All dollar references are in U.S.
dollars, unless noted otherwise.
Brookfield Property Partners L.P. (NASDAQ: BPY; NASDAQ: BPR; TSX:
BPY.UN) (“BPY”) today announced financial results for the quarter
ended September 30, 2018.
“The successful acquisition of GGP Inc. marks
the culmination of a five-year effort to consolidate all of our
real estate investments, giving us direct ownership of our assets
and cash flows, and increasing the flexibility of our balance
sheet,” said Brian Kingston, chief executive officer.
Financial Results
|
Three months endedSept. 30, |
|
Nine months ended Sept. 30, |
(US$ Millions, except per unit amounts) |
2018 |
2017 |
|
2018 |
|
2017 |
Net income(1) |
$ |
722 |
$ |
659 |
$ |
2,796 |
$ |
1,510 |
Company FFO(2) |
$ |
249 |
$ |
236 |
$ |
763 |
$ |
731 |
Realized gains on LP Investments(3) |
$ |
67 |
$ |
58 |
$ |
73 |
$ |
55 |
|
|
|
|
|
|
|
|
|
Net income per LP unit(4) |
$ |
0.44 |
$ |
0.22 |
$ |
1.79 |
$ |
0.31 |
Company FFO per unit(5) |
$ |
0.31 |
$ |
0.34 |
$ |
1.04 |
$ |
1.04 |
Company FFO and realized gains per
unit(5) |
$ |
0.39 |
$ |
0.42 |
$ |
1.13 |
$ |
1.11 |
(1) Consolidated basis – includes amounts
attributable to non-controlling interests.(2) See "Basis of
Presentation" and “Reconciliation of Non-IFRS Measures” in this
press release for the definition and components.(3) “LP
Investments” refer to BPY’s investments in Brookfield-sponsored
private real estate funds. (4) Represents basic net income
attributable to holders of LP units. IFRS requires the inclusion of
preferred shares that are mandatorily convertible into LP units at
a price of $25.70 without an add-back to earnings of the associated
carry on the preferred shares.(5) Company FFO per unit and realized
gains per unit are calculated based on 803.5 million (2017 – 704.0
million) and 737.1 million (2017 – 705.1 million) units outstanding
for the three and nine months ended September 30, 2018,
respectively. See reconciliation of basic net income in the
"Reconciliation of Non-IFRS Measures" section in this press
release.
Net income for the quarter ended September 30,
2018 was $722 million versus $659 million for the same period in
2017, reflective of higher fair value gains recognized this year in
our Core Office segment.
Company FFO was $249 million ($0.31 per unit)
for the quarter ended September 30, 2018, compared with $236
million ($0.34 per unit) for the same period in 2017. Growth was
driven by the acquisition of GGP Inc. and improved same-property
performance in our Core Office operations, offset by income
recognized on the sale of residential condominiums in the prior
year and the negative impact of foreign exchange. The current
quarter Company FFO per unit reflects the issuance of an additional
272 million units in the acquisition of GGP. Realized gains on our
LP investments was $67 million, primarily derived from the sale of
a portfolio of self-storage assets in the U.S. during the
quarter. In the prior period, we earned $58 million of
realized gains on the sales of several office and multifamily
assets in North America.
Operating Highlights
Our Core Office operations generated Company FFO
of $136 million for the quarter ended September 30, 2018 compared
to $126 million in the same period in 2017. This business generated
3% same-property growth, largely driven by leasing activity in
Downtown New York and Washington, D.C.
Occupancy in our Core Office portfolio finished
the quarter at 92.9% on 2.2 million square feet of total leasing,
compared with 92.7% in the prior quarter and 91.8% in the
prior-year period. New leases were signed at average rents
approximately 11% higher than leases that expired during the
quarter.
Through a pre-let agreement with Scotiabank, we
launched the third and final phase of the Bay Adelaide Centre
complex in Toronto. Scotiabank has signed a commitment to
lease 420,000 square feet – approximately 51% of the building – for
15 years as the anchor tenant of Bay Adelaide Centre North.
Our Core Retail operations generated Company FFO
of $146 million for the quarter ended September 30, 2018, compared
to $128 million in the prior year period. This increase was
largely attributable to the acquisition of the balance of GGP in
late August, 2018.
Same-property Core Retail occupancy finished the
third quarter of 2018 at 94.6%, compared to 94.2% in the prior
quarter and 95.4% in the prior-year period. On a trailing 12-month
basis, suite-to-suite leasing spreads were up 11.6% and
NOI-weighted tenant sales per square foot were $744, an increase of
5% over the prior year.
Our LP Investments generated Company FFO of $74
million for the quarter ended September 30, 2018, compared to $88
million in the third quarter of the prior year. The decrease
is primarily attributable to the sale of our European logistics
portfolio and of a hospitality asset, offset in part by acquisition
activity.
Three months ended Sept. 30, |
Nine months ended Sept. 30, |
(US$
Millions) |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Company FFO by
segment |
|
|
|
Core Office |
$ |
136 |
|
$ |
126 |
|
$ |
438 |
|
$ |
384 |
|
Core
Office gain |
|
- |
|
|
- |
|
|
- |
|
|
60 |
|
Core
Retail |
|
146 |
|
|
128 |
|
|
381 |
|
|
357 |
|
LP
Investments |
|
74 |
|
|
88 |
|
|
253 |
|
|
246 |
|
Corporate |
|
(107 |
) |
|
(106 |
) |
|
(309 |
) |
|
(316 |
) |
Company FFO(1) |
$ |
249 |
|
$ |
236 |
|
$ |
763 |
|
$ |
731 |
|
(1) See "Basis of Presentation" and
"Reconciliation of Non-IFRS Measures" below in this press release
for the definitions and components.
Strategic Initiatives
Dispositions
During the third quarter, we advanced several of
our capital recycling initiatives:
- Reported last quarter, seeded into a new Brookfield Asset
Management-sponsored New York City real estate venture, a 27.4%
interest in our New York core office portfolio, for net proceeds of
$1.4 billion to BPY.
- Sold a portfolio of 112 self-storage assets for net proceeds of
$128 million generated for BPY.
- Sold the commercial office component at 685 Fifth Avenue for
$135 million.
- Sold seven triple net lease assets for $22 million ($6 million
at BPY’s share).
- Sold 60 acres of land earmarked for industrial development in
the U.S. for $11 million ($3 million at BPY’s share).
Subsequent to quarter-end:
- Sold Queen’s Quay Terminal in Toronto for C$261 million,
generating net proceeds of C$182 million.
- Sold a 49.9% interest in office buildings at 50 & 60
Carrington Street in Sydney for A$237 million (A$75 million at
BPY’s share).
- Sold our 25% interest in Jean Edmonds Towers in Ottawa for C$47
million, generating net proceeds of C$27 million.
- Sold the Highland Dallas hotel for $68 million, generating net
proceeds of $11 million.
New Investments
The proceeds raised from asset sales were used
to invest in our active development pipeline and to fund new
acquisitions, including:
- Closed on the acquisition of GGP Inc. for approximately $15
billion.
- Reached an agreement to acquire Forest City Realty Trust, Inc.
for $25.35 per share in an all-cash transaction valued at
approximately $11.4 billion (approximately $2.9 billion at BPY’s
share).
- Acquired a mixed-use development site at Mott Haven in Bronx,
NY for $165 million.
- Acquired a 90% interest in a multifamily property powered by
Niido – an Airbnb-friendly apartment concept – in Nashville for $90
million.
- Acquired two class A logistics parks totaling 192,000 square
feet in Sao Paulo, Brazil for $108 million ($29 million at BPY’s
share).
Balance Sheet Update
During the quarter, we executed on the following
transactions to increase our balance sheet flexibility, increase
liquidity and extend the maturity of our debt:
- Issued C$300 million of medium-term unsecured notes at an
interest rate of 4.346% maturing on July 3, 2023.
- Retired a corporate unsecured revolving credit facility
following repayment of the remaining drawn amount of $653
million.
- Financed Bay Adelaide North, with a C$350 million construction
facility for a four-year term with a one-year extension option, at
a rate of Banker’s Acceptance + 1.40%.
- Subsequent to quarter-end, issued C$500 million of medium-term
unsecured notes at a weighted average interest rate of 4.166% and
an average term to maturity of 3.3 years, with proceeds being used
to retire other corporate debt.
Distribution Declaration
The Board of Directors has declared the
quarterly distribution of $0.315 per unit payable on December 31,
2018 to unitholders of record at the close of business on November
30, 2018.
The quarterly distributions are declared in U.S.
dollars. Registered unitholders residing in the United States shall
receive quarterly cash distributions in U.S. dollars and registered
unitholders not residing in the United States shall receive
quarterly cash distributions in the Canadian dollar equivalent,
based on the Bank of Canada exchange rate on the record date.
Registered unitholders residing in the United States have the
option, through Brookfield Property Partners’ transfer agent, AST
Trust Company (Canada) ("AST"), to elect to receive quarterly cash
distributions in the Canadian dollar equivalent and registered
unitholders not residing in the United States have the option
through AST to elect to receive quarterly cash distributions in
U.S. dollars. Beneficial unitholders (i.e., those holding their
units in street name with their brokerage) should contact the
broker with whom their units are held to discuss their options
regarding distribution currency.
Additional Information
Further details regarding the operations of the Partnership are
set forth in regulatory filings. A copy of the filings may be
obtained through the website of the SEC at www.sec.gov and on the
Partnership’s SEDAR profile at www.sedar.com.
The Partnership’s quarterly letter to
unitholders and supplemental information package can be accessed
before the market open on November 1, 2018 at
bpy.brookfield.com. This additional information should be
read in conjunction with this press release.
Basis of Presentation
This press release and accompanying financial
information make reference to net operating income (“NOI”),
same-property NOI, funds from operations (“FFO”), Company FFO
(“Company FFO”) and net income attributable to unitholders.
Company FFO and net income attributable to
unitholders are also presented on a per unit basis. NOI,
same-property NOI, FFO, Company FFO and net income attributable to
unitholders do not have any standardized meaning prescribed by
International Financial Reporting Standards (“IFRS”) and therefore
may not be comparable to similar measures presented by other
companies. The Partnership uses NOI, same-property NOI, FFO,
Company FFO and net income attributable to unitholders to assess
its operating results. These measures should not be used as
alternatives to Net Income and other operating measures determined
in accordance with IFRS, but rather to provide supplemental
insights into performance. Further, these measures do not
represent liquidity measures or cash flow from operations and are
not intended to be representative of the funds available for
distribution to unitholders either in aggregate or on a per unit
basis, where presented.
NOI is defined as revenues from commercial and
hospitality operations of consolidated properties less direct
commercial property and hospitality expenses. As NOI includes the
revenues and expenses directly associated with owning and operating
commercial property and hospitality assets, it provides a measure
to evaluate the performance of the property operations.
Same-property NOI is a subset of NOI, which
excludes NOI that is earned from assets acquired, disposed of or
developed during the periods presented, or not of a recurring
nature, and from opportunistic assets. Same-property NOI allows the
Partnership to segregate the performance of leasing and operating
initiatives on the portfolio from the impact to performance from
investing activities and “one-time items,” which for the historical
periods presented consist primarily of lease termination
income.
FFO is defined as income, including equity
accounted income, before realized gains (losses) from the sale of
investment property (except gains (losses) related to properties
developed for sale), fair value gains (losses) (including equity
accounted fair value gains (losses)), depreciation and amortization
of real estate assets, income tax expense (benefit), and less
non-controlling interests of others in operating subsidiaries and
properties. FFO is a widely recognized measure that is frequently
used by securities analysts, investors and other interested parties
in the evaluation of real estate entities, particularly those that
own and operate income producing properties. The Partnership’s
definition of FFO includes all of the adjustments that are outlined
in the National Association of Real Estate Investment Trusts
(“NAREIT”) definition of FFO. In addition to the adjustments
prescribed by NAREIT, the Partnership also makes adjustments to
exclude any unrealized fair value gains (or losses) that arise as a
result of reporting under IFRS, and income taxes that arise as
certain of its subsidiaries are structured as corporations as
opposed to real estate investment trusts (“REITs”). These
additional adjustments result in an FFO measure that is similar to
that which would result if the Partnership was organized as a REIT
that determined net income in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”), which is
the type of organization on which the NAREIT definition is
premised. The Partnership’s FFO measure will differ from other
organizations applying the NAREIT definition to the extent of
certain differences between the IFRS and U.S. GAAP reporting
frameworks, principally related to the recognition of lease
termination income. FFO provides a performance measure that, when
compared year-over-year, reflects the impact on operations from
trends in occupancy rates, rental rates, operating costs and
interest costs.
Company FFO is defined as FFO before the impact
of depreciation and amortization of non-real estate assets,
transaction costs, gains (losses) associated with non-investment
properties, imputed interest and the FFO that would have been
attributable to unitholders’ shares of GGP, if all outstanding
warrants of GGP were exercised. Prior to the third quarter of 2017,
the adjustment assumed net settlement of the outstanding warrants.
For the third quarter 2017, the adjustment is based on the cash
settlement for all applicable warrants to reflect the Partnership’s
stated plans for settling the warrants on such a basis. The
warrants were exercised in the fourth quarter of 2017. Company FFO,
similar to FFO discussed above, provides a performance measure that
reflects the impact on operations of trends in occupancy rates,
rental rates, operating costs and interest costs. In addition, the
adjustments to Company FFO relative to FFO allow the Partnership
insight into these trends for the real estate operations, by
adjusting for non-real estate components.
Net income attributable to unitholders is
defined as net income attributable to holders of general
partnership units and limited partnership units of the Partnership,
redeemable/exchangeable and special limited partnership units of
Brookfield Property L.P. and limited partnership units of
Brookfield Office Properties Exchange LP. Net income attributable
to unitholders is used by the Partnership to evaluate the
performance of the Partnership as a whole as each of the
unitholders participates in the economics of the Partnership
equally. In calculating net income attributable to unitholders per
unit, the Partnership excludes the impact of mandatorily
convertible preferred units in determining the average number of
units outstanding as the holders of mandatorily convertible
preferred units do not participate in current earnings. The
Partnership reconciles this measure to basic net income
attributable to unitholders per unit determined in accordance with
IFRS which includes the effect of mandatorily convertible preferred
units in the basic average number of units outstanding.
About Brookfield Property
Partners
Brookfield Property Partners, through Brookfield
Property Partners L.P. and its subsidiary Brookfield Property REIT
Inc., is one of the world’s premier commercial real estate
companies, with approximately $86 billion in total assets. We are
leading owners, operators and investors in commercial real estate,
with a diversified portfolio of premier office and retail assets,
as well as interests in multifamily, triple net lease, industrial,
hospitality, self-storage, student housing and manufactured housing
assets. Brookfield Property Partners L.P. is listed on the Nasdaq
stock market and the Toronto stock exchange. Brookfield Property
REIT is listed on the Nasdaq stock market. Further information is
available at bpy.brookfield.com.
Brookfield Property Partners is the flagship
listed real estate company of Brookfield Asset Management, a
leading global alternative asset manager with over $300 billion in
assets under management.
Please note that BPY’s previous audited annual
and unaudited quarterly reports have been filed on EDGAR and SEDAR
and can also be found at bpy.brookfield.com. Hard copies of the
annual and quarterly reports can be obtained free of charge upon
request.
Certain of our investor relations content is
also available on our investor relations app. To download
Brookfield Property Partners' investor relations app, which offers
access to SEC filings, press releases, presentations and more,
please click here to download on your iPhone or iPad. To download
the app on your Android mobile device, please click here.
Brookfield Contact:
Matthew CherrySenior Vice President, Investor
Relations and CommunicationsTel: (212) 417-7488 / Email:
matthew.cherry@brookfield.com
Conference Call and Quarterly Earnings
Details
Investors, analysts and other interested parties
can access BPY’s third quarter 2018 results as well as the letter
to unitholders and supplemental information on BPY’s website at
bpy.brookfield.com.
The conference call can be accessed via webcast
on November 1, 2018 at 11:00 a.m. Eastern Time at
bpy.brookfield.com or via teleconference by dialing +1 (844)
358-9182 toll-free in the U.S. and Canada or for overseas calls,
dial +1 (478) 219-0399, conference ID: 1992595, at approximately
10:50 a.m. A recording of the teleconference can be accessed by
dialing +1 (855) 859-2056 toll-free in the U.S. or Canada or for
overseas calls, dial +1 (404) 537-3406, conference ID: 1992595.
Forward-Looking Statements
This communication contains “forward-looking
information” within the meaning of applicable securities laws and
regulations. Forward-looking statements include statements that are
predictive in nature or depend upon or refer to future events or
conditions, include statements regarding our operations, business,
financial condition, expected financial results, performance,
prospects, opportunities, priorities, targets, goals, ongoing
objectives, strategies and outlook, 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,” “likely,” 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 our actual results, performance or achievements 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: risks
incidental to the ownership and operation of real estate properties
including local real estate conditions; the impact or unanticipated
impact of general economic, political and market factors in the
countries in which we do business; the ability to enter into new
leases or renew leases on favorable terms; business competition;
dependence on tenants’ financial condition; the use of debt to
finance our business; the behavior of financial markets, including
fluctuations in interest and foreign exchange rates; uncertainties
of real estate development or redevelopment; global equity and
capital markets and the availability of equity and debt financing
and refinancing within these markets; risks relating to our
insurance coverage; the possible impact of international conflicts
and other developments including terrorist acts; potential
environmental liabilities; changes in tax laws and other tax
related risks; dependence on management personnel; illiquidity of
investments; the ability to complete and effectively integrate
acquisitions into existing operations and the ability to attain
expected benefits therefrom; operational and reputational risks;
catastrophic events, such as earthquakes and hurricanes; 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 or information, investors
and others should carefully consider the foregoing factors and
other uncertainties and potential events. Except as required by
law, we undertake 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 |
|
|
|
|
|
|
Sep. 30, |
Dec. 31, |
(US$
Millions) |
|
2018 |
|
2017 |
Assets |
|
|
Investment properties |
$ |
73,957 |
$ |
51,357 |
Equity accounted investments in properties |
|
21,940 |
|
19,761 |
Property, plant and equipment |
|
6,863 |
|
5,457 |
Participating loan notes |
|
266 |
|
517 |
Financial assets |
|
216 |
|
176 |
Accounts receivable and other |
|
5,506 |
|
4,155 |
Cash and cash equivalents |
|
2,444 |
|
1,491 |
Assets held for sale |
|
391 |
|
1,433 |
Total Assets |
$ |
111,583 |
$ |
84,347 |
Liabilities and Equity |
|
|
Corporate debt obligations |
$ |
1,991 |
$ |
1,359 |
Funds subscription facilities |
|
2,116 |
|
432 |
Asset-level debt obligations |
|
44,481 |
|
33,401 |
Subsidiary borrowings |
|
5,793 |
|
1,692 |
Capital securities |
|
3,724 |
|
4,165 |
Deferred tax liability |
|
2,659 |
|
2,888 |
Accounts payable and other liabilities |
|
4,913 |
|
3,970 |
Liabilities associated with assets held for sale |
|
148 |
|
1,316 |
Total liabilities |
|
65,825 |
|
49,223 |
Equity |
|
|
Limited
partners |
|
11,213 |
|
7,395 |
General
partner |
|
4 |
|
6 |
Non-controlling interests attributable to: |
|
|
Limited partner units of the operating partnership held by
Brookfield Asset Management Inc. |
|
12,684 |
|
14,500 |
Limited partner units of Brookfield Office Properties Exchange
LP |
|
96 |
|
285 |
Class A shares of Brookfield Property REIT Inc. |
|
4,277 |
|
- |
Interests of others in operating subsidiaries and
properties |
|
17,484 |
|
12,938 |
Total Equity |
|
45,758 |
|
35,124 |
Total Liabilities and Equity |
$ |
111,583 |
$ |
84,347 |
|
|
|
|
CONSOLIDATED STATEMENT OF
OPERATIONS |
|
|
|
|
|
|
Three Months Ended Sep. 30, |
Nine Months Ended Sep. 30, |
(US$ Millions) |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Commercial property and hospitality revenue |
$ |
1,753 |
|
$ |
1,476 |
|
$ |
4,938 |
|
$ |
4,325 |
|
Direct commercial property and hospitality expense |
|
(793 |
) |
|
(668 |
) |
|
(2,250 |
) |
|
(1,989 |
) |
|
|
|
960 |
|
|
808 |
|
|
2,688 |
|
|
2,336 |
|
Investment and other revenue |
|
75 |
|
|
34 |
|
|
161 |
|
|
232 |
|
Share of net earnings from equity accounted investments |
|
65 |
|
|
371 |
|
|
581 |
|
|
897 |
|
|
|
|
1,100 |
|
|
1,213 |
|
|
3,430 |
|
|
3,465 |
|
Expenses |
|
|
|
|
Interest expense |
|
(632 |
) |
|
(493 |
) |
|
(1,689 |
) |
|
(1,475 |
) |
Depreciation and amortization |
|
(81 |
) |
|
(69 |
) |
|
(229 |
) |
|
(201 |
) |
General and administrative expense |
|
(241 |
) |
|
(147 |
) |
|
(593 |
) |
|
(454 |
) |
Investment and other expense |
|
(17 |
) |
|
(1 |
) |
|
(17 |
) |
|
(123 |
) |
|
|
|
129 |
|
|
503 |
|
|
902 |
|
|
1,212 |
|
Fair value (losses) gains, net |
|
556 |
|
|
339 |
|
|
1,943 |
|
|
717 |
|
Income tax (expense) |
|
37 |
|
|
(183 |
) |
|
(49 |
) |
|
(419 |
) |
Net income |
$ |
722 |
|
$ |
659 |
|
$ |
2,796 |
|
$ |
1,510 |
|
|
|
|
|
|
|
Net income attributable to: |
|
|
|
|
Limited partners |
$ |
144 |
|
$ |
61 |
|
$ |
532 |
|
$ |
88 |
|
General partner |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Non-controlling interests: |
|
|
|
|
Limited partner units of the operating partnership held by
Brookfield Asset Management Inc. |
|
206 |
|
|
104 |
|
|
857 |
|
|
149 |
|
Limited partner units of Brookfield Office Properties Exchange
LP |
|
2 |
|
|
3 |
|
|
16 |
|
|
4 |
|
Class A shares of Brookfield Property REIT |
|
28 |
|
|
- |
|
|
39 |
|
|
- |
|
Interests of others in operating subsidiaries and
properties |
|
342 |
|
|
491 |
|
|
1,352 |
|
|
1,269 |
|
|
|
$ |
722 |
|
$ |
659 |
|
$ |
2,796 |
|
$ |
1,510 |
|
|
|
|
|
|
|
RECONCILIATION OF NON-IFRS
MEASURES |
|
|
|
|
|
|
|
Three Months Ended Sep. 30, |
Nine Months Ended Sep. 30, |
(US$
Millions) |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Commercial property and hospitality revenue |
$ |
1,753 |
|
$ |
1,476 |
|
$ |
4,938 |
|
$ |
4,325 |
|
Direct commercial property and hospitality expense |
|
(793 |
) |
|
(668 |
) |
|
(2,250 |
) |
|
(1,989 |
) |
NOI |
|
960 |
|
|
808 |
|
|
2,688 |
|
|
2,336 |
|
Investment and other revenue |
|
75 |
|
|
34 |
|
|
161 |
|
|
232 |
|
Share of equity accounted income excluding fair value
gains |
|
117 |
|
|
189 |
|
|
548 |
|
|
649 |
|
Interest expense |
|
(632 |
) |
|
(493 |
) |
|
(1,689 |
) |
|
(1,475 |
) |
General and administrative expense |
|
(241 |
) |
|
(147 |
) |
|
(593 |
) |
|
(454 |
) |
Investment and other expense |
|
(17 |
) |
|
(1 |
) |
|
(17 |
) |
|
(123 |
) |
Depreciation and amortization of non-real estate assets |
|
(11 |
) |
|
(7 |
) |
|
(28 |
) |
|
(24 |
) |
Non-controlling interests of others in operating
subsidiaries and properties in FFO |
|
(128 |
) |
|
(186 |
) |
|
(509 |
) |
|
(515 |
) |
FFO |
|
123 |
|
|
197 |
|
|
561 |
|
|
626 |
|
Depreciation and amortization of non-real estate assets,
net(1) |
|
9 |
|
|
7 |
|
|
24 |
|
|
20 |
|
Transaction costs(1) |
|
103 |
|
|
10 |
|
|
136 |
|
|
26 |
|
Gains/losses on disposition of non-investment
properties(1) |
|
1 |
|
|
(1 |
) |
|
4 |
|
|
(1 |
) |
Imputed Interest(2) |
|
13 |
|
|
8 |
|
|
38 |
|
|
22 |
|
FFO from GGP Warrants(3) |
|
- |
|
|
15 |
|
|
- |
|
|
38 |
|
Non-controlling interests - Company FFO |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Company FFO |
$ |
249 |
|
$ |
236 |
|
$ |
763 |
|
$ |
731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
123 |
|
|
197 |
|
|
561 |
|
|
626 |
|
Depreciation and amortization of real estate assets |
|
(70 |
) |
|
(62 |
) |
|
(201 |
) |
|
(177 |
) |
Fair value (losses) gains, net |
|
556 |
|
|
339 |
|
|
1,943 |
|
|
717 |
|
Share of equity accounted income - Non FFO |
|
(52 |
) |
|
182 |
|
|
33 |
|
|
248 |
|
Income tax
(expense) benefit |
|
37 |
|
|
(183 |
) |
|
(49 |
) |
|
(419 |
) |
Non-controlling interests of others in operating subsidiaries
and properties in non-FFO |
|
(214 |
) |
|
(305 |
) |
|
(843 |
) |
|
(754 |
) |
Non-controlling interests of others in operating
subsidiaries and properties |
|
342 |
|
|
491 |
|
|
1,352 |
|
|
1,269 |
|
Net income |
$ |
722 |
|
$ |
659 |
|
$ |
2,796 |
|
$ |
1,510 |
|
(1) Presented net
of non-controlling interests on a proportionate basis. |
|
(2) Represents imputed interest on commercial developments
accounted for under the equity method under IFRS |
(3) Represents incremental FFO that would have been
attributable to the partnership's shares of GGP, if all outstanding
warrants of GGP had been exercised including the dilution to FFO as
a result of the issuance of additional common shares by GGP to give
effect to the warrant exercise. Prior to the third quarter of 2017,
the adjustment assumed net settlement of the outstanding warrants.
For the third quarter 2017, the adjustment is based on the cash
settlement for all applicable warrants to reflect the partnership’s
settlement of the warrants on such a basis. The warrants were
exercised in the fourth quarter of 2017. |
|
|
|
|
|
|
NET INCOME PER UNIT |
|
|
Three months ended |
|
|
Sep. 30, 2018 |
|
Sep.30, 2017 |
(US$ Millions, except per unit amounts) |
Net income attributable to
Unitholders |
Average number of
units |
Per unit |
|
Net income attributable to Unitholders |
Average number of units |
Per unit |
Basic |
$ |
380 |
803.5 |
$ |
0.47 |
|
$ |
168 |
704.0 |
$ |
0.24 |
Number of units on conversion of preferred
shares(1) |
|
- |
70.0 |
|
- |
|
|
- |
70.0 |
|
- |
Basic per IFRS |
|
380 |
873.5 |
|
0.44 |
|
|
168 |
774.0 |
|
0.22 |
Dilutive effect of conversion of capital securities and
options(2) |
|
7 |
19.9 |
|
0.35 |
|
|
- |
0.4 |
|
- |
Fully-diluted per IFRS |
$ |
387 |
893.4 |
$ |
0.43 |
|
$ |
168 |
774.4 |
$ |
0.22 |
(1) IFRS requires the inclusion of preferred shares that are
mandatorily convertible into units at a price of $25.70 without an
add back to earnings of the associated carry on the preferred
shares. |
(2) For the three months ended September 30, 2017, the
conversion of capital securities was anti-dilutive and therefore
excluded from the calculation of fully-diluted net income per
IFRS. |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Sep. 30, 2018 |
|
Sep.30, 2017 |
(US$ Millions, except per unit amounts) |
Net income attributable to
Unitholders |
Average number of
units |
Per unit |
|
Net income attributable to Unitholders |
Average number of units |
Per unit |
Basic per
management |
$ |
380 |
803.5 |
$ |
0.47 |
|
$ |
168 |
704.0 |
$ |
0.24 |
Dilutive effect of conversion of preferred shares(1) |
|
29 |
70.0 |
|
0.41 |
|
|
29 |
70.0 |
|
0.41 |
Dilutive effect of conversion of capital securities and
options |
|
7 |
19.9 |
|
0.35 |
|
|
5 |
17.6 |
|
0.28 |
Fully-diluted per management |
$ |
416 |
893.4 |
$ |
0.47 |
|
$ |
202 |
791.6 |
$ |
0.26 |
(1) Represents preferred shares that are mandatorily
convertible into units at a price of $25.70 and the associated
carry. |
|
NET INCOME PER UNIT |
|
|
Nine months ended |
|
|
Sep. 30, 2018 |
|
Sep.30, 2017 |
(US$ Millions, except per unit amounts) |
Net income attributable to
Unitholders |
Average number of
units |
Per unit |
|
Net income attributable to Unitholders |
Average number of units |
Per unit |
Basic |
$ |
1,444 |
737.1 |
$ |
1.96 |
|
$ |
241 |
705.1 |
$ |
0.34 |
Number of units on conversion of preferred
shares(1) |
|
- |
70.0 |
|
- |
|
|
- |
70.0 |
|
- |
Basic per IFRS |
|
1,444 |
807.1 |
|
1.79 |
|
|
241 |
775.1 |
|
0.31 |
Dilutive effect of conversion of capital securities and
options(2) |
|
20 |
18.4 |
|
1.09 |
|
|
- |
0.8 |
|
- |
Fully-diluted per IFRS |
$ |
1,464 |
825.5 |
$ |
1.77 |
|
$ |
241 |
775.9 |
$ |
0.31 |
(1) IFRS requires the inclusion of preferred shares that are
mandatorily convertible into units at a price of $25.70 without an
add back to earnings of the associated carry on the preferred
shares. |
(2) For the nine months ended September 30, 2017, the
conversion of capital securities was anti-dilutive and therefore
excluded from the calculation of fully-diluted net income per
IFRS. |
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Sep. 30, 2018 |
|
Sep.30, 2017 |
(US$ Millions, except per unit amounts) |
Net income attributable to
Unitholders |
Average number of
units |
Per unit |
|
Net income attributable to Unitholders |
Average number of units |
Per unit |
Basic per
management |
$ |
1,444 |
737.1 |
$ |
1.96 |
|
$ |
241 |
705.1 |
$ |
0.34 |
Dilutive effect of conversion of preferred shares(1) |
|
88 |
70.0 |
|
1.26 |
|
|
88 |
70.0 |
|
1.26 |
Dilutive effect of conversion of capital securities and
options |
|
20 |
18.4 |
|
1.09 |
|
|
21 |
25.6 |
|
0.82 |
Fully-diluted per management |
$ |
1,552 |
825.5 |
$ |
1.88 |
|
$ |
350 |
800.7 |
$ |
0.44 |
(1) Represents preferred shares that are mandatorily
convertible into units at a price of $25.70 and the associated
carry. |
|
|
|
|
|
|
|
|
|
Brookfield Property REIT (NASDAQ:BPR)
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