Brookfield Asset Management Reports Third Quarter 2017 Results
(Thomson Reuters ONE) -
Brookfield Asset Management Reports Third Quarter 2017 Results
BROOKFIELD, NEWS, Nov. 09, 2017 (GLOBE NEWSWIRE) -- Brookfield Asset Management
Inc. (NYSE:BAM) (TSX:BAM.A) (Euronext:BAMA), a leading global alternative asset
manager, today announced financial results for the quarter ended September 30,
2017.
Bruce Flatt, CEO of Brookfield, stated that: "We closed a number of acquisitions
during the quarter and have disposed of numerous assets, achieving excellent
results. Assets under management increased to over $265 billion and with
fundraising advancing on our next real estate opportunity fund we are well
positioned for continued growth."
Operating Results
Net income and funds from operations ("FFO") both grew significantly on a
comparable basis as operating results for the third quarter benefited from the
ongoing expansion of our business through fundraising, acquisitions, development
projects and operating improvements.
Net income, prior to tax, was strong compared to last year, at $1.3 billion
versus $1.0 billion in 2016, due to the aforementioned operating improvements
and increased fair value gains. After including the impact of tax, which
reflected a $1.0 billion tax recovery in the prior year quarter, net income was
$992 million compared to $2 billion.
FFO from operating activities was $564 million, a 15% increase from the 2016
quarter. Growth in fee related earnings was 8% due to continued expansion of fee
bearing capital, as our listed issuers generated strong growth in their capital
base, and higher incentive distributions. Invested capital FFO increased by 19%
due to contributions from acquisitions, particularly in our infrastructure
business, higher generation and pricing in our renewable power business and
gains on short-term portfolio investments. FFO inclusive of disposition gains
and realized carried interest was $809 million, slightly less than last year's
amount of $883 million, which included a higher level of disposition gains.
Disposition gains in the current quarter included gains on the sales of several
office properties as well as the sale of a portion of our investment in Norbord.
Dividend Declaration
The Board declared a quarterly dividend of US$0.14 per share
(representing US$0.56 per annum), payable on December 29, 2017 to shareholders
of record as at the close of business on November 30, 2017. The Board also
declared all of the regular monthly and quarterly dividends on its preferred
shares.
Highlights
Our fee bearing capital has reached $120 billion, an 8% increase over September
2016.
The capitalization of our listed issuers increased during the quarter as a
result of strong market performance and capital deployment. During the quarter,
we did not close any major funds although it is expected the first close of our
real estate opportunity fund will occur in the fourth quarter.
Following the quarter, we announced the acquisition of Center Coast Capital, a
Houston-based SEC-registered investment advisor, focusing on energy
infrastructure investments, with over $4 billion in fee bearing capital. This
transaction will strengthen and expand our public securities investment
offerings, and our retail distribution capabilities.
We made progress on several significant transactions during and following the
quarter.
We recently completed the acquisition of a 51% interest in TerraForm Power and
continued to advance the 100% acquisition of TerraForm Global. These
transactions will deploy $1.4 billion into a high quality portfolio of solar and
wind generation projects.
We continued to advance our direct corporate credit business and expect to build
up this business over time, as we see direct credit as an area where we can
leverage our existing expertise by underwriting investments in businesses that
we understand well. During the quarter, we sourced a $650 million direct loan,
of which half was syndicated at closing. We funded the other half from our
balance sheet as a seed asset for our new fund strategies.
In addition to deploying capital in new investments, we have a large capital
backlog of over $14 billion of organic growth projects across our various lines
of business.
In real estate, our team is managing a robust $7 billion pipeline of development
projects. Within our core office business, we have 10 million square feet of
development underway, including $3 billion of premier office building
development ongoing in London, as well as $2 billion core office development
ongoing within North America. The major renovation of our 5 Manhattan West
office tower was recently completed and is now fully leased. During the current
quarter, we signed a 15-year lease with Amazon to occupy the remaining 360,000
square feet in the building, adding to a marquee group of tenants. We are also
focused on re-purposing real estate assets, in particular in the retail sector
within our GGP and Rouse portfolios.
Our infrastructure business remains focused on executing on its large backlog,
which currently stands at $3.5 billion. Key projects include our utility
connections in the U.K. regulated distribution business, network expansion
opportunities in our French communications infrastructure business, and
progressing several major expansion projects within our Brazilian toll road and
electricity transmission operations.
Across our remaining businesses, we have a pipeline of over 1,000 megawatts
being developed in our renewable power business and numerous follow-on capital
projects throughout our private equity business. These projects continue to
provide us with opportunities to put capital to work at very attractive returns,
including in markets or sectors where acquisitions are highly priced.
We made progress on selling several investments and raised significant capital.
In our real estate operations, we agreed to sell Gazeley, an industrial real
estate business in Europe for ?2.4 billion, representing a gross multiple of
over 4.5 times and 47% compound IRR.
We have substantial capital resources at our disposal, consisting of over $17
billion of third-party private fund commitments and $9 billion of core liquidity
from cash and financial assets and from undrawn committed credit facilities, to
pursue further opportunities.
During the quarter, three of our listed issuers raised additional equity, which
we participated in, in order to solidify their liquidity for the next wave of
growth. We also issued C$300 million of perpetual preferred shares and $550
million of notes due in 2047.
Basis of Presentation
This news release and accompanying financial statements are based on
International Financial Reporting Standards ("IFRS"), as issued by the
International Accounting Standards Board ("IASB"), unless otherwise noted and
make reference to Funds From Operations ("FFO").
We define FFO as net income attributable to shareholders prior to fair value
changes, depreciation and amortization, and deferred income taxes, and include
realized disposition gains that are not recorded in net income as determined
under IFRS. FFO also includes the company's share of equity accounted
investments' FFO on a fully diluted basis. FFO consists of the following
components:
* FFO from Operating Activities represents the company's share of revenues
less direct costs and interest expenses; excludes realized carried interest
and disposition gains, fair value changes, depreciation and amortization and
deferred income taxes; and includes our proportionate share of FFO from
operating activities recorded by equity accounted investments on a fully
diluted basis. We present this measure as we believe it assists in
describing our results and variances within FFO.
* Realized Carried Interest represents our contractual share of investment
gains generated within a private fund after considering our clients minimum
return requirements. Realized carried interest is determined on third party
capital that is no longer subject to future investment performance.
* Realized Disposition Gains are included in FFO because we consider the
purchase and sale of assets to be a normal part of the company's business.
Realized disposition gains include gains and losses recorded in net income
and equity in the current period, and are adjusted to include fair value
changes and revaluation surplus balances recorded in prior periods which
were not included in prior period FFO.
We use FFO to assess our operating results and the value of Brookfield's
business and believe that many shareholders and analysts also find this measure
of value to them.
We note that FFO, its components, and its per share equivalent are non-IFRS
measures which do not have any standard meaning prescribed by IFRS and therefore
may not be comparable to similar measures presented by other companies.
We provide additional information on the determination of FFO and reconciliation
between FFO and net income attributable to Brookfield shareholders in our
quarterly Supplemental Information and filings available at www.brookfield.com.
Additional Information
The Letter to Shareholders and the company's Supplemental Information for the
three months ended September 30, 2017 contain further information on the
company's strategy, operations and financial results. Shareholders are
encouraged to read these documents, which are available on the company's
website.
The attached statements are based primarily on information that has been
extracted from our interim financial statements for the three months ended
September 30, 2017, which have been prepared using IFRS, as issued by the IASB.
The amounts have not been audited by Brookfield's external auditor.
Brookfield's Board of Directors reviewed and approved this document, including
the summarized unaudited consolidated financial statements, prior to its
release.
Information on our dividends can be found on our website under Stock &
Distributions/Distribution History.
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access Brookfield Asset
Management's 2017 Third Quarter Results as well as the Shareholders' Letter and
Supplemental Information on Brookfield's website under the Reports & Filings
section at www.brookfield.com.
The conference call can be accessed via webcast on November 9, 2017 at 11:00
a.m. Eastern Time at www.brookfield.com or via teleconference at 1-800-319-4610
toll free in North America. For overseas calls please dial 1-604-638-5340, at
approximately 10:50 a.m. Eastern Time. A recording of the teleconference can be
accessed at 1-800-319-6413 or 1-604-638-9010 (Password 1744#).
Brookfield Asset Management Inc. is a leading global alternative asset manager
with over $265 billion in assets under management. The company has more than a
100-year history of owning and operating assets with a focus on real estate,
renewable power, infrastructure and private equity. Brookfield offers a range of
public and private investment products and services, and is co-listed on the New
York, Toronto and Euronext stock exchanges under the symbol BAM, BAM.A and BAMA,
respectively. For more information, please visit our website
at www.brookfield.com.
Please note that Brookfield's previous audited annual and unaudited quarterly
reports have been filed on EDGAR and SEDAR and can also be found in the investor
section of its website at www.brookfield.com. Hard copies of the annual and
quarterly reports can be obtained free of charge upon request.
For more information, please visit our website at www.brookfield.com or contact:
Claire Holland Linda Northwood
Communications & Media Investor Relations
Tel: (416) 369-8236 Tel: (416) 359-8647
Email: claire.holland(at)brookfield.com Email: linda.northwood(at)brookfield.com
Forward-Looking Statements
Note: This news release contains "forward-looking information" within the
meaning of Canadian provincial securities laws and "forward-looking statements"
within the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended,
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995 and in any applicable Canadian securities regulations.
Forward-looking statements include statements that are predictive in nature,
depend upon or refer to future events or conditions, include statements
regarding the operations, business, financial condition, expected financial
results, performance, prospects, opportunities, priorities, targets, goals,
ongoing objectives, strategies and outlook of Brookfield and its subsidiaries,
as well as the outlook for North American and international economies for the
current fiscal year and subsequent periods, and include words such as "expects,"
"anticipates," "plans," "believes," "estimates," "seeks," "intends," "targets,"
"projects," "forecasts" or negative versions thereof and other similar
expressions, or future or conditional verbs such as "may," "will," "should,"
"would" and "could."
Although we believe that our anticipated future results, performance or
achievements expressed or implied by the forward-looking statements and
information are based upon reasonable assumptions and expectations, the reader
should not place undue reliance on forward-looking statements and information
because they involve known and unknown risks, uncertainties and other factors,
many of which are beyond our control, which may cause the actual results,
performance or achievements of Brookfield to differ materially from anticipated
future results, performance or achievement expressed or implied by such forward-
looking statements and information.
Factors that could cause actual results to differ materially from those
contemplated or implied by forward-looking statements include, but are not
limited to: the impact or unanticipated impact of general economic, political
and market factors in the countries in which we do business; the behavior of
financial markets, including fluctuations in interest and foreign exchange
rates; global equity and capital markets and the availability of equity and debt
financing and refinancing within these markets; strategic actions including
dispositions; the ability to complete and effectively integrate acquisitions
into existing operations and the ability to attain expected benefits; changes in
accounting policies and methods used to report financial condition (including
uncertainties associated with critical accounting assumptions and estimates);
the ability to appropriately manage human capital; the effect of applying future
accounting changes; business competition; operational and reputational risks;
technological change; changes in government regulation and legislation within
the countries in which we operate; governmental investigations; litigation;
changes in tax laws; ability to collect amounts owed; catastrophic events, such
as earthquakes and hurricanes; the possible impact of international conflicts
and other developments including terrorist acts and cyber terrorism; and other
risks and factors detailed from time to time in our documents filed with the
securities regulators in Canada and the United States.
We caution that the foregoing list of important factors that may affect future
results is not exhaustive. When relying on our forward-looking statements,
investors and others should carefully consider the foregoing factors and other
uncertainties and potential events. Except as required by law, Brookfield
undertakes no obligation to publicly update or revise any forward-looking
statements or information, whether written or oral, that may be as a result of
new information, future events or otherwise.
This release does not constitute an offer of any Brookfield fund.
CONSOLIDATED BALANCE SHEETS
September December
30 31
Unaudited
(US$ millions) 2017 2016
-------------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 4,538 $ 4,299
Other financial assets 5,860 4,700
Accounts receivable and other 11,300 9,133
Inventory 6,648 5,349
Assets classified as held for sale 2,304 432
Equity accounted investments 28,155 24,977
Investment properties 56,923 54,172
Property, plant and equipment 47,130 45,346
Intangible assets 14,628 6,073
Goodwill 5,310 3,783
Deferred income tax assets 1,781 1,562
-------------------------------------------------------------------------------
Total Assets $ 184,577 $ 159,826
-------------------------------------------------------------------------------
Liabilities and Equity
Accounts payable and other $ 17,045 $ 11,915
Liabilities associated with assets classified as held for
sale 1,004 127
Corporate borrowings 5,705 4,500
Non-recourse borrowings
Property-specific mortgages 58,095 52,442
Subsidiary borrowings 9,487 7,949
Deferred income tax liabilities 12,233 9,640
Subsidiary equity obligations 3,677 3,565
Equity
Preferred equity 4,196 3,954
Non-controlling interests 50,171 43,235
Common equity 22,964 22,499
-------------------------------------------------------------------------------
Total Equity 77,331 69,688
-------------------------------------------------------------------------------
Total Liabilities and Equity $ 184,577 $ 159,826
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED Three Months Ended Nine Months Ended
FOR THE PERIODS ENDED SEP. 30 ---------------------- ----------------------
(US$ MILLIONS, EXCEPT PER SHARE
AMOUNTS) 2017 2016 2017 2016
-------------------------------------------------------------------------------
Revenues $ 12,276 $ 6,285 $ 27,721 $ 17,476
Direct costs (10,034 ) (4,590 ) (21,753 ) (12,568 )
Other income and gains (29 ) 325 236 391
Equity accounted income 505 454 1,090 1,041
Expenses
Interest (932 ) (825 ) (2,640 ) (2,407 )
Corporate costs (24 ) (20 ) (69 ) (68 )
-------------------------------------------------------------------------------
1,762 1,629 4,585 3,865
Fair value changes 132 (59 ) 141 358
Depreciation and amortization (643 ) (541 ) (1,755 ) (1,538 )
Income tax (259 ) 992 (503 ) 556
-------------------------------------------------------------------------------
Net income $ 992 $ 2,021 $ 2,468 $ 3,241
-------------------------------------------------------------------------------
Net income attributable to:
Brookfield shareholders $ 228 $ 1,036 $ 416 $ 1,478
Non-controlling interests 764 985 2,052 1,763
-------------------------------------------------------------------------------
$ 992 $ 2,021 $ 2,468 $ 3,241
-------------------------------------------------------------------------------
Net income per share
Diluted $ 0.20 $ 1.03 $ 0.32 $ 1.41
Basic 0.20 1.05 0.32 1.44
-------------------------------------------------------------------------------
SUMMARIZED FINANCIAL RESULTS
UNAUDITED Three Months Last Twelve Months
FOR THE PERIODS ENDED SEP. 30 Ended Ended
(US$ MILLIONS, EXCEPT PER SHARE ------------------- --------------------
AMOUNTS) 2017 2016 2017 2016
-------------------------------------------------------------------------------
Asset management $ 211 $ 178 $ 922 $ 695
Real estate 382 545 1,736 1,759
Renewable power 45 49 203 192
Infrastructure 87 89 357 334
Private equity and other 113 107 440 529
Cash and financial assets 54 8 163 63
Interest expense and operating costs (83 ) (93 ) (298 ) (368 )
-------------------------------------------------------------------------------
Funds from operations1,2 $ 809 $ 883 $ 3,523 $ 3,204
-------------------------------------------------------------------------------
Per share $ 0.79 $ 0.87 $ 3.47 $ 3.15
-------------------------------------------------------------------------------
UNAUDITED Last Twelve Months
FOR THE PERIODS ENDED SEP. 30 Three Months Ended Ended
(US$ MILLIONS, EXCEPT PER SHARE -------------------- --------------------
AMOUNTS) 2017 2016 2017 2016
-------------------------------------------------------------------------------
FFO from operating activities2 $ 564 $ 491 $ 2,252 $ 2,056
Realized carried interest3 25 - 177 -
Realized disposition gains2 220 392 1,094 1,148
-------------------------------------------------------------------------------
Funds from operations1,2 809 883 3,523 3,204
Realized disposition gains not in
income (185 ) (231 ) (945 ) (672 )
Fair value changes (137 ) (104 ) (895 ) 80
Depreciation and amortization (221 ) (222 ) (884 ) (868 )
Income tax (38 ) 710 (210 ) 412
-------------------------------------------------------------------------------
Net income attributable to
shareholders $ 228 $ 1,036 $ 589 $ 2,156
-------------------------------------------------------------------------------
Per share $ 0.20 $ 1.03 $ 0.46 $ 2.07
-------------------------------------------------------------------------------
Notes:
1. Non-IFRS measure - see Basis of Presentation on page 3 and a reconciliation
of net
income to FFO on page 8
2. Excludes amounts attributable to non-controlling interests
3. Excludes carried interest generated that is subject to future investment
performance
EARNINGS PER SHARE
UNAUDITED Last Twelve Months
FOR THE PERIODS ENDED SEP. 30 Three Months Ended Ended
(US$ MILLIONS, EXCEPT PER SHARE -------------------- --------------------
AMOUNTS) 2017 2016 2017 2016
-------------------------------------------------------------------------------
Net income $ 992 $ 2,021 $ 2,565 $ 4,428
Non-controlling interests (764 ) (985 ) (1,976 ) (2,272 )
-------------------------------------------------------------------------------
Net income attributable to
shareholders 228 1,036 589 2,156
Preferred share dividends (35 ) (33 ) (139 ) (134 )
-------------------------------------------------------------------------------
Net income available to common
shareholders $ 193 $ 1,003 $ 450 $ 2,022
-------------------------------------------------------------------------------
Weighted average shares 958.9 959.1 958.8 958.9
Dilutive effect of the conversion of
options and escrowed shares using
treasury stock method1 21.6 18.8 16.5 18.2
-------------------------------------------------------------------------------
Shares and share equivalents 980.5 977.9 975.3 977.1
-------------------------------------------------------------------------------
Diluted earnings per share $ 0.20 $ 1.03 $ 0.46 $ 2.07
-------------------------------------------------------------------------------
Notes:
1. Includes management share option plan and escrowed stock plan
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Last Twelve Months
UNAUDITED Three Months Ended Ended
FOR THE PERIODS ENDED SEP. 30 -------------------- --------------------
(US$ MILLIONS) 2017 2016 2017 2016
-------------------------------------------------------------------------------
Net income $ 992 $ 2,021 $ 2,565 $ 4,428
Equity accounted fair value changes
and other non-FFO items (15 ) (18 ) 546 159
Fair value changes (132 ) 59 347 (952 )
Depreciation and amortization 643 541 2,237 1,968
Deferred income taxes 162 (1,030 ) 441 (503 )
Realized disposition gains in fair
value changes or prior periods1 232 235 1,079 996
Non-controlling interests (1,073 ) (925 ) (3,692 ) (2,892 )
-------------------------------------------------------------------------------
Funds from operations1,2 $ 809 $ 883 $ 3,523 $ 3,204
-------------------------------------------------------------------------------
Notes:
1. Non-IFRS measure - see Basis of Presentation on page 3
2. Excludes amounts attributable to non-controlling interests
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Brookfield Asset Management Inc via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 09.11.2017 - 13:08 Uhr
Sprache: Deutsch
News-ID 567502
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contact information:
Town:
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Kategorie:
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