Brookfield Corporation(BN) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Distributed earnings before realizations were $1.3 billion for the quarter, or $0.56 per share, and $5.4 billion over the last 12 months, or $2.27 per share, representing an 18% increase over the same period last year [4][13] - Total distributed earnings, including realizations, were $1.5 billion, or $0.63 per share for the quarter, and $6 billion, or $2.54 per share over the last 12 months [13] - Total net income was $1.7 billion over the same period [13] Business Line Data and Key Metrics Changes - The asset management business generated distributed earnings of $687 million, or $0.29 per share in the quarter, and $2.7 billion, or $1.14 per share over the last 12 months [13] - Wealth Solutions business delivered distributed earnings of $420 million, or $0.18 per share in the quarter, and $1.7 billion, or $0.70 per share over the last 12 months, representing organic growth of over 15% year-over-year [15][16] - Infrastructure and renewable power businesses remain at the forefront of global investment opportunities, with significant initiatives announced [18] Market Data and Key Metrics Changes - The company financed $140 billion of debt across operations and closed $75 billion of asset sales at attractive values [5][23] - The real estate business showed strong performance with 96% occupancy in the Super Core portfolio and 95% in the Core Plus portfolio [19] - Leasing activity in high-quality assets remains strong, with rents on newly signed leases averaging 15% above those expiring [20] Company Strategy and Development Direction - The company is focusing on AI innovation, aging populations, and real estate recovery as key growth drivers [8] - Strategic transactions include the acquisition of Just Group in the U.K. and a reinsurance agreement in Japan, expanding the company's footprint in retirement markets [9][17] - The company aims to leverage its scale and expertise to capture opportunities in energy transition and AI infrastructure [10][18] Management's Comments on Operating Environment and Future Outlook - The economic backdrop remains constructive, with healthy corporate earnings and open capital markets supporting real assets [4][6] - Management anticipates a period of declining real yields and low nominal rates, which would benefit real asset investments [7] - The company expects continued growth in financial results over the remainder of the year and into 2026 [23] Other Important Information - The company completed a three-for-two stock split on October 9, 2025, affecting all per-share amounts discussed [2] - The board declared a quarterly dividend of $0.06 per share, consistent with the previous quarter's dividend [24] Q&A Session Summary Question: Discussion on AI and humanoids creating another leg for Brookfield - Management emphasized that capital deployment is focused on building infrastructure to support AI growth, with significant investment in renewable energy and data centers [28][30] Question: Update on the reinsurance agreement in Japan - The reinsurance agreement is expected to scale over time, with a focus on long-duration low-risk liabilities [32] Question: Timeline for achieving the 200 basis point target net investment yield spread - Management indicated that achieving the target is a medium to long-term goal, with expectations for spread to broaden as capital is deployed [38] Question: Impact of the Oaktree acquisition on share repurchases - The acquisition will not materially impact the company's buyback strategy, with plans to repurchase shares issued as part of the transaction [40] Question: Progress on the Just acquisition and its financial implications - Management is working through regulatory approvals and expects to scale PRT origination significantly post-acquisition [47] Question: Downside protections for nuclear project investments - Investments in nuclear projects will be structured to provide strong downside protection, focusing on scaling Westinghouse's services [52][54] Question: Outlook for Carry Generation and realizations - Management expects a step-up in carried interest in 2026, with a healthy transaction market supporting this outlook [59][61]