All dollar references are in U.S. dollars, unless noted otherwise.
BROOKFIELD NEWS, Nov. 06, 2019 (GLOBE NEWSWIRE) -- Brookfield Property Partners L.P. (NASDAQ: BPY; NASDAQ: BPR; TSX: BPY.UN) (“BPY”) today announced financial results for the quarter ended September 30, 2019.
“In the third quarter we continued to execute our strategy of divesting interests in mature, stable assets at premiums to our carrying values and reinvesting proceeds into development and other higher returning opportunities, including unit buybacks,” said Brian Kingston, Chief Executive Officer. “Our development pipeline continues to advance and stabilize; recently we were pleased to complete and deliver to the market nearly four million square feet of modern, premier office space in New York City and London.”
Financial Results
| Three months ended September 30, | Nine months ended September 30, | |||||||
| (US$ Millions, except per unit amounts) | 2019 | 2018 | 2019 | 2018 | ||||
| Net income(1) | $ | 870 | $ | 722 | $ | 1,606 | $ | 2,796 |
| Company FFO and realized gains(2) | $ | 324 | $ | 302 | $ | 1,053 | $ | 821 |
| Net income per LP unit(3)(4) | $ | 0.46 | $ | 0.44 | $ | 0.90 | $ | 1.79 |
| Company FFO and realized gains per unit(4)(5) | $ | 0.34 | $ | 0.38 | $ | 1.09 | $ | 1.11 |
- Consolidated basis – includes amounts attributable to non-controlling interests.
- Excluding realized gains, Company FFO was $324 million compared with $249 million in the prior year period. See "Basis of Presentation" and “Reconciliation of Non-IFRS Measures” in this press release for the definition and components.
- 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.
- Net income attributable to holders of LP units and Company FFO and realized gains per unit are reduced by preferred dividends of $5 million and $8 million for the three and nine months ended September 30, 2019, respectively in determining per unit amounts.
- Company FFO and realized gains per unit are calculated based on 950.1 million (2018 – 803.5 million) and 957.6 million (2018 – 737.1 million) units outstanding for the three and nine months ended September 30, 2019, respectively. See reconciliation of basic net income in the "Reconciliation of Non-IFRS Measures" section in this press release.
Company FFO (CFFO) and realized gains was $324 million ($0.34 per unit) for the quarter ended September 30, 2019, compared to $302 million ($0.38 per unit) for the same period in 2018. The increase in total CFFO and realized gains is primarily attributable to earnings growth related to new capital invested in our Core Retail business, same-property growth in our Core Office business, and the recognition this quarter of $41 million in incremental transaction and fee income. The decrease in CFFO and realized gains per unit is attributable to $0.07 per unit in realized gains in our LP investments segment recognized in the prior-year period and the issuance of units in conjunction with the acquisition of GGP in August 2018.
Net income for the quarter ended September 30, 2019 was $870 million ($0.46 per LP unit) versus $722 million ($0.44 per LP unit) for the same period in 2018.
Operating Highlights
Our Core Office operations generated Company FFO of $150 million for the quarter ended September 30, 2019 compared to $136 million in the same period in 2018. The business generated 2.5% same-property NOI growth and fee income of $41 million, which was $20 million higher than in the prior period. The increase in Company FFO over the prior year is primarily due to same-property growth and increased fee income, partially offset by asset sales, recent refinancings and a stronger U.S. dollar.
Occupancy in our Core Office portfolio finished the third quarter at 92.4% on 1.9 million square feet of total leasing, consistent with the prior quarter and a decrease of 50 basis points year-over-year. Leases signed in the third quarter were at rents over 30% higher on average than leases that expired in the period.
Our Core Retail operations generated Company FFO of $201 million for the quarter ended September 30, 2019 compared to $146 million in the comparable period in 2018. The increase over the prior year reporting period is attributable to the acquisition of GGP in the third quarter of 2018, a gain of $13 million from land parcel sales, and the $15 million sale of an investment in an operating company.
Same-property NOI was flat for the quarter and year-to-date. Since the beginning of 2018, tenant bankruptcies have resulted in over three million square feet within the portfolio becoming vacant, of which nearly 75% will be occupied with new tenants by this year-end and contributing to earnings.
Our Core Retail business leased over 10 million square feet over the past 12 months with suite-to-suite NOI-weighted rent spreads of 5.4%. At quarter-end, the portfolio was 95.0% leased and we expect it to increase to 96% by year-end. On a year-over-year basis, in-place rents increased 2.4% across the portfolio, and NOI-weighted sales grew 5.4% to $787 per square foot, a new high for the portfolio.
Our LP Investments generated Company FFO and realized gains of $74 million for the quarter ended September 30, 2019, compared to $127 million in the comparable period in 2018. Excluding $53 million of realized gains recognized in the prior-year period, year-over-year performance in this segment was flat.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| (US$ Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Company FFO and realized gains: | ||||||||||||||||
| Core Office | $ | 150 | $ | 136 | $ | 477 | $ | 438 | ||||||||
| Core Retail | 201 | 146 | 555 | 381 | ||||||||||||
| LP Investments | 74 | 127 | 326 | 311 | ||||||||||||
| Corporate | (101 | ) | (107 | ) | (305 | ) | (309 | ) | ||||||||
| Company FFO and realized gains(1) | $ | 324 | $ | 302 | $ | 1,053 | $ | 821 | ||||||||
(1) See "Basis of Presentation" and "Reconciliation of Non-IFRS Measures" below in this press release for the definitions and components.
Dispositions
In the third quarter of 2019 we completed $1.4 billion of gross asset dispositions at our share, at prices that were 4% higher than our IFRS carrying values. These sales generated $723 million in net proceeds. Dispositions completed in the third quarter include:
- Our 30% stake in the Darling Park Complex in Sydney for net proceeds of $298 million.
- The office building at 3 Spring Street in Sydney for net proceeds of $95 million.
- A 77% interest in two of our Brooklyn multifamily developments at Greenpoint for net proceeds of $93 million.
- Our remaining 26% interest in the office building at 75 State Street in Boston for net proceeds of $84 million.
- An 81% interest in the SoNo Collection mall in Norwalk, CT for net proceeds of $83 million
- A portion of our triple net lease automotive dealership assets (CARS) for net proceeds of $32 million.
Subsequent to quarter-end:
- The majority of assets in our Manhattan multifamily portfolio for net proceeds of $135 million.
- Our 50% direct interest in Jessie Street Centre in Sydney for net proceeds of $79 million.
New Investments
- Acquired a further 45% interest in the retail component at the Crown Building in New York for $703 million.
Subsequent to quarter-end:
- Agreed to acquire an interest in two million square feet of beachfront retail in Dubai for $1.3 billion ($91 million at BPY’s share).
- Acquired an interest in a portfolio of luxury hotels and a full-service management and hospitality brand in India for $692 million ($48 million at BPY’s share).
Balance Sheet Update
To increase liquidity and extend the maturity of our debt, during and subsequent to the third quarter we executed the following financing transactions:
- Refinanced 100 Bishopsgate in London for approximately $1.1 billion, generating net proceeds to BPY of approximately $450 million. The new mortgage is floating-rate with a term of five years.
- In Core Retail, we raised an aggregate of $1.3 billion in various financings, generating net proceeds to BPY of approximately $343 million. The new asset-level mortgages are all floating-rate with an average term of over four years.
- Issued $250 million of Perpetual Green Preferred Units (NASDAQ: BPYPO) – the first of their kind in the industry – at an initial distribution rate of 6.375% per annum.
Unit Repurchase Program
Utilizing in-place normal course issuer bids (“NCIBs”), we purchased 2,046,757 of BPY units and BPR shares in the third quarter of 2019 at an average price of $19.10 per unit/share.
Subsequent to quarter-end, we purchased 1,041,067 additional BPY units at an average price of $19.14 per unit/share.
Distribution Declaration
The Board of Directors has declared a quarterly distribution on the partnership’s LP units of $0.33 per unit payable on December 31, 2019 to unitholders of record at the close of business on November 29, 2019.
The quarterly distributions on the LP units 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.
The Board of Directors has also declared a quarterly distribution on the partnership’s Class A Series 1 preferred units of $0.40625 per unit, payable on December 31, 2019 to holders of record at the close of business on December 2, 2019.
The Board of Directors has also declared the pro-rated initial distribution on the Class A Series 2 preferred units of $0.57995 per unit, payable on December 31, 2019 to holders of record at the close of business on December 2, 2019.
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 August 2, 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 and realized gains (“Company FFO and realized gains”) and net income attributable to unitholders.
Company FFO and realized gains, and net income attributable to unitholders are also presented on a per unit basis. NOI, same-property NOI, FFO, Company FFO and realized gains, 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 realized gains, 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 and realized gains 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 on equity accounted investments, realized gains in the partnership’s LP Investment segment and the partnership’s share of BSREP III Company FFO and realized gains. Realized LP Investment gains represent income earned on investing activity when fund investments are realized, inclusive of associated change in carried interest to be due at a future date to the general partner of the relevant Brookfield Asset Management-sponsored funds. The partnership accounts for the investment in BSREP III as a financial asset and income (loss) of the fund is not presented in the partnership’s results. Distributions from BSREP III, recorded as dividend income under IFRS, are removed from investment and other income for Company FFO and realized gains presentation.
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., limited partnership units of Brookfield Office Properties Exchange LP and Class A shares of Brookfield Property REIT Inc. 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 real estate companies, with approximately $85 billion in total assets. We own and operate iconic properties in the world’s major markets, and our global portfolio includes office, retail, multifamily, logistics, hospitality, self-storage, triple net lease, manufactured housing and student housing.
Brookfield Property Partners is the flagship listed real estate company of Brookfield Asset Management Inc., a leading global alternative asset manager with over $500 billion in assets under management. More information is available at www.brookfield.com.
Brookfield Property Partners L.P. is listed on the Nasdaq Stock Market and the Toronto Stock Exchange. Brookfield Property REIT Inc. is listed on the Nasdaq Stock Market. Further information is available at bpy.brookfield.com.
Certain investor relations content is also available on our investor relations app, which offers access to SEC filings, press releases, presentations and more. Click here to download on the iPhone or iPad, or here for Android mobile devices.
Brookfield Contact:
Matt Cherry
Senior Vice President, Investor Relations
Tel: (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 2019 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 6, 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: 6390568, 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: 6390568.
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) | 2019 | 2018 | ||||
| Assets | ||||||
| Investment properties | $ | 70,786 | $ | 80,196 | ||
| Equity accounted investments in properties | 21,617 | 22,698 | ||||
| Property, plant and equipment | 6,769 | 7,506 | ||||
| Participating loan notes | - | 268 | ||||
| Financial assets | 1,082 | 222 | ||||
| Accounts receivable and other | 4,881 | 7,338 | ||||
| Cash and cash equivalents | 2,141 | 3,288 | ||||
| Assets held for sale | 1,780 | 1,004 | ||||
| Total Assets | $ | 109,056 | $ | 122,520 | ||
| Liabilities | ||||||
| Corporate borrowings | $ | 2,355 | $ | 2,159 | ||
| Asset-level debt obligations | 44,079 | 50,407 | ||||
| Subsidiary borrowings, non-recourse to BPY | 5,968 | 11,245 | ||||
| Capital securities | 3,029 | 3,385 | ||||
| Deferred tax liability | 2,548 | 2,378 | ||||
| Accounts payable and other liabilities | 4,996 | 6,043 | ||||
| Liabilities associated with assets held for sale | 1,118 | 163 | ||||
| Equity | ||||||
| Preferred equity | 421 | - | ||||
| General partner | 4 | 4 | ||||
| Limited partners | 12,799 | 12,353 | ||||
| Non-controlling interests attributable to: | ||||||
| Limited partner units of the operating partnership held by Brookfield Asset Management Inc. | 12,684 | 12,740 | ||||
| Limited partner units of Brookfield Office Properties Exchange LP | 84 | 96 | ||||
| FV LTIP units of the operating partnership | 33 | - | ||||
| Class A shares of Brookfield Property REIT Inc. | 1,914 | 3,091 | ||||
| Interests of others in operating subsidiaries and properties | 17,024 | 18,456 | ||||
| Total Equity | 44,963 | 46,740 | ||||
| Total Liabilities and Equity | $ | 109,056 | $ | 122,520 | ||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||
| Three Months Ended Sep. 30, | Nine Months Ended Sep. 30, | |||||||||||||
| (US$ Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Commercial property and hospitality revenue | $ | 1,852 | $ | 1,753 | $ | 5,706 | $ | 4,938 | ||||||
| Direct commercial property and hospitality expense | (776 | ) | (793 | ) | (2,403 | ) | (2,250 | ) | ||||||
| 1,076 | 960 | 3,303 | 2,688 | |||||||||||
| Investment and other revenue | 165 | 75 | 410 | 161 | ||||||||||
| Share of net earnings from equity accounted investments | 409 | 65 | 1,499 | 581 | ||||||||||
| 1,650 | 1,100 | 5,212 | 3,430 | |||||||||||
| Expenses | ||||||||||||||
| Interest expense | (738 | ) | (632 | ) | (2,194 | ) | (1,689 | ) | ||||||
| Depreciation and amortization | (86 | ) | (81 | ) | (256 | ) | (229 | ) | ||||||
| General and administrative expense | (214 | ) | (241 | ) | (656 | ) | (593 | ) | ||||||
| Investment and other expense | - | (17 | ) | (10 | ) | (17 | ) | |||||||
| 612 | 129 | 2,096 | 902 | |||||||||||
| Fair value gains, net | 449 | 556 | (273 | ) | 1,943 | |||||||||
| Income tax (expense) benefit | (191 | ) | 37 | (217 | ) | (49 | ) | |||||||
| Net income | $ | 870 | $ | 722 | $ | 1,606 | $ | 2,796 | ||||||
| Net income attributable to: | ||||||||||||||
| General partner | $ | - | $ | - | $ | - | $ | - | ||||||
| Limited partners | 218 | 144 | 418 | 532 | ||||||||||
| Non-controlling interests: | ||||||||||||||
| Limited partner units of the operating partnership held by Brookfield Asset Management Inc. | 218 | 206 | 427 | 857 | ||||||||||
| Limited partner units of Brookfield Office Properties Exchange LP | 2 | 2 | 3 | 16 | ||||||||||
| FV LTIP units of the operating partnership | - | - | - | - | ||||||||||
| Class A shares of Brookfield Property REIT | 36 | 28 | 86 | 39 | ||||||||||
| Interests of others in operating subsidiaries and properties | 396 | 342 | 672 | 1,352 | ||||||||||
| $ | 870 | $ | 722 | $ | 1,606 | $ | 2,796 | |||||||
| RECONCILIATION OF NON-IFRS MEASURES | ||||||||||||||
| Three Months Ended Sep. 30, | Nine Months Ended Sep. 30, | |||||||||||||
| (US$ Millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Commercial property and hospitality revenue | $ | 1,852 | $ | 1,753 | $ | 5,706 | $ | 4,938 | ||||||
| Direct commercial property and hospitality expense | (776 | ) | (793 | ) | (2,403 | ) | (2,250 | ) | ||||||
| NOI | 1,076 | 960 | 3,303 | 2,688 | ||||||||||
| Investment and other revenue | 165 | 75 | 410 | 161 | ||||||||||
| Share of equity accounted income excluding fair value gains | 177 | 117 | 622 | 548 | ||||||||||
| Interest expense | (738 | ) | (632 | ) | (2,194 | ) | (1,689 | ) | ||||||
| General and administrative expense | (214 | ) | (241 | ) | (656 | ) | (593 | ) | ||||||
| Investment and other expense | - 0 | (17 | ) | (10 | ) | (17 | ) | |||||||
| Depreciation and amortization of non-real estate assets | (14 | ) | (11 | ) | (45 | ) | (28 | ) | ||||||
| Non-controlling interests of others in operating subsidiaries and properties in FFO | (191 | ) | (128 | ) | (620 | ) | (509 | ) | ||||||
| FFO | 261 | 123 | 810 | 561 | ||||||||||
| Depreciation and amortization of non-real estate assets, net(1) | 10 | 9 | 31 | 24 | ||||||||||
| Transaction costs(1) | 35 | 103 | 72 | 136 | ||||||||||
| Gains/losses on disposition of non-investment properties(1) | 1 | 1 | - | 4 | ||||||||||
| Imputed Interest(2) | 15 | 13 | 42 | 38 | ||||||||||
| LP Investments realized gains(3) | - | 53 | 87 | 58 | ||||||||||
| BSREP III earnings(4) | 2 | - | 11 | - | ||||||||||
| Company FFO and realized gains | $ | 324 | $ | 302 | $ | 1,053 | $ | 821 | ||||||
| FFO | 261 | 123 | 810 | 561 | ||||||||||
| Depreciation and amortization of real estate assets | (72 | ) | (70 | ) | (211 | ) | (201 | ) | ||||||
| Fair value (losses) gains, net | 449 | 556 | (273 | ) | 1,943 | |||||||||
| Share of equity accounted income - Non FFO | 232 | (52 | ) | 877 | 33 | |||||||||
| Income tax (expense) benefit | (191 | ) | 37 | (217 | ) | (49 | ) | |||||||
| Non-controlling interests of others in operating subsidiaries and properties in non-FFO | (205 | ) | (214 | ) | (52 | ) | (843 | ) | ||||||
| Non-controlling interests of others in operating subsidiaries and properties | 396 | 342 | 672 | 1,352 | ||||||||||
| Net income | $ | 870 | $ | 722 | $ | 1,606 | $ | 2,796 | ||||||
| (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)Net of associated carried interest to be due at a future date. | ||||||||||||||
| (4)BSREP III is now accounted for as a financial asset which results in FFO being recognized in line with distributions. As such, the BSREP III earnings adjustment reflects our proportionate share of the Company FFO. | ||||||||||||||
| NET INCOME PER UNIT | ||||||||||||||
| Three months ended | ||||||||||||||
| Sep. 30, 2019 | Sep.30, 2018 | |||||||||||||
| (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 | $ | 474 | 950.1 | $ | 0.50 | $ | 380 | 803.5 | $ | 0.47 | ||||
| Preferred share dividends | (5 | ) | - | - | - | - | - | |||||||
| Number of units on conversion of preferred shares(1) | - | 70.1 | - 0 | - | 70.0 | - 0 | ||||||||
| Basic per IFRS | 469 | 1,020.2 | 0.46 | 380 | 873.5 | 0.44 | ||||||||
| Dilutive effect of conversion of capital securities and options(2) | - | - | - 0 | 7 | 19.9 | 0.35 | ||||||||
| Fully-diluted per IFRS | $ | 469 | 1,020.2 | $ | 0.46 | $ | 387 | 893.4 | $ | 0.43 | ||||
| (1) IFRS requires the inclusion of preferred shares that are mandatorily convertible into units at a price of $25.70 without an add back to earnings of the associated carry on the preferred shares. | ||||||||||||||
| (2)For the three months ended September 30, 2019, capital securities were fully redeemed and therefore excluded from the calculation of fully-diluted net income per IFRS. | ||||||||||||||
| Three months ended | ||||||||||||||
| Sep. 30, 2019 | Sep.30, 2018 | |||||||||||||
| (US$ 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 | $ | 474 | 950.1 | $ | 0.50 | $ | 380 | 803.5 | $ | 0.47 | ||||
| Preferred share dividends | (5 | ) | - | - | - | - | - | |||||||
| Dilutive effect of conversion of preferred shares(1) | 29 | 70.1 | 0.41 | 29 | 70.0 | 0.41 | ||||||||
| Dilutive effect of conversion of capital securities and options(2) | - | - | - 0 | 7 | 19.9 | 0.35 | ||||||||
| Fully-diluted per management | $ | 498 | 1,020.2 | $ | 0.49 | $ | 416 | 893.4 | $ | 0.47 | ||||
| (1) Represents preferred shares that are mandatorily convertible into units at a price of $25.70 and the associated carry. | ||||||||||||||
| (2) For the three months ended September 30, 2019, capital securities were fully redeemed and therefore excluded from the calculation of fully-diluted net income per IFRS. | ||||||||||||||
| NET INCOME PER UNIT | |||||||||||||||
| Nine months ended | |||||||||||||||
| Sep. 30, 2019 | Sep.30, 2018 | ||||||||||||||
| (US$ 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 | $ | 934 | 957.6 | $ | 0.98 | $ | 1,444 | 737.1 | $ | 1.96 | |||||
| Preferred share dividends | (8 | ) | - | - | - | - | - | ||||||||
| Number of units on conversion of preferred shares(1) | - | 70.1 | - | - | 70.0 | - | |||||||||
| Basic per IFRS | 926 | 1,027.7 | 0.90 | 1,444 | 807.1 | 1.79 | |||||||||
| Dilutive effect of conversion of capital securities and options | 8 | 9.0 | 0.89 | 20 | 18.4 | 1.09 | |||||||||
| Fully-diluted per IFRS | $ | 934 | 1,036.7 | $ | 0.90 | $ | 1,464 | 825.5 | $ | 1.77 | |||||
| (1)IFRS requires the inclusion of preferred shares that are mandatorily convertible into units at a price of $25.70 without an add back to earnings of the associated carry on the preferred shares. | |||||||||||||||
| Nine months ended | |||||||||||||||
| Sep. 30, 2019 | Sep.30, 2018 | ||||||||||||||
| (US$ 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 | $ | 934 | 957.6 | $ | 0.98 | $ | 1,444 | 737.1 | $ | 1.96 | |||||
| Preferred share dividends | (8 | ) | - | - | - | - | - | ||||||||
| Dilutive effect of conversion of preferred shares(1) | 88 | 70.1 | 1.26 | 88 | 70.0 | 1.26 | |||||||||
| Dilutive effect of conversion of capital securities and options | 8 | 9.0 | 0.89 | 20 | 18.4 | 1.09 | |||||||||
| Fully-diluted per management | $ | 1,022 | 1,036.7 | $ | 0.99 | $ | 1,552 | 825.5 | $ | 1.88 | |||||
| (1)Represents preferred shares that are mandatorily convertible into units at a price of $25.70 and the associated carry. | |||||||||||||||