation")
Issue:
20 million Junior Preference Shares, Series 1 (the "Series 1 Shares")
20 million Junior Preference Shares, Series 2 (the "Series 2 Shares")
10 million Junior Preference Shares, Series 3 (the "Series 3 Shares")
the Series 1 Shares, Series 2 Shares and Series 3 Shares, collectively, the
"Shares"
Amount:
Series 1 Shares - US$500,000,000
Series 2 Shares - US$500,000,000
Series 3 Shares - US$250,000,000
Price:
US$25 per Share
Additional Series:
As long as any of the Shares are outstanding, the Corporation may not issue
any additional Preferred Shares, other than Series F shares issuable upon
the conversion of Series G shares and Series G shares issuable upon the
conversion of Series F shares, without the approval of the holders of the
Shares, expressed by resolution of the holders of all such shares voting
together.
Dividends:
Series 1 Shares: Holders of the Series 1 Shares will be entitled to receive
fixed preferential cumulative cash dividends, if, as and when declared by
the Board of Directors of the Corporation, in an amount equal to US$1.50
per share per annum, payable quarterly on the last day of March, June,
September and December of each year.
Series 2 Shares: Until June 30, 2010, holders of the Series 2 Shares will
be entitled to receive fixed preferential cumulative cash dividends, if, as
and when declared by the Board of Directors of the Corporation, in an
amount equal to US$1.5625 per share per annum, payable quarterly on the
last day of March, June, September and December of each year.
From June 30, 2010 until June 30, 2012, holders of Series 2 Shares will be
entitled to fixed preferential cumulative cash dividends at a rate per
annum equal to the greater of (i) 6.25%; and (ii) a rate equal to 2.05%
over the seven year US treasury bond yield, at the commencement of such
subsequent fixed rate period.
Series 3 Shares: Until June 30, 2010, holders of the Series 3 Shares will
be entitled to receive fixed preferential cumulative cash dividends, if, as
and when declared by the Board of Directors of the Corporation, in an
amount equal to US$1.625 per share per annum, payable quarterly on the last
day of March, June, September and December of each year.
From June 30, 2010 until June 30, 2012 and for each succeeding 2-year (or
less, as applicable) subsequent fixed rate period until June 30, 2015,
holders of Series 3 Shares will be entitled to fixed preferential
cumulative cash dividends at a rate per annum equal to the greater of (i)
6.5%; and (ii) a rate equal to 2.35% over the ten year US treasury bond
yield at the commencement of each subsequent fixed rate period.
Extraordinary Dividends: As long as the Shares having an aggregate issue
price of at least US$300 million remain outstanding, the Corporation will
not at any time, without the approval of the holders of the Shares, pay or
set apart for payment any Extraordinary Dividend (as defined below).
"Extraordinary Dividend" means:
(i) any dividend, other than a stock dividend paid wholly in Common Shares,
declared or paid on the Common Shares that is, when taken together with the
amount or value of all other dividends declared or paid in the 12 month
period preceding the date of declaration of the dividend (the "measurement
period") more than 125% of the aggregate amount or value of the dividends
declared or paid on the Common Shares, other than stock dividends paid
wholly in Common Shares, during the 12 month period ended on the day prior
to the measurement period (or, where there were no dividends paid in the 12
month period ended on the day prior to the measurement period, the period
of 12 months ending on the date on which the Corporation last paid a
dividend, other than a stock dividend paid wholly in Common Shares, on the
Common Shares); or
(ii) any dividend, other than a stock dividend paid wholly in Common
Shares, declared or paid on the Common Shares that results in the Noranda
Annual Dividend Rate exceeding a 10% compound annual growth rate, measured
from and following the Issue Date. For this purpose, the Noranda Annual
Dividend Rate is initially the aggregate amount or value of all dividends
declared or paid on the Common Shares, other than stock dividends paid
wholly in Common Shares, in the 12 month period immediately preceding the
Issue Date and thereafter is the aggregate amount or value of all dividends
declared or paid in any 12 month period immediately preceding the date of
declaration of any other dividend on the Common Shares, together with the
dividend then being declared; or
(iii) any other "special" dividend on, or distribution with respect to, the
Common Shares which is, by its terms or declared intent, declared and paid
outside the normal operations or normal dividend procedures of the
Corporation.
Payment Options:
The Corporation will be entitled to satisfy payment of the quarterly
dividend payments in:
(iv) cash; and/or
(v) that number of freely tradeable common shares of the Corporation (the
"Common Shares") determined by dividing the declared dividend amount by 95%
of the weighted average trading price of the Common Shares on the Toronto
Stock Exchange (the "TSX") for a period of 20 consecutive trading days
ending on the fourth day prior to the date specified for payment of the
dividend
Ranking:
The Shares will rank junior to the preferred shares of the Corporation with
respect to priority in the payment of dividends and the distribution of
assets of the Corporation in the event of any liquidation, dissolution or
winding up of the Corporation or other distribution of assets of the
Corporation among its shareholders for the purpose of winding up its
affairs. Articles of amendment to create the Junior Preference Shares as a
class will be authorized at the next annual meeting of the Corporation's
shareholders. To the extent that the Junior Preference Shares are not
created at the meeting, the Corporation will issue series from the existing
class of preferred shares which are identical in terms to the Shares (other
than as to ranking) and holders of these new preferred shares will be
required to enter into a contractual subordination to give effect to this
ranking.
Redemption:
Series 1: The Series 3 Shares (i) are redeemable, in cash, by the
Corporation at any time on at least 30 and not more than 60 days prior
notice, on or before June 30, 2008 at $25.25 per share plus all accrued and
unpaid dividends and thereafter at $25.00 per share plus all accrued and
unpaid dividends, and (ii) must be redeemed by the Corporation on the date
that is five years plus one day from the date of issue of the Series 1
Shares at $25.00 per share plus accrued and unpaid dividends thereon (the
"Series 1 Final Redemption Date").
Any redemptions of Series 1 Shares prior to June 30, 2009 must be made on a
pro rata basis with all other Shares then outstanding.
Series 2: The Series 2 Shares (i) are redeemable, in cash, by the
Corporation at any time on at least 30 and not more than 60 days prior
notice, on or before June 30, 2010 at $25.25 per share plus all accrued and
unpaid dividends and thereafter until June 29, 2012 at $25.00 per share
plus all accrued and unpaid dividends, and (ii) must be redeemed by the
Corporation on June 30, 2012 at $25.00 per share plus accrued and unpaid
dividends thereon (the "Series 2 Final Redemption Date").
Any redemptions of Series 2 Shares prior to June 30, 2011 must be made on a
pro rata basis with all other Shares then outstanding.
Series 3: The Series 3 Shares (i) are redeemable, in cash, by the
Corporation at any time on at least 30 and not more than 60 days prior
notice, on or before June 30, 2013 at $25.25 per share plus all accrued and
unpaid dividends and thereafter until June 29, 2015 at $25.00 per share
plus accrued and unpaid dividends, and (ii) must be redeemed by the
Corporation on June 30, 2015 at $25.00 per share plus accrued and unpaid
dividends thereon (the "Series 3 Final Redemption Date").
Any redemptions of Series 3 Shares prior to June 30, 2012 must be made on a
pro rata basis with all other Shares then outstanding.
Application of Net Proceeds: From and including June 30, 2010, so long as
any Series 2 Shares or Series 3 Shares are outstanding, the Corporation
will apply the net proceeds it realizes from any public equity offering by
the Corporation or the sale by the Corporation of any assets exceeding Cdn.
$250 million to redeem for cash the then outstanding Series 2 Shares and
Series 3 Shares, provided that if any Series 2 Shares or Series 3 Shares
are then outstanding, the net proceeds will be applied as nearly as
practicable on a pro-rata basis with the then outstanding Series 2 Shares
or Series 3 Shares, as applicable.
Conversion into Common Shares by the Corporation on the Final Redemption Date:
On the Series 1 Final Redemption Date, the Series 2 Final Redemption Date
and the Series 3 Final Redemption Date, so long as: (i) a Change of Control
Event (as defined below) has not occurred (unless the applicable take-over
bid or control transaction has been withdrawn, is terminated or expires
without any person other than Brascan beneficially owning 30% or more of
the voting shares of the Corporation); (ii) an Extraordinary Dividend (as
defined below) has not been paid; and (iii) certain other events have not
occurred, the Shares are convertible, in whole or in part, at the option of
the Corporation, on at least 30 and not more than 60 days prior notice into
that number of freely tradable Common Shares determined by dividing the
aggregate of $25.00, plus an amount equal to accrued and unpaid dividends
up to but excluding the final redemption date, by the greater of $2.00 and
90% of the US dollar equivalent of weighted average trading price of the
Common Shares on the TSX for a period of 20 consecutive trading days ending
on the fourth day prior to the date (if such date is a trading day)
specified for conversion.
"Change of Control Event" means the occurrence of:
(i) the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
section 101 of the Securities Act (Ontario)) by the Corporation or a person
who beneficially owns 30% or more of the outstanding voting shares of the
Corporation of facts indicating that such person has become such;
(ii) the date of the commencement of, or first public announcement of the
intent of any person (other than Brascan, the Corporation or any subsidiary
of the Corporation) to commence a take-over bid to acquire 30% or more of
the voting shares of the Corporation; or
(iii) the date of the commencement of, or first public announcement of the
intent of any person other than Brascan to commence, a transaction which
would result in any person beneficially owning 30% or more of the voting
shares of the Corporation.
Retraction Rights:
Upon the occurrence of a Change of Control Event (unless the applicable
take-over bid or control transaction has been withdrawn, is terminated or
expires without any person beneficially owning 30% of more of the voting
shares of the Corporation), a holder of Shares shall have the right to
require the Corporation to redeem all of the holder's then outstanding
Shares.
Board Representation:
The Shares will be entitled, voting collectively, to elect two directors to
the Board of Directors at each meeting of shareholders of the Corporation
at which directors are to be elected.
Forthwith upon the occurrence of a Board Event (as defined below), and for
so long as it is continuing, the holders of the Shares will be entitled,
voting collectively, to elect three additional directors (for a total of
five).
"Board Event" means any one of the following events:
(i) if four quarterly dividends on the Shares are in arrears, whether or
not such dividends have been declared and whether or not there are any
monies of the Corporation properly applicable to the payment of dividends;
or
(ii) if Adjusted Net Worth is less than US$2.5 billion.
"Adjusted Net Worth" means, as at the end of any fiscal quarter, the
aggregate of :
(i) the dollar amount of outstanding share capital for all shares ranking
junior to the Junior Preference Shares;
(ii) without duplication, any surplus, whether contributed or capital;
(iii) retained earnings; and
(iv) consolidated non-controlling interest;
all as set forth in the Corporation's most recent consolidated balance
sheet filed in accordance with applicable securities laws.
Tax on Share Dividends:
The Corporation will elect, in the manner and within the time provided
under subsection 191.2(1) of the Income Tax Act (Canada) (the "Tax Act"),
to pay or cause payment of the tax under Part VI.1 of the Tax Act at a rate
such that the corporate holders of Shares will not be required to pay tax
under Part IV.1 of the Tax Act on dividends received on such shares.
Covenants:
As long as Series 1 Shares, Series 2 Shares and Series 3 Shares having an
aggregate issue price of US$300,000,000 are outstanding, the Corporation
will not pay an Extraordinary Dividend; or
From and after June 30, 2010, the Corporation will apply the full net
proceeds from (i) the issuance of equity securities for cash (other than in
certain limited circumstances) or (ii) the sale of any capital assets
outside of the ordinary course of business with a sale price exceeding Cdn.
$250 million, to the redemption of the Series 1 Shares, Series 2 Shares and
Series 3 Shares.
Liquidation, Dissolution or Winding Up:
In the event of liquidation, dissolution or winding up of the Corporation
or any other distribution of assets of the Corporation among its
shareholders for the purpose of winding up its affairs, the holders of the
Shares shall be entitled to payment of an amount equal to the amount paid
up on such shares in the case of any liquidation, dissolution, winding up
or other distribution which is involuntary, and to payment of an amount
equal to the amount paid up thereon plus the premium on redemption
applicable at the date thereof, if any, if the same is voluntary, together
in all cases with all unpaid dividends accrued thereon (which shall for
such purpose be treated as accruing up to the date of distribution), the
whole before any amount shall be paid or any assets of the Corporation
distributed to the holders of any Common Shares or shares of any other
class ranking junior to the Shares but the whole subject to the rights of
the holders of any other class of shares of the Corporation entitled to
receive the assets of the Corporation upon such distribution in priority to
or rateably with the holders of the Shares. Upon payment to the holders of
the Shares of the amount so payable to them, they shall not be entitled to
share in any further distribution of assets of the Corporation.
/T/
"SCHEDULE B"
NORANDAFALCONBRIDGE INC.
INDICATIVE PRO FORMA CONSOLIDATED BALANCE SHEET
As at December 31, 2004
(Unaudited - Noranda Merge Buy-Back
US$ Millions) Inc. Falconbridge Shares Proforma
------- ------------ -------- --------
ASSETS
Cash and cash
equivalents 884 - - 884
Short-term
investments - - -
Accounts receivable 931 - 931
Metals and other
inventories 1,436 - 1,436
------- ------------ -------- --------
Current assets 3,251 - - 3,251
------- ------------ -------- --------
Operating capital
assets 4,870 1,441 6,311
Development projects 1,166 721 1,887
Investments and other
assets 324 - 324
------- ------------ -------- --------
9,611 2,162 - 11,773
------- ------------ -------- --------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Accounts and taxes
payable 1,248 - 1,248
Debt due within one
year 570 - 570
------- ------------ -------- --------
Current liabilities 1,818 - - 1,818
------- ------------ -------- --------
Long-term debt 2,638 - - 2,638
Preferred shares - - 1,250 1,250
Convertible debentures 89 - - 89
------- ------------ -------- --------
2,727 - 1,250 3,977
------- ------------ -------- --------
Future income taxes 304 648 - 952
Asset retirement
obligation, pension
and other provisions 595 - - 595
Stockholders' interests
Interests of other
shareholders 1,197 (1,006) - 191
Convertible
debentures - - - -
Capital stock -
preferred 295 - - 295
Capital stock - common,
retained earnings,
currency translation
adjustment 2,675 2,520 (1,250) 3,945
------- ------------ -------- --------
2,970 2,520 (1,250) 4,240
------- ------------ -------- --------
9,611 2,162 - 11,773
------- ------------ -------- --------
------- ------------ -------- --------
The pro forma financial statements may not be indicative of results that
actually would have occurred if the events reflected therein had been in
effect on the dates indicated or of the results that may be obtained in the
future.
NORANDAFALCONBRIDGE INC.
INDICATIVE PRO FORMA CONSOLIDATED STATEMENT OF INCOME
Year ended December 31, 2004
(Unaudited - Noranda Merge Additional 2004
US$ Millions) Inc. Falconbridge Dividends Pro-forma
------- ------------ ---------- ---------
Revenues 6,978 - - 6,978
------- ------------ ---------- ---------
6,978 - - 6,978
------- ------------ ---------- ---------
Operating expenses
Cost of operations 2,094 - - 2,094
Purchases raw
materials 3,005 - - 3,005
Depreciation,
amortization and
accretion 499 48 - 547
------- ------------ ---------- ---------
Total operating
expenses 5,598 48 - 5,646
------- ------------ ---------- ---------
------- ------------ ---------- ---------
Income generated by
operating assets 1,380 (48) - 1,332
------- ------------ ---------- ---------
Interest expense, net 119 - 78 197
Corporate and general
adminstration 66 - - 66
Research, development
and exploration 47 - - 47
Minority interest in
earnings in
subsidiaries 297 (274) - 23
------- ------------ ---------- ---------
529 (274) 78 333
------- ------------ ---------- ---------
Income before
undernoted 851 226 (78) 999
------- ------------ ---------- ---------
Tax expense 333 (14) - 319
Gain net of
restructuring costs
and other (33) - - (33)
------- ------------ ---------- ---------
Net income 551 240 (78) 713
------- ------------ ---------- ---------
------- ------------ ---------- ---------
Basic earnings per
share $ 1.78 $ 1.89
Diluted earnings
per share $ 1.75 $ 1.85
The pro forma financial statements may not be indicative of results that
actually would have occurred if the events reflected therein had been in
effect on the dates indicated or of the results that may be obtained in the
future.
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Falconbridge Limited
(Media) Ian Hamilton
Director, Public Affairs and Communications
(416) 982-7161
ian.hamilton@toronto.norfalc.com
OR
Falconbridge Limited
(Analysts and investors) Dennis Kwong
Director, Business Development
(416) 982-7105
dennis.kwong@toronto.norfalc.com
INDUSTRY: MNG
SUBJECT: ERN
-0-