Brookfield (NYSE: BAM, TSX: BAM.A) today announced financial
results for the quarter ended March 31, 2022.
Nick Goodman, CFO of Brookfield, stated
“Financial results in the first quarter were very strong, and
thanks to our extensive global holdings of inflation protected
cash-generating assets, our results are accelerating in the current
macro environment. Distributable earnings were $1.2 billion,
supported by growth in our asset management franchise and strong
underlying performance across our businesses. Fundraising momentum
remains strong, with fee-bearing capital standing at
$379 billion at the end of the first quarter. We also expect
material fund closes in the second quarter and balance of
2022.”
He continued, “We will separately list and
distribute to shareholders, a 25% interest in our asset management
business, that we expect to complete by the end of 2022. This will
be done on a tax-free basis to both Canadian and U.S. shareholders
(and potentially others). Our asset management business is one of
the leading alternative investment firms in the world, managing the
capital of over 2,000 global institutional investors and a
growing list of high net worth investors. We are excited about this
next chapter of our growth.”
Operating Results
UnauditedFor the periods ended March 31(US$ millions, except per
share amounts) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income1 |
$ |
2,960 |
|
|
$ |
3,776 |
|
|
$ |
11,572 |
|
|
$ |
4,640 |
|
Net income attributable to
common shareholders2 |
$ |
1,359 |
|
|
$ |
1,235 |
|
|
$ |
4,090 |
|
|
$ |
1,394 |
|
Net income per Brookfield share2 |
|
0.81 |
|
|
|
0.77 |
|
|
|
2.45 |
|
|
|
0.85 |
|
Funds from operations2,3 |
$ |
1,597 |
|
|
$ |
2,821 |
|
|
$ |
6,334 |
|
|
$ |
7,117 |
|
Per Brookfield share2,3 |
|
0.96 |
|
|
|
1.80 |
|
|
|
3.85 |
|
|
|
4.53 |
|
Distributable earnings2,3 |
$ |
1,182 |
|
|
$ |
2,507 |
|
|
$ |
4,957 |
|
|
$ |
6,113 |
|
- Consolidated basis – includes amounts
attributable to non-controlling interests.
- Excludes amounts attributable to non-controlling
interests.
- See Non-IFRS and Performance Measures section on page 10 and
Reconciliation of Net Income to FFO and Distributable Earnings on
page 7.
Funds from operations (“FFO”) and net income
totaled $1.6 billion and $3.0 billion for the first quarter. Total
operating FFO increased by 43% to $1.1 billion compared to the
prior year quarter, driven by the growth in our asset management
earnings, contributions from new acquisitions and the benefit of an
increased ownership in our real estate business that we privatized
last year.
Distributable earnings (“DE”) were $1.2 billion
for the quarter and $5.0 billion over the last twelve months. DE
before realizations were $947 million for the quarter and
$3.7 billion over the last twelve months, representing an
increase of 28% compared to the prior year last twelve months. The
growth in DE before realizations was driven by higher fee-related
earnings based on strong fundraising and capital deployment efforts
and increased distributions from our principal investments.
Regular Dividend DeclarationThe
Board declared a quarterly dividend of US$0.14 per share, payable
on June 30, 2022 to shareholders of record as at the close of
business on May 31, 2022. The Board also declared the regular
monthly and quarterly dividends on its preferred shares.
Operating Highlights
Fundraising momentum remains strong. Fee-bearing
capital now totals $379 billion, an increase of approximately
$14 billion during the quarter and $59 billion over the past
year.
We have launched fundraising for our fifth
flagship infrastructure fund and our sixth flagship private equity
fund. Both expect first closes soon. Our fourth flagship real
estate fund has raised $12 billion, with subsequent closes
expected in the coming months. We raised additional capital for our
transition fund, which will be closed at $15 billion soon.
We launched fundraising for our third growth
equity fund and our third infrastructure debt fund during the first
quarter, which are both expected to be larger than their
predecessors. Our perpetual private funds continue to raise capital
at scale, with our infrastructure and real estate perpetual funds
raising $5 billion since the beginning of the year. Our
non-traded REIT is now on eight distribution platforms which should
start to add meaningfully to these numbers.
The above increases in fee-bearing capital
contributed to a 31% increase in fee-related earnings over the last
twelve months.
Fee-related earnings were $501 million in
the quarter, and $2.0 billion for the last twelve months,
representing a 31% increase over the last twelve months. We have
approximately $33 billion of additional committed but un-invested
capital across our strategies that will earn approximately
$330 million of fees annually once deployed.
We invested and/or committed $33 billion to
new investments during the quarter and advanced or completed a
number of monetizations.
We continue to deploy capital for our
$16 billion opportunistic credit fund, which is now
approximately 70% invested or committed. The volatility in the
public markets drove a number of opportunities across our
franchise. This has enabled us to invest or commit over $10 billion
in our latest flagship real estate fund, and enabled us to reach
the threshold for launching our next funds for infrastructure and
private equity.
On the other hand, private markets remain robust
for the sale of assets that generate cash returns and have a form
of inflation protection. For example, within our real estate
business, we are selling two office properties in Melbourne and
Sydney for $2 billion and $1 billion respectively. We also are in
the process of selling an office property in London for over £300
million for just under a 4% cap rate. All sales are transacting at
values substantially higher than our IFRS carrying values.
Our monetization pipeline across our other
businesses remains strong and we are on track to realize up to
$1 billion of realized carried interest during the year. We
generated $896 million of carried interest during the quarter and
$4.3 billion over the past twelve months, driven by the
appreciation of our investments. Total accumulated unrealized
carried interest now stands at $8.4 billion, representing a
12% increase during the quarter. As our funds mature and we return
capital to investors through distributions and monetization
activities, this carried interest will be realized into income.
Annualized fee revenues and target carried
interest now stand at a run-rate of $8.0 billion annually.
Annualized fee revenues are now $3.9 billion, an
increase of 16% over the last twelve months, driven by the
significant growth in our Asset Manager. Gross target carried
interest is $4.1 billion annually.
As at March 31, 2022, we had $85 billion of
capital available to deploy into new investments.
Total deployable capital includes approximately
$15 billion of cash, financial assets and undrawn lines of credit
in BAM and our affiliates, as well as $70 billion of uncalled fund
commitments. During the quarter, we further enhanced our liquidity
by issuing $400 million of 30-year green bonds at 3.63% and
re-opening $400 million of our 2028 notes at 2.55%.
Our Asset Management Business Will be Listed and 25%
Distributed to Shareholders
In our year-end letter, we mentioned that we
were considering publicly listing a partial interest in our asset
management organization. We have been very encouraged by the
feedback we received from shareholders and concluded that
publicly listing a 25% interest in our asset management business
will be overwhelmingly positive. We expect that these shares can be
distributed to shareholders before year end. The distribution will
be tax-free for Canadian and U.S. shareholders and we are working
through the taxation in other jurisdictions.
As you may know, Brookfield’s history dates back
to the establishment of its predecessor company in 1899 for the
purpose of providing electricity and transportation services. The
company evolved throughout the 20th century and underwent a number
of name changes. In the 1970s, the company shifted its investment
focus to real estate, financial services, hydroelectric power and
industrial investments. Thus, our roots are in the direct ownership
and operation of businesses, sometimes in partnership with others
but mostly for our own account. It may surprise some of today’s
shareholders to learn that we didn’t begin to provide asset
management services to third parties, in a meaningful way, until
the late 1990s.
Over the more than 20 years since then, our
expertise in investing our own capital has greatly benefitted our
asset management clients, and the asset management business has
expanded rapidly. The investment sectors we focus on—renewable
power & transition, infrastructure, private equity, real
estate, credit and insurance solutions—which have turned out to be
prime components of what is now known as the “alternative
investment” industry, are very much in demand. We have emphasized
achieving superior returns on our clients’ investments and
Brookfield’s investments alongside those clients, and we have
developed dedicated, expert management in each of the sectors.
Thus, Brookfield has made a lot of money
investing on its own balance sheet, to the point where Brookfield
now has proprietary assets representing approximately $75 billion
of invested capital, and our asset management organization has
taken its place as one of the very top alternative investment
firms.
The combination of our top-tier alternative
asset management organization with our very significant invested
capital makes us unique among our peers and has represented a
significant competitive advantage to us in building our business.
This combination leverages our significant operating expertise
across all our businesses, it further aligns our interests with the
investors in our funds, and it means we can move rapidly to seize
new opportunities. The bottom line is that today’s Brookfield
consists of two businesses that are very different in nature but
work together very well.
Looking forward, we believe that each of these
businesses has incredible potential to expand further. To achieve
this growth, however, we have concluded that they should now be
separated, while preserving the benefits of their complementary
nature and alignment.
We have seen the benefits that can be derived
from this type of separation of businesses. Over close to
15 years, we have methodically launched our renewables,
infrastructure, real estate and private equity platforms into
separately managed businesses. We attribute their outstanding
success in no small part to them having strong, dedicated,
decentralized management teams whose efforts are concentrated on
their respective businesses. This experience gives us great
confidence that implementing operational separation between our
asset manager and the capital investor will provide each business a
platform and focus to deliver on its growth plan.
Moreover, if we are successful in our objective,
creating a “pure-play” asset manager should also expand our
investor base. Today, some potential investors interested in our
asset management business may be put off by the need to also
understand and value our proprietary investments (or they may avoid
making this effort by taking our proprietary assets into
account at a severe discount). Having a new security or “currency”
that is well understood and appreciated by the public markets will
maximize optionality for us as we continue to scale and diversify
our asset management platform.
Here’s how we think about this: for now, we will
refer to the capital investor of our proprietary assets as the
“Corporation” and our asset management entity as the “Manager”:
|
Corporation |
Manager |
|
- Invests for its
own account
- Is capital
intensive
- Retains/invests
the bulk of its earnings
|
-
Manages money for others
-
Requires little or no capital
- Can
thus adopt a higher dividend payout ratio
|
As a first step, the Corporation will
publicly distribute a 25% interest in the Manager to our
shareholders. This will make the Manager a pure play in
money management and one of the clear leaders in alternatives. The
Manager’s balance sheet will be free of the substantial proprietary
investments the Corporation makes for its own account, facilitating
comparison of its financial statements with those of other asset
managers, and its performance as a pure money manager will be
clear. Since asset managers don’t need much in the way of
facilities, equipment or working capital to do business, we plan
for the Manager to pay out approximately 90% of its annual earnings
in dividends.
The Corporation will initially hold a
75% ownership of the Manager. In addition to the shares of the
Manager and our other proprietary investments, the Corporation will
own its existing interest in Brookfield Reinsurance, the most
recent example of a company we have built by investing our own
funds. In essence, following the transaction, the Corporation will
hold the ±$75 billion of investments it currently
owns plus its 75% ownership in the Manager.
The Corporation is also the entity that will
continue to make early investment commitments to funds managed by
the Manager, make direct investments in new and existing
businesses, or repurchase shares when they represent the best
potential use of funds. The Corporation’s objective will be to
continue investing and compounding capital over the long term at an
annualized rate in excess of 15%, consistent with our historical
returns. The Corporation’s appetite for investment capital means,
however, that its annual dividend will initially be set at a lower
level (which, when combined with the dividends shareholders will
receive from the high payout of the Manager, will be around the
same as they receive today).
The result of this transaction will be
two companies: a leading alternative asset management firm and a
capital investor focused on compounding its capital over time, each
of which has its own financial dynamics and each of which will be
easier to analyze when viewed from the outside. However,
through their common ownership and the fact that the Manager will
manage many of the Corporation’s investments, we will preserve the
extensive synergies that historically have existed between our
asset management and proprietary capital investing functions. These
include the sharing of industry expertise; accessing the operating
expertise across our platforms; joint sourcing of deals; and the
capital investor’s use of its strong balance sheet to invest
alongside the asset manager, enabling our combined entities to
complete large-scale transactions.
We think this is the best of both
worlds: separate identities for our two distinct businesses, but
preservation of their ability to benefit each other, and thus all
shareholders. Separated from “asset-heavy” investments, we
think the performance of the Manager as an investment manager will
become even more visible, and therefore be more appealing to
investors desirous of a pure-play investment in the alternatives
industry. On the other hand, shareholders who wish to retain
exposure to the capital investment function may favor the
Corporation. Of course, any shareholder who likes things exactly
the way they’ve been will be able to hold both shares side-by-side
and have just that.
We hope you will share our enthusiasm for this
transaction, and we look forward to having you with us in the
Corporation and/or the Manager, in whatever combination you find
most attractive. As we move forward, we look forward to providing
you with further updates as we finalize the details of the
transaction.
Lastly, as to the fundamental mechanics of the
transaction, we expect them to be as follows:
- The split and
distribution of shares will be structured to be tax-free for
shareholders in the U.S. and Canada.
- The Corporation
and the Manager will both trade on the New York and Toronto stock
exchanges.
- Immediately
post-transaction, the Corporation will own 75% of the Manager and
current Brookfield shareholders will own the remaining 25% via the
shares they receive from the distribution.
- We will also
ensure that holders of Brookfield Reinsurance shares (which are
exchangeable for Class A shares of Brookfield Asset Management
Inc.) will be treated equally from an economic perspective.
- The transaction
will proceed by way of a “plan of arrangement” in accordance with
Canadian laws, subject to approval of our shareholders.
CONSOLIDATED BALANCE SHEETS
Unaudited (US$ millions) |
|
March 31 |
|
|
|
December 31 |
|
|
|
2022 |
|
|
|
|
2021 |
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
11,816 |
|
|
$ |
12,694 |
|
Other financial assets |
|
|
17,012 |
|
|
|
16,546 |
|
Accounts receivable and
other |
|
|
36,448 |
|
|
|
33,718 |
|
Inventory |
|
|
12,003 |
|
|
|
11,415 |
|
Equity accounted
investments |
|
|
45,806 |
|
|
|
46,100 |
|
Investment properties |
|
|
105,429 |
|
|
|
100,865 |
|
Property, plant and
equipment |
|
|
117,286 |
|
|
|
115,489 |
|
Intangible assets |
|
|
31,597 |
|
|
|
30,609 |
|
Goodwill |
|
|
21,116 |
|
|
|
20,227 |
|
Deferred income tax assets |
|
|
3,440 |
|
|
|
3,340 |
|
Total Assets |
|
$ |
401,953 |
|
|
$ |
391,003 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Corporate borrowings |
|
$ |
11,154 |
|
|
$ |
10,875 |
|
|
|
|
|
|
Accounts payable and
other |
|
|
54,963 |
|
|
|
55,694 |
|
Non-recourse borrowings in
entities that we manage |
|
|
173,880 |
|
|
|
165,057 |
|
Subsidiary equity
obligations |
|
|
4,632 |
|
|
|
4,308 |
|
Deferred income tax
liabilities |
|
|
20,891 |
|
|
|
20,328 |
|
|
|
|
|
|
Equity |
|
|
|
|
Non-controlling interests in net assets |
$ |
88,889 |
|
|
$ |
88,386 |
|
Preferred equity |
|
4,145 |
|
|
|
4,145 |
|
Common equity |
|
43,399 |
|
|
136,433 |
|
|
42,210 |
|
134,741 |
|
Total Liabilities and Equity |
|
$ |
401,953 |
|
|
$ |
391,003 |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
UnauditedFor the periods ended March 31(US$ millions, except per
share amounts) |
Three Months Ended |
|
2022 |
|
|
|
2021 |
|
Revenues |
$ |
21,882 |
|
|
$ |
16,410 |
|
Direct costs1 |
|
(16,884 |
) |
|
|
(12,187 |
) |
Other income and gains |
|
29 |
|
|
|
704 |
|
Equity accounted income |
|
843 |
|
|
|
668 |
|
Expenses |
|
|
|
Interest |
|
(2,138 |
) |
|
|
(1,830 |
) |
Corporate costs |
|
(33 |
) |
|
|
(29 |
) |
Fair value changes |
|
1,780 |
|
|
|
2,094 |
|
Depreciation and
amortization |
|
(1,811 |
) |
|
|
(1,510 |
) |
Income
tax |
|
(708 |
) |
|
|
(544 |
) |
Net income |
$ |
2,960 |
|
|
$ |
3,776 |
|
|
|
|
|
Net income attributable
to: |
|
|
|
Brookfield shareholders |
$ |
1,359 |
|
|
$ |
1,235 |
|
Non-controlling interests |
|
1,601 |
|
|
|
2,541 |
|
|
$ |
2,960 |
|
|
$ |
3,776 |
|
|
|
|
|
Net income per share |
|
|
|
Diluted |
$ |
0.81 |
|
|
$ |
0.77 |
|
Basic |
|
0.84 |
|
|
|
0.79 |
|
- Direct costs
exclude depreciation and amortization expenses disclosed
above.
SUMMARIZED FINANCIAL
RESULTS
RECONCILIATION OF NET INCOME TO FFO AND
DISTRIBUTABLE EARNINGS
UnauditedFor the periods ended March 31(US$ millions) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
$ |
2,960 |
|
|
$ |
3,776 |
|
|
$ |
11,572 |
|
|
$ |
4,640 |
|
Financial statement components
not included in FFO: |
|
|
|
|
|
|
|
Equity accounted fair value changes and other non-FFO items1 |
|
226 |
|
|
|
288 |
|
|
|
1,293 |
|
|
|
2,520 |
|
Fair value changes |
|
(1,780 |
) |
|
|
(2,094 |
) |
|
|
(4,837 |
) |
|
|
(1,085 |
) |
Depreciation and amortization |
|
1,811 |
|
|
|
1,510 |
|
|
|
6,738 |
|
|
|
5,892 |
|
Deferred income taxes |
|
425 |
|
|
|
189 |
|
|
|
1,446 |
|
|
|
102 |
|
Realized disposition gains in
fair value changes or prior periods |
|
368 |
|
|
|
1,724 |
|
|
|
1,505 |
|
|
|
3,185 |
|
Non-controlling interests2 |
|
(2,413 |
) |
|
|
(2,572 |
) |
|
|
(11,383 |
) |
|
|
(8,137 |
) |
Funds from operations3,4 |
|
1,597 |
|
|
|
2,821 |
|
|
|
6,334 |
|
|
|
7,117 |
|
|
|
|
|
|
|
|
|
Less: total disposition
gains |
|
(356 |
) |
|
|
(1,821 |
) |
|
|
(1,617 |
) |
|
|
(3,266 |
) |
Less: net invested capital
FFO |
|
(612 |
) |
|
|
(364 |
) |
|
|
(2,110 |
) |
|
|
(1,819 |
) |
Less: realized carried
interest, net |
|
(128 |
) |
|
|
(223 |
) |
|
|
(620 |
) |
|
|
(512 |
) |
Corporate activities |
|
(173 |
) |
|
|
(152 |
) |
|
|
(613 |
) |
|
|
(565 |
) |
Distributions from
investments |
|
622 |
|
|
|
489 |
|
|
|
2,331 |
|
|
|
1,965 |
|
Equity-based compensation |
|
37 |
|
|
|
29 |
|
|
|
127 |
|
|
|
98 |
|
Preferred share dividends |
|
(40 |
) |
|
|
(39 |
) |
|
|
(158 |
) |
|
|
(146 |
) |
Distributable earnings before
realizations3 |
|
947 |
|
|
|
740 |
|
|
|
3,674 |
|
|
|
2,872 |
|
Realized carried interest,
net5 |
|
128 |
|
|
|
223 |
|
|
|
620 |
|
|
|
512 |
|
Disposition gains from principal investments |
|
107 |
|
|
|
1,544 |
|
|
|
663 |
|
|
|
2,729 |
|
Distributable earnings3 |
$ |
1,182 |
|
|
$ |
2,507 |
|
|
$ |
4,957 |
|
|
$ |
6,113 |
|
- 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 10.
- Excludes amounts attributable to
non-controlling interests.
- Includes our share of Oaktree’s
distributable earnings attributable to realized carried
interest.
SEGMENT FUNDS FROM
OPERATIONS
UnauditedFor the periods ended March 31(US$ millions) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Asset management |
$ |
629 |
|
|
$ |
636 |
|
|
$ |
2,607 |
|
|
$ |
2,032 |
|
Renewable power and
transition |
|
70 |
|
|
|
823 |
|
|
|
291 |
|
|
|
1,801 |
|
Infrastructure |
|
115 |
|
|
|
130 |
|
|
|
782 |
|
|
|
562 |
|
Private equity |
|
219 |
|
|
|
992 |
|
|
|
1,257 |
|
|
|
1,762 |
|
Real estate |
|
598 |
|
|
|
250 |
|
|
|
1,533 |
|
|
|
907 |
|
Residential |
|
72 |
|
|
|
23 |
|
|
|
307 |
|
|
|
98 |
|
Corporate |
|
(106 |
) |
|
|
(33 |
) |
|
|
(443 |
) |
|
|
(45 |
) |
Funds from operations1,2,3 |
$ |
1,597 |
|
|
$ |
2,821 |
|
|
$ |
6,334 |
|
|
$ |
7,117 |
|
|
|
|
|
|
|
|
|
Per
share4 |
$ |
0.96 |
|
|
$ |
1.80 |
|
|
$ |
3.85 |
|
|
$ |
4.53 |
|
- Non-IFRS measure –
see Non-IFRS and Performance Measures section on page 10.
- 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
UnauditedFor the periods ended March 31(US$ millions) |
|
Three Months Ended |
|
Last Twelve Months Ended |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
|
$ |
2,960 |
|
|
$ |
3,776 |
|
|
$ |
11,572 |
|
|
$ |
4,640 |
|
Non-controlling interests |
|
|
(1,601 |
) |
|
|
(2,541 |
) |
|
|
(7,482 |
) |
|
|
(3,246 |
) |
Net income attributable to shareholders |
|
|
1,359 |
|
|
|
1,235 |
|
|
|
4,090 |
|
|
|
1,394 |
|
Preferred share
dividends1 |
|
|
(37 |
) |
|
|
(37 |
) |
|
|
(148 |
) |
|
|
(143 |
) |
Dilutive effect of conversion of subsidiary preferred shares |
|
|
— |
|
|
|
(11 |
) |
|
|
(15 |
) |
|
|
63 |
|
Net income available to common shareholders |
|
|
1,322 |
|
|
|
1,187 |
|
|
|
3,927 |
|
|
|
1,314 |
|
Dilutive impact of exchangeable shares of affiliate |
|
|
2 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
Net income available to common shareholders including dilutive
impact of exchangeable shares |
|
$ |
1,324 |
|
|
$ |
1,187 |
|
|
$ |
3,931 |
|
|
$ |
1,314 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares |
|
|
1,567.8 |
|
|
|
1,510.5 |
|
|
|
1,549.6 |
|
|
|
1,511.3 |
|
Dilutive effect of conversion of options and escrowed shares using
treasury stock method2 and exchangeable shares of affiliate |
|
|
59.0 |
|
|
|
34.9 |
|
|
|
56.3 |
|
|
|
28.8 |
|
Shares and share equivalents |
|
|
1,626.8 |
|
|
|
1,545.4 |
|
|
|
1,605.9 |
|
|
|
1,540.1 |
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share3 |
|
$ |
0.81 |
|
|
$ |
0.77 |
|
|
$ |
2.45 |
|
|
$ |
0.85 |
|
- Excludes dividends
paid on perpetual subordinated notes of $3 million (2021 – $2
million) and $10 million (2021 – $3 million) for the three months
and the last twelve months ended March 31, 2022, which are
recognized within net income.
- Includes management share option
plan and escrowed stock plan.
- Per share amounts are inclusive of
dilutive effect of mandatorily redeemable preferred shares held in
a consolidated subsidiary.
DISTRIBUTABLE EARNINGS
UnauditedFor the periods ended March 31(US$ millions) |
Three Months Ended |
|
Last Twelve Months Ended |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Fee-related earnings |
$ |
501 |
|
|
$ |
413 |
|
|
$ |
1,987 |
|
|
$ |
1,520 |
|
|
|
|
|
|
|
|
|
Perpetual affiliates |
|
533 |
|
|
|
389 |
|
|
|
2,014 |
|
|
|
1,468 |
|
Corporate cash and financial
assets |
|
25 |
|
|
|
73 |
|
|
|
(6 |
) |
|
|
395 |
|
Other
principal investments |
|
64 |
|
|
|
27 |
|
|
|
323 |
|
|
|
102 |
|
Distributions from investments |
|
622 |
|
|
|
489 |
|
|
|
2,331 |
|
|
|
1,965 |
|
|
|
|
|
|
|
|
|
Corporate activities |
|
(173 |
) |
|
|
(152 |
) |
|
|
(613 |
) |
|
|
(565 |
) |
Preferred share dividends |
|
(40 |
) |
|
|
(39 |
) |
|
|
(158 |
) |
|
|
(146 |
) |
Add
back: equity-based compensation |
|
37 |
|
|
|
29 |
|
|
|
127 |
|
|
|
98 |
|
Distributable earnings before realizations |
|
947 |
|
|
|
740 |
|
|
|
3,674 |
|
|
|
2,872 |
|
Realized carried interest,
net |
|
128 |
|
|
|
223 |
|
|
|
620 |
|
|
|
512 |
|
Disposition gains from principal investments |
|
107 |
|
|
|
1,544 |
|
|
|
663 |
|
|
|
2,729 |
|
Distributable earnings1 |
$ |
1,182 |
|
|
$ |
2,507 |
|
|
$ |
4,957 |
|
|
$ |
6,113 |
|
1. Non-IFRS measure
– see Non-IFRS and Performance Measures section on page 10.
Additional Information
The Letter to Shareholders and the company’s
Supplemental Information for the three months ended
March 31, 2022, contain further information on the
company’s strategy, operations and financial results. Shareholders
are encouraged to read these documents, which are available on the
company’s website.
The statements contained herein are based
primarily on information that has been extracted from our financial
statements for the quarter ended March 31, 2022, which have been
prepared using IFRS, as issued by the IASB. The amounts have not
been audited by Brookfield’s external auditor.
Brookfield’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 Asset Management’s 2022 First Quarter Results
as well as the Shareholders’ Letter and Supplemental Information on
Brookfield’s website under the Reports & Filings section at
www.brookfield.com.
To participate in the Conference Call today at
10:00 a.m. EST, please pre-register at
http://www.directeventreg.com/registration/event/3299480. Upon
registering, you will be emailed a dial-in number, direct passcode
and unique PIN. The Conference Call will also be Webcast live at
https://edge.media-server.com/mmc/go/bamQ1-2022. For those unable
to participate in the Conference Call, the telephone replay will be
archived and available until May 26, 2022. To access this
rebroadcast, please call 1-855-859-2056 or 1-404-537-3406
(Conference ID: 3299480).
About Brookfield Brookfield
(NYSE: BAM, TSX: BAM.A) is a leading global alternative asset
manager with approximately $725 billion of assets under
management across real estate, infrastructure, renewable power and
transition, private equity and credit. Brookfield owns
and operates long-life assets and businesses, many of which form
the backbone of the global economy. Utilizing its global reach,
access to large-scale capital and operational expertise, Brookfield
offers a range of alternative investment products to investors
around the world—including public and private pension plans,
endowments and foundations, sovereign wealth funds, financial
institutions, insurance companies and private wealth investors.
Please note that Brookfield’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.brookfield.com or contact:
Communications & Media:Kerrie McHugh HayesTel:
(212) 618-3469Email: kerrie.mchugh@brookfield.com |
|
Investor Relations: Linda Northwood Tel: (416)
359-8647Email: linda.northwood@brookfield.com |
|
|
|
Non-IFRS and Performance
Measures
This news release and accompanying financial
information are based on International Financial Reporting
Standards (“IFRS”), as issued by the International Accounting
Standards Board (“IASB”), unless otherwise noted.
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:
- FFO from Operating Activities
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 our Asset Management
segment FFO, distributions received from our ownership of
investments, and disposition gains from principal investments, net
of Corporate Activities FFO, equity-based compensation and
preferred share dividends. This provides 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’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.brookfield.com.
Notice to Readers
Brookfield is not making any offer or invitation
of any kind by communication of this news release and under no
circumstance is it to be construed as a prospectus or an
advertisement.
This news release contains “forward-looking
information” within the meaning of Canadian provincial securities
laws and “forward-looking statements” within the meaning of
Canadian provincial securities laws and “forward-looking
statements” within the meaning of the U.S. Securities Act of 1933,
the U.S. Securities Exchange Act of 1934, and, “safe harbor”
provisions of the United States Private Securities Litigation
Reform Act of 1995 and in any applicable Canadian securities
regulations. Forward-looking statements include statements that are
predictive in nature, depend upon or refer to future events or
conditions, include statements which reflect management’s
expectations regarding the operations, business, financial
condition, expected financial results, performance, prospects,
opportunities, priorities, targets, goals, ongoing objectives,
strategies and outlook of Brookfield and its subsidiaries, as well
as the outlook for North American and international economies for
the current fiscal year and subsequent periods, and include words
such as “expects,” “anticipates,” “plans,” “believes,” “estimates,”
“seeks,” “intends,” “targets,” “projects,” “forecasts” or negative
versions thereof and other similar expressions, or future or
conditional verbs such as “may,” “will,” “should,” “would” and
“could.” In particular, the forward-looking statements contained in
this news release include statements referring to the future state
of the economy or the securities market and expected future
deployment of capital, dispositions and associated realized carried
interest, as well as statements regarding future product offerings,
and the results of future fundraising efforts and financial
earnings. In addition, forward-looking statements contained in this
news release include statements regarding the listing and
distribution of our asset management business, including the
anticipated timing of such transaction and the impact that such
transaction may have on Brookfield and its shareholders. The board
of directors of Brookfield has approved, in principle, Brookfield
pursuing the transaction. The transaction will be subject to the
satisfaction of a number of conditions, including shareholder
approval, and, as such, there can be no certainty that the
transaction will proceed or proceed in the manner described.
Where this news release refers to “target
carried interest” it is based on an assumption that existing funds
meet their target gross returns. Target gross returns are
typically ~20% for opportunistic funds; 10% to 15% for value add,
credit and core funds. Fee terms vary by investment strategy
and may change over time.
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 Brookfield
and the Manager to differ materially from anticipated future
results, performance or achievement expressed or implied by such
forward-looking statements and information.
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) investment 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 the 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
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 our real estate,
renewable power and transition, infrastructure, private equity,
credit, and residential development activities; and
(xxv) factors detailed from time to time in our documents
filed with the securities regulators in Canada and the United
States.
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 the historic investments discussed
herein (because of economic conditions, the availability of
investment opportunities or otherwise), that targeted returns,
diversification or asset allocations will be met or that an
investment strategy or investment objectives will be
achieved.
Target returns set forth in this news release
are for illustrative and informational purposes only and have been
presented based on various assumptions made by Brookfield in
relation to the investment strategies being pursued by the funds,
any of which may prove to be incorrect. There can be no assurance
that targeted returns will be achieved. Due to various risks,
uncertainties and changes (including changes in economic,
operational, political or other circumstances) beyond Brookfield’s
control, the actual performance of the funds and the business could
differ materially from the target returns set forth herein. In
addition, industry experts may disagree with the assumptions used
in presenting the target returns. No assurance, representation or
warranty is made by any person that the target returns will be
achieved, and undue reliance should not be put on them. Prior
performance is not indicative of future results and there can be no
guarantee that the funds will achieve the target returns or be able
to avoid losses.
Certain of the information contained herein is
based on or derived from information provided by independent
third-party sources. While Brookfield believes that such
information is accurate as of the date it was produced and that the
sources from which such information has been obtained are reliable,
Brookfield makes no representation or warranty, express or implied,
with respect to the accuracy, reasonableness or completeness of any
of the information or the assumptions on which such information is
based, contained herein, including but not limited to, information
obtained from third parties.
Brookfield Asset Managem... (NYSE:BAM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Brookfield Asset Managem... (NYSE:BAM)
Historical Stock Chart
From Sep 2023 to Sep 2024