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Quantitative and Qualitative Risk Disclosures
−Removed: BAM has limited activities and operations.
−Removed: BAM’s exposure to market, foreign currency, interest rate and credit risk is driven by its equity interest in our asset management business.
+Added: Our exposure to market, foreign currency, interest rate and credit risk is driven by its equity interest in our asset management business.
There have been no material changes to BAM’s financial risk exposure or risk management activities since December 31, 2024.
Please refer to Item 1A of this report for a detailed description of BAM’s financial risk exposure and risk management activities.
−Removed: The primary market risk exposure of our asset management business relates to its role as an asset manager of the publicly listed permanent capital vehicles and the sensitivity of base management fees earned from these affiliates due to movements in their underlying trading price.
+Added: The primary market risk exposure of BAM relates to its role as an asset manager of the publicly listed permanent capital vehicles and the sensitivity of base management fees earned from these affiliates due to movements in their underlying trading price.
Specifically, with respect to the market risk related to base management fees earned based on the market capitalization of BEP, BIP and BBU.
−Removed: The table below outlines the impact to base management and advisory fee revenues if there was a 10% decline in the market capitalization of the aforementioned permanent capital vehicles:
−Removed: FOR THE YEARS ENDED DECEMBER 31,
−Removed: 2024 2023 2022
−Removed: BEP $ 20 $ 22 $ 19
−Removed: Revenues $ 60 $ 58 $ 59
Foreign Currency Risk
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Additionally, the majority of our revenues are earned in the U.S.
+Added: We may from time to time reduce foreign currency risk by employing hedging techniques, including using forward contracts to reduce exposure to future changes in exchange rates when a meaningful amount of capital has been invested in foreign currencies.
Interest Rate Risk
−Removed: BAM has interest rate exposure through balances held with affiliates and does not hold debt or term deposits with third parties.
−Removed: BAM incurs interest expense on its revolving credit facility borrowings with the Asset Management Company at variable rates.
−Removed: In fiscal 2024, a 50 basis-point increase (or decrease) in interest rates, with all other variables held constant, would have resulted in an approximate increase (or decrease) of $1.1 million in interest expense.
−Removed: Assuming December 31, 2024 year-end balances remain constant throughout 2025, a similar 50 basis-point change in interest rates would result in an approximate increase (or decrease) of $1.1 million in interest expense.
−Removed: The Asset Management Company has interest rate exposure through balances held with affiliates, as well as its internal revolving credit facility with BN and its external revolving credit facility which is currently undrawn.
−Removed: The Asset Management Company earns interest income on its deposit balance with BN and as the lender on the revolving credit facility it extends to BAM.
−Removed: The Asset Management Company incurs interest expense on its revolving credit facility borrowings with BN.
+Added: BAM has interest rate exposure through balances held with affiliates and external parties, as well as its internal revolving credit facility with BN and its external $1.1 billion revolving credit facility, of which none is drawn as at December 31, 2025.
+Added: BAM earns interest income on amounts held on deposit with BN and incurs interest expense on its external and internal revolving credit facility borrowings.
Interest income and expenses on these balances are at variable rates.
−Removed: In fiscal 2024, a 50 basis-point increase (decrease) in interest rates, with all other variables held constant, would have resulted in an approximate increase (decrease) of $7.4 million in net interest income.
−Removed: A 50 basis-point increase (decrease) in interest rates would result in an approximate increase (decrease) of $1.8 million in net interest income assuming December 31, 2024 year end balances remain constant throughout 2025.
+Added: BAM's $750 million senior notes due 2035 have a fixed annual coupon of 5.795%.
+Added: BAM's $750 million senior notes due 2055 have a fixed annual coupon of 6.077%.
+Added: BAM's $600 million senior notes due 2030 have a fixed annual coupon of 4.653%.
+Added: BAM's $400 million senior notes due 2036 have a fixed annual coupon of 5.298%.
Investors in our private funds make capital commitments to these vehicles via subscription agreements.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.