BROOKFIELD, NEWS,
| Unaudited As at and for the periods ended (US$ millions, except per share amounts) | Three Months Ended | ||||
| 2022 | 2021 | ||||
| Equity | $ | 1,447 | $ | 112 | |
| Excess capital1 | 687 | 18 | |||
| Net reserve capital1 | 760 | 94 | |||
| Distributable operating earnings1 | 13 | 1 | |||
| Net income2 | 128 | 3 | |||
| Net income per class A & class B share3,4 | $ | 0.14 | n/a | ||
| Net income per class C share3 | $ | 5.37 | n/a | ||
- See Non-IFRS and Performance Measures on page 6 and a reconciliation from net income on page 5.
- Net income for the three months ended
March 31, 2021 is attributed to our predecessor companyBrookfield Annuity Holdings Inc. - For the period from
June 28, 2021 onward. - 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.
Highlights
- Closed 7 transactions in the quarter within our Pension Risk Transfer (“PRT”) business, representing
$109 million of new premiums - Added over
$180 million of flow premiums from reinsurance treaties closed in late 2021 - Completed the purchase of an additional 6,775,000 shares of common stock of American Equity Investment Life Holding Company (NYSE: AEL) (“AEL”), bringing our total equity interest in AEL to approximately 17%
- Progressed the acquisition of American National Group, Inc. (NASDAQ: ANAT) (“American National”), with an anticipated closing in the coming weeks
Operating Update
During the quarter, we received over
We recognized
We recorded net income of
Today, we have approximately
Update on Growth Initiatives
Our acquisition of American National remains on track to close in the second quarter. Once closed, we will have approximately
Regular Distribution Declaration
The Board declared a quarterly distribution of
Distribution of 25% of Brookfield’s Asset Management Business
Today Brookfield provided an update on its plan to distribute to its shareholders, and publicly list, a 25% interest in its asset management business. As part of this update, Brookfield has advised that, pursuant to the transaction, holders of class A exchangeable limited voting shares (“Class A Shares”) of our company (which are exchangeable for Brookfield Class A Shares on a one-for-one basis) will be treated equally to Brookfield Class A Shares from an economic perspective. While the details of the transaction are still being finalized, we expect that holders of our Class A Shares will be able to participate in the distribution without the need to exchange their shares for Brookfield Class A shares in advance of the transaction. We look forward to providing you with further updates in the coming months.
Brookfield Asset Management 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 first quarter and last twelve months operating results is provided below:
| Unaudited For the periods ended (US$ millions, except per share amounts) | Three Months Ended | Last Twelve Months Ended | |||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||
| Net income | $ | 2,960 | $ | 3,776 | $ | 11,572 | $ | 4,640 | |||
| Net income attributable to common shareholders | $ | 1,359 | $ | 1,235 | $ | 4,090 | $ | 1,394 | |||
| Net income per Brookfield share | 0.81 | 0.77 | 2.45 | 0.85 | |||||||
| Funds from operations | $ | 1,597 | $ | 2,821 | $ | 6,334 | $ | 7,117 | |||
| Per Brookfield share | 0.96 | 1.80 | 3.85 | 4.53 | |||||||
| Distributable earnings | $ | 1,182 | $ | 2,507 | $ | 4,957 | $ | 6,113 | |||
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 bam.brookfield.com.
CONSOLIDATED BALANCE SHEETS
| Unaudited (US$ millions) | |||||
| 2022 | 2021 | ||||
| Assets | |||||
| Cash and cash equivalents | $ | 323 | $ | 393 | |
| Reinsurance funds withheld | |||||
| Cash and short-term securities1 | 412 | 665 | |||
| Investments | 4,374 | 3,985 | |||
| Investments | 4,757 | 4,943 | |||
| Reinsurance assets | 148 | 169 | |||
| Deferred acquisition costs | 801 | 776 | |||
| Equity accounted investments | 593 | 344 | |||
| Accounts receivable and other | 69 | 47 | |||
| Deferred tax asset | 16 | 20 | |||
| Derivative assets | 73 | 146 | |||
| Intangible assets | 1 | 3 | |||
| Property and equipment | 2 | 2 | |||
| Total assets | $ | 11,569 | $ | 11,493 | |
| Liabilities and Equity | |||||
| Accounts payable and other | 26 | 64 | |||
| Due to related parties | 427 | 467 | |||
| Corporate borrowings | 751 | 693 | |||
| Insurance reserves | 8,512 | 8,497 | |||
| Deferred revenue | 81 | 82 | |||
| Derivative liabilities | 10 | 1 | |||
| Reinsurance payable | 68 | 75 | |||
| Liabilities issued to our reinsurance entities | 235 | 167 | |||
| Funds withheld liabilities | 12 | 12 | |||
| Total liabilities | $ | 10,122 | $ | 10,058 | |
| Equity | |||||
| Class A exchangeable and Class B | $ | 539 | $ | 539 | |
| Class C | 908 | 896 | |||
| Total Equity | $ | 1,447 | $ | 1,435 | |
| Total Liabilities and Equity | $ | 11,569 | $ | 11,493 | |
- Liquid securities maturing within 12 months.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Unaudited For the periods ended (US$ millions, except per share amounts) | Three Months Ended | ||||||
| 2022 | 2021 | ||||||
| Net premiums | $ | 338 | $ | 3 | |||
| Net investment income, including funds withheld | (14 | ) | (63 | ) | |||
| Income from equity accounted investments | 13 | — | |||||
| Total revenues | 337 | (60 | ) | ||||
| Benefits paid on insurance contracts | |||||||
| Gross | 138 | 17 | |||||
| Ceded | (3 | ) | (6 | ) | |||
| Change in insurance reserves | |||||||
| Gross | (7 | ) | (93 | ) | |||
| Ceded | 23 | 15 | |||||
| Other reinsurance expenses | 27 | — | |||||
| Operating expenses | 17 | 3 | |||||
| Interest expense | 9 | — | |||||
| Total benefits and expenses | 204 | (64 | ) | ||||
| Net income before income taxes | 133 | 4 | |||||
| Income tax expense | (5 | ) | (1 | ) | |||
| Net income for the period | $ | 128 | $ | 3 | |||
| Attributable to: | |||||||
| Brookfield Asset Management Inc.1 | — | 3 | |||||
| Class A exchangeable & class B shareholders2,3 | 2 | — | |||||
| Class C shareholder2,3 | 126 | — | |||||
| $ | 128 | $ | 3 | ||||
| Net income per class A & class B share2,3,4 | $ | 0.14 | n/a | ||||
| Net income per class C share2,3 | $ | 5.37 | n/a | ||||
- For the periods prior to
June 28, 2021 . - For the period from
June 28, 2021 onward. - Net income for the three months ended
March 31, 2021 is attributed to our predecessor companyBrookfield Annuity Holdings Inc. - 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.
SUMMARIZED FINANCIAL RESULTS
RECONCILIATION OF NET INCOME TO DISTRIBUTABLE OPERATING EARNINGS
| Unaudited For the periods ended US$ millions | Three Months Ended | ||||||
| 2022 | 2021 | ||||||
| Net income | $ | 128 | $ | 3 | |||
| Deferred income tax expense | 4 | 1 | |||||
| Transaction costs | 4 | — | |||||
| Mark-to-market on investments and derivatives | (123 | ) | (3 | ) | |||
| Distributable operating earnings1 | $ | 13 | $ | 1 | |||
RECONCILIATION OF TOTAL EQUITY TO EXCESS CAPITAL AND NET RESERVE CAPITAL
| Unaudited As at US$ millions | Three Months Ended | ||||||
| 2022 | 2021 | ||||||
| Equity | $ | 1,447 | $ | 112 | |||
| Less: | |||||||
| Investments held outside of regulated insurance agreements | |||||||
| Cash on deposit with related parties | (10 | ) | — | ||||
| Equity accounted investments | (593 | ) | — | ||||
| Other corporate net investments | (68 | ) | — | ||||
| Deferred tax asset | (16 | ) | (18 | ) | |||
| Excess capital1 | (687 | ) | (18 | ) | |||
| Net reserve capital1 | $ | 760 | $ | 94 | |||
- 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.
For more information, please visit our website at bamr.brookfield.com or contact:
| 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 proportionate 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
We provide additional information on key terms and non-IFRS measures in our filings available at bamr.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
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