Mr. Bruce Flatt reports
BROOKFIELD ASSET MANAGEMENT REPORTS SOLID THIRD QUARTER 2014 RESULTS
Brookfield Asset Management Inc. has released its financial results for the quarter ended Sept. 30, 2014.
Investors, analysts and other interested parties can access Brookfield Asset
Management's 2014 third-quarter results, as well as the shareholders letter
and supplemental information, on Brookfield's website under the
investors/financial reports section.
The conference call can be accessed by webcast on Nov. 7, 2014, at 11
a.m. Eastern Time at the Brookfield Asset
Management website or by 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 followed by the pound sign).
"We continue to deploy capital, increase our fee-bearing assets and harvest investments," commented Bruce Flatt, chief executive officer of Brookfield. "Our access to capital, global scale and operating platforms continue to provide us with competitive advantages when investing our capital."
- Net income for the third quarter was $1.1-billion, or $1.09 per share.
Net income increased to $3.5-billion on a year-to-date basis and $4.4-billion for the last 12 months (LTM). Net income in the 2014
period reflected a higher level of fair value gains, primarily due to the
impact of increased cash flows and lower discount rates within the Brookfield Asset Management
commercial property portfolios.
- Funds from operations for Brookfield shareholders were $564-million or 83 cents per share in the third quarter and were $2.7-billion
($3.98 per share) on an LTM basis. FFO excluding gains increased to $362-million from $342-million in the 2013 quarter, and benefited from
increased fee-related earnings and investment returns, offset in part by
the impact of lower water levels, which reduced cash flows in Brookfield Asset Management's
renewable energy business. Total FFO in the 2013 periods included a high
level of disposition gains arising from several large monetization
transactions.
- Fee-bearing capital increased to $84-billion and represented 14-per-cent growth
from the same quarter last year. Brookfield Asset Management has more than $12-billion of
private funds in marketing for a variety of strategies, which should
raise approximately $9-billion of third-party capital.
- Brookfield Asset Management committed $19-billion to real asset investments over the last 12
months, including a large net lease commercial property portfolio,
natural gas assets and a European telecom tower portfolio.
FINANCIAL RESULTS
(in millions of U.S. dollars, except per-share amounts)
Three months ended Nine months ended Last 12 months
Sept. 30, Sept. 30, Sept. 30,
2014 2013 2014 2013 2014 2013
Consolidated net
income (1) $1,109 $1,495 $3,510 $2,994 $4,360 $3,773
Per Brookfield
share (2) 1.09 1.23 3.07 2.05 4.16 2.77
Funds from
operations (2, 3) 564 1,193 1,625 2,346 2,655 2,805
Per Brookfield
share (2, 3) 0.83 1.85 2.39 3.56 3.98 4.23
(1) Consolidated basis -- includes amounts attributable to non-controlling
interests.
(2) Excludes amounts attributable to non-controlling interests.
(3) See basis of presentation on the Brookfield Asset Management website.
Operating highlights
Brookfield Asset Management expanded its asset management franchise and its flagship listed partnerships.
Fee-bearing capital was $84-billion at Sept. 30, which was 14 per cent higher than the same quarter last year after adjusting for the sale of a low-margin fixed-income investment business. Brookfield Asset Management increased both the quantity and quality of fee-bearing capital, as annualized base fees increased to $630-million at quarter-end, up 19 per cent from the same time last year. Brookfield Asset Management added $4-billion of assets under management in its public markets asset business through both market appreciation and net inflows to funds that invest in property and infrastructure securities.
Brookfield Asset Management's flagship private funds have committed or invested approximately 70 per cent of their capital commitments in aggregate, and it continues to maintain a robust pipeline of investment opportunities. Brookfield Asset Management expects that its new flagship funds will grow at a robust pace and will be approximately twice as large as their predecessors. Brookfield Asset Management has raised approximately $5-billion for its private funds in the last 12 months. Total assets under management were $193-billion at the end of the quarter.
Brookfield Asset Management announced or completed acquisitions and capital expansions that will deploy over $3-billion of capital on behalf of clients and Brookfield shareholders.
Brookfield Asset Management expanded its property portfolio by acquiring a 15.6-million-square-foot net lease commercial property portfolio for $4.3-billion, a portfolio of apartment buildings in New York for $1.1-billion, a 270,000-square-foot office building in Sao Paulo and interests in three shopping malls.
In its infrastructure portfolio, the company completed $1-billion of investments into rail and port assets in Brazil and district energy businesses in Chicago and Seattle. Subsequent to quarter-end, the company committed to acquire a 50-per-cent interest in a portfolio of 6,700 European telecom towers for $2.2-billion. Brookfield Asset Management's private equity group committed $540-million to an acquisition that will create one of North America's largest coal bed methane producers.
Brookfield Asset Management increased cash flow and created value with growth initiatives and operational improvements in its major businesses.
FFO excluding realized disposition gains was $362-million, compared with $342-million in the same quarter a year ago. Brookfield Asset Management's asset management business generated fee revenues of $194-million ($721-million on an LTM basis), leading to quarterly fee-related earnings of $102-million.
Brookfield Asset Management's property group generated FFO of $136-million, excluding gains, up 12 per cent from the same quarter last year, as a result of increased ownership of its office and United States retail portfolios, opportunistic investments, and increases in net rents compared with expiring leases. Brookfield Asset Management signed new leases that were on average 47 per cent above expiring rents in its office properties and 16 per cent above expiring rents in its retail portfolio.
Brookfield Asset Management's renewable energy assets generated FFO of $28-million. This was lower than the $57-million in the same quarter a year ago, reflecting lower water levels and wind production in Canada.
Brookfield Asset Management's infrastructure group recorded $55-million of FFO, which was 12 per cent higher on a comparable or same-store basis than last year. In 2013, the company also recorded $163-million of gains on sales of timber assets.
Brookfield Asset Management's private equity group generated $110-million of FFO excluding gains. FFO in 2013 was $127-million and included $16-million of FFO from assets that were subsequently sold prior to the most recent quarter.
Realized disposition gains generated $202-million of FFO and included a $191-million gain on the sale of the company's remaining shares in a forest products business.
Dividend declaration
The board of directors declared a quarterly dividend of 16 U.S. cents per share (representing 64 U.S. cents per annum), payable on Dec. 31, 2014, to shareholders of record as at the close of business on Nov. 30, 2014. The board also declared all of the regular monthly and quarterly dividends on its preferred shares.
Information on the company's dividends can be found on its website under investors/stock and dividend information.
Additional information
The letter to shareholders and the company's supplemental information for the three months ended Sept. 30, 2014, 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions of U.S. dollars except per-share amounts)
Three months ended Nine months ended
Sept. 30, Sept. 30,
2014 2013 2014 2013
Revenues $ 4,659 $ 4,501 $ 13,670 $ 14,600
Direct (costs) (3,467) (3,230) (9,686) (10,256)
1,192 1,271 3,984 4,344
Other income and
gains (7) 1,200 190 1,218
Equity-accounted
income 350 194 969 684
1,535 2,665 5,143 6,246
Expenses
(Interest) (645) (617) (1,910) (1,940)
Corporate (costs) (27) (36) (93) (116)
863 2,012 3,140 4,190
Fair value changes 637 104 2,348 630
(Depreciation and
amortization) (353) (357) (1,100) (1,095)
Income (tax) (38) (264) (878) (731)
Net income 1,109 1,495 3,510 2,994
Net income
attributable to
Brookfield
shareholders 734 813 2,060 1,403
Non-controlling
interests 375 682 1,450 1,591
1,109 1,495 3,510 2,994
Net income per share
Diluted 1.09 1.23 3.07 2.05
Basic 1.12 1.26 3.15 2.10
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.