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EQUITY (Tables) | 12 Months Ended
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Dec. 31, 2023
Equity [abstract] |
Schedule of equity | Equity consists of the following:
AS AT DEC. 31 (MILLIONS) | Note |  | 2023 |  | 2022
Preferred equity | (a) |  | $ | 4,103 |  |  | $ | 4,145 |
Non-controlling interests | (b) |  | 122,465 |  |  | 98,138 |
Common equity | (c) |  | 41,674 |  |  | 39,608 |
|  |  | $ | 168,242 |  |  | $ | 141,891 |
Preferred equity includes perpetual preferred shares and rate-reset preferred shares and consists of the following:
| Average Rate |  |  |  |
AS AT DEC. 31 (MILLIONS) | 2023 |  | 2022 |  | 2023 |  | 2022
Perpetual preferred shares |  |  |  |  |  |  |
Floating rate | 5.29 | % |  | 4.26 | % |  | $ | 463 |  |  | $ | 505 |
Fixed rate | 4.82 | % |  | 4.82 | % |  | 739 |  |  | 739 |
| 5.00 | % |  | 4.59 | % |  | 1,202 |  |  | 1,244 |
Fixed rate-reset preferred shares | 4.72 | % |  | 4.31 | % |  | 2,901 |  |  | 2,901 |
| 4.80 | % |  | 4.40 | % |  | $ | 4,103 |  |  | $ | 4,145 |
Further details on each series of preferred shares are as follows:
|  |  | Issued and Outstanding |  |  |  |
AS AT DEC. 31 (MILLIONS, EXCEPT PER SHARE INFORMATION) | Rate |  | 2023 |  | 2022 |  | 2023 |  | 2022
Class A preferred shares |  |  |  |  |  |  |  |  |
Perpetual preferred shares |  |  |  |  |  |  |  |  |
Series 2 | 70% P |  | 10,220,175 |  |  | 10,220,175 |  |  | $ | 169 |  |  | $ | 169 |
Series 4 | 70% P |  | 3,983,910 |  |  | 3,983,910 |  |  | 45 |  |  | 45 |
Series 13 | 70% P |  | 8,792,596 |  |  | 8,792,596 |  |  | 195 |  |  | 195 |
Series 15 | B.A. + 40 b.p.1 |  | — |  |  | 2,000,000 |  |  | — |  |  | 42 |
Series 17 | 4.75 | % |  | 7,840,204 |  |  | 7,840,204 |  |  | 171 |  |  | 171 |
Series 18 | 4.75 | % |  | 7,681,088 |  |  | 7,681,088 |  |  | 178 |  |  | 178 |
Series 36 | 4.85 | % |  | 7,842,909 |  |  | 7,842,909 |  |  | 197 |  |  | 197 |
Series 37 | 4.90 | % |  | 7,830,091 |  |  | 7,830,091 |  |  | 193 |  |  | 193 |
Series 51 | Variable up to P |  | 3,320,486 |  |  | 3,320,486 |  |  | 54 |  |  | 54 |
|  |  |  |  |  |  | 1,202 |  |  | 1,244 |
Rate-reset preferred shares 2 |  |  |  |  |  |  |  |  |
Series 24 | 3.24 | % |  | 10,808,027 |  |  | 10,808,027 |  |  | 265 |  |  | 265 |
Series 26 3 | 3.85 | % |  | 9,770,928 |  |  | 9,770,928 |  |  | 240 |  |  | 240 |
Series 28 4 | 4.61 | % |  | 9,233,927 |  |  | 9,233,927 |  |  | 232 |  |  | 232 |
Series 30 5 | 6.09 | % |  | 9,787,090 |  |  | 9,787,090 |  |  | 241 |  |  | 241 |
Series 32 6 | 6.74 | % |  | 11,750,299 |  |  | 11,750,299 |  |  | 297 |  |  | 297 |
Series 34 | 4.44 | % |  | 9,876,735 |  |  | 9,876,735 |  |  | 253 |  |  | 253 |
Series 38 | 3.57 | % |  | 7,906,132 |  |  | 7,906,132 |  |  | 179 |  |  | 179 |
Series 40 | 4.03 | % |  | 11,841,025 |  |  | 11,841,025 |  |  | 271 |  |  | 271 |
Series 42 | 3.25 | % |  | 11,887,500 |  |  | 11,887,500 |  |  | 266 |  |  | 266 |
Series 44 | 5.00 | % |  | 9,831,929 |  |  | 9,831,929 |  |  | 187 |  |  | 187 |
Series 46 7 | 5.39 | % |  | 11,740,797 |  |  | 11,740,797 |  |  | 217 |  |  | 217 |
Series 48 8 | 6.23 | % |  | 11,885,972 |  |  | 11,885,972 |  |  | 244 |  |  | 244 |
Series 52 | 2.75 | % |  | 1,177,580 |  |  | 1,177,580 |  |  | 9 |  |  | 9 |
|  |  |  |  |  |  | 2,901 |  |  | 2,901 |
Total |  | $ | 4,103 |  |  | $ | 4,145 |
1.Rated determined quarterly. All Series 15 shares were fully redeemed and cancelled as at March 31, 2023. 2.Dividend rates are fixed for 5 to 6 years from the quarter end dates after issuance, June 30, 2011, March 31, 2012, June 30, 2012, December 31, 2012, September 30, 2013, March 31, 2014, June 30, 2014, December 31, 2014, December 31, 2015, December 31, 2016 and December 31, 2017, respectively and reset after 5 to 6 years to the 5-year Government of Canada bond rate plus between 180 and 417 basis points. 3.Dividend rate reset commenced March 31, 2022. 4.Dividend rate reset commenced June 30, 2022. 5.Dividend rate reset commenced December 31, 2022. 6.Dividend rate reset commenced October 1, 2023. 7.Dividend rate reset commenced March 31, 2022. 8.Dividend rate reset commenced December 31, 2022. P – Prime Rate, B.A. – Bankers’ Acceptance Rate, b.p. – Basis Points. Non-controlling interests represent the common and preferred equity in consolidated entities that are owned by other shareholders.
AS AT DEC. 31 (MILLIONS) | 2023 |  | 2022
Common equity | $ | 117,318 |  |  | $ | 92,991 |
Preferred equity | 5,147 |  |  | 5,147 |
Total | $ | 122,465 |  |  | $ | 98,138 |
The company’s common equity is comprised of the following:
AS AT DEC. 31 (MILLIONS) | 2023 |  | 2022
Common shares | $ | 10,879 |  |  | $ | 10,901 |
Contributed surplus | 112 |  |  | 148 |
Retained earnings | 18,006 |  |  | 18,006 |
Ownership changes | 4,510 |  |  | 2,959 |
Accumulated other comprehensive income | 8,167 |  |  | 7,594 |
Common equity | $ | 41,674 |  |  | $ | 39,608 |
The number of issued and outstanding Class A and Class B shares and unexercised options are as follows:
AS AT DEC. 31 | 2023 |  | 2022
Class A shares 1,3 | 1,523,372,339 |  |  | 1,573,286,748 |
Class B shares | 85,120 |  |  | 85,120 |
Shares outstanding 1 | 1,523,457,459 |  |  | 1,573,371,868 |
Unexercised options, other share-based plans 2 and exchangeable shares of affiliate 3 | 91,632,045 |  |  | 55,500,881 |
Total diluted shares | 1,615,089,504 |  |  | 1,628,872,749 |
1.Net of 81,849,805 Class A shares held by the company in respect of long-term compensation agreements as at December 31, 2023 (December 31, 2022 – 62,910,220). 2.Includes management share option plan and escrowed stock plan. 3.During the year, 32,934,574 BN Class A shares (“BN shares”) were voluntarily exchanged for newly-issued BNRE class A-1 exchangeable non-voting shares on a one-for-one basis. BNRE Class A-1 shares are convertible in BN shares. The authorized common share capital consists of an unlimited number of Class A shares and 85,120 Class B shares. Shares issued and outstanding changed as follows:
FOR THE YEARS ENDED DEC. 31 |  |  |  |  | 2023 |  | 2022
Outstanding, beginning of year 1 |  |  |  |  | 1,573,371,868 |  |  | 1,568,828,941 |
Issued (Repurchased) |  |  |  |  |  |  |
Issuances |  |  |  |  | 794,418 |  |  | 1,406,586 |
Repurchases |  |  |  |  | (54,547,332) |  |  | (17,247,660) |
Long-term share ownership plans 2 |  |  |  |  | 3,722,567 |  |  | 19,138,775 |
Dividend reinvestment plan and other |  |  |  |  | 115,938 |  |  | 1,245,226 |
Outstanding, end of year 3 |  |  |  |  | 1,523,457,459 |  |  | 1,573,371,868 |
1.Net of 62,910,220 Class A shares held by the company in respect of long-term compensation agreements as at December 31, 2022 (December 31, 2021 – 69,663,192). 2.Includes management share option plan and restricted stock plan. 3.Net of 81,849,805 Class A shares held by the company in respect of long-term compensation agreements as at December 31, 2023 (December 31, 2022 – 62,910,220). The expense recognized for share-based compensation is summarized in the following table:
FOR THE YEARS ENDED DEC. 31 (MILLIONS) |  |  |  | 2023 |  | 2022
Expense arising from equity-settled share-based payment transactions |  |  |  | $ | 104 |  |  | $ | 159 |
Expense (recovery) arising from cash-settled share-based payment transactions |  |  |  | 290 |  |  | (621) |
Total expense (recovery) arising from share-based payment transactions |  |  |  | 394 |  |  | (462) |
Effect of hedging program |  |  |  | (289) |  |  | 629 |
Total expense included in consolidated income |  |  |  | $ | 105 |  |  | $ | 167 |
The changes in the number of options during 2023 and 2022 were as follows:
|  |  | NYSE
|  |  |  |  | Number of Options (000’s)1 |  | Weighted- Average Exercise Price
Outstanding as at January 1, 2023 |  |  |  |  |  | 44,093 |  |  | US$ | 25.16 |
Granted |  |  |  |  |  | 716 |  |  |  | 36.37 |
Exercised |  |  |  |  |  | (4,731) |  |  |  | 16.25 |
Cancelled |  |  |  |  |  | (333) |  |  |  | 39.57 |
Outstanding as at December 31, 2023 |  |  |  |  |  | 39,745 |  |  | US$ | 26.30 |
1.Options to acquire NYSE listed Class A shares.
|  |  | NYSE
|  |  |  |  | Number of Options (000’s)1 |  | Weighted- Average Exercise Price
Outstanding as at January 1, 2022 |  |  |  |  |  | 43,794 |  |  | US$ | 22.59 |
Granted |  |  |  |  |  | 3,956 |  |  |  | 46.62 |
Exercised |  |  |  |  |  | (3,258) |  |  |  | 15.35 |
Cancelled |  |  |  |  |  | (399) |  |  |  | 35.70 |
Outstanding as at December 31, 2022 |  |  |  |  |  | 44,093 |  |  | US$ | 25.16 |
1.Options to acquire NYSE listed Class A shares. The weighted-average fair value of options granted for the year ended December 31, 2023 was $9.61 (2022 – $8.82), and was determined using the Black-Scholes valuation model, with inputs to the model as follows:
FOR THE YEARS ENDED DEC. 31 | Unit |  | 2023 |  | 2022
Weighted-average share price | US$ |  | 36.37 |  |  | 46.62 |
Average term to exercise | Years |  | 7.5 |  |  | 7.5 |
Share price volatility 1 | % |  | 28.7 |  |  | 24.8 |
Liquidity discount | % |  | 25.0 |  |  | 25.0 |
Weighted-average annual dividend yield | % |  | 1.0 |  |  | 1.4 |
Risk-free rate | % |  | 4.0 |  |  | 1.9 |
1.Share price volatility was determined based on historical share prices over a similar period to the average term to exercise. As at December 31, 2023, the following options to purchase Class A shares were outstanding:
|  |  |  | Options Outstanding (000’s)
Exercise Price |  | Weighted-Average Remaining Life |  | Vested |  | Unvested |  | Total
US$13.77 – US$16.70 |  | 1.8 years |  | 4,845 |  |  | — |  |  | 4,845 |
US$18.43 – US$22.05 |  | 3.0 years |  | 16,604 |  |  | — |  |  | 16,604 |
US$24.15 – US$31.64 |  | 5.2 years |  | 5,539 |  |  | 1,390 |  |  | 6,929 |
US$35.56 – US$46.62 |  | 7.3 years |  | 4,175 |  |  | 7,192 |  |  | 11,367 |
|  |  |  | 31,163 |  |  | 8,582 |  |  | 39,745 |
As at December 31, 2022, the following options to purchase Class A shares were outstanding:
|  |  |  | Options Outstanding (000’s)
Exercise Price |  | Weighted-Average Remaining Life |  | Vested |  | Unvested |  | Total
US$13.77 – US$16.70 |  | 2.1 years |  | 8,376 |  |  | — |  |  | 8,376 |
US$18.43 – US$22.05 |  | 4.0 years |  | 16,569 |  |  | 1,094 |  |  | 17,663 |
US$24.15 – US$31.64 |  | 6.2 years |  | 4,381 |  |  | 2,700 |  |  | 7,081 |
US$35.56 – US$46.62 |  | 8.2 years |  | 2,099 |  |  | 8,874 |  |  | 10,973 |
|  |  |  | 31,425 |  |  | 12,668 |  |  | 44,093 |
The weighted-average fair value of escrowed shares granted for the year ended December 31, 2023 was $9.61 (2022 – $7.66), and was determined using the Black-Scholes model of valuation with inputs to the model as follows:
FOR THE YEARS ENDED DEC. 31 | Unit |  | 2023 |  | 2022
Weighted-average share price | US$ |  | 36.37 |  |  | 36.25 |
Average term to exercise | Years |  | 7.5 |  |  | 7.2 |
Share price volatility 1 | % |  | 28.7 |  |  | 26.7 |
Liquidity discount | % |  | 25.0 |  |  | 25.0 |
Weighted-average annual dividend yield | % |  | 1.0 |  |  | 1.0 |
Risk-free rate | % |  | 4.0 |  |  | 3.7 |
1.Share price volatility was determined based on historical share prices over a similar period to the average term to exercise. The change in the number of ES shares during 2023 and 2022 was as follows:
| Number of Units (000’s) |  | Weighted- Average Exercise Price
Outstanding as at January 1, 2023 | 39,425 |  |  | $ | 35.00 |
Granted | 2,155 |  |  | 36.37 |
Exercised | (228) |  |  | 34.84 |
Cancelled | (15) |  |  | 43.51 |
Outstanding as at December 31, 2023 | 41,337 |  |  | $ | 35.03 |
| Number of Units (000’s) |  | Weighted- Average Exercise Price
Outstanding as at January 1, 2022 | 50,378 |  |  | $ | 25.14 |
Granted | 43,650 |  |  | 36.25 |
Exercised | (54,600) |  |  | 26.94 |
Cancelled | (3) |  |  | 41.06 |
Outstanding as at December 31, 2022 | 39,425 |  |  | $ | 35.00 |
The change in the number of DSUs and RSUs during 2023 and 2022 was as follows:
| DSUs |  | RSUs
| Number of Units (000’s) |  | Number of Units (000’s) |  |  | Weighted- Average Exercise Price
Outstanding as at January 1, 2023 | 21,648 |  |  | 13,679 |  |  | C$ | 6.10 |
Granted and reinvested | 271 |  |  | — |  |  |  | — |
Exercised and cancelled | (968) |  |  | — |  |  |  | — |
Outstanding as at December 31, 2023 | 20,951 |  |  | 13,679 |  |  | C$ | 6.10 |
| DSUs |  | RSUs
| Number of Units (000’s) |  | Number of Units (000’s) |  |  | Weighted- Average Exercise Price
Outstanding as at January 1, 2022 | 18,286 |  |  | 13,679 |  |  | C$ | 6.10 |
Granted and reinvested | 3,415 |  |  | — |  |  |  | — |
Exercised and cancelled | (53) |  |  | — |  |  |  | — |
Outstanding as at December 31, 2022 | 21,648 |  |  | 13,679 |  |  | C$ | 6.10 |
The fair value of each DSU is equal to the traded price of the company’s common shares.
| Unit |  | Dec. 31, 2023 |  | Dec. 31, 2022
Share price on date of measurement | C$ |  | 53.15 |  |  | 42.58 |
Share price on date of measurement | US$ |  | 40.12 |  |  | 31.46 |
The fair value of RSUs was determined primarily using the following inputs:
| Unit |  | Dec. 31, 2023 |  | Dec. 31, 2022
Share price on date of measurement | C$ |  | 53.15 |  |  | 42.58 |
Weighted-average fair value of a unit | C$ |  | 47.05 |  |  | 36.48 |
Schedule of basic and diluted earnings per share | The components of basic and diluted earnings per share are summarized in the following table:
FOR THE YEARS ENDED DEC. 31 (MILLIONS) |  |  |  |  | 2023 |  | 2022
Net income attributable to shareholders |  |  |  |  | $ | 1,130 |  |  | $ | 2,056 |
Preferred share dividends |  |  |  |  | (166) |  |  | (150) |
Net income available to shareholders |  |  |  |  | 964 |  |  | 1,906 |
Dilutive impact of exchangeable shares |  |  |  |  | 5 |  |  | 5 |
Net income available to shareholders including dilutive impact of exchangeable shares |  |  |  |  | $ | 969 |  |  | $ | 1,911 |
FOR THE YEARS ENDED DEC. 31 (MILLIONS) |  |  |  |  | 2023 |  | 2022
Weighted average – Class A and Class B shares |  |  |  |  | 1,558.5 |  |  | 1,567.5 |
Dilutive effect of conversion of options and escrowed shares using treasury stock method and exchangeable shares of affiliate |  |  |  |  | 29.7 |  |  | 40.7 |
Class A and Class B shares and share equivalents |  |  |  |  | 1,588.2 |  |  | 1,608.2 |

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