Distributable Earnings Before Realizations Increased 19% to a
Record
Advanced Monetizations of $17 billion and New Investments of
as Transaction Activity Continues to Increase
BROOKFIELD, NEWS,
He added, “With capital markets continuing to improve and transaction activity picking up, we recently executed on several financings and signed or closed a number of monetizations across our business. As the macro tailwinds turn in our favor, we are better positioned than ever to drive strong earnings growth and deliver 15%+ total returns to our shareholders over the long term.”
Operating Results
Distributable earnings (“DE”) before realizations increased by 19% over the prior year quarter.
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Last Twelve Months Ended | |||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Net income of consolidated business1 | $ | 1,518 | $ | 35 | $ | 4,886 | $ | 2,015 | |||
| Net income attributable to Brookfield shareholders2 | 64 | 230 | 908 | 115 | |||||||
| Distributable earnings before realizations2,3,4 | 1,259 | 1,056 | 4,582 | 4,049 | |||||||
| – Per Brookfield share2,3,4 | 0.80 | 0.67 | 2.90 | 2.54 | |||||||
| Distributable earnings2,3 | 1,325 | 1,150 | 5,980 | 4,992 | |||||||
| – Per Brookfield share2,3 | 0.84 | 0.73 | 3.78 | 3.13 | |||||||
See endnotes on page 8.
Total consolidated net income was
Our asset management business delivered 14% growth in fee-related earnings compared to the prior year quarter, due to recent fundraising momentum across our diversified strategies, primarily from our credit funds and insurance inflows.
Wealth solutions earnings doubled compared to the prior year quarter, benefiting from the acquisition of
Our operating businesses continue to deliver growing cash flows, backed by the resilient earnings of our renewable power and transition, infrastructure and private equity businesses and 4% growth in same-store net operating income (“NOI”) from our core real estate portfolio over the prior year quarter.
During the quarter and over the LTM, earnings from realizations were $66 million and
Regular Dividend Declaration
The Board declared a quarterly dividend for
Operating Highlights
Distributable earnings before realizations were a record
Asset Management:
- DE was $694 million (
$0.44 /share) in the quarter and$2 .6 billion ($1.64 /share) over the LTM. - Fee-related earnings increased by 14% compared to the prior year quarter, driven by a 23% increase in fee-bearing capital over the LTM to $539 billion as at
September 30, 2024 . Inflows were $21 billion in the quarter and $135 billion for the LTM. - During the quarter, we closed on the previously announced strategic partnership with
Castlelake , a global alternative investment manager specializing in asset-based private credit including aviation and specialty finance. We also completed the acquisition ofSVB Capital throughPinegrove Capital Partners , our venture investment platform formed with Sequoia Heritage.
Wealth Solutions:
- Distributable operating earnings were $364 million (
$0.23 /share) in the quarter and$1 .2 billion ($0.75 /share) over the LTM. - Our insurance assets increased to over $115 billion, as we generated approximately
$4 .5 billion of organic inflows in the quarter, primarily driven by retail and institutional annuity sales. - The average investment portfolio yield on our insurance assets was 5.4%, 1.8% higher than our average cost of capital. As we continue to reposition the investment portfolio, annualized earnings for the business are poised to grow from approximately
$1 .5 billion today to $2 billion in the near term. - Today, a subsidiary of Brookfield Wealth Solutions announced an agreement to reinsure
$1.4 billion ofU.K. pension liabilities. This is our first transaction outside ofNorth America , as we continue to look to diversify and expand our wealth solutions business. - Through our combined wealth solutions platforms, we are raising close to $2 billion of retail capital per month.
Operating Businesses:
- DE was $356 million (
$0.23 /share) in the quarter and$1 .5 billion ($0.93 /share) over the LTM. - Cash distributions from our operating businesses are supported by their resilient earnings and strong underlying performance. Our core real estate portfolio continues to deliver growth, with same-store NOI increasing by 4% over the prior year quarter.
- In our real estate business, we signed close to 6 million square feet of office and retail leases during the quarter. Rents on the newly signed leases were approximately 10% higher compared to those leases expiring.
Earnings from the monetization of mature assets were $66 million (
- In the past few months, we have seen increased levels of transaction activity. We closed or advanced over $17 billion of asset sales across the business, which include retail parks in the
U.K. , a luxury resort in theU.S. , multiple renewable power assets globally, and an office asset inAustralia . All of these are expected to generate attractive returns. - Total accumulated unrealized carried interest was
$11 .5 billion at quarter end, representing an increase of 17% over the LTM, net of carried interest realized into income. We recognized $295 million of net realized carried interest into income so far this year.
We ended the quarter with over $150 billion of capital available to deploy into new investments.
- During the quarter, we returned
$203 million to shareholders through regular dividends and share repurchases. Over the last twelve months, we repurchased approximately $1 billion of shares, and we plan to keep allocating capital to share repurchases. - We have over $150 billion of deployable capital, which includes $66 billion of cash, financial assets and undrawn credit lines at the Corporation, our affiliates and our wealth solutions business.
- Our balance sheet remains conservatively capitalized. Our corporate debt at the Corporation has a weighted-average term of 13 years and modest maturities through to the end of 2025.
- Our strong access to capital throughout our franchise enabled us to execute on over $30 billion of financings in the past few months. This includes an
$850 million loan on a high-quality mall inLas Vegas and an approximately $600 million financing for the acquisition of an industrial portfolio, demonstrating the very active CMBS market.
CONSOLIDATED BALANCE SHEETS
| Unaudited (US$ millions) |
|
|
|||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 11,824 | $ | 11,222 | |||||||
| Other financial assets | 30,096 | 28,324 | |||||||||
| Accounts receivable and other | 35,956 | 31,001 | |||||||||
| Inventory | 11,031 | 11,412 | |||||||||
| Equity accounted investments | 65,101 | 59,124 | |||||||||
| Investment properties | 129,586 | 124,152 | |||||||||
| Property, plant and equipment | 148,305 | 147,617 | |||||||||
| Intangible assets | 37,420 | 38,994 | |||||||||
|
|
34,812 | 34,911 | |||||||||
| Deferred income tax assets | 4,013 | 3,338 | |||||||||
| Total Assets | $ | 508,144 | $ | 490,095 | |||||||
| Liabilities and Equity | |||||||||||
| Corporate borrowings | $ | 14,898 | $ | 12,160 | |||||||
| Accounts payable and other | 61,074 | 59,011 | |||||||||
| Non-recourse borrowings | 232,195 | 221,550 | |||||||||
| Subsidiary equity obligations | 5,212 | 4,145 | |||||||||
| Deferred income tax liabilities | 24,866 | 24,987 | |||||||||
| Equity | |||||||||||
| Non-controlling interests in net assets | $ | 123,428 | $ | 122,465 | |||||||
| Preferred equity | 4,103 | 4,103 | |||||||||
| Common equity | 42,368 | 169,899 | 41,674 | 168,242 | |||||||
| Total Equity | 169,899 | 168,242 | |||||||||
| Total Liabilities and Equity | $ | 508,144 | $ | 490,095 | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Nine Months Ended | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | $ | 20,623 | $ | 24,441 | $ | 66,580 | $ | 71,406 | |||||||
| Direct costs1 | (12,934 | ) | (18,842 | ) | (46,222 | ) | (54,166 | ) | |||||||
| Other income and gains | 711 | 381 | 1,195 | 2,245 | |||||||||||
| Equity accounted income | 184 | 809 | 1,695 | 1,639 | |||||||||||
| Interest expense | |||||||||||||||
| – Corporate borrowings | (190 | ) | (164 | ) | (544 | ) | (454 | ) | |||||||
| – Non-recourse borrowings | |||||||||||||||
| Same-store | (3,712 | ) | (3,917 | ) | (11,390 | ) | (11,004 | ) | |||||||
| Acquisitions, net of dispositions2 | (113 | ) | — | (160 | ) | — | |||||||||
| Upfinancings2 | (317 | ) | — | (542 | ) | — | |||||||||
| Corporate costs | (20 | ) | (16 | ) | (56 | ) | (53 | ) | |||||||
| Fair value changes | (166 | ) | (170 | ) | (761 | ) | (70 | ) | |||||||
| Depreciation and amortization | (2,410 | ) | (2,246 | ) | (7,320 | ) | (6,648 | ) | |||||||
| Income tax | (138 | ) | (241 | ) | (723 | ) | (924 | ) | |||||||
| Net income | 1,518 | 35 | 1,752 | 1,971 | |||||||||||
| Less: Amounts attributable to non-controlling interests | (1,454 | ) | 195 | (1,543 | ) | (1,540 | ) | ||||||||
| Net income attributable to Brookfield shareholders | $ | 64 | $ | 230 | $ | 209 | $ | 431 | |||||||
| Net income per share | |||||||||||||||
| Diluted | $ | 0.01 | $ | 0.12 | $ | 0.05 | $ | 0.20 | |||||||
| Basic | 0.01 | 0.12 | 0.05 | 0.20 | |||||||||||
- Direct costs disclosed above exclude depreciation and amortization expense.
- Interest expense from acquisitions, net of dispositions, and upfinancings completed over the twelve months ended
September 30, 2024 .
SUMMARIZED FINANCIAL RESULTS
DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Asset management | $ | 694 | $ | 634 | $ | 2,600 | $ | 2,607 | |||||||
| Wealth solutions | 364 | 182 | 1,182 | 657 | |||||||||||
| BEP | 107 | 105 | 423 | 415 | |||||||||||
| BIP | 84 | 80 | 331 | 315 | |||||||||||
| BBU | 9 | 9 | 36 | 36 | |||||||||||
| BPG | 166 | 179 | 722 | 766 | |||||||||||
| Other | (10 | ) | (7 | ) | (48 | ) | (24 | ) | |||||||
| Operating businesses | 356 | 366 | 1,464 | 1,508 | |||||||||||
| Corporate costs and other | (155 | ) | (126 | ) | (664 | ) | (616 | ) | |||||||
| Distributable earnings before realizations1 | 1,259 | 1,056 | 4,582 | 4,156 | |||||||||||
| Realized carried interest, net | 61 | 94 | 395 | 750 | |||||||||||
| Disposition gains from principal investments | 5 | — | 1,003 | 86 | |||||||||||
| Distributable earnings1 | $ | 1,325 | $ | 1,150 | $ | 5,980 | $ | 4,992 | |||||||
- Non-IFRS measure – see Non-IFRS and Performance Measures section on page 8.
RECONCILIATION OF NET INCOME TO DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 1,518 | $ | 35 | $ | 4,886 | $ | 2,015 | |||||||
| Financial statement components not included in DE: | |||||||||||||||
| Equity accounted fair value changes and other items | 1,158 | 298 | 3,328 | 2,743 | |||||||||||
| Fair value changes and other | 179 | 503 | 2,516 | 2,214 | |||||||||||
| Depreciation and amortization | 2,410 | 2,246 | 9,747 | 8,637 | |||||||||||
| Disposition gains in net income | (430 | ) | (167 | ) | (4,999 | ) | (2,936 | ) | |||||||
| Deferred income taxes | (324 | ) | (238 | ) | (839 | ) | (766 | ) | |||||||
| Non-controlling interests in the above items1 | (3,252 | ) | (1,788 | ) | (10,074 | ) | (7,679 | ) | |||||||
| Less: realized carried interest, net | (61 | ) | (94 | ) | (395 | ) | (750 | ) | |||||||
| Working capital, net | 61 | 261 | 412 | 678 | |||||||||||
| Distributable earnings before realizations2 | 1,259 | 1,056 | 4,582 | 4,156 | |||||||||||
| Realized carried interest, net3 | 61 | 94 | 395 | 750 | |||||||||||
| Disposition gains from principal investments | 5 | — | 1,003 | 86 | |||||||||||
| Distributable earnings2 | $ | 1,325 | $ | 1,150 | $ | 5,980 | $ | 4,992 | |||||||
- Amounts attributable to non-controlling interests are calculated based on the economic ownership interests held by non-controlling interests in consolidated subsidiaries. By adjusting DE attributable to non-controlling interests, we are able to remove the portion of DE earned at non-wholly owned subsidiaries that is not attributable to Brookfield.
- Non-IFRS measure – see Non-IFRS and Performance Measures section on page 8.
- Includes our share of Oaktree’s distributable earnings attributable to realized carried interest.
EARNINGS PER SHARE
| Unaudited For the periods ended (millions, except per share amounts) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 1,518 | $ | 35 | $ | 4,886 | $ | 2,015 | |||||||
| Non-controlling interests | (1,454 | ) | 195 | (3,978 | ) | (1,900 | ) | ||||||||
| Net income attributable to shareholders | 64 | 230 | 908 | 115 | |||||||||||
| Preferred share dividends1 | (43 | ) | (41 | ) | (170 | ) | (162 | ) | |||||||
| Dilutive impact of exchangeable shares of affiliate | — | 1 | 11 | — | |||||||||||
| Net income available to common shareholders including dilutive impact of exchangeable shares |
$ | 21 | $ | 190 | $ | 749 | $ | (47 | ) | ||||||
| Weighted average shares | 1,508.5 | 1,561.2 | 1,520.2 | 1,568.0 | |||||||||||
| Dilutive effect of conversion of options and escrowed shares using treasury stock method2 and exchangeable shares of affiliate |
32.4 | 24.5 | 61.6 | — | |||||||||||
| Shares and share equivalents | 1,540.9 | 1,585.7 | 1,581.8 | 1,568.0 | |||||||||||
| Diluted earnings per share3 | $ | 0.01 | $ | 0.12 | $ | 0.47 | $ | (0.03 | ) | ||||||
- Excludes dividends paid on perpetual subordinated notes of $3 million (2023 – $3 million) and
$10 million (2023 –$10 million ) for the three and twelve months endedSeptember 30, 2024 , 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.
Additional Information
The Letter to Shareholders and the company’s Supplemental Information for the three and twelve months ended
The statements contained herein are based primarily on information that has been extracted from our financial statements for the periods ended
Brookfield Corporation’s Board of Directors has 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 2024 Third Quarter 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
About
We have a track record of delivering 15%+ annualized returns to shareholders for over 30 years, supported by our unrivaled investment and operational experience. Our conservatively managed balance sheet, extensive operational experience, and global sourcing networks allow us to consistently access unique opportunities. At the center of our success is the Brookfield Ecosystem, which is based on the fundamental principle that each group within Brookfield benefits from being part of the broader organization.
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.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:
| Media: Tel: (212) 618-3469 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 Distributable Earnings (“DE”). We define DE as the sum of distributable earnings from our asset management business, distributable operating earnings from our wealth solutions business, distributions received from our ownership of investments, realized carried interest and disposition gains from principal investments, net of earnings from our Corporate Activities, 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.
Realized carried interest and realized disposition gains are further described below:
- 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 from principal investments are included in DE because we consider the purchase and sale of assets from our directly held investments 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 DE.
We use 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 make reference to Operating Funds from Operations (“Operating FFO”). We define Operating FFO as 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 make reference to Net Operating Income (“NOI”), which refers to the revenues from our operations less direct expenses before the impact of depreciation and amortization within our real estate business. We present this measure as we believe it is a key indicator of our ability to impact the operating performance of our properties. As NOI excludes non-recurring items and depreciation and amortization of real estate assets, it provides a performance measure that, when compared to prior periods, reflects the impact of operations from trends in occupancy rates and rental rates.
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 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.
| End Notes | |
- Consolidated basis – includes amounts attributable to non-controlling interests.
- Excludes amounts attributable to non-controlling interests.
- See Reconciliation of Net Income to Distributable Earnings on page 5 and Non-IFRS and Performance Measures section on page 8.
- Distributable earnings before realizations, including per share amounts, for the twelve months ended
September 30, 2023 were adjusted for the special distribution of 25% of our asset management business onDecember 9, 2022 . Prior to the adjustment, DE before realizations were$4 .2 billion for the twelve months endedSeptember 30, 2023 .
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 caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect future results. Readers are urged to consider these risks, as well as other uncertainties, factors and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements, which are based only on information available to us as of the date of this news release or such other date specified herein. Except as required by law,
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
When we speak about our wealth solutions business or Brookfield Wealth Solutions, we are referring to Brookfield’s investments in this business that supported the acquisitions of its underlying operating subsidiaries.
Source:
| Title | Document |
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English |