Brookfield Asset Management Inc.
(TSX:BAM.A)(NYSE:BAM)(EURONEXT:BAMA) -
Investors, analysts and other interested parties can access
Brookfield Asset Management's 2012 Second Quarter Results as well
as the Shareholders' Letter and Supplemental Information on
Brookfield's website under the Investor Centre/Financial Reports
section at www.brookfield.com.
The 2012 Second Quarter Results conference call can be accessed
via webcast on August 10, 2012 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. The
teleconference taped rebroadcast can be accessed at 1-800-319-6413
or 1-604-638-9010 (Password 2811#).
Brookfield Asset Management Inc. today announced its financial
results for the quarter ended June 30, 2012. The financial results
are based on International Financial Reporting Standards ("IFRS")
unless otherwise noted.
Three months ended Six months ended
June 30 June 30
--------------------------------------------
US$ millions (except per share
amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Funds from operations(1), (2) $ 244 $ 309 $ 527 $ 540
Net income(1) 138 838 554 1,116
Total return(1), (2) 272 840 983 1,267
Per Brookfield share
Funds from operations(1), (2) $ 0.34 $ 0.45 $ 0.74 $ 0.78
Net income(1) 0.17 1.26 0.78 1.67
Total return(1), (2) 0.43 1.34 1.56 2.03
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Attributable to Brookfield shareholders. Excludes amounts attributable
to non-controlling interests
2. Non-IFRS measure. See Basis of Presentation on pages 3 and 4 for details
Bruce Flatt, CEO of Brookfield, commented that: "During the last
few months we completed a record number of acquisitions, and
despite market volatility, most of our operations achieved solid
performance. Our strong capital position during this environment
enabled us to acquire a $600 million portfolio of U.S. hydro power
facilities, a joint controlling interest in a 3,200 kilometer
Brazilian toll road company, a UK utility business, a GBP 518
million portfolio of office properties in London, and over $1.5
billion of office, retail and industrial properties in the U.S. and
Australia. Investors continue to allocate further capital to our
investment funds."
Financial Results
Despite the recent economic volatility, we recorded good
financial results. We generated a Total Return for Brookfield
shareholders of $272 million, or $0.43 per share, which brings our
Total Return for the first half of 2012 to nearly $1 billion, or
$1.56 per share. Total Return includes our share of funds from
operations ("FFO"), which was $244 million, and $61 million of
valuation gains; less $33 million of preferred share dividends.
FFO totalled $613 million on a consolidated basis, of which $244
million (or $0.34 per share) accrued to Brookfield shareholders,
compared to $309 million of FFO for Brookfield shareholders in the
same quarter a year ago. FFO reflects improved performance and
economic conditions in most of our operations; however these were
partially offset by below average generation in our renewable power
operations and the unfavourable impact of market volatility on our
investment securities. In contrast, the 2011 quarter reflected
slightly below average hydroelectric power generation and a $61
million private equity monetization gain, which together accounted
for most of the variance in FFO.
Valuation gains include fair value changes recorded in net
income and other comprehensive income, as well as changes in
incremental values that we record in respect of items not otherwise
revalued under IFRS. Net gains during the quarter reflect continued
increases in commercial property valuations, but these were largely
offset by the impact of declining interest rates on existing
contracts to lock in rates on future debt issuance, which despite
being a great long-term hedge, is marked to market in our results
until the actual loans are refinanced.
The intrinsic value of our common equity was $41.81 per share at
June 30, compared to $40.99 at the beginning of the year, $39.31 at
the end of the comparable quarter in 2011 and $42.35 at March 31.
The decline in the second quarter is due largely to the impact of
lower foreign exchange rates on non-U.S. operations that more than
offset the total return generated in the quarter.
Consolidated net income was $379 million, of which $138 million
(or $0.17 per share) accrued to Brookfield shareholders. Net income
includes FFO as well as non-cash revaluation items such as
accounting depreciation and changes in the appraised values of
commercial properties. This compares to $838 million (or $1.26 per
share) in the second quarter of 2011, which was an exceptional
quarter in terms of increases in the value of commercial office and
retail property asset valuations, particularly in the U.S.
Operating Highlights
-- We continued to expand our asset management franchise with both listed
and private entities.
We closed on over $3 billion of capital across our private funds
during the quarter, of which $2 billion came from third party
investors. We are moving forward with capital campaigns on nine
private funds seeking a further $4 billion of third party capital.
We continue to advance the launch of our global listed property
business, which will rank as one of the largest and most
diversified public property businesses, and issued approximately
$0.5 billion of additional equity from our listed infrastructure
entity in July. Our flagship $2.6 billion infrastructure fund is
almost fully committed, with a robust pipeline of deals.
-- We raised $12.1 billion of capital since March 31 through asset sales,
equity issuance, fund formations and debt financings, totalling $15.7
billion of capital raised year to date.
Low interest rates, receptive credit markets and strong investor
interest in our income-generating, high quality assets continued to
support our capital raising and refinancing initiatives. These
activities enhanced our liquidity, refinanced near-term maturities,
lowered our cost of capital, extended terms and funded new
investment initiatives.
-- We made significant investments in most of our major operating
businesses, expanding the capital deployed by both our listed and
private entities. We also completed a number of organic growth
initiatives that increased the value of our assets and the associated
cash flows.
We acquired or agreed to acquire a number of assets at
attractive valuations, all of which we believe to have significant
growth potential. Our property business acquired a portfolio of six
office buildings and development sites in the City of London for
GBP 518 million, expanding our presence in this major global
financial centre. Our renewable power unit is investing $600
million in four hydroelectric facilities that add 378 megawatts of
generating capacity for customers in the southeastern United
States, expanding our portfolio into a high-growth region. Our
infrastructure business continues to expand its South American toll
road portfolio and has reached an agreement to acquire and
recapitalize a utility business in the United Kingdom, which will
have an enterprise value in excess of $1 billion.
We announced the launch of a one million square foot office
building in Toronto with a global professional services firm as our
lead tenant, opened a fully leased office building in Perth and
leased 2.7 million square feet of commercial property at rents
substantially higher than the expiring leases. Our U.S. retail
business is attracting new tenants, increasing occupancy across the
portfolio and are considering plans of 11 anchor pads in malls
acquired from a major retailer. Initial rents for new leases in our
U.S. mall portfolio increased by 9.6% on a comparable basis from
2011.
In our power business, we began commercial operations at
Canada's largest wind power facility and continue to advance
construction on four projects with a further 99 megawatts of
installed capacity. Within our infrastructure operations, we have
largely completed our $600 million Australian rail expansion, which
is now contributing meaningfully to FFO, and have completed the
majority of construction on our Texas transmission network. Our
Brazilian residential businesses completed R$358 million of
launches and contracted sales of R$737 million, a more sustainable
velocity than previously experienced. We are seeing a slow but
steady recovery in U.S. housing markets, which is benefitting a
number of cyclical investments that are tied to U.S. homebuilding
activity.
In total, we completed $1.2 billion of acquisitions and capital
expansions, and plan to complete another $3.7 billion of
acquisitions we have already announced, which will deploy
approximately $2.6 billion of equity capital for our operating
platforms and our clients.
Intrinsic Value of Common Equity
The intrinsic value of Brookfield's common equity was $41.81 per
share at June 30, 2012. This includes net tangible asset value of
$35.35 per share and $6.46 per share related to the company's asset
management franchise.
Dividend Declaration
The Board of Directors declared a quarterly dividend of US$0.14
per share (representing US$0.56 per annum), payable on November 30,
2012, to shareholders of record as at the close of business on
November 1, 2012. The Board also declared all of the regular
monthly and quarterly dividends on its preferred shares.
Information on Brookfield Asset Management's declared share
dividends can be found on the company's website under
Investors/Stock and Dividend Information.
Basis of Presentation
This news release and accompanying financial statements make
reference to total return, funds from operations, invested capital
and intrinsic value.
Total return is defined as comprehensive income excluding
deferred tax expenses and the impact of foreign currency
fluctuations on the long-term capital invested in non U.S.
operations, and including incremental valuation adjustments for
assets not otherwise revalued under IFRS. Brookfield uses total
return to assess the performance of the overall business as well as
individual business units.
Funds from operations is defined as net income prior to fair
value changes, depreciation and amortization, and deferred income
taxes, and includes certain disposition gains that are not
otherwise included in net income as determined under IFRS.
Brookfield uses funds from operations to assess its operating
results and the value of its business and believes that many of its
shareholders and analysts also find this measure of value to
them.
Invested capital represents the capital invested by the company
in its operations on a segmented basis, net of the underlying
liabilities and non-controlling interests. These balances are
derived from the company's IFRS balance sheets and are adjusted to
exclude deferred income taxes and to include adjustments to present
the fair value of assets and liabilities that are carried at
historical book values or otherwise not reflected in the company's
IFRS balance sheets. Common equity on this basis is referred to as
net tangible asset value.
Intrinsic value includes net tangible asset value, as
represented by its invested capital, as well as the value
attributed to the company's asset management franchise. Asset
management franchise value represents management's estimate of the
value attributable to the company's asset management activities
that is not otherwise included in net tangible asset value, based
on current capital under management, associated fee arrangements,
and potential growth.
Total return, funds from operations, invested capital and
intrinsic value and their per share equivalents 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. The company provides additional information on
the determination of funds from operations, invested capital and
intrinsic value and a reconciliation between funds from operations
and net income attributable to Brookfield shareholders and invested
capital and intrinsic value and common equity in the Supplemental
Information available at www.brookfield.com.
Additional Information
The Letter to Shareholders and the company's Supplemental
Information for the quarter ended June 30, 2012 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 unaudited interim financial statements
for the quarter ended June 30, 2012, which have been prepared using
IFRS. The amounts have not been audited and are not subject to
review by Brookfield's external auditor.
Brookfield Asset Management Inc. is a global alternative asset
manager with over $150 billion in assets under management. The
company has over a 100-year history of owning and operating assets
with a focus on property, renewable power, infrastructure and
private equity. It has a range of public and private investment
products and services, which leverage its expertise and experience
and provide Brookfield with a competitive advantage in the markets
where it operates. Brookfield is co-listed on the New York and
Toronto Stock Exchanges under the symbol BAM and BAM.A,
respectively, and on NYSE Euronext under the symbol BAMA. 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.
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 the company 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 the
company 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 exchanges rate;
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 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; changes in
tax laws, catastrophic events, such as earthquakes and hurricanes;
the possible impact of international conflicts and other
developments including terrorist acts; 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, the company 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.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30 December 31
US$ millions 2012 2011
----------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 2,539 $ 2,027
Other financial assets 3,468 3,773
Accounts receivable and other 6,974 6,723
Inventory 6,354 6,060
Investments 10,514 9,401
Investment properties 29,612 28,366
Property, plant and equipment 26,160 22,832
Timber 3,131 3,155
Intangible assets 4,147 3,968
Goodwill 2,549 2,607
Deferred income tax asset 1,746 2,110
----------------------------------------------------------------------------
Total Assets $ 97,194 $ 91,022
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and Equity
Accounts payable and other $ 9,837 $ 9,266
Corporate borrowings 4,354 3,701
Non-recourse borrowings
Property-specific mortgages 31,332 28,415
Subsidiary borrowings 5,549 4,441
Deferred income tax liability 5,482 5,817
Capital securities 1,263 1,650
Interests of others in consolidated funds 356 333
Equity
Preferred equity 2,443 2,140
Non-controlling interests in net assets 19,655 18,516
Common equity 16,923 16,743
----------------------------------------------------------------------------
Total equity 39,021 37,399
----------------------------------------------------------------------------
Total Liabilities and Equity $ 97,194 $ 91,022
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three months ended Six months ended
--------------------------------------------
For the period ended June 30
US$ millions (except per share
amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Total revenues $ 4,293 $ 3,963 $ 8,337 $ 7,376
Asset management and other
services 108 95 185 171
Revenues less direct operating
costs
Property 498 421 969 765
Renewable power 170 227 418 417
Infrastructure 210 191 408 372
Private equity 167 131 281 234
Equity accounted income 258 1,017 648 1,228
Investment and other income 76 71 253 204
----------------------------------------------------------------------------
1,487 2,153 3,162 3,391
Expenses
Interest 613 564 1,267 1,110
Operating costs 119 116 240 228
Current income taxes 42 21 69 54
----------------------------------------------------------------------------
Net income prior to other items 713 1,452 1,586 1,999
Other items
Fair value changes (106) 310 200 558
Depreciation and amortization (287) (231) (584) (452)
Deferred income taxes 59 (103) (103) (107)
----------------------------------------------------------------------------
Net income $ 379 $ 1,428 $ 1,099 $ 1,998
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income attributable to:
Brookfield shareholders $ 138 $ 838 $ 554 $ 1,116
Non-controlling interests 241 590 545 882
----------------------------------------------------------------------------
$ 379 $ 1,428 $ 1,099 $ 1,998
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per share
Diluted $ 0.17 $ 1.26 $ 0.78 $ 1.67
Basic $ 0.17 $ 1.32 $ 0.80 $ 1.74
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Note:
The foregoing table includes the results attributable to
non-controlling interests whereas the corporation's segmented
operating results discussed elsewhere in this release do not.
RECONCILIATION OF NET INCOME TO TOTAL RETURN(1)
(Unaudited) Three months ended Six months ended
--------------------------------------------
For the period ended June 30
US$ millions (except per share
amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Net income attributable to
Brookfield shareholders (see
page 7)(2) $ 138 $ 838 $ 554 $ 1,116
Fair value changes included in
other comprehensive income(2) (74) 40 86 278
----------------------------------------------------------------------------
64 878 640 1,394
remove: deferred income taxes(2) (49) 49 75 (210)
add: fair value changes not
included in IFRS 290 (61) 330 134
----------------------------------------------------------------------------
305 866 1,045 1,318
less: preferred share dividends (33) (26) (62) (51)
----------------------------------------------------------------------------
Total return(3) $ 272 $ 840 $ 983 $ 1,267
----------------------------------------------------------------------------
- Per share $ 0.43 $ 1.34 $ 1.56 $ 2.03
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Unaudited) Three months ended Six months ended
--------------------------------------------
For the period ended June 30
US$ millions 2012 2011 2012 2011
----------------------------------------------------------------------------
Total return consists of
Funds from operations(3) (see
below) $ 244 $ 309 $ 527 $ 540
Valuation gains(3) 61 557 518 778
less: preferred share
dividends (33) (26) (62) (51)
----------------------------------------------------------------------------
$ 272 $ 840 $ 983 $ 1,267
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. See Basis of Presentation on pages 3 and 4 for details
2. Excludes amounts attributable to non-controlling interests and foreign
currency revaluations
3. Total return, valuation gains and funds from operations are non-IFRS
measures
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS(1)
(Unaudited) Three months ended Six months ended
--------------------------------------------
For the period ended June 30
US$ millions 2012 2011 2012 2011
----------------------------------------------------------------------------
Net income prior to other items
(see page 7) $ 713 $ 1,452 $ 1,586 $ 1,999
Adjust for: fair value changes
within equity accounted
income (111) (844) (362) (878)
Disposition gains recorded in
equity under IFRS 11 61 11 64
----------------------------------------------------------------------------
613 669 1,235 1,185
Non-controlling interest (369) (360) (708) (645)
----------------------------------------------------------------------------
Funds from operations(2) $ 244 $ 309 $ 527 $ 540
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. See Basis of Presentation on pages 3 and 4 for details
2. Non-IFRS measure
Contacts: Media: Brookfield Asset Management Inc. Andrew Willis
SVP, Communications & Media (416) 369-8236 (416) 363-2856
(FAX)andrew.willis@brookfield.com Investors: Brookfield Asset
Management Inc. Katherine Vyse SVP, Investor Relations (416)
369-8246 (416) 363-2856 (FAX)katherine.vyse@brookfield.com
www.brookfield.com
Brookfield Asset Managem... (TSX:BAM.A)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Brookfield Asset Managem... (TSX:BAM.A)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
