BROOKFIELD, NEWS,
| Unaudited As at and for the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Year Ended | |||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| Total assets1 | $ | 61,643 | $ | 43,458 | $ | 61,643 | $ | 43,458 | |||
| Adjusted equity1,2 | 8,969 | 4,788 | 8,969 | 4,788 | |||||||
| Distributable operating earnings2 | 258 | 170 | 745 | 388 | |||||||
| Net income1 | 453 | 181 | 797 | 501 | |||||||
| Net income per each class A and A-1 share3 | $ | 0.07 | $ | 0.14 | $ | 0.28 | $ | 0.56 | |||
- As at
January 1, 2023 ,Brookfield Reinsurance converted its accounting framework from IFRS to US GAAP. The conversion is applied retrospectively and prior period figures have been restated where applicable. - See Non-GAAP and Performance Measures on page 7 and a reconciliation from net income and reconciliation from equity on page 6.
- Class A, Class A-1 and Class B shares receive distributions at the same amount per share as the cash dividends paid on each Brookfield Corporation Class A Limited Voting Share (“Brookfield Class A Shares”). Following the spin-off of Brookfield’s Asset Management business in
December 2022 , combined, Brookfield Corporation’s quarterly distribution of$0.07 per share and Brookfield Asset Management’s quarterly dividend of$0.32 per share (equivalent to$0.08 per Class A share held prior to the special distribution), would equate to$0.15 per Class A share held prior to the special distribution; representing a 7% increase from the prior year distribution.
2023 Highlights
- Originated
$8 billion of annuity sales, including approximately$5 billion of sales for our retail annuity platform,$2 billion of flow reinsurance premiums from existing reinsurance treaties and$1 .5 billion of pension risk transfer (“PRT”) premiums across our North American PRT platform - Completed the acquisition of
Argo Group for approximately$1.1 billion , further diversifying our operations and adding a foundational piece to our expandingU.S. property and casualty (“P&C”) operations - Entered into an agreement to acquire
American Equity Life , which we expect to close shortly and contribute over$50 billion of incremental insurance assets - Deployed approximately
$5 billion into proprietary investment strategies at returns in excess of 9%, increasing our gross portfolio wide yield to 5.6% - Significantly enhanced the equity base and market capitalization of
Brookfield Reinsurance through our successful public exchange offer, without any dilution toBrookfield Corporation orBrookfield Reinsurance
Operating Update
We recognized $258 million and
We recorded net income of
Today we are in a strong liquidity position within our corporate and subsidiaries’ investment portfolios, with approximately
Update on Growth Initiatives
On
In November, our pending acquisition of AEL received overwhelming approval from AEL shareholders and we expect to close the acquisition shortly. Upon closing the AEL transaction, we will have over
As we grow our insurance business, we are focused on balance sheet strength and capital flexibility. In
Regular Distribution Declaration
The Board declared a quarterly distribution of
Brookfield Corporation Operating Results
An investment in Class A and A-1 shares of our company is intended to be, as nearly as practicable, functionally and economically, equivalent to an investment in the Brookfield Class A Shares. A summary of Brookfield Corporation’s fourth quarter and full year operating results is provided below:
| Unaudited For the periods ended (US$ millions, except per share amounts) |
Three Months Ended | Years Ended | |||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| Net income | $ | 3,134 | $ | 44 | $ | 5,105 | $ | 5,195 | |||
| Distributable earnings before realizations | 1,209 | 1,142 | 4,223 | 4,314 | |||||||
| - Adjusted for the special distribution1 | 1,209 | 1,035 | 4,223 | 3,825 | |||||||
| - Per Brookfield share1 | 0.76 | 0.65 | 2.66 | 2.38 | |||||||
| Distributable earnings | 1,312 | 1,498 | 4,806 | 5,229 | |||||||
| - Per Brookfield share | 0.83 | 0.94 | 3.03 | 3.25 | |||||||
- Distributable earnings before realizations, including per share amounts, for the three months and year ended
December 31, 2022 were adjusted for the special distribution of 25% of Brookfield’s asset management business onDecember 9, 2022 .
CONSOLIDATED BALANCE SHEETS
| Unaudited | ||||||||
| (US$ millions) | 2023 | 20221 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 3,342 | $ | 2,145 | ||||
| Investments | 40,804 | 30,295 | ||||||
| Reinsurance funds withheld | ||||||||
| Cash and short-term investments | 1,482 | 743 | ||||||
| Investments | 5,766 | 5,069 | ||||||
| Accrued investment income | 280 | 341 | ||||||
| 51,674 | 38,593 | |||||||
| Reinsurance recoverables | 3,388 | 589 | ||||||
| Premiums due and other receivables | 711 | 436 | ||||||
| Deferred policy acquisition costs | 2,468 | 1,585 | ||||||
| Deferred tax asset | 432 | 490 | ||||||
| Other assets | 1,781 | 720 | ||||||
| Separate account assets | 1,189 | 1,045 | ||||||
| Total assets | 61,643 | 43,458 | ||||||
| Liabilities and equity | ||||||||
| Policy and contract claims | 7,288 | 1,786 | ||||||
| Future policy benefits | 9,813 | 8,011 | ||||||
| Policyholders' account balances | 24,939 | 20,141 | ||||||
| Deposit liabilities | 1,577 | 1,657 | ||||||
| Market risk benefit | 89 | 124 | ||||||
| Other policyholder funds | 335 | 322 | ||||||
| Unearned premium reserve | 2,056 | 1,086 | ||||||
| 46,097 | 33,127 | |||||||
| Due to related parties | 564 | 241 | ||||||
| Notes payable | 174 | 151 | ||||||
| Corporate borrowings | 1,706 | 2,160 | ||||||
| Subsidiary borrowings | 1,863 | 1,492 | ||||||
| Liabilities issued to reinsurance entities | 114 | 151 | ||||||
| Other liabilities | 1,087 | 826 | ||||||
| Separate account liabilities | 1,189 | 1,045 | ||||||
| Junior preferred shares | 2,694 | 2,580 | ||||||
| Non-controlling interest | 146 | 8 | ||||||
| Class A, class A-1 and class B | 1,591 | 432 | ||||||
| Class C | 4,418 | 6,155 | 1,245 | 1,685 | ||||
| Total liabilities and equity | $ | 61,643 | $ | 43,458 | ||||
December 31, 2022 figures reflect adjustments related to the conversion of accounting framework from IFRS to US GAAP and the adoption of Long Duration Targeted Improvements issued by the FASB, effectiveJanuary 1, 2023 , applied retrospectively.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended US$ millions |
Three Months Ended | Year Ended | |||||||||||||
| 2023 | 20221 | 2023 | 20221 | ||||||||||||
| Net premiums and other policy revenue | $ | 1,432 | $ | 836 | $ | 4,550 | $ | 3,235 | |||||||
| Net investment income, including funds withheld | 621 | 418 | 2,122 | 1,178 | |||||||||||
| Net investment gains (losses), including funds withheld | 274 | 121 | 348 | (104 | ) | ||||||||||
| Total revenues | 2,327 | 1,375 | 7,020 | 4,309 | |||||||||||
| Benefits and claims paid on insurance contracts | (1,194 | ) | (750 | ) | (3,939 | ) | (2,852 | ) | |||||||
| Interest sensitive contract benefits | (250 | ) | (207 | ) | (1,097 | ) | (357 | ) | |||||||
| Commissions for acquiring services and policies, net of changes in deferred policy acquisition costs | (172 | ) | (15 | ) | (85 | ) | (74 | ) | |||||||
| Other reinsurance expenses | (16 | ) | (19 | ) | (107 | ) | (78 | ) | |||||||
| Changes in fair value of market risk benefit | 99 | 15 | 72 | 127 | |||||||||||
| Operating expenses | (248 | ) | (178 | ) | (801 | ) | (439 | ) | |||||||
| Interest expense | (68 | ) | (44 | ) | (249 | ) | (104 | ) | |||||||
| Total benefits and expenses | (1,849 | ) | (1,198 | ) | (6,206 | ) | (3,777 | ) | |||||||
| Net income before income taxes | 478 | 177 | 814 | 532 | |||||||||||
| Income tax recovery (expense) | (25 | ) | 4 | (17 | ) | (31 | ) | ||||||||
| Net income for the period | $ | 453 | $ | 181 | $ | 797 | $ | 501 | |||||||
| Attributable to: | |||||||||||||||
| Class A, class A-1 and class B shareholders2 | $ | 2 | $ | 1 | $ | 5 | $ | 6 | |||||||
| Class C shareholder | 453 | 180 | 791 | 493 | |||||||||||
| Non-controlling interest | (2 | ) | — | 1 | 2 | ||||||||||
| $ | 453 | $ | 181 | $ | 797 | $ | 501 | ||||||||
- Three months and year ended
December 31, 2022 figures reflect adjustments related to the conversion of accounting framework from IFRS to US GAAP and the adoption of Long Duration Targeted Improvements issued by the FASB, effectiveJanuary 1, 2023 , applied retrospectively. - Class A and A-1 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 | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 453 | $ | 181 | $ | 797 | $ | 501 | |||||||
| Net investment (gains) losses, including funds withheld | (274 | ) | (121 | ) | (348 | ) | 104 | ||||||||
| Mark-to-market on insurance contracts and other net assets | (6 | ) | 104 | 212 | (271 | ) | |||||||||
| 173 | 164 | 661 | 334 | ||||||||||||
| Deferred income tax (recovery) expense | 47 | (4 | ) | 14 | 10 | ||||||||||
| Transaction costs | 24 | 5 | 40 | 31 | |||||||||||
| Depreciation | 14 | 5 | 30 | 13 | |||||||||||
| Distributable operating earnings1 | $ | 258 | $ | 170 | $ | 745 | $ | 388 | |||||||
RECONCILIATION OF EQUITY TO ADJUSTED EQUITY
| Unaudited As at US$ millions |
2023 | 2022 | |||
| Equity | $ | 6,155 | $ | 1,685 | |
| Add: | |||||
| Accumulated other comprehensive loss (income) | 120 | 523 | |||
| Junior Preferred Shares | 2,694 | 2,580 | |||
| Adjusted equity1 | $ | 8,969 | $ | 4,788 | |
- Non-GAAP measure - see Non-GAAP and Performance Measures on page 7.
Additional Information
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-GAAP and Performance Measures
This news release and accompanying financial statements are based on US GAAP, 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, deferred income taxes, and breakage and transaction costs, as well as certain investment and insurance reserve gains and losses, including gains and losses related to asset and liability matching strategies, non-operating adjustments related to changes in cash flow assumptions for future policy benefits, and change in market risk benefits, and is inclusive of returns on equity invested in certain variable interest entities and our share of adjusted earnings from our investments in certain 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, A-1, 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-GAAP measures in our filings available at bnre.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
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,
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
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