Brookfield Corporation

Hello, and welcome to the Brookfield Corporation fourth quarter 2023 conference call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. I would now like to hand the conference call over to our first speaker, Ms. Angela Yulo, vice president. Please go ahead.

Thank you, operator, and good morning. Welcome to Brookfield Corporation's fourth quarter and full year 2023 conference call. On the call today are Bruce Flatt, our Chief Executive Officer, and Nick Goodman, President of Brookfield Corporation. Bruce will start off by giving a business update, followed by Nick, who will discuss our financial and operating results for the quarter and the year. After our formal comments, we'll turn the call over to the operator and take analyst questions. In order to accommodate all those who want to take questions, we ask that you refrain from asking more than two questions. I would like to remind you that in today's comments, including in responding to questions and in discussing new initiatives and their financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risk and future events and results may differ materially from such statements. For further information on these risks and the potential impacts on our company, please see our filings with the securities regulators in Canada and the US, and the information available on our website. And with that, I'll turn the call over to Bruce.

Thank you, Angela, and welcome everyone on the call. We had an excellent year in 2023, with each of our businesses delivering strong financial results. In total, distributable earnings before realizations were $4.2 billion. This was a 12% increase per share year over year on a comparable basis, and we delivered net income of $5.1 billion. Our manager had one of its strongest fundraising years ever. Our insurance solutions business had a transformational year with assets set to shortly be over $100 billion with annualized earnings over $1.3 billion. And our operating businesses continue to demonstrate their resilience through a period of economic uncertainty. Turning briefly to the market, capital was less available in 2023 for many. This resulted in significantly reduced transaction activity more broadly. Despite that backdrop, we differentiated our franchise by maintaining strong access to capital. We financed approximately $100 billion of assets and businesses during the year. This, combined with our strong liquidity position, enabled us to also remain very active on the investment front. We invested over $55 billion and we expect to reap the benefits of many of these contrary investments for years to come. Today, the macro environment feels better. Short-term interest rates have crested globally and are expected to go down. As capital markets regain strength, we anticipate transaction activity to pick up. As a result, it looks like 2024 and 2025 will be good years for our business. We recognize that geopolitics can lead to heightened volatility, but this does seem to have become the new normal. The most important thing for shareholders to remember is that owning businesses and assets that form the backbone of the global economy combined with maintaining access to multiple sources of capital is always a safe place to be. This is proven over many decades and in our view, this has not changed. Looking back over the last 20 years, the value of our business has grown at a compound annualized return of 23%. To illustrate, a holder of one share started with a split adjusted value of just over $2.50 at that time and over the 20 years, Assuming dividend reinvestment, the total value is today $145, or 57 times the return on capital. We think, though, the best is yet to come. The discount of our trading price to our value also presents an excellent opportunity for us to continue to add value to the company through share buybacks. Accordingly, we plan to accelerate our share repurchases this year and buy an additional billion dollars of shares in the open market over the next number of months if prices stay reasonable. Going forward, our investment philosophy though remains the same. To build and operate the backbone of the global economy, our experience has demonstrated it is possible to earn very good returns with moderate risk. And doing so for decades has proven that the results can compound a very meaningful wealth. We have stuck with this strategy for a long time, but have also continuously evolved in line with how the world has changed over that time. Of more than the $900 billion of assets that we manage, nearly half are in sectors that did not exist as an investment asset class 20 years ago. The contractual and inflation protected nature of these assets is very similar. But the types of assets we dedicate our capital to today look different from those historically, as the incremental capital needed to build out capacity continuously evolved. With the global uptick in data demand showing no signs of slowing down, we continue to expand our investments, for example, in this sector. And we are very much aligned with the largest and fastest growing companies in the world. As an example, we have significantly increased our data center operations, and we now own and operate one of the largest global hyperscale data center platforms, and this only looks to grow. In addition, the accelerating global trend of digitalization was already driving a step change in data center and electricity needs, but the power intensive nature of AI is amplifying energy demand from renewable power sources. By building a leading global development platform for data centers, renewable power, and combined with our large global real estate business, we are positioned to meet the exponentially growing needs for the largest and fastest growing companies in the world. I would note the future will be centered around three trends, decarbonization, deglobalization, and digitalization. as well as tilted towards the still emerging markets which have voracious capital needs. As we constantly evolve our focus, we believe the backbone of the global economy will continue to be an excellent place to invest for a very long time. It always just looks a little different. As we look ahead, we continue to focus on strengthening our franchise, expanding our access to capital, owning and growing high-quality assets and businesses that form the backbone of the global economy, and aligning ourselves with global trends with the largest and fastest-growing companies. All these position us well to continue to significantly increase the intrinsic value of our business over the long term. As always, thank you for your continued support and interest in Brookfield, and with that, Nick will take you through our results.