[caption id="attachment_71958" align="aligncenter" width="640"] Source: Company reports/Coresight Research[/caption]   4Q18 Results Brookfield reported net income of $858 million ($0.51 per unit) versus $958 million ($0.17 per unit) in the year-ago quarter. FFO was $416 million ($0.43 per unit), compared with $286 million ($0.41 per unit) in the year-ago quarter. The increases in FFO in the quarter and year were due to the following factors: Higher investment in core retail and seasonally strong performance in the 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 negative currency effects. FY18 Results 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. FFO was $1.18 billion ($1.48 per unit) for the year, compared with $1.02 billion ($1.44 per unit) in the prior year, breaking down as follows:

• Core office FFO was $608 million, compared to $532 million on a comparable basis in the prior year. Total leasing was 7.8 million square feet, and occupancy increased 90 basis points.
• Core retail FFO was $651 million, compared to $515 million in in the prior year. NOI-weighted tenant sales per square foot increased 6% to $746 in 2018.
• LP investments generated FFO of $330 million, compared to $335 million in the prior year.

Management commented that 2018 was a transformational year, during which the company grew earnings, continued its capital recycling initiatives, completed the acquisition of GGP and launched BPR, its new U.S. REIT.   Details from the Quarter Core office generated FFO of $170 million, compared to $148 million in the year-ago quarter. The increases are primarily attributable to same-property growth, partly offset by negative currency effects and the reallocation of capital from asset sales to other businesses. Occupancy in the portfolio increased 60 basis points to 93.5%, on 3.3 million square feet of total leasing. Leases signed offered 8% higher average rents expiring leases. Core retail generated FFO of $270 million, compared to $158 million in year-ago quarter. The increases in FFO over quarter and year were primarily attributable to the acquisition of GGP in August 2018. Same-property retail occupancy finished the quarter 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. LP Investments generated FFO of $77 million, compared to $89 million in the year-ago quarter. The decrease in FFO was due to the sale of stabilized investments in this segment, whose proceeds were reinvested but are not yet yielding comparable income, which was partly offset by strong same-property growth in existing investments. Other details:

• Brookfield’s strategy during the past five years has been to consolidate its ownership in various operating businesses and complete the privatization of five publicly listed companies, which, having done that, gives the company operating flexibility and access to free cash flow, which has enabled the $500 repurchase program announced today.
• Moreover, during the past 12 months, the company has disposed of more than $8 billion of real estate assets, generating $3.6 billion of net proceeds at prices that were 5% above carrying value.
• Management expects that the use of $500 million of the $3.6 billion proceeds to repurchase units and shares at a 30% discount will create almost $250 million in value for unitholders. If the company’s units continue to trade at a significant discount following the completion of the offer, management will continue to devote more capital to repurchasing units.

Last week, the company announced it would close its largest real-estate fund to date, with $15 billion of total equity commitments, including $1 billion from BPY and $2.75 billion from Brookfield Asset Management. Outlook Following the fifth consecutive year of increased FFO per unit, the company raised the quarterly distribution to unitholders by 5% and allocated a significant amount of capital to the aforementioned repurchase program. The company did not provide guidance for 2019. Current consensus estimates call for:

• Revenues of $6.41 billion, up 17.6%.
• FFOPS of $1.59, up 12.0%.