Brookfield Corporation

Hello, and welcome to the Brookfield Corporation fourth quarter 2024 conference call and webcast. At this time, all participants are in a 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 1-1 on your telephone. I would now like to hand the conference call over to our first speaker, Ms. Angela Yulo, Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and good morning. Welcome to Brookfield Corporation's fourth quarter and full year 2024 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 ask questions, we request 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 our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities laws. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks and future events and results may differ materially from such statements. For further information on these risks and their 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. In addition, when we speak about our wealth solutions business or Brookfield Wealth Solutions, we are referring to Brookfield's investments in this business that supported the acquisition of its underlying operating subsidiaries. With that, I'll turn the call over to Bruce.

Thank you, Angela, and welcome everyone on the call. We had a strong year in 2024 with record financial results. Distributable earnings before realizations increased 15% to $4.9 billion. That's $3.07 per share. for the year and total distributed earnings increased 31% to $6.3 billion. Nick will expand on these results later. Our manager had over $135 billion of inflows and further expanded its credit platform. Our wealth solutions business is now firmly established as a top tier annuity writer in the US and we are just getting started in the UK. our operating businesses continue to generate stable and growing cash flows backed by our high quality essential service assets and businesses. With the 55% return in stock market during 24, that moved our 30-year track record up to a compound annualized return of 19% for the 30 years. Said differently, a million dollars then became about $189 million today. That is a lot of compounding. Turning briefly to the economic environment, markets were constructive for most of 24 despite increased volatility caused by potential policy changes and geopolitics. But with inflation tempered, short-term rates are stabilizing at levels consistent with more normalized economic conditions. We capitalized on this backdrop, financing approximately $135 billion of debt and selling nearly $40 billion of assets at strong returns. Looking ahead, market conditions are becoming increasingly constructive, which should contribute to a continued recovery in transaction activity, especially for high-quality assets in businesses like ours. We expect to advance our robust pipeline of asset sales at attractive returns, which will lead to significant carried interest in the coming years. Nick will speak to that in more detail in his remarks. At the same time, with record deployable capital of approximately $160 billion, and a constructive market backdrop, the outlook for deployment is strong. This makes us quite confident in the outlook for growth in our earnings and cash flows, which should lead to increased intrinsic value for your shares. 2025 looks like it should be another good year. Our strong stock performance in 24 was great. More importantly, though, the business's ability to consistently generate attractive investment returns has led to continued growth of our intrinsic value over the long term. The intrinsic value per share is now approximately $100 per share, which underpins your shares and should allow you to earn a greater return than the underlying performance of our business over time. In addition to that, this offers us an easy way to continue to add value per share by repurchasing shares. In 2024, we repurchased approximately a billion dollars of shares with another $200 million to date in 25. Our businesses also continue to get better. Our operations-oriented approach and our focus on high-quality cash-generative businesses has driven significant value creation for stakeholders. One such recent example is the dividend distribution and recapitalization of Clarios, which is the world's leading provider of advanced low-voltage batteries. In our six years of ownership, which I might emphasize included a lot of market volatility, the COVID era included, profitability increased by more than $500 million to over $2 billion a year of annual EBITDA. This allowed us to reduce debt by $2 billion, and we solidified the business to service virtually all hybrids and electric cars. All of this enabled us to refinance the business recently, funding a $4.5 billion distribution to Clario shareholders that generated a 1.5 multiple of our original equity. Just to be clear on that outcome, all owners, including ourselves, received back 1.5 times our original invested equity, and we still own 100% of the business. On the opposite side, our observation on the public markets is that we continue to see a shift from active to passive investing. Over the past few decades, much of the investing for regular nonprofessional investors has transferred to passive index investing. While on balance indexing has probably been beneficial for the average investor, there have been implications for listed businesses. This indexing impacts us in a couple of ways. First, increasingly there are a group of companies that do not fit neatly into indexes and as a result trade poorly relative to value. Our recent take privates such as Triton, Tritex Eurobox and Network International are all examples of companies that were excluded from the indexes and therefore were acquired at good value. Our collective knowledge and expertise combined with our scale and resources have enabled us to execute these transactions and we see more opportunities to come. Indexing also affects our own companies and while our main job is to make money for you, we also pay attention to how that value trades in the market to ensure that the value of the business is ultimately reflected in the share price over the longer term. Our efforts to simplify the structure of our asset management business and establish its eligibility for all relevant major US indexes is the outcome of this reality. In summary, and before I turn it over to Nick, our access to capital and the embedded growth within each of our businesses, in conjunction with the transaction activity picking up in 25, positions us well to continue to deliver strong growth in our cash flows and intrinsic value per share over the long term. Thank you for your support and interest in Brookfield. I'll turn it over to Nick.