SYS-CON MEDIA Authors: Xenia von Wedel, Peter Silva, Glenn Rossman, Ava Smith, Elizabeth White

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
High-performing enterprise Software Quality Assurance (SQA) teams validate systems that are ready for use - getting most actively involved as components integrate and form complete systems. These teams catch and report on defects, making sure the customer gets the best software possible. SQA teams have leveraged automation and virtualization to execute more thorough testing in less time - bringing Dev and Ops together, ensuring production readiness. Does the emergence of DevOps mean the end of E...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
"Verizon offers public cloud, virtual private cloud as well as private cloud on-premises - many different alternatives. Verizon's deep knowledge in applications and the fact that we are responsible for applications that make call outs to other systems. Those systems and those resources may not be in Verizon Cloud, we understand at the end of the day it's going to be federated," explained Anne Plese, Senior Consultant, Cloud Product Marketing at Verizon Enterprise, in this SYS-CON.tv interview at...
"For the past 4 years we have been working mainly to export. For the last 3 or 4 years the main market was Russia. In the past year we have been working to expand our footprint in Europe and the United States," explained Andris Gailitis, CEO of DEAC, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. Acco...
"Cloud consumption is something we envision at Solgenia. That is trying to let the cloud spread to the user as a consumption, as utility computing. We want to allow the people to just pay for what they use, not a subscription model," explained Ermanno Bonifazi, CEO & Founder of Solgenia, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps,...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...