Net Income of $858 Million for the Quarter and
$3.7 Billion for the Year;Company FFO of $416 Million for the
Quarter and $1.2 Billion for the Year; Quarterly Distribution
Raised by 5% to $0.33 per Unit
Brookfield Property Partners L.P. (NASDAQ: BPY; NASDAQ: BPR; TSX:
BPY.UN) (“BPY”) today announced financial results for the quarter
and year ended December 31, 2018. In addition, the
Partnership announced its intention to launch a Substantial Issuer
Bid (“SIB”) to repurchase up to an aggregate of $500 million of BPY
units and Class A shares of Brookfield Property REIT Inc. at a
price of at least $19.00 per unit but not more than $21.00 per
unit.
“2018 was a transformational year for BPY as we
grew our earnings, continued our capital recycling initiatives,
completed the acquisition of GGP and launched BPR, our new U.S.
REIT,” said Brian Kingston, chief executive officer. “With our
fifth consecutive year of increased Company FFO per unit, we are
pleased to announce that we are raising the quarterly distribution
to unitholders by 5% and will also be allocating a significant
amount of capital to repurchase our own units at a substantial
discount to their underlying
value.”
Financial Results
|
Three months endedDec. 31, |
|
Twelve months endedDec. 31, |
(US$ Millions, except per unit amounts) |
2018 |
2017 |
|
2018 |
|
2017 |
Net income(1) |
$ |
858 |
$ |
958 |
$ |
3,654 |
$ |
2,468 |
Company
FFO(2) |
$ |
416 |
$ |
286 |
$ |
1,179 |
$ |
1,017 |
Realized
gains on LP Investments(3) |
$ |
417 |
$ |
422 |
$ |
490 |
$ |
477 |
|
|
|
|
|
|
|
|
|
Net
income per LP unit(4) |
$ |
0.51 |
$ |
0.17 |
$ |
2.28 |
$ |
0.48 |
Company
FFO per unit(5) |
$ |
0.43 |
$ |
0.41 |
$ |
1.48 |
$ |
1.44 |
Company FFO and realized gains per unit(5) |
$ |
0.86 |
$ |
1.01 |
$ |
2.09 |
$ |
2.12 |
- Consolidated basis – includes amounts attributable to
non-controlling interests.
- See "Basis of Presentation" and “Reconciliation of Non-IFRS
Measures” in this press release for the definition and
components.
- “LP Investments” refer to BPY’s investments in
Brookfield-sponsored private real estate funds.
- 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.
- Company FFO per unit and realized gains per unit are calculated
based on 974.1 million (2017 – 703.5 million) and 796.8 million
(2017 – 704.7 million) units outstanding for the three and twelve
months ended December 31, 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 December 31,
2018 was $858 million ($0.51 per unit) versus $958 million ($0.17
per unit) for the same period in 2017. Net income for the year
ended December 31, 2018 was $3.65 billion ($2.28 per unit) compared
with $2.47 billion ($0.48 per unit) in 2017.
Company FFO was $416 million ($0.43 per unit)
for the quarter ended December 31, 2018, compared with $286 million
($0.41 per unit) for the same period in 2017. Company FFO was $1.18
billion ($1.48 per unit) for the year ended December 31, 2018,
compared with $1.02 billion ($1.44 per unit) in 2017. The increases
in Company FFO for the quarter and year are primarily attributable
to our increased investment in core retail and its seasonally
strong performance in the fourth quarter, along with same-property
income growth in the core office business. This strong
operating performance more than offset the impact of a higher
interest rate environment and the negative impact of converting
foreign currency into U.S. dollars.
Operating Highlights
Our core office operations generated Company FFO
of $170 million for the quarter ended December 31, 2018 compared to
$148 million in the same period in 2017 and $608 million for the
year ended December 31, 2018 compared to $532 million on a
comparable basis in 2017. The increases over the prior year
reporting periods are primarily attributable to same-property
growth, offset in part by the negative impact of converting foreign
currency into U.S. dollars, and the reallocation of capital from
asset sales to our other businesses.
Occupancy in our core office portfolio increased
60 basis points during the fourth quarter to 93.5% on 3.3 million
square feet of total leasing. Leases signed in the fourth quarter
were at average rents 8% higher than leases that expired in the
period. Total leasing for the year was 7.8 million square feet and
occupancy increased 90 basis points during the year.
Our core retail operations generated Company FFO
of $270 million for the quarter ended December 31, 2018 compared to
$158 million in the comparable period in 2017 and $651 million for
the year ended December 31, 2018 compared to $515 million in 2017.
The increases in Company FFO over the prior quarter and year
periods are primarily attributable to the acquisition of GGP
in August 2018.
Core same-property retail occupancy finished the
year at 96.5% on 9.6 million square feet of total leasing, with
average initial suite-to-suite rent spreads of 11% on an
NOI-weighted basis. NOI-weighted tenant sales per square foot
increased 6% in 2018 to $746.
Our LP investments generated Company FFO of $77
million for the quarter ended December 31, 2018, compared to $89
million in the comparable period in 2017 and $330 million for the
year ended December 31, 2018 compared to $335 million in 2017. The
decrease in Company FFO over the prior reporting periods was
largely a result of the sale of stabilized investments in this
segment, where proceeds were reinvested but are not yet yielding
comparable income. This was offset in part by strong
same-property growth in existing investments.
Three months ended Dec. 31, |
Twelve months ended Dec. 31, |
(US$ Millions) |
2018 |
2017 |
2018 |
2017 |
Company
FFO by segment |
|
|
|
Core Office |
$ |
170 |
|
$ |
148 |
|
$ |
608 |
|
$ |
532 |
|
Core
Office gain |
|
- |
|
|
- |
|
|
- |
|
|
60 |
|
Core
Retail |
|
270 |
|
|
158 |
|
|
651 |
|
|
515 |
|
LP
Investments |
|
77 |
|
|
89 |
|
|
330 |
|
|
335 |
|
Corporate |
|
(101 |
) |
|
(109 |
) |
|
(410 |
) |
|
(425 |
) |
Company FFO(1) |
$ |
416 |
|
$ |
286 |
|
$ |
1,179 |
|
$ |
1,017 |
|
(1) See "Basis of Presentation" and
"Reconciliation of Non-IFRS Measures" below in this press release
for the definitions and components.
Strategic Initiatives
Dispositions
In total for 2018, we participated in
approximately $8 billion of gross asset dispositions at our share,
sold on average at prices approximately 5% higher than our carrying
IFRS values. These sales generated approximately $3.6 billion
in net proceeds to BPY during the year. Dispositions completed in
the fourth quarter include:
LP Investments
- Sold U.S. logistics property business, IDI Logistics, for $3.5
billion, generating net proceeds of $482 million to BPY.
- Sold 21 multifamily properties in the U.S. for an aggregate of
$1.2 billion, generating net proceeds of $207 million to BPY.
- Sold the Pullman Melbourne Hotel for A$156 million, generating
net proceeds of $34 million to BPY.
- Sold the Highline Dallas hotel for $68 million, generating net
proceeds of $5 million to BPY.
Core Assets
- Sold the office buildings at 10 & 12 Shelley St. in Sydney
for A$804 million, generating net proceeds of $311 million to
BPY.
- Sold a 48% interest in a portfolio of five high-quality assets
in Sydney and Perth. Net proceeds to BPY were $150
million.
- Sold 49% of Fashion Place mall in Murray, UT for $594 million,
generating net proceeds of $160 million to BPY.
- Sold a 49% interest in 2001 M. Street in Washington, DC for
$250 million, generating net proceeds of $38 million to BPY.
- Sold 1550 Wilson Blvd. and 1560 Wilson Blvd. in Arlington, VA
for $103 million, generating net proceeds of $38 million to
BPY.
New Investments
The following new LP investments were made
during the fourth quarter:
- Completed the acquisition of Forest City Realty Trust Inc. for
approximately $6.9 billion ($486 million at BPY’s share).
- Acquired a 90% interest in a student housing and aparthotel
operator and developer in France for €298 million ($330 million)
($22 million at BPY’s share).
- Acquired the PGA National Hotel and Resort in Palm Beach, FL
for $221 million ($15 million at BPY’s share).
- Acquired 10 triple net lease properties for an aggregate of
$118 million ($34 million at BPY’s share).
- Acquired three extended-stay hotels in Tampa, FL for $42
million ($11 million at BPY’s share).
- Acquired an aparthotel development in Lisbon, Portugal for €39
million ($45 million) ($3 million at BPY’s share).
BSREP III
Brookfield Asset Management Inc. (“BAM”) recently closed its
successor opportunistic property fund (“the Fund”) with total
capital of $15 billion. BPY committed $1 billion to this Fund and
BAM committed the balance of Brookfield’s total commitment of $3.75
billion. The commitment by BPY is a smaller percentage than its
investment in the prior opportunistic property fund as its excess
capital is expected to be utilized to repurchase its units.
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:
- Refinanced Potsdamer Platz for €1.1 billion.
- Refinanced the Wells Fargo Center South Tower in Los Angeles
for $253 million.
- Refinanced five core retail assets for an aggregate of $552
million.
Unit Repurchase Program
Utilizing BPY’s in-place NCIB, the Partnership purchased
3,927,910 of its Limited Partnership units in the fourth quarter of
2018 at an average price of $17.04 per unit. In 2018, the total
units purchased under the NCIB were 4,661,145 units at an average
price of $17.35 per unit.
Distribution Increase and
Declaration
The Board of Directors approved an increase in
the Partnership’s quarterly distribution from $0.315 to $0.33 per
unit ($1.32 per unit on an annual basis). Accordingly, the Board of
Directors has declared a quarterly distribution of $0.33 per unit
payable on March 29, 2019 to unitholders of record at the close of
business on February 28, 2019.
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.
Board of Directors Update
The Board of Directors of BPY is pleased to
announce the appointment of a new director, Scott R. Cutler.
Mr. Cutler brings an impressive resume of experience in the
technology and finance industries, recently having served in senior
leadership positions at eBay, StubHub and the New York Stock
Exchange.
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 February 7, 2019 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 Inc. (“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 $87 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 $350 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 fourth quarter and full-year 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 February 7, 2019 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: 2842607, 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: 2842607.
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.
Additional Information Regarding the
Substantial Issuer Bid Offer
The offer to repurchase units referred to in
this press release has not yet commenced. This press release is
neither an offer to purchase nor a solicitation of an offer to sell
any units of BPY. The solicitation and the offer to purchase units
by BPY will be made pursuant to an offer to purchase, issuer bid
circular, letters of transmittal, notices of guaranteed delivery,
and related materials that BPY will file with the Canadian
securities regulatory authorities and the U.S. Securities and
Exchange Commission and that BPY will distribute to its
unitholders, copies of which will be available free of charge from
BPY, as well as available on the website of the SEC at www.sec.gov
and on the Partnership’s SEDAR profile at www.sedar.com. These
documents will contain important information about the offer and
unitholders are urged to read them carefully when they become
available.
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
Dec. 31, |
Dec. 31, |
(US$
Millions) |
|
2018 |
|
2017 |
Assets |
|
|
Investment properties |
$ |
80,196 |
$ |
51,357 |
Equity accounted investments in properties |
|
22,698 |
|
19,761 |
Property, plant and equipment |
|
7,506 |
|
5,457 |
Participating loan notes |
|
268 |
|
517 |
Financial assets |
|
222 |
|
176 |
Accounts receivable and other |
|
7,338 |
|
4,155 |
Cash and cash equivalents |
|
3,288 |
|
1,491 |
Assets held for sale |
|
1,004 |
|
1,433 |
Total Assets |
$ |
122,520 |
$ |
84,347 |
Liabilities |
|
|
Corporate debt obligations |
$ |
2,159 |
$ |
1,359 |
Funds subscription facilities |
|
4,516 |
|
432 |
Asset-level debt obligations |
|
50,407 |
|
33,401 |
Subsidiary borrowings |
|
6,729 |
|
1,692 |
Capital securities |
|
3,385 |
|
4,165 |
Deferred tax liability |
|
2,378 |
|
2,888 |
Accounts payable and other liabilities |
|
6,043 |
|
3,970 |
Liabilities associated with assets held for sale |
|
163 |
|
1,316 |
Equity |
|
|
General
partner |
|
4 |
|
6 |
Limited
partners |
|
12,353 |
|
7,395 |
Non-controlling interests attributable to: |
|
|
Limited partner units of the operating partnership held by
Brookfield Asset Management Inc. |
|
12,740 |
|
14,500 |
Limited partner units of Brookfield Office Properties Exchange
LP |
|
96 |
|
285 |
Class A shares of Brookfield Property REIT Inc. |
|
3,091 |
|
- |
Interests of others in operating subsidiaries and
properties |
|
18,456 |
|
12,938 |
Total Equity |
|
46,740 |
|
35,124 |
Total Liabilities and Equity |
$ |
122,520 |
$ |
84,347 |
|
|
CONSOLIDATED STATEMENT OF
OPERATIONS |
|
|
|
|
Three Months Ended Dec. 31, |
Twelve Months Ended Dec. 31, |
(US$
Millions) |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Commercial property and hospitality revenue |
$ |
2,018 |
|
$ |
1,515 |
|
$ |
6,956 |
|
$ |
5,840 |
|
Direct
commercial property and hospitality expense |
|
(837 |
) |
|
(707 |
) |
|
(3,087 |
) |
|
(2,696 |
) |
|
|
1,181 |
|
|
808 |
|
|
3,869 |
|
|
3,144 |
|
Investment and other revenue |
|
122 |
|
|
63 |
|
|
283 |
|
|
295 |
|
Share of
net earnings from equity accounted investments |
|
366 |
|
|
64 |
|
|
947 |
|
|
961 |
|
|
|
1,669 |
|
|
935 |
|
|
5,099 |
|
|
4,400 |
|
Expenses |
|
|
|
|
Interest
expense |
|
(775 |
) |
|
(492 |
) |
|
(2,464 |
) |
|
(1,967 |
) |
Depreciation and amortization |
|
(79 |
) |
|
(74 |
) |
|
(308 |
) |
|
(275 |
) |
General
and administrative expense |
|
(439 |
) |
|
(160 |
) |
|
(1,032 |
) |
|
(614 |
) |
Investment and other expense |
|
(9 |
) |
|
(15 |
) |
|
(26 |
) |
|
(138 |
) |
|
|
367 |
|
|
194 |
|
|
1,269 |
|
|
1,406 |
|
Fair
value (losses) gains, net |
|
523 |
|
|
537 |
|
|
2,466 |
|
|
1,254 |
|
Income
tax (expense) |
|
(32 |
) |
|
227 |
|
|
(81 |
) |
|
(192 |
) |
Net income |
$ |
858 |
|
$ |
958 |
|
$ |
3,654 |
|
$ |
2,468 |
|
|
|
|
|
|
Net
income attributable to: |
|
|
|
|
General
partner |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
Limited
partners |
|
226 |
|
|
48 |
|
|
764 |
|
|
136 |
|
Non-controlling interests: |
|
|
|
|
Limited
partner units of the operating partnership held by Brookfield Asset
Management Inc. |
|
240 |
|
|
84 |
|
|
1,085 |
|
|
233 |
|
Limited
partner units of Brookfield Office Properties Exchange LP |
|
2 |
|
|
2 |
|
|
17 |
|
|
6 |
|
Class A
shares of Brookfield Property REIT |
|
66 |
|
|
- |
|
|
112 |
|
|
- |
|
Interests of others in operating subsidiaries and properties |
|
324 |
|
|
824 |
|
|
1,676 |
|
|
2,093 |
|
|
$ |
858 |
|
$ |
958 |
|
$ |
3,654 |
|
$ |
2,468 |
|
|
|
|
|
|
|
RECONCILIATION OF NON-IFRS
MEASURES |
|
|
Three Months Ended Dec. 31, |
Twelve Months Ended Dec. 31, |
(US$
Millions) |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Commercial property and hospitality revenue |
$ |
2,018 |
|
$ |
1,515 |
|
$ |
6,956 |
|
$ |
5,840 |
|
Direct commercial property and hospitality expense |
|
(837 |
) |
|
(707 |
) |
|
(3,087 |
) |
|
(2,696 |
) |
NOI |
|
1,181 |
|
|
808 |
|
|
3,869 |
|
|
3,144 |
|
Investment and other revenue |
|
122 |
|
|
63 |
|
|
283 |
|
|
295 |
|
Share of equity accounted income excluding fair value
gains |
|
285 |
|
|
230 |
|
|
833 |
|
|
879 |
|
Interest expense |
|
(775 |
) |
|
(492 |
) |
|
(2,464 |
) |
|
(1,967 |
) |
General and administrative expense |
|
(439 |
) |
|
(160 |
) |
|
(1,032 |
) |
|
(614 |
) |
Investment and other expense |
|
(9 |
) |
|
(15 |
) |
|
(26 |
) |
|
(138 |
) |
Depreciation and amortization of non-real estate assets |
|
(17 |
) |
|
(7 |
) |
|
(45 |
) |
|
(31 |
) |
Non-controlling interests of others in operating
subsidiaries and properties in FFO |
|
(43 |
) |
|
(180 |
) |
|
(552 |
) |
|
(695 |
) |
FFO |
|
305 |
|
|
247 |
|
|
866 |
|
|
873 |
|
Depreciation and amortization of non-real estate assets,
net(1) |
|
11 |
|
|
7 |
|
|
35 |
|
|
27 |
|
Transaction costs(1) |
|
85 |
|
|
15 |
|
|
221 |
|
|
41 |
|
Gains/losses on disposition of non-investment
properties(1) |
|
2 |
|
|
1 |
|
|
6 |
|
|
- |
|
Imputed Interest(2) |
|
13 |
|
|
16 |
|
|
51 |
|
|
38 |
|
FFO from GGP Warrants(3) |
|
- |
|
|
- |
|
|
- |
|
|
38 |
|
Company FFO |
$ |
416 |
|
$ |
286 |
|
$ |
1,179 |
|
$ |
1,017 |
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
305 |
|
|
247 |
|
|
866 |
|
|
873 |
|
Depreciation and amortization of real estate assets |
|
(63 |
) |
|
(67 |
) |
|
(264 |
) |
|
(244 |
) |
Fair value (losses) gains, net |
|
523 |
|
|
537 |
|
|
2,466 |
|
|
1,254 |
|
Share of equity accounted income - Non FFO |
|
81 |
|
|
(166 |
) |
|
114 |
|
|
82 |
|
Income tax
(expense) benefit |
|
(32 |
) |
|
227 |
|
|
(81 |
) |
|
(192 |
) |
Non-controlling interests of others in operating subsidiaries
and properties in non-FFO |
|
(280 |
) |
|
(644 |
) |
|
(1,123 |
) |
|
(1,398 |
) |
Non-controlling interests of others in operating
subsidiaries and properties |
|
324 |
|
|
824 |
|
|
1,676 |
|
|
2,093 |
|
Net income |
$ |
858 |
|
$ |
958 |
|
$ |
3,654 |
|
$ |
2,468 |
|
(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 |
|
|
Dec. 31, 2018 |
|
Dec.31, 2017 |
(US$ Millions, except per unit amounts) |
Net
incomeattributabletoUnitholders |
Averagenumber
ofunits |
Per unit |
|
Net incomeattributabletoUnitholders |
Averagenumber ofunits |
Per unit |
Basic |
$ |
534 |
974.1 |
$ |
0.55 |
|
$ |
134 |
703.5 |
$ |
0.19 |
Number of units on conversion of preferred
shares(1) |
|
- |
70.0 |
|
- |
|
|
- |
70.0 |
|
- |
Basic per IFRS |
|
534 |
1,044.1 |
|
0.51 |
|
|
134 |
773.5 |
|
0.17 |
Dilutive effect of conversion of capital securities and
options(2) |
|
7 |
19.6 |
|
0.36 |
|
|
- |
0.3 |
|
- |
Fully-diluted per IFRS |
$ |
541 |
1,063.7 |
$ |
0.51 |
|
$ |
134 |
773.8 |
$ |
0.17 |
(1)
IFRS requires the inclusion of preferred shares that are
mandatorily convertible into units at a price of $25.70 without an
add back to earnings of the associated carry on the preferred
shares. |
(2) For the three months ended December 31, 2017, the
conversion of capital securities was anti-dilutive and therefore
excluded from the calculation of fully-diluted net income per
IFRS. |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Dec. 31, 2018 |
|
Dec.31, 2017 |
(US$ Millions, except per unit amounts) |
Net
incomeattributabletoUnitholders |
Averagenumber
ofunits |
Per unit |
|
Net incomeattributabletoUnitholders |
Averagenumber ofunits |
Per unit |
Basic per
management |
$ |
534 |
974.1 |
$ |
0.55 |
|
$ |
134 |
703.5 |
$ |
0.19 |
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 |
19.6 |
|
0.36 |
|
|
5 |
17.2 |
|
0.29 |
Fully-diluted per management |
$ |
570 |
1,063.7 |
$ |
0.54 |
|
$ |
168 |
790.7 |
$ |
0.21 |
(1) Represents preferred shares that are mandatorily
convertible into units at a price of $25.70 and the associated
carry. |
|
|
NET INCOME PER UNIT |
|
|
|
Twelve months ended |
|
|
Dec. 31, 2018 |
|
Dec.31, 2017 |
(US$ Millions, except per unit amounts) |
Net
incomeattributabletoUnitholders |
Averagenumber
ofunits |
Per unit |
|
Net incomeattributabletoUnitholders |
Averagenumber ofunits |
Per unit |
Basic |
$ |
1,978 |
796.8 |
$ |
2.48 |
|
$ |
375 |
704.7 |
$ |
0.53 |
Number of units on conversion of preferred
shares(1) |
|
- |
70.0 |
|
- |
|
|
- |
70.0 |
|
- |
Basic per IFRS |
|
1,978 |
866.8 |
|
2.28 |
|
|
375 |
774.7 |
|
0.48 |
Dilutive effect of conversion of capital securities and
options(2) |
|
27 |
18.4 |
|
1.47 |
|
|
- |
1.2 |
|
- |
Fully-diluted per IFRS |
$ |
2,005 |
885.2 |
$ |
2.26 |
|
$ |
375 |
775.9 |
$ |
0.48 |
(1) IFRS requires the inclusion of preferred shares that are
mandatorily convertible into units at a price of $25.70 without an
add back to earnings of the associated carry on the preferred
shares. |
(2)
For the twelve months ended December 31, 2017, the conversion of
capital securities was anti-dilutive and therefore excluded from
the calculation of fully-diluted net income per IFRS. |
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
Dec. 31, 2018 |
|
Dec.31, 2017 |
(US$ Millions, except per unit amounts) |
Net
incomeattributabletoUnitholders |
Averagenumber
ofunits |
Per unit |
|
Net incomeattributabletoUnitholders |
Averagenumberof units |
Per unit |
Basic per
management |
$ |
1,978 |
796.8 |
$ |
2.48 |
|
$ |
375 |
704.7 |
$ |
0.53 |
Dilutive effect of conversion of preferred shares(1) |
|
117 |
70.0 |
|
1.67 |
|
|
88 |
70.0 |
|
1.26 |
Dilutive effect of conversion of capital securities and
options |
|
27 |
18.4 |
|
1.47 |
|
|
27 |
24.5 |
|
1.10 |
Fully-diluted per management |
$ |
2,122 |
885.2 |
$ |
2.40 |
|
$ |
490 |
799.2 |
$ |
0.61 |
(1) Represents preferred shares that are mandatorily
convertible into units at a price of $25.70 and the associated
carry. |
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