Brookfield Asset Management Reports Strong First Quarter 2013 Financial Results

Brookfield Asset Management Reports Strong First Quarter 2013 Financial Results 
- 34% INCREASE IN FFO TO $689 MILLION OR $1.03 PER COMMON SHARE  
- NET INCOME OF $697 MILLION OR $0.51 PER COMMON SHARE 
TORONTO, ONTARIO -- (Marketwired) -- 05/09/13 -- Brookfield Asset
Management Inc. (TSX:BAM.A)(NYSE:BAM)(EURONEXT:BAMA)- 
Investors, analysts and other interested parties can access
Brookfield Asset Management's 2013 First 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 May 9, 2013 at
1:00 p.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 12:50 p.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 March 31, 2013.  
"Our operating performance was strong in the first quarter of 2013,
with virtually all of the operations contributing growth. Performance
was good across our operations, contributing to a significant
increase in our cash flow," commented Bruce Flatt, CEO of Brookfield.
"Our three flagship public entities are now operating and clients are
increasing their commitments to our portfolio of private funds."  
Performance Highlights 


 
--  Net income during the first three months of 2013 was $697 million,
    resulting in $0.51 per share attributable to Brookfield shareholders. 
    
--  Funds from operations ("FFO") for the first quarter of 2013 increased
    34% to $689 million. 
    
--  Annualized base management fees, including incentive distributions,
    increased 20% to $500 million, following the launch of a number of
    funds, and accumulated performance fees increased to $724 million. 
    
--  Fee bearing capital in our listed, private and public funds increased by
    $14 billion, increasing fee bearing capital under management to
    approximately $74 billion. 
    
--  Brookfield Property Partners was launched as our flagship global
    commercial property business, in tandem with our listed infrastructure
    and renewable power entities. 

 
Financial Results  


 
Three months ended March 31                                                 
US$ millions (except per share amounts)                         2013    2012
----------------------------------------------------------------------------
                                                                            
Funds from operations(1,2)                                    $  689  $  515
Net income(3)                                                    697     722
                                                                            
Per Brookfield share                                                        
  Funds from operations(1,2)                                  $ 1.03  $ 0.77
  Net income(1)                                                 0.51    0.60
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1.  Excludes amounts attributable to non-controlling interests 
2.  Non-IFRS measure. See Basis of Presentation on page 4 for details 
3.  Consolidated basis. Includes amounts attributable to non-controlling
    interests 

 
Our financial results reflect increases in a number of our operations
including significant contributions from housing related businesses
and an increased contribution from asset management and other service
activities. We also benefitted from improved pricing in our renewable
power operations, contributions from recent capital expansion
projects in our infrastructure operations and favorable rental growth
in our property portfolios. Net income reflects a lower level of fair
value gains in the quarter compared to the same period in 2012.  
FFO for Brookfield shareholders increased by $174 million to $689
million, with the increase due primarily to the positive operating
variances noted in the preceding paragraph. Disposition gains
included in FFO were relatively consistent, with $325 million
recorded in the current quarter compared to $299 million in the 2012
quarter. 
Operating Highlights  
We expanded our asset management franchise with both listed and
private entities.  
Our fee-bearing capital under management increased to approximately
$74 billion, up 24% from year end. We launched our third flagship
listed entity, Brookfield Property Partners, with one of the world's
premier commercial property portfolios. This new partnership has the
scale needed to undertake significant transactions, as do our
infrastructure and renewable power businesses, and we believe that
all three entities have excellent growth potential.  
Our private funds group continues to move forward with capital
campaigns for seven new funds that are targeting commitments of an
additional $5 billion in third party capital. We have a total of $23
billion committed to our private funds at the end of the quarter.  
We increased cash flow with operational improvements in all of our
major businesses.  
Our private equity business continues to achieve strong performance
from a number of operations linked to the North American housing
industry. We signed 1.3 million square feet of new leases in our
office property business at rates 16% higher than the previous rents,
and we see opportunities to attract new tenants on terms that are
significantly better than expiring leases. Our renewable power
operations experienced better pricing and also generated more
electricity as a result of acquisitions and developments. In our
infrastructure business, we achieved approximately a 10%
year-over-year increase in traffic on our South American toll roads,
due to rising consumer acceptance of the networks.  
We invested in growth opportunities in all our major operating
businesses, increasing the capital deployed by both our listed
entities and private funds.  
We announced or completed acquisitions and capital expansions during
the quarter, deploying $1.8 billion of capital on behalf of clients
and Brookfield shareholders. We expect these businesses will make a
significant contribution to our future cash flows and value
increases.  
In our property business, we moved forward with construction of new
office projects in New York and Toronto and announced the purchase of
a Los Angeles office property portfolio for $550 million subsequent
to quarter end. Our infrastructure group expects to begin moving
electricity through an $830 million new-build transmission system in
Texas this quarter. 
Our renewable power business invested $600 million in three
transactions: a portfolio of hydroelectric facilities in New England,
a California wind farm and the remaining 50% of a hydroelectric
project in British Columbia. We continue to advance new hydroelectric
and wind projects in North and South America. In our private equity
business, we continue to harvest capital from housing related
businesses and invest in businesses with exposure to the U.S. natural
gas market. 
We generated additional liquidity over the course of the quarter
through asset sales, equity issuance, fund formations and debt
financings.  
We sold $250 million of units in our renewable power business and a
portion of our equity position in one of our panelboard operations
generating approximately $100 million in proceeds.  
We continue to refinance debt at attractive long term rates. We
obtained $1.5 billion of debt within our retail property portfolios.
Our infrastructure group refinanced over $2 billion of short term
borrowings at our Australian railway and UK utility, generating $300
million of incremental proceeds. The renewable power platform
refinanced $1 billion of debt, including a $450 million bond issue
backed by one of our Canadian wind farms.  
Dividend Declaration  
The Board of Directors declared a quarterly dividend of US$0.15 per
share (representing US$0.60 per annum), payable on August 31, 2013,
to shareholders of record as at the close of business on August 1,
2013. 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, which is a
non-IFRS measure. 
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. Funds from
operations also includes the company's proportionate share of equity
accounted investments fund from operations. 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.  
Funds from operations 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 March 31, 2013 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 interim financial statements for the three
months ended March 31, 2013, 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 $175 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. 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. 
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. 
The tender offer for the issued and outstanding shares of the 7.625%
Series A Cumulative Redeemable Preferred Stock ("Preferred Stock") of
MPG Office Trust, Inc. ("MPG") by Brookfield DTLA Inc. ("Purchaser"),
a direct wholly-owned subsidiary of Brookfield Office Properties Inc.
("BPO"), to be made in connection with the transaction described in
this communication has not yet commenced, and this communication is
neither an offer to purchase nor a solicitation of an offer to sell
any shares of Preferred Stock. This communication is for
informational purposes only. At the time the tender offer is
commenced, Purchaser will file a tender offer statement with the
Securities and Exchange Commission ("SEC") on Schedule TO containing
an offer to purchase, form of letter of tr
ansmittal and related
materials, and thereafter MPG will file with the SEC a tender offer
solicitation/recommendation statement on Schedule 14D-9 with respect
to the tender offer. In addition, Brookfield DTLA Fund Office Trust
Investor Inc. ("Sub REIT"), a company that has been established in
connection with the transaction, may file a registration statement
with the SEC relating to preferred stock of Sub REIT that may be
issued to holders of Preferred Stock who do not tender into the
tender offer. Holders of Preferred Stock should read those materials
carefully because they will contain important information, including
the various terms and conditions of the tender offer. These materials
will be sent free of charge to all holders of Preferred Stock. In
addition, all of those materials (and all other materials filed or
furnished by MPG, BPO, Purchaser or Sub REIT with the SEC) will be
available at no charge from the SEC through its website at
www.sec.gov. 
CONSOLIDATED BALANCE SHEETS 


 
                                                    (Unaudited)             
                                                       March 31  December 31
US$ millions                                               2013         2012
----------------------------------------------------------------------------
Assets                                                                      
Cash and cash equivalents                           $     2,926  $     2,850
Other financial assets                                    3,280        3,111
Accounts receivable and other                             6,993        6,952
Inventory                                                 6,839        6,581
Investments                                              11,642       11,618
Investment properties                                    33,478       33,161
Property, plant and equipment                            32,075       31,148
Sustainable resources                                     3,464        3,516
Intangible assets                                         5,689        5,770
Goodwill                                                  2,478        2,490
Deferred income tax asset                                 1,686        1,665
----------------------------------------------------------------------------
Total Assets                                        $   110,550  $   108,862
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities and Equity                                                      
Accounts payable and other                          $    10,692  $    11,652
Corporate borrowings                                      3,691        3,526
Non-recourse borrowings                                                     
  Property-specific mortgages                            35,049       33,720
  Subsidiary borrowings                                   8,146        7,585
                                                                            
Deferred income tax liabilities                           6,570        6,425
                                                                            
Capital securities                                          967        1,191
Interests of others in consolidated funds                   453          425
Equity                                                                      
  Preferred equity                                        2,901        2,901
  Non-controlling interests in net assets                24,764       23,287
  Common equity                                          17,317       18,150
----------------------------------------------------------------------------
  Total Equity                                           44,982       44,338
----------------------------------------------------------------------------
Total Liabilities and Equity                        $   110,550  $   108,862
----------------------------------------------------------------------------
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CONSOLIDATED STATEMENTS OF OPERATIONS 


 
(Unaudited)                                                                 
For the three months ended March 31                                         
US$ millions (except per share amounts)                   2013         2012 
----------------------------------------------------------------------------
Revenues                                            $    4,951   $    4,039 
Direct costs                                            (3,420)      (2,864)
----------------------------------------------------------------------------
                                                         1,531        1,175 
Equity accounted income                                    266          388 
----------------------------------------------------------------------------
                                                         1,797        1,563 
Expenses                                                                    
  Interest                                                (655)        (655)
  Corporate costs                                          (44)         (42)
----------------------------------------------------------------------------
Net income prior to valuation items and income tax       1,098          866 
Valuation items                                                             
  Fair value changes                                        61          343 
  Depreciation and amortization                           (365)        (297)
                                                                            
Income tax                                                 (97)        (190)
----------------------------------------------------------------------------
Net income                                          $      697   $      722 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income attributable to:                                                 
  Brookfield shareholders                           $      360   $      416 
  Non-controlling interests                                337          306 
----------------------------------------------------------------------------
                                                    $      697   $      722 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income per share                                                        
  Diluted                                           $     0.51   $     0.60 
  Basic                                             $     0.52   $     0.63 
----------------------------------------------------------------------------
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RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS(1) 


 
(Unaudited)                                                                 
For the three months ended March 31                                         
US$ millions                                              2013         2012 
----------------------------------------------------------------------------
Net income prior to valuation items and income tax                          
 (see above)                                        $    1,098   $      866 
  Adjust for:                                                               
    Fair value changes within equity accounted                              
     income                                                (68)        (251)
    Current income taxes                                   (34)         (27)
    Disposition gains not included in net income           350          291 
----------------------------------------------------------------------------
                                                         1,346          879 
  Non-controlling interest                                (657)        (364)
----------------------------------------------------------------------------
Funds from operations(1)                            $      689   $      515 
----------------------------------------------------------------------------
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Notes: 


 
1.  Non-IFRS measure, see Basis of Presentation on page 4 

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
 
 
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