Welcome!

News Feed Item

Brookfield Asset Management Reports Second Quarter 2014 Results

Net Income Doubles to $1.6 Billion or $1.19 Per Share

TORONTO, ONTARIO -- (Marketwired) -- 08/08/14 --



----------------------------------------------------------------------------
----------------------------------------------------------------------------
Investors, analysts and other interested parties can access Brookfield Asset
Management's 2014 Second 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 conference call can be accessed via webcast on August 8, 2014 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. (NYSE: BAM)(TSX: BAM.A)(EURONEXT: BAMA) today announced its financial results for the quarter ended June 30, 2014.

"We are continuing to see clients allocate an increasing portion of their capital to Brookfield's real asset investment strategies, due to the superior risk adjusted returns generated by these assets," commented Bruce Flatt, CEO of Brookfield. "Our flagship listed partnerships and private funds are well positioned to deliver long-term performance for clients and shareholders."


--  Consolidated net income for the quarter was $1.6 billion, or $1.19 per
    share, nearly four times the $0.31 recorded in the second quarter last
    year. Net income for the six months increased to
    $2.4 billion.

--  Funds from operations ("FFO") for Brookfield shareholders were $569
    million or $0.84 per share, 24% higher than the $0.68 recorded last
    year. This reflected increases in asset management fees, realized
    disposition gains and the contribution from capital deployed over the
    last 12 months.

--  Fee bearing capital increased to $84 billion and represented 16% growth
    from the same quarter last year.

Financial Results


                                  Three Months Ended     Six Months Ended
                                --------------------------------------------
For the periods ended June 30
US$ millions (except per share
 amounts)                              2014       2013       2014       2013
----------------------------------------------------------------------------

Consolidated net income(1)       $    1,558 $      802 $    2,401 $    1,499
  Per Brookfield share(2)              1.19       0.31       1.98       0.82

Funds from operations(2,3)       $      569 $      464 $    1,061 $    1,153
  Per Brookfield share(2,3)            0.84       0.68       1.56       1.72
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1.  Consolidated basis - includes amounts attributable to non-controlling
    interests
2.  Excludes amounts attributable to non-controlling interests
3.  See Basis of Presentation on page 3

Operating Highlights

We expanded our asset management franchise and our flagship listed partnerships.

Fee bearing capital increased during the quarter by $7 billion to $84 billion, which was 16% higher than the same quarter last year after adjusting for the sale of a low-margin fixed income investment business. We acquired the remaining shares in our office property company, which increased the equity base of our flagship listed property partnership by $500 million. We added $1.6 billion of assets under management in our public markets asset management business, primarily through market appreciation and fund flows to property and infrastructure securities.

Our flagship private funds have committed or invested approximately 60% of their capital commitments in aggregate, and we continue to maintain a robust pipeline of investment opportunities. This gives us confidence that we will be in a position to launch successor funds well before expiration of their investment period, which should in turn lead to increases in fee bearing capital. Total assets under management were $192 billion at the end of the quarter.

We announced or completed acquisitions and capital expansions that will deploy over $2 billion of capital on behalf of clients and Brookfield shareholders.

We continued to invest in emerging markets and Europe, where we believe valuations are compelling, in particular when compared to the U.S. We announced plans to acquire a portfolio of office properties in India with an aggregate value of approximately $800 million, continued to move forward with the acquisition of a port and rail network in Brazil, and closed the purchase of wind farms in Ireland for $690 million.

Across our property business, we recycled $1.2 billion through the sale of 13 mature properties. We invested approximately $450 million in retail projects in New York. Our renewable energy business moved forward with the purchase of the stake we did not own in one of the largest hydroelectric facilities in North America for $613 million, and launched development of new wind projects in Ireland. Our infrastructure group announced plans to acquire a natural gas storage facility in California and continues to move forward with an acquisition of a container terminal in New York and district energy businesses in Chicago, Seattle and Las Vegas.

Our private equity group made further add-on purchases in a number of areas and now owns a substantial face value of debt in the power generation and distribution subsidiary of a Texas company that is currently in bankruptcy, making us one of its largest creditors.

We increased cash flow and created value with growth initiatives and operational improvements in all of our major businesses.

FFO excluding gains was $422 million, compared to $406 million in the same quarter a year ago. Our asset management business generated fee revenues of $185 million ($702 million on a LTM basis) leading to a 24% increase in quarterly fee related earnings to $88 million. The continued increase is due to 16% growth in fee-bearing capital and a resultant 31% increase in the fees generated from our listed partnerships, private funds and public market business.

Our property group generated FFO of $137 million, excluding gains, up 10% from the same quarter last year, as a result of increased ownership of our office and U.S. retail portfolios, opportunistic investments, and increases in net rents compared with expiring leases. Our office property group announced new long-term leases in New York and London that significantly increased our occupancy rates and will contribute to cash flow increases by 2016. We signed new leases that were on average 5% above expiring rents in our office properties and 14% above expiring rents in our retail portfolio.

Our renewable energy assets generated FFO of $83 million, up 5% over last year, and benefitted from the contribution from recently acquired assets and increased energy prices and capacity sales on uncontracted generation. In Brazil, we locked in long-term power supply contracts with counterparties at attractive levels.

Our infrastructure group recorded $53 million of FFO, which was up on a comparable or "same store" basis but lower than the previous year, which included the results of an Australasian utility sold in the fourth quarter of 2013. Performance was in line with expectations, and benefited from increased ownership of our Brazilian toll road network as well as inflation indexation and a larger regulated asset base in our utilities group. We continue to invest in the expansion of our South American toll roads and UK port operations.

Our private equity group generated $123 million of FFO excluding gains. This was lower than the 2013 quarter, which included additional FFO from assets that were subsequently sold, in addition to a decrease in panelboard prices. Our construction business announced new mandates totalling $1.2 billion, including a contract to build a major stadium in Australia. In our North American residential operations, we recorded higher profits following an increase in the level of land development and sales activity over the last year.

Realized disposition gains generated $147 million of FFO, compared with $58 million in the same quarter a year ago, and included a $68 million gain on the sale of a Denver office property and a $30 million gain on the repayment in full of a distressed debt investment in a European office portfolio.

Dividend Declaration

The Board of Directors declared a quarterly dividend of US$0.16 per share (representing US$0.64 per annum), payable on September 30, 2014 to shareholders of record as at the close of business on August 31, 2014. The Board also declared all of the regular monthly and quarterly dividends on its preferred shares.

Information on our dividends can be found on our 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 funds from operations.

Funds from Operations (FFO) is defined as net income attributable to shareholders prior to fair value changes, depreciation and amortization, and deferred income taxes, and includes 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' funds from operations. FFO consists of the following two components:


--  FFO from Operating Activities represents the company's share of revenues
    less direct costs and interest expenses; excludes realized 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. We present this
    measure as we believe it assists in describing our results and variances
    within FFO.

--  Realized Disposition Gains are included in FFO as the purchase and sale
    of assets is 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.

Brookfield uses FFO 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.

FFO and its per share equivalent are non-IFRS measures which do not have any standard meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies.

The company provides additional information on the determination of funds from operations and a reconciliation between funds from operations and net income attributable to Brookfield shareholders, in the Supplemental Information available at www.brookfield.com.

Additional Information

The Letter to Shareholders and the company's Supplemental Information for the three months ended June 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.

The attached statements are based primarily on information that has been extracted from our financial statements for the three and six months ended June 30, 2014, 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 approximately $200 billion in assets under management. The company has over a 100-year history of owning and operating assets with a focus on property, renewable energy, infrastructure and private equity. Brookfield offers a range of public and private investment products and services, and is co-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

Forward-Looking Statements

Note: This news release contains "forward-looking information" within the meaning of Canadian provincial securities laws and "forward-looking statements" within the meaning of Section 27A of the 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)
                                               June 30           December 31
US$ millions                                      2014                  2013
----------------------------------------------------------------------------
Assets
Cash and cash equivalents        $               3,917 $               3,663
Other financial assets                           5,869                 4,947
Accounts receivable and other                    6,271                 6,666
Inventory                                        6,526                 6,291
Equity accounted investments                    14,017                13,277
Investment properties                           41,029                38,336
Property, plant and equipment                   32,378                31,019
Sustainable resources                              455                   502
Intangible assets                                4,909                 5,044
Goodwill                                         1,712                 1,588
Deferred income tax assets                       1,455                 1,412
----------------------------------------------------------------------------
Total Assets                     $             118,538 $             112,745
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liabilities and Equity
Accounts payable and other       $              10,922 $              10,316
Corporate borrowings                             4,577                 3,975
Non-recourse borrowings
  Property-specific mortgages                   37,440                35,495
  Subsidiary borrowings                          7,549                 7,392
Capital securities                                 624                   791
Interests of others in
 consolidated funds                              1,379                 1,086
Deferred income tax liabilities                  6,871                 6,164
Equity
  Preferred equity                               3,553                 3,098
  Non-controlling interests in
   net assets                                   27,037                26,647
  Common equity                                 18,586                17,781
----------------------------------------------------------------------------
Total Equity                                    49,176                47,526
----------------------------------------------------------------------------
Total Liabilities and Equity     $             118,538 $             112,745
----------------------------------------------------------------------------
----------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)
For the periods ended
 June 30
US$ millions (except per
 share amounts)             Three Months Ended         Six Months Ended
                        ----------------------------------------------------
                                2014         2013         2014         2013
----------------------------------------------------------------------------

Total revenues and other
 gains                   $     4,835  $     5,166  $     9,208  $    10,117
Direct costs                  (3,229)      (3,606)      (6,219)      (7,026)
----------------------------------------------------------------------------
                               1,606        1,560        2,989        3,091
Equity accounted income          345          224          619          490
----------------------------------------------------------------------------
                               1,951        1,784        3,608        3,581
Expenses
  Interest                      (639)        (668)      (1,265)      (1,323)
  Corporate costs                (33)         (36)         (66)         (80)
----------------------------------------------------------------------------
                               1,279        1,080        2,277        2,178
Fair value changes               996          465        1,711          526
Depreciation and
 amortization                   (371)        (373)        (747)        (738)
Income tax                      (346)        (370)        (840)        (467)
----------------------------------------------------------------------------
Net income               $     1,558  $       802  $     2,401  $     1,499
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net income attributable
 to:
  Brookfield
   shareholders          $       785  $       230  $     1,326  $       590
  Non-controlling
   interests                     773          572        1,075          909
----------------------------------------------------------------------------
                         $     1,558  $       802  $     2,401  $     1,499
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net income per share
  Diluted                $      1.19  $      0.31  $      1.98  $      0.82
  Basic                         1.21         0.31         2.03         0.84
----------------------------------------------------------------------------
----------------------------------------------------------------------------

SUMMARIZED FINANCIAL RESULTS(1)

The following financial results include non-IFRS measures. See Basis of Presentation on page 3.


                                     Funds from Operations(1,2)
                        ----------------------------------------------------
(Unaudited)
For the periods ended
 June 30
US$ millions (except per
 share amounts)             Three Months Ended         Six Months Ended
                        ----------------------------------------------------
                                 2014         2013         2014         2013
----------------------------------------------------------------------------
FFO from operating
 activities              $        422 $        406 $        809 $        770
Realized disposition
 gains(3)                         147           58          252          383
----------------------------------------------------------------------------
                         $        569 $        464 $      1,061 $      1,153
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Per share                $       0.84 $       0.68 $       1.56 $       1.72
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(Unaudited)
For the periods ended
 June 30
US$ millions (except per
 share amounts)             Three Months Ended         Six Months Ended
                        ----------------------------------------------------
                                2014         2013         2014         2013
----------------------------------------------------------------------------
FFO from operating
 activities              $       422  $       406  $       809  $       770
Realized disposition
 gains(3)                         60           15           95           76
Fair value changes               672          253        1,240          389
Depreciation and
 amortization                   (174)        (185)        (351)        (350)
Income tax                      (195)        (259)        (467)        (295)
----------------------------------------------------------------------------
Net income(2)            $       785  $       230  $     1,326  $       590
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Per share                $      1.19  $      0.31  $      1.98  $      0.82
----------------------------------------------------------------------------
----------------------------------------------------------------------------

RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS(1)


(Unaudited)
For the periods ended
 June 30
US$ millions                Three Months Ended         Six Months Ended
                        ----------------------------------------------------
                                2014         2013         2014         2013
----------------------------------------------------------------------------
Net income prior to fair
 value changes,
 depreciation and
 amortization and income
 tax (see page 6)        $     1,279  $     1,080  $     2,277  $     2,178
  Adjust for:
   Fair value changes
    within equity
    accounted income             (74)         (23)         (88)         (91)
   Current income taxes          (36)         (47)         (73)         (81)
   Realized disposition
    gains not included
    in net income                 87           43          157          307
----------------------------------------------------------------------------
                               1,256        1,053        2,273        2,313
  Non-controlling
   interest                     (687)        (589)      (1,212)      (1,160)
----------------------------------------------------------------------------
Funds from operations(1) $       569  $       464  $     1,061  $     1,153
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Notes:


1.  Includes non-IFRS measures - see Basis of Presentation on page 3
2.  Excludes amounts attributable to non-controlling interests
3.  FFO includes gains recorded in net income, directly in equity as well as
    the realization of appraisal gains recorded in prior years

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
In their Live Hack” presentation at 17th Cloud Expo, Stephen Coty and Paul Fletcher, Chief Security Evangelists at Alert Logic, provided the audience with a chance to see a live demonstration of the common tools cyber attackers use to attack cloud and traditional IT systems. This “Live Hack” used open source attack tools that are free and available for download by anybody. Attendees learned where to find and how to operate these tools for the purpose of testing their own IT infrastructure. The...
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
Information technology (IT) advances are transforming the way we innovate in business, thereby disrupting the old guard and their predictable status-quo. It’s creating global market turbulence. Industries are converging, and new opportunities and threats are emerging, like never before. So, how are savvy chief information officers (CIOs) leading this transition? Back in 2015, the IBM Institute for Business Value conducted a market study that included the findings from over 1,800 CIO interviews ...
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, will present an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He will expound on the industry issues he frequently came up against as an analyst, and...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Jared Parker, Director of Financial Services at Kinetica, will discuss how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich inf...
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...