15/11/2024 - Brookfield Corporation: Third Quarter (bws q3 2024 interim report)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF

Note

September

December 31,

US$ MILLIONS, EXCEPT SHARE DATA

30, 2024

2023

Assets

Available-for-sale fixed maturity securities, at fair value (net of allowance for credit losses of

3

$

52,133

$

18,777

$29 and $30, respectively; amortized cost of $50,411 and $19,341, respectively)

Equity securities, at fair value

4

3,819

3,663

Mortgage loans on real estate, at amortized cost (net of allowance for credit losses of $104 and

5

12,300

5,962

$60, respectively)

Private loans, at amortized cost (net of allowance for credit losses of $70 and $44, respectively)

6

3,901

1,198

Investment real estate (net of accumulated depreciation of $239 and $325, respectively)

7

2,136

861

Real estate partnerships

7

4,659

3,110

Investment funds

8

3,471

2,483

Policy loans

11

277

390

Short-terminvestments

11

4,377

3,115

Other invested assets

11

1,174

279

Total investments

88,247

39,838

Cash and cash equivalents

11

14,627

4,308

Accrued investment income

784

280

Deferred policy acquisition costs, deferred sales inducements and value of business acquired

14

10,495

2,468

Reinsurance funds withheld

11

1,532

7,248

Premiums due and other receivables

735

711

Ceded unearned premiums

550

401

Deferred tax asset

22

952

432

Reinsurance recoverables and deposit assets

17, 19, 20

13,229

3,388

Property and equipment (net of accumulated depreciation of $367 and $340, respectively)

290

294

Intangible assets (net of accumulated amortization of $73 and $9, respectively)

15

1,754

235

Goodwill

16

751

121

Other assets

11, 19

1,864

730

Separate account assets

13

1,302

1,189

.........................................................................................................................................Total assets

137,112

61,643

Liabilities

11,057

Future policy benefits

17

9,813

Policyholders' account balances

18

82,413

24,939

Policy and contract claims

20

7,696

7,288

Deposit liabilities

1,525

1,577

Market risk benefits

19

3,725

89

Unearned premium reserve

2,003

2,056

Due to related parties

26

593

564

Other policyholder funds

348

335

Notes payable

8, 11

178

174

Corporate borrowings

21

1,847

1,706

Subsidiary borrowings

21

3,330

1,863

Funds withheld for reinsurance liabilities

3,534

83

Other liabilities

16

4,608

1,118

Separate account liabilities

13

1,302

1,189

....................................................................................................................................Total liabilities

124,159

52,794

Mezzanine equity

Class A redeemable junior preferred shares ($25 par value)

23

2,779

2,694

Equity

Class A exchangeable and Class B ($33.18 and $33.42 par value, respectively; 43,440,700 and

1,568

43,409,526 issued and outstanding, respectively)1

23

1,577

Class C ($1 par value; 128,643,406 and 102,056,784 issued and outstanding, respectively)

23

4,726

3,607

Retained earnings

1,512

945

Accumulated other comprehensive income (loss)

24

1,519

(120)

Non-controllinginterests

849

146

.........................................................................................................................................Total equity

10,174

6,155

.................................................................................Total liabilities, mezzanine equity and equity

$

137,112

$

61,643

FOR THE PERIODS ENDED SEP. 30

Three Months Ended

Nine Months Ended

Note

2024

2023

2024

2023

US$ MILLIONS, EXCEPT PER SHARE AMOUNTS

Net premiums

12

$

1,165

$

913

$

4,212

$

2,812

Other policy revenue

12

217

106

529

306

Net investment income

10

1,264

442

2,956

1,282

Investment related gains (losses)

10

331

2

261

94

Net investment results from reinsurance

(8)

398

funds withheld

71

189

................................................Total revenues

2,969

1,534

8,356

4,683

Policyholder benefits and claims incurred

12, 17, 20

(1,230)

(870)

(4,159)

(2,745)

Interest sensitive contract benefits

12, 18

(557)

(89)

(1,164)

(332)

Amortization of deferred policy acquisition

costs, deferred sales inducements and

(366)

(867)

value of business acquired

14

(120)

(452)

Change in fair value of insurance-related

(219)

(162)

derivatives and embedded derivatives

9

(130)

(169)

Change in fair value of market risk benefits....

12, 19

(207)

73

(406)

81

Other reinsurance expenses

(6)

(52)

(20)

(16)

Operating expenses

(330)

(218)

(1,024)

(533)

Interest expense

(99)

(61)

(266)

(181)

..........................Total benefits and expenses

(3,014)

(1,467)

(8,068)

(4,347)

Net income (loss) before income taxes

(45)

67

288

336

Income tax recovery

22

110

10

383

8

.............................Net income for the period

$

65

$

77

$

671

$

344

Attributable to:

Class A exchangeable and Class B

shareholders1

$

4

$

1

$

10

$

3

Class C shareholders

48

75

641

338

Non-controllinginterests

13

1

20

3

$

65

$

77

$

671

$

344

Net income per Class C share

Basic

25

$

0.16

$

0.65

$

4.77

$

4.92

FOR THE PERIODS ENDED SEP. 30

Three Months Ended

Nine Months Ended

Note

2024

2023

2024

2023

US$ MILLIONS

Net income

$

65

$

77

$

671

$

344

Other comprehensive income (loss), net of tax:

Change in net unrealized investment gains

1,512

1,751

(losses)

(251)

(123)

Foreign currency translation

28

(3)

1

(4)

Change in discount rate for future policy

(335)

(86)

benefits

17

323

225

Change in instrument-specific credit risk for

(71)

(49)

market risk benefits

19

(14)

(24)

Defined benefit pension plan adjustment

3

1

22

4

Total other comprehensive income (loss)

24

1,137

56

1,639

78

Comprehensive income

$

1,202

$

133

$

2,310

$

422

Attributable to:

Class A exchangeable and Class B

shareholders1

$

4

$

1

$

10

$

3

Class C shareholders

1,185

131

2,280

416

Non-controllinginterests

13

1

20

3

$

1,202

$

133

$

2,310

$

422

Class A exchangeable and Class B

shareholders2

Class C shareholders

Accumulated

other

Non-

FOR THE PERIODS ENDED SEP. 30, 2024

Share

Retained

Total

Share

Retained

comprehensive

Total

controlling

Total

US$ MILLIONS

capital

earnings

capital

earnings

income (loss)

interests

equity

......................................................Balance as of January 1, 2024

$

1,577

$

14

$

1,591

$

3,607

$

931

$

(120)

$

4,418

$

146

$

6,155

Net income

-

3

3

-

332

-

332

2

337

Other comprehensive income

-

-

-

-

-

4

4

-

4

Comprehensive income

-

3

3

-

332

4

336

2

341

Other items:

Distributions and redeemable preferred share dividends1

(3)

-

(3)

-

(28)

-

(28)

(3)

(34)

Total change in the period

(3)

3

-

-

304

4

308

(1)

307

......................................................Balance as of March 31, 2024

$

1,574

$

17

$

1,591

$

3,607

$

1,235

$

(116)

$

4,726

$

145

$

6,462

Net income

-

3

3

-

261

-

261

5

269

Other comprehensive income

-

-

-

-

-

498

498

-

498

Comprehensive income

-

3

3

-

261

498

759

5

767

Other items:

Equity issuances

-

-

-

1,119

-

-

1,119

-

1,119

Non-controlling interest assumed on acquisition

-

-

-

-

-

-

-

713

713

Distributions and redeemable preferred share dividends1

(3)

-

(3)

-

(28)

-

(28)

(15)

(46)

Total change in the period

(3)

3

-

1,119

233

498

1,850

703

2,553

..........................................................Balance as of June 30, 2024

$

1,571

$

20

$

1,591

$

4,726

$

1,468

$

382

$

6,576

$

848

$

9,015

Net income

-

4

4

-

48

-

48

13

65

Other comprehensive income

-

-

-

-

-

1,137

1,137

-

1,137

Comprehensive income

-

4

4

-

48

1,137

1,185

13

1,202

Other items:

Equity issuances

1

-

1

-

-

-

-

1

2

Distributions and redeemable preferred share dividends1

(4)

-

(4)

-

(28)

-

(28)

(13)

(45)

Total change in the period

(3)

4

1

-

20

1,137

1,157

1

1,159

...............................................Balance as of September 30, 2024

$

1,568

$

24

$

1,592

$

4,726

$

1,488

$

1,519

$

7,733

$

849

$

10,174

Class A exchangeable and Class B

shareholders

Class C shareholders

Accumulated

other

Non-

FOR THE PERIODS ENDED SEP. 30, 2023

Share

Retained

Total

Share

Retained

comprehensive

Total

controlling

Total

US$ MILLIONS

capital

earnings

capital

earnings

income (loss)

interests

equity

......................................................Balance as of January 1, 2023

$

423

$

9

$

432

$

1,467

$

301

$

(523)

$

1,245

$

8

$

1,685

Net income (loss)

-

1

1

-

(99)

-

(99)

5

(93)

Other comprehensive income

-

-

-

-

-

240

240

-

240

Comprehensive income (loss)

-

1

1

-

(99)

240

141

5

147

Other items:

Equity issuances

38

-

38

-

-

-

-

-

38

Distributions and redeemable preferred share dividends1

(1)

-

(1)

-

(67)

-

(67)

(4)

(72)

Other

(10)

-

(10)

10

-

-

10

-

-

Total change in the period

27

1

28

10

(166)

240

84

1

113

......................................................Balance as of March 31, 2023

$

450

$

10

$

460

$

1,477

$

135

$

(283)

$

1,329

$

9

$

1,798

Net income (loss)

-

1

1

-

362

-

362

(3)

360

Other comprehensive loss

-

-

-

-

-

(218)

(218)

-

(218)

Comprehensive income (loss)

-

1

1

-

362

(218)

144

(3)

142

Other items:

Equity issuances

-

-

-

-

-

-

-

1

1

Distributions and redeemable preferred share dividends1

(1)

-

(1)

-

(28)

-

(28)

2

(27)

Other

-

-

-

-

(3)

-

(3)

-

(3)

Total change in the period

(1)

1

-

-

331

(218)

113

-

113

..........................................................Balance as of June 30, 2023

$

449

$

11

$

460

$

1,477

$

466

$

(501)

$

1,442

$

9

$

1,911

Net income

-

1

1

-

75

-

75

1

77

Other comprehensive income

-

-

-

-

-

56

56

-

56

Comprehensive income

-

1

1

-

75

56

131

1

133

Other items:

Equity issuances

-

-

-

2,130

-

-

2,130

-

2,130

Distributions and redeemable preferred share dividends1

(1)

-

(1)

-

(28)

-

(28)

(2)

(31)

Total change in the period

(1)

1

-

2,130

47

56

2,233

(1)

2,232

...............................................Balance as of September 30, 2023

$

448

$

12

$

460

$

3,607

$

513

$

(445)

$

3,675

$

8

$

4,143

FOR THE NINE MONTHS ENDED SEP. 30

2024

2023

US$ MILLIONS

Operating activities

$

671

Net income

$

344

Adjustments to reconcile net income to net cash from operating activities:

Other policy revenue

(441)

(306)

Accretion on investments

(372)

(146)

Amortization of deferred policy acquisition costs, deferred sales inducements and value of business

867

acquired

452

Deferral of policy acquisition costs

(962)

(1,118)

Losses (gains) on investments and derivatives

(1,132)

(155)

Provisions for credit losses

57

(9)

Income from real estate partnerships, investment funds and corporations

(234)

(121)

Distributions from real estate partnerships, investment funds and corporations

335

63

Interest credited to policyholders' account balances

1,261

361

Change in fair value of embedded derivatives

982

179

Depreciation and amortization

156

28

Deferred income taxes

(680)

(33)

Changes in operating assets and liabilities:

Insurance-relatedliabilities

1,292

2,682

Deposit liabilities

(79)

(151)

Funds withheld under reinsurance

(391)

(1,406)

Reinsurance recoverables and deposit assets

741

(59)

Accrued investment income

(91)

(22)

Working capital and other

338

371

..............................................................................................................Cash flows from operating activities

2,318

954

Investing activities

10,843

Acquisition of subsidiary, net of cash acquired

-

Purchase of investments:

(8,652)

(4,337)

Equity securities

(553)

(408)

Mortgage loans on real estate

(1,012)

(402)

Private loans

(2,577)

(24)

Investment real estate and real estate partnerships

(1,625)

(1,301)

Investment funds

(302)

(620)

Short-terminvestments

(9,495)

(9,778)

Other invested assets

(292)

(440)

Proceeds from sales and maturities of investments:

6,944

4,743

Equity securities

80

110

Mortgage loans on real estate

1,248

418

Private loans

681

449

Investment real estate and real estate partnerships

225

74

Investment funds

436

161

Short-terminvestments

8,988

9,453

Other invested assets

83

95

Purchase of derivatives

(416)

(83)

Proceeds from sales and maturities of derivatives

678

47

Purchase of intangibles and property and equipment

(61)

-

Proceeds from sales of intangibles and property and equipment

27

-

Change in collateral held for derivatives

417

55

Other

11

12

...............................................................................................................Cash flows from investing activities

5,676

(1,776)

FOR THE NINE MONTHS ENDED SEP. 30

2024

US$ MILLIONS

2023

Financing activities

(10)

Return of capital to common stockholders

(3)

Proceeds from non-controllinginterest

-

1

Borrowings from related parties

1,988

368

Repayment of borrowings to related parties

(1,988)

-

Borrowings from external parties

3,520

1,134

Repayment of borrowings to external parties

(2,767)

(2,054)

Borrowings issued to reinsurance entities

4

-

Repayment of borrowings issued to reinsurance entities

(29)

-

Policyholders' account deposits

7,785

4,480

Policyholders' account withdrawals

(6,117)

(1,844)

Debt issuance costs

(4)

-

Proceeds from repurchase agreement

153

221

Repayments of repurchase agreement

(152)

(178)

Insuance of common stock to non-controllinginterest

1

-

Distributions to non-controllinginterest

(31)

-

...............................................................................................................Cash flows from financing activities

2,353

2,125

Cash and cash equivalents

4,308

Cash and cash equivalents, beginning of period

2,145

Net change during the period

10,347

1,303

Foreign exchange on cash balances held in foreign currencies

(28)

-

......................................................................................................Cash and cash equivalents, end of period

$

14,627

$

3,448

Supplementary cash flow disclosures

Cash taxes paid (net of refunds received)

$

2

$

(11)

Cash interest paid

201

94

Non-cash transactions:

Investments received in connection with pension risk transfer transactions

462

-

Issuance of common stock in exchange for equity securities purchased (See Note 23)

1,119

-

Equity securities transferred as consideration paid for acquisition of a subsidiary (See Note 16)

(1,111)

-