Distributable Earnings of
BROOKFIELD, NEWS,
He continued, “We successfully completed the distribution to shareholders and listing of a 25% interest in our asset management business in
Operating Results
Excluding the impact of realizations recorded in the prior year, distributable earnings increased by 24% compared to the prior year.
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Years Ended | |||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||
| Net income1 | $ | 44 | $ | 3,461 | $ | 5,195 | $ | 12,388 | |||
| Operating funds from operations2,3 | 1,135 | 1,237 | 4,618 | 3,761 | |||||||
| Per Brookfield share2,3 | 0.68 | 0.74 | 2.78 | 2.27 | |||||||
| Distributable earnings before realizations2,3 | 1,142 | 1,052 | 4,314 | 3,467 | |||||||
| Per Brookfield share2,3 | 0.71 | 0.64 | 2.68 | 2.18 | |||||||
- Consolidated basis – includes amounts attributable to non-controlling interests.
- Excludes amounts attributable to non-controlling interests.
- See Reconciliation of Net Income to FFO, Distributable Earnings before realizations and Distributable Earnings on page 5 and Non-IFRS and Performance Measures section on page 9.
Our businesses continued to deliver very strong financial performance. Operating Funds from Operations (“Operating FFO”) was
Distributable Earnings (“DE”) before realizations were
Regular Dividend Declaration
The Board declared a quarterly dividend for the Corporation of
Combined, Brookfield Corporation’s quarterly dividend of
The Board also declared the regular monthly and quarterly dividends on its preferred shares.
Operating Highlights
DE before realizations was
Our asset management business generated fee-related earnings of $576 million in the quarter and
Our insurance solutions business generated distributable earnings of $170 million in the quarter and $388 million for the full year with the growth in earnings providing a natural interest rate hedge to our broader business. During the quarter, we re-deployed $2 billion of highly liquid and short-duration investments into higher yielding assets, increasing annualized DE to
Distributions from our operating businesses were $624 million for the quarter and
We invested and/or committed $81 billion of capital to new investments during the year and advanced monetizations on numerous mature assets.
We continue to acquire high-quality businesses and assets during the quarter, including
Our monetization pipeline across our businesses remains strong. We recently sold a student housing business in the
We ended the year with approximately
We have significant group-wide liquidity with approximately
We continue to have strong access to capital, and in December completed a
We have been actively repurchasing shares. In total, we returned approximately $15 billion of capital to shareholders, including $686 million of open market share repurchases, regular dividends and our special distribution of BAM shares. In addition, our balance sheet remains conservatively capitalized and we have no maturities until 2024.
CONSOLIDATED BALANCE SHEETS
| Unaudited (US$ millions) |
||||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 14,396 | $ | 12,694 | ||||
| Other financial assets | 26,899 | 16,546 | ||||||
| Accounts receivable and other | 30,208 | 33,718 | ||||||
| Inventory | 12,843 | 11,415 | ||||||
| Equity accounted investments | 47,094 | 46,100 | ||||||
| Investment properties | 115,100 | 100,865 | ||||||
| Property, plant and equipment | 124,268 | 115,489 | ||||||
| Intangible assets | 38,411 | 30,609 | ||||||
|
|
28,662 | 20,227 | ||||||
| Deferred income tax assets | 3,403 | 3,340 | ||||||
| Total Assets | $ | 441,284 | $ | 391,003 | ||||
| Liabilities and Equity | ||||||||
| Corporate borrowings | $ | 11,390 | $ | 10,875 | ||||
| Accounts payable and other | 57,620 | 55,694 | ||||||
| Non-recourse borrowings in entities that we manage | 203,005 | 165,057 | ||||||
| Subsidiary equity obligations | 4,188 | 4,308 | ||||||
| Deferred income tax liabilities | 23,190 | 20,328 | ||||||
| Equity | ||||||||
| Non-controlling interests in net assets | $ | 98,138 | $ | 88,386 | ||||
| Preferred equity | 4,145 | 4,145 | ||||||
| Common equity | 39,608 | 141,891 | 42,210 | 134,741 | ||||
| Total Liabilities and Equity | $ | 441,284 | $ | 391,003 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Years Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | $ | 24,213 | $ | 21,787 | $ | 92,769 | $ | 75,731 | |||||||
| Direct costs1 | (18,218 | ) | (16,631 | ) | (70,828 | ) | (57,563 | ) | |||||||
| Other income and gains | 989 | 21 | 1,594 | 3,099 | |||||||||||
| Equity accounted income | 273 | 633 | 2,613 | 2,451 | |||||||||||
| Expenses | |||||||||||||||
| Interest | (3,285 | ) | (2,044 | ) | (10,702 | ) | (7,604 | ) | |||||||
| Corporate costs | (33 | ) | (30 | ) | (122 | ) | (116 | ) | |||||||
| Fair value changes | (1,811 | ) | 1,980 | (977 | ) | 5,151 | |||||||||
| Depreciation and amortization | (1,989 | ) | (1,739 | ) | (7,683 | ) | (6,437 | ) | |||||||
| Income tax | (95 | ) | (516 | ) | (1,469 | ) | (2,324 | ) | |||||||
| Net income | $ | 44 | $ | 3,461 | $ | 5,195 | $ | 12,388 | |||||||
| Net (loss) income attributable to: | |||||||||||||||
| Brookfield shareholders | $ | (316 | ) | $ | 1,118 | $ | 2,056 | $ | 3,966 | ||||||
| Non-controlling interests | 360 | 2,343 | 3,139 | 8,422 | |||||||||||
| $ | 44 | $ | 3,461 | $ | 5,195 | $ | 12,388 | ||||||||
| Net (loss) income per share | |||||||||||||||
| Diluted | $ | (0.23 | ) | $ | 0.66 | $ | 1.19 | $ | 2.39 | ||||||
| Basic | (0.23 | ) | 0.69 | 1.22 | 2.47 | ||||||||||
-
Direct costs exclude depreciation and amortization expenses disclosed above.
SUMMARIZED FINANCIAL RESULTS
RECONCILIATION OF NET INCOME TO FFO AND DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income | $ | 44 | $ | 3,461 | $ | 5,195 | $ | 12,388 | |||||||
| Financial statement components not included in FFO: | |||||||||||||||
| Equity accounted fair value changes and other non-FFO items1 | 938 | 432 | 1,840 | 1,355 | |||||||||||
| Fair value changes | 1,811 | (1,980 | ) | 977 | (5,151 | ) | |||||||||
| Depreciation and amortization | 1,989 | 1,739 | 7,683 | 6,437 | |||||||||||
| Deferred income taxes | (285 | ) | 292 | 191 | 1,210 | ||||||||||
| Realized disposition gains in fair value changes or prior periods | 213 | 394 | 903 | 2,861 | |||||||||||
| Non-controlling interests in FFO2 | (2,878 | ) | (2,609 | ) | (10,495 | ) | (11,542 | ) | |||||||
| Funds from operations3,4 | 1,832 | 1,729 | 6,294 | 7,558 | |||||||||||
| Less: total disposition gains | (417 | ) | (351 | ) | (1,121 | ) | (3,082 | ) | |||||||
| Less: realized carried interest, net | (280 | ) | (141 | ) | (555 | ) | (715 | ) | |||||||
| Operating Funds from operations3,4 | 1,135 | 1,237 | 4,618 | 3,761 | |||||||||||
| Less: net invested capital FFO | (624 | ) | (719 | ) | (2,655 | ) | (1,952 | ) | |||||||
| Less: asset management business FFO | (511 | ) | (518 | ) | (1,963 | ) | (1,809 | ) | |||||||
| Corporate activities | (163 | ) | (116 | ) | (595 | ) | (462 | ) | |||||||
| Insurance solutions operating earnings | 170 | 21 | 388 | 30 | |||||||||||
| Distributions from investments | 624 | 637 | 2,558 | 2,128 | |||||||||||
| Distributions from asset management business | 534 | 539 | 2,061 | 1,892 | |||||||||||
| Equity-based compensation | 18 | 9 | 62 | 36 | |||||||||||
| Preferred share dividends | (41 | ) | (38 | ) | (160 | ) | (157 | ) | |||||||
| Distributable earnings before realizations3 | 1,142 | 1,052 | 4,314 | 3,467 | |||||||||||
| Realized carried interest, net5 | 280 | 141 | 555 | 715 | |||||||||||
| Disposition gains from principal investments | 76 | 108 | 360 | 2,100 | |||||||||||
| Distributable earnings3 | $ | 1,498 | $ | 1,301 | $ | 5,229 | $ | 6,282 | |||||||
-
Other non-FFO items correspond to amounts that are not directly related to revenue earning activities and are not normal or recurring items necessary for business operations.
-
Amounts attributable to non-controlling interests are calculated based on the economic ownership interests held by non-controlling interests in consolidated subsidiaries. By adjusting FFO attributable to non-controlling interests, we are able to remove the portion of FFO earned at non-wholly owned subsidiaries that is not attributable to Brookfield.
-
Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
-
Excludes amounts attributable to non-controlling interests.
-
Includes our share of Oaktree’s distributable earnings attributable to realized carried interest.
SEGMENT OPERATING FUNDS FROM OPERATIONS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Asset management | $ | 511 | $ | 518 | $ | 1,963 | $ | 1,809 | |||||||
| Renewable power and transition | 108 | 75 | 379 | 244 | |||||||||||
| Infrastructure | 135 | 120 | 501 | 426 | |||||||||||
| Private equity | 230 | 224 | 945 | 655 | |||||||||||
| Real estate | 179 | 421 | 953 | 1,004 | |||||||||||
| Corporate | (28 | ) | (121 | ) | (123 | ) | (377 | ) | |||||||
| Operating funds from operations1,2 | 1,135 | 1,237 | 4,618 | 3,761 | |||||||||||
| Realized carried interest, net | 280 | 141 | 555 | 715 | |||||||||||
| Disposition gains | 417 | 351 | 1,121 | 3,082 | |||||||||||
| Funds from operations1,2 | $ | 1,832 | $ | 1,729 | $ | 6,294 | $ | 7,558 | |||||||
| Per share3 | |||||||||||||||
| Total Operating FFO | $ | 0.68 | $ | 0.74 | $ | 2.78 | $ | 2.27 | |||||||
| Total FFO | $ | 1.12 | $ | 1.04 | $ | 3.82 | $ | 4.67 | |||||||
-
Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
-
Excludes amounts attributable to non-controlling interests.
-
Per share amounts are inclusive of dilutive effect of mandatorily redeemable preferred shares held in a consolidated subsidiary.
SEGMENT FUNDS FROM OPERATIONS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Asset management | $ | 791 | $ | 659 | $ | 2,518 | $ | 2,524 | |||||||
| Renewable power and transition | 108 | 75 | 401 | 1,044 | |||||||||||
| Infrastructure | 154 | 102 | 640 | 797 | |||||||||||
| Private equity | 273 | 271 | 1,026 | 2,031 | |||||||||||
| Real estate | 534 | 713 | 1,744 | 1,442 | |||||||||||
| Corporate | (28 | ) | (91 | ) | (35 | ) | (280 | ) | |||||||
| Funds from operations1,2,3 | $ | 1,832 | $ | 1,729 | $ | 6,294 | $ | 7,558 | |||||||
| Per share4 | |||||||||||||||
| Total FFO | $ | 1.12 | $ | 1.04 | $ | 3.82 | $ | 4.67 | |||||||
-
Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
-
Excludes amounts attributable to non-controlling interests.
-
Includes disposition gains.
-
Per share amounts are inclusive of dilutive effect of mandatorily redeemable preferred shares held in a consolidated subsidiary.
EARNINGS PER SHARE
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income | $ | 44 | $ | 3,461 | $ | 5,195 | $ | 12,388 | |||||||
| Non-controlling interests | (360 | ) | (2,343 | ) | (3,139 | ) | (8,422 | ) | |||||||
| Net (loss) income attributable to shareholders | (316 | ) | 1,118 | 2,056 | 3,966 | ||||||||||
| Preferred share dividends1 | (39 | ) | (37 | ) | (150 | ) | (148 | ) | |||||||
| Dilutive effect of conversion of subsidiary preferred shares | — | — | — | (26 | ) | ||||||||||
| Net (loss) income available to common shareholders | (355 | ) | 1,081 | 1,906 | 3,792 | ||||||||||
| Dilutive impact of exchangeable shares of affiliate | — | 1 | 5 | 2 | |||||||||||
| Net (loss) income available to common shareholders including dilutive impact of exchangeable shares | $ | (355 | ) | $ | 1,082 | $ | 1,911 | $ | 3,794 | ||||||
| Weighted average shares | 1,574.8 | 1,568.4 | 1,567.5 | 1,536.5 | |||||||||||
| Dilutive effect of conversion of options and escrowed shares using treasury stock method2 and exchangeable shares of affiliate | — | 62.7 | 40.7 | 50.4 | |||||||||||
| Shares and share equivalents | 1,574.8 | 1,631.1 | 1,608.2 | 1,586.9 | |||||||||||
| Diluted earnings per share3 | $ | (0.23 | ) | $ | 0.66 | $ | 1.19 | $ | 2.39 | ||||||
-
Excludes dividends paid on perpetual subordinated notes of $2 million (2021 – $1 million) and $10 million (2021 – $9 million) for the three months and year ended
December 31, 2022 , which are recognized within net income. -
Includes management share option plan and escrowed stock plan.
-
Per share amounts are inclusive of dilutive effect of mandatorily redeemable preferred shares held in a consolidated subsidiary.
DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Distributions from asset management business | $ | 534 | $ | 539 | $ | 2,061 | $ | 1,892 | |||||||
| Insurance solutions operating earnings | 170 | 21 | 388 | 30 | |||||||||||
| Perpetual affiliates | 619 | 665 | 2,434 | 2,127 | |||||||||||
| Corporate cash and financial assets | (6 | ) | (22 | ) | 77 | 42 | |||||||||
| Other principal investments | 11 | (6 | ) | 47 | (41 | ) | |||||||||
| Distributions from investments | 624 | 637 | 2,558 | 2,128 | |||||||||||
| Corporate activities | (163 | ) | (116 | ) | (595 | ) | (462 | ) | |||||||
| Preferred share dividends | (41 | ) | (38 | ) | (160 | ) | (157 | ) | |||||||
| Add back: equity-based compensation costs | 18 | 9 | 62 | 36 | |||||||||||
| Distributable earnings before realizations | 1,142 | 1,052 | 4,314 | 3,467 | |||||||||||
| Realized carried interest, net | 280 | 141 | 555 | 715 | |||||||||||
| Disposition gains from principal investments | 76 | 108 | 360 | 2,100 | |||||||||||
| Distributable earnings1 | $ | 1,498 | $ | 1,301 | $ | 5,229 | $ | 6,282 | |||||||
- Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
Additional Information
The Letter to Shareholders and the company’s Supplemental Information for the three months and year ended
The statements contained herein are based primarily on information that has been extracted from our financial statements for the quarter and year ended
Brookfield Corporation’s Board of Directors have reviewed and approved this document, including the summarized unaudited consolidated financial statements prior to its release.
Information on our dividends can be found on our website under Stock & Distributions/Distribution History.
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access Brookfield Corporation’s 2022 Year End Results as well as the Shareholders’ Letter and Supplemental Information on Brookfield Corporation’s website under the Reports & Filings section at www.bn.brookfield.com.
To participate in the Conference Call today at
https://register.vevent.com/register/BI10eaa1188b6d47ee8623456993378c04.
About
Please note that Brookfield Corporation’s previous audited annual and unaudited quarterly reports have been filed on EDGAR and SEDAR and can also be found in the investor section of its website at www.bn.brookfield.com. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.
For more information, please visit our website at www.bn.brookfield.com or contact:
| Communications & Media: Tel: (416) 943-7937 Email: [email protected] |
Investor Relations: Tel: (416) 359-8647 Email: [email protected] |
Non-IFRS and Performance Measures
This news release and accompanying financial information are based on International Financial Reporting Standards (“IFRS”), as issued by the
We make reference to Funds from Operations (“FFO”). We define FFO as net income attributable to shareholders prior to fair value changes, depreciation and amortization, and deferred income taxes, and includes realized disposition gains that are not recorded in net income as determined under IFRS. FFO also includes the company’s share of equity accounted investments’ FFO on a fully diluted basis. FFO consists of the following components:
-
Operating FFO represents the company’s share of revenues less direct costs and interest expenses; excludes realized carried interest and disposition gains, fair value changes, depreciation and amortization and deferred income taxes; and includes our proportionate share of FFO from operating activities recorded by equity accounted investments on a fully diluted basis. We present this measure as we believe it assists in describing our results and variances within FFO.
-
Realized Carried Interest represents our contractual share of investment gains generated within a private fund after considering our clients minimum return requirements. Realized carried interest is determined on third-party capital that is no longer subject to future investment performance.
-
Realized Disposition Gains are included in FFO because we consider the purchase and sale of assets to be a normal part of the company’s business. Realized disposition gains include gains and losses recorded in net income and equity in the current period, and are adjusted to include fair value changes and revaluation surplus balances recorded in prior periods which were not included in prior period FFO.
We make reference to Distributable Earnings (“DE”), which is referring to the sum of distributions from our asset management business, operating earnings from our insurance solutions business, distributions received from our ownership of investments, realized carried interest and disposition gains from principal investments, net of Corporate Activities FFO, preferred share dividends and equity-based compensation costs. We also make reference to DE before realizations, which refers to DE before realized carried interest and realized disposition gains from principal investments. We believe these measures provide insight into earnings received by the company that are available for distribution to common shareholders or to be reinvested into the business.
We use FFO and DE to assess our operating results and the value of Brookfield Corporation’s business and believe that many shareholders and analysts also find these measures of value to them.
We disclose a number of financial measures in this news release that are calculated and presented using methodologies other than in accordance with IFRS. These financial measures, which include FFO and DE, should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in accordance with IFRS. We caution readers that these non-IFRS financial measures or other financial metrics are not standardized under IFRS and may differ from the financial measures or other financial metrics disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities.
We provide additional information on key terms and non-IFRS measures in our filings available at www.bn.brookfield.com.
Notice to Readers
This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of the
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 the actual results, performance or achievements of
Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: (i) returns that are lower than target; (ii) the impact or unanticipated impact of general economic, political and market factors in the countries in which we do business including as a result of COVID-19 and related global economic disruptions; (iii) the behavior of financial markets, including fluctuations in interest and foreign exchange rates; (iv) global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; (v) strategic actions including acquisitions and dispositions; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits; (vi) changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); (vii) the ability to appropriately manage human capital; (viii) the effect of applying future accounting changes; (ix) business competition; (x) operational and reputational risks; (xi) technological change; (xii) changes in government regulation and legislation within the countries in which we operate; (xiii) governmental investigations; (xiv) litigation; (xv) changes in tax laws; (xvi) ability to collect amounts owed; (xvii) catastrophic events, such as earthquakes, hurricanes and epidemics/pandemics; (xviii) the possible impact of international conflicts and other developments including terrorist acts and cyberterrorism; (xix) the introduction, withdrawal, success and timing of business initiatives and strategies; (xx) the failure of effective disclosure controls and procedures and internal controls over financial reporting and other risks; (xxi) health, safety and environmental risks; (xxii) the maintenance of adequate insurance coverage; (xxiii) the existence of information barriers between certain businesses within our asset management operations; (xxiv) risks specific to our business segments including real estate, renewable power and transition, infrastructure, private equity, and credit; and (xxv) factors detailed from time to time in our documents filed with the securities regulators in
We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the foregoing risks, as well as other uncertainties, factors and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. Except as required by law, the company undertakes 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.
Past performance is not indicative nor a guarantee of future results. There can be no assurance that comparable results will be achieved in the future, that future investments will be similar to historic investments discussed herein, that targeted returns, growth objectives, diversification or asset allocations will be met or that an investment strategy or investment objectives will be achieved (because of economic conditions, the availability of appropriate opportunities or otherwise).
Target returns and growth objectives set forth in this news release are for illustrative and informational purposes only and have been presented based on various assumptions made by
Certain of the information contained herein is based on or derived from information provided by independent third-party sources. While
Source:
| Title | Document |
|---|---|
English |