Brookfield Property Partners L.P. Condensed consolidated financial statements (unaudited) As at September 30, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025 and 2024 | Unaudited | | Three months ended Sep. 30, | | Nine months ended Sep. 30, | | | --- | --- | --- | --- | --- | --- | | (US$ Millions) | Note | 2025 | 2024 | 2025 | 2024 | | Net loss | $ | (301) $ | (525) $ | (476) $ | (2,023) | | Other comprehensive (loss) income | 26 | | | | | | Items that may be reclassi ...

Core Insights - Bill Ackman described his investment in General Growth Properties (GGP) as "the best investment" of his career, highlighting the potential of investing in companies facing bankruptcy [1][2] Investment Strategy - Ackman purchased a 25% stake in GGP in late 2008 when its stock price fell from $63 to 34 cents per share, emphasizing that buying stock in a bankrupt company can be a contrarian investment strategy [2] - GGP was the second-largest mall operator in the U.S. with $27 billion in debt, of which $15 billion was due within 18 months, yet Ackman believed in the strength of its underlying assets [2] Financial Performance - Ackman noted that GGP's occupancy rates, rents, and net operating income were all increasing, indicating solid fundamentals for the company [3] - The investment of approximately $60 million by Pershing Square Holdings Ltd. was significant, and Ackman took a board position to assist in the restructuring process [3] Success Stories - A New York City cab driver turned a $50,000 investment in GGP into a $3 million retirement fund, showcasing the transformative potential of Ackman's investment advice [4] Acquisition and Market Impact - The successful turnaround of GGP culminated in its acquisition by Brookfield Property Partners for $9 billion in 2018, marking a key milestone in Ackman's career [5] - Despite a recent decline of 1.58% in Brookfield Property Partners' stock, it has shown favorable price trends over various time frames [5]

Revenue Performance - Total revenue for Q2 2025 was $1,802 million, a decrease of 25.6% compared to $2,423 million in Q2 2024[3] - Commercial property revenue decreased to $1,143 million in Q2 2025, down 26% from $1,545 million in Q2 2024[3] - Hospitality revenue fell by 39.5% to $412 million in Q2 2025 from $682 million in Q2 2024[3] - The partnership's revenue for the three months ended June 30, 2025, was $1,396 million, an increase from $1,282 million in the same period of 2024[27] - Total revenue for the six months ended June 30, 2025, was $4,743 million, a decrease from $4,743 million in the same period of 2024[112] Financial Performance - Net loss for Q2 2025 was $46 million, compared to a net loss of $789 million in Q2 2024[5] - For the six months ended June 30, 2025, Brookfield Property Partners reported a net loss of $175 million, a significant improvement from a net loss of $1,498 million in the same period of 2024[9] - Funds from operations (FFO) for the three months ended June 30, 2025, reported a loss of $144 million, compared to a loss of $133 million in the same period of 2024[111] - The partnership's net income for the six months ended June 30, 2025, was $1,189 million, compared to $957 million for the same period in 2024, reflecting a year-over-year increase of 24.2%[27] Asset and Liability Management - Total assets decreased to $98,885 million as of June 30, 2025, down from $102,591 million at the end of 2024[2] - Total liabilities reduced to $58,683 million as of June 30, 2025, compared to $64,342 million at the end of 2024[2] - Non-current liabilities decreased to $38,249 million as of June 30, 2025, down from $42,672 million at the end of 2024[2] - The partnership's total liabilities were $38,623 million as of June 30, 2025, compared to $36,595 million as of December 31, 2024[27] Fair Value and Comprehensive Income - Fair value gains (losses) for Q2 2025 were $47 million, a significant improvement from losses of $508 million in Q2 2024[3] - Other comprehensive income for Q2 2025 was $327 million, compared to a loss of $68 million in Q2 2024[5] - The partnership's fair value gains, net, for the six months ended June 30, 2025, were $554 million, compared to $528 million for the same period in 2024[27] Investment Activity - The partnership's investment properties decreased from $62,078 million at the end of 2024 to $58,651 million by June 30, 2025, primarily due to property dispositions and deconsolidation of India REIT[19] - The partnership's capital expenditures for the first half of 2025 were $514 million, compared to $2,134 million for the entire year of 2024, indicating a reduction in investment activity[19] - The partnership sold assets for net proceeds of approximately $1.032 billion in the first half of 2025, including $642 million in Q1 and $390 million in Q2[43][44] Debt Management - Total debt obligations issued amounted to $5,130 million in 2025, down from $10,596 million in 2024, while debt repayments were $6,659 million compared to $9,962 million in the previous year[9] - The partnership's cash paid for interest decreased from $2,250 million in 2024 to $1,593 million in 2025, reflecting improved financing conditions[9] - Total debt obligations decreased to $47,993 million as of June 30, 2025, down from $51,499 million at December 31, 2024, a reduction of 6.5%[46] Equity and Non-controlling Interests - Total equity increased to $40,202 million as of June 30, 2025, up from $38,249 million at the end of 2024[2] - Non-controlling interests increased to $31,489 million as of June 30, 2025, from $29,829 million at the end of 2024[72] - The partnership's total non-controlling interests increased to $17,162 million as of June 30, 2025, up from $16,022 million at the end of 2024[73] Operational Efficiency - Direct commercial property expenses decreased to $474 million in Q2 2025, down 21% from $600 million in Q2 2024[77] - General and administrative expenses decreased to $308 million in Q2 2025, down 10% from $341 million in Q2 2024[79] - Direct hospitality expenses for Q2 2025 were $291 million, a reduction of 46% compared to $536 million in Q2 2024[78] Currency and Derivative Management - The partnership's foreign currency translation adjustments contributed $1,235 million to the investment property balance in the first half of 2025, contrasting with a loss of $1,391 million in 2024[19] - The notional value of net investment hedges in foreign currencies as of June 30, 2025, includes £992 million and €466 million, with fair values of $(278) million and $(53) million respectively[98] - The partnership's derivative assets decreased to $76 million as of June 30, 2025, down from $100 million at December 31, 2024, a decline of 24.0%[37]

Financial Performance - Total revenue for Q1 2025 was $1,749 million, a decrease of 24.6% compared to $2,320 million in Q1 2024[3] - Net loss for Q1 2025 was $129 million, significantly improved from a net loss of $709 million in Q1 2024[5] - Other comprehensive income for Q1 2025 was $349 million, contrasting with a loss of $144 million in Q1 2024[5] - The partnership reported a net income of $721 million for the three months ended March 31, 2025, significantly up from $273 million for the same period in 2024[27] - The partnership's Funds from Operations (FFO) for Q1 2025 was $(113) million, improving slightly from $(122) million in Q1 2024[110] Revenue Breakdown - Commercial property revenue decreased to $1,264 million, down 17.9% from $1,539 million year-over-year[3] - Total hospitality revenue for the three months ended March 31, 2025, was $335 million, a decrease from $595 million in the same period of 2024[73] - Total investment and other revenue for the three months ended March 31, 2025, was $150 million, down from $186 million in the same period of 2024[74] - The Office segment generated total revenue of $475 million in Q1 2025, down from $484 million in Q1 2024[110] - The Retail segment reported total revenue of $366 million in Q1 2025, down from $395 million in Q1 2024[110] - The LP Investments segment saw total revenue decrease to $871 million in Q1 2025 from $1,388 million in Q1 2024[110] Assets and Liabilities - Total assets decreased to $99,000 million as of March 31, 2025, down from $102,591 million at the end of 2024[2] - Total liabilities reduced to $60,280 million, a decrease from $64,342 million at the end of 2024[2] - Total non-current assets decreased to $92,684 million from $94,482 million at the end of 2024[2] - The partnership's total liabilities as of March 31, 2025, were $60,280 million, down from $64,342 million as of December 31, 2024[111] - The partnership's total assets decreased to $99,000 million as of March 31, 2025, from $102,591 million as of December 31, 2024[111] Cash and Cash Equivalents - Cash and cash equivalents as of March 31, 2025, were $1,819 million, down from $2,208 million at the end of 2024[2] - The partnership's cash and cash equivalents decreased to $1.819 billion by the end of the period, down from $2.573 billion at the beginning of the period[9] - The partnership's net change in cash and cash equivalents during the period was a decrease of $446 million, contrasting with an increase of $256 million in the same period of 2024[9] Fair Value and Losses - Fair value losses, net for Q1 2025 were $110 million, an improvement from $372 million in Q1 2024[3] - Fair value losses for the period were reported at $229 million, compared to losses of $506 million for the year ended December 31, 2024[19] - Fair value losses, net, improved to a loss of $110 million in Q1 2025 compared to a loss of $372 million in Q1 2024, reflecting a reduction of about 70.5%[78] Capital Expenditures and Investments - The partnership's capital expenditures for the quarter were $253 million, compared to $2.134 billion for the year ended December 31, 2024[19] - The partnership acquired investment properties worth $1.629 billion during the quarter, compared to $8.010 billion for the entire year of 2024[19] - The partnership committed approximately $1.3 billion to the BSREP I fund, with $129 million of uncontributed capital commitments remaining as of March 31, 2025[83] - The partnership's BSREP II fund has a total commitment of $2.3 billion, with $512 million of uncontributed capital commitments remaining as of March 31, 2025[84] - The BSREP IV fund has a total commitment of $3.5 billion, with $1.2 billion of uncontributed capital commitments remaining as of March 31, 2025[89] Debt Obligations - The partnership's total debt obligations issued amounted to $2.844 billion, while repayments totaled $2.940 billion, resulting in a net cash outflow from financing activities of $585 million[9] - The partnership's total debt obligations decreased to $49,965 million as of March 31, 2025, down from $51,499 million at the end of 2024, representing a reduction of approximately 3%[45] - The partnership's debt obligations as of March 31, 2025, are $49,965 million, down from $51,499 million as of December 31, 2024[98] Expenses - Total direct commercial property expense decreased to $488 million in Q1 2025 from $611 million in Q1 2024, a reduction of approximately 20.1%[75] - Total direct hospitality expense fell to $281 million in Q1 2025, down from $533 million in Q1 2024, representing a decrease of about 47.4%[76] - General and administrative expenses decreased to $286 million in Q1 2025 from $340 million in Q1 2024, a decline of approximately 15.9%[77] Other Financial Metrics - The partnership's equity accounted investments increased to $20.224 billion as of March 31, 2025, compared to $19.547 billion at the end of 2024[26] - The balance of commercial properties at the beginning of the period was $60.093 billion, with a decrease of $3.485 billion due to the deconsolidation of the India REIT[19] - The partnership's total other non-current assets slightly increased to $5,352 million as of March 31, 2025, compared to $5,339 million at the end of 2024[37]