Bruce Flatt, CEO of
Operating Results
UNAUDITED
FOR THE PERIODS ENDED MAR. 31
(US$ MILLIONS, EXCEPT PER SHARE Last Twelve Months
AMOUNTS) Three Months Ended Ended
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2017 2016 2017 2016
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Net income(1) $ 518 $ 636 $ 3,220 $ 3,867
Per Brookfield share(2) (0.08) 0.23 1.25 1.77
Funds from operations(2,3) $ 674 $ 703 $ 3,208 $ 2,705
Per Brookfield share(2,3) 0.65 0.69 3.15 2.64
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1. Consolidated basis - includes amounts attributable to non-controlling
interests
2. Excludes amounts attributable to non-controlling interests
3. See Basis of Presentation on pages 3 and 4 and a reconciliation of net
income to FFO on page 9
During the first quarter we achieved "same-store" growth across most of our operations, and benefited from a positive contribution from recent acquisitions. This was offset in net income by fair value changes in the quarter arising from the impact of lower stock market prices on market-valued investments. The aggregate value of our
Funds from operations ("FFO") grew 3% on a comparative basis as 2016 included catch up and transaction fees of
Annualized fees increased to
Dividend Declaration
The Board declared a quarterly dividend of
Highlights
We announced or completed acquisitions that deployed
We completed the acquisition of a
Our renewable power business announced the acquisition of a 51% controlling interest in TerraForm Power, and 100% of TerraForm Global. These businesses collectively own and operate a 3,600 megawatt global wind and solar portfolio. This transaction marks our first major investment in solar and establishes a platform for further growth in the sector.
In April, our infrastructure group closed the purchase of a 90% interest in a natural gas pipeline business in
In our private equity business, we recently closed the acquisition of an 85% interest in a leading road fuels provider in the
Our flagship funds are significantly invested, positioning us well for future fundraising.
Our second flagship real estate opportunity fund, BSREP II, is now approximately 80% committed or invested. This enables us to launch a successor fund in the second quarter. Our flagship funds in infrastructure (BIF III) and private equity (BCP IV) closed in 2016 with a solid pipeline of investment opportunities and are now over 45% and 55% invested or committed, respectively. We expect to begin fundraising for our next infrastructure and private equity flagship funds in 2018.
We continue to maintain high levels of liquidity in order to pursue further transactions.
We finished the quarter with core liquidity of
We are broadening our product offering to provide additional options for our investors.
In addition to our traditional funds, we have been deploying capital in several new entities across asset classes and geographies. We continue to raise capital and invest it for our open-ended private real estate fund. Another particular area of focus has been credit strategies: we have built dedicated private credit programs within each business group, including an infrastructure debt fund where we will provide loans against high quality core infrastructure assets, a real estate debt fund in
Special Dividend of Trisura Group Shares Declared
We have now received the necessary approvals to complete the previously announced distribution of all of the common shares of Trisura Group Ltd. ("Trisura Group") to holders of
On June 22, 2017, shareholders of record as of June 1, 2017 will receive one Trisura Group common share for every 170 Shares of Brookfield (see below for further information about the trading of Trisura Group and
Shareholders will receive a cash payment in lieu of any fractional interests in the Trisura Group common shares.
Only holders of Brookfield Shares as of close of business on June 1, 2017 will be entitled to receive the distribution of the common shares of Trisura Group. Holders of "BAM" or "BAM.A" who sell their shares before June 1, 2017, and whose sales of such securities settle before the close of business on the New York Stock Exchange ("NYSE") or the Toronto Stock Exchange ("TSX") on such date, will not be entitled to receive the distribution of the common shares of Trisura Group. Similarly, investors who purchase shares before June 1, 2017, and whose purchases of such securities settle after the close of business in
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
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 March 31, 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 March 31, 2017, 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 2017 First Quarter Results as well as the Shareholders' Letter and Supplemental Information on
The conference call can be accessed via webcast on May 11, 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
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 March 31 December 31 (US$ millions) 2017 2016 ---------------------------------------------------------------------------- Assets Cash and cash equivalents$ 6,427 $ 4,299 Other financial assets 4,693 4,700 Accounts receivable and other 9,055 9,133 Inventory 5,437 5,349 Assets classified as held for sale 948 432 Equity accounted investments 24,936 24,977 Investment properties 57,092 54,172 Property, plant and equipment 45,653 45,346 Intangible assets 6,271 6,073 Goodwill 3,906 3,783 Deferred income tax assets 1,578 1,562 ---------------------------------------------------------------------------- Total Assets$ 165,996 $ 159,826 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Liabilities and Equity Accounts payable and other$ 12,025 $ 11,915 Liabilities associated with assets classified as held for sale 52 127 Corporate borrowings 5,272 4,500 Non-recourse borrowings Property-specific mortgages 56,635 52,442 Subsidiary borrowings 7,990 7,949 Deferred income tax liabilities 9,830 9,640 Subsidiary equity obligations 3,766 3,565 Equity Preferred equity 3,950 3,954 Non-controlling interests 43,965 43,235 Common equity 22,511 22,499 ---------------------------------------------------------------------------- Total Equity 70,426 69,688 ---------------------------------------------------------------------------- Total Liabilities and Equity$ 165,996 $ 159,826 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED FOR THE PERIODS ENDED MAR. 31 Three Months Ended ---------------------------- (US$ MILLIONS, EXCEPT PER SHARE AMOUNTS) 2017 2016 ---------------------------------------------------------------------------- Revenues$ 6,001 $ 5,218 Direct costs (4,387) (3,648) Other income and gains 265 35 Equity accounted income 335 152 Expenses Interest (843) (767) Corporate costs (25) (23) ---------------------------------------------------------------------------- 1,346 967 Fair value changes (204) 352 Depreciation and amortization (499) (481) Income tax (125) (202) ---------------------------------------------------------------------------- Net income$ 518 $ 636 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net income (loss) attributable to: Brookfield shareholders$ (37) $ 257 Non-controlling interests 555 379 ----------------------------------------------------------------------------$ 518 $ 636 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net income (loss) per share Diluted$ (0.08) $ 0.23 Basic (0.08) 0.23 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- SUMMARIZED FINANCIAL RESULTS UNAUDITED Last Twelve Months FOR THE PERIODS ENDED MAR. 31 Three Months Ended Ended ------------------------------------------- (US$ MILLIONS) 2017 2016 2017 2016 ---------------------------------------------------------------------------- Asset management$ 166 $ 184 $ 848 $ 599 Real estate 325 373 1,513 1,477 Renewable power 67 68 179 220 Infrastructure 83 71 386 266 Private equity and other 94 62 500 472 Cash and financial assets 14 34 131 13 Interest expense and operating costs (75) (89) (349) (342) ---------------------------------------------------------------------------- Funds from operations(1,2)$ 674 $ 703 $ 3,208 $ 2,705 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- UNAUDITED Last Twelve Months FOR THE PERIODS ENDED MAR. 31 Three Months Ended Ended ------------------------------------------- (US$ MILLIONS, EXCEPT PER SHARE AMOUNTS) 2017 2016 2017 2016 ---------------------------------------------------------------------------- FFO from operating activities(2)$ 457 $ 491 $ 2,131 $ 1,783 Realized carried interest(3) 3 - 152 30 Realized disposition gains(2) 214 212 925 892 ---------------------------------------------------------------------------- Funds from operations(1,2) 674 703 3,208 2,705 Realized disposition gains not in income (83) (193) (622) (568) Fair value changes (353) 65 (763) 564 Depreciation and amortization (201) (206) (895) (804) Income tax (74) (112) 429 (28) ---------------------------------------------------------------------------- Net income (loss) attributable to shareholders$ (37) $ 257 $ 1,357 $ 1,869 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Per share$ (0.08) $ 0.23 $ 1.25 $ 1.77 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Notes:
1. Non-IFRS measure - see Basis of Presentation on pages 3 and 4 and a
reconciliation of net income to FFO on page 9
2. Excludes amounts attributable to non-controlling interests
3. Excludes carried interest generated that is subject to future investment
performance
EARNINGS PER SHARE
UNAUDITED
FOR THE THREE MONTHS ENDED MAR. Last Twelve Months
31 Three Months Ended Ended
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(US$ MILLIONS, EXCEPT PER SHARE
AMOUNTS) 2017 2016 2017 2016
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Net income $ 518 $ 636 $ 3,220 $ 3,867
Non-controlling interests (555) (379) (1,863) (1,998)
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Net income (loss) attributable
to shareholders (37) 257 1,357 1,869
Preferred share dividends (36) (33) (136) (133)
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Net income (loss) available to
shareholders $ (73) $ 224 $ 1,221 $ 1,736
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Weighted average shares 958.5 959.2 958.8 956.7
Dilutive effect of the
conversion of options and
escrowed shares using treasury
stock method(1) - 15.6 15.3 21.6
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Shares and share equivalents 958.5 974.8 974.1 978.3
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Diluted earnings (loss) per
share $ (0.08) $ 0.23 $ 1.25 $ 1.77
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Notes:
1. Includes management share option plan and escrowed stock plan
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
UNAUDITED
Last Twelve Months
FOR THE PERIODS ENDED MAR. 31 Three Months Ended Ended
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(US$ MILLIONS) 2017 2016 2017 2016
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Net income $ 518 $ 636 $ 3,220 $ 3,867
Equity accounted fair value
changes and other non-FFO items 122 274 306 (7)
Fair value changes 204 (352) 686 (1,405)
Depreciation and amortization 499 481 2,038 1,775
Deferred income taxes 108 170 (620) 67
Realized disposition gains in
fair value changes or prior
periods(1) 152 212 706 897
Non-controlling interests (929) (718) (3,128) (2,489)
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Funds from operations(1,2) $ 674 $ 703 $ 3,208 $ 2,705
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Notes:
1. Non-IFRS measure - see Basis of Presentation on pages 3 and 4 2. Excludes amounts attributable to non-controlling interests
Contacts: Claire Holland Communications & Media (416) 369-8236 [email protected] Linda Northwood Investor Relations (416) 359-8647 [email protected] www.brookfield.com
Source: Brookfield Asset Management Inc.
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