BROOKFIELD, NEWS,
| Unaudited As at and for the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Year Ended | |||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Total assets | $ | 43,499 | $ | 11,493 | $ | 43,499 | $ | 11,493 | |||||
| Adjusted equity1 | 4,852 | 1,451 | 4,852 | 1,451 | |||||||||
| Distributable operating earnings1 | 170 | 21 | 388 | 30 | |||||||||
| Net income2 | 140 | (43 | ) | 492 | (44 | ) | |||||||
| Net income per class A share3,4 | $ | 0.14 | $ | 0.13 | $ | 0.56 | $ | 0.26 | |||||
- See Non-IFRS and Performance Measures on page 6 and a reconciliation from net income and reconciliation from equity on page 5.
- Net income for the period ended
January 1, 2021 toJune 28, 2021 are attributed to our predecessor companyBrookfield Annuity Holdings Inc. - For the period from
June 28, 2021 onward. - Excluding special distributions. Class A and Class B shares receive distributions at the same amount per share as the cash dividends paid on each Brookfield Class A Share.
2022 Highlights
- Diversified our product lines and scaled our US platform through the acquisition of
American National Group, Inc. (“American National”) in May, which has since contributed$1.7 billion of new premiums and over$375 million of Distributable Operating Earnings (“DOE”)
- Closed 28 pension risk transfer (“PRT”) transactions, our most active year to date, representing
$1.6 billion of premiums, a 50% increase over the prior year and inclusive of our first ever PRT transaction in the US market, where we expect to continue to be active in 2023
- Added approximately
$1 billion of flow premiums to our reinsurance treaties during the year and continued to reposition these portfolios, driving a step up in our reinsurance business spread earnings
- Across each of our business segments, deployed the capital from transactions closed over the last eighteen months into accretive, higher yielding investments, driving a step up in our net investment spreads, while still ending the year with a very strong liquidity position
- Subsequent to year-end, we announced a definitive agreement to acquire Argo Group International Holdings, Ltd. for approximately
$1.1 billion , further diversifying our operations and adding a foundational piece to our expandingU.S. P&C operations
Operating Update
We recognized
We recognized
We recorded net income of
Today, we have approximately
Regular Distribution Declaration
The Board declared a quarterly distribution of
In December, Brookfield completed the distribution of 25% of its asset management business
Combined, Brookfield Corporation’s quarterly distribution of
Brookfield Corporation Operating Results
An investment in Class A Shares of our company is intended to be, as nearly as practicable, functionally and economically, equivalent to an investment in the Brookfield Class A Shares. A summary of Brookfield’s fourth quarter and full year operating results is provided below:
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Years Ended | |||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||
| Net income | $ | 44 | $ | 3,461 | $ | 5,195 | $ | 12,388 | |||
| Operating funds from operations | $ | 1,135 | $ | 1,237 | $ | 4,618 | $ | 3,761 | |||
| Per Brookfield share | 0.68 | 0.74 | 2.78 | 2.27 | |||||||
| Distributable earnings before realizations | $ | 1,142 | $ | 1,052 | $ | 4,314 | $ | 3,467 | |||
| Per Brookfield share | 0.71 | 0.64 | 2.68 | 2.18 | |||||||
Given the economic equivalence, we expect that the market price of the Class A Shares of our company will be impacted significantly by the market price of the Brookfield Class A Shares and the business performance of Brookfield as a whole. In addition to carefully considering the disclosure made in this news release in its entirety, shareholders are strongly encouraged to carefully review Brookfield’s letter to shareholders, supplemental information and its other continuous disclosure filings. Investors, analysts and other interested parties can access Brookfield’s disclosure on Brookfield’s website under the Reports & Filings section at bn.brookfield.com.
CONSOLIDATED BALANCE SHEETS
| Unaudited | ||||||||
| (US$ MILLIONS) | 2022 | 2021 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 2,145 | $ | 393 | ||||
| Investments | 28,098 | 4,943 | ||||||
| Reinsurance funds withheld | 5,610 | 4,650 | ||||||
| Accrued investment income | 341 | 21 | ||||||
| Reinsurance related assets | 570 | 169 | ||||||
| Premiums due and other receivables | 436 | — | ||||||
| Deferred acquisition costs | 1,732 | 776 | ||||||
| Equity accounted investments | 1,673 | 344 | ||||||
| Investment properties | 562 | — | ||||||
| Deferred tax asset | 531 | 20 | ||||||
| Other assets | 756 | 177 | ||||||
| Separate account assets | 1,045 | — | ||||||
| Total assets | 43,499 | 11,493 | ||||||
| Liabilities and equity | ||||||||
| Future policy benefits | 15,771 | 8,497 | ||||||
| Policyholders' account balances | 14,310 | — | ||||||
| Policy and contract claims | 1,786 | — | ||||||
| Unearned premium reserve | 1,086 | — | ||||||
| Reinsurance payable | 90 | 75 | ||||||
| Other policyholder funds | 322 | — | ||||||
| Accounts payable and other liabilities | 779 | 77 | ||||||
| Due to related parties | 309 | 467 | ||||||
| Corporate borrowings | 2,160 | 693 | ||||||
| Subsidiary borrowings | 1,492 | — | ||||||
| Notes payable | 151 | — | ||||||
| Deferred revenue | 78 | 82 | ||||||
| Liabilities issued to reinsurance entities | 151 | 167 | ||||||
| Separate account liabilities | 1,045 | — | ||||||
| Junior preferred shares | 2,512 | — | ||||||
| Non-controlling interest | 8 | — | ||||||
| Class A exchangeable and Class B | 432 | 539 | ||||||
| Class C | 1,017 | 1,457 | 896 | 1,435 | ||||
| Total liabilities and equity | $ | 43,499 | $ | 11,493 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Year Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net premiums and other policy revenue | $ | 1,168 | $ | 4,881 | $ | 4,484 | $ | 7,162 | |||||||
| Net investment income, including funds withheld | 389 | 61 | 617 | 79 | |||||||||||
| Income from equity accounted investments | 74 | 14 | 222 | 8 | |||||||||||
| Total revenues | 1,631 | 4,956 | 5,323 | 7,249 | |||||||||||
| Benefits and claims paid on insurance contracts | 589 | 188 | 1,635 | 292 | |||||||||||
| Change in future policy benefits | 515 | 4,814 | 2,189 | 6,980 | |||||||||||
| Interest credited to policyholders' account balances | 124 | — | 156 | — | |||||||||||
| Commissions for acquiring and servicing policies | 167 | — | 412 | — | |||||||||||
| Other reinsurance expenses | 47 | 18 | 125 | 19 | |||||||||||
| Changes in deferred acquisition costs | (216 | ) | (44 | ) | (383 | ) | (44 | ) | |||||||
| Operating expenses | 167 | 13 | 433 | 35 | |||||||||||
| Interest expense | 83 | 8 | 196 | 9 | |||||||||||
| Total benefits and expenses | 1,476 | 4,997 | 4,763 | 7,291 | |||||||||||
| Net income (loss) before income taxes | 155 | (41 | ) | 560 | (42 | ) | |||||||||
| Income tax expense | (15 | ) | (2 | ) | (68 | ) | (2 | ) | |||||||
| Net income (loss) for the period | $ | 140 | $ | (43 | ) | $ | 492 | $ | (44 | ) | |||||
| Attributable to: | |||||||||||||||
| — | — | — | 5 | ||||||||||||
| Class A exchangeable & class B shareholders2,3 | 1 | 1 | 6 | 3 | |||||||||||
| Class C shareholder2,3 | 139 | (44 | ) | 484 | (52 | ) | |||||||||
| Non-controlling interest | — | — | 2 | — | |||||||||||
| $ | 140 | $ | (43 | ) | $ | 492 | $ | (44 | ) | ||||||
| Net income per class A share3 | $ | 0.14 | $ | 0.13 | $ | 0.56 | $ | 0.26 | |||||||
- For the periods prior to
June 28, 2021 . - For the period from
June 28, 2021 onward. - Class A shares receive distributions at the same amount per share as the cash dividends paid on each Brookfield Class A Share.
SUMMARIZED FINANCIAL RESULTS
RECONCILIATION OF NET INCOME TO DISTRIBUTABLE OPERATING EARNINGS
| Unaudited For the periods ended US$ millions |
Three Months Ended | Year Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income (loss) | $ | 140 | $ | (43 | ) | $ | 492 | $ | (44 | ) | |||||
| Deferred income tax expense | 24 | 2 | 47 | 2 | |||||||||||
| Junior preferred share dividends | 28 | — | 67 | — | |||||||||||
| Transaction costs | 4 | 3 | 31 | 8 | |||||||||||
| Equity accounted (income) loss | (7 | ) | (14 | ) | (54 | ) | (8 | ) | |||||||
| Depreciation | 5 | — | 13 | — | |||||||||||
| Mark-to-market on investments and reserves | (24 | ) | 73 | (208 | ) | 72 | |||||||||
| Distributable operating earnings1 | $ | 170 | $ | 21 | $ | 388 | $ | 30 | |||||||
RECONCILIATION OF EQUITY TO ADJUSTED EQUITY
| Unaudited As at US$ millions |
|||||
| 2022 | 2021 | ||||
| Equity | $ | 1,457 | $ | 1,435 | |
| Add: | |||||
| Accumulated other comprehensive loss (income) | 883 | 16 | |||
| Preferred shares | 2,512 | — | |||
| Adjusted Equity1 | $ | 4,852 | $ | 1,451 | |
- Non-IFRS measure - see Non-IFRS and Performance Measures on page 6.
Additional Information
Brookfield Reinsurance was established on
The statements contained herein are based primarily on information that has been extracted from our financial statements for the quarter ended
Brookfield Reinsurance’s Board of Directors have reviewed and approved this document, including the summarized unaudited consolidated financial statements prior to its release.
Information on our distributions can be found on our website under Stock & Distributions/Distribution History.
| Communications & Media: Tel: (212) 618-3469 Email: [email protected] |
Investor Relations: Tel: (416) 956-5141 Email: [email protected] |
Non-IFRS and Performance Measures
This news release and accompanying financial statements are based on IFRS, as issued by the IASB, unless otherwise noted.
We make reference to distributable operating earnings. We define distributable operating earnings as net income excluding the impact of depreciation and amortization, income taxes, income from equity accounted investments, mark-to-market on investments and derivatives, breakage and transaction costs, and is inclusive of our share of adjusted earnings from our investments in associates. Distributable operating earnings is a measure of operating performance. We use distributable operating earnings to assess our operating results. We also make reference to Adjusted Equity. Adjusted Equity represents the total economic equity of our Company through its Class A, B, and C shares, excluding accumulated other comprehensive income, and the Junior Preferred Shares issued by our Company. We use Adjusted Equity to assess our return on our equity.
We provide additional information on key terms and non-IFRS measures in our filings available at bnre.brookfield.com.
Notice to Readers
Brookfield Reinsurance 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
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 shutdown; (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, infrastructure, private equity, and other alternatives, including credits; 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, Brookfield Reinsurance 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.
Certain of the information contained herein is based on or derived from information provided by independent third-party sources. While Brookfield Reinsurance 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 Reinsurance does not make any 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.
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