Distributable Earnings of
Quarterly Dividend Raised by 14%
BROOKFIELD, NEWS,
He added, “We repurchased over $600 million of shares in 2023 and expect to acquire at least a further $1 billion this year, adding value to all remaining shares. With significant growth levers embedded in the business, we are well positioned to continue to deliver strong financial results going forward and to achieve our targeted 15%+ per share returns for our shareholders over the long term.”
Operating Results
Distributable earnings (“DE”) before realizations increased by 17% and 12% per share compared to the prior periods, after adjusting for the special distribution of 25% of our asset management business in
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Years Ended | |||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| Net income1 | $ | 3,134 | $ | 44 | $ | 5,105 | $ | 5,195 | |||
| Distributable earnings before realizations2,3 | 1,209 | 1,142 | 4,223 | 4,314 | |||||||
| – Adjusted for the special distribution2,3,4 | 1,209 | 1,035 | 4,223 | 3,825 | |||||||
| – Per Brookfield share2,3,4 | 0.76 | 0.65 | 2.66 | 2.38 | |||||||
| Distributable earnings2,3 | 1,312 | 1,498 | 4,806 | 5,229 | |||||||
| – Per Brookfield share2,3 | 0.83 | 0.94 | 3.03 | 3.25 | |||||||
See endnotes on page 8.
Each of our businesses delivered strong financial results during the year, amidst a challenging market backdrop. Net income was
Our asset management business benefited from continued fundraising momentum and strong capital deployment across our flagship funds and complementary fund offerings, driving an increase in DE of 7% compared to the prior year.
In our insurance solutions business, we continued to scale our asset base and leverage our investment capabilities to drive earnings growth.
Our operating businesses generated stable and growing cash distributions, underpinned by the resilient earnings across our renewable power & transition, infrastructure and private equity businesses, as well as 7% growth in same-store net operating income (“NOI”) within our core real estate.
During the quarter and for the year, earnings from realizations were $103 million and $583 million, respectively, with total DE for the quarter and for the year of
Regular Dividend Declaration
The Board declared a 14% increase in the quarterly dividend for
Operating Highlights
DE before realizations were
Asset Management:
- Distributable earnings were $649 million (
$0.41 /share) in the quarter and$2 .6 billion ($1.61 /share) for the year. - Our private fund strategies continue to attract strong interest from our clients, leading to $93 billion of capital raised which, combined with the approximately $50 billion anticipated upon the closing of
American Equity Life (“AEL”), brings the total to $143 billion. Fee-bearing capital was $457 billion as ofDecember 31, 2023 , an increase of $39 billion or 9% over the prior year, and will shortly be over $500 billion with the closing of AEL. - Fee-related earnings increased by 6% compared to the prior year.
- Our fundraising outlook remains strong heading into 2024, which should contribute to meaningful earnings growth.
Insurance Solutions:
- Distributable operating earnings were $253 million (
$0.16 /share) in the quarter and $740 million ($0.47 /share) for the year. - Our insurance assets increased to approximately $60 billion, with the close of
Argo Group and the origination of new annuity policies. Our average investment portfolio yield on our insurance assets was 5.5%, approximately 2% higher than the average cost of capital. - As at the end of 2023, annualized earnings in this business were $940 million. With the closing of AEL expected shortly, our insurance solutions business will grow to over $100 billion of assets and
$1 .3 billion of annualized earnings. - Through our retail wealth and insurance solutions platforms, we remain on track to reach
$1 .5 billion of monthly retail capital inflows in 2024.
Operating Businesses:
- Distributable earnings were $400 million (
$0.25 /share) in the quarter and$1 .5 billion ($0.92 /share) for the year. - Operating Funds from Operations within our renewable power & transition and infrastructure businesses increased by 7% over the year, supporting stable cash distributions. Our private equity business continues to deliver strong earnings growth, with Adjusted EBITDA up by 11%, benefiting from the essential nature of the services they provide.
- In our real estate business, our core portfolio produced same-store NOI growth of 7% compared to the prior year. We continue to capture tenant demand with over 15 million square feet of leases executed in the year across all our office assets, and tenant sales per square foot were 21% higher than 2019 in our core retail portfolio.
Earnings from the monetization of mature assets were $103 million (
- During the year, we monetized over $30 billion of assets—substantially all transacting at values higher than our IFRS carrying values, validating the carrying values of our investments.
- We recognized
$570 million of net realized carried interest into income during the year, and with the pool of carry-eligible capital growing larger every year, we expect significant cash flows going forward. - Total accumulated unrealized carried interest now stands at
$10.2 billion , representing an increase of 11% over the year, net of carried interest realized into income.
We ended the quarter with $122 billion of capital available to deploy into new investments.
- Over the year, we returned
$1.1 billion to shareholders through regular dividends and share repurchases, with total share buybacks of over $600 million. - We have $122 billion of deployable capital, which includes
$38 billion of cash, financial assets and undrawn credit lines at the Corporation and our affiliates. - Our balance sheet remains conservatively capitalized, with a weighted-average term of 13 years and modest maturities through to the end of 2025.
- We continue to have strong access to the capital markets. In December, we received a credit rating upgrade from DBRS on our senior unsecured debt to A, reflecting the strength of our franchise and continued growth in our earnings.
CONSOLIDATED BALANCE SHEETS
| Unaudited (US$ millions) |
||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 11,222 | $ | 14,396 | ||||
| Other financial assets | 28,324 | 26,899 | ||||||
| Accounts receivable and other | 31,001 | 30,208 | ||||||
| Inventory | 11,412 | 12,843 | ||||||
| Equity accounted investments | 59,124 | 47,094 | ||||||
| Investment properties | 124,152 | 115,100 | ||||||
| Property, plant and equipment | 147,617 | 124,268 | ||||||
| Intangible assets | 38,994 | 38,411 | ||||||
|
|
34,911 | 28,662 | ||||||
| Deferred income tax assets | 3,338 | 3,403 | ||||||
| Total Assets | $ | 490,095 | $ | 441,284 | ||||
| Liabilities and Equity | ||||||||
| Corporate borrowings | $ | 12,160 | $ | 11,390 | ||||
| Accounts payable and other | 59,011 | 57,941 | ||||||
| Non-recourse borrowings | 221,550 | 202,684 | ||||||
| Subsidiary equity obligations | 4,145 | 4,188 | ||||||
| Deferred income tax liabilities | 24,987 | 23,190 | ||||||
| Equity | ||||||||
| Non-controlling interests in net assets | $ | 122,465 | $ | 98,138 | ||||
| Preferred equity | 4,103 | 4,145 | ||||||
| Common equity | 41,674 | 168,242 | 39,608 | 141,891 | ||||
| Total Equity | 168,242 | 141,891 | ||||||
| Total Liabilities and Equity | $ | 490,095 | $ | 441,284 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Years Ended | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenues | $ | 24,518 | $ | 24,213 | $ | 95,924 | $ | 92,769 | |||||||
| Direct costs1 | (18,168 | ) | (18,218 | ) | (72,334 | ) | (70,828 | ) | |||||||
| Other income and gains | 4,256 | 989 | 6,501 | 1,594 | |||||||||||
| Equity accounted income | 429 | 273 | 2,068 | 2,613 | |||||||||||
| Interest expense | |||||||||||||||
| – Corporate borrowings | (142 | ) | (158 | ) | (596 | ) | (527 | ) | |||||||
| – Non-recourse borrowings | |||||||||||||||
| Same-store | (3,637 | ) | (3,127 | ) | (13,195 | ) | (10,175 | ) | |||||||
| Acquisitions, net of dispositions2 | (260 | ) | — | (1,392 | ) | — | |||||||||
| Upfinancings2 | (6 | ) | — | (320 | ) | — | |||||||||
| Corporate costs | (16 | ) | (33 | ) | (69 | ) | (122 | ) | |||||||
| Fair value changes | (1,326 | ) | (1,811 | ) | (1,396 | ) | (977 | ) | |||||||
| Depreciation and amortization | (2,427 | ) | (1,989 | ) | (9,075 | ) | (7,683 | ) | |||||||
| Income tax | (87 | ) | (95 | ) | (1,011 | ) | (1,469 | ) | |||||||
| Net income | $ | 3,134 | $ | 44 | $ | 5,105 | $ | 5,195 | |||||||
| Net income (loss) attributable to: | |||||||||||||||
| Brookfield shareholders | $ | 699 | $ | (316 | ) | $ | 1,130 | $ | 2,056 | ||||||
| Non-controlling interests | 2,435 | 360 | 3,975 | 3,139 | |||||||||||
| $ | 3,134 | $ | 44 | $ | 5,105 | $ | 5,195 | ||||||||
| Net income (loss) per share | |||||||||||||||
| Diluted | $ | 0.42 | $ | (0.23 | ) | $ | 0.61 | $ | 1.19 | ||||||
| Basic | 0.43 | (0.23 | ) | 0.62 | 1.22 | ||||||||||
1. Direct costs disclosed above exclude depreciation and amortization expense.
2. Interest expense from acquisitions, net of dispositions, and upfinancings completed over the year ended
SUMMARIZED FINANCIAL RESULTS
DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Asset management | $ | 649 | $ | 702 | $ | 2,554 | $ | 2,944 | |||||||
| Insurance solutions | 253 | 170 | 740 | 388 | |||||||||||
| BEP | 102 | 100 | 417 | 400 | |||||||||||
| BIP | 79 | 75 | 319 | 300 | |||||||||||
| BBU | 9 | 9 | 36 | 33 | |||||||||||
| BPG | 218 | 251 | 733 | 854 | |||||||||||
| Other | (8 | ) | 11 | (43 | ) | (53 | ) | ||||||||
| Operating businesses | 400 | 446 | 1,462 | 1,534 | |||||||||||
| Corporate costs and other | (93 | ) | (176 | ) | (533 | ) | (552 | ) | |||||||
| Distributable earnings before realizations1 | 1,209 | 1,142 | 4,223 | 4,314 | |||||||||||
| Realized carried interest, net | 100 | 280 | 570 | 555 | |||||||||||
| Disposition gains from principal investments | 3 | 76 | 13 | 360 | |||||||||||
| Distributable earnings1 | $ | 1,312 | $ | 1,498 | $ | 4,806 | $ | 5,229 | |||||||
1. 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 | Years Ended | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 3,134 | $ | 44 | $ | 5,105 | $ | 5,195 | |||||||
| Financial statement components not included in DE: | |||||||||||||||
| Equity accounted fair value changes and other items | 1,097 | 938 | 2,902 | 1,840 | |||||||||||
| Fair value changes and other | 1,549 | 1,811 | 1,952 | 977 | |||||||||||
| Depreciation and amortization | 2,427 | 1,989 | 9,075 | 7,683 | |||||||||||
| Disposition gains in net income | (4,424 | ) | (1,280 | ) | (6,080 | ) | (2,604 | ) | |||||||
| Deferred income taxes | (416 | ) | (285 | ) | (897 | ) | 191 | ||||||||
| Non-controlling interests in the above items1 | (2,064 | ) | (1,802 | ) | (7,941 | ) | (8,109 | ) | |||||||
| Less: realized carried interest, net | (100 | ) | (280 | ) | (570 | ) | (555 | ) | |||||||
| Working capital, net | 6 | 7 | 677 | (304 | ) | ||||||||||
| Distributable earnings before realizations2 | 1,209 | 1,142 | 4,223 | 4,314 | |||||||||||
| Realized carried interest, net3 | 100 | 280 | 570 | 555 | |||||||||||
| Disposition gains from principal investments | 3 | 76 | 13 | 360 | |||||||||||
| Distributable earnings2 | $ | 1,312 | $ | 1,498 | $ | 4,806 | $ | 5,229 | |||||||
1. 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.
2. Non-IFRS measure – see Non-IFRS and Performance Measures section on page 8.
3. Includes our share of Oaktree’s distributable earnings attributable to realized carried interest.
EARNINGS PER SHARE
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Years Ended | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 3,134 | $ | 44 | $ | 5,105 | $ | 5,195 | |||||||
| Non-controlling interests | (2,435 | ) | (360 | ) | (3,975 | ) | (3,139 | ) | |||||||
| Net income (loss) attributable to shareholders | 699 | (316 | ) | 1,130 | 2,056 | ||||||||||
| Preferred share dividends1 | (43 | ) | (39 | ) | (166 | ) | (150 | ) | |||||||
| Net income (loss) available to common shareholders | 656 | (355 | ) | 964 | 1,906 | ||||||||||
| Dilutive impact of exchangeable shares of affiliate | 3 | — | 5 | 5 | |||||||||||
| Net income (loss) available to common shareholders including dilutive impact of exchangeable shares | $ | 659 | $ | (355 | ) | $ | 969 | $ | 1,911 | ||||||
| Weighted average shares | 1,540.1 | 1,574.8 | 1,558.5 | 1,567.5 | |||||||||||
| Dilutive effect of conversion of options and escrowed shares using treasury stock method2and exchangeable shares of affiliate | 40.8 | — | 29.7 | 40.7 | |||||||||||
| Shares and share equivalents | 1,580.9 | 1,574.8 | 1,588.2 | 1,608.2 | |||||||||||
| Diluted earnings per share3 | $ | 0.42 | $ | (0.23 | ) | $ | 0.61 | $ | 1.19 | ||||||
1. Excludes dividends paid on perpetual subordinated notes of $2 million (2022 – $2 million) and
2. Includes management share option plan and escrowed stock plan.
3. 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 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 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 2023 Fourth 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
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:
| Communications & 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 insurance 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 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 it 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 as defined above.
- 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 use DE and FFO 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 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 report adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), which refers to our private equity business’ net income and equity accounted income at its share, excluding the impact of interest income (expense), net, income taxes, depreciation and amortization, gains (losses) on acquisitions/dispositions, net, transaction costs, restructuring charges, revaluation gains or losses, impairment expenses or reversals, other income (expense), net and distributions to preferred equity holders. We believe that Adjusted EBITDA is a measure of our private equity business’ ability to generate recurring earnings.
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 and FFO, 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 |
1. Consolidated basis – includes amounts attributable to non-controlling interests.
2. Excludes amounts attributable to non-controlling interests.
3. See Reconciliation of Net Income to Distributable Earnings on page 5 and Non-IFRS and Performance Measures section on page 8.
4. Distributable earnings before realizations, including per share amounts, for the three months and year ended
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. 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
Certain of the information contained herein is based on or derived from information provided by independent third-party sources. While
Source:
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English |