Brookfield Asset Management Inc. (NYSE: BAM, TSX: BAM.A) today
announced financial results for the quarter ended
June 30, 2020.
Bruce Flatt, CEO of Brookfield, stated, “We had
our best fundraising period, ever; with $23 billion of capital
added to our franchise, increasing total capital for deployment to
$77 billion. Very strong performance in our asset management
business and continued resiliency within most of our operations
contributed to strong operating results.”
Operating Results
UnauditedFor the periods ended June 30(US$ millions, except per
share amounts) |
Three Months Ended |
|
Last Twelve Months Ended |
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net (loss) income attributable to shareholders1 |
$ |
(656 |
) |
|
$ |
399 |
|
|
$ |
844 |
|
|
$ |
3,061 |
|
Per Brookfield share1,2 |
(0.43 |
) |
|
0.24 |
|
|
0.47 |
|
|
1.95 |
|
Funds from operations1,3 |
$ |
1,161 |
|
|
$ |
1,108 |
|
|
$ |
4,075 |
|
|
$ |
4,600 |
|
Per Brookfield share1,2,3 |
0.73 |
|
|
0.73 |
|
|
2.59 |
|
|
3.04 |
|
Net
(loss) income4 |
$ |
(1,493 |
) |
|
$ |
704 |
|
|
$ |
1,744 |
|
|
$ |
5,929 |
|
1. Excludes amounts attributable to
non-controlling interests.2. 2019 per share
amounts have been updated to reflect BAM’s three-for-two stock
split effective April 1, 2020.3. See Basis
of Presentation on page 9 and a reconciliation of net (loss) income
to FFO on page 6.4. Consolidated basis –
includes amounts attributable to non-controlling interests.
Most of our operations continued to generate
favorable operating profits, driven by their revenues being largely
contracted or regulated. Despite that, some of our operating
businesses were impacted by the economic shutdown in the second
quarter. In addition, we recorded some non-cash revaluations,
largely attributed to our real estate portfolio. As a result, we
recorded a net loss of $656 million attributable to shareholders,
or $0.43 per share. Income of $844 million was recorded
over the last twelve months.
Funds from operations (“FFO”) were $1.2 billion
for the quarter and $4.1 billion over the last twelve months.
Fee-related earnings before performance fees increased by 23% on a
quarter-over-quarter basis to $324 million, and 41% over the last
twelve months to $1.3 billion. This reflects strong fundraising in
our long-term and perpetual private funds, solid performance in our
listed partnerships, and the contribution of fee-related earnings
from our credit business. Growth in FFO from invested capital
deployed over the last twelve months was offset during the quarter
by the impact of the short-term shutdowns across certain of our
real estate businesses and some of our private equity businesses.
This resulted in our operating FFO being in line with the prior
year, and we are now seeing recoveries accelerating in many
jurisdictions in which we operate. As a result, we expect this to
contribute to better results for the second half of 2020.
During the quarter we recognized $473 million of
disposition gains in FFO, mainly as a result of a partial sell down
of our investment in BEP. The transaction served to increase the
public float and liquidity of BEP units, which have experienced
strong growth in performance and demand. Today, we remain a 52%
owner of the company.
Dividend Declaration
The Board declared a quarterly dividend of
US$0.12 per share, payable on September 30, 2020 to
shareholders of record as at the close of business on August 31,
2020. The Board also declared the regular monthly and quarterly
dividends on its preferred shares.
Operating Highlights
We raised $23 billion of capital in our asset
management operations since we last reported, taking our
assets under management to approximately $550 billion. This
included commitments of $12 billion to our latest distressed
debt fund and continued inflows to our perpetual private funds.
Total growth in fee-bearing capital over the last twelve months led
to a 41% growth in fee-related earnings, before performance fees,
over the same period.
The fundraising results highlight the breadth of
our product offerings and strength of our existing investor base
which have allowed us to raise significant amounts of capital even
amidst a global shutdown. Our core, perpetual private funds are
experiencing positive fundraising momentum and we have now added a
European perpetual core-plus real estate fund that recently
closed with €725 million of commitments and has an active pipeline
of transactions. Fundraising for the distressed debt fund will
continue throughout the year and we expect this fund, by final
close, to be one of our largest funds.
As at June 30, 2020 fee-bearing capital was
$277 billion, representing an increase of 69% from the prior
year. We have an additional $29 billion of capital that is
currently committed and will earn fees when deployed, of which $15
billion was raised since we last reported. Our growth in
fee-bearing capital over the last twelve months led to an increase
in fee-related earnings of 23% in the quarter relative to the same
period a year ago, and a 41% increase in earnings for the last
twelve months, before performance fees.
Growth in our fee-related earnings is
attributable to private fund capital raised in our infrastructure
and private equity flagship funds, and across our perpetual private
fund strategies, as well as three quarters of fee-related earnings
from our credit business. Today, our latest flagship real estate,
infrastructure and private equity funds are approximately 50%
invested or committed, in aggregate. We expect that we will
continue to find excellent places to deploy this capital as the
current economic environment begins to stabilize over the coming
months and new opportunities are uncovered.
We realized $264 million of net realized carried
interest into income over the last twelve months, and our
accumulated unrealized carried interest now stands at $2.9
billion.
We realized $16 billion through asset sales
across the portfolio over the last twelve months and we remain
focused on recycling capital across the business and returning
capital to our investors. Over the last twelve months, we have
recorded $264 million of net realized carried interest into income,
including $31 million during the current quarter. We expect that
any planned dispositions and associated realized carried interest
initially forecasted to be recognized in the first half of 2020
will be recognized later in 2020 or into 2021. We have no required
asset monetizations, and therefore capital recycling initiatives
will be done opportunistically on a value basis. For the last
twelve-month period, we generated $187 million of carried
interest, before the impact of foreign exchange or costs.
Annualized fee revenues and target carried
interest now stand at a run-rate of $5.6 billion.
Annualized fee revenues and annualized
fee-related earnings are now $2.8 billion and $1.3 billion,
respectively. Gross target carried interest stands at $2.8 billion,
or $1.6 billion net of costs, at our share. Growth in both our
annualized fee-related earnings and target carried interest is
attributable to private fund capital raised in
our infrastructure and private equity flagship funds, and
across our perpetual private fund strategies, as well as the
contribution from our investment in our credit franchise.
We generated over $2.6 billion of cash available
for distribution and/or reinvestment (“CAFDR”) over the last twelve
months, and as at June 30, 2020, we had $66 billion of available
liquidity to deploy into new investments.
Excluding realized carried interest and
performance fees, CAFDR increased 13% over the prior year period,
representing the strength and resiliency of the cash flow streams
of our business, even in times of market and economic volatility.
Today, we continue to generate over $2.4 billion of annualized
CAFDR, before accounting for any carried interest.
Today, we have $77 billion of total deployable
capital, including $16 billion of cash, financial assets and
undrawn lines of credit in BAM and our affiliates and $61 billion
of uncalled fund commitments available for new transactions. The
increase in core liquidity since the prior quarter includes raising
approximately $1.3 billion of long-term financing across BAM
and the public affiliates as well as $2 billion of increased credit
facility capacity to be used for new investment opportunities.
We expect in the coming months, as government
aid tapers and companies will increasingly be in need of capital,
there will be many opportunities for us to invest across all our
pools of capital, including control investments within our flagship
funds, non-control investments within our Special Investments
program capital, and distressed debt opportunities, within the
latest flagship fund.
We invested $9 billion during the current
quarter.
During the quarter, we have invested $5 billion
across our credit funds, and over $1 billion into certain public
toehold positions, and approximately $250 million in convertible
preferred shares in a propane distribution company, within our
Brookfield Special Investments program, which already has a strong
pipeline of investments.
Subsequent to quarter-end, we announced a
commitment, along with other institutional partners, to purchase up
to $1 billion units and shares of Brookfield Property Partners. We
view that we are buying at a fraction of the underlying value of
the business, even in the most draconian scenario.
Lastly, in late July, we completed the
previously announced privatization of TerraForm Power and the
concurrent spin out of Brookfield Renewable Corporation (“BEPC”) –
shares of Brookfield Renewable that are economically equivalent to
existing BEP units. We are pleased with the tremendous success of
the BIPC spin-out completed earlier this year within Brookfield
Infrastructure, and look forward to the greater flexibility for
investors to participate in our high-quality renewable power
portfolio through BEPC.
CONSOLIDATED BALANCE SHEETS
Unaudited (US$ millions) |
|
|
June 30 |
|
|
|
December 31 |
|
|
|
2020 |
|
|
|
2019 |
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
9,523 |
|
|
$ |
6,778 |
|
Other financial assets |
|
14,353 |
|
|
12,468 |
|
Accounts receivable and
other |
|
17,682 |
|
|
21,971 |
|
Inventory |
|
10,212 |
|
|
10,272 |
|
Equity accounted
investments |
|
39,213 |
|
|
40,698 |
|
Investment properties |
|
96,887 |
|
|
96,686 |
|
Property, plant and
equipment |
|
86,067 |
|
|
89,264 |
|
Intangible assets |
|
25,117 |
|
|
27,710 |
|
Goodwill |
|
13,816 |
|
|
14,550 |
|
Deferred income tax
assets |
|
3,565 |
|
|
3,572 |
|
Total Assets |
|
$ |
316,435 |
|
|
$ |
323,969 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Corporate borrowings |
|
$ |
8,051 |
|
|
$ |
7,083 |
|
|
|
|
|
|
Accounts payable and
other |
|
42,408 |
|
|
44,767 |
|
Non-recourse borrowings in
entities that we manage |
|
136,362 |
|
|
136,292 |
|
Subsidiary equity
obligations |
|
4,201 |
|
|
4,132 |
|
Deferred income tax
liabilities |
|
14,347 |
|
|
14,849 |
|
|
|
|
|
|
Equity |
|
|
|
|
Preferred equity |
$ |
4,145 |
|
|
$ |
4,145 |
|
|
Non-controlling interests in net assets |
78,996 |
|
|
81,833 |
|
|
Common equity |
27,925 |
|
|
111,066 |
|
30,868 |
|
|
116,846 |
|
Total Liabilities and Equity |
|
$ |
316,435 |
|
|
$ |
323,969 |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
UnauditedFor the periods ended June 30(US$ millions, except per
share amounts) |
Three Months Ended |
|
Six Months Ended |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Revenues |
$ |
12,829 |
|
|
$ |
16,924 |
|
|
$ |
29,415 |
|
|
$ |
32,132 |
|
Direct costs |
(9,446 |
) |
|
(13,385 |
) |
|
(22,155 |
) |
|
(24,970 |
) |
Other income and gains |
29 |
|
|
889 |
|
|
270 |
|
|
921 |
|
Equity accounted (loss)
income |
(631 |
) |
|
1,003 |
|
|
(843 |
) |
|
1,347 |
|
Expenses |
|
|
|
|
|
|
|
Interest |
(1,715 |
) |
|
(1,833 |
) |
|
(3,567 |
) |
|
(3,449 |
) |
Corporate costs |
(25 |
) |
|
(23 |
) |
|
(49 |
) |
|
(49 |
) |
Fair value changes |
(1,153 |
) |
|
(1,398 |
) |
|
(1,567 |
) |
|
(1,229 |
) |
Depreciation and
amortization |
(1,376 |
) |
|
(1,234 |
) |
|
(2,785 |
) |
|
(2,268 |
) |
Income tax |
(5 |
) |
|
(239 |
) |
|
(369 |
) |
|
(475 |
) |
Net (loss) income |
$ |
(1,493 |
) |
|
$ |
704 |
|
|
$ |
(1,650 |
) |
|
$ |
1,960 |
|
|
|
|
|
|
|
|
|
Net (loss) income attributable
to: |
|
|
|
|
|
|
|
Brookfield shareholders |
$ |
(656 |
) |
|
$ |
399 |
|
|
$ |
(949 |
) |
|
$ |
1,014 |
|
Non-controlling interests |
(837 |
) |
|
305 |
|
|
(701 |
) |
|
946 |
|
|
$ |
(1,493 |
) |
|
$ |
704 |
|
|
$ |
(1,650 |
) |
|
$ |
1,960 |
|
|
|
|
|
|
|
|
|
Net (loss) income per
share1 |
|
|
|
|
|
|
|
Diluted |
$ |
(0.43 |
) |
|
$ |
0.24 |
|
|
$ |
(0.63 |
) |
|
$ |
0.63 |
|
Basic |
(0.43 |
) |
|
0.25 |
|
|
(0.63 |
) |
|
0.64 |
|
1. Adjusted to reflect the
three-for-two stock split effective April 1, 2020.
SUMMARIZED FINANCIAL
RESULTS
RECONCILIATION OF NET (LOSS) INCOME TO
FUNDS FROM OPERATIONS
Unaudited For the periods ended June 30 (US$ millions) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net (loss) income |
$ |
(1,493 |
) |
|
$ |
704 |
|
|
$ |
1,744 |
|
|
$ |
5,929 |
|
Realized disposition gains in
fair value changes or prior periods |
469 |
|
|
7 |
|
|
944 |
|
|
1,169 |
|
Non-controlling interests |
(1,501 |
) |
|
(1,863 |
) |
|
(7,178 |
) |
|
(6,724 |
) |
Financial statement components
not included in FFO |
|
|
|
|
|
|
|
Equity accounted fair value changes and other non-FFO items |
1,253 |
|
|
(379 |
) |
|
2,462 |
|
|
540 |
|
Fair value changes |
1,153 |
|
|
1,398 |
|
|
1,169 |
|
|
840 |
|
Depreciation and amortization |
1,376 |
|
|
1,234 |
|
|
5,393 |
|
|
4,028 |
|
Deferred income taxes |
(96 |
) |
|
7 |
|
|
(459 |
) |
|
(1,182 |
) |
Funds from operations1,2 |
$ |
1,161 |
|
|
$ |
1,108 |
|
|
$ |
4,075 |
|
|
$ |
4,600 |
|
SEGMENT FUNDS FROM
OPERATIONS
UnauditedFor the periods ended June 30(US$ millions, except per
share amounts) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Asset management |
$ |
355 |
|
|
$ |
400 |
|
|
$ |
1,609 |
|
|
$ |
1,436 |
|
Real estate |
89 |
|
|
316 |
|
|
927 |
|
|
1,707 |
|
Renewable power |
566 |
|
|
69 |
|
|
742 |
|
|
385 |
|
Infrastructure |
84 |
|
|
62 |
|
|
429 |
|
|
431 |
|
Private equity |
137 |
|
|
326 |
|
|
645 |
|
|
960 |
|
Residential |
(11 |
) |
|
18 |
|
|
109 |
|
|
64 |
|
Corporate |
(59 |
) |
|
(83 |
) |
|
(386 |
) |
|
(383 |
) |
Funds from operations1,2 |
$ |
1,161 |
|
|
$ |
1,108 |
|
|
$ |
4,075 |
|
|
$ |
4,600 |
|
|
|
|
|
|
|
|
|
Per
share3,4 |
$ |
0.73 |
|
|
$ |
0.73 |
|
|
$ |
2.59 |
|
|
$ |
3.04 |
|
1. Non-IFRS measure – see Basis of
Presentation on page 9.2. Excludes amounts
attributable to non-controlling interests.3.
Adjusted to reflect the three-for-two stock split effective April
1, 2020.4. Per share amounts are inclusive of
dilutive effect of mandatorily redeemable preferred shares held in
a consolidated subsidiary.
EARNINGS PER SHARE
Unaudited For the periods ended June 30 (US$ millions, except per
share amounts) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net (loss) income |
$ |
(1,493 |
) |
|
$ |
704 |
|
|
$ |
1,744 |
|
|
$ |
5,929 |
|
Non-controlling interests |
837 |
|
|
(305 |
) |
|
(900 |
) |
|
(2,868 |
) |
Net (loss) income attributable
to shareholders |
(656 |
) |
|
399 |
|
|
844 |
|
|
3,061 |
|
Preferred share dividends |
(36 |
) |
|
(38 |
) |
|
(148 |
) |
|
(150 |
) |
Dilutive effect of conversion of subsidiary preferred shares |
49 |
|
|
(5 |
) |
|
12 |
|
|
(56 |
) |
Net
(loss) income available to common shareholders |
$ |
(643 |
) |
|
$ |
356 |
|
|
$ |
708 |
|
|
$ |
2,855 |
|
|
|
|
|
|
|
|
|
Weighted average shares1 |
1,512.1 |
|
|
1,433.3 |
|
|
1,487.7 |
|
|
1,433.8 |
|
Dilutive effect of the
conversion of options and escrowed shares using treasury stock
method1,2 |
— |
|
|
34.1 |
|
|
29.4 |
|
|
29.1 |
|
Shares and share equivalents1 |
1,512.1 |
|
|
1,467.4 |
|
|
1,517.1 |
|
|
1,462.9 |
|
|
|
|
|
|
|
|
|
Diluted
earnings per share1,3 |
$ |
(0.43 |
) |
|
$ |
0.24 |
|
|
$ |
0.47 |
|
|
$ |
1.95 |
|
1. Adjusted to reflect the
three-for-two stock split effective April 1, 2020.2.
Includes management share option plan and escrowed
stock plan.3. Per share amounts are
inclusive of dilutive effect of mandatorily redeemable preferred
shares held in a consolidated subsidiary.
CASH AVAILABLE FOR DISTRIBUTION AND/OR
REINVESTMENT
Unaudited For the periods ended June 30 (US$ millions) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Fee-related earnings1, excluding performance fees |
$ |
279 |
|
|
$ |
263 |
|
|
$ |
1,233 |
|
|
$ |
954 |
|
Our share of Oaktree’s
distributable earnings |
58 |
|
|
— |
|
|
155 |
|
|
— |
|
Distributions from
investments |
443 |
|
|
400 |
|
|
1,580 |
|
|
1,703 |
|
Other invested capital
earnings |
|
|
|
|
|
|
|
Corporate interest expense |
(95 |
) |
|
(86 |
) |
|
(359 |
) |
|
(338 |
) |
Corporate costs and taxes |
(39 |
) |
|
(36 |
) |
|
(138 |
) |
|
(157 |
) |
Other wholly owned investments |
(35 |
) |
|
(30 |
) |
|
(48 |
) |
|
3 |
|
|
(169 |
) |
|
(152 |
) |
|
(545 |
) |
|
(492 |
) |
Preferred share dividends |
(36 |
) |
|
(38 |
) |
|
(148 |
) |
|
(150 |
) |
Add
back: equity-based compensation |
21 |
|
|
22 |
|
|
90 |
|
|
84 |
|
Cash available for
distribution and/or reinvestment before carried interest and
performance fees |
596 |
|
|
495 |
|
|
2,365 |
|
|
2,099 |
|
Realized carried interest,
net, excluding Oaktree1,2 |
9 |
|
|
137 |
|
|
203 |
|
|
388 |
|
Performance fees |
— |
|
|
— |
|
|
— |
|
|
94 |
|
Cash
available for distribution and/or reinvestment |
$ |
605 |
|
|
$ |
632 |
|
|
$ |
2,568 |
|
|
$ |
2,581 |
|
1. Excludes our share
of Oaktree’s fee-related earnings and carried interest.2.
Non-IFRS measure – see Basis of Presentation on page
9.
Additional Information
The Letter to Shareholders and the company’s
Supplemental Information for the three months ended
June 30, 2020, 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 statements contained herein are based
primarily on information that has been extracted from our financial
statements for the quarter ended June 30, 2020, which have been
prepared using IFRS, as issued by the IASB. The amounts have not
been audited by Brookfield’s external auditor.
Brookfield’s Board of Directors have reviewed
and approved this document, including the summarized unaudited
consolidated financial statements prior to its release.
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 2020 Second Quarter
Results as well as the Shareholders’ Letter and Supplemental
Information on Brookfield’s website under the Reports & Filings
section at www.brookfield.com.
To participate in the Conference Call, please
dial 1-866-688-9425 toll free in North America, or for overseas
calls please dial 1-409-216-0815 (Conference ID: 2698259) at
approximately 10:50 a.m. EST. The Conference Call will also be
Webcast live at https://edge.media-server.com/mmc/go/bamQ2-2020.
For those unable to participate in the Conference Call, the
telephone replay will be archived and available until midnight
August 20, 2020. To access this rebroadcast, please call
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Brookfield Asset Management
Inc. is a leading global alternative asset manager with
approximately $550 billion of assets under management across
real estate, infrastructure, renewable power, private equity and
credit. Brookfield owns and operates long-life assets and
businesses, many of which form the backbone of the global economy.
Utilizing its global reach, access to large-scale capital and
operational expertise, Brookfield offers a range of alternative
investment products to investors around the world—including public
and private pension plans, endowments and foundations, sovereign
wealth funds, financial institutions, insurance companies and
private wealth investors. Brookfield Asset Management is listed on
the New York and Toronto stock exchanges under the symbol BAM and
BAM.A respectively. 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 or contact:
Communications & Media:Claire HollandTel:
(416) 369-8236Email: claire.holland@brookfield.com |
|
Investor Relations:Linda Northwood Tel:
(416) 359-8647 Email: linda.northwood@brookfield.com |
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 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 Brookfield’s business and believe that many
shareholders and analysts also find this measure of value to
them.
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 issuers and
entities.
We make reference to Invested Capital. Invested
Capital is defined as the amount of common equity in our segments
and underlying businesses within the segments.
We make reference to Cash available for
distribution and/or reinvestment, which is referring to the sum of
our Asset Management segment FFO and distributions received from
our ownership of investments, net of Corporate Activities FFO,
equity-based compensation and preferred share dividends. This
provides insight into earnings received by the corporation that are
available for distribution to common shareholders or to be
reinvested into the business.
We provide additional information on key terms
and non-IFRS measures in our filings available at
www.brookfield.com.
Notice to Readers
Brookfield is not making any offer or invitation
of any kind by communication of this news release and under no
circumstance is it to be construed as a prospectus or an
advertisement.
This news release contains “forward-looking
information” within the meaning of Canadian provincial securities
laws and “forward-looking statements” within the meaning of
Canadian provincial securities laws and “forward-looking
statements” within the meaning of the U.S. Securities Act of 1933,
the U.S. Securities Exchange Act of 1934, and, “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 which reflect management’s
expectations regarding the operations, business, financial
condition, expected financial results, performance, prospects,
opportunities, priorities, targets, goals, ongoing objectives,
strategies and outlook of Brookfield 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.” In particular, the forward-looking statements contained in
this News Release include statements referring to the future state
of the economy or the securities market and expected future
deployment of capital, dispositions and associated realized carried
interest, as well as statements regarding the results of future
fundraising efforts.
Where this news release refers to “target
carried interest” it is based on an assumption that existing funds
meet their target gross returns. Target gross returns are
typically ~20% for opportunistic funds; 10% to 15% for value add,
credit and core funds. Fee terms vary by investment strategy
and may change over time.
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, including the
ongoing and developing COVID-19 pandemic and the global
economic shutdown, which may cause the actual results, performance
or achievements of Brookfield 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:
(i) investment returns that are lower than target;
(ii) the impact or unanticipated impact of general economic,
political and market factors in the countries in which we do
business including as a result of COVID-19 and the related global
economic shutdown; (iii) the behavior of financial markets,
including fluctuations in interest and foreign exchange rates;
(iv) global equity and capital markets and the availability of
equity and debt financing and refinancing within these
markets; (v) strategic actions including dispositions; the
ability to complete and effectively integrate acquisitions into
existing operations and the ability to attain expected benefits;
(vi) changes in accounting policies and methods used to report
financial condition (including uncertainties associated with
critical accounting assumptions and estimates); (vii) the
ability to appropriately manage human capital; (viii) the
effect of applying future accounting changes; (ix) business
competition; (x) operational and reputational risks;
(xi) technological change; (xii) changes in government
regulation and legislation within the countries in which we
operate; (xiii) governmental investigations;
(xiv) litigation; (xv) changes in tax laws;
(xvi) ability to collect amounts owed;
(xvii) catastrophic events, such as earthquakes, hurricanes
and epidemics/pandemics; (xviii) the possible impact of
international conflicts and other developments including terrorist
acts and cyberterrorism; (xix) the introduction, withdrawal,
success and timing of business initiatives and strategies;
(xx) the failure of effective disclosure controls and
procedures and internal controls over financial reporting and
other risks; (xxi) health, safety and environmental risks;
(xxii) the maintenance of adequate insurance coverage;
(xxiii) the existence of information barriers between certain
businesses within our asset management operations; (xxiv) risks
specific to our business segments including our real estate,
renewable power, infrastructure, private equity, and residential
development activities; and (xxiv) 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 and other
factors could also adversely affect its results. Investors and
other readers are urged to consider the foregoing risks, as well as
other uncertainties, factors and assumptions carefully in
evaluating the forward-looking information and are cautioned not to
place undue reliance on such forward-looking information. Except as
required by law, the corporation 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.
Past performance is not indicative nor a
guarantee of future results. There can be no assurance that
comparable results will be achieved in the future, that future
investments will be similar to the historic investments discussed
herein (because of economic conditions, the availability of
investment opportunities or otherwise), that targeted returns,
diversification or asset allocations will be met or that an
investment strategy or investment objectives will be achieved.
Target returns set forth in this news release
are for illustrative and informational purposes only and have been
presented based on various assumptions made by Brookfield in
relation to the investment strategies being pursued by the funds,
any of which may prove to be incorrect. There can be no assurance
that targeted returns will be achieved. Due to various risks,
uncertainties and changes (including changes in economic,
operational, political or other circumstances) beyond Brookfield’s
control, the actual performance of the funds and the business could
differ materially from the target returns set forth herein. In
addition, industry experts may disagree with the assumptions used
in presenting the target returns. No assurance, representation or
warranty is made by any person that the target returns will be
achieved, and undue reliance should not be put on them. Prior
performance is not indicative of future results and there can be no
guarantee that the funds will achieve the target returns or be able
to avoid losses.
Certain of the information contained herein is
based on or derived from information provided by independent
third-party sources. While Brookfield believes that such
information is accurate as of the date it was produced and that the
sources from which such information has been obtained are reliable,
Brookfield makes no representation or warranty, express or implied,
with respect to the accuracy, reasonableness or completeness of any
of the information or the assumptions on which such information is
based, contained herein, including but not limited to, information
obtained from third parties.
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