Brookfield Asset Management Inc.
(TSX:BAM.A)(NYSE:BAM)(EURONEXT:BAMA) -
Investors, analysts and other interested parties can access Brookfield Asset
Management's 2012 Third Quarter Results as well as the Shareholders' Letter
and Supplemental Information on Brookfield's website under the
Investors/Financial Reports section at www.brookfield.com.
The 2012 Third Quarter Results conference call can be accessed via webcast
on November 9, 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 September 30, 2012.
Three months ended Nine months ended
September 30(1) September 30(1)
----------------------------------------
US$ millions (except per share
amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Funds from operations(2,3) $ 282 $ 241 $ 809 $ 781
Net income(2) 334 253 888 1,369
Total return(2,3) 578 210 1,561 1,477
Per Brookfield share
Funds from operations(2,3) $ 0.40 $ 0.35 $ 1.13 $ 1.13
Net income(2) 0.48 0.36 1.25 2.03
Total return(2,3) 0.92 0.34 2.48 2.37
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Financial results are based on International Financial Reporting
Standards ("IFRS") unless otherwise noted
2. Attributable to Brookfield shareholders. Excludes amounts attributable to
non-controlling interests
3. Non-IFRS measure. See Basis of Presentation on page 4 for details
"Acquisitions made in the last three years are beginning to
generate significant cash flows. Our strategy of investing in high
quality assets that compound in value over time, positions
Brookfield to continue to deliver strong cash flow growth through
periods of economic uncertainty," said Bruce Flatt, CEO of
Brookfield. "Furthermore, our clients are allocating increasing
amounts of their capital to property and infrastructure assets
globally, which is enabling us to increase our assets under
management."
Financial Results
Total Return for Brookfield shareholders was $578 million, or
$0.92 per share, which brings our Total Return for the nine months
of 2012 to $1.6 billion, or $2.48 per share. Total Return includes
our share of funds from operations ("FFO"), which was $282 million
for the quarter, as well as $328 million of valuation gains; less
$32 million of preferred share dividends.
FFO totalled $723 million on a consolidated basis, of which $282
million (or $0.40 per share) accrued to Brookfield shareholders,
compared to $241 million of FFO for Brookfield shareholders in the
2011 quarter. The increase in FFO from the prior year reflects
improved operating performance and economics in most of our core
operations, including increased cash flows in our property
operations and the impact of increased housing activity in the
United States on operations within our private equity group. We
did, however, experience water flows in our renewable power
operations that were well below long-term average, leading to a
reduction in FFO from this segment, and we incurred a $34 million
charge on the early redemption of corporate debt which was
refinanced with lower cost long-term debt. The comparative quarter
in 2011 reflected more normalized hydroelectric generation levels
and $50 million of mark-to-market losses on investment
positions.
The valuation gains of $328 million (or $0.52 per share)
included in Total Return during the current quarter 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 in our financial
statements. These reflect continued increases in commercial
property valuations and housing related private equity
investments.
The intrinsic value of our common equity was $42.86 per share at
September 30, compared to $40.99 at the beginning of the year, and
$41.81 at June 30. The increase in the third quarter reflects the
total return generated during the period and the positive impact of
stronger foreign exchange rates on non-U.S. operations, partially
offset by common equity dividends.
Consolidated net income was $872 million, of which $334 million
(or $0.48 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 $253 million for Brookfield
shareholders (or $0.36 per share) in the third quarter of 2011.
Operating Highlights
We continued to expand our asset management franchise with both
listed and private entities.
Investors are increasing their allocations of capital to
investment strategies that we employ and we continue to expand our
flagship listed issuers and private funds. Committed and invested
client capital of our listed issuers and private funds increased by
$4.3 billion or 19% since year end. Quarterly highlights include
the successful first close on one private fund and the final closes
on two private funds focused on private equity and multifamily
residential. We are in the midst of capital campaigns for a number
of private funds seeking a further $5 billion of third party
capital. We hope to launch our third flagship listed entity,
Brookfield Property Partners, by the end of the fourth quarter and
expect it to rank as one of the largest and highest quality listed
global public property businesses.
We generated $7.8 billion of capital since June 30 through asset
sales, equity issuance, fund formations and debt financings, and a
total of $20.1 billion year to date.
We are improving our liquidity and lowering our financing costs
with the benefit of supportive credit markets, low coupon rates and
continued investor interest in companies that produce stable cash
flows and growth. We continue to see opportunities to refinance at
attractive rates, which lowers our cost of capital, extends term
and funds new growth initiatives.
We continued to invest in high quality assets in our major
operating businesses, increasing the capital deployed by both our
listed entities and private funds. We also completed a number of
organic growth initiatives that increased the value of our assets
and the associated cash flows.
We announced or completed acquisitions and capital expansions
totalling $4.7 billion in the quarter, deploying $2.7 billion of
equity capital on behalf of clients and Brookfield shareholders.
More importantly, we believe these new businesses have significant
growth potential. Assets that we acquired over the past three years
are now making significant contributions to our cash flow.
Subsequent to quarter end, we acquired an Australian property
developer with $1 billion of assets, including a prime office site
in Sydney and a portfolio of hotels and residential developments
and increased our interest in a flagship development property, 100
Bishopsgate, in the City of London. Also in the fourth quarter, we
reached an agreement to acquire an industrial property business
with assets in the southwestern U.S. and Mexico for approximately
$870 million.
Our renewable power operations received regulatory approval for
the acquisition of four hydroelectric facilities in the
southeastern United States with 378 megawatts of capacity for $600
million and invested in a listed company with wind farms adjacent
to our facilities in California.
Our infrastructure business acquired a district heating and
cooling business in Toronto from the city and an investment
partner, an acquisition that draws on our expertise across
renewable power, utilities and property. We advanced the $1.7
billion purchase of a 3,200 kilometre toll road network in Brazil.
In addition, we closed the acquisition of a UK utility and obtained
regulatory clearance for the recapitalization of the utility which
we plan to merge with our existing natural gas connections unit. We
are also considering asset dispositions, that could include a
portion of our timber holdings, which we would redeploy into other
growth opportunities.
Our infrastructure group completed a $600 million expansion of
our Australian railroad, transforming the cash flow profile of this
business by securing the revenue streams with long-term "take or
pay" contracts from major industrial and resource customers. We
have also completed the majority of construction on our Texas
transmission network and expect it will contribute to cash flow in
2013.
Organic growth initiatives in our property business included the
leasing of 1.8 million square feet of commercial property, bringing
the year-to-date total to 5.6 million square feet at rents 33%
higher than expiring leases. We completed the renovation of our
flagship First Canadian Place office tower in Toronto, and closed
over $700 million in commercial office property financings, netting
proceeds of approximately $300 million.
Our U.S. retail business is executing on its growth strategy by
attracting high quality new tenants, increasing occupancy across
the portfolio and extending the term of leases. Initial rents for
leases commencing occupation in 2012 increased by 10% over the
comparable expiring rents, increasing net operating income by 4%
for their regional mall portfolio and FFO by 9%.
In our renewable power business, we are moving forward with $0.4
billion of hydroelectric development projects in North and South
America, and considering opportunistic acquisitions in Europe.
We see continued evidence of strength in U.S. housing markets,
which is improving the performance of a number of our cyclical
investments that are linked to this part of the economy. We have
approximately $3 billion invested in companies that benefit from
the recovery in U.S. residential real estate.
Intrinsic Value of Common Equity
The intrinsic value of Brookfield's common equity was $42.86 per
share at September 30, 2012. This includes net invested capital of
$36.40 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 February 28,
2013, to shareholders of record as at the close of business on
February 1, 2013. 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 are
based on International Financial Reporting Standards ("IFRS")
unless otherwise noted and 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
its 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 invested capital.
Intrinsic value includes net 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 invested capital 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 total return, funds from operations, invested
capital and intrinsic value and a reconciliation between total
return and comprehensive income attributable to Brookfield
shareholders, 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 September 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 September 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. 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 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 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)
September 30 December 31
US$ millions 2012 2011
----------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 2,760 $ 2,027
Other financial assets 3,555 3,773
Accounts receivable and other 7,071 6,723
Inventory 6,518 6,060
Investments 11,006 9,401
Investment properties 30,984 28,366
Property, plant and equipment 26,486 22,832
Timber 3,142 3,155
Intangible assets 4,186 3,968
Goodwill 2,561 2,607
Deferred income tax asset 1,870 2,110
----------------------------------------------------------------------------
Total Assets $ 100,139 $ 91,022
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and Equity
Accounts payable and other $ 10,480 $ 9,266
Corporate borrowings 4,219 3,701
Non-recourse borrowings
Property-specific mortgages 31,752 28,415
Subsidiary borrowings 5,441 4,441
Deferred income tax liability 5,696 5,817
Capital securities 1,301 1,650
Interests of others in consolidated funds 390 333
Equity
Preferred equity 2,700 2,140
Non-controlling interests in net assets 20,948 18,516
Common equity 17,212 16,743
----------------------------------------------------------------------------
Total equity 40,860 37,399
----------------------------------------------------------------------------
Total Liabilities and Equity $ 100,139 $ 91,022
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three months ended Nine months ended
----------------------------------------
For the period ended September 30
US$ millions (except per share
amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Total revenues $ 4,701 $ 4,423 $ 13,205 $ 11,799
----------------------------------------
Asset management and other services 146 119 331 290
Revenues less direct costs
Property 499 418 1,468 1,183
Renewable power 94 193 512 610
Infrastructure 210 177 618 549
Private equity 230 98 511 332
Equity accounted income 256 393 904 1,621
Investment and other income 145 51 398 255
----------------------------------------------------------------------------
1,580 1,449 4,742 4,840
Expenses
Interest 593 622 1,860 1,732
Operating costs 128 115 368 343
Current income taxes 31 26 100 80
----------------------------------------------------------------------------
Net income prior to other items 828 686 2,414 2,685
Other items
Fair value changes 493 318 693 876
Depreciation and amortization (327) (224) (911) (676)
Deferred income taxes (122) (64) (225) (171)
----------------------------------------------------------------------------
Net income $ 872 $ 716 $ 1,971 $ 2,714
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income attributable to:
Brookfield shareholders $ 334 $ 253 $ 888 $ 1,369
Non-controlling interests 538 463 1,083 1,345
----------------------------------------------------------------------------
$ 872 $ 716 $ 1,971 $ 2,714
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per share
Diluted $ 0.48 $ 0.36 $ 1.25 $ 2.03
Basic $ 0.49 $ 0.36 $ 1.28 $ 2.10
----------------------------------------------------------------------------
----------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO TOTAL RETURN(1)
(Unaudited) Three months ended Nine months ended
---------------------------------------
For the period ended September 30
US$ millions (except per share
amounts) 2012 2011 2012 2011
----------------------------------------------------------------------------
Net income attributable to Brookfield
shareholders (see page 7)(2) $ 334 $ 253 $ 888 $ 1,369
Fair value changes included in other
comprehensive income(2) (90) (508) (15) (419)
----------------------------------------------------------------------------
244 (255) 873 950
remove: deferred income taxes
included in net income(2) 91 5 177 (16)
add: fair value changes not included
in IFRS comprehensive income 275 486 605 620
----------------------------------------------------------------------------
610 236 1,655 1,554
less: preferred share dividends (32) (26) (94) (77)
----------------------------------------------------------------------------
Total return(3) $ 578 $ 210 $ 1,561 $ 1,477
- Per share $ 0.92 $ 0.34 $ 2.48 $ 2.37
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Unaudited) Three months ended Nine months ended
----------------------------------------
For the period ended September 30
US$ millions 2012 2011 2012 2011
----------------------------------------------------------------------------
Total return consists of
Funds from operations(3) (see
below) $ 282 $ 241 $ 809 $ 781
Valuation gains(3) 328 (5) 846 773
less: preferred share dividends (32) (26) (94) (77)
----------------------------------------------------------------------------
$ 578 $ 210 $ 1,561 $ 1,477
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. See Basis of Presentation on page 4 for details
2. Excludes amounts attributable to non-controlling interests
3. Total return, funds from operations and valuation gains are non-IFRS
measures
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS(1)
(Unaudited) Three months ended Nine months ended
----------------------------------------
For the period ended September 30
US$ millions 2012 2011 2012 2011
----------------------------------------------------------------------------
Net income prior to other items (see
page 7) $ 828 $ 686 $ 2,414 $ 2,685
Adjust for: fair value changes
within equity accounted income (102) (226) (464) (1,104)
Disposition gains recorded in
equity under IFRS(2) (3) 5 8 69
----------------------------------------------------------------------------
723 465 1,958 1,650
Non-controlling interest (441) (224) (1,149) (869)
----------------------------------------------------------------------------
Funds from operations(3) $ 282 $ 241 $ 809 $ 781
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. See Basis of Presentation on page 4 for details
2. Excludes deferred income taxes
3. 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 Sep 2024 bis Okt 2024
Brookfield Asset Managem... (TSX:BAM.A)
Historical Stock Chart
Von Okt 2023 bis Okt 2024