Distributable Earnings of
Alternative Fund Inflows of
He continued, “Following shareholder approval received on
Operating Results
Excluding the impact of realizations recorded in the prior year, distributable earnings increased by 39% compared to the prior year quarter.
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income1 | $ | 716 | $ | 2,722 | $ | 8,612 | $ | 10,742 | |||||||
| Net income attributable to common shareholders2 | 423 | 797 | 3,490 | 3,491 | |||||||||||
| Per |
0.24 | 0.47 | 2.06 | 2.13 | |||||||||||
| Operating Funds from operations2,3 | 1,216 | 934 | 4,720 | 3,579 | |||||||||||
| Per |
0.73 | 0.56 | 2.81 | 2.19 | |||||||||||
| Distributable earnings before realizations2,3 | 1,216 | 873 | 4,224 | 3,268 | |||||||||||
- Consolidated basis – includes amounts attributable to non-controlling interests.
- Excludes amounts attributable to non-controlling interests.
- See Reconciliation of Net Income to FFO and Distributable Earnings on page 5 and Non-IFRS and Performance Measures section on page 9.
Operating Funds from Operations (“FFO”) and net income totaled
The resilience of our underlying operations and the positive contributions from acquisitions over the last 12 months supported growth in distributions of 23% compared to the prior year quarter. When combined with our Asset Management earnings, we generated Distributable Earnings (“DE”) before realizations of
Regular Dividend Declaration
The Board declared a quarterly dividend for the Corporation of
Operating Highlights
We had material inflows of
During the quarter, we held strong first closes for our fifth flagship infrastructure fund and our sixth flagship private equity fund which now stand at approximately
In addition, we continue to raise capital across our other complementary strategies. We held a first close for our third infrastructure debt fund for
The above increases in fee-bearing capital contributed to a 20% increase in fee-related earnings over the last twelve months.
Fee-related earnings were $531 million in the quarter, and
We invested and/or committed
We are increasingly becoming a partner of choice for corporations and others seeking capital solutions, based on our large-scale, flexible capital, operational expertise and strong investment track record. During the quarter, we announced a partnership with Intel to fund half of a
We generated
Annualized fee revenues and target carried interest now stand at a run-rate of almost
Annualized fee revenues are now
As at
Total investable capital includes approximately
CONSOLIDATED BALANCE SHEETS
| Unaudited (US$ millions) |
|||||||||||||||
| 2022 | 2021 | ||||||||||||||
| Assets | |||||||||||||||
| Cash and cash equivalents | $ | 11,306 | $ | 12,694 | |||||||||||
| Other financial assets | 23,238 | 16,546 | |||||||||||||
| Accounts receivable and other | 38,423 | 33,718 | |||||||||||||
| Inventory | 12,138 | 11,415 | |||||||||||||
| Equity accounted investments | 44,064 | 46,100 | |||||||||||||
| Investment properties | 111,603 | 100,865 | |||||||||||||
| Property, plant and equipment | 111,538 | 115,489 | |||||||||||||
| Intangible assets | 36,704 | 30,609 | |||||||||||||
|
|
26,484 | 20,227 | |||||||||||||
| Deferred income tax assets | 3,652 | 3,340 | |||||||||||||
| Total Assets | $ | 419,150 | $ | 391,003 | |||||||||||
| Liabilities and Equity | |||||||||||||||
| Corporate borrowings | $ | 11,296 | $ | 10,875 | |||||||||||
| Accounts payable and other | 54,887 | 55,694 | |||||||||||||
| Non-recourse borrowings in entities that we manage | 193,180 | 165,057 | |||||||||||||
| Subsidiary equity obligations | 4,324 | 4,308 | |||||||||||||
| Deferred income tax liabilities | 21,487 | 20,328 | |||||||||||||
| Equity | |||||||||||||||
| Non-controlling interests in net assets | $ | 89,430 | $ | 88,386 | |||||||||||
| Preferred equity | 4,145 | 4,145 | |||||||||||||
| Common equity | 40,401 | 133,976 | 42,210 | 134,741 | |||||||||||
| Total Liabilities and Equity | $ | 419,150 | $ | 391,003 | |||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Nine Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenues | $ | 23,418 | $ | 19,248 | $ | 68,556 | $ | 53,944 | |||||||
| Direct costs1 | (17,771 | ) | (14,751 | ) | (52,610 | ) | (40,932 | ) | |||||||
| Other income and gains | 111 | 1,123 | 605 | 3,078 | |||||||||||
| Equity accounted income | 933 | 662 | 2,340 | 1,818 | |||||||||||
| Expenses | |||||||||||||||
| Interest | (2,874 | ) | (1,899 | ) | (7,417 | ) | (5,560 | ) | |||||||
| Corporate costs | (30 | ) | (27 | ) | (89 | ) | (86 | ) | |||||||
| Fair value changes | (549 | ) | 700 | 834 | 3,171 | ||||||||||
| Depreciation and amortization | (1,997 | ) | (1,617 | ) | (5,694 | ) | (4,698 | ) | |||||||
| Income tax | (525 | ) | (717 | ) | (1,374 | ) | (1,808 | ) | |||||||
| Net income | $ | 716 | $ | 2,722 | $ | 5,151 | $ | 8,927 | |||||||
| Net income attributable to: | |||||||||||||||
shareholders |
$ | 423 | $ | 797 | $ | 2,372 | $ | 2,848 | |||||||
| Non-controlling interests | 293 | 1,925 | 2,779 | 6,079 | |||||||||||
| $ | 716 | $ | 2,722 | $ | 5,151 | $ | 8,927 | ||||||||
| Net income per share | |||||||||||||||
| Diluted | $ | 0.24 | $ | 0.47 | $ | 1.40 | $ | 1.72 | |||||||
| Basic | 0.25 | 0.49 | 1.44 | 1.78 | |||||||||||
-
Direct costs exclude depreciation and amortization expenses disclosed above.
SUMMARIZED FINANCIAL RESULTS
RECONCILIATION OF NET INCOME TO FFO AND DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income | $ | 716 | $ | 2,722 | $ | 8,612 | $ | 10,742 | |||||||
| Financial statement components not included in FFO: | |||||||||||||||
| Equity accounted fair value changes and other non-FFO items1 | 141 | 307 | 1,334 | 1,300 | |||||||||||
| Fair value changes | 549 | (700 | ) | (2,814 | ) | (3,346 | ) | ||||||||
| Depreciation and amortization | 1,997 | 1,617 | 7,433 | 6,234 | |||||||||||
| Deferred income taxes | 240 | 428 | 768 | 906 | |||||||||||
| Realized disposition gains in fair value changes or prior periods | 170 | 255 | 1,084 | 3,298 | |||||||||||
| Non-controlling interests in FFO2 | (2,347 | ) | (3,221 | ) | (10,226 | ) | (11,209 | ) | |||||||
| Funds from operations3,4 | 1,466 | 1,408 | 6,191 | 7,925 | |||||||||||
| Less: total disposition gains | (151 | ) | (328 | ) | (1,055 | ) | (3,541 | ) | |||||||
| Less: realized carried interest, net | (99 | ) | (146 | ) | (416 | ) | (805 | ) | |||||||
| Operating Funds from operations3,4 | 1,216 | 934 | 4,720 | 3,579 | |||||||||||
| Less: net invested capital FFO | (685 | ) | (483 | ) | (2,611 | ) | (1,821 | ) | |||||||
| Corporate activities | (173 | ) | (144 | ) | (672 | ) | (584 | ) | |||||||
| Insurance solutions operating earnings | 159 | 5 | 239 | 11 | |||||||||||
| Distributions from investments | 696 | 567 | 2,556 | 2,125 | |||||||||||
| Equity-based compensation | 43 | 33 | 149 | 114 | |||||||||||
| Preferred share dividends | (40 | ) | (39 | ) | (157 | ) | (156 | ) | |||||||
| Distributable earnings before realizations3 | 1,216 | 873 | 4,224 | 3,268 | |||||||||||
| Realized carried interest, net5 | 99 | 146 | 416 | 805 | |||||||||||
| Disposition gains from principal investments | 48 | 223 | 392 | 2,540 | |||||||||||
| Distributable earnings3 | $ | 1,363 | $ | 1,242 | $ | 5,032 | $ | 6,613 | |||||||
-
Other non-FFO items correspond to amounts that are not directly related to revenue earning activities and are not normal or recurring items necessary for business operations.
-
Amounts attributable to non-controlling interests are calculated based on the economic ownership interests held by non-controlling interests in consolidated subsidiaries. By adjusting FFO attributable to non-controlling interests, we are able to remove the portion of FFO earned at non-wholly owned subsidiaries that is not attributable to
Brookfield . -
Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
-
Excludes amounts attributable to non-controlling interests.
-
Includes our share of Oaktree’s distributable earnings attributable to realized carried interest.
SEGMENT OPERATING FUNDS FROM OPERATIONS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Asset management | $ | 531 | $ | 451 | $ | 2,109 | $ | 1,758 | |||||||
| Renewable power and transition | 98 | 60 | 346 | 237 | |||||||||||
| Infrastructure | 126 | 103 | 486 | 408 | |||||||||||
| Private equity | 222 | 194 | 895 | 729 | |||||||||||
| Real estate | 86 | 201 | 884 | 535 | |||||||||||
| Residential | 66 | 76 | 355 | 190 | |||||||||||
| Corporate | 87 | (151 | ) | (355 | ) | (278 | ) | ||||||||
| Operating funds from operations1,2 | 1,216 | 934 | 4,720 | 3,579 | |||||||||||
| Realized carried interest, net | 99 | 146 | 416 | 805 | |||||||||||
| Disposition gains | 151 | 328 | 1,055 | 3,541 | |||||||||||
| Funds from operations1,2 | $ | 1,466 | $ | 1,408 | $ | 6,191 | $ | 7,925 | |||||||
| Per share3 | |||||||||||||||
| Total operating FFO | $ | 0.73 | $ | 0.56 | $ | 2.81 | $ | 2.19 | |||||||
| Total FFO | $ | 0.89 | $ | 0.85 | $ | 3.72 | $ | 4.97 | |||||||
-
Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
-
Excludes amounts attributable to non-controlling interests.
-
Per share amounts are inclusive of dilutive effect of mandatorily redeemable preferred shares held in a consolidated subsidiary.
EARNINGS PER SHARE
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income | $ | 716 | $ | 2,722 | $ | 8,612 | $ | 10,742 | |||||||
| Non-controlling interests | (293 | ) | (1,925 | ) | (5,122 | ) | (7,251 | ) | |||||||
| Net income attributable to shareholders | 423 | 797 | 3,490 | 3,491 | |||||||||||
| Preferred share dividends1 | (37 | ) | (36 | ) | (148 | ) | (147 | ) | |||||||
| Dilutive effect of conversion of subsidiary preferred shares | — | (1 | ) | — | (10 | ) | |||||||||
| Net income available to common shareholders | 386 | 760 | 3,342 | 3,334 | |||||||||||
| Dilutive impact of exchangeable shares of affiliate | 1 | 1 | 5 | 1 | |||||||||||
| Net income available to common shareholders including dilutive impact of exchangeable shares | $ | 387 | $ | 761 | $ | 3,347 | $ | 3,335 | |||||||
| Weighted average shares | 1,562.5 | 1,552.8 | 1,566.7 | 1,523.2 | |||||||||||
| Dilutive effect of conversion of options and escrowed shares using treasury stock method2and exchangeable shares of affiliate | 48.9 | 59.6 | 56.0 | 41.7 | |||||||||||
| Shares and share equivalents | 1,611.4 | 1,612.4 | 1,622.7 | 1,564.9 | |||||||||||
| Diluted earnings per share3 | $ | 0.24 | $ | 0.47 | $ | 2.06 | $ | 2.13 | |||||||
-
Excludes dividends paid on perpetual subordinated notes of $3 million (2021 – $3 million) and $9 million (2021 – $9 million) for the three months and the last twelve months ended
September 30, 2022 , which are recognized within net income. -
Includes management share option plan and escrowed stock plan.
-
Per share amounts are inclusive of dilutive effect of mandatorily redeemable preferred shares held in a consolidated subsidiary.
DISTRIBUTABLE EARNINGS
| Unaudited For the periods ended (US$ millions) |
Three Months Ended | Last Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Fee-related earnings | $ | 531 | $ | 451 | $ | 2,109 | $ | 1,758 | |||||||
| Perpetual affiliates | 537 | 509 | 2,169 | 1,678 | |||||||||||
| Corporate cash and financial assets | 89 | (29 | ) | 61 | 227 | ||||||||||
| Other principal investments | 70 | 87 | 326 | 220 | |||||||||||
| Distributions from investments | 696 | 567 | 2,556 | 2,125 | |||||||||||
| Insurance solutions operating earnings | 159 | 5 | 239 | 11 | |||||||||||
| Corporate activities | (173 | ) | (144 | ) | (672 | ) | (584 | ) | |||||||
| Preferred share dividends | (40 | ) | (39 | ) | (157 | ) | (156 | ) | |||||||
| Add back: equity-based compensation | 43 | 33 | 149 | 114 | |||||||||||
| Distributable earnings before realizations | 1,216 | 873 | 4,224 | 3,268 | |||||||||||
| Realized carried interest, net | 99 | 146 | 416 | 805 | |||||||||||
| Disposition gains from principal investments | 48 | 223 | 392 | 2,540 | |||||||||||
| Distributable earnings1 | $ | 1,363 | $ | 1,242 | $ | 5,032 | $ | 6,613 | |||||||
- Non-IFRS measure – see Non-IFRS and Performance Measures section on page 9.
Additional Information
The Letter to Shareholders and the company’s Supplemental Information for the three months ended
The statements contained herein are based primarily on information that has been extracted from our financial statements for the quarter ended
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 Third 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
https://register.vevent.com/register/BI500b8aa08e984baeab1ebbd3bd66dad1.
About
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: 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 Funds from Operations (“FFO”). We define FFO as net income attributable to shareholders prior to fair value changes, depreciation and amortization, and deferred income taxes, and includes realized disposition gains that are not recorded in net income as determined under IFRS. FFO also includes the company’s share of equity accounted investments’ FFO on a fully diluted basis. FFO consists of the following components:
-
Operating FFO represents the company’s share of revenues less direct costs and interest expenses; excludes realized carried interest and disposition gains, fair value changes, depreciation and amortization and deferred income taxes; and includes our proportionate share of FFO from operating activities recorded by equity accounted investments on a fully diluted basis. We present this measure as we believe it assists in describing our results and variances within FFO.
-
Realized Carried Interest represents our contractual share of investment gains generated within a private fund after considering our clients minimum return requirements. Realized carried interest is determined on third-party capital that is no longer subject to future investment performance.
-
Realized Disposition Gains are included in FFO because we consider the purchase and sale of assets to be a normal part of the company’s business. Realized disposition gains include gains and losses recorded in net income and equity in the current period, and are adjusted to include fair value changes and revaluation surplus balances recorded in prior periods which were not included in prior period FFO.
We make reference to Distributable Earnings (“DE”), which is referring to the sum of our Asset Management segment FFO, distributions received from our ownership of investments, operating earnings from our insurance solutions business 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
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
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
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
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
Certain of the information contained herein is based on or derived from information provided by independent third-party sources. While
Source:
| Title | Document |
|---|---|
English |