Brookfield Corporation (BN) Earnings Call Transcript & Summary

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. The resolution has been moved and second the motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the stock option plan of new BM.

Adoption of this motion requires the approval of a majority calculated on a combined basis of the votes cast in person or by proxy by one, the holders of the corporation's Class A limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class A limited voting shares at Brookfield Wealth Solutions Shareholder Meeting being held later today or the BWS meeting as it will be referred to in this meeting. And 2 the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting. Now management has received proxies representing approximately 76% of the corporation's Class A and then voting shares and 100% of the corporation's Class B limited voting shares. These proxies direct me to vote over 75% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so. The seventh item of business today is the approval of the new BM escrowed stock plan resolution. As stated in the management information circular, the Board of Directors recommended that shareholders vote in favor of the new BN escrowed stock plan resolution. The Board welcomes comments and questions on the new BN escrow stock plan resolution.

Mr. Chair, I move to the new BN escrowed stock plan resolution set forth in Appendix E to the transactional supplement of the Management Information Circular dated June 5, 2026, to be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. The resolution has been moved and second the motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the escrowed stock ban of New BN.

Adoption of this motion requires the approval of a majority which will be calculated on a combined basis, of the votes cast presented by proxy by first lien, the holders of the Corporation's passing Limited voting share centers meeting and the holders of Brookfield Wealth Solutions Class A limited voting shares at the BWS meeting; and secondly, the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting. Now management has received proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 71% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the rest of the show. I will now call for shareholders and proxy holders to submit their vote if they have not already done. The eighth item of business today is the approval of the new BNC escrowed stock plan resolution. As stated in the management information circular, the Board of Directors has recommended that shareholders vote in favor of the new BNC escrow stock plan resolution. The Board welcomes comments and questions on the new BNC escrow stock plan resolution.

Mr. Chair, I moved to the new BNC escrowed stock plan resolution set forth in appendix and to the transaction supplement of the Management Information Circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. The resolution has been moved and second the motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the escrow stock plan C.

Adoption of this motion requires the approval of a majority which is calculated on a combined basis. of the votes cast in person or by proxy bit. Firstly, the holders of Corporation's Class A Limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class A limited voting shares at the BWS meeting; and secondly, the holders of the corporation's possible limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting. Management has received proxies representing about 76% of the corporation's Class A Limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 94% of of the Class A limited voting shares and 100% of the Class B voting shares in favor of the resolution. I will now call for shareholders and proxy holders to submit their vote if they have not already done so. The ninth annum of business today is the approval of the new BMC share option plan resolution. As stated in the management information circular, the Board of Directors recommended the shareholders vote in favor of the new BNC share option plan resolution. The Board welcomes comments and questions on the new BMC Share Option Plan resolution.

Mr. Chair, I move that the new BNC share option plan resolution set forth in Appendix to the transaction supplement of the Management Information Circular dated June 5, 2026, be approved.

Thank you, Thomas.

Mr. Chair, I second the motion.

Thank you, Oscar. Resolution has been moved and second the motion is now before the meeting for discussion.

Mr. Chair, we have not received any questions or comments in connection with the stock option plan of new BNC.

Adoption of this motion requires the approval of a majority calculated on a combined basis of the votes cast in person or by proxy by firstly to the holders of the corporation success any limited voting shares at this meeting the holders of Brookfield Wealth Solutions Class A limited voting shares at the BWS meeting. And secondly, -- the holders of the corporation's Class B limited voting shares at this meeting and the holders of Brookfield Wealth Solutions Class B limited voting shares at the BWS meeting. Management has proxies representing approximately 76% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 94% of the Class A limited voting shares and 100% of the Class B limited voting shares in favor of the resolution. I will now call for shareholders and proxyholders to submit their vote if they have not already done so. Voting is now closed on all resolutions. I'm advised that our Corporate Secretary as a result of the vote based on the final tabulations of proxy votes received.

Thank you, Mr. Chair. I'm pleased to report as there are 16 directors to be elected and the same number of nominees, I now declare that those nominated have been duly elected as directors of the corporation. On the appointment of the corporation's external auditor and authorization of Directors to set its remuneration. I declare the motion carried. On the approval of the advisory resolution on the corporation's approach to executive compensation, I declare the motion carried. On the approval of the transaction resolution, I declare the motion carried. Regarding the new BN share option plan resolution, the new BN escrowed stock plan resolution, the new BNC escrowed stock plan resolution and the new BNC share option plan resolution. Formal declaration will be made following the BWS meeting to be held later today. The final voting results will be available after the BWS meeting and will be posted to Cederplus, www.cederplus.ca.

Ladies and gentlemen, that completes the formal business of today's meeting. There being no other business, I declare the meeting terminated. Now that the meeting has concluded the formal meeting has concluded, Nick Goodman will be leading a presentation on behalf of our management team. At the end of the presentation, we will be available to respond to any questions or comments you may have submitted. Now please note that in responding to questions and in talking about our new initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. For further information on known risk factors, you're encouraged to review the business environment and risk section of management's discussion and analysis in our annual report. Finally, we would like to ensure that all shareholders who are interested in asking the question of the opportunity to do so. We will make every effort on our part to address questions during the allotted question-and-answer period. With that, I invite Nick Goodman to commence management's presentation.

Thank you, Mr. Chairman, and good morning, everyone. I'm going to review our financial performance over the last 12 months and the progress we have made in executing our strategic priorities. I'll then turn -- I'll then turn to our outlook for the business and the steps we are taking to position Brookfield for continued long-term growth. But first, I will start with an overview of where the business stands today. We have built a permanent capital base, which at $175 billion today is 1 of the largest pools of discretionary capital globally. This capital is invested across our 3 core businesses, which we have methodically scaled over time, being asset management, wealth solutions and our operating businesses. Our permanent capital base gives us significant flexibility, remains 1 of our greatest competitive advantages and is central to how we continue to grow and compound value for shareholders over the long term. Brookfiled Corporation captures the full value of the Brookfield franchise. And as we continue to scale our businesses and reinvest capital, the corporation is uniquely positioned to compound value for shareholders. Our asset management business holds a leadership position in the secular trends shaping the global economy. Digitalization, deglobalization and decarbonization are driving demand for our private fund strategies. Our wealth solutions business has scaled into a global investment-led insurance platform. We have built leading origination capabilities in North America, recently completed the acquisition of -- just Group giving our business immediate scale in the U.K. and have significant runway to scale further as we grow our existing product lines, expand distribution and enter new markets. Matched with our investing capabilities, this business is well positioned to continue compounding earnings and value for shareholders over the long term. Our operating businesses continue to generate resilient cash flows supported by contracted and inflation-linked revenues, central service assets and strong underlying operations. And carried interest is now reaching an inflection point as transaction activity continues to accelerate we expect carried interest to becoming a much more meaningful contributor to earnings, driving higher cash flows that can be reinvested to further compound value. Underpinning all of this is a conservatively capitalized balance sheet and significant liquidity that gives us the flexibility to invest when opportunities arise and support growth across the franchise. Bringing this all together, -- the strength of our franchise, the growth embedded across each of our businesses and our disciplined approach to capital allocation gives us the foundation to continue delivering 15% plus annual returns for our shareholders over the long term. Now let's turn to the past year. We have had a very strong year with each of our businesses performing well and contributing meaningfully to the overall earnings profile franchise. Over this period, we generated $6 billion of distributable earnings, supported by continued growth across our core businesses. Our Asset Management business benefited from strong fundraising momentum, raising $108 billion of capital across strategies and increasing fee bearing capital to $614 million. Our Wealth Solutions business continued to scale globally with insurance assets growing to $118 billion, inclusive of the acquisition of Just Group. We also continued to advance monetizations across the franchise monetizing over $80 billion of assets and crystallizing significant value for our investors. Our access to capital remained very strong with $170 billion of financings completed across our businesses and reflecting our enduring commitment to driving long-term shareholder value, we returned $1.5 billion of capital to shareholders. Now turning to the details driving performance in each of our businesses. Our Asset Management business delivered strong growth. We raised $108 billion across our flagship funds and complementary strategies, reflecting the strength of our client relationships and their continued demand for our investment strategies. This fundraising drove fee bearing capital to $614 billion and supported 18% growth in fee-related earnings, which reached $3.1 billion over the last 12 months. On the back of this momentum, we recently launched the NIC vintages of our flagship infrastructure and private equity strategies. Both are expected to first closes later this year. And importantly, we expect each of them to be the largest funds we have ever raised in its respective strategy. Our Wealth Solutions business also continued to scale globally over the past year and delivered strong financial results. Distributable earnings increased 11% to $1.7 billion supported by strong investment performance and a continued expansion of our insurance asset base. We originated $20 billion of annuity sales and completed the strategic acquisition of -- just Group in the U.K., which expanded our global presence and increased Fultoinsurance assets by $40 billion to $118 billion. We also deployed $14 billion float into Brookfield managed strategies, underscoring our strategy to reposition the incumbent investment portfolio into higher-yielding real assets, targeting mid-teen returns on BN's invested capital. Our operating businesses continued to deliver stable and resilient cash flows, demonstrating the quality of the underlying operations. We generated $1.5 billion of distributable earnings supported by strong operating fundamentals across the portfolio. And a specific callout in real estate, our high-quality assets continue to perform well with occupancy rates above 95% across our super core and core+ portfolios. As highlighted, the strong performance across our businesses has allowed our free cash flow to scale meaningfully over time. Today, distributable earnings are $2.54 per share compared to $1.29 per share 5 years ago. That represents a 15% compound annual growth rate, meaning our earnings have nearly doubled over that period. Share buybacks remain an important part of our capital allocation framework and our focus on creating meaningful long-term value for shareholders. Over the last year, we returned $1.5 billion of capital to shareholders, including $900 million through opportunistic share repurchases of $600 million through dividends. Underpinning all of this is a balance sheet that we manage conservatively together with our strong access to capital. As mentioned over the last year, we maintained strong access to the capital markets and completed $170 billion of financings across our businesses -- and today, we have $188 billion of deployable capital and continue to be rated A minus as a corporation. This combination of significant liquidity and scale access to capital gives us the ability to act on attractive opportunities across market cycles and to support the long-term compounding of our capital. Now that we have summarized the strength of our performance over the past year, let's look forward. We are exceptionally well positioned to continue scaling our earnings of more than 20% annually over the next 5 years. and that growth comes from 2 key areas. The first is participating in the growth delivered by our core businesses. And second is capital allocation. We generate significant free cash flow from our core businesses and we reinvest that capital across the franchise, planting the seeds for future earnings growth. Over the next 5 years, we expect the earnings generated from capital reinvestment to incrementally add 5% annualized growth for our earnings profile. In total, that translates to 25% comp annual growth in earnings over the next 5 years. Before the effects of capital allocation, the earnings profile of our core businesses underpins annualized growth of 20% through 2013. We -- starting from $2.54 per share today, we expect DE to grow to $5.85 per share by 2030, in line with the plans we laid out at our Investor Day last September. Now let me spend a minute walking you through what drives that growth. In Wealth Solutions, we have grown insurance assets to $180 billion in just a few years, and we see a clear path to nearly doubling that to $350 billion by 2030. That growth will come from scaling our product set, growing our distribution channels and expanding the geographies where we serve policyholders. At BAM, we expect fee bearing capital to grow to more than $1 trillion -- that growth will come from scaling our flagship strategies and expanding our complementary strategies to meet the needs of our clients. In real estate, there are 2 important contributors to our plan. First, our Supercore portfolio comprises high-quality assets in supply-constrained markets are performing well and achieving strong rent spreads on new leases, which should continue to drive NOI growth. Second, as demand for hard assets continues to gain momentum, we expect transaction activity will surface meaningful capital that can be reinvested -- and lastly, carried interest is reaching an inflection point, and the outlook for realizations over the next few years is encouraging. Carried interest represents our share of the value that has been compounding in our funds over many years. And as we monetize assets across our mature funds that that value comparison to cash that can be reinvested across the franchise to further drive earnings value creation. If we are successful in executing our plans, we expect to generate $53 billion of cumulative free cash flow from our existing businesses over the next 5 years. That cash -- that free cash flow will then be deployed through our disciplined, centralized capital allocation framework. This framework has been methodically developed over many years. at BN, our role is to allocate capital across the business to the areas where we see the most attractive long-term risk-adjusted returns. And because we sit at the center of the Brookfield franchise, we have a broad perspective on the relative opportunities and capital needs across each of our businesses that allows us to invest with discipline and with purpose. It is a centralized approach to capital allocation and the flexibility of Provide that we believe is 1 of our greatest differentiators and strengths. As free cash flow is generated by each of our core businesses are repatriated to the corporation, we centralized our capital allocation approach but a consistent focus on driving shareholder value. Some of the key 4 case areas for our capital include supporting growth across our core businesses, investing in strategic initiatives such as Oaktree and the continued scaling of our solutions, as well as targeted investments of our capital into smaller opportunities where we believe having exposure can provide knowledge and benefits to the franchise over time. We also retain ample liquidity to defend against downside risks and maintain flexibility. -- and lastly, returning capital to shareholders primarily through opportunistic share repurchases. To that end, capital allocation should contribute meaningfully to our growth in distributable earnings per share adding $1.10 per share of earnings over 5 years, increasing distributable earnings to $6.95 per share by 2030. Now with the foundations in place, we are positioned to drive meaningful growth. And the combination of BN and BWS will support our continued growth and our evolution. Combining BN and BWS marks the next evolution of Brookfield. 5 years ago, we established Brookfield Growth Solutions with the clear objective to build a world-class insurance business that protects policyholders delivers attractive risk-adjusted returns and leverages Brookfield's differentiated real asset investing capabilities. That strategy has worked extremely well for us. In just a few years, the business has grown to nearly $200 billion of assets, generating nearly $2 billion of annual earnings. However, as the business is scaled, it is now clear that to keep growing and to maximize our returns while maintaining a low-risk profile to fuel combination is optimal. First, the positions Brookfield is a globally diversified fully integrated insurance and investment organization under a single public company. to simplifies our corporate structure and allows shareholders to directly own the full value of BN and BWS for single security. Second, the combination provides our insurance operations with direct access to the corporation's permanent capital base. an incremental $145 billion. This enables a more efficient capital structure, enhances flexibility and provide significant capacity to support long-term growth, something very few insurance organizations overly have access to. Third, the new structure creates a path toward broader global index inclusion that is unavailable today. Over time, inclusion of broader indices will broaden our investor base, improve trading liquidity and facilitate greater ownership of our shares by passive investment vehicles. And importantly, this transaction is expected to be tax efficient for most shareholders. Taken together, the combination of BN and BS -- it's a simpler, more efficient and more flexible structure that positions Brookfield exceptionally well to continue compounding value for shareholders over the long term. In summary, -- we are positioned for a transformational phase of growth. We have a leading position around the secular trends shaping the global economy, and those trends are fueling the growth in our business plan. We expect the trajectory of our earnings and the capital from realizations to generate substantial free cash flow over the next 5 years that can be reinvested to drive long-term value for shareholders. And lastly, the combination of BN and BWS will position Brookfield as a globally diversified fully integrated insurance new investment organization, supporting continued growth and enhancing returns on equity. Thank you all for your time. That concludes our prepared remarks. Any questions have been submitted through our live webcast platform. We will be pleased to answer them too.

Mr. Chair, there are no questions to be addressed.

Ladies and gentlemen, I would like to thank you for taking the time to join us today. I hope that you found the meeting and management presentation informative. We appreciate your participation.