Brookfield Corporation · NYSE:BN
Brookfield — Investor Day (2024)
171 slides from Brookfield's investor day presentation, 2024
Slide 1: Brookfield Corporation
Brookfield Brookfield Corporation
Slide 2: Agenda
Agenda 2:00 PM Introduction Bruce Flatt 2:10 PM Overview and Financial Outlook Nick Goodman 2:40 PM Real Estate Update Ben Brown / Kevin McCrain 3:00 PM Wealth Solutions Update Sachin Shah 3:45 PM Q&A Bruce Flatt / Nick Goodman
Slide 3: Introduction
Introduction Bruce Flatt, Chief Executive Officer INFORMATION IN THIS PRESENTATION IS QUALIFIED BY THE NOTICE TO RECIPIENTS AND ENDNOTES INCLUDED IN THIS PRESENTATION 3
Slide 4: A leading global investment firm building long-term wealth
We are a leading global investment firm focused on building long-term wealth for institutions and individuals 4
Slide 5: ~$225 billion of gains generated
For private and public investors over the past 30 years, we have generated gains of… ~$225 billion 5
Slide 6: BN shares compounded at 18% annualized over 30 years
Our BN shares have compounded at 18% annualized over the last 30 years… 1. Represents annualized total return, with dividends reinvested. 6
Slide 7: Comparison with S&P 500 and other companies
Which compares favorably with the S&P 500 and some of the great companies listed below Annualized Total Return Compound Return 30 Years 25 Years 20 Years 30 Years 1 — 18% 25% — 14% 13% 16% 4,579% 13% 10% 11% 3,655% 12% 9% 10% 2,919% S&P 500 11% 8% 11% 1,984% 1. Amazon has only been public for 27 yea
Slide 8: One of the largest pools of discretionary capital globally
Today, we have one of the largest pools of discretionary capital globally Our Own A Flexible A Pre-Eminent Perpetual Insurance Global Capital Float Manager ~$155B $110B+ ~$1T Perpetual Capital Float AUM 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3. 8
Slide 9: Access to multiple layers of large-scale capital
We have access to multiple layers of large-scale capital Institutional Insurance Global Banking Investors Relationships Private Wealth Public Markets 9
Slide 10: Positioned to deliver 15%+ returns
But, the best should be ahead… We are better positioned now to deliver 15%+ returns over the longer term than ever before 1. See Notice to Recipients and Endnotes, including endnote 4. 10
Slide 11: Our approach to compounding long-term wealth is simple
Our approach to compounding long-term wealth is simple 1 Invest in good businesses 2 Run the businesses well 3 Allocate excess free cash flow wisely 4 Align everyone with long-term objectives 5 Evolve with the world around us Let’s take these in order… 11
Slide 12: Invest in good businesses
1 Invest in good businesses The secret to wealth creation is buying good businesses that can deploy cash at high returns We try to identify We try to focus on those And have resilient high-quality businesses that continuously earnings and strong and buy for value deploy capital in a recurring cash f
Slide 13: Building the backbone of the global economy
This has led us to build / buy / own the backbone of the global economy ~240,000 Operating Employees Renewable Power Infrastructure Private Equity Real Estate & Transition Supported by stable, largely contracted and growing revenues 13
Slide 14: Run the businesses well
2 Run the businesses well We focus on operational We try to operate We leverage significant improvements and in a cost-disciplined operating expertise and expansionary capex to fashion teams of professionals drive free cash flow 14
Slide 15: Operating businesses well is the difference between good and great
Operating businesses well is the difference between good and great 15 15
Slide 16: Allocate capital wisely
3 Allocate capital wisely Wise cash allocation is the lifeblood of a great business Our goal is to build new We reinvest back into We opportunistically businesses and create existing businesses that return capital to global champions with can compound at 15%+ shareholders earnings power over the lon
Slide 17: BN retains ~75% of annual free cash flow
Currently at BN, we retain ~75% of our annual free cash flow and focus on compounding capital, which have enabled us to… 17
Slide 18: Scaling BAM into a pre-eminent asset manager
Scale BAM into one of the pre-eminent asset management franchises in the world over the last 25 years Assets Under Management $2T ~$1T $0B ~25 years ago Today In 5 years 1. See Notice to Recipients and Endnotes, including endnote 4. 18
Slide 19: Four market-leading operating businesses
Build four market-leading operating businesses with scale capital invested across a global portfolio of core inflation-linked real assets Renewable Power Infrastructure Private Equity Real Estate & Transition 19
Slide 20: Growing Wealth Solutions to over $110 billion
Grow the Wealth Solutions business to over $110 billion in four years Insurance Assets ~$300B $110B+ $2B ~4 years ago Today In 5 years This business will shortly generate $2 billion of profits annually— and the business is only getting started 1. See Notice to Recipients and Endnotes, including endn
Slide 21: $20 billion of capital returned to shareholders
While doing all that, we have also returned $20 billion of capital to our shareholders over the last five years 1. Represents dividends, special distributions and share buybacks over the last five years. 21
Slide 22: Align everyone with long-term objectives
4 Align everyone with long-term objectives We focus teams We promote We align long-term on clear mandates from within compensation 22
Slide 23: Alignment is the most important operating objective
Alignment is the most important operating objective one can implement 23
Slide 24: Senior management ownership in Brookfield
None more so than senior management — we eat our own cooking ~90% of senior management’s wealth is concentrated in Brookfield ~20% of BN and BAM are owned by senior management Our team continues to buy more shares in the company We are heavily aligned in the objective of creating value in Brookfield
Slide 25: Evolve with the world around us
5 Evolve with the world around us We created our We added retirement We adapt our listed affiliates and wealth solutions asset classes as the backbone of the global economy widens 25
Slide 26: The world evolves – we must evolve with it
The world evolves – we must evolve with it 26
Slide 27: Evolution of the backbone
Evolution As the Backbone expands, we adapt with it Railroads / Ports Telecom Towers / Data Centers Hydro Then Today Solar / Batteries / Nuclear Pipelines Logistics / Housing / Hospitality 27
Slide 28: Conservative balance sheet and strong access to capital
All of this is underpinned by our conservative balance sheet and strong access to capital across the business ~$155B $60B+ ~$115B Permanent Listed Securities Financings Capital Base at the Corporation Executed Across the Business 1. Figures as at and for the twelve months ended June 30, 2024. 28
Slide 29: Core principles key to our success
These core principles have been key to our success and will be just as important moving forward 29
Slide 30: Never better set up to drive earnings growth
We have never been better set up to drive earnings growth and value creation One of the largest A partner of choice with Our businesses are pools of capital globally counterparties centered around major secular tailwinds Plus… 30
Slide 31: Tailwinds are turning in our favor
Tailwinds are turning in our favor 31
Slide 32: Earnings growth of 17% in the past 12 months
Our business has been very resilient over the past few years, with earnings growth of 17% in the past 12 months Distributable Earnings per Share $3.67 17% CAGR $3.13 2023 2024 1. Represents distributable earnings on a per share basis for the twelve months ended June 30. See Notice to Recipients and
Slide 33: More than doubled Net Asset Value
Despite the chaos of the past five years, this period has been the best from a value creation perspective… we have more than doubled Net Asset Value Plan Value per Share $45 $84 $94 2019 2024 2024 +Spinoffs 1. Figures as at June 30th. 33
Slide 34: Tailwinds should drive further earnings growth
Tailwinds should drive further earnings growth from here Tailwinds Result in Lower Borrowing Costs Higher Asset Values Lower Capitalization Rates Return of Capital to Investors Increased Transaction Activity Carried Interest Generation 34
Slide 35: Cash flow expected to grow 20%+ annually per share
Our expectation is that our annual cash flow will grow by 20%+ annually on a per share basis over the next five years… 1. See Notice to Recipients and Endnotes, including endnotes 4 and 5. 35 35
Slide 36: $47 billion of free cash flow
Generating free cash flow of $47 billion or $30 per share to allocate wisely 1. See Notice to Recipients and Endnotes, including endnotes 4 and 5. 36
Slide 37: Annualized returns on invested capital of 16%
This should enable us to deliver annualized returns on invested capital of 16% $84 $176 2024 16% 2029 CAGR Plan Value per Share 1. See Notice to Recipients and Endnotes, including endnotes 1 to 4 and 6. 37
Slide 38: Price trading at Value can result in 29% returns
But it gets better—having Price trade at Value can result in 29% compound returns for you $176 $ per share 29% Total 16% Return Total Return $84 $50 2024 2024 2029 Market Price Plan Value Plan Value 1. See Notice to Recipients and Endnotes, including endnotes 1 to 4 and 6. 38
Slide 39: Positioned to deliver 15%+ returns with moderate risk
We are well positioned to deliver 15%+ returns over the longer term while taking moderate risk 1. See Notice to Recipients and Endnotes, including endnotes 1 to 4. 39
Slide 40: Overview and Financial Outlook
Overview and Financial Outlook Nick Goodman, President, Brookfield Corporation INFORMATION IN THIS PRESENTATION IS QUALIFIED BY THE NOTICE TO RECIPIENTS AND ENDNOTES INCLUDED IN THIS PRESENTATION 40
Slide 41: Summary, Review of the Past, Our Business, Bringing It All Together, Key Takeaways
Summary Review of the Past Our Business Bringing It All Together Key Takeaways
Slide 42: Summary
Summary 42
Slide 43: 18% annualized earnings growth over five years
We delivered 18% annualized growth in earnings over the last five years but… the best is yet to come 1. Represents distributable earnings before realizations for the five-year period ended June 30, 2024. See Notice to Recipients and Endnotes, including endnote 7. 43
Slide 44: Earnings per share growth of 20%+ over next five years
We are set up to grow earnings per share at 20%+ annually over the next five years to $9.77 per share 1. See Notice to Recipients and Endnotes, including endnote 4. 44
Slide 45: Drivers of distributable earnings growth
Growth in distributable earnings for the Corporation is driven by: 17% 33% Asset Management Wealth Solutions 28% Carried Interest 25% CAGR 2% 20% Operating Businesses Capital Allocation 1. See Notice to Recipients and Endnotes, including endnotes 4 and 5. 45
Slide 46: $47 billion of free cash flow expected
Over the next five years, we expect to generate free cash flow of… $47 billion or $30 per share 1. See Notice to Recipients and Endnotes, including endnotes 4 and 5. 46
Slide 47: Wise investment of cash flow
The wise investment of this cash flow will determine a big part of our future 47
Slide 48: Strong balance sheet and high liquidity
This is all underpinned by our strong balance sheet and high levels of liquidity 48
Slide 49: 15%+ total returns per share over the long term
We are well positioned to deliver 15%+ total returns per share over the long term $84 $176 Today Plan Value 2029 Per Share 1. See Notice to Recipients and Endnotes, including endnotes 1 to 4 and 6. 49
Slide 50: Review of the Past
Review of the Past 50
Slide 51: Progress on 2023–24 objectives
We made good progress on our 2023–24 objectives 2023 Objective Completed Highlight Increased BAM’s annualized DE by 12% 1 • Grow DE per share in line with plan • Increased Wealth Solutions’ DOE by 58% • Increased total DE by 17% to $5.8 billion or $3.67 per share 2 Maintain strong access to capital
Slide 52: 17% earnings growth over the past year
We delivered 17% earnings growth over the past year For the 12 months ended June 30 ($ millions) 2023 2024 Distributable earnings before realizations $ 4,078 $ 4,379 Realized carried interest, net 755 428 Disposition gains from principal investments 134 998 Distributable earnings $ 4,967 $ 5,805 17%
Slide 53: Over $1.5 billion returned via dividends and repurchases
We returned over $1.5 billion of capital to our shareholders via regular dividends and share repurchases 1. For the twelve months ended June 30, 2024. 53 53
Slide 54: Plan value today is $133 billion or $84 per share
Our plan value today is $133 billion or $84 per share 23x As at June 30 ($ billions, unless otherwise stated) 2024 Asset Management $ 89 Wealth Solutions 21 DE Multiple (Today) Operating Businesses 42 $ 152 Debt and preferred capital Total plan value $ (19) 133 15x Average DE Multiple (Next Five Yea
Slide 55: Total return of approximately 14% in 2023 and 2024
After a 22% increase in 2022, we generated a total return of approximately 14% in both 2023 and 2024 $84 $74 14% Total Return 2023 2024 Plan Value per Share 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3. 55
Slide 56: Conservative balance sheet, liquidity and access to capital
This is all underpinned by our conservative balance sheet, high levels of liquidity and strong access to capital across the business Conservative Capitalization Strong Corporate Liquidity $6B Cash, financial assets ~$155B and undrawn facilities $60B+ ~$13B Long-term debt Listed securities ~$5B perpe
Slide 57: Achieved baseline plans from five years ago
We achieved our baseline plans from five years ago ~$17B Five-Year Cumulative DE Before Realizations Projection / Actuals 18% CAGR $4.4B $4.1B $3.4B $2.0B $2.7B 2020 2021 2022 2023 2024 Actuals 1. Represents figures for the twelve months ended June 30th. See Notice to Recipients and Endnotes, includ
Slide 58: Intrinsic value grown in line with plan
We grew our intrinsic value in line with our plan from five years ago $94 Operating $84 Wealth Businesses Solutions $45 Carried Interest BAM 16% 2019 CAGR 2024 Plan Value per Share Spinoffs 1. 2019 was adjusted for the impact of the 3-for-2 stock split on April 1, 2020. Multiple of 20x was applied t
Slide 59: Total return ahead of target
Achieving a total return ahead of our target 2019–24 Growth in plan value 16% Average dividend yield 1% Total compound annual return 17% 1. See Notice to Recipients and Endnotes, including endnotes 1 to 3. 59
Slide 60: Shares delivered 18% returns over 30 years
Our shares have delivered 18% returns over the past 30 years but 80 simply having the Price trade at Value brings that return to ~20% 12450 70 $84 10450 18% 60 50 Annualized $50 8450 Return1 40 6450 30 11% 4450 20 Annualized Return 2450 10 0 450 1994 BN BN NAV S&P 500 2024 1. Represents annualized t
Slide 61: Price versus Value discrepancy
Our Price versus Value discrepancy offers a large margin of safety or substantial upside from today ($ per share, unless otherwise stated) Intrinsic Value 14x Trading DE Multiple Total Plan Value $ 84 (Today) 9x Equity Market Capitalization (50) Discount to Plan Value 40% Average Trading DE Multiple
Slide 62: Our Business
Our Business 62
Slide 63: Perpetual capital base of ~$155B generating over $5B annually
Our perpetual capital base of ~$155B is currently generating over $5B of cash flows annually Asset Management Wealth Solutions Operating Businesses (BAM) (BNT) (BEP/BIP/BBU/BPG) $89B $2.5B $21B $1.4B $42B $1.6B Capital DE Capital DE Capital DE Leading global alternative Global wealth Portfolio of gl
Slide 64: Base business earnings growth of 18% over five years
Our base business has demonstrated its resilience with earnings growth of 18% over the last five years… 1. Represents distributable earnings before realizations for the five-year period ended June 30, 2024. See Notice to Recipients and Endnotes, including endnote 7. 64 64
Slide 65: Each business continued to execute on its plan
As each of our businesses continued to execute on their plans Asset • Fee-related earnings growth of 17% Management1 Wealth • Distributable operating earnings grew from nil to $1.4 billion Solutions2 • Return on equity of ~20% • Renewable Power & Transition and Infrastructure FFO growth of 10% Opera
Slide 66: Headwinds turning to tailwinds
We are well positioned as economic headwinds turn to tailwinds in our favor… which should further drive strong earnings growth 66 66
Slide 67: Our Private Holdings
Our Private Holdings 67
Slide 68: Public securities of $62 billion; private holdings $90 billion
Our public securities of $62 billion are simple to value Our private holdings are valued at $90 billion As at June 30, 2024 ($ billions, except per share amounts) Intrinsic Value 41% Public Holdings $ 62 Private Holdings 90 59% 152 Debt and Preferred Capital (19) Total $ 133 Per Share $ 84 We will u
Slide 69: Five parts of private holdings earnings and value
There are five parts to the earnings profile and intrinsic value of our private holdings As at June 30, 2024 Plan Value Annualized DE1 Valuation Method ($ billions) ($ millions) 1 Asset Management a) Direct Investments $ 11 $ 788 Fair value under IFRS b) Carried Interest 33 428 10x target carry 2 We
Slide 70: 1A. Asset Management – Direct Investments
1A. Asset Management – Direct Investments 70
Slide 71: $11 billion of direct investments in BAM funds
On our balance sheet, we have $11 billion of direct investments in funds managed by BAM… 1. Figure as at June 30, 2024. 71 71
Slide 72: Targeting strong long-term returns
Targeting strong long-term returns Target Return Capital Original Returned Current ($ billions) Investment To Date Investment Gross Net BSREP I $ 1.6 $ 2.9 $ 0.1 ~20% ~16% BSREP II 2.8 3.0 1.7 ~20% ~16% BSREP III 4.0 1.1 4.2 ~20% ~16% BSREP IV 0.7 0.2 0.5 ~20% ~16% Oaktree Investments 2.3 0.1 2.1 ~1
Slide 73: Recycle $3 billion of excess capital over five years
Over the next five years, we expect to recycle $3 billion of excess capital and stabilize the capital at work at ~$8 billion 1. See Notice to Recipients and Endnotes, including endnotes 1 and 2. 73 73
Slide 74: 1B. Asset Management – Carried Interest
1B. Asset Management – Carried Interest 74
Slide 75: Carry-eligible capital grown at 26% CAGR
We directly own all the carry from pre-2023 funds and a gross 33% of those raised after 2023 (with the balance owned by BAM) Our carry-eligible capital has grown by a 26% CAGR over five years 26% $232B CAGR $220B $176B $144B $122B $72B 2019 2020 2021 2022 2023 2024 1. Figures as at June 30th. 75
Slide 76: Carry accrues daily but realization is irregular
Carry accrues daily as it is just the value creation in a business— but realization is irregular based on when it is optimal to sell businesses 2023-24 were slow but activity is picking up 2020 ~$3.8B 2021 2022 ~$2.6B 2023 2024 Five-Year Cumulative Projection Five-Year Cumulative Actuals $0.7B $0.8B
Slide 77: Funds tracking to meet or exceed target returns
Our funds are tracking to meet or exceed their target returns Target IRR Actual IRR As at June 30, 2024 Fund Number of Fund History Vintages Gross Net Gross Net Infrastructure/Renewable Power 14 years 5 13% 11% 15% 12% Private Equity 23 years 6 22% 18% 27% 21% Real Estate 18 years 8 20% 16% 21% 17%
Slide 78: $25 billion of net carried interest over 10 years
We expect to realize $25 billion of net carried interest direct to BN over the next 10 years… $21B $4B On Funds Raised to Date On Funds to Be Raised 1. See Notice to Recipients and Endnotes, including endnote 8. 78
Slide 79: $5 billion of net realized carry over next three years
Which includes $5 billion of net realized carried interest over the next three years Funds realizing carry in the next 1–3 years $14B $25B $5B BSREP II BIF II BCP V Opps X & XI $6B 1–3 years 4–5 years 6 years + 1. See Notice to Recipients and Endnotes, including endnote 8. 79
Slide 80: Carried interest diversified across asset classes
Our carried interest is diversified across asset classes, risk profiles and strategies—this reduces volatility 18% Real Estate 31% Infrastructure 13% Private Equity Renewable Power and Transition 17% Credit and Other 21% 1. See Notice to Recipients and Endnotes, including endnote 8. 80
Slide 81: Carry potential to grow substantially over five years
Our carry potential is expected to grow substantially over the next five years Carry-Eligible Capital Annual Generated Carry Realized Carry $531B $7B $7B 18% 26% 51% CAGR CAGR CAGR $232B $2B $3B $3B $0.8B $1B $0.4B 2024 2029 2024 2029 2024 2029 Net Net 1. 2024 figures are as at and for the twelve mo
Slide 82: Carried interest valued at $33 billion
We value our carried interest at $33 billion, as a multiple of target carried interest plus accumulated unrealized carry As at June 30, 2024 ($ billions) Multiple Intrinsic Value Target carried interest, net $ 2.6 10x $ 26 Accumulated unrealized carried interest, net 7 Total carried interest $ 33 1.
Slide 83: Carried interest turns to cash as we monetize assets
And this carried interest turns to real hard cash as we monetize assets 83 83
Slide 84: 21% annual earnings growth from asset management
Overall, we expect to generate 21% earnings growth annually from our asset management business ($ billions) 2024 2029 Distributable earnings from BAM1 $ 1.7 $ 3.7 18% CAGR Direct investments – growth 0.8 0.9 Direct investments – dispositions – (0.3) Distributable earnings from direct investments2 0.
Slide 85: 2. Wealth Solutions
2. Wealth Solutions 85
Slide 86: Wealth Solutions in summary
In summary The Wealth Solutions business has over $110 billion of insurance assets, with a plan to generate $2 billion of distributable earnings in the near term In just a few years, the business has been able to deliver ~20% cash returns on equity The business is well set up to triple its earnings
Slide 87: Keep it simple and focus on compounding capital
Our guiding principle for building a business is to… keep it simple and focus on compounding capital 87 87
Slide 88: Focus on 15%+ returns on equity with modest risk
The primary focus in insurance is to deliver 15%+ returns on our equity but take modest risk with predictable liabilities Acquire predictable, Originate attractive Maintain a low low-risk, risk-adjusted investment overall business long-duration liabilities opportunities to risk profile invest the fl
Slide 89: $110+ billion of insurance assets with path to ~$300 billion
The Wealth Solutions business has $110+ billion of insurance assets today, with a path to ~$300 billion Insurance Assets ~$300B • U.S. Annuities Growth $110B+ • U.K. Pension Market • Europe • Japan Annuities $50B Scaled Annuity Platform Multi-Line Direct Origination $2B Pension Risk Transfer Special
Slide 90: Our secret sauce is our investment franchise
Our secret sauce is our investment franchise 90 90
Slide 91: The sourcing advantage
The sourcing advantage: a leading investment franchise perfectly aligned with insurance Long-dated track record of investing Supports stable, recurring for value across segments investment income to back our insurance liabilities Generates over $50 billion of Allows us to be a price maker across pro
Slide 92: Top-tier annuity engine
The Wealth Solutions business has a top-tier annuity engine to write over $20 billion annually of long-duration annuities 1. See Notice to Recipients and Endnotes. 92 92
Slide 93: Low risk profile benefiting policyholders
All of this is underpinned by a low risk profile, benefiting policyholders A ~$50B BBB+ Rated Operating Liquidity Investment Platform1 Portfolio 1. Rating for the annuity platform of Brookfield Wealth Solutions. 93
Slide 94: Tripling earnings by 2029
The business is now focused on tripling its earnings by 2029 $4.8B $2B $1.4B $0B 2020 2024 ~2026 2029 Distributable Operating Earnings 1. See Notice to Recipients and Endnotes, including endnote 4. 94
Slide 95: Earnings profile supports the value proposition
The earnings profile supports a compelling value proposition ($ billions, except per share amounts) 2024 ~2026 2029 Earnings $ 1.4 $ 2 $ 4.8 Multiple 15x 15x 12x Valuation $ 21 $ 30 $ 58 Per BN share $ 13 $ 19 $ 36 Which when valued at 15x generates a $21 billion value 1. See Notice to Recipients an
Slide 96: 3. Real Estate
3. Real Estate 96
Slide 97: Diversified portfolio of world-class real estate
We own and operate a diversified portfolio of world-class real estate held directly on our balance sheet 97
Slide 98: Tailwinds for real estate earnings and valuations
We see many tailwinds for the earnings and valuations of our real estate business… Continued strength in Liquidity returning to the Interest rates declining operating performance capital markets and transaction volume improving 98
Slide 99: Core and Transitional & Development portfolios
Which includes the highest-quality office, retail and residential properties globally 1 Core 2 Transitional & Development Residential $15B $7B $3B Brookfield Place, New York One The Esplanade, Perth Wendell Falls Community, NC 1. Figures as at June 30, 2024. 99
Slide 100: Irreplaceable Core portfolio of trophy mixed-use precincts
1 We have an irreplaceable Core portfolio of 35 trophy mixed-use precincts with strong underlying fundamentals $15B 16 19 Equity Value Premier Office & Irreplaceable Mixed-Use Complexes Retail Centers 4% 96% 48% 7 years SS NOI Growth1 Occupancy LTV Lease Life 1. Represents the same-store net operati
Slide 101: Plan to sell down T&D portfolio over time
2 We plan to sell down our T&D portfolio over time… many of which are world-class assets $7B 174 Equity Value High-Quality Properties 91% 51% 4 years Occupancy LTV Lease Life 1. Figures as at June 30, 2024. 101
Slide 102: Reposition real estate and recycle capital
We plan to reposition our real estate business and recycle capital over the next five years Monetize Migrate Core assets Right size our T&D assets at the into insurance real estate opportune time accounts in corporate-level debt Wealth Solutions 102
Slide 103: Substantial cash for reinvestment as we reposition
This business will generate substantial cash for reinvestment as we reposition Today1 Growth Dispositions Reinvestment 2029 ($ billions) Plan Value Core $ 15 3 (6) 1 $ 13 T&D 7 – (7) 1 1 Residential 3 – (3) 1 1 Total $ 25 3 (16) 3 $ 15 ($ millions) DE $ 735 165 (540) 165 $ 525 1. Today’s figures rep
Slide 104: Capital Allocation
Capital Allocation 104
Slide 105: Allocating capital to maximize Net Asset Value
We are focused on allocating and deploying our capital to maximize the Net Asset Value of the company 105
Slide 106: $47 billion of free cash flow over five years
We expect to generate $47 billion of free cash flow over the next five years Asset Management $47B Wealth Solutions Operating Businesses Realized Carried Interest 1. See Notice to Recipients and Endnotes, including endnotes 4 and 5. 106
Slide 107: Significant excess cash flow to invest
Leading to significant excess cash flow to invest into new opportunities ($ billions) 2025–29 Distributable earnings $ 47 Less: dividends paid to shareholders (3) Less: reinvestment into existing businesses (20) Excess cash flow $ 24 Absent investment opportunities, capital will be available to retu
Slide 108: Wise investment should add to earnings
Wise investment of this cash should add meaningfully to our earnings over time Invest in strategic Opportunistically Retain ample liquidity transactions buy back shares to respond to opportunity and ensure we can protect against downside risks 108
Slide 109: Bringing It All Together
Bringing It All Together 109
Slide 110: 17% annualized DE per share growth from base business
We are set up to deliver 17% annualized growth in DE per share from our base business over the next five years… increasing to 25% when you factor in carried interest and capital allocation 1. See Notice to Recipients and Endnotes, including endnotes 4 and 5. 110
Slide 111: Drivers of growth in distributable earnings
Growth in distributable earnings before realizations and capital allocation for the Corporation is driven by: ($ billions) 20241 2029 BAM2 $ 1.7 $ 3.7 18% CAGR Direct Investments3 0.8 0.6 Asset Management 2.5 4.3 28% Wealth Solutions 1.4 4.8 CAGR Operating Businesses and Other 0.8 1.0 DE before real
Slide 112: DE before realizations to $10.1 billion
If we achieve the base plan, we should grow DE before realizations and capital allocation by 17% to $10.1 billion over the next five years $10.1B 17% CAGR $4.7B 2024 2029 Operating Businesses Asset Management Wealth Solutions DE Before Realizations and Capital Allocation 1. See Notice to Recipients
Slide 113: Carried interest to generate $11 billion cumulative
Carried interest will generate $11 billion of cumulative cash flows over the plan period $13.5B 21% CAGR $5.1B 2024 2029 Operating Businesses Asset Management Wealth Solutions Realized Carried Interest Distributable Earnings Before Capital Allocation 1. See Notice to Recipients and Endnotes, includi
Slide 114: Reinvestment adds ~$4 billion of cash flows
And reinvestment of excess cash should add ~$4 billion of cumulative cash flows over the next five years $15.6B 25% CAGR $5.1B 2024 2029 Operating Businesses Asset Management Wealth Solutions Realized Carried Interest Capital Allocation Distributable Earnings 1. See Notice to Recipients and Endnotes
Slide 115: Conservatively capitalized balance sheet and funding model
Our balance sheet and funding model will remain conservatively capitalized going forward • We have many levers to access liquidity from the markets • Our businesses are financed predominantly with asset-level debt that has recourse only to the asset and has 8% no cross-collateralization Debt to Plan
Slide 116: Key Takeaways
Key Takeaways 116
Slide 117: DE per share CAGR of 17% and 25%
DE before realizations & capital allocation and total DE per share should increase at a 17% and 25% CAGR, respectively, over the next five years $ per share DE Before Realizations and DE Capital Allocation $9.77 $6.33 17% 25% CAGR CAGR $2.94 $3.20 2024 2029 2024 2029 Operating Businesses Asset Manag
Slide 118: Plan Value per share to increase to $176 by 2029
Plan Value per share should increase to $176 by 2029 $84 $176 Today Plan Value 2029 Per Share 1. See Notice to Recipients and Endnotes, including endnotes 1 to 4 and 6. 118
Slide 119: Key Takeaways
Key Takeaways Significant tailwinds should lead to strong earnings growth in the near term The Corporation drives additional growth through proven capital allocation We are set up to grow earnings per share at 20%+ annually over the next five years This is all underpinned by a very conservative bala
Slide 120: The best is yet to come
The best is yet to come 120
Slide 121: Real Estate Update
Real Estate Update Ben Brown, Head of Americas Region, Brookfield Real Estate Kevin McCrain, Head of Retail, Brookfield Real Estate INFORMATION IN THIS PRESENTATION IS QUALIFIED BY THE NOTICE TO RECIPIENTS AND ENDNOTES INCLUDED IN THIS PRESENTATION 121
Slide 122: State of the Market
State of the Market Our real estate business has proved resilient, and is performing well Supply is decreasing Liquidity is returning Values have troughed Real estate will continue to deliver strong cash flow and capital appreciation for BN 122
Slide 123: Two Pools of Capital
Two Pools of Capital Private Fund Balance Sheet Investments Investments 5–10 years Hold Forever Buy, Fix, Sell Strategy Compound Returns Core Transitional & Development 123
Slide 124: Core Portfolio and Transitional & Development
Core Portfolio Transitional & Development 4% 7% 7% 18% 25% U.S. Office 16% Other Office $15B $7B 4% Retail Equity Value Residential & Hospitality Equity Value1 16% 48% Urban Retail 55% Allocated by property-level equity value 1. Excludes North American Residential segment. 124
Slide 125: 10 premier office properties
10 premier office… As of June 30, 2024 Asset Asset Value Equity Value Occupancy WALT Premier Office New York Brookfield Place $ 4,357 $ 2,018 93% 7 Manhattan West 3,256 1,660 98% 9 300 Madison Avenue 1,242 464 100% 10 Grace Building 1,078 624 100% 10 London Canary Wharf 3,186 1,303 91% 11 100 Bishop
Slide 126: Mixed-use complexes
And mixed-use complexes As of June 30, 2024 Asset City Asset Value Equity Value Occupancy WALT Luxury Residential & Hotels The Eugene New York $ 521 $ 253 94% N/A Pendry Manhattan West New York 155 104 N/A N/A Canary Wharf Residential London 1,994 1,038 90% N/A Total $ 2,670 $ 1,395 92% N/A Luxury U
Slide 127: 19 irreplaceable retail centers
19 irreplaceable retail centers As of June 30, 2024 Asset City Asset Value Equity Value Sales per sf Luxury Retail Ala Moana Center Honolulu $ 2,204 $ 1,195 $ 1,544 Park Meadows Lone Tree 1,330 689 971 730 Fifth Avenue New York 1,178 553 - Tysons Galleria McLean 1,020 679 2,136 Fashion Show Las Vega
Slide 128: Macro & Capital Markets Backdrop
Macro & Capital Markets Backdrop 128
Slide 129: Property Pricing Turning a Corner
Property Pricing Turning a Corner Property values have adjusted from 2021 highs and we are past the bottom Transaction volume has troughed. With record dry powder, we anticipate a strong recovery in transaction markets 129
Slide 130: Liquidity is Back, Supporting Values
Liquidity is Back, Supporting Values Base Rates Spreads CMBS Issuance +$50B increase 100+bps 70bps from 2023 Source: Trepp, GreenStreet. 130
Slide 131: Market Momentum
Market Momentum Enhanced liquidity coupled with record dry power is expected to drive transaction activity and allow for execution of the plan over the next five years Real Estate Plan Value ($B) $22 Expected $7 monetization $14 of ~85% of $1 T&D Portfolio by 2029 $15 $13 Today 2029 Core T&D1 1. Exc
Slide 132: Poised to Benefit from Macro Tailwinds
Poised to Benefit from Macro Tailwinds Record Dry Powder Low Supply Flight to Quality 132
Slide 133: Office Market Overview
Office Market Overview 133
Slide 134: Growing Demand for U.S. Office
Growing Demand for U.S. Office Total SF Demand (All Industry Groups) 7.9% CAGR 34.9 Jun ’21-’24 28.1 2021-2022 Avg. 2023-2024 Avg. Source: VTS. 134
Slide 135: Future U.S. Office Supply
Future U.S. Office Supply Office Supply (SF in Millions) (65%) 20M SF Decrease from long term average 6M SF 3M SF 3M SF 2018-2022 Avg. 2024-2026 Avg. Completed Under Construction Source: Eastdil. 135
Slide 136: Flight to Quality
Flight to Quality 30% 40% Of buildings Of buildings have comprise ~90% of no vacant space office vacancy Source: JLL. Excludes owner occupied buildings. 136
Slide 137: Trophy Product Setting High Watermark Globally
Trophy Product Setting High Watermark Globally Average premium to market of +59% 119% 83% $200.0 $160.0 63% 57% $120.0 52% 41% 31% $80.0 $40.0 - Toronto Shanghai Sydney Paris Beijing New York London Market Average New Supply Equivalent Source: JLL. Excludes owner occupied buildings. 137
Slide 138: Case Study: ICD Brookfield Place—Dubai
Case Study: ICD Brookfield Place—Dubai 2020 2024 24% +75 p.p. 99% Pre-leased Leased $55 PSF +47% and +214%, $81 PSF $173 PSF respectively Avg. Office New Office Avg. Office Rent Rent Leases $82 PSF +33% $109 PSF Retail Rent Retail Rent Source: PERE (Middle East transaction size rank). 138
Slide 139: Core assets ~75% of Office portfolio value
Core assets comprise ~75% of Office portfolio value 75% 25% Core Transitional & Office Development Source: Q2 24 IFRS values and is based on GAV less debt plus working capital change. 139
Slide 140: A Strong First Half in 2024
A Strong First Half in 2024 2.3 MSF 95% $2.9B 80% Office leases signed Core Office Office Reduction in carbon at rents 26% above Occupancy Financings emissions in NYC and those expiring Wash. DC by 2024; Remainder of U.S. by 2026 140
Slide 141: Retail Market Overview
Retail Market Overview 141
Slide 142: High-quality real estate and value creation through operating platform
We are invested in high-quality real estate and create value through our operating platform 142
Slide 143: Retail value concentrated in large gateway cities
Brookfield’s retail value is concentrated in large gateway cities Note: Market stats based on 3-mile radius of the property. 143
Slide 144: Core assets well leased with strong sales
Core assets are well leased and have strong sales 97% 9.2 $1,168 $9B Fully Average years Sales per Total leased of lease term square foot Sales Source: Core assets, ending June 2024; Sales per square foot and Total Sales are based on <10k square feet including Apple and Tesla. Lease term is weight a
Slide 145: U.S. retail sales and store growth remain strong
U.S. retail sales and store growth continue to remain strong +3% +40% +676 YTD vs. PYTD vs. 2019 Net new stores opened Source: U.S. Retail sales: U.S. Census, June 2024 YTD, excludes gas, auto, and food away from home; Net new stores opened: Coresight Research 7/5/24 YTD. 145
Slide 146: The value of physical retail is undeniable
The value of physical retail is undeniable +222% acquisition cost 2.5x Market growth when open a store Source: https://blog.hubspot.com/service/customer-acquisition-study; https://www.forbes.com/sites/brinsnelling/2023/02/08/how- warby-parkers-stores-are-setting-the-stage-for-direct-to-consumer-bran
Slide 147: Core assets over 70% of portfolio value
19 Core assets comprise over 70% portfolio value 71% 29% Core Transitional & Development 147
Slide 148: Capital markets are open
Capital markets are open $3.1B $1.5B+ Debt refinance in 2024 Core only Q4-23 – Q3-24 Source: $3.4 includes BPR Refi Activity YTD 2024; $1.4 includes Q4 2023-Q3 2024; Core refinances include: Oakbrook Center, Stonestown Galleria, Kenwood Towne Center, Stonebriar Centre. 148
Slide 149: Tenant mix shift June 2015 to June 2024
June 2015 June 2024 Apparel 18% - 8% 18% Footwear Entertainment 38% 11% 45% +9% 9% Food 2% 4% Large Format Box Retail 14% Home Furnishing 17% 5% 4% 6% 10% Other Source: GLA Mix in June 2015 and June 2024 for Core assets. All other categories include: Beauty & Personal Services, Jewelry, Books/Statio
Slide 150: Luxury is thriving in secondary markets
Luxury is thriving in secondary markets San Antonio Saint Louis Cincinnati The Shops at La Cantera Plaza Frontenac Kenwood Towne Centre 150
Slide 151: Reclaim and reimagine outdated boxes
Reclaim and reimagine outdated and low-performing boxes with tailored approach to meet the local market’s needs 151
Slide 152: Oxmoor Center
Oxmoor Center +56% NOI 10% yield on cost Source: NOI includes latest full year ending July 2024 vs. 2020; yield on cost is based on direct yield for redevelopment. 152
Slide 153: Oakbrook Center
Oakbrook Center +89% Center SPSF 10% yield on cost Source: NOI includes latest full year ending July 2024 vs. 2020; yield on cost is based on direct yield for redevelopment. 153
Slide 154: Stonestown Galleria
Stonestown Galleria +75% NOI +149% Sales Source: NOI includes latest full year ending July 2024 vs. 2020; Total Sales includes June 2024 R12 vs. 2020 excluding anchors, including Apple and Tesla . 154
Slide 155: In Conclusion
In Conclusion Our core assets continue to outperform with +3% same-store NOI growth over the past 12 months Decreasing interest rates and continued spread compression will have a positive and immediate impact on FFO With liquidity returning, there will be more opportunity to recycle capital out of t
Slide 156: Wealth Solutions Update
Wealth Solutions Update Sachin Shah, Chief Executive Officer, Brookfield Wealth Solutions INFORMATION IN THIS PRESENTATION IS QUALIFIED BY THE NOTICE TO RECIPIENTS AND ENDNOTES INCLUDED IN THIS PRESENTATION 156
Slide 157: Summary
Summary There is a compelling macroeconomic backdrop for this business We have the scale and operating capabilities to triple our float by the end of the decade with little additional capital invested BAM’s investment franchise is a key differentiator to deliver outsized returns Our focus is on deli
Slide 158: American National Case Study
American National Case Study: Growth in Partnership with Brookfield Wealth Solutions Tim Walsh, Chief Executive Officer, American National INFORMATION IN THIS PRESENTATION IS QUALIFIED BY THE NOTICE TO RECIPIENTS AND ENDNOTES INCLUDED IN THIS PRESENTATION 158
Slide 159: 120+ year track record of owning and operating businesses
Brookfield has a 120+ year track record of successfully owning, building and operating businesses with deep access to global capital 159
Slide 160: Our partnership is a blueprint for success
Our partnership is a blueprint for success • Multi-line insurer established in 1905 • Strong, experienced owner with a long-term perspective • Strong brand recognition, with diversified distribution channels and • Differentiated and diversified enduring relationships investment origination platform
Slide 161: Positioning the business for growth and sustainable success
Brookfield Wealth Solutions' priority has been to position the business for growth and sustainable success, with a solid financial and operating foundation 161
Slide 162: Progress in fulfilling key acquisition commitments
In just two years, we have made remarkable progress in fulfilling key acquisition commitments Priorities Status Highlights Investing in 15%+ ROE business lines with lower risk 1 Focus on capital allocation Driving capital optimization while maintaining high A rating 2 yielding Re-allocate investment
Slide 163: Plugging American National into the Brookfield ecosystem
Brookfield Wealth Solutions retained and leveraged American National’s strengths while plugging them into the Brookfield Ecosystem to create a strong platform for future growth 163
Slide 164: To summarize
To summarize Through our partnership, we have emerged stronger We have launched a successful pension risk transfer business, while scaling our fixed rate annuity franchise to be an industry leader American National’s historical single-digit ROE has improved to 15%+ and growing With Brookfield Wealth
Slide 165: Q&A
Q&A
Slide 166: Thank You
Thank You
Slide 167: Endnotes
Endnotes 1. Illustrative Plan Value analysis is not intended to forecast or predict future events, but rather to provide information utilized by Brookfield Corporation in measuring performance for business planning purposes, based on the specific assumptions and other factors described herein and in
Slide 168: Endnotes
Endnotes 10. Performance metrics are presented for flagship and predecessor funds along with similar strategies and do not include all Brookfield Asset Management or Oaktree funds. Composite returns presented are calculated by aggregating total cash flows of such funds, using the same information us
Slide 169: Notice to Recipients
Notice to Recipients INVESTOR DAY 2024 – NOTICE TO RECIPIENTS Brookfield Corporation is not making any offer or invitation of any kind by communication of this document to the recipient and under no circumstances is it to be construed as a prospectus or an advertisement. Except where otherwise indic
Slide 170: Notice to Recipients (cont'd)
Notice to Recipients (cont’d) We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect future results. Readers are urged to consider these risks, as well as other uncertainties, factors and assumptions care
Slide 171: Notice to Recipients (cont'd)
Notice to Recipients (cont’d) STATEMENT REGARDING USE OF NON-IFRS MEASURES This presentation to shareholders contains references to financial measures that are calculated and presented using methodologies other than in accordance with IFRS. These financial measures, which include Distributable Earni