Bruce Flatt, CEO of
Operating Results
UNAUDITED
FOR THE PERIODS ENDED JUN.
30
(US$ MILLIONS, EXCEPT PER
SHARE AMOUNTS) Three Months Ended Last Twelve Months Ended
------------------------------------------------
2017 2016 2017 2016
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Net income(1) $ 958 $ 584 $ 3,594 $ 3,252
Per Brookfield share(2) 0.19 0.15 1.29 1.30
Funds from operations(2,3) $ 1,026 $ 637 $ 3,597 $ 2,822
Per Brookfield share(2,3) 1.01 0.62 3.55 2.76
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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 page 3 and a reconciliation of net income to
FFO on page 8
Operating results for the second quarter benefited from continued growth of our asset management business. Net income included increased fair value gains in the quarter, primarily from our opportunistic real estate investment portfolio. The per share number is after the allocation of net income to non-controlling interests and preferred share dividends.
Funds from operations ("FFO") totaled
Dividend Declaration
The Board declared a quarterly dividend of
Highlights
We are now raising capital for our next flagship real estate fund, which we expect to be larger than its predecessor fund and to hold a first close later this year.
We have invested and committed approximately 80% of capital in our current
We completed acquisitions that deployed
Our infrastructure business closed the
Our private equity business closed two previously announced transactions, BRK Ambiental, a water distribution, collection and treatment business in
Our renewable power business continues to advance the acquisition of a 51% interest in TerraForm Power and 100% of TerraForm Global, marking our first major investment into solar power. We have received bankruptcy court approvals, as well as a number of other important milestones, and expect to close the transactions in the second half of this year.
As a result of these and other transactions announced to date, our flagship infrastructure and private equity funds are over 45% and 60% invested and committed, respectively.
We continue to leverage our operating expertise to improve cash flows in our businesses.
We continue to focus on enhancing the cash flows of our acquired businesses through operational improvements, where we have large, experienced teams dedicated to these efforts across the globe. One example of this is in our graphite electrode manufacturing operations within our private equity business where we have reduced annual fixed costs by
We further simplified our operating structure and streamlined our business.
Our real estate business completed the privatization of the previously listed fund, Brookfield Canada Office Properties, as part of our plan to fully integrate our North American office operations and simplify the structure.
We completed the spin-off to our BAM shareholders of our international specialty insurance provider, Trisura Group Ltd., on June 22, 2017.
We have substantial capital resources at our disposal to pursue further opportunities with
In 2016 we closed on flagship funds in our real estate, infrastructure and private equity businesses. While we have been actively deploying capital over the past year, we have over
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 June 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 June 30, 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 Second Quarter Results as well as the Shareholders' Letter and Supplemental Information on
The conference call can be accessed via webcast on August 10, 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 over
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 June 30 December 31 (US$ millions) 2017 2016 ---------------------------------------------------------------------------- Assets Cash and cash equivalents $ 4,429 $ 4,299 Other financial assets 4,998 4,700 Accounts receivable and other 11,183 9,133 Inventory 6,290 5,349 Assets classified as held for sale 1,284 432 Equity accounted investments 26,293 24,977 Investment properties 56,827 54,172 Property, plant and equipment 46,034 45,346 Intangible assets 14,167 6,073 Goodwill 4,984 3,783 Deferred income tax assets 1,694 1,562 ---------------------------------------------------------------------------- Total Assets$ 178,183 $ 159,826 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Liabilities and Equity Accounts payable and other $ 15,870 $ 11,915 Liabilities associated with assets classified as held for sale 742 127 Corporate borrowings 4,924 4,500 Non-recourse borrowings Property-specific mortgages 57,246 52,442 Subsidiary borrowings 9,829 7,949 Deferred income tax liabilities 11,909 9,640 Subsidiary equity obligations 3,618 3,565 Equity Preferred equity 3,949 3,954 Non-controlling interests 47,767 43,235 Common equity 22,329 22,499 ---------------------------------------------------------------------------- Total Equity 74,045 69,688 ---------------------------------------------------------------------------- Total Liabilities and Equity$ 178,183 $ 159,826 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
FOR THE PERIODS ENDED
JUN. 30
(US$ MILLIONS, EXCEPT
PER SHARE AMOUNTS) Three Months Ended Six Months Ended
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2017 2016 2017 2016
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Revenues $ 9,444 $ 5,973 $ 15,445 $ 11,191
Direct costs (7,332) (4,330) (11,719) (7,978)
Other income and gains - 31 265 66
Equity accounted income 250 435 585 587
Expenses
Interest (865) (815) (1,708) (1,582)
Corporate costs (20) (25) (45) (48)
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1,477 1,269 2,823 2,236
Fair value changes 213 65 9 417
Depreciation and
amortization (613) (516) (1,112) (997)
Income tax (119) (234) (244) (436)
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Net income $ 958 $ 584 $ 1,476 $ 1,220
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Net income attributable
to:
Brookfield
shareholders $ 225 $ 185 $ 188 $ 442
Non-controlling
interests 733 399 1,288 778
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$ 958 $ 584 $ 1,476 $ 1,220
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Net income per share
Diluted $ 0.19 $ 0.15 $ 0.12 $ 0.38
Basic 0.20 0.16 0.12 0.39
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SUMMARIZED FINANCIAL RESULTS
UNAUDITED
FOR THE PERIODS ENDED
JUN. 30
(US$ MILLIONS) Three Months Ended Last Twelve Months Ended
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2017 2016 2017 2016
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Asset management $ 231 $ 190 $ 889 $ 654
Real estate 661 275 1,899 1,428
Renewable power 65 37 207 191
Infrastructure 84 111 359 316
Private equity and other 32 98 434 551
Cash and financial
assets 13 27 117 38
Interest expense and
operating costs (60) (101) (308) (356)
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Funds from
operations(1,2) $ 1,026 $ 637 $ 3,597 $ 2,822
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UNAUDITED
FOR THE PERIODS ENDED
JUN. 30
(US$ MILLIONS, EXCEPT
PER SHARE AMOUNTS) Three Months Ended Last Twelve Months Ended
----------------------------------------------------
2017 2016 2017 2016
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FFO from operating
activities(2) $ 562 $ 514 $ 2,179 $ 1,963
Realized carried
interest(3) - - 152 15
Realized disposition
gains(2) 464 123 1,266 844
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Funds from
operations(1,2) 1,026 637 3,597 2,822
Realized disposition
gains not in income (498) (129) (991) (509)
Fair value changes (94) 5 (862) 304
Depreciation and
amortization (217) (227) (885) (834)
Income tax 8 (101) 538 (374)
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Net income attributable
to shareholders $ 225 $ 185 $ 1,397 $ 1,409
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Per share $ 0.19 $ 0.15 $ 1.29 $ 1.30
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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
FOR THE PERIODS ENDED
JUN. 30
(US$ MILLIONS, EXCEPT
PER SHARE AMOUNTS) Three Months Ended Last Twelve Months Ended
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2017 2016 2017 2016
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Net income $ 958 $ 584 $ 3,594 $ 3,252
Non-controlling
interests (733) (399) (2,197) (1,843)
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Net income attributable
to shareholders 225 185 1,397 1,409
Preferred share
dividends (35) (34) (137) (133)
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Net income available to
common shareholders $ 190 $ 151 $ 1,260 $ 1,276
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Weighted average shares 958.6 958.8 958.8 958.9
Dilutive effect of the
conversion of options
and escrowed shares
using treasury stock
method(1) 20.0 18.2 15.7 19.9
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Shares and share
equivalents 978.6 977.0 974.5 978.8
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Diluted earnings per
share $ 0.19 $ 0.15 $ 1.29 $ 1.30
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Notes:
1. Includes management share option plan and escrowed stock plan
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
UNAUDITED
FOR THE PERIODS ENDED
JUN. 30
(US$ MILLIONS) Three Months Ended Last Twelve Months Ended
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2017 2016 2017 2016
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Net income $ 958 $ 584 $ 3,594 $ 3,252
Equity accounted fair
value changes and
other non-FFO items 241 4 543 254
Fair value changes (213) (65) 538 (1,400)
Depreciation and
amortization 613 516 2,135 1,863
Deferred income taxes 31 162 (751) 634
Realized disposition
gains in fair value
changes or prior
periods(1) 499 123 1,082 829
Non-controlling
interests (1,103) (687) (3,544) (2,610)
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Funds from
operations(1,2) $ 1,026 $ 637 $ 3,597 $ 2,822
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Notes:
1. Non-IFRS measure - see Basis of Presentation on page 3
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]
Source: Brookfield Asset Management Inc.
| Title | Document |
|---|---|
English |
|
Q2 2017 Letter to Shareholders |
|
Q2 2017 Supplemental |