Bruce Flatt, CEO of
Operating Results
Unaudited
For the years ended December 31 (US$ millions, except
per share amounts)
2016 2015
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Net income(1) $ 3,338 $ 4,669
Per Brookfield share(2) 1.55 2.26
Funds from operations(2,3) $ 3,237 $ 2,559
Per Brookfield share(2,3) 3.18 2.49
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1. Consolidated basis - includes amounts attributable to non-controlling
interests
2. Reflects amounts attributable to Brookfield shareholders
3. See Basis of Presentation on page 3
Net income for 2016 totalled
The increase in FFO includes a 64% increase from our asset management business, which is a result of the continued growth in our fee bearing capital, including capital raised in our private funds and the increased capitalization of our listed issuers. We also recorded carried interests relating to the monetization of investments in our private funds. Operating FFO from invested capital increased by 22% as a result of the contribution from acquisitions and operational improvements throughout our businesses, including the commencement of leases and commissioning of development projects. Current year FFO also included realized disposition gains of
Appraisal gains within our property portfolio totalled
Dividend Declaration
The Board declared a quarterly dividend of
Operating Highlights
Fundraising of
Fee bearing capital increased by 16% to
As a result, our annualized fee revenues increased by 26% to
We made solid progress in capital deployment, investing or committing
We continue to invest significant amounts of capital into new investments, diversified by both asset class and geography. Our latest flagship real estate opportunity fund, BSREP II, is now approximately 75% invested. Our most recent flagship funds in infrastructure (BIF III) and private equity (BCP IV), closed earlier this year, and are both advancing well at approximately 35% and 50% invested or committed, respectively.
Our property group agreed to buy a 4.2 million square foot office portfolio in
Our renewable power business completed the acquisition of Isagen, which is a premier 3,000 megawatt Colombian hydroelectric portfolio, as well as other hydro assets in
Our infrastructure group made first investments in
Our private equity operations announced the acquisition of a 70% stake in
We further focused our business and simplified our structure, providing improved transparency for investors.
In June, we spun off Brookfield Business Partners, our fourth listed partnership. This completes the process of separating our operating businesses into four distinct business groups, each with private and public funding entities, furthering our asset management strategy. Following this spin-off, approximately 85% of our invested capital is now in listed assets. These listed partnerships provide us with perpetual capital as well as providing additional investment options and increased transparency for investors.
Brookfield Property Partners ("BPY") recently made a proposal to Brookfield Canada Office Properties ("BOX") to acquire the remaining equity interest in BOX not owned by it or its affiliates. Acquiring full ownership of BOX will allow BPY to fully integrate its North American office operations and further simplifies our structure.
Finally, we have been able to take advantage of the historically low interest rate environment over the last couple of years, including raising proceeds from asset sales and refinanced a significant portion of our debt.
We continued to recycle capital by selling mature assets and redeploying it for higher returns in our opportunistic funds. Sales have been in sectors and geographies where we felt we could achieve attractive valuations and either redeploy that capital or return it to investors. In total we realized proceeds of approximately
During this time, we also completed a significant number of financings throughout our operating businesses and listed entities at attractive rates. We completed more than
As a result of the foregoing, as well as our fundraising activities, we finished the year with substantial financial resources with which to pursue future transactions. Dry powder in our private funds at the end of the quarter was
Trisura Group
For the past 10 years, we have owned a property and casualty insurance business called Trisura Guarantee Insurance Company ("Trisura Guarantee"), which has consistently and profitably grown its operations. This business is no longer strategic to
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.
We also 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
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
Additional Information
The Letter to Shareholders and the company's Supplemental Information for the three months ended December 31, 2016 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 financial statements for the year ended December 31, 2016, which have been prepared using IFRS, as issued by the IASB. The amounts have not been audited by
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 2016 Fourth Quarter Results as well as the Shareholders' Letter and Supplemental Information on
The conference call can be accessed via webcast on February 9, 2017 at 11:00 a.m. Eastern Time at www.brookfield.com or via teleconference at 1-800-319-4610 toll free in
Brookfield Asset Management Inc. is a leading global alternative asset manager with approximately
Please note that
For more information, please visit our website at www.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
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
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
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,
This release does not constitute an offer of any
CONSOLIDATED BALANCE SHEETS
Unaudited December 31 December 31 (US$ millions) 2016 2015 ---------------------------------------------------------------------------- Assets Cash and cash equivalents $ 4,299 $ 2,774 Other financial assets 4,700 6,156 Accounts receivable and other 9,133 7,044 Inventory 5,349 5,281 Assets classified as held for sale 432 1,397 Equity accounted investments 24,977 23,216 Investment properties 54,172 47,164 Property, plant and equipment 45,346 37,273 Intangible assets 6,073 5,170 Goodwill 3,783 2,543 Deferred income tax assets 1,562 1,496 ---------------------------------------------------------------------------- Total Assets$ 159,826 $ 139,514 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Liabilities and Equity Accounts payable and other $ 11,915 $ 11,366 Liabilities associated with assets classified as held for sale 127 522 Corporate borrowings 4,500 3,936 Non-recourse borrowings Property-specific mortgages 52,442 46,044 Subsidiary borrowings 7,949 8,303 Deferred income tax liabilities 9,640 8,785 Subsidiary equity obligations 3,565 3,331 Equity Preferred equity 3,954 3,739 Non-controlling interests in net assets 43,235 31,920 Common equity 22,499 21,568 ---------------------------------------------------------------------------- Total Equity 69,688 57,227 ---------------------------------------------------------------------------- Total Liabilities and Equity$ 159,826 $ 139,514 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
For the periods ended
December 31
(US$ millions, except
per share amounts) Years Ended Three Months Ended
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2016 2015 2016 2015
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Revenues $ 24,411 $ 19,913 $ 6,935 $ 5,538
Direct costs (17,718) (14,433) (5,150) (4,092)
Other income and gains 482 145 91 -
Equity accounted income 1,293 1,695 252 521
Expenses
Interest (3,233) (2,820) (826) (703)
Corporate costs (92) (106) (24) (23)
Fair value changes (130) 2,166 (488) 594
Depreciation and
amortization (2,020) (1,695) (482) (430)
Income tax 345 (196) (211) (218)
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Net income $ 3,338 $ 4,669 $ 97 $ 1,187
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Net income attributable
to:
Brookfield
shareholders $ 1,651 $ 2,341 $ 173 $ 678
Non-controlling
interests 1,687 2,328 (76) 509
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$ 3,338 $ 4,669 $ 97 $ 1,187
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Net income per share
Diluted $ 1.55 $ 2.26 $ 0.14 $ 0.66
Basic 1.58 2.32 0.15 0.67
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RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Unaudited
For the periods ended
December 31
(US$ millions) Years Ended Three Months Ended
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2016 2015 2016 2015
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Net income $ 3,338 $ 4,669 $ 97 $ 1,187
Equity accounted fair
value changes and other
non-FFO items 458 (262) 198 (101)
Fair value changes 130 (2,166) 488 (594)
Depreciation and
amortization 2,020 1,695 482 430
Deferred income taxes (558) 64 140 195
Realized disposition
gains in fair value
changes or prior
periods(1) 766 847 196 426
Non-controlling
interests (2,917) (2,288) (587) (562)
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Funds from
operations(1,2) 3,237 2,559 1,014 981
Adjust for:
Realized carried
interest(3) (149) (32) (149) -
Realized disposition
gains(1) (923) (842) (196) (421)
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Funds from operations
from operating
activities(1,2) $ 2,165 $ 1,685 $ 669 $ 560
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Notes:
1. Non-IFRS measure - see Basis of Presentation on page 3
2. Excludes amounts attributable to non-controlling interests
3. Excludes carried interest generated that is subject to future investment
performance
SUMMARIZED FINANCIAL RESULTS
Unaudited
For the periods ended
December 31
(US$ millions) Years Ended Three Months Ended
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2016 2015 2016 2015
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Asset management $ 866 $ 528 $ 314 $ 143
Property 1,561 1,387 368 566
Renewable power 180 233 26 38
Infrastructure 374 252 103 63
Private equity and other 468 469 201 262
Cash and financial
assets 151 30 82 (6)
Interest expense and
operating costs (363) (340) (80) (85)
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Funds from
operations(1,2) $ 3,237 $ 2,559 $ 1,014 $ 981
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Unaudited
For the periods ended
December 31
(US$ millions, except
per share amounts) Years Ended Three Months Ended
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2016 2015 2016 2015
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FFO from operating
activities(1,2) $ 2,165 $ 1,685 $ 669 $ 560
Realized carried
interest(3) 149 32 149 -
Realized disposition
gains(1) 923 842 196 421
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Funds from
operations(1,2) 3,237 2,559 1,014 981
Realized disposition
gains not in income(1) (732) (537) (179) (119)
Fair value changes (345) 1,138 (311) 114
Depreciation and
amortization (900) (780) (245) (213)
Income tax 391 (39) (106) (85)
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Net income attributable
to shareholders $ 1,651 $ 2,341 $ 173 $ 678
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Per share $ 1.55 $ 2.26 $ 0.14 $ 0.66
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Notes:
1. Non-IFRS measure - see Basis of Presentation on page 3
2. Excludes amounts attributable to non-controlling interests
3. Excludes carried interest generated that is subject to future investment
performance
Contacts: Suzanne Fleming Communications & Media (212) 417-2421 [email protected] Linda Northwood Investor Relations (416) 359-8647 [email protected]
Source: Brookfield Asset Management Inc.
| Title | Document |
|---|---|
Q4 2016 Letter to Shareholders |
|
Q4 2016 Press Release |
|
Q4 Supplemental Information |
|
Q4 2016 MP3 Recording |
|
Q4 2016 transcript |