Brookfield Corporation Reports Strong Second Quarter Results
Distributable Earnings Increased 80% to
$2.1 billion for the Quarter
as
Global Transaction Activity Begins to
Recover
Cash and Liquid Assets Increased to $62
billion
Deployable Capital Increased to $150
billion
$800 million of Share Buybacks Completed to
Date in 2024
BROOKFIELD, NEWS, Aug. 08, 2024 (GLOBE NEWSWIRE)
-- Brookfield Corporation (NYSE: BN, TSX: BN) announced strong
financial results for the quarter ended June 30, 2024.
Nick Goodman, President of Brookfield
Corporation, said, “We achieved strong financial performance in the
second quarter, with cash flows across our asset management, wealth
solutions and operating businesses continuing to grow. This
momentum is expected to build over the balance of 2024 and beyond.
We completed $800 million of share buybacks to date this year
and will keep allocating capital to share repurchases when it makes
sense, further enhancing the value of each remaining share.”
He added, “With capital markets improving and a
constructive economic backdrop, we expect transaction activity to
continue to increase over the coming quarters. This sets us up well
to execute on monetizations across the business and, in turn,
further bolster our earnings.”
Operating Results
Distributable earnings (“DE”) before
realizations increased by 11% on a per share basis over the prior
year quarter.
Unaudited
For the periods ended June 30
(US$ millions, except per share
amounts)
|
Three Months Ended |
|
Last Twelve Months Ended |
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net income attributable to Brookfield shareholders1 |
$ |
43 |
|
|
$ |
81 |
|
$ |
1,074 |
|
$ |
308 |
| Net income (loss) of
consolidated business2 |
|
(285 |
) |
|
|
1,512 |
|
|
3,403 |
|
|
2,696 |
| |
|
|
|
|
|
|
|
| Distributable earnings before
realizations1,3,4 |
|
1,113 |
|
|
|
1,013 |
|
|
4,379 |
|
|
4,078 |
|
– Per Brookfield share1,3,4 |
|
0.71 |
|
|
|
0.64 |
|
|
2.77 |
|
|
2.56 |
| |
|
|
|
|
|
|
|
| Distributable
earnings1,3 |
|
2,127 |
|
|
|
1,187 |
|
|
5,805 |
|
|
5,205 |
|
– Per Brookfield share1,3 |
|
1.35 |
|
|
|
0.75 |
|
|
3.67 |
|
|
3.26 |
See endnotes on page 8.
Our share of net income was $43 million and
$1.1 billion for the quarter and the last twelve months
(“LTM”), respectively. Due to certain accounting nuances, mostly
related to the treatment of acquisitions in our infrastructure
business, total consolidated net income was negative
$285 million in the quarter but positive $3.4 billion
over the LTM. Distributable earnings before realizations were
$1.1 billion ($0.71/share) for the quarter and
$4.4 billion ($2.77/share) for the last twelve months.
Assets under management within our asset
management business grew to approximately $1 trillion and
fee-bearing capital increased to $514 billion, as a result of
strong fundraising across our diversified fund offerings.
Wealth solutions delivered another strong
quarter, benefiting from the close of American Equity Life (“AEL”)
and the strength of our investment performance.
Our operating businesses generated resilient and
recurring cash flows, underpinned by the high-quality earnings
across our renewable power and transition, infrastructure and
private equity businesses and 3% growth in same-store net operating
income (“NOI”) from our core real estate portfolio over the
LTM.
During the quarter and over the LTM, earnings
from realizations were $1.0 billion and $1.4 billion,
with total DE for the quarter and the LTM of $2.1 billion
($1.35/share) and $5.8 billion ($3.67/share), respectively.
Regular Dividend
Declaration
The Board declared a quarterly dividend for
Brookfield Corporation of $0.08 per share, payable on
September 27, 2024 to shareholders of record as at the close
of business on September 12, 2024. The Board also declared the
regular monthly and quarterly dividends on our preferred
shares.
Operating Highlights
Distributable earnings before realizations
were $1.1 billion ($0.71/share)
for the quarter and $4.4 billion
($2.77/share) over the last twelve months,
representing an increase of 11% on a per share
basis over the prior year quarter. Total distributable earnings
were $2.1 billion ($1.35/share)
for the quarter and $5.8 billion
($3.67/share) for the last twelve
months.
Asset Management:
- DE was
$636 million ($0.40/share) in the quarter and
$2.5 billion ($1.61/share) over the LTM.
- Assets under
management are now approximately $1 trillion and fee-bearing
capital was $514 billion as of June 30, 2024, representing an
increase of 17% over the LTM. Inflows during the quarter were
$68 billion, backed by the scaling of our credit platform.
This increase contributed to the 11% and 6% growth in annualized
fee-related earnings (“FRE”) and FRE, respectively, compared to the
prior year quarter.
- We expect
fundraising to ramp up in the back half of 2024, with closes
anticipated for our latest flagship funds in the market, which
should result in further earnings growth.
- During the
quarter, our ownership in BAM decreased by 2% to 73% as we used
approximately $1 billion of BAM shares as part of the consideration
for the acquisition of AEL.
Wealth Solutions:
- Distributable
operating earnings were $292 million ($0.19/share) in the
quarter and $1.0 billion ($0.63/share) over the LTM.
- Insurance
assets grew to over $110 billion, with the close of AEL and
the origination of $3.5 billion of new business via our
annuity channel during the quarter.
- The average
investment portfolio yield on our existing insurance assets was
5.8%, approximately 2% higher than our average cost of capital.
Inclusive of AEL, the spread was 1.7% in the quarter. As we
reposition the AEL investment portfolio, we expect the investment
spread to increase back closer to 2%, and as a result, annualized
earnings should grow from $1.4 billion currently to
$2 billion.
- Through our
combined wealth solutions platforms, we are raising close to
$2 billion of retail capital per month.
Operating Businesses:
- DE was
$371 million ($0.24/share) in the quarter and
$1.5 billion ($0.93/share) over the LTM.
- Operating
Funds from Operations (“Operating FFO”) in our renewable power,
transition and infrastructure businesses increased by 7% over the
prior year quarter, and same-store Operating FFO in our private
equity business grew by 17% versus the prior year quarter. In
addition, our core real estate portfolio delivered 3% growth in
same-store NOI over the LTM.
- In our real
estate business, we signed nearly 5 million square feet of
office and retail leases during the quarter, and rents on newly
signed leases in our office assets grew by 23% compared to those
leases expiring. We are past the bottom of the market, liquidity is
coming back and quality assets are achieving their highest rents
ever in most markets.
Earnings from the monetization of mature
assets were $1.0 billion ($0.64/share) for the
quarter and $1.4 billion
($0.90/share) for the
LTM.
- With
transaction activity picking up, we expect an increased level of
monetizations going forward. During the quarter, we advanced or
completed several sales at strong investment returns including on a
luxury hotel in South Korea, an office asset in Washington, DC, a
road fuels operation in Europe, several renewable assets, and the
sale of 2% of our BAM shares to assist with increased float in the
shares.
- Total
accumulated unrealized carried interest was $10.7 billion at
quarter end, representing an increase of 13% over the LTM, net of
carried interest realized into income. Year to date, we recognized
$234 million of net realized carried interest into income,
with $15 billion of asset sales completed globally.
We ended the quarter with approximately
$150 billion of capital available to deploy into
new investments.
- During the
quarter, we returned $408 million to shareholders through regular
dividends and share repurchases. To date this year, we repurchased
over $800 million of shares, and we expect to continue to
further allocate capital to share buybacks over the remainder of
2024.
- We have
approximately $150 billion of deployable capital, which
includes $62 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.
- We have
best-in-class, strong access to most capital markets globally. This
enabled us to execute on approximately $75 billion of financings
across the business to date this year, supporting growth and
ongoing operations. This includes the issuance of $650 million
of 10-year and 30-year bonds at the Corporation. In this deal, we
tightened credit spreads by 55 bps and 10 bps, respectively,
relative to the most recent comparable issuances.
CONSOLIDATED BALANCE SHEETS
Unaudited
(US$ millions)
|
|
June 30 |
|
December 31 |
|
|
|
2024 |
|
|
2023 |
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
11,249 |
|
$ |
11,222 |
| Other financial assets |
|
|
30,614 |
|
|
28,324 |
| Accounts receivable and
other |
|
|
33,094 |
|
|
31,001 |
| Inventory |
|
|
11,841 |
|
|
11,412 |
| Equity accounted
investments |
|
|
62,285 |
|
|
59,124 |
| Investment properties |
|
|
127,235 |
|
|
124,152 |
| Property, plant and
equipment |
|
|
146,128 |
|
|
147,617 |
| Intangible assets |
|
|
37,172 |
|
|
38,994 |
| Goodwill |
|
|
34,270 |
|
|
34,911 |
|
Deferred income tax assets |
|
|
3,426 |
|
|
3,338 |
|
Total Assets |
|
$ |
497,314 |
|
$ |
490,095 |
|
|
|
|
|
|
| Liabilities and
Equity |
|
|
|
|
| Corporate borrowings |
|
$ |
14,823 |
|
$ |
12,160 |
| Accounts payable and
other |
|
|
57,793 |
|
|
59,011 |
| Non-recourse borrowings |
|
|
227,693 |
|
|
221,550 |
| Subsidiary equity
obligations |
|
|
5,021 |
|
|
4,145 |
| Deferred income tax
liabilities |
|
|
24,420 |
|
|
24,987 |
| |
|
|
|
|
| Equity |
|
|
|
|
|
Non-controlling interests in net assets |
|
|
122,229 |
|
|
122,465 |
|
Preferred equity |
|
|
4,103 |
|
|
4,103 |
|
Common equity |
|
|
41,232 |
|
|
41,674 |
|
Total Equity |
|
|
167,564 |
|
|
168,242 |
|
Total Liabilities and Equity |
|
$ |
497,314 |
|
$ |
490,095 |
CONSOLIDATED STATEMENTS OF
OPERATIONS
Unaudited
For the periods ended June 30
(US$ millions, except per share
amounts)
|
Three Months Ended |
|
Six Months Ended |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
$ |
23,050 |
|
|
$ |
23,668 |
|
|
$ |
45,957 |
|
|
$ |
46,965 |
|
| Direct costs1 |
|
(16,717 |
) |
|
|
(17,692 |
) |
|
|
(33,288 |
) |
|
|
(35,324 |
) |
| Other income and gains |
|
244 |
|
|
|
1,483 |
|
|
|
484 |
|
|
|
1,864 |
|
| Equity accounted income |
|
825 |
|
|
|
401 |
|
|
|
1,511 |
|
|
|
830 |
|
| Interest expense |
|
|
|
|
|
|
|
|
– Corporate borrowings |
|
(181 |
) |
|
|
(154 |
) |
|
|
(354 |
) |
|
|
(290 |
) |
|
– Non-recourse borrowings |
|
|
|
|
|
|
|
|
Same-store |
|
(3,885 |
) |
|
|
(3,610 |
) |
|
|
(7,678 |
) |
|
|
(7,087 |
) |
|
Dispositions, net of acquisitions2 |
|
21 |
|
|
|
— |
|
|
|
(47 |
) |
|
|
— |
|
|
Upfinancings2 |
|
(131 |
) |
|
|
— |
|
|
|
(225 |
) |
|
|
— |
|
| Corporate costs |
|
(19 |
) |
|
|
(23 |
) |
|
|
(36 |
) |
|
|
(37 |
) |
| Fair value changes |
|
(753 |
) |
|
|
62 |
|
|
|
(595 |
) |
|
|
100 |
|
| Depreciation and
amortization |
|
(2,435 |
) |
|
|
(2,214 |
) |
|
|
(4,910 |
) |
|
|
(4,402 |
) |
| Income
tax |
|
(304 |
) |
|
|
(409 |
) |
|
|
(585 |
) |
|
|
(683 |
) |
|
Net income (loss) |
|
(285 |
) |
|
|
1,512 |
|
|
|
234 |
|
|
|
1,936 |
|
| Less:
Amounts attributable to non-controlling interests |
|
328 |
|
|
|
(1,431 |
) |
|
|
(89 |
) |
|
|
(1,735 |
) |
|
Net income attributable to Brookfield
shareholders |
$ |
43 |
|
|
$ |
81 |
|
|
$ |
145 |
|
|
$ |
201 |
|
|
|
|
|
|
|
|
|
|
| Net income per share |
|
|
|
|
|
|
|
|
Diluted |
$ |
— |
|
|
$ |
0.03 |
|
|
$ |
0.04 |
|
|
$ |
0.08 |
|
|
Basic |
|
— |
|
|
|
0.03 |
|
|
|
0.04 |
|
|
|
0.08 |
|
1. Direct costs disclosed above exclude depreciation and
amortization expense.
2. Interest expense from acquisitions, net of dispositions,
and upfinancings completed over the twelve months ended June 30,
2024.
SUMMARIZED FINANCIAL
RESULTS
DISTRIBUTABLE EARNINGS
Unaudited
For the periods ended June 30
(US$ millions)
|
Three Months Ended |
|
Last Twelve Months Ended |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Asset management |
$ |
636 |
|
|
$ |
604 |
|
|
$ |
2,540 |
|
|
$ |
2,721 |
|
| |
|
|
|
|
|
|
|
| Wealth solutions |
|
292 |
|
|
|
160 |
|
|
|
1,000 |
|
|
|
634 |
|
| |
|
|
|
|
|
|
|
| BEP |
|
107 |
|
|
|
105 |
|
|
|
421 |
|
|
|
410 |
|
| BIP |
|
84 |
|
|
|
80 |
|
|
|
327 |
|
|
|
310 |
|
| BBU |
|
9 |
|
|
|
9 |
|
|
|
36 |
|
|
|
36 |
|
| BPG |
|
172 |
|
|
|
196 |
|
|
|
735 |
|
|
|
778 |
|
|
Other |
|
(1 |
) |
|
|
7 |
|
|
|
(45 |
) |
|
|
(22 |
) |
|
Operating businesses |
|
371 |
|
|
|
397 |
|
|
|
1,474 |
|
|
|
1,512 |
|
| |
|
|
|
|
|
|
|
|
Corporate costs and other |
|
(186 |
) |
|
|
(148 |
) |
|
|
(635 |
) |
|
|
(551 |
) |
|
Distributable earnings before realizations1 |
|
1,113 |
|
|
|
1,013 |
|
|
|
4,379 |
|
|
|
4,316 |
|
| Realized carried interest,
net |
|
51 |
|
|
|
170 |
|
|
|
428 |
|
|
|
755 |
|
|
Disposition gains from principal investments |
|
963 |
|
|
|
4 |
|
|
|
998 |
|
|
|
134 |
|
|
Distributable
earnings1 |
$ |
2,127 |
|
|
$ |
1,187 |
|
|
$ |
5,805 |
|
|
$ |
5,205 |
|
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 June 30
(US$ millions)
|
Three Months Ended |
|
Last Twelve Months Ended |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income (loss) |
$ |
(285 |
) |
|
$ |
1,512 |
|
|
$ |
3,403 |
|
|
$ |
2,696 |
|
| Financial statement components
not included in DE: |
|
|
|
|
|
|
|
|
Equity accounted fair value changes and other items |
|
444 |
|
|
|
703 |
|
|
|
2,468 |
|
|
|
2,586 |
|
|
Fair value changes and other |
|
797 |
|
|
|
(62 |
) |
|
|
2,840 |
|
|
|
2,260 |
|
|
Depreciation and amortization |
|
2,435 |
|
|
|
2,214 |
|
|
|
9,583 |
|
|
|
8,388 |
|
|
Disposition gains in net income |
|
(110 |
) |
|
|
(1,445 |
) |
|
|
(4,736 |
) |
|
|
(2,987 |
) |
|
Deferred income taxes |
|
(55 |
) |
|
|
(151 |
) |
|
|
(753 |
) |
|
|
(288 |
) |
| Non-controlling interests in
the above items1 |
|
(2,233 |
) |
|
|
(1,815 |
) |
|
|
(8,610 |
) |
|
|
(8,001 |
) |
| Less: realized carried
interest, net |
|
(51 |
) |
|
|
(170 |
) |
|
|
(428 |
) |
|
|
(755 |
) |
| Working
capital, net |
|
171 |
|
|
|
227 |
|
|
|
612 |
|
|
|
417 |
|
|
Distributable earnings before
realizations2 |
|
1,113 |
|
|
|
1,013 |
|
|
|
4,379 |
|
|
|
4,316 |
|
| Realized carried interest,
net3 |
|
51 |
|
|
|
170 |
|
|
|
428 |
|
|
|
755 |
|
|
Disposition gains from principal investments |
|
963 |
|
|
|
4 |
|
|
|
998 |
|
|
|
134 |
|
|
Distributable
earnings2 |
$ |
2,127 |
|
|
$ |
1,187 |
|
|
$ |
5,805 |
|
|
$ |
5,205 |
|
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 June 30
(millions, except per share amounts)
|
Three Months Ended |
|
Last Twelve Months Ended |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income (loss) |
$ |
(285 |
) |
|
$ |
1,512 |
|
|
$ |
3,403 |
|
|
$ |
2,696 |
|
|
Non-controlling interests |
|
328 |
|
|
|
(1,431 |
) |
|
|
(2,329 |
) |
|
|
(2,388 |
) |
|
Net income attributable to shareholders |
|
43 |
|
|
|
81 |
|
|
|
1,074 |
|
|
|
308 |
|
| Preferred share
dividends1 |
|
(42 |
) |
|
|
(41 |
) |
|
|
(168 |
) |
|
|
(158 |
) |
|
Dilutive impact of exchangeable shares of affiliate |
|
— |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
Net income available to common shareholders including dilutive
impact of exchangeable shares |
$ |
1 |
|
|
$ |
40 |
|
|
$ |
915 |
|
|
$ |
150 |
|
|
|
|
|
|
|
|
|
|
| Weighted average shares |
|
1,509.6 |
|
|
|
1,564.0 |
|
|
|
1,532.6 |
|
|
|
1,568.3 |
|
|
Dilutive effect of conversion of options and escrowed shares using
treasury stock method2 and exchangeable shares of
affiliate |
|
26.4 |
|
|
|
14.4 |
|
|
|
49.9 |
|
|
|
16.2 |
|
|
Shares and share equivalents |
|
1,536.0 |
|
|
|
1,578.4 |
|
|
|
1,582.5 |
|
|
|
1,584.5 |
|
|
|
|
|
|
|
|
|
|
| Diluted
earnings per share3 |
$ |
— |
|
|
$ |
0.03 |
|
|
$ |
0.58 |
|
|
$ |
0.09 |
|
1. Excludes dividends paid on perpetual subordinated notes
of $2 million (2023 – $2 million) and $10 million (2023 –
$10 million) for the three and twelve months ended June 30, 2024,
which are recognized within net income.
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 and twelve months ended June
30, 2024, 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 periods ended June 30, 2024, which have been
prepared using IFRS, as issued by the IASB. The amounts have not
been audited by Brookfield Corporation’s external auditor.
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 Second 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
10:00 a.m. ET, please pre-register at
https://register.vevent.com/register/BI7f26355391e0463d93cbdf4f162e05fd.
Upon registering, you will be emailed a dial-in number, and unique
PIN. The Conference Call will also be webcast live at
https://edge.media-server.com/mmc/p/dttytztv. For those unable to
participate in the Conference Call, the telephone replay will be
archived and available until August 8, 2025. To access this
rebroadcast, please visit:
https://edge.media-server.com/mmc/p/m49bqp6n.
About Brookfield
Corporation
Brookfield Corporation is a leading global
investment firm focused on building long-term wealth for
institutions and individuals around the world. We have three core
businesses: Alternative Asset Management, Wealth Solutions, and our
Operating Businesses which are in renewable power, infrastructure,
business and industrial services, and real estate.
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. Brookfield Corporation is publicly traded in
New York and Toronto (NYSE: BN, TSX: BN).
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:
Kerrie McHugh
Tel: (212) 618-3469
Email: kerrie.mchugh@brookfield.com
|
|
Investor
Relations:
Linda Northwood
Tel: (416) 359-8647
Email: 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 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.
1. Excludes amounts attributable to
non-controlling interests.
2. Consolidated basis – includes 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 twelve months ended June 30, 2023 were
adjusted for the special distribution of 25% of our asset
management business on December 9, 2022. Prior to the adjustment,
DE before realizations were $4.3 billion for the twelve months
ended June 30, 2023.
Notice to Readers
Brookfield Corporation 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 the
U.S. Securities Act of 1933, the U.S. Securities Exchange Act of
1934, “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995 and in any applicable
Canadian securities regulations (collectively, “forward-looking
statements”). Forward- looking statements include statements that
are predictive in nature, depend upon or refer to future results,
events or conditions, and include, but are not limited to,
statements which reflect management’s current estimates, beliefs
and assumptions regarding the operations, business, financial
condition, expected financial results, performance, prospects,
opportunities, priorities, targets, goals, ongoing objectives,
strategies, capital management and outlook of Brookfield
Corporation and its subsidiaries, as well as the outlook for North
American and international economies for the current fiscal year
and subsequent periods, and which in turn are based on our
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors
management believes are appropriate in the circumstances. The
estimates, beliefs and assumptions of Brookfield Corporation are
inherently subject to significant business, economic, competitive
and other uncertainties and contingencies regarding future events
and as such, are subject to change. Forward-looking statements are
typically identified by words such as “expect,” “anticipate,”
“believe,” “foresee,” “could,” “estimate,” “goal,” “intend,”
“plan,” “seek,” “strive,” “will,” “may” and “should” and similar
expressions. In particular, the forward-looking statements
contained in this news release include statements referring to the
impact of current market or economic conditions on our business,
the future state of the economy or the securities market, the
anticipated allocation and deployment of our capital, our
fundraising targets, and our target growth objectives.
Although Brookfield Corporation believes
that such forward-looking statements are based upon reasonable
estimates, beliefs and assumptions, actual results may differ
materially from the forward-looking statements. 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; (iii) the
behavior of financial markets, including fluctuations in interest
and foreign exchange rates and heightened inflationary pressures;
(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
and sanctions; (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 asset management,
wealth solutions, renewable power and transition, infrastructure,
private equity, real estate and corporate 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 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,
Brookfield Corporation undertakes no obligation to publicly update
or revise any forward- looking statements, 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 Brookfield Corporation in relation to the investment
strategies being pursued, any of which may prove to be incorrect.
There can be no assurance that targeted returns or growth
objectives will be achieved. Due to various risks, uncertainties
and changes (including changes in economic, operational, political
or other circumstances) beyond Brookfield Corporation’s control,
the actual performance of the business could differ materially from
the target returns and growth objectives set forth herein. In
addition, industry experts may disagree with the assumptions used
in presenting the target returns and growth objectives. No
assurance, representation or warranty is made by any person that
the target returns or growth objectives will be achieved, and undue
reliance should not be put on them.
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