Brookfield Asset Management Ltd. 10-K

bam-20241231 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2024 . ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-41563 BROOKFIELD ASSET MANAGEMENT LTD. (Exact name of registrant as specified in its charter) British Columbia, Canada 98-1702516 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Brookfield Place 250 Vesey Street, 15th Floor New York , NY 10281-0221 (Address of principal executive offices) (212) 417-7000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Limited Voting Shares BAM New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the other registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of June 30, 2024, the aggregate market value of the Class A Limited Voting Shares held by non-affiliates of the registrant was $ 16.0 billion. As of March 7, 2025, the registrant had 1,637,295,707 Class A Limited Voting Shares and 21,280 Class B Limited Voting Shares outstanding. EXPLANATORY NOTE Brookfield Asset Management Ltd. (“BAM”) is a New York based asset manager, yet qualifies as an eligible Canadian issuer under the Multijurisdictional Disclosure System and as a “foreign private issuer” as such term is defined in Rule 405 under the U.S. Securities Act of 1933, as amended, and Rule 3b-4 under the U.S. Securities Exchange Act of 1934, as amended. Although, as a foreign private issuer, BAM is not required to do so, BAM intends to voluntarily file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC instead of filing the reporting forms available to foreign private issuers. BAM intends to prepare and file a management information circular and related materials under Canadian requirements that will not be filed pursuant to Regulation 14A. BROOKFIELD ASSET MANAGEMENT LTD. FORM 10-K For the Year Ended December 31, 2024 TABLE OF CONTENTS PART I Item 1. Business 10 Item 1A. Risk Factors 27 Item 1B. Unresolved Staff Comments 49 Item 1C. Cybersecurity 49 Item 2. Properties 49 Item 3. Legal Proceedings 50 Item 4. Mine Safety Disclosures 50 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 51 Item 6. [ Reserved ] 53 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 94 Item 8. Financial Statements and Supplementary Data 96 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 196 Item 9A. Controls and Procedures 196 Item 9B. Other Information 196 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 197 PART III Item 10. Directors, Executive Officers and Corporate Governance 198 Item 11. Executive Compensation 209 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 232 Item 13. Certain Relationships and Related Transactions, and Director Independence 234 Item 14. Principal Accountant Fees and Services 239 PART IV Item 15. Exhibits and Financial Statement Schedules 240 Item 16. Form 10-K Summary 241 SIGNATURES 242 4 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and forward-looking information within the meaning of other relevant securities legislation, including applicable securities laws in Canada, which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook”, “believe”, “think”, “expect”, “potential”, “continue”, “may”, “should”, “seek”, “approximately”, “predict”, “intend”, “will”, “plan”, “estimate”, “anticipate”, the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. These statements identify prospective information. Important factors could cause actual results to differ, possibly materially, from those indicated in these statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. We believe these factors include those described in the section entitled “Risk Factors” in this Annual Report on Form 10-K (our “Annual Report” or “report”). These factors should be read in conjunction with the other cautionary statements that are included in this report and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”). We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. CERTAIN TERMS USED IN THIS REPORT In this report, references to “BAM Ltd.” or “BAM” refer to Brookfield Asset Management Ltd. References to our “asset management business”, the “Asset Management Company”, “BAM ULC”, or the “Company” refer to Brookfield Asset Management ULC, and references to “we”, “us”, “our” means our asset management business and BAM, individually or collectively, where applicable. The term “BN” means Brookfield Corporation and its subsidiaries (including the perpetual affiliates (as defined below)) other than the Asset Management Company and its subsidiaries and does not, for greater certainty, include BAM, BWS (as defined below) or Oaktree (as defined below) and their affiliates. The term “Brookfield” means BAM, BN and the Asset Management Company, collectively. Additional information about BAM is available on our website at https://bam.brookfield.com and on the EDGAR section of the SEC website at www.sec.gov. The information on our website is not, and shall not be deemed to be, a part of this report or incorporated by reference into any other filings we make with the SEC. Information is also available on the Canadian Securities Administrators’ (“CSA”) website at www.sedarplus.ca. Unless the context suggests otherwise, references to: • “2022 Arrangement” means the court approved plan of arrangement involving BN as a result of which (i) the shareholders of BN, while retaining their shares of BN, became shareholders of BAM, which acquired a 25% interest in our asset management business through common shares of the Asset Management Company, and (ii) BN changed its name from “Brookfield Asset Management Inc.” to “Brookfield Corporation”; • “2025 Arrangement” has the meaning ascribed thereto on page 16 ; • “2025 Plan of Arrangement” has the meaning ascribed thereto on page 16 ; • “AEL” means American Equity Investment Life Holding Company; • “AEL Mandate” means the May 2, 2024 acquisition of AEL by BWS through its subsidiary American National Group LLC. We manage AEL insurance capital under an investment management agreement with AEL operating companies; • “AMSA” means the Asset Management Services Agreement dated December 9, 2022 between BAM and BAM ULC; • “Asset Management Services Agreement” means the agreement dated November 8, 2022 between BAM and the Asset Management Company to govern the provision of services by BAM’s employees to the Asset Management Company on a cost recovery basis under a perpetual agreement, as further described in Note 1 “Organization” of the Consolidated Financial Statements of BAM; • “Assets Under Management” or “AUM” has the meaning ascribed thereto under “Item 7 - Key Financial and Operating Measures” ; • “BAM Credit Facility” means the credit agreement dated November 8, 2022 between BAM and the Asset Management Company, pursuant to which the Asset Management Company has provided a five-year revolving $500 million credit facility to BAM, as further described under “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”; • “BAM Partnership” means BAM Partners Trust; 5 • “BBU” means Brookfield Business Partners L.P., together with its subsidiaries including its paired corporation, Brookfield Business Corporation; • “BCP” means Brookfield Capital Partners; • “BEP” means Brookfield Renewable Partners L.P., together with its subsidiaries including its paired corporation, Brookfield Renewable Corporation; • “BGTF” means Brookfield Global Transition Fund; • “BIP” means Brookfield Infrastructure Partners L.P., together with its subsidiaries including its paired corporation, Brookfield Infrastructure Corporation; • “BN” means Brookfield Corporation; • “Board” means the board of directors of BAM; • “BPG” means Brookfield Property Group, including Brookfield Property Partners L.P. and BN’s wholly-owned real estate directly held entities; • “BPREP” means Brookfield Premier Real Estate Partners; • “BPY” means Brookfield Property Partners, together with its subsidiaries; • “Brookfield REIT” means Brookfield Real Estate Income Trust; • “BSI” means Brookfield Special Investments; • “BSIP” means Brookfield Super-Core Infrastructure Partners; • “BSREP” means Brookfield Strategic Real Estate Partners; • “BWS” means Brookfield Wealth Solutions Ltd., a paired entity to BN offering a range of retirement services, wealth protection products and tailored capital solutions; • “Castlelake” means our 51% economic interest in Fee-Related Earnings, 7.5% interest in carried interest, 20% of returns from GP commitments of Castlelake, and 51% of GP commitments for in-market and future Castlelake funds acquired on September 16, 2024; • “Class A Shares” means the class A limited voting shares in the capital of BAM; • “Class B Shares” means the class B limited voting shares in the capital of BAM; • “Code” means the U.S. Internal Revenue Code of 1986, as amended; • “Code of Conduct” means the code of business conduct and ethics of BAM; • “corporate liquidity” consists of cash, short-term financial assets, as well as the undrawn portions of the $300 million revolving credit facility established on November 8, 2022, with BN as lender, and a $750 million five-year revolving credit facility established on August 29, 2024, through bilateral agreements with a group of third party lenders; • “CORRA” means the Canadian Overnight Repo Rate Average; • “CRA” means the Canada Revenue Agency; • “CTF” means Catalytic Transition Fund; • “Distributable Earnings”, a non-GAAP measure, has the meaning ascribed thereto under “ Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures ” ; • “Fee-Bearing Capital”, a non-GAAP measure, has the meaning ascribed thereto under “ Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures ” ; • “Fee-Related Earnings”, a non-GAAP measure, has the meaning ascribed thereto under “ Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures ” ; • “Fee Revenues”, a non-GAAP measure, has the meaning ascribed thereto under “ Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures ” ; • “Investment Company Act” means the United States Investment Company Act of 1940, as amended; • “IRS” means the United States Internal Revenue Service; 6 • “GEMS Education” means our warehoused investment in a Dubai-based international education provider, GEMS Education, acquired on July 12, 2024, as part of a Brookfield-led consortium of investors including the Asset Management Company, BSI, BWS, and certain co-investors; • “Group deployable capital” consists of: (1) corporate liquidity of the Company and the perpetual affiliates, and (2) uncalled private fund commitments, which are third-party commitments available for drawdown in the private funds of our asset management business; • “managed assets” means the businesses, operations and other assets managed by BN prior to completion of the 2022 Arrangement and to be managed by BAM and our asset management business following completion of the 2022 Arrangement; • “mature fund” means a Brookfield fund which has already significantly deployed upon completion of the 2022 Arrangement; • “new sponsored fund” or “new fund” means a Brookfield fund launched on or after the date of the 2022 Arrangement; • “Oaktree” means Oaktree Capital Management, L.P., together with its affiliates, Oaktree Capital II, L.P. General (“OCM II General”), Oaktree Capital II, L.P. Manager (“OCM II Manager”), Oaktree Capital II, L.P New Fund (“OCM II New Fund”), Oaktree AIF Investments, L.P., Oaktree Capital Management (Cayman) L.P. and Oaktree Investment Holdings, L.P. and their consolidated subsidiaries; • “perpetual affiliates” means BEP, BIP, BBU and BPG; • “PFIC” means a passive foreign investment company for U.S. federal income tax purposes; • “Pinegrove Ventures” means our acquisition of the investment platform business of SVB Financial Group, SVB Capital (rebranded to Pinegrove Ventures after acquisition), acquired on September 26, 2024 through Pinegrove Venture Partners (“Pinegrove”), our venture investment platform formed with Sequoia Heritage; • “Pretium” means our 11% economic interest in Pretium acquired on June 29; • “PVI” means Partners Value Investments L.P., a publicly-listed investment partnership whose principal business activity is owning equity interests in Brookfield for the long-term. • “Relationship Agreement” means the agreement dated November 8, 2022 among BN, BAM and the Asset Management Company to govern aspects of their relationship following the 2022 Arrangement, as further described under Note 1 “Organization” of the Consolidated Financial Statements of BAM; • “SOFR” means the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York (or a successor administrator); • “Tax Act” means the Income Tax Act ( Canada ); • “Transitional Services Agreement” means the agreement dated November 8, 2022 among BN, BAM and the Asset Management Company described under Note 1 “Organization” of the Consolidated Financial Statements of BAM; • “Trust Agreement” means the agreement dated December 9, 2022 among BAM, the BAM Partnership and Computershare Trust Company of Canada relating to the Class B Shares • “Uncalled Fund Commitments”, a non-GAAP measure, has the meaning ascribed thereto under “ Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures ” ; • “U.S. Holder” is a beneficial owner of Class A Shares that for U.S. federal income tax purposes is: (1) an individual who is a citizen or resident of the United States, (2) a corporation (or other entity classified as a corporation for U.S. federal income tax purposes) created or organized in the United States, any state thereof, or the District of Columbia, (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (4) a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes; and • “Voting Agreement” means the agreement dated December 9, 2022 between BN and BAM providing for the election of directors of the Asset Management Company. The Voting Agreement was terminated on February 4, 2025 upon completion of the 2025 Arrangement. BAM and the Asset Management Company prepare their financial statements in conformity with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). This report discloses a number of non-GAAP financial and supplemental 7 financial measures which are utilized in monitoring our asset management business, including for performance measurement, capital allocation and valuation purposes. BAM believes that providing these performance measures is helpful to investors in assessing the overall performance of our asset management business. These non-GAAP financial measures should not be considered as the sole measure of BAM's or our asset management business’ performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in conformity with U.S. GAAP financial measures. These non-GAAP financial measures are not standardized financial measures and may not be comparable to similar financial measures used by other issuers. Non-GAAP measures include, but are not limited to: (i) distributable earnings (“Distributable Earnings”), (ii) fee revenues (“Fee Revenues”) and (iii) fee-related earnings (“Fee-Related Earnings” or “FRE”). Supplemental financial measures include assets under management (“AUM”), fee-bearing capital (“Fee-Bearing Capital”) and uncalled fund commitments (“Uncalled Fund Commitments”). The asset management business includes the asset management activities of Oaktree, an equity accounted affiliate, in its key financial and operating measures for the asset management business. For more information on non-GAAP measures and other financial metrics, see “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP, where applicable, are included in “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” in this report. The financial information contained in this report is presented in U.S. dollars and, unless otherwise indicated, all references to “$” are to U.S. dollars. All references to C$ are to Canadian dollars. All information in this report is presented as at December 31, 2024, unless otherwise noted. SUMMARY RISK FACTORS The following is a summary of the risk factors associated with investing in our securities. You should read this summary together with a more detailed description of these risks in the “Risk Factors” section of this report and in other filings that we make from time to time with the SEC. We are subject to risks related to our business, including risks involving: • volatility in the trading price of the Class A Shares; • deficiencies in public company financial reporting and disclosures; • the difficulty for investors to effect service of process and enforce judgments in various jurisdictions; • being subjected to numerous laws, rules and regulatory requirements; • the potential ineffectiveness of our policies to prevent violations of applicable law; • foreign currency risk and exchange rate fluctuations; • further increases in interest rates; • political instability or changes in government; • unfavorable economic conditions or changes in the industries in which we operate; • inflationary pressures; • catastrophic events, such as earthquakes, hurricanes, or pandemics/epidemics; • ineffective management of sustainability considerations, and inadequate or ineffective health and safety programs; • failure of our information technology systems; • us and our managed assets becoming involved in legal disputes; • losses not covered by insurance; • inability to collect on amounts owing to us; • operating and financial restrictions through covenants in our loan, debt and security agreements; • the material assets of BAM consist solely of its interest in the common shares of the Asset Management Company; and • our liability for our asset management business. 8 We are subject to risks related to our investment strategies, including risks involving: • our ability to maintain our global reputation; • risks related to our renewable power and transition, infrastructure, private equity, real estate, and credit strategies; • the impact on growth in Fee-Bearing Capital of poor product development or marketing efforts; • meeting our financial obligations due to our cash flow from our asset management business; • our acquisitions; • requirement of temporary investments and backstop commitments to support our asset management business; • revenues impacted by a decline in the size or pace of investments made by our managed assets; • our earnings growth can vary, which may affect our dividend and the trading price of the Class A Shares; • exposed risk due to increased amount and type of investment products in our managed assets; and • information barriers that may give rise to conflicts and risks. We are subject to risks related to our organizational structure and ownership, including risks involving: • BN exercising substantial influence over BAM; • BN transferring the ownership of BAM to a third party; • potential conflicts of interest with BN; and • difficulty in maintaining our culture or managing our human capital. We are subject to risks related to taxation, including risks involving: • United States and Canadian taxation laws and changes thereto. We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect future results. Readers are urged to consider these risks, as well as other uncertainties, factors and assumptions carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements, which are based only on information available to us as of the date of this report and such other date specified herein. Certain of the information contained herein is based on or derived from information provided by independent third-party sources. While BAM believes that such information is accurate as of the date it was produced and that the sources from which such information has been obtained are reliable, BAM makes no representation or warranty, express or implied, with respect to the accuracy, reasonableness or completeness of any of the information or the assumptions on which such information is based, contained herein, including but not limited to, information obtained from third parties. 9 PART I ITEM 1. BUSINESS Business Overview We are a leading global alternative asset manager, headquartered in New York, NY, with over $1 trillion of Assets Under Management across renewable power and transition, infrastructure, private equity, real estate, and credit. Our objective is to generate attractive, long-term risk-adjusted returns for the benefit of our clients and shareholders. We manage a range of public and private investment products and services for institutional and retail clients. We earn asset management income for doing so and ensure strong alignment of interests with our clients by investing Brookfield capital alongside them. Our access to large-scale capital enables us to make investments in sizeable, premier assets and businesses across geographies and asset classes that we believe few others can. To do this, we leverage our team of over 2,500 investment and asset management professionals, our global reach, deep operating expertise, and access to large-scale capital to identify attractive investment opportunities and invest on a proprietary basis. Our investment approach and strong track record have been the foundation and driver of our growth. We provide a highly diversified suite of alternative investment strategies to our clients and are constantly seeking to innovate new strategies to meet their needs. We have over 50 unique active strategies that span a wide range of risk-adjusted returns, including opportunistic, value-add, core, super-core, and credit. We evaluate the performance of these product offerings and our investment strategies using a number of non-GAAP measures. BAM utilizes Fee-Bearing Capital, Fee Revenues, Fee-Related Earnings and Distributable Earnings to assess the performance of our asset management business. We are in a fortunate position to be trusted with our clients’ capital and our objective is to meet their financial goals and provide for a better financial future while providing market leading experience. Our team of over 300 client service professionals across 19 global offices are dedicated to ensuring that the business exceeds our clients’ service expectations. We have over 2,300 clients, with some of our clients being among the world’s largest institutional investors, including sovereign wealth funds, pension plans, endowments, foundations, financial institutions, and insurance companies. Our guiding principle is to operate our business and conduct our relationships with the highest level of integrity. Our emphasis on a culture of collaboration allows us to attract and retain top talent. BAM's Class A Limited Voting Shares (the “Class A Shares”) are co-listed on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”) under the symbol “BAM”. Value Creation We create shareholder value by increasing the earnings profile of our asset management business. Alternative asset management businesses such as ours are typically valued based on a multiple of their Fee-Related Earnings and performance income. Accordingly, we create value by increasing the amount and quality of Fee-Related Earnings and performance income, net of associated costs. We achieve this by raising more Fee-Bearing Capital and delivering strong investment performance, which enables us to generate performance income, such as carried interest, while maintaining efficient operating margins. As at December 31, 2024, we had Fee-Bearing Capital of $539 billion, of which 87% is long-dated or perpetual in nature, providing significant stability to our earnings profile. We consider Fee-Bearing Capital that is long-dated or perpetual in nature to be Fee-Bearing Capital relating to our long-term private funds, which are typically committed for at least 10 years with two one-year extension options, and Fee-Bearing Capital relating to our perpetual strategies, which include our permanent capital vehicles as well as capital we manage in our perpetual private fund and private wealth strategies. We seek to increase our Fee-Bearing Capital by growing the size of our existing product offerings and developing new strategies that cater to our clients’ investment needs. We also aim to deepen our existing institutional relationships, develop new institutional relationships, and access new distribution channels, such as high net worth individuals and retail. As of December 31, 2024, we had a diversified client base of over 2,300 clients, which continues to grow. Our private wealth channel also continues to grow and represents over 8% of capital raised. We have a dedicated team of over 150 people that are focused on distributing and developing catered products to the private wealth channel. As we grow our Fee-Bearing Capital, we earn incremental base management fees. In order to support this growth, we have grown our team of investment and asset management professionals. Our costs are predominantly in the form of compensation for the over 2,500 professionals we employ globally. When deploying our clients’ capital, we seek to leverage our competitive advantages to acquire high-quality real assets and essential service businesses that form the backbone of the global economy. We use our global reach and access to scale capital to source 10 attractive investment opportunities and leverage our deep operating expertise to underwrite investments and create value through active asset management. Our goal is to deliver superior investment returns to our clients and successfully doing so should result in the growth of realized carried interest over time. We generate robust Distributable Earnings, which is a key measure of our financial performance. Distributable Earnings of BAM represent the Distributable Earnings from the Asset Management Company. BAM intends to pay out approximately 90% of its Distributable Earnings to shareholders quarterly and reinvest the balance back into the business, as discussed further in “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures.” We are actively progressing new organic growth strategies, including transition and secondaries. We are also pursuing strategic M&A opportunities that would expand our capabilities. These new initiatives, in addition to our existing strategies, are expected to have a very meaningful impact on our growth trajectory in the long term as BAM continues to be the partner of choice for investors. An example of such growth is the partnership we formed with Oaktree in 2019, which deepened the capabilities we offer our clients and better positions us across market cycles. Such acquisitions may occur from time to time should they be additive to our franchise, attractive to our clients, and accretive to our shareholders. Competitive Advantages We seek to harness the following four distinct competitive advantages that enable us to consistently identify and invest in high-quality assets and create significant value in the assets that we invest in and operate on behalf of our clients. Operating Expertise We are supported globally by approximately 250,000 operating employees of our managed businesses, who are instrumental in maximizing the value and cash flows of our managed assets. We believe that strong operating experience is essential in maximizing efficiency and productivity – and ultimately, returns. We do this by maintaining a culture of long-term focus, alignment of interest and collaboration through the people we hire, our compensation philosophy, and our operating philosophy. This operating expertise developed through our heritage as an owner-operator is invaluable in underwriting investments, conducting thorough due diligence, and executing value-creating development and capital projects. Global Reach We invest on behalf of our clients in more than 30 countries on five continents around the world. We believe that our global reach allows us to diversify and identify a broad range of opportunities. We can invest where capital is scarce, and we believe that our scale enables us to move quickly and pursue multiple opportunities across different markets. Our global reach also allows us to operate our assets more effectively: we believe that a strong on-the-ground presence is critical to operating successfully in many of our markets, and many of our businesses are truly local. Furthermore, the combination of our strong local presence and global reach enables us to bring relationships and operating practices to bear across markets to enhance returns. Large Scale We had over $1 trillion in Assets Under Management and $539 billion in Fee-Bearing Capital as of December 31, 2024. We offer our investors a large selection of private funds that have global mandates and diversified strategies. Our access to large-scale, flexible capital allows us to pursue transactions on a scale beyond the reach of many, delivering superior risk-adjusted returns. Brookfield Ecosystem The unique intelligence we generate from the ongoing interconnectivity between our over $1 trillion of Assets Under Management, our global partnerships and our visibility into global capital flows helps us identify themes and trends in investing, spot pockets of value and source attractive investment opportunities as BAM continues to be the partner of choice for investors. This competitive advantage has allowed us to build leading positions in assets classes that are most in favor among investors and deliver strong investment returns to our clients across multiple business cycles. Investment Process Our Investment Process Leads to Value Creation Earning robust returns on the investments we make on behalf of our clients enhances our ability to increase our Fee-Bearing Capital and generates carried interest, both of which grow our cash flows and create value for our shareholders. 11 1. Raise Capital As an asset manager, the starting point of the investment cycle is establishing new funds and other investment products for our clients. This in turn provides the capital to invest, from which we earn base management fees, incentive distributions and performance-based returns such as carried interest. Accordingly, we create value by increasing our amount of Fee-Bearing Capital and by achieving strong investment performance, which leads to growth in Fee-Bearing Capital and increased cash flows. 2. Identify and Invest in High-Quality Assets We follow a value-based approach to investing and allocating capital. We believe that our disciplined approach, global reach and operating expertise afford us access to a wide range of potential opportunities and enable us to invest at attractive valuations and generate superior risk-adjusted returns for our clients. We also leverage our considerable expertise in executing recapitalizations, operational turnarounds and large development and capital projects, providing additional opportunities to deploy capital. 3. Secure Long-Term Financing For our equity investments we finance the investments on behalf of our clients predominantly on a long-term investment-grade basis and asset-by-asset, which are primarily non-recourse. This financing approach provides us with considerable stability, improves our ability to withstand financial downturns and enables our asset management teams to focus on operations and other growth initiatives. 4. Enhance Value and Cash Flows Through Operating Expertise We use our operating capabilities to increase the value of the assets within our product offerings and the cash flows they produce, and they help to protect our clients’ capital in adverse conditions. The combination of operating expertise, development capabilities and effective financing can help ensure that an investment’s full value creation potential is realized, which we believe is one of our most important competitive advantages. 5. Realize Capital from Asset Sales or Refinancing We actively monitor opportunities to sell or refinance assets to generate proceeds for our investors. Capital generated in our limited life funds is returned to investors, and in the case of our perpetual funds, we then redeploy the capital to enhance returns. In many cases, returning capital from private funds completes the investment process, locks in investor returns and gives rise to performance income. Products and Principal Strategies Our products broadly fall into one of three categories: (i) long-term private funds, (ii) permanent capital vehicles and perpetual strategies, and (iii) liquid strategies. These are invested across five principal strategies: (i) renewable power and transition, (ii) infrastructure, (iii) real estate, (iv) private equity, and (v) credit. Renewable Power and Transition Overview • We are one of the largest investors in renewable power and transition investments, with $126 billion of AUM and $58 billion of Fee-Bearing Capital as of December 31, 2024. • We believe that the growing global demand for low-cost, low-carbon energy, especially amongst corporate off-takers, will lead to continued growth opportunities for us in the future. The investment environment for renewable power and transition remains favorable and we expect to continue to advance our substantial pipeline of renewable power and transition opportunities on behalf of our clients and managed assets. • We have approximately 145 investment and asset management professionals globally that are focused on our renewable power and transition strategy, supported by approximately 17,800 operating employees in the renewable power and transition operating businesses that we manage. Our extensive experience and knowledge in this industry enable us to be a leader in all major technologies with deep operating and development capabilities. 12 Our Products Long-term Private Funds • Brookfield Global Transition Fund (“BGTF”) is our flagship transition fund series which is focused on investments aimed at accelerating the global transition to a net-zero carbon economy. The mandate of this product is to assist utility, e nergy and industrial businesses to reduce carbon dioxide emissions, expand low-carbon and renewable energy production and advance sustainable solutions. • Our recently launched Catalytic Transition Fund (“CTF”) focuses on directing capital into clean energy and transition assets in emerging markets in South and Central America, South and Southeast Asia, the Middle East, and Eastern Europe. CTF will help drive clean energy investment in emerging markets. Permanent Capital Vehicl es and Perpetual Strategies • We also manage Brookfield Renewable Partners L.P. (“BEP”), one of the world’s largest publicly traded renewable power platforms, which is listed on the NYSE and TSX and had a market capitalization of over $16.0 billion as of December 31, 2024. Across our renewable power and transition products, we have invested on behalf of our clients in: • Hydroelectric operations, through river systems and facilities that provide electricity and have grid stabilizing capabilities; • Utility solar operations that harness energy from the sun to generate electricity; • Distributed energy and storage which provides small-scale generation that can be locally installed, and pump storage facilities; • Wind operations that use turbines to create electricity; and • Sustainable solutions including renewable natural gas, carbon capture and storage, recycling, cogeneration biomass, nuclear services, and power transformation. Infrastructure Overview • We are one of the world’s largest investment managers in infrastructure, with $202 billion of AU M and $97 billion of Fee-Bearing Capital as of December 31, 2024 . • We focus on acquiring high-quality real assets and operating businesses on behalf of our clients that deliver essential goods and services, diversified across the utilities, transport, midstream and data infrastructure sectors. We partner closely with management teams to enable long-term success through operational and other improvements. • We have approxim ately 220 investment and asset management professionals globally that are focused on our infrastructure strategy, supported by approximately 61,000 operating emp loyees in the infrastructure operating businesses that we manage. Our Products Long-term Private Funds • Brookfield Infrastructure Fund (“ BIF ” ) is our flagship infrastructure fund series. In this product offering, we invest on behalf of our clients in high-quality infrastructure assets on a value basis and seek to add value through the investment life cycle by utilizing our operations-oriented approach. • Brookfield Infrastructure Structured Solutions Fund (“ BISS ” ) seeks to invest structured equity and non-control common equity in the infrastructure mid-market. The fund is focused on deploying our deep capabilities to partner with sponsors, developers, and corporates to access attractive development opportunities. Permanent Capital Vehicles and Perpetual Strategies • We manage Brookfield Infrastructure Partners L.P. (“BIP”), one of the largest, pure-play, publicly traded global infrastructure platforms, which is listed on the NYSE and TSX and had a market capitalization of $26.3 billion as of December 31, 2024. • We manage Brookfield Super-Core Infrastructure Partners (“BSIP”), which is our perpetual infrastructure private fund s trategy. In this product offering, we invest on behalf of our clients in core infrastructure assets in developed markets, with a focus on yield, diversification, and inflation-protection. 13 • We also manage Brookfield Infrastructure Income Fund, a semi-liquid infrastructure strategy, offering private wealth investors access to our best-in-class infrastructure platform. The infrastructure investments that we manage provide a diversified exposure for our clients to scarce, high-quality businesses that benefit from significant barriers to entry and deliver essential goods and services to generate resilient and inflation-protected cash flow streams. Through the various products outlined, we have invested in: • Regulated or contracted businesses that earn a return on an asset base, including electricity and gas connections, natural gas pipelines and electricity transmission lines; • Systems involved in the movement of freight, commodities and passengers, including rail operations, toll roads, terminal and export facilities; • Assets that handle the movement and storage of commodities from a source of supply to a demand center, including transmission pipelines, natural gas process plants and natural gas storage; and • Businesses that provide essential services and critical infrastructure to transmit and store data globally, including telecom towers and active rooftop sites, fiber optic cable and data centers. Real Estate Overview • We are one of the world’s largest investment managers in real estate, wit h over $271 billion of A UM and $94 billion of Fee-Bearing Capital as of December 31, 2024 . • We have invested, on behalf of clients, in iconic properties in the world’s most dynamic markets with the goal of generating stable and growing distri butions for our investors while protecting them against downside risk. • We have approximately 650 investment and asset management professionals that are focused on generating superior returns across our real estate strategies, supported by approximately 24,500 operating employees in the real estate operating businesses that we manage. Our Products Long-term Private Funds • Our opportunistic real estate flagship fund series is Brookfield Strategic Real Estate Partners (“BSREP”) . Through this product, we invest globally across various sector s and geographies on behalf of our clients in high-quality real estate with a focus on large, complex, distressed assets, turnarounds, and recapitalizations. • We also manage a real estate secondaries strategy, Brookfield Real Estate Secondaries, with a focus on providing liquidity solutions for other real estate general partners. Permanent Capital Vehicles and Perpetual Strategies • We manage $17 billion of Fee-Bearing Capital in Brookfield Property Group (“BPG”) as of December 31, 2024, which we invest, on behalf of BN, directly in real estate assets. BPG owns, operates, and develops iconic properties in the world’s most dynamic markets with a global portfolio of office, retail, multifamily, logistics, hospitality, land and housing, triple net lease, manufactured housing, and student housing assets on five continents. • We also manage capital in our perpetual private fund real estate strategy, Brookfield Premier Real Estate Partners (“BPREP”). This is a core plus strategy that invests in high-quality, stabilized real assets located primarily in the U.S. with a focus on office, retail, multifamily and logistics real estate assets. We also have two regional BPREP strategies that are dedicated specifically to investments in Australia and Europe. • We also manage a non-traded REIT, Brookfield Real Estate Income Trust (“Brookfield REIT”), which is a semi-liquid strategy catering specifically to the private wealth channel. This product invests in high quality income-producing opportunities globally through equity or real estate-related debt. Through the various products outlined, we have invested in multiple asset classes including: • Office properties in key gateway cities in the U.S., Canada, the U.K., Germany, Australia, Brazil and India; • High-quality retail destinations that are central gathering places for the communities they serve, combining shopping, dining, entertainment and other activities; 14 • Full-service hotels and leisure-style hospitality assets in high-barrier markets across North America, the U.K. and Australia; and • High-quality assets with operational upside across multifamily, alternative living, life sciences and logistics sectors globally. Private Equity Overview • We have one of the best long-term track records for investing in private equity with $145 billion of AUM and $45 billion of Fee-Bearing Capital as of December 31, 2024 . • We focus on high-quality businesses that provide essential products and services, diversified across business services and industrials sectors. We partner closely with management teams to enable long-term success through operational and other improvements. • We have approximately 270 investment and asset management professionals globally that are focused on our private equity strategy, supported by approximately 142,900 operating em ployees in the businesses that we manage. Our Products Long-term Private Funds • Our global opportunistic flagship fund series, Brookfield Capital Partners (“BCP”) , is our leading private equity offering. The series of funds focuses on cash-flowing industrial and essential service businesses. We seek investments that benefit from high barriers to entry and enhance their cash flow capabilities by improving strategy and execution. • Our special investments strategy, Brookfield Special Investments (“BSI”) , is focused on structured, large-scale, non-control investments. This product capitalizes on transactions that do not fit our traditional control-oriented flagship private equity fund series. Situations may include recapitalization or strategic growth capital where we expect to generate equity-like returns while ensuring downside protection through contracted returns. • Our thematic private equity strategy, Brookfield Financial Infrastructure Partners, focuses on investments in asset-light financial infrastructure companies that underpin the global financial system. • Our regional private equity strategy, Brookfield Middle East Partners, is focused on opportunistically investing across sectors and countries in the Middle East by drawing on Brookfield’s global footprint and value-add as a strategic partner. • Our venture capital strategy, Pinegrove Ventures, manages investments in the innovation economy and is uniquely positioned to access highly sought-after opportunities in high quality venture-backed companies and funds. Permanent Capital Vehicles and Perpetual Strategies • We manage Brookfield Business Partners L.P. (“ BBU ” ), which is a publicly traded global business services and industrials company focused on owning and operating high-quality providers of essential products and services. BBU is listed on the NYSE and TSX and had a market capitalization of $5.2 billion as at December 31, 2024 . Our private equity vehicles acquire high-quality operations globally. The broad investment mandate provides us with the flexibility to invest on behalf of our clients across multiple industries through many forms. Through the various products outlined above, we have invested on behalf of our clients in: • Leading service providers to large-scale infrastructure assets, including a leading provider of work access services, modular building leasing services, and a leading global provider of lottery services and technology solutions; • Operationally intense industrial businesses that benefit from a strong competitive position, including a leading global provider of advanced automotive battery technology, a leading global aviation services and leasing business, and a leading manufacturer of engineered components for industrial trailers and other towable equipment providers, among others; and • Essential services providers, including the largest private sector residential mortgage insurer in Canada, a leading value-add distributor of telecom equipment, a leading provider of software and technology services to automotive dealers, and one of the largest private school operators globally. Credit Overview • We are one of the world’s largest and most experienced credit managers globally, with $317 billion of AUM and $245 billion of Fee-Bearing Capital as of December 31, 2024 . 15 • We seek to provide flexible, specialized capital solutions to borrowers and deliver attractive risk-adjusted returns to our clients across a range of debt strategies, focusing on private credit and direct lending in areas in which we possess differentiated investment and operational capabilities. • We have approximately 230 investment and asset management professionals globally that are focused on our credit strategies, investing across a broad spectrum of investments, leveraging the capabilities we have organically built in collaboration with the capabilities of leading credit managers with whom we partner. Our Products • Our flagship opportunistic credit strategy, Global Opportunities, seeks to generate current income and long-term capital appreciation by investing in private loans to large private-equity-owned companies with a focus on protecting against losses by buying claims on assets at discounted prices. We aim to achieve substantial gains by actively participating in restructurings to restore companies to financial viability and creating value at every stage of the investment process. • Brookfield Infrastructure Debt is our infrastructure debt fund series, which invests on behalf of our clients in mezzanine debt investments in high-quality, infrastructure a ssets. • Brookfield Real Estate Finance Fund is our commercial real estate debt fund series, which targets investments in transactions that are senior to traditional equity and subordinate to first mortgages or investment-grade corporate debt. • In addition to several other credit strategies, we also provide tailored separately managed accounts for our clients, with private credit investment programs designed for each of our clients’ specific risk, return, and prudential requirements. Each client’s private credit investment portfolio can be customized across multiple dimensions, including asset class, credit quality, duration, sector, and geography, with proprietary access to our broad-based private credit origination capabilities. The credit investments that we manage enable our clients to have exposure to a broad range of credit strategies, including: • Private Credit strategies focusing on underwriting and managing directly sourced credit investments on behalf of our clients, across various sectors, including infrastructure, renewable energy, real estate, corporate credit, royalties, aviation, equipment finance, as well as consumer and SME credit; • Opportunistic Credit strategies that are designed to capitalize on market dislocations and inefficiencies to generate high returns. These strategies typically involve investing in distressed or special situations where credit is undervalued or overlooked by traditional investors; • Structured Credit strategies investing across structured and asset-backed finance opportunities in real estate, fund finance, aviation, consumer and corporate credit and more; and • Liquid Credit strategies investing across a broad spectrum of public debt securities, from investment-grade to high-yield. Development of the Business Our asset management business is owned and operated through the Asset Management Company, which, as of February 4, 2025, is wholly-owned by BAM. BAM is headquartered in New York, NY and was incorporated on July 4, 2022. BAM and the Asset Management Company were formed by BN to facilitate the 2022 Arrangement. The 2022 Arrangement, which closed on December 9, 2022, involved the division of Brookfield Asset Management Inc. into two publicly traded companies: BAM, a pure-play, leading global alternative asset management business; and BN, a leading global investment firm focused on building long-term wealth for institutions and individuals around the world. As at December 31, 2024, BAM owned approximately 27% of the Asset Management Company. On February 4, 2025, BAM completed a corporate restructuring with BN by way of a court-approved plan of arrangement (the “2025 Plan of Arrangement”), which was originally announced on October 31, 2024, whereby BN transferred its approximate 73% interest in the Asset Management Company to BAM in exchange for newly issued Class A Shares of BAM, on a one-for-one basis (the “2025 Arrangement”). After giving effect to the 2025 Arrangement, BAM owns 100% of the Asset Management Company, and BN owns approximately 73% of the Class A Shares. The 2025 Arrangement is expected to continue to broaden BAM’s shareholder base and simplify the structure of the Asset Management Company further by having its ownership consolidated under BAM, rather than being split between BN and BAM. The 2025 Arrangement also resulted in BAM’s market capitalization reflecting 100% of the value of the asset management business, which management believes will align BAM’s size and structure with its U.S.-based global alternative asset management business peers and position BAM for potential inclusion in some of the most widely followed global large cap stock indices, including in the U.S., in the future. As part of these efforts, a number of changes were made to BAM's board of directors. Please see “Part III—Item 10. Directors, Executive Officers and Corporate Governance—Directors and Executive Officers” on page 198 of this report. 16 The following is a summary of other recent developments affecting BAM and our asset management business since January 1, 2024. Asset Management Business 2025 Activity On February 10, 2025, BAM announced a €20 billion infrastructure investment program to support the deployment of artificial intelligence infrastructure in France. Brookfield's investment will be targeted across data centers and associated infrastructure sectors which are vital for the deployment of artificial intelligence. Up to €15 billion of data center investment will be led by a Brookfield portfolio company, Data4, one of Europe’s largest data center developers, headquartered in Paris. The investment of a further €5 billion is planned by Brookfield in France across associated artificial intelligence infrastructure such as data transfer, chip storage and energy generation. The total €20 billion investment is projected to be delivered by 2030. On February 11, 2025, Oaktree announced the final close of Oaktree Opportunities Fund XII ( “ Opps XII ” ), with approximately $16 billion of commitments, including co-investment and affiliated vehicles. As of February 11, the Fund has more than $7 billion invested or committed for investment in businesses that are diversified across geographies, sectors, and asset classes. On March 11, 2025, BAM announced the closing of its inaugural Brookfield Infrastructure Structured Solutions Fund (“BISS”), a middle-market infrastructure fund, achieving its fundraising target with over $1 billion of capital commitments. BISS is focused on deploying Brookfield’s capabilities as an owner and operator of global infrastructure assets to partner with sponsors, developers, and corporates in the mid-market. The strategy seeks to invest both structured and common equity. 2024 Activity In 2024, our asset management business benefited from strong fundraising across our flagship and complementary fund offerings, with total fundraising of over $135 billion. The successful fundraising across our flagship series included the second vintage of our global transition fund of $4.6 billion, our fifth real estate flagship fund of $2.9 billion, and the twelfth vintage of our opportunistic credit fund of $5.2 billion. We expect to hold a final close for our second global transition flagship fund and fifth real estate flagship fund series in the first half of 2025. We also raised approximately $103 billion of capital this year across more than a dozen credit strategies and under our mandate with BWS. This includes raising nearly $29 billion across our Oaktree franchise, including our aforementioned twelfth opportunities credit fund, $1.7 billion in the fourth vintage of our infrastructure debt fund, and $2.5 billion across our other partner managers. In addition, we raised a total of $67 billion from BWS including a $49 billion mandate following the May 2, 2024 acquisition of AEL and $17 billion from retail annuity sales, pension risk transfer inflows, and other reinsurance products. Our Fee-Bearing Capital represents the total capital managed by our asset management business for which we earn fee revenue. Fee-Bearing Capital of our asset management business increased by $82 billion, or 18% to $539 billion in 2024; of this, 87% is long-dated or perpetual in nature, providing resiliency and predictability to our revenues. Increases to Fee-Bearing Capital of $129 billion were largely attributable to fundraising during the year and the aforementioned AEL Mandate. These increases were partially offset by redemptions within our liquid and perpetual strategies and annuity-related outflows. The increase in Fee-Bearing Capital contributed to Fee Revenues of $4.7 billion and Fee-Related Earnings of $2.5 billion for 2024, which increased by 7% and 10% , respectively, compared to 2023. The increase in Fee-Related Earnings was partially offset by higher cash taxes resulting in DE of $2.4 billion for 2024 , or an increase of 5% compared to 2023. During the year, our asset management business deployed $47.6 billion across the business groups, including $5.6 billion from renewable power and transition, $3.8 billion from infrastructure, $5.9 billion from private equity, $6.1 billion from real estate and $26.2 billion from credit. As at December 31, 2024 , the asset management business had total uncalled private fund commitments of $115 billion of which a pproximately $53 billion is committed across the business groups and is currently not earning fees, but will become fee-bearing once the capital is invested. Once invested, we expect these commitments will earn approximately $530 million of additional Fee Revenues. Digitalization is being further propelled by significant increases in AI investment, increasing corporate clean energy demand, and the transformative role of private credit in the capital markets. In 2024, our investment strategies continued to focus on growing fundraising channels, direct credit lending, infrastructure, and transition and renewables. Some notable examples include: • In February 2024, BAM announced that it raised $10 billion (inclusive of fund commitments and strategic capital from the investor base of our asset management business) in the first closing of the second vintage of Brookfield Global Transition Fund, our private fund dedicated to facilitating the global transition to a net-zero carbon economy. Total fundraising for the strategy this year was $5.2 billion. • On May 2, 2024, BWS completed the acquisition of the remaining outstanding common stock of AEL that it did not already own. The acquisition by BWS from BN of the BAM Class A Shares required to satisfy the stock consideration pursuant to the 17 AEL acquisition resulted in an increase to BAM's ownership in the Asset Management Company (after giving effect to the 2025 Arrangement, the non-controlling interest in BAM) from approximately 25% to approximately 27%. The AEL acquisition also resulted in the raising of $49 billion of fee-bearing capital to be managed by the asset management business. • On September 17, 2024, we acquired a 51% stake in Castlelake’s fee-related earnings, a 7.5% stake in Castlelake's carried interest, 20% of returns from GP commitments, and 51% of GP commitments for in-market and future Castlelake funds for total cash consideration of approximately $489 million. In addition, BWS committed to invest approximately $1 billion in Castlelake's investment strategies and funds. • We launched our Catalytic Transition Fund with an initial close on September 23, 2024, of which $2.4 billion was raised in the year. This new capital is inclusive of the $1 billion anchor investment from ALTÉRRA, the world’s largest private climate investment fund. • On September 26, 2024, we completed our acquisition of Pinegrove Ventures (previously “SVB Capital”), the investment platform business of SVB Financial Group through Pinegrove Venture Partners (“Pinegrove”). Pinegrove is our venture investment platform formed and owned in partnership with Sequoia Heritage, focused on providing secondary solutions within the growth and technology sector. Pinegrove manages approximately $10 billion in assets. Corporate 2025 Activity – to date On January 9, 2025, BAM announced stock exchange approval of a share repurchase program to purchase up to 37.1 million Class A Shares, representing at the time approximately 10% of the public float of Class A Shares, through open market purchases on the NYSE and TSX. Under the share repurchase program, which commenced on January 13, 2025 and is set to expire on January 12, 2026, BAM has, as of March 7, 2025, purchased 1,110,543 Class A Shares at an average price of $53.27. On January 16, 2025, BAM announced the appointment of Bruce Flatt as Chair of the Board of BAM. He replaced Mark Carney, who on the same day announced his candidacy for the leadership of the Liberal Party of Canada. Concurrent with the launch of Mr. Carney's campaign, Brookfield accepted his resignation from BAM. On February 12, 2025, BAM declared a quarterly dividend of $0.4375 per share, representing a 15% increase relative to the prior year, payable on March 31, 2025, to shareholders of record as of the close of business on February 28, 2025. 2024 Activity On January 9, 2024, BAM announced stock exchange approval of a share repurchase program to purchase up to 34.6 million Class A Shares, representing at the time approximately 10% of the public float of Class A Shares, through open market purchases on the NYSE and TSX. Under the share purchase program, which commenced on January 11, 2024 and expired on January 10, 2025, BAM did not purchase any Class A Shares. On February 7, 2024, BAM declared a quarterly dividend of $0.38 per share, representing a 19% increase relative to the prior year, payable on March 28, 2024, to shareholders of record as of the close of business on February 29, 2024. On March 19, 2024, BAM announced the appointment of Hadley Peer Marshall as Chief Financial Officer of BAM, effective May 31, 2024. On October 31, 2024, BAM announced that it changed its head office to New York, NY. 18 Organizational Structure The following simplified diagram illustrates our organizational structure as at March 7, 2025. Employees We have a team of over 2,500 investment and asset management professionals that are integral to the business, including individuals focused on our core investment strategies and those undertaking various corporate activities. Approximately 270 of these are employed by BAM and the remainder are employed by the Asset Management Company and their subsidiaries. In 2024, BAM provided the services of our employees to the Asset Management Company on a cost recovery basis under the Asset Management Services Agreement. Our long-term approach to our business influences everything we do, including how we make investment decisions, how we support and oversee our businesses, and how we develop our people and compensate them. Our employee compensation programs link a significant portion of employee rewards to successful investment outcomes. Our emphasis on fostering collaboration enables us to benefit from a diverse set of skills and experiences. Our talent management processes and our approach to long-term compensation encourage collaboration. This shows itself in a number of ways, including in the sharing of expertise and best practices through both formal and informal channels and building relationships and capabilities through employee secondments and transfers. We have a group of dedicated operations professionals in all our key regions that have extensive experience leading businesses. We take an active role in enhancing the performance of the assets and businesses we acquire. As a result, our operations team is fully integrated – meaning our operations professionals sit alongside our experienced investment team working hand in hand from diligence to the execution of our business plan and through the monetization phase of an investment. The team works closely with the senior management teams of the companies in which we invest to develop and implement business improvements that enable us to increase cash flow and our return on capital. While enhancement opportunities may differ across assets and businesses, they generally involve a combination of strategic repositioning, focus on operational excellence and enhanced commercial execution. We recognize that people drive our success, and therefore hiring, developing and retaining our people is one of our top priorities. We do this by ensuring our people are constantly engaged and provide a wide range of development opportunities across all levels. We aim to create an environment that is built on strong relationships and conducive to developing our workforce, and where individuals from diverse backgrounds can thrive. Globally, we are supported by approximately 250,000 full-time operating employees (up 2% from approximately 240,000 in 2023). We also periodically hire contractors as needed to support the growth of our business. The chart below sets out our full-time operating employees by region as at December 31, 2024. 19 Other full time operating employees represents over 70 countries and no country makes up greater than 3% of the total balance. Competition BAM competes with many other firms in every aspect of our business, including raising funds, investments opportunities and hiring and retaining professionals. In our view, competition for fund investors is based primarily on investment performance, willingness to invest, investor perception of the investment manager, the investment manager's reputation, duration of relationships, quality of services, pricing, fund terms including fees, and the relative attractiveness of our present or future investments. We believe that competition for investment opportunities is based primarily on the pricing, terms and structure (including financing conditions) of a proposed investment and certainty of execution. Strong investment performance enhances our ability to compete for investors. Our investors and potential investors continually assess investment performance and our ability to raise capital for existing and future funds depends on our funds’ relative and absolute performance. If our investment returns or changes in investment mandates prevent us from raising further capital from our existing partners, we may need to identify and attract new investors in order to maintain or increase the size of our private funds. Further, as competition and disintermediation in the asset management industry increase, there may be pressure to reduce or modify our asset management fees, including base management fees and/or carried interest, or modify other terms governing our current asset management fee structure, in order to attract and retain investors. There are other funds focused on renewable power and transition, infrastructure, private equity, real estate, and credit strategies that compete for investor capital. Fund managers have also increasingly adopted investment strategies outside of their traditional focus. Furthermore, as institutional fund investors increasingly consolidate their relationships for multiple investment products with a few investment firms, competition for capital from such institutional fund investors may become more acute. Such consolidation may lead institutional fund investors to prefer more established investment firms, which could help us to compete against newer entrants or investment firms that are smaller in size or offer more limited types of investment strategies. Competition is also intense for the attraction and retention of qualified personnel. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new asset management and investment professionals and other employees and retain and motivate our existing personnel. For additional information regarding the competitive risks that we face, please see “Part I—Item 1A. Risk Factors”. 20 Risk Management Our Approach Focus on Risk Culture Maintain an effective risk culture that aligns our business strategy and activities with our risk tolerance Shared Execution Business and functional groups are primarily responsible for identifying and managing risks within their business Oversight and Coordination Consistent approach and practices across business and functional groups, with coordinated management of common risks Managing risk is an integral and critical part of our business. We have a well-established, proactive and disciplined risk management approach that is based on clear operating methods and a strong risk management culture. We ensure that we have the necessary capacity and resilience to respond to changing environments by evaluating both current and emerging risks. We adhere to a robust risk management framework and methodology that is designed to enable comprehensive and consistent management of risk across the organization. We use a thorough and integrated risk assessment process to identify and evaluate risk areas across the business, including human capital, climate change, cybersecurity, liquidity, disruption, regulatory compliance and other strategic, financial, and operational risks. Management and mitigation approaches are tailored to the specific risk areas and executed by business and functional groups for their businesses and areas of responsibility, with appropriate coordination and oversight through monitoring and reporting processes. Focus on Risk Culture A strong risk culture is the cornerstone of our risk management program: one that promotes measured and appropriate risk-taking, addresses current and emerging risks, and ensures employees conduct business with a long-term perspective and in a sustainable and ethical manner. This culture is reinforced by the strong commitment and leadership of our senior executives and supported by the policies and practices we have implemented, including our compensation approach. Shared Execution Given the diversified and decentralized nature of our operations, we seek to ensure that risk is managed as close to its source as possible and by management teams that have the most knowledge and expertise in the specific business or risk area. As such, business specific risks—such as health and safety, environmental and other operational risks—are generally managed at the operating business level, as the risks vary based on the nature of each business. At the same time, we monitor key risks organization-wide to ensure adequacy of risk management, adherence to applicable Brookfield policies, and sharing of best practices. For risks that are more pervasive and correlated in their impact across the organization—such as liquidity, foreign exchange and interest rates or where we can bring specialized knowledge—we utilize a coordinated approach that is centralized amongst our corporate and business groups. Management of strategic, reputational and regulatory and compliance risks are similarly coordinated to ensure consistent focus and implementation across the organization. Oversight and Coordination We have implemented strong governance practices to monitor and oversee our risk management program. Management committees bring together required expertise to manage key risk areas, ensuring appropriate application and coordination of risk management practices across our business and functional groups, and include the following: • Risk Management Steering Committee: supports the overall corporate risk management program, and coordinates risk assessment and mitigation on an enterprise-wide basis. • Investment Committees: oversee the investment process and review and approve investment transactions. • Conflicts Committee: resolves potential conflict situations in the investment process and other corporate transactions. • Financial Risk Oversight Committee: reviews and monitors financial exposures. • Sustainability Leadership: oversees, coordinates and implements activities related to sustainability, including current and future initiatives, and sector and market trends. • Safety Leadership Committee: promotes a strong safety culture, monitors safety trends, and sponsors strategic initiatives related to health, safety, security and environmental matters. • Net Zero Steering Committee: develops decarbonization targets, operationalizes decarbonization approaches and shares best practices across the organization. 21 • Disclosure Committee: oversees the public disclosure of material information. Regulatory Matters Our business, including our investment advisory and broker-dealer business, is subject to substantial and increasing regulatory compliance obligations and oversight, and this higher level of scrutiny gives rise to certain risks. See “Part I—Item 1A. Risk Factors—Risks Relating to our Business—We are subject to numerous laws, rules and regulatory requirements which may impact our business, including resulting in financial penalties, loss of business and/or damage to our reputation in instances of non-compliance”. Sustainability Sustainability at Brookfield We believe that value creation and sustainable business practices are complementary goals. We draw on our 100+ year heritage as an owner and operator to invest for value and seek to generate strong returns for our clients across economic cycles. Our investment strategy has remained unchanged throughout our firm’s history – we focus on utilizing our operational expertise to enhance long-term value through strategic and operational improvements within our operating businesses and portfolio companies. Our primary objective is to deliver strong risk-adjusted returns without compromise to our fiduciary duty. Our Sustainability Policy outlines our approach and is based on the following guiding principles: Mitigate the impact of our operations on the environment • Strive to minimize the environmental impact of operations and improve efficient use of resources over time. • Support the ambition of reaching net-zero greenhouse gas (“GHG”) emissions by 2050 or sooner. Strive to ensure the well-being and safety of employees • Foster a positive work environment based on respect for human rights, valuing diversity and having zero tolerance for workplace discrimination, violence or harassment. • Operate with leading health and safety practices to support the goal of achieving zero serious safety incidents. Uphold strong governance practices • Operate to the highest ethical standards by conducting business activities in accordance with our Code of Business Conduct and Ethics. • Maintain strong stakeholder relationships through transparency and active engagement. Be good corporate citizens • Strive to ensure the interests, safety and well-being of the communities in which we operate are integrated into our business decisions. • Support philanthropy and volunteerism by our employees. Our global sustainability policy codifies our longstanding strategy of integrating sustainability considerations into our decision-making. This policy is reviewed at least annually and, where applicable, updated periodically by our senior executives, as well as each of our business groups. Sustainability Affiliations and Partnerships Through our engagement with sustainability frameworks and organizations, we continue to evolve our sustainability reporting and protocols to align with leading practices. The following are some of the frameworks and organizations with which we are affiliated: • Principles for Responsible Investment (“PRI”) – We have been signatories to the PRI since 2020 and complete the PRI assessment annually, which reinforces our longstanding commitment to responsible investment and sustainability best practices. • International Financial Reporting Standards (“IFRS”) Sustainability Alliance – We are members of the IFRS Sustainability Alliance, a global program established to develop globally accepted accounting and sustainability disclosures. We review all of our memberships with external organizations periodically or in the event of material changes in their strategy or 22 operations to determine if they continue to be aligned with our objectives. Sustainability Organization and Governance Upholding robust sustainability programs throughout our firm, business groups, and encouraging our portfolio companies to do the same, remains an important priority. We understand that good governance is essential to sustainable business operations. The oversight of sustainability is integrated into our overall governance framework and is aligned with our governance approach. We are committed to upholding strong practices to monitor and oversee our business, including our overall approach to sustainability. Our Board is focused on maintaining strong corporate governance and prioritizing the interests of our shareholders. The Board oversees our business, including reviewing major strategic initiatives and receiving progress reports on the firm’s sustainability initiatives throughout the year. Our approach to sustainability has sponsorship and oversight from each business group’s CEO and sustainability leads, supported by senior executives, including the Chief Operating Officer (COO) of Brookfield (Governance, Operations and Risk Management) and BAM’s CEO of Renewable Power and Transition (Decarbonization and Investment), working in collaboration with BAM’s Chief Financial Officer (CFO) (GHG Reporting and Measurement). Since sustainability covers a significant range of priorities that are varied in scope, we believe that sustainability initiatives should be overseen by individuals closest to the particular business activity. Functional leads are responsible for developing, implementing and monitoring relevant sustainability factors within their functional area, such as Technology Services and Human Resources. Management teams and committees, including the Decarbonization Steering Committee and Safety Leadership Committee, bring together expertise to address key sustainability areas. This focuses on proper application and coordination of approaches across our business and functional groups. We organize working groups dedicated to specialized areas, such as the Sustainability Working Group and Decarbonization Operational Committee, to develop and coordinate initiatives to advance our overall sustainability efforts. Integrating Sustainability into Our Investment Process As part of our due diligence over investments where we have control or significant influence, we seek to assess sustainability-related opportunities and risks and factor them into the overall investment decision. This includes leveraging industry guidance to identify sustainability factors most likely to materially impact the financial condition or operating performance of companies in a sector. As part of our Sustainability Due Diligence Protocol, we provide specific guidance to investment teams on assessing bribery and corruption, cybersecurity, health and safety, human rights, modern slavery and climate-related risks. Where warranted, we perform deeper due diligence, working with internal and third-party experts as appropriate. Investments, other than de-minimis or follow on investments, must be approved by the applicable Investment Committee. Investment teams present the Investment Committee with the merits of the transaction, its material risks, mitigants and significant opportunities for improvement, including sustainability aspects and their implications for investment returns. As part of each acquisition, investment teams develop a customized integration plan that encompasses, among other items, significant sustainability-related matters for evaluation or implementation. We believe there is a strong correlation between managing these considerations appropriately and enhancing investment returns. Consistent with our management approach, it is the responsibility of management teams within each portfolio company to manage sustainability opportunities and risks through the investment’s life cycle, supported by our applicable investment teams. The combination of local accountability and expertise along with our investment and operating experience and insight is important when managing a wide range of asset types across jurisdictions. We leverage these capabilities in collaborating on sustainability initiatives, where appropriate, to drive returns. Where appropriate, we encourage our portfolio companies to organize training on a variety of sustainability matters for relevant staff. Management teams regularly report to their respective boards of directors from both financial and operating perspectives, including key performance indicators that incorporate material sustainability factors, such as health and safety, compliance with regulatory requirements, environmental management, and, increasingly, GHG emissions. For investments where we do not have a controlling interest, for example, where we are a debt investor or in other circumstances where we do not have the ability to exercise influence through our contractual rights, we actively monitor the performance of our investments and, where appropriate, utilize our stewardship and engagement practices to encourage sustainability outcomes that are aligned with our sustainability approach. When preparing an asset for divestiture, we seek to outline potential value creation deriving from several different factors, including relevant sustainability considerations. Where applicable, we also prepare both qualitative and quantitative data that summarize the sustainability performance of the investment and provide a holistic understanding of how we managed the investment during the holding period. 23 Stewardship and Engagement In managing our assets, we leverage our significant influence and operating capabilities to collaborate with our portfolio companies. We encourage sound sustainability practices that are essential for building resilient and profitable businesses, aiming to create long-term value for our investors and stakeholders. Due to the operational nature of our value creation methods, we focus on investing in private markets where we can often acquire controlling interests, or positions of significant influence, in order to deploy our operations-oriented investment strategies. As a result, proxy voting does not represent a significant portion of our investment activities. The majority of our proxy voting occurs within Brookfield’s Public Securities Group, which represents a very small portion of our overall business (approximately 1% of our AUM as of December 31, 2024). The following is a summary of some of the sustainability initiatives that we undertook in 2024. Environmental Emissions Reduction Initiatives As the world is transitioning to a lower-carbon economy, we view emissions reduction as a material value-creation opportunity. In 2021, we set an ambition to reach net zero by 2050 or sooner across operationally managed investments. Our net-zero ambition targets assets and investments where we can directly influence outcomes—termed “Operationally Managed Investments”—or those already pursuing a transition strategy for economic benefit. In selecting which of these assets are capable of making meaningful progress toward decarbonization targets, we prioritize Operationally Managed Investments where: • We consider such decarbonization steps will add value over the life of the investment; • We can operationally manage the outcomes; and • We are able to identify and implement actionable initiatives in the near term. Driving efficiency and, consequently, value is a cornerstone of our operations-oriented approach to investing. Therefore, we would expect the quantity and timing of GHG emissions reductions of our portfolio companies over time to be slightly ahead of industry and regional averages. While we view decarbonization as a meaningful operational efficiency lever, we acknowledge that transitioning to a net zero future is an ambition that is subject to many unknowns and uncertainties, including the future availability of required technologies, such as the need for greater battery storage capacity to support the introduction of greater intermittent renewable energy within electricity grids. Despite these challenges, we work with our portfolio companies to identify operational value-enhancement and decarbonization opportunities, including areas such as energy efficiency and electrification measures, amongst others, where our operations teams can work closely with senior management of our portfolio companies to support the implementation of these value-enhancing improvements. In doing so, we are supporting our portfolio companies in maximizing their value, while also achieving their decarbonization potential. This contributes to a future lower emissions economy, while delivering strong risk-adjusted returns for our investors. We eschew firm-wide policies purporting to exclude industries or sectors for investment across the energy landscape, including in respect of fossil-fuel-based generation, transportation, and distribution. Nor do we believe in divestment of high-emitting industries. We believe that there is significant value in supporting decarbonization initiatives of the highest-emitting industries where we can deliver the greatest level of impact. Leveraging our leading capabilities in development and operation of renewable power over the last 30 years, we launched our inaugural Brookfield Global Transition Fund (“BGTF I”), raising $15 billion of capital in 2022. This transition strategy focuses on building renewable power, providing capital to other decarbonization solutions, and targeting high-emission sectors to help businesses transition to sustainable business models and drive long-term value. Following BGTF I’s success, we launched BGTF II in 2023, which is expected to surpass the scale of its predecessor. Our investments in BGTF I and II aim to deliver strong risk-adjusted financial returns and meaningful decarbonization impacts. These funds seek to invest in clean energy expansion, sustainable solutions (i.e., carbon capture and storage, waste recycling,) and transforming companies in carbon-intensive sectors to more sustainable and value accretive business models. Beyond our global transition fund strategy, we do not limit our investments to those that meet specific sustainability criteria or standards. Through the expertise developed within our global transition strategy, we can offer resources and tools to help companies better identify operational value-enhancement and decarbonization opportunities. Across all investments, we invest capital on behalf of our clients with the primary objective of delivering strong risk-adjusted returns. 24 Water, Waste and Biodiversity Reducing the impact of our overall water consumption and waste generation helps build efficient systems, resiliency in our businesses and contributes to a sustainable future. We seek to utilize leading practices to efficiently monitor water usage and for certain portfolio companies, manage performance, with the objective to seek opportunities for water consumption reduction. In addition, we seek to adhere to all applicable local and regional waste regulations and track waste and recycling metrics. Encouraging the conservation of nature and its associated living organisms and ecosystem services is an important component in achieving our decarbonization goals and managing physical risks related to climate change. Social Culture Matters: Human Capital Development Our people are our most important asset. The core values of collaboration, entrepreneurship and discipline underpin our firmwide culture. We invest in our people and prepare them for future leadership. Our firmwide culture, from our dealings with clients to the interactions among employees and executives, is defined by mutual respect, teamwork and passion, and revolves around our core values: • Collaboration: Leadership works side by side with colleagues throughout the organization and is committed to achieving shared success. One of the key attributes that we screen carefully for in new hires is their aptitude to collaborate with others. The firm wants people to share information across groups and take an interest in all the businesses, not just the one they happen to work for at any particular point in time. We do not hire people just for a specific job; we hire for the potential of all the future positions they might hold and that will contribute to the broader success of the firm. We actively look for people who want to learn, grow, and develop—and demonstrate a willingness to be stretched outside their comfort zone. • Entrepreneurship: Our flat organization is results-oriented—responsibility is earned based on initiative and hard work, rather than job title—and decisions are made close to the action. This principle is not uncommon, but we have encouraged our entrepreneurial spirit throughout our growth during the past 20 years. We look for employees who have a passion not only for what they do but also for what the firm does. The shared values of ownership extend beyond helping the company succeed or generate more revenue. It means caring about the little things as well, such as not wasting money and treating everyone with respect. • Discipline: Our team shares an awareness of, and commitment to, our goal of generating superior long-term returns for investors. Discipline also requires that each person is expected to have a realistic understanding of his or her own abilities. We expect employees to understand their strengths, recognize their weaknesses, be willing to stretch outside their comfort zones, and be willing to ask for help when necessary. The three attributes—collaboration, entrepreneurship, and discipline—form the foundation of Brookfield and have been critical to the success of the partnership in building relationships that are long-lasting and mutually rewarding. By hiring talented people and giving them opportunities to move into different businesses, we have been able to build our expertise into a broad ecosystem that facilitates collaboration across different areas and geographies as needed. The teams draw on sound data and expertise to identify emergent themes—informing their investment process and enabling us to draw upon actionable intelligence for the benefit of its investors. Employee Composition The composition and makeup of our employee base is indicative of our focus that, as we grow, our people reflect the communities in which we operate. We recognize that a workforce encompassing a variety of backgrounds is critical to our success. A diverse workforce not only reinforces our core principles of long-term focus, alignment of interests, and collaboration, but also provides for a more dynamic and interesting work environment. We are committed to a hiring process that is objective, nondiscriminatory and in compliance with all applicable legislation and good governance. It is grounded in our commitment to provide equal employment opportunities with the objective of attracting the highest-qualified talent to our business. We proactively recruit people who align with the attributes of a Brookfield leader and have the potential to develop within our organization. Our succession process focuses on the development of early career candidates through stretch roles and exposure. Occupational Health and Safety Managing health and safety risk is an integral part of the management of our business. Our goal is to have zero serious safety incidents. We have implemented a health and safety governance initiative to propagate a strong health and safety culture, encourage the sharing of best practices and support the continuous improvement of safety performance to help eliminate serious safety incidents. The initiative is overseen by the Safety Leadership Committee, which comprises senior operations executives from across our business groups and regions. Portfolio company management is responsible for ensuring that their company’s health and safety policies and systems are developed, operationalized, and reviewed regularly to address their specific risk areas. Portfolio company CEOs are 25 accountable for the safety performance of their companies, and they report to their respective board of directors on this safety performance, safety incidents, and the status of improvement initiatives. Reports on overall health and safety trends and key initiatives are provided to the Board as part of the quarterly operational risk update. Human Rights and Modern Slavery Regarding human rights, we are committed to conducting our business in an ethical and responsible manner, including by carrying out our activities in a manner that respects fundamental human rights and supports the prevention of human rights violations within our business. We strive to embed this into our core business activities, including training, communications, contracts and due diligence processes set out in our Human Rights and Anti-Modern Slavery Policy (“Human Rights Policy”), Sustainability Due Diligence Protocol and Vendor Management Program. Integrity, fairness and respect are hallmarks of our culture, including carrying out our activities by respecting fundamental human rights and our efforts to identify and prevent human rights violations within our business and supply chain. We are committed to policies aimed at maintaining a workplace free of discrimination, violence and harassment, and we expect our staff to act in a way which promotes a positive working environment. Our Human Rights Policy aims to codify our approach to minimizing the risk of modern slavery within our business and supply chain. We also have specific processes aimed at identifying human rights and modern slavery as part of due diligence for new investments, which include risk assessments, remedies, training and governance. Where appropriate, these processes give consideration to the Organization for Economic Co-operation and Development (“OECD”) Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights as part of our due diligence process and ongoing management. In addition, our Human Rights Policy consolidates the relevant commitments set out in our Code of Conduct, Sustainability Policy, financial crimes policies, and Whistleblowing Policy. We have several additional policies and procedures that provide guidance on the identification of human rights and modern slavery risks and the steps to be taken to mitigate these risks. Governance Strong governance is essential to sustainable business operations, and we aim to conduct our business according to high ethical and legal standards. Sustainability Regulation and Frameworks Our governance practices are the foundation upon which we operate our business. We continuously adapt and enhance our policies to meet evolving standards and regulations across jurisdictions in which we operate. Data Privacy and Cybersecurity Data privacy and cybersecurity remain key sustainability focus areas for us. We undertake initiatives to further enhance our data protection and threat-intelligence capabilities, and to improve our third-party risk management processes. We review and update our cybersecurity program at least annually and conduct regular external-party assessments of our program maturity based on the National Institute of Standards and Technology Cybersecurity Framework. Additionally, we have continued mandatory cybersecurity education for all employees and enhanced our phishing simulations to include more advanced simulations and social engineering. For additional disclosure on our approach to data privacy and cybersecurity, see “Part I—Item 1C. Cybersecurity”, below. Website and Available Information Our website address is https://bam.brookfield.com . Information on our website is not incorporated by reference herein and is not a part of this report. We make available free of charge on our website or provide a link on our website to our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC. To access these filings, go to our website, and then visit the “Regulatory Filings” section under the “Reports & Filings” tab. These reports and the other documents we file with the SEC are available at a website maintained by the SEC at www.sec.gov. You can also access them on the CSA website at www.sedarplus.ca. From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding our company is routinely posted on and accessible at https://bam.brookfield.com . In addition, you may automatically receive e-mail alerts and other information about our company by enrolling your e-mail address by visiting the “Email Alerts” section of our website under the “Contacts & Alerts” tab. 26 ITEM 1A. RISK FACTORS You should carefully consider the following factors in addition to other information set forth in this Annual Report. If any of the following risks were actually to occur, our business, financial condition and results of operations and the prospects and value of the Class A Shares would likely suffer. Risks Relating to Our Business The trading price of the Class A Shares is subject to volatility due to market conditions and other factors and cannot be predicted. The market price of our Class A Shares may be volatile and could fluctuate significantly in response to factors both related and unrelated to our operating performance and/or future prospects, including, but not limited to: (i) variations in our operating results and financial condition; (ii) actual or prospective changes in government laws, rules or regulations affecting our business and our managed assets; (iii) material announcements by us, our affiliates or our competitors; (iv) the general state of the securities markets; (v) market conditions and events specific to the industries in which we and our managed assets operate; (vi) changes and developments in general economic, political, or social conditions, including as a result of pandemics/epidemics and related economic disruptions; (vii) changes in the values of our investments and distributions or changes in the amount of interest paid in respect of investments; (viii) differences between our actual financial results and those expected by investors and analysts; (ix) changes in analysts’ recommendations or earnings projections; (x) the depth and liquidity of the market for the Class A Shares; (xi) dilution from the issuance of additional equity; (xii) investor perception of our business, our managed assets and the sectors in which we deploy the funds from our strategies; (xiii) investment restrictions; (xiv) our dividend policy; (xv) the departure of key executives; (xvi) sales of Class A Shares by senior management or significant shareholders; and (xvii) the materialization of other risks. Deficiencies in our public company financial reporting and disclosures could adversely impact our reputation. As we expand the size and scope of our business, there is a greater susceptibility that our financial reporting and other public disclosure documents may contain material misstatements and that the controls we maintain to attempt to ensure the complete accuracy of our public disclosures may fail to operate as intended. The occurrence of such events could adversely impact our reputation and financial condition. In addition, we disclose certain metrics that do not have standardized meaning, are based on our own methodologies and assumptions and may not properly convey the information they purport to reflect. Management is responsible for establishing and maintaining adequate internal controls over financial reporting to give our stakeholders assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in conformity with U.S. GAAP. However, the process for establishing and maintaining adequate internal controls over financial reporting has inherent limitations, including the possibility of human error. In addition, we may exclude recently acquired companies from our evaluation of internal controls. Our internal controls over financial reporting may not prevent or detect misstatements in our financial disclosures on a timely basis, or at all. Some of these processes may be new for certain subsidiaries in our structure, and in the case of acquisitions, may take time to be fully implemented. Our disclosure controls and procedures are designed to provide assurance that information required to be disclosed by us in reports filed or submitted under U.S. and Canadian securities laws is recorded, processed, summarized and reported within the time periods specified. Our policies and procedures governing disclosures may not ensure that all material information regarding us is disclosed in a proper and timely fashion, or that we will be successful in preventing the disclosure of material information to a single person or a limited group of people before such information is generally disseminated. As at December 31, 2024, BAM used the equity method of accounting for its interest in our asset management business, and our asset management business’ results are not consolidated into BAM's financial statements, and therefore the recording of our asset management business’ transactions into its accounts is not part of BAM’s internal control structure. BAM has provided Asset Management Company stand-alone financial statements in this report. However, as of December 31, 2024, our asset management business was not independently required to meet Sarbanes-Oxley requirements and BAM did not have the same control and certification processes with respect to the information on our asset management business that it would have if it were a wholly-owned subsidiary of BAM. If BAM or our auditors were to conclude that our internal controls over financial reporting were not effective in respect of any reporting period, investors could lose confidence in our reported financial information and the price of our Class A Shares could decline. Our failure to achieve and maintain effective internal controls could have a materially adverse effect on our business, our ability to access capital markets and our reputation. In addition, material weaknesses in our internal controls could require significant expense and management time to remediate. 27 Investors may find it difficult or impossible to effect service of process and enforce judgments against us, our directors and our executive officers. BAM is headquartered in New York, NY, but some of its officers and directors are not residents of the United States, and a portion of the assets of BAM and said persons are located outside the United States. As a result, it may be difficult for U.S. investors to: (i) effect service of process within the United States upon BAM or those directors and officers who are not residents of the United States; or (ii) realize in the United States upon judgments of courts of the United States predicated upon the civil liability provisions of the United States federal securities laws. Investors outside of the U.S. will similarly find it difficult to enforce judgments obtained outside of the U.S. We are subject to numerous laws, rules and regulatory requirements which may impact our business, including resulting in financial penalties, loss of business and/or damage to our reputation in instances of non-compliance. There are many laws, governmental rules and regulations and listing exchange rules that apply to our business and our managed assets. Changes in these laws, rules and regulations, or their interpretation by governmental agencies or the courts, could adversely affect our business, our managed assets, or our prospects, or those of our affiliates, customers, clients or partners. The failure of BAM, our asset management business or the entities that we manage to comply with these laws, rules and regulations, or with the rules and registration requirements of the respective stock exchanges on which we and they are listed, could adversely affect our reputation and financial condition. Our business, including our investment advisory and broker-dealer business, is subject to substantial and increasing regulatory compliance obligations and oversight, and this higher level of scrutiny may lead to more regulatory enforcement actions. There continues to be uncertainty regarding the appropriate level of regulation and oversight of asset management businesses in a number of jurisdictions in which we operate. The financial services industry has been the subject of heightened scrutiny and enforcement actions. Regulatory investigations and/or enforcement actions by our regulators could have a material adverse effect on our business and/or reputation. In addition, the introduction of new legislation and increased regulations may result in increased compliance costs and could materially affect the manner in which we conduct our business and adversely affect our profitability. Although there may be some areas where governments in certain jurisdictions propose deregulation, it is difficult to predict the timing and impact of any such deregulation, and we may not materially benefit from any such changes. Our business is not only regulated in the U.S., but also in other jurisdictions where we conduct operations including, but not limited to, the E.U., the U.K., Canada, Brazil, Colombia, Australia, India and South Korea. Similar to the environment in the U.S., our business and how we market in jurisdictions outside the U.S. has become subject to further regulation. Governmental agencies around the world have proposed or implemented a number of initiatives and additional rules and regulations that could adversely affect our business and our managed assets, and governmental agencies may propose or implement further rules and regulations in the future. These rules and regulations may impact how we market in these jurisdictions and introduce compliance obligations with respect to disclosure and transparency, as well as restrictions on investor participation and distributions. Such regulations may also prescribe certain capital requirements on our managed assets, and conditions on the leverage our managed assets may employ and the liquidity these managed assets must have. Compliance with additional regulatory requirements will impose additional restrictions and expenses for us and could reduce our operating flexibility and fundraising opportunities. The broker-dealer side of our managed assets is regulated by the SEC, the various Canadian provincial securities commissions, as well as self-regulatory organizations, including the Financial Industry Regulatory Authority in the U.S. These regulatory bodies may conduct administrative or enforcement proceedings that can result in censure, fine, suspension or expulsion of a broker-dealer, its directors, officers or employees. Such proceedings, whether or not resulting in adverse findings, can require substantial expenditures and can have an adverse impact on the reputation of a broker-dealer. The advisors of certain of our managed assets are registered as investment advisers with the SEC. Registered investment advisers are subject to the requirements and regulations of the Investment Advisers Act of 1940, which grants U.S. supervisory agencies broad administrative powers, including the power to limit or restrict the carrying on of business for failure to comply with laws or regulations. If such powers are exercised, the possible sanctions that may be imposed include the suspension of individual employees, limitations on the activities in which the investment adviser may engage, suspension or revocation of the investment adviser’s registration, censure and fines. Compliance with these requirements and regulations results in the expenditure of resources, and a failure to comply could result in investigations, financial or other sanctions, and reputational damage. The Investment Company Act and the rules promulgated thereunder provide certain protections to investors and impose certain restrictions on entities that are deemed “investment companies” under the Investment Company Act. We are not currently, nor do we intend to become, an investment company under the Investment Company Act. To ensure that we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of our operations or plans and the types of acquisitions that we may make, and we may need to modify our organizational structure or dispose of assets that we would not otherwise dispose of. If we were required to register as an investment company, we would face severe limitations on the operation of our business. Among other things, we would be prohibited from engaging in certain business activities (or have conditions placed on our business activities), face 28 restrictions on engaging in transactions with affiliated entities and issuing certain securities or engaging in certain types of financings, be restricted with respect to the amount and types of borrowings we are permitted to obtain, be required to limit the amount of investments that we make as principal, and face other limitations on our activities. We have and may become subject to additional regulatory and compliance requirements as we expand our product offerings and investment platform which likely will carry additional legal and compliance costs, as well as additional operating requirements that may also increase costs. Our strategies primarily invest in renewable power and transition, infrastructure, business services, real estate and industrial assets. In doing so, our managed assets are required to comply with extensive and complex municipal, state or provincial, national and international laws and regulations. These laws and regulations can result in uncertainty and delays and impose additional costs, which may adversely affect our results of operations. Changes in these laws and regulations may negatively impact us and our managed assets or may benefit our competitors and their businesses. Additionally, liability under such laws, rules and regulations may occur without our fault. In certain cases, parties can pursue legal actions against us to enforce compliance as well as seek damages for non-compliance or for personal injury or property damage. Our insurance may not provide sufficient coverage in the event that a successful claim is made against us. Most of our funds rely on Rule 506 of Regulation D under the U.S. Securities Act to raise capital from investors. Rule 506 is not available to issuers deemed to be “bad actors” under Rule 506 if a covered person of the issuer has been the subject to certain criminal, civil or regulatory disqualifying events. Covered persons include, among others, the issuer, executive officer or other officer participating in the offering of the issuer, any general partner or managing member of the foregoing entities, any promoter of the issuer and any beneficial owner of 20% or more of the issuer’s outstanding voting equity securities. If one or more of our funds were to lose the ability to rely on the Rule 506 exemption because a covered person has been the subject of a disqualifying event, our business, financial condition and results of operations could be materially and adversely affected. Federal, state and foreign anti-bribery and corruption and trade sanctions laws and restrictions on foreign direct investment applicable to us and our managed assets create the potential for significant liabilities and penalties, the inability to complete transactions, imposition of significant costs and burdens, and reputational harm and we may also be subject to various governmental investigations. We are from time to time subject to various governmental investigations, audits and inquiries, both formal and informal. These investigations, regardless of their outcome, can be costly, divert management attention and damage our reputation. The unfavorable resolution of such investigations could result in criminal liability, fines, penalties or other monetary or non-monetary sanctions and could materially affect our business or results of operations. We are subject to a number of laws and regulations governing payments and contributions to public officials or other third parties both domestically and in respect of managed assets abroad, including the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), various federal and state corruption laws, and similar laws in non-U.S. jurisdictions, such as the U.K. Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act (the “CFPOA”) and Part IV of the Criminal Code (Canada), the Brazilian Clean Companies Act, the Australian Criminal Code Act 1995, the Indian Prevention of Corruption Act, and the Bermudian Bribery Act 2016. This global focus on anti-bribery and corruption enforcement may also lead to more investigations, both formal and informal, in this area, the results of which cannot be predicted. Instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be difficult to detect, in particular when conducting due diligence in connection with acquisitions, and fraud and other deceptive practices can be widespread in certain jurisdictions. We invest in emerging market countries that may not have established stringent anti-bribery and corruption laws and regulations, where existing laws and regulations may not be consistently enforced, or that are perceived to have materially higher levels of corruption according to international rating standards. Due diligence on investment opportunities in these jurisdictions is frequently more challenging because consistent and uniform commercial practices in such locations may not have developed or do not meet international standards. Bribery, fraud, accounting irregularities and corrupt practices can be especially difficult to detect in such locations. When acquiring assets in distress, the quality of financial information of the target may also make it difficult to identify irregularities. The FCPA prohibits bribery of non-U.S. officials, candidates for office and political parties, and requires U.S. companies to keep books and records that accurately and fairly reflect those companies’ transactions. Similar laws in non-U.S. jurisdictions, such as the U.K. Bribery Act 2010 and the CFPOA, as well as other applicable anti-bribery and corruption or related laws in the U.S. and abroad, may also impose stricter or more onerous requirements than the FCPA, and implementing them may disrupt our business or cause us to incur significantly more costs to comply with those laws. The policies and procedures we have implemented to comply with anti-bribery and corruption legislation may be inadequate. If we fail to comply with such laws and regulations, we could be exposed to claims for damages, financial penalties, incarceration of our employees, reputational harm, restrictions on our operations and other liabilities, which could negatively affect our operating results and financial condition. In addition, we may be subject to successor 29 liability for violations under these laws and regulations or other acts of bribery committed by entities in which we or our managed assets invest. We are also subject to laws and regulations governing trade and economic sanctions. The Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of Commerce and the U.S. Department of State administer and enforce various trade control laws and regulations, including economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals. These laws and regulations implicate a number of aspects of our business, including servicing existing fund investors, finding new fund investors, and sourcing new investments, as well as activities by our managed assets or other controlled investments. Some of these regulations provide that penalties can be imposed on us for the conduct of our managed assets, even if we have not ourselves violated any regulation. Similar laws in non-U.S. jurisdictions, such as the Special Economic Measures Act (Canada), the United Nations Act (Canada) and the Justice for Victims of Corrupt Foreign Officials Act (Canada), and E.U. sanctions, may also impose restrictions or requirements on us or our managed assets. Anti-corruption, anti-money laundering, economic sanctions, and trade control laws imposed by non-U.S. jurisdictions, such as EU and UK sanctions or blocking statutes and the UK Bribery Act, may also impose stricter or more onerous requirements than the FCPA, OFAC, the U.S. Department of Commerce, the U.S. Department of State or U.S. Department of Treasury, and implementing them may disrupt our business or cause us to incur significantly more costs to comply with those laws. Different laws may also contain conflicting provisions, making compliance with all laws more difficult.” In February 2022, the U.S. and other countries began imposing meaningful sanctions targeting Russia as a result of actions taken by Russia in Ukraine. We and our managed assets are required to comply with these and potentially additional sanctions imposed by the U.S. and by other countries, for which the full costs, burdens and limitations on our business and prospects are currently unknown and may become significant. In addition, the U.S. and many non-U.S. countries that have laws designed to protect national security or to restrict foreign direct investment. For example, under the United States Foreign Investment Risk Review Modernization Act, the Committee on Foreign Investment in the United States has the authority to review, block or impose conditions on investments by non-U.S. persons in U.S. companies or real assets deemed critical or sensitive to the U.S. Many non-U.S. jurisdictions have similar laws. For example, the E.U. has adopted an E.U.-wide mechanism to screen foreign investment on national security grounds and most E.U. member states now have a foreign investment screening mechanism in place or has initiated a consultative or legislative process expected to result in the adoption of a new mechanism or amendments to an existing mechanism, adopted a regulation aimed at regulation of foreign subsidies that could distort the internal E.U. market. Under these laws, governments have the authority to impose a variety of actions, including requirements for the advance screening or notification of certain transactions, blocking or imposing conditions on certain transactions, limiting the size of foreign equity investments or control by foreign investors, and restricting the employment of foreigners as key personnel. These actions could limit our ability to find suitable investments, cause delays in consummating transactions, result in the abandonment of transactions, and impose burdensome operational requirements on us or our managed assets. These laws could also negatively impact our fundraising and syndication activities by causing us to exclude or limit certain investors in our funds or co-investors for our transactions. Moreover, these laws may make it difficult for us to identify suitable buyers for our investments that we want to exit and could constrain the universe of exit opportunities generally. Complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us or our managed assets to comply with them could expose us to significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny, and reputational harm. Foreign exchange rate fluctuations could adversely impact our aggregate foreign currency exposure and hedging strategies may not be effective. We have pursued and intend to continue to pursue growth opportunities in international markets, and often deploy capital in countries where the U.S. dollar is not the local currency. As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. A significant depreciation in the value of the currency utilized in one or more countries where we have a significant presence may have a material adverse effect on the results of our operations and financial position. In addition, we are active in certain markets where economic growth is dependent on the price of commodities and the currencies in these markets can be more volatile as a result. Our business and our managed assets are impacted by changes in currency rates, interest rates, commodity prices and other financial exposures. We may selectively utilize financial instruments to manage these exposures, including credit default swaps and other derivatives to hedge certain of our financial positions. However, a significant portion of these risks may remain unhedged. We may also choose to establish unhedged positions in the ordinary course of business. There is no assurance that hedging strategies, to the extent they are used, will fully mitigate the risks they are intended to offset. Additionally, derivatives that we may use are also subject to their own unique set of risks, including counterparty risk with respect to the financial well-being of the party on the other side of these transactions and a potential requirement to fund mark-to-market adjustments. Our financial risk management policies may not ultimately be effective at managing these risks. 30 The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and similar laws in other jurisdictions impose rules and regulations governing oversight of the over-the-counter derivatives market and its participants. These regulations may impose additional costs and regulatory scrutiny on us. If our derivative transactions are required to be executed through exchanges or regulated facilities, we will face incremental collateral requirements in the form of an initial margin and require variation margin to be cash settled on a daily basis. Such an increase in margin requirements (relative to bilateral agreements) or a more restricted list of securities that qualify as eligible collateral, would require us to hold larger positions in cash and treasuries, which could reduce income. We cannot predict the effect of changing derivatives legislation on our hedging costs, our hedging strategy or its implementation, or the risks that we hedge. Regulation of derivatives may increase the cost of derivative contracts, reduce the availability of derivatives to protect against operational risk and reduce the liquidity of the derivatives market, all of which may reduce our use of derivatives and result in the increased volatility and decreased predictability of our cash flows. Further increases in interest rates could increase our interest costs and adversely affect our financial performance. Many long-life assets are interest rate sensitive. Further increases in interest rates will, other things being equal, decrease the value of an asset by reducing the present value of the cash flows expected to be produced by such asset. As the present value of an income-producing asset may decline as a result of interest rate increases, certain financial and other covenants under credit agreements governing such asset could be breached, even if we have satisfied and continue to satisfy our payment obligations thereunder. Such a breach could result in negative consequences on our financial performance and results of operations. Additionally, any of our debt or preferred shares that are subject to variable interest rates, either as an obligation with a variable interest rate or as an obligation with a fixed interest rate that resets into a variable interest rate in the future, are subject to interest rate risk. Further, the value of any debt or preferred share that is subject to a fixed interest rate will be determined based on the prevailing interest rates and, accordingly, this type of debt or preferred share is also subject to interest rate risk. In many jurisdictions in which we operate, a period of sharply increasing interest rates may cause certain market dislocations that could negatively impact our financial performance, increase the cost and impact the availability of debt financing and thereby negatively impact the ability of our managed assets to obtain attractive financing or refinancing and could increase the cost of such financing if obtained. Many factors may impact us and our managed assets, including interest rate increases, which would impact the amount of revenue generated by our managed assets and may lead to an increase in the amount of cash required to service our obligations. Political instability, changes in government policy or unfamiliar cultural factors could adversely impact the value of our investments. We are subject to geopolitical uncertainties in all jurisdictions in which we operate. We make investments in businesses that are based outside of the United States and we may pursue investments in unfamiliar markets, which may expose us to additional risks not typically associated with investing in the United States. We may not properly adjust to the local culture and business practices in such markets, and there is the prospect that we may hire personnel or partner with local persons who might not comply with our culture and ethical business practices; either scenario could result in the failure of our initiatives in new or existing markets and lead to financial losses for us and our managed assets. There are risks of political instability and significant changes in laws and policies in several of our major markets and in other parts of the world in which we conduct business from factors such as political conflict, tariffs and other protectionist trade policies, including the encouragement of the onshoring of manufacturing in the U.S. and other countries, income inequality, refugee migration, terrorism, armed conflict, the potential break-up of countries or political-economic unions and political corruption; the materialization of one or more of these risks could negatively affect our financial performance. Further, conflict in Eastern Europe has contributed to global economic uncertainty, resulted in volatility in fuel prices, and heightened cybersecurity and cyber-terrorism disruptions and threats. Further economic and political instability and the commencement, escalation or expansion of armed conflict in Eastern Europe, the Middle East, or elsewhere in the world could significantly disrupt the free movement of goods, services and people, have a destabilizing effect on energy markets and result in potential higher costs of conducting business. Similarly, the inability of local and national governments to effectively manage ongoing political disputes could result in local, regional and/or global instability. The materialization of one or more of these risks could negatively affect our financial performance and adversely impact our business. Any existing or new operations may be subject to significant political, economic and financial risks, which vary by country, and may include: (i) changes in government policies and regulations, including tariffs and other protectionist policies, or personnel; (ii) changes in general economic or social conditions; (iii) restrictions on currency transfer or convertibility; (iv) changes in labor relations; (v) military conflict, political instability and civil unrest; (vi) less developed or efficient financial markets than in North America; (vii) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements; (viii) less government supervision and regulation; (ix) a less developed legal or regulatory environment; (x) heightened exposure to corruption risk; (xi) political hostility to investments by foreign investors; (xii) less publicly available information in respect of companies in non-North American markets; (xiii) adversely higher or lower rates of inflation; (xiv) higher transaction costs; (xv) difficulty in enforcing contractual obligations and expropriation or confiscation of assets; and (xvi) fewer investor protections. 31 Unforeseen political events in markets where we have significant investors and/or where we have managed assets or may look to for further growth of our assets and businesses, such as the North American, South American, Australian, European, Middle Eastern and Asian markets, may create economic uncertainty that has a negative impact on our financial performance. Such uncertainty could cause disruptions to our businesses, including affecting our managed assets and/or our relationships with our investors, customers and suppliers, as well as altering the relationship among tariffs and currencies, including the value of foreign currencies relative to the U.S. dollar. Disruptions and uncertainties could adversely affect our financial condition, operating results and cash flows. In addition, political outcomes in the markets in which we operate may also result in legal uncertainty and potentially divergent national laws and regulations, which can contribute to general economic uncertainty. Economic uncertainty impacting us and our managed assets could be exacerbated by supply chain disruptions, trade policy and geopolitical tensions. Unfavorable economic conditions or changes in the industries in which we operate could adversely impact our financial performance. We are exposed to local, regional, national and international economic conditions and other events and occurrences beyond our control, including, but not limited to, the following: short-term and long-term interest rates; inflation; credit and capital market volatility; business investment levels; government spending levels; sovereign debt risks; consumer spending levels; changes in laws, rules or regulations; trade barriers; supply chain disruptions; commodity prices; currency exchange rates and controls; national and international political circumstances (including wars, terrorist acts or security operations); catastrophic events (including pandemics/epidemics, earthquakes, tornadoes or floods); the rate and direction of economic growth; and general economic uncertainty. On a global basis, certain industries and sectors have created capacity that anticipated higher growth, which has caused volatility across all markets, including commodity markets, which may have a negative impact on our financial performance. Unfavorable economic conditions could affect the jurisdictions in which our entities are formed and where we and our managed assets operate businesses, and may cause a reduction in: (i) securities prices; (ii) the liquidity of investments made by our managed assets; (iii) the value or performance of the investments made by our managed assets; and (iv) the ability of us and our managed assets to raise or deploy capital, each of which could adversely impact our financial condition. In general, a decline in economic conditions, either in the markets or industries in which our strategies invest, or both, will result in downward pressure on our operating margins and asset values as a result of lower demand and increased price competition for the services and products that we provide. In particular, given the importance of the U.S. to our operations, an economic downturn in this market could have a significant adverse effect on our operating margins and asset values. Many of our private funds have a finite life that may require us to exit an investment made in a fund at an inopportune time. Volatility in the exit markets for these investments, increasing levels of capital required to finance companies to exit and rising enterprise value thresholds to go public or complete a strategic sale can all contribute to the risk that we will not be able to exit a private fund investment successfully. We cannot always control the timing of our private fund investment exits or our realizations upon exit. See “—Actions or conduct that have a negative impact on our investors’ or stakeholders’ perception of us could adversely impact our ability to attract and/or retain investor capital and generate fee revenue”. If global economic conditions deteriorate, our investment performance could suffer, resulting in, for example, the payment of less or no carried interest to us. The payment of less or no carried interest to us could cause our cash flow from operations to decrease, which could materially adversely affect our liquidity position and the amount of cash we have on hand to conduct our operations. A reduction in our cash flow from our Fee-Bearing Capital strategies and products could, in turn, require us to rely on other sources of cash such as the capital markets, which may not be available to us on acceptable terms, or debt and other forms of leverage. In addition, in an economic downturn, there is an increased risk of default by counterparties to our investments and other transactions. In these circumstances, it is more likely that such transactions will fail or perform poorly, which may in turn have a material adverse effect on our business, results of operation and financial condition. Inflationary pressures could adversely impact our businesses. Our managed assets are impacted by inflationary pressures. While inflation has eased and central banks began reducing interest rates in the second half of 2024, past price increases continue to affect households and weigh on confidence and spending power. The potential for increased tariffs and trade barriers, as well as increased geopolitical risks, adds uncertainty to the long term outlook for inflation and interest rates and a reacceleration of inflation could trigger a reversal in recent interest rate decreases. Interest rate increases or other government actions taken to reduce inflation could also result in recessionary pressures in many parts of the world. Interest rate risk poses a significant market risk to us as a result of interest rate-sensitive assets and liabilities held by us and our managed assets. Higher interest rates or elevated interest rates for a sustained period could also result in an economic slowdown. Economic contraction or further deceleration in the rate of growth in certain industries, sectors or geographies may contribute to poor financial results at our managed assets. While regulated and contractual arrangements in our managed assets can provide significant protection against inflationary pressures, any sustained upward trajectory in the inflation rate may still have an impact on our managed assets and our investors, and could impact our ability to source suitable investment opportunities, match or exceed prior investment strategy performance and secure attractive debt financing, all of which could adversely impact our managed assets and our growth and capital recycling initiatives. 32 Catastrophic events (or combination of events), such as earthquakes, tornadoes, floods, wildfires, pandemics/epidemics, climate change, military conflict/war or terrorism/sabotage, could adversely impact our financial performance. Our managed assets could be exposed to effects of catastrophic events, such as severe weather conditions, natural disasters, major accidents, pandemics/epidemics, acts of malicious destruction, climate change, war/military conflict or terrorism, which could materially adversely impact our operations. A local, regional, national or international outbreak of a contagious disease, such as COVID-19, which spreads across the globe at a rapid pace impacting global commercial activity and travel, or future public health crises, epidemics or pandemics, could materially and adversely affect our results of operations and financial condition due to disruptions to commerce, reduced economic activity and other unforeseen consequences that are beyond our control. Natural disasters and ongoing changes to the physical climate in which we and our managed assets operate may have an adverse impact on our business, financial position, results of operations or cash flows. Changes in weather patterns or extreme weather (such as floods, wildfires, droughts, hurricanes and other storms) may negatively affect our managed assets’ operations or damage assets that we may own or develop. Further, rising sea levels could, in the future, affect the value of any low-lying coastal real assets that we may manage. Climate change may increase the frequency and severity of severe weather conditions and may change existing weather patterns in ways that are difficult to anticipate. Responses to these changes could result in higher costs, such as the imposition of new property taxes and increases in insurance rates or additional capital expenditures. Our managed assets forming part of our commercial office strategy are concentrated in large metropolitan areas, some of which have been or may be perceived to be threatened by terrorist attacks or acts of war. Furthermore, many of such properties consist of high rise buildings that may also be subject to this actual or perceived threat. The perceived threat of a terrorist attack or outbreak of war could negatively impact our ability to lease office space in our managed real estate portfolio. Renewable power and infrastructure assets that we manage, such as roads, railways, power generation facilities and ports, may also be targeted by terrorist organizations or in acts of war. Any damage or business interruption costs as a result of uninsured or underinsured acts of terrorism or war could result in a material cost to us and could adversely affect our business, financial condition or results of operation. Adequate terrorism insurance may not be available at rates we believe to be reasonable in the future. These risks could be heightened by foreign policy decisions of the U.S. (where we have significant operations) and other influential countries or general geopolitical conditions. Additionally, our managed assets rely on free movement of goods, services and capital from around the globe. Any slowdown in international investment, business or trade as a result of catastrophic events could also have a material adverse effect on our business, financial position, results of operations or cash flows. Ineffective management of environmental and sustainability issues, including climate change, and inadequate or ineffective health and safety programs could damage our reputation, adversely impact our financial performance and lead to regulatory action. There is increasing stakeholder interest in sustainability considerations and how they are managed. Sustainability considerations include climate change, human capital and labor management, corporate governance, diversity and privacy and data security, among others. Increasingly, investors and lenders are incorporating sustainability considerations into their investment or lending process, respectively, alongside traditional financial considerations. Investors or potential investors may not invest in all our products given certain industries in which we operate. If we are unable to successfully integrate sustainability considerations into our practices, we may incur a higher cost of capital, lower interest in our debt securities and/or equity securities or otherwise face a negative impact on our business, operating results and cash flows and result in reputational damage. Certain of our managed assets may be subject to compliance with laws, regulations, regulatory rules and/or guidance relating to sustainability, and any failure to comply with these laws, regulations, regulatory rules or guidance could expose us to material adverse consequences, including loss, limitations on our ability to undertake licensable business, legal liabilities, financial and non-financial sanctions and penalties, and/or reputational damage. Sustainability requirements imposed by jurisdictions in which we do business, such as the E.U. Sustainable Finance Disclosure Regulation (2019/2088), could (a) result in additional compliance costs, disclosure obligations or other implications or restrictions; and/or (b) impact our established business practices, cost base and, by extension, our profitability. Sustainability-related requirements and market practices differ by region, industry and issue and are evolving dynamically, and the sustainability requirements applicable to us, our managed assets or our assessment of such requirements or practices may change over time. Under emerging sustainability requirements, we may be required to classify our businesses against, or determine the alignment of underlying investments under, Sustainability-related legislative and regulatory criteria and taxonomies, some of which can be open to subjective interpretation. Our view on the appropriate classifications may develop over time, including in response to statutory or regulatory guidance or changes in industry approach to classification. A change to the relevant classification may require further actions to be taken, for example it may require further disclosures, or it may require new processes to be set up to capture data, which may lead to additional cost, disclosure obligations or other implications or restrictions. 33 The transition to a lower-carbon economy has the potential to be disruptive to traditional business models and investment strategies. Efforts to limit global warming may give rise to changes in regulations, reporting and consumer sentiment that could have a negative impact on our existing operations by increasing the costs of operating our business or reducing demand for our products and services. The adverse effects of climate change and related regulation at state, provincial, federal or international levels could have a material adverse effect on our business, financial position, results of operations or cash flows. The ownership and operation of some of our managed assets carry varying degrees of inherent risk or liability related to worker health and safety and the environment, including the risk of government-imposed orders to remedy unsafe conditions and contaminated lands and potential civil liability. Compliance with health, safety and environmental standards and the requirements set out in the relevant licenses, permits and other approvals obtained by the managed assets is crucial. Our managed assets have incurred and will continue to incur significant capital and operating expenditures to comply with sustainability requirements, including health and safety standards, to obtain and comply with licenses, permits and other approvals, and to assess and manage potential liability exposure. Nevertheless, they may be unsuccessful in obtaining or maintaining an important license, permit or other approval or become subject to government orders, investigations, inquiries or other proceedings (including civil claims) relating to health, safety and environmental matters, any of which could have a material adverse effect on us. Health, safety and environmental laws and regulations can change rapidly and significantly, and we and/or our managed assets may become subject to more stringent laws and regulations in the future. The occurrence of any adverse health, safety or environmental event, or any changes, additions to, or more rigorous enforcement of, health, safety and environmental standards, licenses, permits or other approvals could have a significant impact on operations and/or result in material expenditures. Owners and operators of real assets may become liable for the costs of removal and remediation of certain hazardous substances released or deposited on or in their properties, or at other locations regardless of whether the owner and operator caused the release or deposit of such hazardous materials. These costs could be significant and could reduce cash available for our managed assets. The failure to remove or remediate such substances, if any, could adversely affect our ability to sell our assets or to borrow using these assets as collateral, and could potentially result in claims or other proceedings. Certain of our managed assets are involved in using, handling or transporting substances that are toxic, combustible or otherwise hazardous to the environment and may be in close proximity to environmentally sensitive areas or densely populated communities. If a leak, spill or other environmental incident occurred, it could result in substantial fines or penalties being imposed by regulatory authorities, revocation of licenses or permits required to operate the business, the imposition of more stringent conditions in those licenses or permits or legal claims for compensation (including punitive damages) by affected stakeholders. Global sustainability challenges, such as greenhouse gas emissions, privacy and data security, demographic shifts and regulatory pressures are introducing new risk factors for us that we may not have dealt with previously. We are also engaged with various sustainability frameworks and organizations through which we have stated certain ambitions and commitments regarding sustainability best practices. If we are unable to successfully manage our sustainability compliance, this could have a negative impact on our reputation and our ability to raise capital and could be detrimental to our economic value and the value of our managed assets. Failure to maintain the security of our information and technology systems could have a material adverse effect on us. We rely on the use of technology and information systems, many of which are controlled by third-party service providers, which may not be able to accommodate our growth or may increase in cost and may become subject to cyber-terrorism or other compromises and shut-downs, and any failures or interruptions of these systems could adversely affect our businesses and results of operations. We and our managed assets operate in businesses that are dependent on information systems and other technology, such as computer systems used for information storage, processing, administrative and commercial functions as well as the machinery and other equipment used in certain parts of our operations. In addition, our managed assets rely on telecommunication services to interface with their business networks and customers. The information and embedded systems of key business partners and regulatory agencies are also important to our operations. We rely on this technology functioning as intended. Our information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on us. We rely heavily on certain financial, accounting, communications and other data processing systems. We collect, store and use large amounts of sensitive information, including personally identifiable information, through our information technology systems. Our information technology systems face ongoing cybersecurity and cyber-terrorism threats and attacks, which could result in the failure of such infrastructure. We may in the future be subject to cyber-terrorism or other cybersecurity risks or other breaches of information technology security, noting the increasing frequency, sophistication and severity of these kinds of incidents. In particular, our information technology systems may be subject to cyber-terrorism intended to obtain unauthorized access to our proprietary information, personally identifiable information or to client or third-party data stored on our systems, destroy or disable our data, and/or that of our business partners, disclose confidential data in breach of data privacy legislation, destroy data or disable, degrade or 34 sabotage our systems, through the introduction of computer viruses, cyber-attacks and other means. Such attacks could originate from a wide variety of sources, including internal actors or unknown third parties. Further, unauthorized parties may also gain physical access to our facilities and infiltrate our information systems or attempt to gain access to information and data. The sophistication of these threats continue to evolve and grow, including the risk associated with the use of emerging technologies, such as artificial intelligence and quantum computing, for nefarious purposes. We cannot predict what effects such cyber-attacks or compromises or shut-downs may have on our business and on the privacy of the individuals or entities affected, and the consequences could be material. Cyber incidents may remain undetected for an extended period, which could exacerbate these consequences. The costs to eliminate or address the foregoing security threats and vulnerabilities before or after a cyber-incident could be material. A significant actual or potential theft, loss, corruption, exposure, fraudulent, unauthorized or accidental use or misuse of investor, policyholder, employee or other personally identifiable or proprietary business data, whether by third parties or as a result of employee malfeasance or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation and regulatory actions against us by governments, various regulatory organizations or exchanges, or affected individuals, in addition to significant reputational harm and/or financial loss, and it may not be possible to recover losses suffered from such incidents under our insurance policies. In addition, our operating equipment may not continue to perform as it has in the past, and there is a risk of equipment failure due to wear and tear, latent defect, design or operator errors or early obsolescence, among other things. A breach of our cybersecurity measures or the failure or malfunction of any of our computerized business systems, associated backup or data storage systems could cause us to suffer a disruption in one or more parts of our business and experience, among other things, financial loss, reputational damage, a loss of business opportunities, misappropriation or unauthorized release of confidential or personal information, damage to our systems and those with whom we do business, violation of privacy and other laws, litigation, regulatory penalties and remediation and restoration costs as well as increased costs to maintain our systems. We are reliant on third party service providers for certain aspects of our business, including for the administration of certain funds we manage, as well as for certain information systems and technology platforms, trustee services, legal services, technology, administration, tax, accounting and compliance matters. A disaster, disruption or compromise in technology or infrastructure that supports our managed assets, including a disruption involving electronic communications or other services used by us, our vendors or third parties with whom we conduct business, may have an adverse impact on our ability to continue to manage our assets without interruption which could have a material adverse effect on us. These risks could increase as vendors increasingly offer cloud-based software services rather than software services that can be operated within our own data centers. These risks also increase to the extent we engage with vendors and third-party services providers in jurisdictions with which we are not familiar. In addition to the fact that these third-party service providers could also face ongoing cybersecurity threats and compromises of their systems, we generally have less control over the delivery of such third-party services, and as a result, we may face disruptions to our ability to manage an asset as a result of interruptions of such services. A prolonged global failure of cloud services provided by a variety of cloud services providers that we engage could result in cascading systems failures for us. Although we are continuing to develop measures to ensure the integrity of our systems, we can provide no assurance that our efforts or those of third-party service providers will be successful in protecting our systems and preventing or ameliorating damage from a cyber incident. Data protection and privacy rules have become a focus for regulators globally. For instance, the European General Data Protection Regulation (“GDPR”) sets out data protection rules for individuals that are residents of the E.U. The GDPR imposes stringent rules and penalties for non- compliance. Other countries where we operate are enacting or amending data protection, artificial intelligence and other technology laws to empower regulators to impose financial penalties and injunctions on certain data processing activities, which could have an adverse effect on our business. We and our managed assets may become involved in legal disputes in the U.S. and internationally that could adversely impact our financial performance and reputation. In the normal course of our and our managed assets’ businesses, we become involved in various legal actions, including claims relating to personal injury, property damage, property taxes, land rights and contract and other commercial disputes. The investment decisions we make and the activities of our investment professionals on behalf of our managed assets may subject us and our managed assets to the risk of third-party litigation. Further, we have significant operations in the U.S. which may, as a result of the prevalence of litigation in the U.S., be more susceptible to legal action than certain of our other competitors. The final outcome with respect to outstanding, pending or future litigation cannot be predicted with certainty, and the resolution of such actions may have an adverse effect on our financial position or results of our operations in a particular quarter or fiscal year. Any litigation may consume substantial amounts of our management’s time and attention, and that time and the devotion of these resources to litigation may, at times, be disproportionate to the amounts at stake in the litigation. Even if ultimately unsuccessful against us, any litigation has the potential to adversely affect our business, including by damaging our reputation. 35 Losses not covered by insurance may be large, which could adversely impact the assets under management. We and our managed assets carry various insurance policies in relation to our respective business activities. These policies contain policy specifications, limits and deductibles that may mean that such policies do not provide coverage or sufficient coverage against all potential material losses. We or those also part of the group policy may also self-insure a portion of certain of these risks, and therefore we may not be able to recover from a third-party insurer in the event that we, if we had separate insurance coverage from a third party, could make a claim for recovery. There are certain types of risk (generally of a catastrophic nature such as war or environmental contamination) that are either uninsurable or not economically insurable. Further, there are certain types of risk for which insurance coverage is not equal to the full replacement cost of the insured assets. Should any uninsured or underinsured loss occur, we could lose our anticipated profits and cash flows from one or more of our assets under management. We also carry directors’ and officers’ liability insurance (“D&O insurance”) for losses or advancement of defense costs in the event a legal action is brought against our directors, officers or employees for alleged wrongful acts in their capacity as directors, officers or employees. Our D&O insurance contains certain customary exclusions that may make it unavailable for us in the event it is needed; and in any case our D&O insurance may not be adequate to fully protect us against liability for the conduct of our directors, officers or employees. We may also self-insure a portion of our D&O insurance, and therefore we may not be able to recover from a third-party insurer in the event that we, if we had D&O insurance from a third-party insurer, could make a claim for recovery. For economic efficiency and other reasons, we may enter into insurance policies as a group (which may include BN) that are intended to provide coverage for the entire group. Where group policies are in place, any payments under such policy could have a negative impact on other entities covered under the policy as they may not be able to access adequate insurance in the event it is needed. While management attempts to design coverage limits under group policies to ensure that all entities covered under a policy have access to sufficient insurance coverage, there are no guarantees that these efforts will be effective in obtaining this result. Inability to collect amounts owing to us could adversely impact financial performance. Third parties may not fulfill their payment obligations to us, which could include money, securities or other assets, thereby impacting our operations and financial results. These parties include deal and trading counterparties, governmental agencies, customers and financial intermediaries. Third parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure, general economic conditions or other reasons. We manage assets that loan money to distressed companies, either privately or via an investment in publicly traded debt securities. As a result, we actively take heightened credit risk in other entities from time to time and whether we realize satisfactory investment returns on these loans is uncertain and may be beyond our control. If some of these debt investments fail, our financial performance could be negatively impacted. Investors in our private funds, including BN and its affiliates, make capital commitments to these vehicles through the execution of subscription agreements. When a private fund makes an investment, these capital commitments are then satisfied by our investors via capital contributions. Investors in our private funds may default on their capital commitment obligations, which could have an adverse impact on our earnings or result in other negative implications to our business and our managed assets, such as the requirement to redeploy our own capital to cover such obligations. This impact would be magnified if the investor that does so is in multiple funds. We are subject to operating and financial restrictions through covenants in our loan, debt and security agreements. BAM and its subsidiaries are subject to operating and financial restrictions through covenants in our loan, debt and security agreements. These restrictions may prohibit or limit our ability to, among other things, incur additional debt, provide guarantees for indebtedness, grant liens, dispose of assets, liquidate, dissolve, amalgamate, consolidate or effect corporate or capital reorganizations, declare distributions, issue equity interests and create subsidiaries. A financial covenant in our corporate bank credit facilities may limit our overall indebtedness to a percentage of distributable earnings, a restriction which may limit our ability to obtain additional financing, withstand downturns in our business and take advantage of business and development opportunities. If we breach our covenants, our credit facilities may be terminated or come due and such an event may cause our credit rating to deteriorate and subject BAM to higher interest and financing costs. From time to time, we also acquire businesses and assets that have debt obligations that are in default. We may also be required to seek additional debt financing on terms that include more restrictive covenants and/or higher interest rates, change of control restrictions, require repayment on an accelerated schedule or impose other obligations that limit our ability to grow our business, acquire needed assets, exit investments in assets or portfolio companies, or take other actions that we might otherwise consider appropriate or desirable. The material assets of BAM consist solely of its interest in the common shares of the Asset Management Company. The material assets of BAM consist solely of its interest in the common shares of the Asset Management Company. After giving effect to the 2025 Arrangement, BAM owns 100% of the Asset Management Company. 36 BAM depends on distributions and other payments from our asset management business to provide it with the funds necessary to meet its financial obligations, as well as pay dividends to shareholders. BAM intends to pay dividends to shareholders on a quarterly basis equal to approximately 90% of its Distributable Earnings in the preceding quarter and our asset management business intends to pay dividends to BAM on a quarterly basis sufficient to ensure that BAM can pay its intended dividend. Dividends will be variable and will change in line with the growth of Distributable Earnings. The declaration and payment of any dividends will be at the discretion of the Board (and the board of the Asset Management Company), and may change at any time, including, without limitation, to reduce such quarterly dividends or to eliminate such dividends entirely. Our asset management business and our managed assets are legally distinct from BAM and some of them are or may become restricted in their ability to pay dividends and distributions or otherwise make funds available to BAM pursuant to local law, regulatory requirements and their contractual agreements, including agreements governing their financing arrangements. Our asset management business and our managed assets will generally be required to service their debt and other obligations before making distributions to BAM. BAM is solely liable for the debts and liabilities of the asset management business. The Asset Management Company is an unlimited liability company and certain of its subsidiaries are also unlimited liability companies. As a result, after giving effect to the 2025 Arrangement whereby BAM acquired 100% of the Asset Management Company, it became liable for the payment of the debts and liabilities of the Asset Management Company on a liquidation or dissolution. If BAM has assets other than its interest in the asset management business, and if the assets of the asset management business are not sufficient to cover its debts and liabilities (including those arising as a result of its obligations towards its unlimited liability company subsidiaries), then BAM would be required to contribute its assets to the Asset Management Company, further reducing the assets of BAM available to its shareholders. Risks Relating to our Investment Activities Actions or conduct that have a negative impact on our investors’ or stakeholders’ perception of us could adversely impact our ability to attract and/or retain investor capital and generate fee revenue. The growth of our business relies on continuous fundraising for various private and public investment products, and retention of capital raised from third-party investors. We depend on our business relationships and our global reputation for integrity and high-caliber asset management services to attract and retain investors and advisory clients, and to pursue investment opportunities for our clients. Our business relationships and reputation could be negatively impacted by a number of factors, including: poor performance; actual, potential or perceived conflicts of interest that are not adequately addressed; misconduct or alleged misconduct by employees; rumors or innuendos; or failed or ineffective implementation of new investments or strategies. If we are unable to continue to raise and retain capital from third-party investors, including from BN, either privately, publicly or both, or otherwise are unable to pursue our investment opportunities, this could materially reduce our revenue and cash flows and adversely affect our financial condition. Poor performance of any kind could damage our reputation with current and potential investors in our managed assets, making it more difficult for us to raise new capital. Investors may decline to invest in current and future managed assets and may withdraw their investments from our managed assets as a result of poor performance in the entity in which they are invested, and investors in our private funds may demand lower fees for new or existing funds, all of which would decrease our revenue. As a global alternative asset manager with various lines of business and investment products, some of which have overlapping mandates, we may be subject to a number of actual, potential or perceived conflicts of interest. In addressing these conflicts, we have implemented a variety of policies and procedures; however, there can be no assurances that these will be effective at mitigating actual, potential or perceived conflicts of interest in all circumstances, or will not reduce the positive synergies that we seek to cultivate. It is also possible that actual, potential or perceived conflicts of interest, if not properly addressed, could give rise to investor dissatisfaction, litigation, regulatory enforcement actions or other detrimental outcomes. See “Risks Relating to BAM — Our organizational and ownership structure may create conflicts of interest that may be resolved in a manner that is not in our best interests or the best interests of our shareholders”. Appropriately dealing with conflicts of interest for an asset manager like us is a priority and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with actual, potential or perceived conflicts of interest. Asset manager conflicts are subject to enhanced regulatory scrutiny in the markets in which we operate and in the U.S. in particular. Such regulatory scrutiny can lead to fines, penalties and other negative consequences. Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, business, financial condition or results of operations in a number of ways, including an inability to adequately capitalize existing managed assets or raise new managed assets, including private funds, and a reluctance of counterparties to do business with us. For information regarding conflicts of interests between the businesses within our asset management operations that operate on opposite sides of an information barrier, see “—Information barriers may give rise to certain conflicts and risks and investment teams managing the activities of businesses that operate on opposite sides of an information barrier will not be aware of, and will not have the ability to manage, such conflicts and risks” herein. 37 Our reputation could also be negatively impacted if there is misconduct or alleged misconduct by our personnel or those of our managed assets, including historical misconduct prior to the investment in such managed asset. Risks associated with misconduct at our managed assets is heightened in cases where we do not have legal control or significant influence over a particular managed asset or are not otherwise involved in actively managing an investment. In such situations, given our management position and affiliation with the managed asset, we may still be negatively impacted from a reputational perspective through this association. In addition, even where we have management over an asset, if it is a newly acquired asset that we are in the process of integrating then we may face reputational risks related to historical or current misconduct or alleged misconduct at such managed asset for a period of time. We may also face an increased risk of misconduct to the extent investments in operating assets in emerging markets and distressed companies increases. If we face allegations of improper conduct by private litigants or regulators, whether the allegations are valid or invalid or whether the ultimate outcome is favorable or unfavorable to us, such allegations may result in negative publicity and press speculation about us, our investment activities or the asset management industry in general, which could harm our reputation and may be more damaging to our business than to other types of businesses. We are subject to a number of obligations and standards arising from our business and our authority over the assets we manage. The violation of these obligations and standards by any of our employees may adversely affect our partners and our business and reputation. Our business often requires that we deal with confidential matters. If our employees were to improperly use or disclose confidential information, or a security breach results in an inadvertent disclosure of such information, we could suffer serious harm to our reputation, financial position and current and future business relationships. It is not always possible to detect or deter employee misconduct or security breaches, and the precautions we take in this regard may not be effective. Implementation of new investment and growth strategies involves a number of risks that could result in losses and harm to our professional reputation, including the risk that the expected results are not achieved, that new strategies are not appropriately planned for or integrated, that new strategies may conflict with, detract from or compete against our managed assets, and that the investment process, controls and procedures that we have developed will prove insufficient or inadequate. Furthermore, our strategic initiatives may include joint ventures, in which case we will be subject to additional risks and uncertainties in that we may be dependent upon and subject to liability, losses or reputational damage relating to systems, controls and personnel that are not under our complete control or under the control of another. In addition to impacting our ability to raise and retain third-party capital and pursue investment opportunities, certain of the risks identified herein that may have a negative impact on our reputation also could, in extreme cases, result in our removal as general partner or an acceleration of the liquidation date of the private funds that we manage. The governing agreements of our private funds provide that, subject to certain conditions (which may, particularly in the case of our removal as general partner, include final legal adjudications of the merits of the particular issue), third-party investors in these funds will have the right to remove us as general partner or to accelerate the liquidation date of the fund. Additionally, at any time, investors may seek to terminate a fund and accelerate the liquidation date upon the vote of a super-majority of investors in such fund. A significant negative impact to our reputation would be expected to increase the likelihood that investors could seek to terminate a private fund. This effect would be magnified if, as is often the case, an investor is invested in more than one fund. Such an event, were it to occur, would result in a reduction in the fees we would earn from such fund, particularly if we are unable to maximize the value of the fund’s investments during the liquidation process or in the event of the triggering of a “clawback” for fees already paid out to us as general partner. We face risks specific to our renewable power and transition strategies. Our renewable power and transition strategies invest in assets that are subject to changes in the weather, hydrology and price, but also include risks related to equipment or dam failure, counterparty performance, water rental costs, land rental costs, changes in regulatory requirements and other material disruptions. The revenues generated by the power facilities we manage are correlated to the amount of electricity generated, which in turn is dependent upon available water flows, wind, irradiance and other elements beyond our control. Hydrology, wind and irradiance levels vary naturally from year to year and may also change permanently because of climate change or other factors. It is therefore possible that low water, wind and irradiance levels at certain of our power generating operations could occur at any time and potentially continue for indefinite periods. A portion of the renewable power and transition revenue is tied, either directly or indirectly, to the wholesale market price for electricity, which is impacted by a number of external factors beyond our control. Additionally, a portion of the power that is generated is sold under long-term power purchase agreements, shorter-term financial instruments and physical electricity contracts which are intended to mitigate the impact of fluctuations in wholesale electricity prices; however, they may not be effective in achieving this outcome. Certain of the power purchase agreements of our managed assets will be subject to re-contracting in the future. If the price of electricity in power markets is declining at the time of such re-contracting, it may impact our ability to re-negotiate or replace these contracts on terms that are acceptable to us. Conversely, what appears to be an attractive price at the time of re-contracting could, if power prices rise over the power purchase agreement’s term, result in us having committed to sell power in the future at below market rate. If we are unable to re-negotiate or replace these contracts, or unable to secure prices at least equal to the current prices we receive, our business, financial condition, results of operation and prospects could be adversely affected. 38 In our renewable power and transition portfolio, there is a risk of equipment failure due to severe weather conditions (including as a result of climate change), wear and tear, latent defect, design error or operator error, among other things. The occurrence of such failures could result in a loss of generating capacity and repairing such failures could require the expenditure of significant capital and other resources. Failures could also result in exposure to significant liability for damages due to harm to the environment, to the public generally or to specific third parties. Equipment that our renewable power and transition operations need, including spare parts and components required for project development, may become unavailable or difficult to procure, inhibiting our ability to maintain full availability of existing plants and also our ability to complete development projects on scope, schedule and budget. In certain cases, some catastrophic events may not excuse us from performing our obligations pursuant to agreements with third parties and we may be liable for damages or suffer further losses as a result. Our renewable power and transition portfolio is exposed to performance and operational risks in respect of certain nuclear technologies. The nuclear fuel and power industries are heavily regulated and could be significantly impacted by changes in government policies and priorities such as increased regulation and/or more onerous operating requirements that negatively impact our nuclear technology services. A future accident at a nuclear reactor could result in the shutdown of existing plants or impact the continued acceptance by the public and regulatory authorities of nuclear energy and the future prospects for nuclear generators. Accidents, terrorism, natural disasters or other incidents occurring at nuclear facilities or involving shipments of nuclear materials could reduce the demand for nuclear technology services. The ability of the platforms we manage to develop greenfield renewable power projects in our development pipeline may be affected by a number of factors, including the state of capital markets, the ability to secure project financing (including from equity investors and through tax and other government incentives), the ability to secure approvals, licenses and permits and the ability to secure a long-term power purchase agreement or other sales contracts on reasonable terms. The development of our pipeline of greenfield renewable power projects is also subject to environmental, engineering and construction risks that could result in cost-overruns, delays and reduced performance. New regulatory initiatives related to sustainability could adversely impact our managed assets. While we believe that regulatory initiatives and market trends towards an increased focus on sustainability are generally beneficial to our renewable power and transition group, any such regulatory initiatives also have the potential to adversely impact us. For example, regulatory initiatives seeking to reorient investment toward sustainability by regulating green financial products could have the effect of increasing burdensome disclosure requirements around sustainability and prescribing approaches to sustainability policies that are inconsistent with our current practices. If regulators disagree with the sustainability disclosures that we make, or with the categorization of our financial products, we may face regulatory enforcement action, and our business or reputation could be adversely affected. We face risks specific to our infrastructure strategies. Our infrastructure managed assets include utilities, transport, midstream and data businesses. Our infrastructure assets include toll roads, telecommunication towers, electricity transmission systems, terminal operations, electricity and gas distribution companies, residential infrastructure, rail networks, ports and data centers. The principal risks facing the regulated and unregulated businesses comprising our infrastructure assets relate to government regulation, general economic conditions and other material disruptions, counterparty performance and capital expenditure requirements. Many of the infrastructure assets we manage are subject to government regulation, including with respect to revenues and environmental sustainability. If any of the respective regulators in the jurisdictions in which we operate decides to change the tolls or rates we are allowed to charge or the amounts of the provisions we are allowed to collect, we may not be able to earn the rate of return on our investments that we had planned, or we may not be able to recover our initial cost. With environmental regulation becoming more stringent, our managed assets may become subject to increasing environmental responsibility and liability. These regulations may result in increased costs to our managed assets that may not be able to be passed onto their customers and may have an adverse impact on prospects for growth of some businesses. General economic conditions (including those resulting from climate change and severe weather conditions) affect international demand for the commodities handled and services provided by operators in our infrastructure managed assets. A downturn in the economy generally or specific to any of our infrastructure managed assets, may lead to a reduction in volumes, disruption to business, bankruptcies or liquidations of one or more large customers, which could reduce our revenues, increase our bad debt expense, reduce our ability to make capital expenditures or have other adverse effects on us. Some of our managed assets have customer contracts as well as concession agreements in place with public and private sector clients. Our managed assets with customer contracts could be adversely affected by any material change in the assets, financial condition or results of operations of such customers. Protecting the quality of our revenue streams through the inclusion of take-or-pay or guaranteed minimum volume provisions into our contracts is not always possible or fully effective. 39 Some of our managed assets may require substantial capital expenditures to maintain their asset base. Any failure to make necessary expenditures to maintain their operations could impair their ability to serve existing customers or accommodate increased volumes. In addition, we may not be able to recover investments in capital expenditures based upon the rates our operations are able to charge. We face risks specific to our private equity strategies. The principal risks for our private equity managed assets are potential loss of invested capital as well as insufficient investment or fee income to cover operating expenses and cost of capital. Our private equity platform is invested in industrial operations, business services operations and infrastructure services operations, many of which can be cyclical and/or illiquid and therefore may be difficult to monetize at our discretion, limiting our flexibility to react to changing economic or investment conditions. In addition, increasingly we have certain managed assets that provide goods and services directly to consumers across a variety of industries. These businesses are prone to greater liabilities, as well as reputational, litigation and other risks by virtue of being more public-facing and reliant on their ability to develop and preserve consumer relationships and achieve consumer satisfaction. Unfavorable economic conditions could negatively impact the ability of our managed assets to repay debt. Adverse economic conditions facing our managed assets may adversely impact the value of our investments or deplete our financial or management resources. These investments are also subject to the risks inherent in the underlying businesses, some of which are facing difficult business conditions and may continue to do so for the foreseeable future. These risks are compounded by recent growth, as new acquisitions have increased the scale and scope of our operations, including in new geographic areas and industry sectors, and we may have difficulty managing these additional operations. We may deploy our client’s capital in managed assets that are experiencing significant financial or business difficulties, including companies involved in work-outs, liquidations, spin-outs, reorganizations, bankruptcies and similar transactions. Such an investment entails the risk that the transaction will be unsuccessful, will take considerable time or will result in a distribution of cash or new securities, the value of which may be less than the purchase price of the securities in respect of which such distribution is received. In addition, if an anticipated transaction does not occur, we may be required to sell our investment at a loss. These managed assets may become subject to legal and/or regulatory proceedings and our investment may be adversely affected by external events beyond our control, leading to legal, indemnification or other expenses. We have several managed assets that operate in the highly competitive service industry. A wide variety of micro and macroeconomic factors affecting our clients and over which we have no control can impact how these companies operate. For example, our Canadian residential mortgage insurer is subject to significant regulation and may be adversely affected by changes in government policy. The majority of the revenue from our healthcare services operation is derived from private health insurance funds, which may be affected by a deterioration in the economic climate, a change in economic incentives, increases in private health insurance premiums and other factors. In addition, alternative technologies in the health care industry could impact the demand for, or use of, our services and could impair or eliminate the competitive advantage of our businesses in this industry. Our infrastructure services operations include companies in lottery services, marine transportation and work access services. Our lottery services operation is heavily dependent on long-term contracts and failure to win, maintain and renew these contracts could substantially impact revenue. Our lottery services operation also often requires entering into strategic relationships with third parties, including competitors, which we do not control, and which may have inconsistent business interests or goals from us. Marine transportation and oil production are inherently risky, particularly in the extreme conditions in which many of our vessels operate. An incident involving significant loss of product or environmental contamination by any of our vessels could harm our reputation and business. Our work access services business is subject to the risks inherent to construction operations, including risks relating to seasonal fluctuations in the demand for our services, a dependence on labor and performance being materially impacted by a lack of availability of labor force or increases in the cost of labor available, and operational hazards that could result in personal injury or death, work stoppage or serious property and equipment damage. We face risks specific to our real estate strategies. Our real estate strategies invest in commercial properties and are therefore exposed to certain risks inherent in the commercial real estate business. Commercial real estate investments are subject to varying degrees of risk depending on the nature of the property. These risks include changes in general economic conditions (such as the availability and cost of mortgage capital), local conditions (such as an oversupply of space or a reduction in demand for real estate in the markets in which we operate), the attractiveness of the properties to tenants, competition from other landlords and our ability to provide adequate maintenance at an economical cost. Certain expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs and related charges, must be made whether or not a property is producing sufficient income to service these expenses. These commercial properties are typically subject to mortgages that require debt service payments. If we become unable or unwilling to meet mortgage payments on any property, losses could be sustained as a result of the mortgagee’s exercise of its rights of foreclosure or of sale. Continuation of rental income is dependent on favorable leasing markets to ensure expiring leases are renewed and new tenants are found promptly to fill vacancies. It is possible that we may face a disproportionate amount of space expiring in any one year. 40 Additionally, rental rates could decline, tenant bankruptcies could increase, and tenant renewals may not be achieved, particularly in the event of an economic slowdown. Our real estate strategies invest in businesses that operate in industries or geographies that may be impacted by a local, regional, national or international outbreak of a contagious disease. Adverse impacts on our managed assets may also include: • a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action and climate change events including hurricanes, earthquakes, tsunamis and other natural and man-made disasters; • a slowdown in business activity may severely impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to fund their business operations, meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations; • an increase in re-leasing timelines, potential delays in lease-up of vacant space and the market rates at which such lease will be executed; • reduced economic activity could result in a prolonged recession, which could negatively impact consumer discretionary spending; and • expected completion dates for our development and redevelopment projects may be subject to delay as a result of the disruption of local economic conditions. The retail real estate assets in our managed assets are susceptible to any economic factors that have a negative impact on consumer spending. Lower consumer spending would have an unfavorable effect on the sales of our retail tenants, which could result in their inability or unwillingness to make all payments owing to us, and on our ability to keep existing tenants and attract new tenants. Significant expenditures associated with each equity investment in real estate assets, such as mortgage payments, property taxes and maintenance costs, are generally not reduced when there is a reduction in income from the investment, so our income and cash flow would be adversely affected by a decline in income from our retail properties. In addition, low occupancy or sales at our retail properties, as a result of competition or otherwise, could result in termination of or reduced rent payable under certain of our retail leases, which could adversely affect our retail property revenues. The hospitality and multifamily assets in our managed assets are subject to a range of operating risks common to these industries, many of which are outside our control, and the profitability of our investments in these industries may be adversely affected by these factors. For example, our hospitality business faces risks relating to climate change; hurricanes, earthquakes, tsunamis and other natural and man-made disasters; the potential spread of contagious diseases; and insect infestations more common to rental accommodations. Such factors could limit or reduce the demand for or the prices our hospitality properties are able to obtain for their accommodations or could increase our costs and therefore reduce the profitability of our hospitality businesses. There are numerous housing alternatives that compete with our multifamily properties, including other multifamily properties as well as condominiums and single-family homes. This competitive environment could have a material adverse effect on our ability to lease apartment homes at our present properties or any newly developed or acquired real estate, as well as on the rents realized. We face risks specific to our credit strategies. Our credit strategies offer a broad range of strategies to our investors. Similar to our other private funds managed across different strategies, we earn base management fees on our credit strategies and, in certain cases, carried interest on fund capital and separate accounts in our credit strategies. Cyclicality is important to credit strategies and weak economic environments have tended to afford some of the best investment opportunities and relative investment performance to such strategies. Any prolonged economic expansion or recession could have an adverse impact on certain credit strategies and materially affect the ability to deliver attractive investment returns for clients or generate incentive or other income in respect of those strategies. Growth in Fee-Bearing Capital could be adversely impacted by poor product development or marketing efforts. In addition, investment returns could be lower than target returns due to inappropriate allocation of capital or ineffective investment management. Our business depends on our ability to fundraise third-party capital, deploy that capital effectively and produce targeted investment returns. Our ability to raise third-party capital depends on a number of factors, including many that are outside our control such as the general economic environment and market conditions (including the performance of the stock market), investment rules or policies to which third party investors are subject, and the number of other investment funds being raised at the same time by our competitors. Investors may reduce (or even eliminate) their investment allocations to alternative investments, including closed-ended private funds. Investors that are required to maintain specific asset class allocations within their portfolio may be required to reduce their investment allocations to alternative investments, particularly during periods when other asset classes, such as public securities, are decreasing in 41 value. In addition, investors may prefer to insource and make direct investments; therefore, becoming competitors and ceasing to be clients and/or making new capital commitments. Our initiatives to expand our retail investor base, including outside of the U.S., require the investment of significant time, effort and resources, including the potential hiring of additional personnel, the implementation of new operational, compliance and other systems and processes and the development or implementation of new technology. There is no assurance that our efforts to grow our retail assets under management will be successful. Competition from other asset managers for raising public and private capital is intense, with competition based on a variety of factors, including investment performance, the quality of service provided to investors, the quality and availability of investment products, marketing efforts, investor liquidity and willingness to invest, and reputation. Poor investment performance could hamper our ability to compete for these sources of capital or force us to reduce our management fees. Our investors and potential investors continually assess investment performance and our ability to raise capital for existing and future funds depends on our funds’ relative and absolute performance. If poor investment returns or changes in investment mandates prevent us from raising further capital from our existing partners, we may need to identify and attract new investors in order to maintain or increase the size of our private funds, and there are no assurances that we will be able to find new investors. Further, as competition and disintermediation in the asset management industry increase, we may face pressure to reduce or modify our asset management fees, including base management fees and/or carried interest, or modify other terms governing our current asset management fee structure, in order to attract and retain investors. The successful execution of our investing strategy is uncertain as it requires suitable opportunities, careful timing and business judgment, as well as the resources to complete asset purchases and restructure them, if required, notwithstanding difficulties experienced in a particular industry. There is no certainty that we will be able to identify suitable or sufficient opportunities that meet our investment criteria and be able to acquire additional high-quality assets at attractive prices to supplement our growth in a timely manner, or at all. In pursuing investment opportunities and returns, we and our managed assets face competition from other investment managers and investors worldwide. Each of our strategies is subject to competition in varying degrees and our competitors may have certain competitive advantages over us when pursuing investment opportunities. Some of our competitors may have higher risk tolerances, different risk assessments, lower return thresholds, a lower cost of capital, or a lower effective tax rate (or no tax rate at all), all of which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments. We may lose investment opportunities in the future if we do not match investment prices, structures and terms offered by our competitors, some of whom may have synergistic businesses which allow them to consider bidding a higher price than we can reasonably offer. While we will continue to attempt to deal with competitive pressures by leveraging our asset management strengths and the operating capabilities of BN and compete on more than just price, there is no guarantee these measures will be successful, and we may have difficulty competing for investment opportunities, particularly those offered through auction or other competitive processes. If we are unable to successfully raise, retain and deploy third-party capital into investments, or make acquisitions which yield attractive returns, we may be unable to collect management fees, carried interest or transaction fees, which would materially reduce our revenue and cash flows and adversely affect our financial condition. Our approach to investing may entail adding assets to our existing managed assets through tuck-in acquisitions when the competition for assets is weakest; typically, when depressed economic conditions exist in the market relating to a particular entity or industry. Such an investing style carries with it inherent risks when investments are made in either markets or industries that are undergoing some form of dislocation. We may fail to value opportunities accurately or to consider all relevant factors that may be necessary or helpful in evaluating an opportunity, may underestimate the costs necessary to bring an acquisition up to standards established for its intended market position, may be exposed to unexpected risks and costs associated with these investments, including risks arising from alternative technologies that could impair or eliminate the competitive advantage of our managed assets in a particular industry, and/or may be unable to quickly and effectively integrate new acquisitions into existing operations or exit from the investment on favorable terms. In addition, liabilities may exist that we or our managed assets do not discover in due diligence prior to the consummation of an acquisition, or circumstances may exist with respect to the entities or assets acquired that could lead to future liabilities and, in each case, we or our managed assets may not be entitled to sufficient, or any, recourse against the contractual counterparties to an acquisition. We generally pursue investment opportunities that involve business, regulatory, legal and other complexities. Our tolerance for complexity presents risks, as completing complex transactions on behalf of our managed assets can be more difficult, expensive and time-consuming to finance and execute, and have a higher risk of execution failure. It can also be more difficult to manage or realize value from the assets acquired in such transactions and such transactions sometimes entail a higher level of regulatory scrutiny or a greater risk of contingent liabilities. At times, we make investments (for one or more of our funds or managed assets) in companies that we do not control. These investments are subject to the risk that the company in which the investment is made may make business, financial or management decisions with which we do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our interests. 42 Certain strategies may be concentrated in particular asset types or geographic regions, which could exacerbate any negative performance of one or more of our managed assets to the extent those concentrated investments are in assets or regions that experience market dislocation. In addition, certain of our funds hold publicly traded securities, the price of which will be volatile and are likely to fluctuate due to a number of factors beyond our control, including actual or anticipated changes in the profitability of the issuers of such securities; general economic, social, or political developments; changes in industry conditions; changes in governance regulation; inflation; the general state of the securities markets; pandemics/epidemics; and other material events. The failure of a newly acquired business to perform according to expectations could have a material adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flows. Alternatively, we may be required to sell a business before it has realized our expected level of returns for such business. If any of our managed investments perform poorly or experience prolonged periods of volatility, or we are unable to deploy capital effectively, our fee-based revenue, cash available for distribution and/or carried interest would decline. Accordingly, our expected returns on these investments may be less than we have assumed in forecasting the value of our business. Our cash flow must be available to meet our financial obligations when due and enable us to capitalize on investment opportunities when they arise. We employ debt and other forms of leverage in the ordinary course of business to enhance returns. We are therefore subject to the risks associated with debt financing (directly and indirectly through our managed assets) and refinancing, including but not limited to the following: (i) our cash flow may be insufficient to meet required payments of principal and interest; (ii) payments of principal and interest on borrowings may leave us with insufficient cash resources to pay operating expenses and dividends; (iii) if we are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at high interest rates or on other unfavorable terms, we may have difficulty completing acquisitions or may generate profits that are lower than would otherwise be the case; (iv) we may not be able to refinance indebtedness at maturity due to company and market factors such as the estimated cash flow produced by our assets, the value of our assets, liquidity in the debt markets and/or financial, competitive, business and other factors; and (v) if we are able to refinance our indebtedness, the terms of a refinancing may not be as favorable as the original terms for such indebtedness. If we are unable to refinance our indebtedness on acceptable terms, or at all, we may need to utilize available liquidity, which would reduce our ability to pursue new investment opportunities, or we may need to dispose of one or more of our or our managed assets on disadvantageous terms, or raise equity, thereby causing dilution to existing shareholders. Regulatory changes or changes in economic or market conditions may also result in higher borrowing costs and reduced access to credit. The terms of our various credit agreements and other financing documents may require us to comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios, adequate insurance coverage and certain credit ratings. These covenants may limit our flexibility in conducting our business and our cash flows, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, even if we have satisfied and continue to satisfy our payment obligations. A large proportion of our managed assets include physical assets and securities that can be hard to sell, especially if market conditions are poor. Further, because our investment strategy can entail our having representation on public company boards, we may be restricted in our ability to affect sales during certain time periods. A lack of liquidity could limit our ability to vary our managed assets promptly in response to changing economic or investment conditions. Additionally, if financial or operating difficulties of other owners result in distress sales, such sales could depress asset values in the markets in which we manage assets. The restrictions inherent in managing physical assets could reduce our ability to respond to changes in market conditions and could adversely affect the performance of investments across our fund strategies, our financial condition and our results of operations. Because there is significant uncertainty in the valuation of, or in the stability of the value of illiquid or non-public investments, the fair values of such investments do not necessarily reflect the prices that would actually be obtained when such investments are realized. Realizations at values significantly lower than the values at which investments have been recorded would result in losses, a decline in asset management fees and the potential loss of carried interest and incentive fees. Additionally, from time to time, we may guarantee the obligations of other entities that we manage. If we are required to fund these commitments and are unable to do so, this could result in damages being pursued against us or a loss of opportunity through default under contracts that are otherwise to our benefit. We may be exposed to risks associated with acquisitions. Part of BAM’s growth strategy involves seeking acquisition opportunities. We will face competition for acquisitions, including from our competitors, many of whom will have greater financial resources than us. There can be no assurance that we will identify and successfully complete acquisitions that will advance our growth strategy, or at all. Though we are not currently pursuing any strategic acquisitions, future acquisitions will likely involve some or all of the following risks, which could materially and adversely affect our business, financial condition or results of operations: the difficulty of integrating the acquired operations and personnel into our current operations; potential disruption of our current operations; diversion of resources, including our management’s time and 43 attention; the difficulty of managing the growth of a larger organization; the risk of entering markets in which we have little experience; the risk of becoming involved in labor, commercial or regulatory disputes or litigation related to the new enterprise; the risk of environmental or other liabilities associated with the acquired business; and the risk of a change of control resulting from an acquisition triggering rights of third parties or government agencies under contracts with, or authorizations held by, the managed assets being acquired. It is possible that due diligence investigations into businesses being acquired may fail to uncover all material risks, or to identify a change of control trigger in a material contract or authorization, or that a contractual counterparty or government agency may take a different view on the interpretation of such a provision to that taken by us, thereby resulting in a dispute. We may be required to make temporary investments and backstop commitments with respect to our business and managed assets and may be unable to syndicate, assign or transfer such investments and commitments. We periodically may be asked to enter into agreements that commit us to acquire or stand in place of another entity to acquire assets or securities in order to support our managed assets with the expectation that our commitment is temporary. For example, we may acquire an asset suitable for a particular managed business that is fundraising and warehouse that asset through the fundraising period before transferring the asset to the managed business for which it was intended. As another example, our asset management business may commit capital for a particular acquisition transaction as part of a consortium alongside certain of our managed assets with the expectation that we will syndicate or assign all or a portion of our own commitment to investors prior to, at the same time as, or subsequent to, the anticipated closing of the transaction. In all of these cases, our support is intended to be of a temporary nature, and we engage in this activity in order to further the growth and development of our asset management business. Even if our asset management business’ direct participation is intended to be of a temporary nature, our asset management business may be unable to syndicate, assign or transfer its interest or commitment as our asset management business intended and therefore may be required to take or keep ownership of assets or securities for an extended period. This would increase the amount of our asset management business’ own capital deployed to certain assets and could have an adverse impact on our asset management business’ liquidity, which may negatively impact its ability to meet other financial commitments. Our revenues may be adversely affected by a decline in the size or pace of investments made by our managed assets. Our revenue is driven in part by the pace at which our funds make investments and the size of those investments, and a decline in the pace or the size of such investments may reduce our revenues. In particular, in recent years we have meaningfully increased the number of perpetual strategies we offer and the assets under management in such strategies. The fees we earn from our perpetual capital strategies represent a significant and growing portion of our overall revenues. If our funds, including our perpetual capital strategies, are unable to deploy capital at a sufficient pace, our revenues would be adversely impacted. Many factors could cause a decline in the pace of investment, including a market environment characterized by relative high prices, the inability of our investment professionals to identify attractive investment opportunities, competition for such opportunities among other potential acquirers, decreased availability of capital on attractive terms. Further, we may fail to consummate identified investment opportunities because of business, regulatory or legal complexities or uncertainty and adverse developments in the markets in which we operate, financial markets or geopolitical conditions, and our ability to deploy capital in certain countries may be adversely impacted by government policy changes and regulations. Our revenue, earnings, net income and cash flow can materially vary from quarter to quarter, which may affect our earnings growth and dividend on a quarterly basis and can affect the trading price of the Class A Shares. Our revenue, net income and cash flow, substantially all of which is derived from our asset management business, can vary materially due to our reliance on incentive distributions and performance-based returns, such as carried interest. We may experience fluctuations in our results, including our revenue and net income, from quarter to quarter due to a number of other factors, including timing of realizations, changes in the valuations of our funds’ investments, changes in the amount of distributions, dividends or interest paid in respect of investments, changes in our operating expenses, the degree to which we encounter competition and general economic and market conditions. Achieving steady growth in net income and cash flow on a quarterly basis may be difficult, which could in turn cause our dividend and our ability to pay dividends to fluctuate and lead to large adverse movements or general increased volatility in the price of the Class A Shares. We also do not provide any guidance regarding our expected quarterly and annual operating results. The lack of guidance may affect the expectations of public market analysts and could cause increased volatility in the Class A Shares. Our cash flow may fluctuate significantly due to the fact that we receive carried interest from certain of our funds only when investments are realized and achieve a certain preferred return. The payment of performance-based returns, including carried interest, depends on the applicable funds’ performance and opportunities for realizing gains, which may be limited. It takes a substantial period of time to identify attractive investment opportunities, to raise all the funds needed to make an investment and then to realize the cash value (or other proceeds) of an investment through a sale, public offering, recapitalization or other exit. Even if an investment proves to be profitable, it may be a number of years before any profits can be realized in cash (or other proceeds). We cannot predict when, or if, any realization of investments will occur. The mark-to-market valuations of investments made by our funds are subject to volatility driven by economic and market conditions. Economic and market conditions may also negatively impact our realization opportunities. 44 The valuations of and realization opportunities for investments made by our funds could also be subject to high volatility as a result of uncertainty regarding governmental policy with respect to, among other things, tax, financial services regulation, international trade, immigration, healthcare, labor, infrastructure and energy. In addition, upon the realization of a profitable investment by any of our funds featuring performance-based returns and prior to our receiving any carried interest in respect of that investment, 100% of the proceeds of that investment must generally be paid to the investors in such fund until they have recovered certain fees and expenses and achieved a certain return on all realized investments by that fund as well as a recovery of any unrealized losses. A particular realization event may have a significant impact on our results for that particular quarter that may not be replicated in subsequent quarters. We recognize revenue on investments in our funds based on our allocable share of realized and unrealized gains (or losses) reported by such funds, and a decline in realized or unrealized gains, or an increase in realized or unrealized losses, would adversely affect our revenue and possibly cash flow, which could further increase the volatility of our quarterly results. Because our funds have preferred return thresholds to investors that need to be met prior to our receiving any carried interest or other performance-based returns, substantial declines in the carrying value of the investment portfolios of such funds can significantly delay or eliminate any performance-based returns paid to us in respect of that fund since the value of the assets in the fund would need to recover to their aggregate cost basis plus the preferred return over time before we would be entitled to receive any performance-based returns, including carried interest, from that fund. The timing and receipt of performance-based returns also varies with the life cycle of our funds. During periods in which a relatively large portion of our assets under management is attributable to funds and investments in their “harvesting” period, our funds would make larger distributions than in the fundraising or investment periods that precede harvesting. During periods in which a significant portion of our assets under management is attributable to funds that are not in their harvesting periods, we may receive substantially lower performance-based returns, including carried interest. The varying frequency of payments of our different funds and strategies will contribute to the volatility of our cash flow. Furthermore, we earn this incentive income only if the net asset value of a vehicle has increased or, in the case of certain vehicles, increased beyond a particular return threshold, or if the vehicle has earned a net profit. Certain of these vehicles also have “high water marks” whereby we do not earn incentive income during a particular period even though the vehicle had positive returns in such period as a result of losses in prior periods. If one of these vehicles experiences losses, we will not earn incentive income from it until it surpasses the previous high water mark. The incentive income we earn is therefore dependent on the net asset value or the net profit of the vehicle, which could lead to significant volatility in our results. Our access to retail investors and selling retail directed products in numerous jurisdictions opens us up to potential litigation and regulatory enforcement risks. In 2021, we created a business group in partnership with Oaktree to serve the global wealth management channel, delivering access to Brookfield and Oaktree’s private and public funds. Our goal is to increase the number and type of investment products we offer to high-net-worth individuals and mass affluent investors in the U.S. and other jurisdictions around the world. In some cases, our unregistered funds are distributed to retail investors indirectly through third-party managed vehicles sponsored by brokerage firms, private banks or third-party feeder providers, and in other cases directly to the qualified clients of private banks, independent investment advisors and brokers. In other cases, we create investment products specifically designed for direct investment by retail investors in the U.S., some of whom are not accredited investors, or similar investors in non-U.S. jurisdictions, including in Europe. Such investment products are regulated by the SEC in the U.S. and by other similar regulatory bodies in other jurisdictions. Accessing retail investors and selling retail directed products exposes us to new and greater levels of risk, including heightened litigation and regulatory enforcement risks. To the extent distribution of retail products is through new channels, including through an increasing number of distributors with whom we engage, we may not be able to effectively monitor or control the manner of their distribution, which could result in litigation or regulatory action against us, including with respect to, among other things, claims that products distributed through such channels are distributed to customers for whom they are unsuitable or that they are distributed in an otherwise inappropriate manner. Although we seek to ensure through due diligence and onboarding procedures that the third-party channels through which retail investors access our investment products conduct themselves responsibly, we are exposed to the risks of reputational damage and legal liability to the extent such third parties improperly sell our products to investors. This risk is heightened by the continuing increase in the number of third parties through whom we distribute our investment products around the world and who we do not control. For example, in certain cases, we may be viewed by a regulator as responsible for the content of materials prepared by third-party distributors. Similarly, there is a risk that employees involved in the direct distribution of our products, or employees who oversee independent advisors, brokerage firms and other third parties around the world involved in distributing our products, do not follow our compliance and supervisory procedures. In addition, the distribution of retail products, including through new channels whether directly or through market intermediaries, could expose us to allegations of improper conduct and/or actions by state and federal regulators in the U.S. and regulators in jurisdictions outside of the U.S. with respect to, among other things, product suitability, investor classification, compliance with securities laws, conflicts of interest and the adequacy of disclosure to customers to whom our products are distributed through those channels. 45 As we expand the distribution of products to retail investors outside of the U.S., we are increasingly exposed to risks in non-U.S. jurisdictions. While these risks are similar to those that we face in the distribution of products to retail investors in the U.S., securities laws and other applicable regulatory regimes in many jurisdictions, including the U.K. and the European Economic Area, are extensive, complex, and vary by local jurisdiction. As a result, this expansion subjects us to additional litigation and regulatory risk. Information barriers may give rise to certain conflicts and risks and investment teams managing the activities of businesses that operate on opposite sides of an information barrier will not be aware of, and will not have the ability to manage, such conflicts and risks. Certain of our investment professionals operate largely independently of one another pursuant to an information barrier. The information barrier restricts businesses on opposite sides from coordinating or consulting with one another with respect to investment activities and/or decisions. Accordingly, these businesses manage their investment operations independently of each other. The investment activities and decisions made by a business on one side of an information barrier are not expected to be subject to any internal approvals by any person who would have knowledge and/or decision-making control of the investment activities and decisions made by a business on the other side of the information barrier. This absence of coordination and consultation will give rise to certain conflicts and risks in connection with the activities of the businesses within our asset management strategies and make it more difficult to mitigate, ameliorate or avoid such situations. These conflicts (and potential conflicts) of interests may include: (i) competing from time to time for the same investment opportunities, (ii) the pursuit by a business on one side of the information barrier of investment opportunities suitable for a business on the other side of the information barrier, without making such opportunities available to such business, and (iii) the formation or establishment of new strategies or products that could compete or otherwise conduct their affairs without regard as to whether or not they adversely impact the strategies or products of businesses operating on the other side of the information barrier. Investment teams managing the activities of businesses that operate on opposite sides of an information barrier are not expected to be aware of, and will not have the need or ability to manage, such conflicts which may impact the investment strategy, performance and investment returns of certain businesses within our asset management strategies. The investment professionals that operate on opposite sides of an information barrier are likely to be deemed affiliates for purposes of certain laws and regulations notwithstanding that they may be operationally independent from one another. The information barrier does not eliminate the requirement to aggregate certain investment holdings for certain securities laws and other regulatory purposes. This may result in, among other things, earlier public disclosure of investments; restrictions on transactions (including the ability to make or dispose of certain investments at certain times); potential short-swing profit disgorgement; penalties and/or regulatory remedies; or adverse effects on the prices of investments for our investment professionals’ businesses that operate on the other side of such information barrier. Although these information barriers are intended to address the potential conflicts of interests and regulatory, legal and contractual requirements applicable to us, we may decide, at any time and without notice to our shareholders, to remove or modify the information barriers. In addition, there may be breaches (including inadvertent breaches) of the information barriers and related internal controls. In the event that the information barrier is removed or modified, it would be expected that we will adopt certain protocols designed to address potential conflicts and other considerations relating to the management of the investment activities of those businesses that previously operated on opposite sides of an information barrier. See “Risks Relating to our Organizational and Ownership Structure — Our organizational and ownership structure may create conflicts of interest that may be resolved in a manner that is not in the best interests of our company or the best interests of our shareholders”. The breach or failure of our information barriers could result in the sharing of material non-public information between investment professionals that operate on opposite sides of an information barrier, which may restrict the acquisition or disposition activities of one of our strategies and ultimately impact the returns generated for our investors. In addition, any such breach or failure could also result in potential regulatory investigations and claims for securities laws violations in connection with our direct and/or indirect investment activities. Any inadvertent trading on material non-public information, or perception of trading on material non-public information by our personnel, could have a significant adverse effect on our reputation, result in the imposition of regulatory or financial sanctions and negatively impact our ability to raise third-party capital and provide investment management services to our clients, all of which could result in negative financial impact to our investment activities. Risks Relating to our Organizational and Ownership Structure BN will exercise substantial influence over BAM. After giving effect to the 2025 Arrangement, BN owns approximately 73% of the Class A Shares. As a result, for so long as BN maintains a significant voting interest in BAM, it will have the ability to exert substantial influence over many matters affecting BAM’s business, including: (i) the composition of the Board and, through the Board, any determinations with respect to the business plans and policies of BAM, including the appointment and removal of its officers; (ii) determinations with respect to acquisitions of businesses, mergers or other business combinations; and (iii) BAM’s capital structure, including financing activities. In addition, BN has the right (but not the obligation) to participate up to 25% (net of any participation of our asset management business) in each new sponsored fund of our asset management business. This participation includes any participation by BN’s 46 perpetual affiliates and BWS, but they are also not obligated to invest capital in our funds. Any fees to be paid to our asset management business on BN’s managed capital must be agreed to by BN, in its sole discretion. It is expected that most of BN’s capital will continue to be provided by the perpetual affiliates, for whom existing fee arrangements will continue to apply. For greater certainty, for any new capital, BN has a right to determine that no fees will apply. If BN does not commit all the capital it is entitled to provide, or does not agree for its capital to be fee-bearing, we may have difficulty growing our managed capital or our revenues. Moreover, a significant portion of our Fee-Bearing Capital is represented by the capital of the perpetual affiliates, which are controlled by BN. BN will therefore exercise significant influence over their operation, including (among other things) distribution policies that enable us to earn incentive distributions. BN has no obligation to provide backstops or other guarantees relating to new investments or acquisitions, or to commit capital on a transitional basis while other investors are being sourced, but any arrangements or understandings existing at the time of completion of the 2022 Arrangement will be continued. Moreover, if BN does make transitory investments it will generally be entitled to receive the same cost of carry for such investment as the relevant fund of our asset management business is entitled to under its fund documents (typically 8%) as well as stand-by / commitment fees at market rates and such other compensation as otherwise may be mutually agreed. It is possible that our ability to deploy capital may be adversely affected by not having BN’s backstops or other guarantees, or we may be required to deploy our own capital, or to pay for other sources of capital. We depend on our global reputation for integrity and investment acumen. Our business could be negatively impacted by changes in BN’s global reputation. In addition, other than as described in this Annual Report, BN is not committed to an exclusive relationship with us, and we may compete with BN (except for capital represented by the perpetual affiliates, which is exclusive) or compete with other asset managers for BN’s capital. The ownership of BN may change and the control of BAM may be transferred to a third party without shareholder approval. BN is not required to maintain any ownership level in BAM and may sell the Class A Shares to a third party without the consent of BAM shareholders. Similarly, if a third party were to acquire ownership of BN’s Class A Shares and appoint new directors or officers of its own choosing, it would be able to exercise substantial influence over BAM’s policies and procedures and exercise substantial influence over BAM’s management. Such changes could result in BAM’s capital being used to make acquisitions in which BN has no involvement or to make acquisitions that are substantially different from those targeted by BAM’s current growth strategy. Additionally, BAM cannot predict with any certainty the effect that changes in the ownership of BN would have on the trading price of the Class A Shares or its ability to raise capital or make investments in the future, because such matters would depend to a large extent on the identity of the new owner and the new owner’s intentions with regard to BAM. As a result, BAM’s business, financial condition and results of operations may suffer. Our organizational and ownership structure may create conflicts of interest that may be resolved in a manner that is not in our best interests or the best interests of our shareholders. Our organizational and ownership structure involves a number of relationships that may give rise to conflicts of interest between us and our shareholders, on the one hand, and BN, on the other hand. For example, except to a limited extent, BN is not committed to an exclusive relationship with us, and we may compete with BN (except for capital represented by the perpetual affiliates, which is exclusive) or may compete with other asset managers for BN’s capital. Many of our executives and employees have a material portion of their equity compensation awards that are tied to the performance of the shares of BN. If the market value of BAM’s shares and BN’s shares are not fully aligned, the existence of these awards may result in our executives and employees being less focused on BAM’s financial success. Ineffective maintenance of our culture or ineffective management of human capital could adversely impact our business and financial performance. Our ability to compete effectively in our business will depend upon our ability to attract new employees and retain and motivate our existing employees. Our senior management team has a significant role in our success and oversees the execution of our investment strategies. If we are unable to attract and retain qualified employees, our ability to compete successfully and achieve our business objectives could be limited, and our business, financial condition and results of operations could be negatively impacted. Our ability to retain and motivate our management team, attract suitable replacements should any members of our management team leave, or attract new investment professionals as our business grows, is dependent on, among other things, the competitive nature of the employment market and the career opportunities and compensation that we can offer. In all of our markets, we face intense competition in connection with the attraction and retention of qualified employees. We may experience departures of key professionals in the future. We cannot predict the impact that any such departures will have on our ability to achieve our objectives. Our senior management team possesses substantial experience and expertise and has strong business relationships with investors in our managed assets and other members of the business communities and industries in which we operate. As a result, the loss of these personnel could jeopardize our relationships with investors in our managed assets and other 47 members of the business communities and industries in which we operate and result in the reduction of our assets under management or fewer investment opportunities. Accordingly, the loss of services from key professionals or a limitation in their availability could adversely impact our financial condition and cash flow. Furthermore, such a loss could be negatively perceived in the capital markets. Additionally, the departure of certain individuals could trigger certain “key person” provisions in the documentation governing certain of our private funds, which would permit the limited partners of those funds to suspend or terminate the funds’ investment periods or withdraw their capital prior to the expiration of the applicable lock-up date. Our key person provisions vary by both strategy and fund and, with respect to each strategy and fund, are typically tied to multiple individuals, meaning that it would require the departure of more than one individual to trigger the key person provisions. Our human capital risks may be exacerbated by the fact that we do not maintain any key person insurance. The conduct of our business and the execution of our strategy rely heavily on teamwork. Our continued ability to respond promptly to opportunities and challenges as they arise depends on co-operation and co-ordination across our organization and our team-oriented management structure, which may not materialize in the way we expect. A portion of the workforce in some of our managed assets is unionized. If we are unable to negotiate acceptable collective bargaining agreements with any of our unions as existing agreements expire, we could experience a work stoppage, which could result in a significant disruption to the affected operations, higher ongoing labor costs and restrictions on our ability to maximize the efficiency of our operations, all of which could have an adverse effect on our financial results. Risks Relating to Taxation If BAM is classified as a passive foreign investment company, U.S. persons who own Class A Shares could be subject to adverse U.S. federal income tax consequences. If BAM is classified as a PFIC for U.S. federal income tax purposes, a U.S. Holder that owns Class A Shares could be subject to adverse tax consequences, including a greater tax liability than might otherwise apply, an interest charge on certain taxes deemed deferred as a result of BAM’s non-U.S. status and additional U.S. tax reporting obligations. In general, a non-U.S. corporation will be a PFIC during a taxable year if, taking into account the income and assets of certain of its affiliates, (i) 75% or more of its gross income constitutes passive income or (ii) 50% or more of its assets produce, or are held for the production of, passive income. Passive income generally includes interest, dividends and other investment income. Based on its current and expected income, assets and activities, BAM does not expect to be classified as a PFIC for the current taxable year or in the foreseeable future. However, the determination of whether BAM is a PFIC depends upon the composition of its income and assets and the nature of its activities from time to time and must be made annually as of the close of each taxable year. The PFIC determination also depends on the application of complex U.S. federal income tax rules that are subject to differing interpretations. Thus, there can be no assurance that BAM will not be classified as a PFIC for any taxable year, or that the IRS or a court will agree with BAM’s determination as to its PFIC status. U.S. Holders are urged to consult their tax advisers regarding the application of the PFIC rules, including the related reporting requirements and the advisability of making any available election under the PFIC rules, with respect to their ownership and disposition of Class A Shares. Changes in Canadian federal income tax law might adversely affect BAM and/or holders of Class A Shares. There can be no assurance that Canadian federal income tax laws, the judicial interpretation thereof, or the administrative policies and assessing practices of the CRA will not be changed in a manner that adversely affects BAM and/or holders of Class A Shares. Any such developments could have a material adverse effect on the holders of Class A Shares or our business, financial condition and results of operations. Reassessments by tax authorities or changes in tax laws could create additional tax costs for us. We operate in countries with differing tax laws and tax rates. Our tax reporting is supported by tax laws in the countries in which we operate and the application of tax treaties between the various countries in which we operate. Our income tax reporting is subject to audit by tax authorities in the countries in which we operate. Our effective tax rate may change from year to year, based on changes in the mix of activities and income earned among the different jurisdictions in which we operate, changes in tax laws in these jurisdictions, changes in the tax treaties between the countries in which we operate, changes in our eligibility for benefits under those tax treaties, and changes in the estimated values of deferred tax assets and liabilities. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Such changes could result in a substantial increase in the effective tax rate on all or a portion of our income. Governments around the world increasingly seek to regulate multinational companies and the application of differential tax rates between jurisdictions. This effort includes a greater emphasis by various nations on coordinating and sharing information regarding companies and the taxes they pay. A number of countries across the globe have also agreed to implement a “two pillar” plan for global tax reform, developed by the OECD/G20 Inclusive Framework on BEPS, to address perceived base erosion and profit shifting 48 (“BEPS”) by some multinational groups. Governmental taxation reforms, policies and practices could adversely affect us and, depending on the nature of such reforms, policies and practices, including the implementation of the BEPS proposals in the jurisdictions in which we operate, could have an impact on us. As a result of this increased focus on the use of tax planning by multinational companies, our company could be subject to negative media coverage, which may adversely impact our reputation. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 1C. CYBERSECURITY Cybersecurity Governance Cybersecurity at our company is overseen by our Board, the Audit Committee and management, as well as through our Enterprise Information Security Policy (“EISP”). The Audit Committee of our Board is responsible for overseeing risk management strategies that are specific to our company, including reviewing management’s assessment of the current and emerging risks and related mitigation strategies across financial and non-financial risks, including cybersecurity risks. Regular reports and updates on cybersecurity risks are made to senior management of BAM. Pursuant to the EISP, executive management has appointed a Chief Information Security Officer (“CISO”), who works closely with senior management, legal counsel and external counsel to develop and monitor our data protection, privacy and cybersecurity program and policies. The CISO provides periodic reports to the Audit Committee, which subsequently reports to the Board about data protection and cybersecurity risks and issues. The CISO has over 20 years’ experience in cybersecurity oversight, holds a Bachelor's Degree in Computer Science and Economics from York University and holds a number of information security certifications, including: CISSP, CISM, CISA and CRISC. Cybersecurity Risk Management and Strategy We have a cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats. This includes compliance with the EISP. Our cybersecurity program performance and effectiveness are also frequently assessed and audited internally and by third parties . We believe our cybersecurity program is reasonably designed to materially protect the integrity and availability of our information and technology. This program addresses security governance, security awareness, employee training, relevant access and end-point security, vulnerability management, penetration testing, security monitoring and incident response. We use technologies to optimize our security risk detection and response capabilities, in addition to access controls and anti-malware protections. We believe our practices align with the NIST Cybersecurity Framework in meeting and exceeding the industry average in cybersecurity practice. In addition, all employees regularly undergo mandatory continuing cybersecurity training. Employees in higher-risk functions receive additional training and cybersecurity awareness education. Audits, cybersecurity simulations and employee testing results indicate that our program is effective in protecting our information. The effectiveness of these programs is evaluated regularly through both internal and third-party audits. In 2024, we undertook the following initiatives: further enhanced our data protection and threat-intelligence capabilities; improved our processes for third-party risk management ; continued mandatory cybersecurity education for all employees; and incorporated social engineering to our phishing simulations. When we engage third parties, we have policies and processes to govern their access and reduce the risks associated with their access. For example, all third-party access must be authorized and have a legitimate business need. Prior to authorization and granting access, the terms and conditions of such access must be agreed to as part of a formal agreement or contract. In addition, all authorized third-party access must be limited, monitored and controlled as appropriate. Our systems face cybersecurity risks, and we have in the past experienced threats to our data and systems. However, to date, these incidents have not had a material impact on our business strategy, results of operations, or financial condition. We can provide no assurance that we will not experience any material cybersecurity threats or incidents in the future. See “Part I—Item 1A. Risk Factors—Failure to maintain the security of our information and technology systems could have a material adverse effect on us”. ITEM 2. PROPERTIES Our principal executive office is located at Brookfield Place, 250 Vesey Street, 15th Floor, New York, NY. We also lease space for our other offices in North America, South America, Europe, Middle East, and Asia-Pacific. We consider these facilities to be suitable and adequate for the management and operations of our business. 49 ITEM 3. LEGAL PROCEEDINGS For a discussion of BAM's legal proceedings, see the section entitled “Litigation” appearing in Note 8 and 18, respectively, “Commitments and Contingencies” in BAM's and the Asset Management Company's financial statements included elsewhere in this report, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 50 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Class A Shares are listed on each of the NYSE and TSX under the symbol “BAM”. As at March 7, 2025, the following shares of BAM were issued and outstanding: 1,637,295,707 Class A Shares; 21,280 Class B Shares; and no Class A Preferred Shares. The number of holders of record of our Class A Shares as at March 7, 2025 was 7,528. This does not include the number of shareholders that hold shares in “street name” through banks or broker-dealers. The BAM Partnership is the sole holder of the Class B Shares outstanding. Dividend Policy Class A Shares and Class B Shares The declaration and payment of dividends on the Class A Shares and Class B Shares are at the discretion of the Board. Dividends on the Class A Shares and Class B Shares are paid quarterly, at the end of March, June, September and December of each year. We intend to pay out approximately 90% of our Distributable Earnings to shareholders quarterly and reinvest the balance back into the business. Our asset management business intends to pay dividends to BAM on a quarterly basis sufficient to ensure that BAM can pay its intended dividend. Dividends will be variable and will change in line with the growth of Distributable Earnings. Registered holders of our Class A Shares who are resident in Canada have the opportunity to acquire additional Class A Shares by reinvesting all or a portion of their cash dividend without paying commissions through our Dividend Reinvestment Plan (the “DRIP”). The DRIP is currently not available for registered shareholders of our Class A Shares who are resident in the United States. Pursuant to our DRIP, registered holders of our Class A Shares who are resident in Canada may also elect to receive their dividends in the form of newly issued Class A Shares at a price equal to the NYSE volume-weighted average price (as determined in accordance with the DRIP) multiplied by an exchange factor which is calculated as the average daily exchange rate as reported by the Bank of Canada during each of the five trading days immediately preceding the relevant investment date. The following table summarizes the dividends paid per share for the periods indicated on the Class A Shares and the Class B Shares, all expressed in U.S. dollars. 2024 2023 First Quarter $ 0.38 $ 0.32 Second Quarter 0.38 0.32 Third Quarter 0.38 0.32 Fourth Quarter 0.38 0.32 $ 1.52 $ 1.28 Exchange and Foreign Ownership Controls We are not aware of any Canadian federal or provincial laws, decrees, or regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest, or other payments to non-Canadian holders of the Class A Shares. There are no limitations under the laws of Canada or by the articles or our other constating documents on ownership of our voting shares by non-Canadians, except the Investment Canada Act which may require review and approval by the Minister of Innovation (Canada) of certain acquisitions of control of us by non-Canadians. The threshold for acquisitions of control is generally defined as being one-third or more of our voting shares, provided certain financial thresholds are also exceeded. If the investment is potentially injurious to national security, it may be subject to review under the Investment Canada Act notwithstanding the percentage interest acquired or amount of the investment. “Non-Canadian” generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust, or joint venture that is ultimately controlled by non-Canadians. Certain Canadian Federal Income Tax Considerations for U.S. Residents The following is a summary of the principal Canadian federal income tax considerations generally applicable under the Income Tax Act (Canada) (together with the regulations thereto, the “Tax Act”) to a beneficial holder of Class A Shares who, for the purposes of the Tax Act and the Canada-United States Income Tax Convention (1980) (the “Treaty”), and at all relevant times, (i) is not and is not deemed to be a resident in Canada, (ii) is a resident of the United States for the purposes of the Treaty and is entitled to the full benefits thereunder, (iii) holds all Class A Shares as capital property, (iv) deals at arm’s length with and is not affiliated with BAM, and (v) does not use or hold and is not deemed to use or hold Class A Shares in connection with a business carried on in Canada (each such holder, a “U.S. Resident Holder”). Generally, the Class A Shares will be considered to be capital property to a U.S. Resident 51 Holder provided the U.S. Resident Holder does not hold such shares in the course of carrying on a business of trading or dealing in securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade. This summary is not generally applicable to a U.S. Resident Holder: (i) that is an insurer carrying on an insurance business in Canada and elsewhere, (ii) that is an “authorized foreign bank” (as defined in the Tax Act), (iii) that is a “financial institution” (as defined in the Tax Act) for purposes of the “mark-to-market property” rules; (iv) an interest in which is or would constitute a “tax shelter investment” (as defined in the Tax Act); (v) that is a “specified financial institution” (as defined in the Tax Act); or (vi) that has or will enter into a “synthetic disposition arrangement” or a “derivative forward agreement” (as those terms are defined in the Tax Act) in respect of Class A Shares. Such U.S. Resident Holders should consult their own tax advisors. This summary is based on the provisions of the Tax Act and the Treaty in force on the date hereof, and the current administrative policies and assessing practices of the CRA published in writing prior to the date hereof. This summary does not otherwise take into account or anticipate any changes in law or administrative policy or assessing practice whether by legislative, administrative, or judicial action or decision, nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ from those discussed herein. This summary is not exhaustive of all possible Canadian federal income tax consequences that may affect U.S. Resident Holders. U.S. Resident Holders should consult their own tax advisors. This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular U.S. Resident Holder, and no opinion or representation with respect to the tax consequences to any U.S. Resident Holder or prospective U.S. Resident Holder is made. Accordingly, U.S. Resident Holders and prospective U.S. Resident Holders should consult their own tax advisors with respect to the income tax consequences of purchasing, owning, and disposing of Class A Shares having regard to their own particular circumstances. Dividends on the Class A Shares Dividends paid or credited, or deemed to be paid or credited, on Class A Shares by BAM to a U.S. Resident Holder will be subject to Canadian withholding tax under Part XIII of the Tax Act at the rate of 25%, subject to a possible reduction under the provisions of the Treaty. Under the Treaty, the rate of Canadian withholding tax applicable to a dividend paid on a Class A Share to a U.S. Resident Holder who is a resident of the United States for purposes of the Treaty, beneficially owns the dividend and is fully entitled to the benefits of the Treaty, will generally be reduced to 15% (or 5% in certain cases where such U.S. Resident Holder is a corporation that beneficially owns at least 10% of BAM’s voting shares). Additionally, such dividends will be generally exempt from Canadian withholding tax for a U.S. Resident Holder who is fully entitled to the benefits of the Treaty, is generally exempt from income taxation in the United States, and is operated exclusively to administer or provide pension, retirement or employee benefits. U.S. Resident Holders should consult their own tax advisors in this regard. Disposition of Class A Shares A U.S. Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed disposition of a Class A Share, unless the Class A Share constitutes taxable Canadian property of the U.S. Resident Holder for purposes of the Tax Act at the time of the disposition or deemed disposition and the U.S. Resident Holder is not entitled to relief under the Treaty. Provided that the Class A Shares are listed on a “designated stock exchange” (as defined in the Tax Act and which currently includes the TSX and the NYSE), the Class A Shares will generally not constitute taxable Canadian property of a U.S. Resident Holder at a particular time unless, at any time during the sixty-month period immediately preceding that time, the following two conditions are met concurrently: (a) 25% or more of the issued shares of any class of BAM were owned by or belonged to one or any combination of (i) the U.S. Resident Holder, (ii) persons with whom the U.S. Resident Holder did not deal at arm’s length, and (iii) partnerships in which the U.S. Resident Holder or persons with whom the U.S. Resident Holder did not deal at arm’s length holds a membership interest, directly or indirectly through one or more other partnerships; and (b) more than 50% of the fair market value of the Class A Shares was derived directly or indirectly from one or any combination of: (i) real or immovable property situated in Canada, (ii) “Canadian resource properties” (as defined in the Tax Act), (iii) “timber resource properties” (as defined in the Tax Act), and (iv) options in respect of, or interests or rights in, property described in (i) to (iii), whether or not the property exists. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, the Class A Shares may be deemed to be taxable Canadian property of a U.S. Resident Holder. In the event that a Class A Share is “taxable Canadian property,” within the meaning of the Tax Act, to a U.S. Resident Holder, such U.S. Resident Holder should consult their own tax advisor as to the Canadian federal income tax consequences of the disposition, including potential compliance requirements and withholding under section 116 of the Tax Act. Unregistered Sales of Equity Securities On October 31, 2024, BAM and BN entered into an arrangement agreement with respect to the 2025 Arrangement, whereby on February 4, 2025, BAM acquired approximately 73% of the outstanding common shares of the Asset Management Company, from BN and certain of its subsidiaries. Prior to the 2025 Arrangement, BAM owned an approximate 27% interest in the Asset Management Company and BN owned an approximate 73% interest in the Asset Management Company. As part of the 2025 Arrangement, BAM 52 issued Class A Shares to BN in exchange for all of the common shares of the Asset Management Company currently owned by BN and its subsidiaries on a one-for-one basis. Pursuant to the 2025 Arrangement, a total of 1,194,021,145 Class A Shares were issued to BN and certain of its subsidiaries pursuant to an exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. Upon completion of the 2025 Arrangement, BAM owns, directly and indirectly, 100% of the common shares of the Asset Management Company and BN owns approximately 73% of the outstanding Class A Shares. Share Repurchases in the Fourth Quarter of 2024 As at December 31, 2024, there were 34,605,494 Class A Shares remaining for further repurchases under BAM's former share repurchase program, which expired on January 10, 2025. Under BAM's current share repurchase program, 37,123,295 Class A Shares can be repurchased and as at March 7, 2025, there were 36,012,752 Class A Shares remaining for further repurchases. Under our current repurchase program, BAM is authorized to repurchase Class A Shares from time to time in open market transactions. The timing, manner, price and amount of any Class A Share repurchases will be determined by BAM in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions. The current repurchase program expires on January 12, 2026 or until the maximum approved number of shares has been purchased. The program does not require BAM to repurchase any specific number of Class A Shares, and the program may be suspended, extended, modified or discontinued at any time. Issuer Purchases of Class A Shares (amounts in millions, except share and per share amounts) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 to October 31, 2024 — $ — — 34,605,494 November 1, 2024 to November 30, 2024 — $ — — 34,605,494 December 1, 2024 to December 31, 2024 — $ — — 34,605,494 Total through December 31, 2024 — $ — — 34,605,494 ITEM 6. [RESERVED] 53 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with BAM's consolidated financial statements and the related notes included within this Annual Report. Business Environment In 2024, global GDP growth is expected to have risen by 3.2% compared to 3.1% in 2023, above the projection of 2.9% at the beginning of 2024. This economic activity was supported by lower inflation, steady employment growth, and less restrictive monetary policy. Labor markets continued to ease, though unemployment generally remained at or near historical lows. Additionally, headline inflation has now returned to target in a number of advanced and emerging-market economies despite lingering pressures in service sectors. Over the course of 2024, differences in economic performance and monetary policy across countries emerged following the coordinated rate hiking cycle that came before it. Some economies, such as the United States and India, demonstrated above-average growth, whereas others, including the Eurozone, the U.K. and China, grew at slower rates. GDP growth in the United States remained healthy at 2.8% for 2024, where robust consumption growth was supported by real wage gains. Core consumer price inflation fell from 3.9% at the end of 2023 to 3.3% at the end of 2024. Labor market tightness gradually eased, with the ratio of job vacancies to the number of unemployed people continuing to decline. The unemployment rate increased slightly over the year from 3.8% to 4.1%, remaining low by historical standards, led by the public sector being a strong source of labor demand, with its contribution to total employment growth in 2024 being significantly above pre‑pandemic levels. Higher interest rates have had the desired effect of bringing inflation down closer to central bank targets in most developed economies. In 2024, monetary policy shifted as most major central banks began easing cycles. By the latter half of the year, most central banks across advanced economies cut policy rates at least once. Federal Open Market Committee policymakers started the Fed's easing cycle with a larger-than-expected 50 basis point rate cut in September before transitioning to a more gradual pace of easing. Market expectations for Federal Reserve monetary policy fluctuated materially over the course of the year. This saw 2-year treasury yields begin the year at 4.3%, rise above 5.0% in April, fall to 3.8% after unexpectedly weak payroll data, before climbing back to 4.2% to end the year. The Fed's Summary of Economic Projections implies two 25 basis point cuts in 2025, and the Fed's terminal rate has been lifted to 3% from 2.9% previously. Elsewhere, easing cycles have been gradual, as in the case of the Bank of England with two 25 basis point rate cuts, while others cut rates at a faster pace, such as in the Eurozone with four 25 basis point deposit rate cuts and the Bank of Canada with three 25 basis point and two 50 basis point rate cuts. Conversely, the Bank of Japan ended its negative interest rate policy in March with its first-rate hike since 2007. Policymakers in emerging markets were more varied. The People's Bank of China continued lowering lending rates in 2024, the Reserve Bank of India held steady, while in Latin America, the Brazilian Central Bank returned to rate hikes. Credit spreads on both investment grade and high yield bond indices ended the year tighter, after a spike in early August due to concerns over a slowdown. Credit default swaps on both indices also tightened over the course of the year. U.S. primary markets for investment grade and high yield bonds continued to recover to close to recent highs with gross issuances increasing by 25% and 66% over the prior year, respectively. Over the course of 2024, demand for credit improved and bond funds recorded their highest inflows over the past decade, as investors sought attractive yields against a backdrop of easing from major central banks. Equity market performance was strong in 2024 as markets grew increasingly optimistic relative to expectations at the beginning of the year. The MSCI World Index increased by 17%. Additionally, the S&P 500 and Nasdaq increased by 23% and 25%, respectively. For the first time in two and a half decades, the S&P 500 achieved consecutive returns of more than 20% in both 2023 and 2024. Global M&A volumes increased to $3.5 trillion in 2024 from $3.2 trillion in 2023. Lower interest rates and optimism on growth increased deal volumes from private equities and other financial investors as that class began to regain ground with a 29% increase in deal values compared to the prior year. Corporate M&A, which is less influenced by small movements in the cost of debt, is on track to end the year 12% above 2023. Initial public offering (“IPO”) activity in the Americas saw a strong recovery, reaching its highest IPO activity since 2021, in both volume and proceeds, with 205 IPO’s raising US$33.1billion. Following a 13% contraction in 2023, commodity prices were largely flat in 2024 as measured by the Bloomberg Commodity Index, as declines in energy and agriculture were balanced by price increases in metals. Precious metals surged 19%, as investors sought haven in gold. For the second consecutive year, energy declined significantly by 8%, primarily driven by a 14% drop in natural gas prices resulting from increased production and lower demand. After the spike in April to $91 per barrel due to geopolitical tensions and output cuts, brent oil prices declined through the remainder of 2024 to end the year at $75 per barrel. During 2024, a large portion of the world's population took part in general elections that resulted in incumbent governments losing power or suffering setbacks. The U.S. presidential election saw the return of former President Donald Trump and Republican 54 majorities in both houses of Congress. Financial markets and risk assets performed strongly against this backdrop with limited volatility. In the U.K., politics moved to the left with the Labor Party ousting the incumbent Conservative Party with a significant majority. Japan's Lower House election saw the incumbent party that has governed for most of the post-World War II era lose their majority. In France, President Macron’s decision to hold snap elections resulted in losses to left-wing and right-wing parties. However, uncertainty over the policies that new governments will implement, as well as geopolitics and the impact on economic activity, may continue to be a feature of the near-term outlook. Our business is well-positioned within the evolving alternative asset management landscape by leveraging a strategic and agile approach to investment opportunities. As investors seek diversification and innovative solutions, we are equipped to navigate market complexities and government policies by delivering value through disciplined strategies. Our ability to adapt to shifting economic conditions and capitalize on emerging trends ensures we remain a trusted partner in achieving long-term financial outcomes. 55 Review of Financial Results Income Statement Analysis Consolidated Statement of Comprehensive Income The following table summarizes the financial results of BAM for the years ended December 31, 2024, 2023 and the period from July 4, 2022 to December 31, 2022: FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 AND FOR THE PERIOD JULY 4, 2022 TO DECEMBER 31, 2022 (MILLIONS) 2024 2023 2022 2024 vs 2023 2023 vs 2022 Operating recoveries $ 482 $ 383 $ 37 $ 99 $ 346 Expenses Compensation and benefits (368) (326) (1) (42) (325) Other operating expense (7) (5) (35) (2) 30 Carried interest allocation compensation Realized (61) (24) — (37) (24) Unrealized (59) (38) (3) (21) (35) Total carried interest allocation compensation (120) (62) (3) (58) (59) Interest expense (16) (9) — (7) (9) Total expenses (511) (402) (39) (109) (363) Share of income from Brookfield Asset Management ULC 570 470 21 100 449 Net income $ 541 $ 451 $ 19 $ 90 $ 432 Net income consists of BAM’s equity interest in the earnings of the Asset Management Company and compensation and benefit costs, primarily attributable to executive compensation costs of BAM and unrealized carried interest compensation expense. A material portion of these costs are reimbursed by BN and the Asset Management Company in accordance with the Relationship Agreement and the Asset Management Services Agreement. For the years ended December 31, 2024 and 2023 During the year ended December 31, 2024, BAM recorded net income of $541 million, compared to $451 million in the prior year. On May 2, 2024, Brookfield Wealth Solutions (“BWS”) completed the acquisition of the remaining outstanding common stock of American Equity Investment Life Holding Company (“AEL”) that it did not already own. In connection with the transaction, BAM issued approximately 28.8 million Class A Shares totaling consideration of $1.1 billion to BN in exchange for 28.8 million common shares of the Asset Management Company (the “AEL Mandate”). The AEL Mandate was non-dilutive to BAM Ltd. shareholders and increased BAM's ownership in the Asset Management Company from approximately 25% to approximately 27%. The increase in net income compared to the prior year was driven by the higher income of the Asset Management Company and our higher ownership resulting from the aforementioned AEL Mandate. This was partially offset by higher interest expense on the credit facility with the Asset Management Company and higher non-recoverable compensation costs. Refer to the following discussion for details on the earnings of the Asset Management Company. For the year ended December 31, 2023 and the period from July 4, 2022 to December 31, 2022 During the year ended December 31, 2023, BAM recorded net income of $451 million compared to $19 million for the period from July 4, 2022 to December 31, 2022. Net income of $19 million from the comparative period represents earnings from December 9, 2022 (the date of the 2022 Arrangement) to December 31, 2022 compared to a full year of net income in 2023. Refer to the following discussion for details on the earnings of the Asset Management Company. 56 Consolidated and Combined Statement of Operations The following table summarizes the Consolidated and Combined Statements of Operations for the Asset Management Company for the years ended December 31, 2024, 2023 and 2022: FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 2024 vs 2023 2023 vs 2022 Revenues Base management and advisory fees $ 2,957 $ 2,766 $ 2,500 $ 191 $ 266 Incentive fees 424 376 335 48 41 Investment income Carried interest allocations Realized 25 51 241 (26) (190) Unrealized (9) 348 249 (357) 99 Total investment income 16 399 490 (383) (91) Interest and dividend revenue 143 172 258 (29) (86) Other revenues 440 349 44 91 305 Total revenues 3,980 4,062 3,627 (82) 435 Expenses Compensation, operating, and general and administrative expenses Compensation and benefits (1,154) (1,048) (700) (106) (348) Other operating expenses (347) (342) (236) (5) (106) General, administrative and other (64) (56) (81) (8) 25 Total compensation, operating, and general and administrative expenses (1,565) (1,446) (1,017) (119) (429) Carried interest allocation compensation Realized (69) (26) (61) (43) 35 Unrealized (24) (60) (139) 36 79 Total carried interest allocation compensation (93) (86) (200) (7) 114 Interest expense (22) (14) (154) (8) 140 Total expenses (1,680) (1,546) (1,371) (134) (175) Other (expenses) income, net (93) (129) 1,090 36 (1,219) Share of income from equity method investments 339 167 146 172 21 Income before taxes 2,546 2,554 3,492 (8) (938) Income tax expense (438) (417) (627) (21) 210 Net income 2,108 2,137 2,865 (29) (728) Net (income) loss attributable to: Redeemable non-controlling interests in consolidated funds — — (909) — 909 Preferred shares redeemable non-controlling interest 211 (262) (35) 473 (227) Non-controlling interest (151) (36) (6) (115) (30) Net income attributable to the common stockholders $ 2,168 $ 1,839 $ 1,915 $ 329 $ (76) The asset management business primarily generates revenue from fees earned pursuant to contractual arrangements with funds, publicly traded vehicles, and investors as well as transaction and advisory fees. These fees include base management fees, incentive distribution rights, and certain advisory fees. Base management fees are long-term, recurring in nature, and correspond to fundraising activity, net asset values of certain of our funds, and market capitalizations of our publicly traded vehicles, specifically BIP, BEP and BBU. Incentive distribution rights are performance fees earned from BIP and BEP for exceeding predetermined distribution thresholds, are long-term, and are not subject to clawback. The asset management business is entitled to carried interest assuming certain investment returns are achieved, as well as incentive management fees in certain of our structures where we are entitled to contractual fees from an investment fund based on achieving prescribed investment returns. 57 The composition of our revenues will vary based on market conditions and the cyclical nature of our businesses. Carried interest allocations generated by our funds and associated carried interest compensation are driven by the performance of the underlying investments as well as overall market conditions. Fair values are affected by changes in the fundamentals of our investments, the industries in which they operate, the overall economy, and other market conditions. The impact of fair values of our underlying investments throughout market cycles may result in material increases or decreases to carry generated, net of expenses. Expenses within our asset management business primarily include employee base compensation, bonuses, and share-based compensation. Period over period changes in employee base compensation and bonuses generally result from changes in headcount and annual salary changes. Share-based awards are granted in the first quarter of each year and generally vest over 5 years. Equity settled compensation awards vest on a graded basis over the vesting period and cash settled share-based compensation awards are recorded at fair value quarterly based on the trading price of BAM Ltd. Class A Shares. Therefore, for cash settled share-based compensation, an increase or decrease in the share price of BAM Ltd. will result in share-based compensation expense or recovery. For the years ended December 31, 2024 and 2023 Net income for the year ended December 31, 2024 was $2.1 billion, of which $2.2 billion was attributable to common stockholders. This compares to net income of $2.1 billion for the year ended December 31, 2023, of which $1.8 billion was attributable to common stockholders. Revenues Revenues for the year ended December 31, 2024 were $4.0 billion, which represents a decrease of $82 million compared to $4.1 billion of revenue for the year ended December 31, 2023. Base Management and Advisory Fees Base management and advisory fees for the year ended December 31, 2024 were $3.0 billion, which represents an increase of $191 million or 7% compared to the year ended December 31, 2023. The increase was predominantly driven by the AEL Mandate, resulting in $49 billion of inflows of Fee-Bearing Capital, as well as annuity-related inflows and other insurance capital generated in BWS. Management fee revenues also increased due to incremental contributions from capital raised for our latest flagship funds, capital deployed across our complementary strategies, as well as a higher trading price of BBU. These increases were partially offset by lower trading prices of BIP, lower net asset value of BPG, and the end of the investment period of certain of our older vintage funds. Incentive Fees Incentive fees for the year ended December 31, 2024, were $424 million, an increase of $48 million or 13% from the year ended December 31, 2023, driven by higher incentive distribution fees earned due to growth in BIP and BEP's dividends of 6% and 5%, respectively. Carried Interest Allocations Realized carried interest allocations were $25 million for the year ended December 31, 2024, which represents a decrease of $26 million compared to the year ended December 31, 2023. Realized carried interest allocations in the current and prior year were predominantly due to dispositions within our first real estate flagship fund and certain other real estate fund strategies. All realized carried interest income in both the year ended December 31, 2024 and December 31, 2023, net of carry compensation related to mature funds are attributable to BN through our redeemable preferred shares. The unrealized carried interest allocations reversal of $9 million for the year ended December 31, 2024 represents a decrease of $357 million compared to the year ended December 31, 2023. The change reflects lower valuations across our real estate flagship funds, which is partially offset by higher valuations in our global transition and infrastructure flagship funds. Carried interest allocations generated by new funds are 66.7% attributable to the asset management business and 33.3% to BN. Within the Consolidated and Combined Statements of Operations, carry interest allocations are presented on a 100% basis and the portion attributable to BN is presented in Net Income Attributable to Non-Controlling Interest. Unrealized carried interest allocations attributable to the asset management business were $257 million for the year ended December 31, 2024, compared to $109 million for the year ended December 31, 2023. Interest and Dividend Revenue Interest and dividend revenue for the year ended December 31, 2024 was $143 million, which represents a decrease of $29 million compared to the year ended December 31, 2023. The decrease was due to the lower deposit balance held with BN driven by the acquisition of our incremental approximately 4.5% interest in Oaktree, our acquisition of an interest in Castlelake, as well as other strategic acquisitions made during the year. In addition, the funding of working capital requirements further decreased our deposit balance with BN. 58 Other Revenues Other revenues were $440 million for the year ended December 31, 2024, an increase of $91 million compared to the year ended December 31, 2023. Other revenues are largely comprised of recoverables from BN related to share and performance-based compensation as defined by the Relationship Agreement, fund expense recharges, and incentive management fees earned on certain funds. The increase compared to the prior year was due to higher incentive management fees earned, fund expense recharges and increased recoveries in share and performance-based compensation. Share-based and performance-based award expenses that are recoverable from BN are recognized in other revenues with the offsetting expense recognized in compensation and benefits, and carried interest allocation compensation, respectively. Expenses Total expenses for the year ended December 31, 2024 were $1.7 billion, an increase of $134 million or 9% compared to the year ended December 31, 2023. Compensation and Benefits Compensation and benefits for the year ended December 31, 2024 were $1.2 billion, which represents an increase of $106 million compared to the year ended December 31, 2023. This was attributable to higher compensation costs from the ongoing growth of our asset management business as well as higher share-based compensation expense in the year due to higher mark-to-market movements on liability-based compensation awards. Other Operating Expenses Other operating expenses are comprised of professional fees, facilities costs, as well as costs directly associated with our fundraising and investment functions. Other operating expenses were $347 million for the year ended December 31, 2024, compared to $342 million for the year ended December 31, 2023. The increase was primarily attributable to the growth in our business relative to the prior year. Carried Interest Allocation Compensation Compensation expenses related to carried interest allocation compensation were $93 million for the year ended December 31, 2024, which represents an increase of $7 million compared to the year ended December 31, 2023. This was primarily driven by higher relative valuation gains across certain infrastructure, renewable, and private equity funds compared to the prior year. The carried interest compensation expense associated with mature funds is fully recoverable from BN. Carried interest compensation expense on new funds was $7 million during the year. Other Expenses, net Other expenses, net for the year ended December 31, 2024 were an expense of $93 million compared to $129 million in the prior year. This expense primarily consists of mark-to-market movements on our investment in BSREP III and mark-to-market adjustments on put and call options to acquire additional interests in Oaktree, Primary Wave, and Castlelake. Current year expense compared to the prior year were lower due to gains on the various put and call options held by the asset management company and financial instruments associated with various investments. This was partially offset by valuation changes in BSREP III and unrealized foreign exchange losses. Share of Income from Equity Method Investments Our share of income from equity method investments was $339 million compared to $167 million in the prior year, or an increase of $172 million. This is predominantly driven by increased earnings from our investment in Oaktree due to higher management fees earned and unrealized carried interest generated during the year, as well as our higher ownership interest. In addition, our share of income from equity method investments reflects earnings from our Castlelake investment from September 17, 2024. Income Tax Expense Income tax expense was $438 million for the year ended December 31, 2024, which represents an increase of $21 million compared to the year ended December 31, 2023. This increase was driven by changes in tax rates in certain jurisdictions in which we earn income relative to the prior year. Net Loss Attributable to Preferred Share Redeemable Non-Controlling Interest The asset management business recognizes carried interest income and associated carried interest allocation expense on mature funds within our Consolidated and Combined Statements of Operations on a gross basis. As the net carried interest generated on mature funds is all attributable to BN, the net income or loss attributable to BN via the preferred shares primarily represents the change in carried interest, net of carried interest allocation expense and taxes on mature funds owing to BN. 59 Net loss attributable to preferred redeemable non-controlling interest was $211 million for the year ended December 31, 2024 primarily due to lower valuations in certain mature funds. Net Income Attributable to Non-Controlling Interest Net income attributable to non-controlling interest was $151 million for the year ended December 31, 2024. The asset management business recognizes carried interest income on new funds within our Consolidated and Combined Statements of Operations on a gross basis. On new funds, 33.3% of carried interest revenue is attributable to BN. This balance is primarily the carried interest generated on new funds that is attributable to BN and fluctuates depending on the carried interest generated on new funds during the year. For the years ended December 31, 2023 and 2022 Net income for the year ended December 31, 2023 was $2.1 billion, of which $1.8 billion was attributable to common stockholders. This compares to net income of $2.9 billion for the year ended December 31, 2022, of which $1.9 billion was attributable to common stockholders. Revenues Revenues for the year ended December 31, 2023 were $4.1 billion, which represents an increase of $435 million or 12% compared to $3.6 billion of revenue for the year ended December 31, 2022. Base Management and Advisory Fees Base management and advisory fees for the year ended December 31, 2023 were $2.8 billion, which represents an increase of $266 million or 11% compared to the year ended December 31, 2022. The increase was predominantly driven by incremental contributions from capital raised for our latest flagship funds and capital deployed across our complementary strategies. Incentive Fees Incentive fees for the year ended December 31, 2023, were $376 million, an increase of $41 million or 12% from the year ended December 31, 2022, driven by higher incentive distribution fees earned due to growth in BIP and BEP's dividends of 6% and 5%, respectively. Carried Interest Allocations Realized carried interest allocations were $51 million for the year ended December 31, 2023, which represents a decrease of $190 million compared to the year ended December 31, 2022. Realized carried interest allocations in the year were primarily driven by dispositions within our real estate flagship funds. Realized carried interest allocations of $241 million for the year ended December 31, 2022 were primarily driven by realizations within our real estate long-term and perpetual funds, as well as a realization within our infrastructure business. All realized carried interest allocations, net of carry compensation for the current and comparative period related to mature funds and are attributable to BN. Realized carried interest allocations on mature funds are attributed to BN through our redeemable preferred shares. Unrealized carried interest allocations were $348 million for the year ended December 31, 2023, which represents an increase of $99 million compared to the year ended December 31, 2022. The unrealized carried interest allocations were primarily related to growth in valuations in our private equity, real estate and transition flagship funds, partially offset by realizations in the year. Carried interest allocation generated by new funds are 66.7% attributable to the asset management business and 33.3% to BN. Within the Consolidated and Combined Statements of Operations, carry revenue is presented on a 100% basis and the portion attributable to BN is presented in Net Income Attributable to Non-Controlling Interest. Unrealized carried interest allocations attributable to the asset management business, which represents unrealized carried interest on new funds, was $167 million for the year ended December 31, 2023, compared to $124 million for the year ended December 31, 2022. Interest and Dividend Revenue Interest and dividend revenue for the year ended December 31, 2023 were $172 million, which represents a decrease of $86 million compared to the year ended December 31, 2022. The decrease was a result of the transfer of certain investments and loans of the asset management business to BN as part of the 2022 Arrangement. Prior year interest and dividend income was earned from legacy investments and interest bearing loans with affiliates. 60 Other Revenues Other revenues were $349 million for the year ended December 31, 2023, an increase of $305 million compared to the year ended December 31, 2022. Other revenues are largely comprised of recoverables from BN related to share and performance-based compensation as defined by the Relationship Agreement, fund expense recharges, and incentive management fees earned on certain funds. The increase is due to amounts recoverable from BN associated with share and performance based compensation as defined by the Relationship Agreement. A decrease in performance and liability-based compensation resulted in reduced recoveries in the prior year. Share-based and performance-based award expenses that are recoverable from BN are recognized in other revenues with the offsetting expense recognized in compensation and benefits, and carried interest allocation compensation, respectively. Expenses Total expenses for the year ended December 31, 2023 were $1.5 billion, an increase of $175 million or 13% compared to the year ended December 31, 2022. Compensation and Benefits Compensation and benefits for the year ended December 31, 2023 were $1.0 billion, which represents an increase of $348 million compared to the year ended December 31, 2022. This is primarily attributable to increased compensation costs resulting from the ongoing growth of our asset management business and mark-to-market increases of liability-based awards. Other Operating Expenses Other operating expenses are comprised of professional fees, facilities costs, as well as costs directly associated with our fundraising and investment functions. Other operating expenses were $342 million for the year ended December 31, 2023, compared to $236 million for the year ended December 31, 2022. The increase was primarily attributable to the growth in our business relative to the prior year. Carried Interest Allocation Compensation Compensation expenses related to carried interest allocation compensation were $86 million for the year ended December 31, 2023, which represents a decrease of $114 million compared to the year ended December 31, 2022. This is predominantly driven by lower relative valuation gains compared to the year ended December 31, 2022 across certain of our funds. The carried interest compensation expense associated with mature funds is fully recoverable from BN. Carried interest compensation expense on new funds was $2 million on a net basis. Other (Expenses) Income, net Other (expenses) income, net for the year ended December 31, 2023, primarily consists of mark-to-market movements on our investment in BSREP III and mark-to-market adjustments on call and put options to acquire an additional interest in Oaktree and Primary Wave. BSREP III mark-to-market movements and dividend distributions during 2023 are not attributable to the Asset Management Company on a net basis. The Asset Management Company also recorded impairment charges associated with intangible assets and goodwill of $30 million related to legacy acquisitions, and transaction costs related to the spin-off of the asset management business. Other income in the prior year relates to dividend income received from BSREP III. Share of Income from Equity Accounted Investments Our share of income from equity accounted investments was $167 million compared to $146 million in the prior year, or an increase of 14%. This is predominantly our share of income from our investment in Oaktree, primarily driven by unrealized carried interest generated during the year. Income Tax Expense Income tax expense was $417 million for the year ended December 31, 2023, which represents a decrease of $210 million compared to the year ended December 31, 2022. This decrease was driven by lower taxable income relative to prior year. Net Income Attributable to Preferred Share Redeemable Non-Controlling Interest The asset management business recognizes carried interest income and associated carried interest allocation expense on mature funds within our Consolidated and Combined Statements of Operations on a gross basis. As the net carried interest generated on mature funds is all attributable to BN, the net income or loss attributable to BN via the preferred shares primarily represents the change in carried interest, net of carried interest allocation expense and taxes on mature funds owing to BN. Net income attributable to preferred redeemable non-controlling interest was $262 million for the year ended December 31, 2023 primarily due to higher valuations in certain mature funds. 61 Net Income Attributable to Non-Controlling Interest Net income attributable to non-controlling interest was $36 million for the year ended December 31, 2023. The asset management business recognizes carried interest income on new funds within our Consolidated and Combined Statements of Operations on a gross basis. On new funds, 33.3% of carried interest revenue is attributable to BN. This balance is primarily the carried interest generated on new funds that is attributable to BN and fluctuates depending on the carried interest generated on new funds during the year. Balance Sheet Analysis Consolidated Balance Sheets The following table summarizes the Consolidated Balance Sheets of BAM as at December 31, 2024 and December 31, 2023: AS AT DECEMBER 31, (MILLIONS, EXCEPT SHARE AMOUNTS) 2024 2023 Assets Cash and cash equivalents $ 12 $ 9 Due from affiliates 968 886 Other assets 75 40 Investment in Brookfield Asset Management ULC 3,331 2,270 Total assets $ 4,386 $ 3,205 Liabilities Accounts payable and accrued liabilities $ 879 $ 859 Due to affiliates 229 261 Total liabilities 1,108 1,120 Commitment and contingencies Equity Common Stock: Class A, unlimited authorized, 443,135,847 (2023 – 413,026,253) issued and 420,217,136 (2023 – 388,733,466) outstanding as at December 31, 2024 3,475 2,354 Class B, unlimited authorized, 21,280 (2023 – 21,280) issued and outstanding as at December 31, 2024 — — Class A held in treasury, 22,918,711 (2023 – 24,292,787) shares as at December 31, 2024 (651) (649) Additional paid-in-capital 565 403 Retained deficit (143) (35) Accumulated other comprehensive income 1 3 Total common equity 3,247 2,076 Non-controlling interest 31 9 Total equity 3,278 2,085 Total liabilities, non-controlling interest and equity $ 4,386 $ 3,205 As at December 31, 2024 and December 31, 2023 Assets As at December 31, 2024, BAM’s total assets were $4.4 billion, an increase of $1.2 billion, or 37% from December 31, 2023. Total assets consist primarily of approximately 27% interest in the Asset Management Company and reimbursements due from affiliates related to long-term executive compensation programs of BAM. Due from Affiliates Due from affiliates increased by $82 million from $886 million to $968 million, or 9%, primarily due to higher reimbursable expenses related to long-term executive compensation programs and performance-based awards of BAM. This was partially offset by payments under the Asset Management Services Agreement related to share-based compensation awards and settlements of certain liability-based awards for which BAM was reimbursed. 62 Other Assets Other assets increased from $40 million to $75 million due to the purchase of an option to acquire Brookfield Asset Management ULC’s shares for $35 million. These options track certain awards issued to employees of our asset management business and are exercised at the same time and at the same exercise price as the underlying awards. Investment in Brookfield Asset Management ULC The investment in Brookfield Asset Management ULC increased by $1.1 billion, or 47% to $3.3 billion. BAM issued approximately 28.8 million Class A Shares in exchange for approximately 28.8 million shares of the Asset Management Company. The share exchange was valued at $1.1 billion, was non-dilutive to BAM Ltd. shareholders, and increased BAM's ownership from approximately 25% to approximately 27%. The investment balance is net of distributions, partially offset by our share of income during the year. Liabilities As at December 31, 2024, BAM’s total liabilities were $1.1 billion, a decrease of $12 million compared to December 31, 2023. This was driven by a decrease in due to affiliates of $32 million, or 12%, due to repayments on BAM's credit facility with the Asset Management Company. Accounts payable and accrued liabilities increased due to movement in liability-based awards, partially offset by the settlement of certain liability-based awards. Equity As at December 31, 2024, BAM's total equity was $3.3 billion, which increased by $1.2 billion, or 57% compared to December 31, 2023. This was primarily due to the aforementioned equity issuance. In addition, net income earned and increases in additional paid-in-capital related to stock-based compensation plans were partially offset by distributions in the period. 63 Consolidated and Combined Balance Sheets The following table presents the Consolidated and Combined Balance Sheets of the Asset Management Company as at December 31, 2024 and December 31, 2023: AS AT DECEMBER 31, (MILLIONS, EXCEPT SHARE AMOUNTS) 2024 2023 Assets Cash and cash equivalents $ 404 $ 2,667 Accounts receivable and other, net 483 551 Financial assets 231 37 Due from affiliates 2,500 2,504 Investments 9,113 7,522 Investments held for sale 242 — Investments in consolidated funds 251 — Property, plant and equipment, net 58 73 Intangible assets, net 38 42 Goodwill 251 251 Deferred income tax assets 586 643 Total assets $ 14,157 $ 14,290 Liabilities Accounts payable and other, net $ 1,349 $ 1,677 Financial liabilities 228 122 Due to affiliates 1,092 986 Deferred income tax liabilities 46 40 Non-recourse borrowings in consolidated funds 251 — Total liabilities 2,966 2,825 Commitments and contingencies Preferred shares redeemable non-controlling interest 2,103 2,166 Equity Common shares, unlimited authorized, 1,635,428,404 (2023 – 1,635,349,629) issued and 1,630,525,104 (2023 – 1,635,349,629) outstanding as at December 31, 2024 9,017 9,014 Common shares held in treasury, 4,903,300 (2023 – nil) shares as at December 31, 2024 (91) — Retained deficit (488) (178) Accumulated other comprehensive income 162 168 Additional paid-in capital 152 122 Total common equity 8,752 9,126 Non-controlling interest 336 173 Total equity 9,088 9,299 Total liabilities, redeemable non-controlling interest and equity $ 14,157 $ 14,290 As at December 31, 2024 and December 31, 2023 Assets Total assets were $14.2 billion as at December 31, 2024, a decrease of $133 million or 1% compared to December 31, 2023, due to decreases in cash and cash equivalents, partially offset by an increase in investments during the year. 64 Cash and Cash Equivalents Cash and cash equivalents were $404 million as at December 31, 2024, a decrease of $2.3 billion or 85% from December 31, 2023. This was largely due to the acquisition of our incremental approximately 4.5% ownership interest in Oaktree, our acquisition of Castlelake, as well as other strategic acquisitions made during the year ended December 31, 2024. This was partially offset by the repayment of a bridge facility made to an affiliate, and reimbursements of fund expenses. Of this balance, $132 million is on deposit with BN. Accounts Receivable and Other, Net Accounts receivable and other, net of $483 million primarily consists of receivables from third parties and prepaid expenses. The decrease of $68 million from December 31, 2023 was largely driven by the timing of collections, partially offset by management fees receivable from third parties and prepayments of stock-based compensation costs to BAM in accordance with the Asset Management Services Agreement. Financial Assets Financial assets of $231 million primarily consists of call options to acquire additional interests in Primary Wave and Castlelake in the future and financial instruments associated with various investments. The increase of $194 million from December 31, 2023 was largely driven by mark-to-market valuation increases of certain of our call options, as well as the recognition of new call options recognized during the year. Due from Affiliates Due from affiliates of $2.5 billion primarily relates to management fees earned but not collected from our managed funds, receivables for expenses paid on behalf of certain of our funds, as well as reimbursements due from BN for long-term compensation awards. The movement of $4 million from December 31, 2023 was primarily the result of collections on management fees, settlement of certain liability-based awards, fund recharge receivables and certain receivables with BN, and repayments of interest bearing related party loans. These decreases were partially offset by management fees receivables on fee revenues earned from our funds during the year and recoverable expenses for certain liability-based awards recoverable from BN. Investments Investments are comprised of: • Our approximately 15% limited partnership interest in BSREP III of $1.0 billion; • Our $4.6 billion interest in Oaktree which increased from approximately 68% to approximately 73% ownership interest during the year; • Accumulated unrealized carried interest in our mature and new funds of $931 million and $693 million, respectively; and • Other investments totaling $1.9 billion. During the year, investments increased by $1.6 billion due to the aforementioned increase in our Oaktree ownership, investments made in Castlelake for approximately $489 million excluding contingent consideration, the purchase of a warehoused investment in GEMS Education for approximately $347 million, for which $97 million has been syndicated as at December 31, 2024, and our investment in Pretium of $351 million. The investment in BSREP III and carry generated on mature funds are fully attributable to BN through their preferred shares redeemable non-controlling interest and does not impact net income attributable to common stockholders. Investments in Consolidated Funds Investments in consolidated funds represents certain funds in which the asset management company holds a sufficient interest to require the consolidation of the fund. Investments in these funds are measured at fair value. Investments Held for Sale Investments held for sale of $242 million relate to a fund acquired in conjunction with our acquisition of Pinegrove Ventures through Pinegrove Venture Partners, our venture investment platform formed with Sequoia Heritage. We expect to monetize this investment for cash in the near term. Liabilities Total liabilities were $3.0 billion as at December 31, 2024, an increase of $141 million or 5% compared to December 31, 2023. 65 Accounts Payable and Other, Net Accounts payable and other, net primarily consists of accrued bonus compensation, performance and cash-settled share-based compensation. The decrease of $328 million compared to December 31, 2023 reflects annual bonus payments, settlement of certain liability-based awards, and timing of taxes paid during the year. This was partially offset by higher performance and liability-based compensation owed to employees. Financial Liabilities Financial liabilities of $228 million primarily consists of contingent consideration associated with our investment in Castlelake and the mark-to-market of derivatives associated with put options on certain of our investments. The increase of $106 million compared to December 31, 2023 reflects the recognition of contingent consideration and put options associated with investments made during the year, and mark-to-market movements of a put option held by third parties to sell additional interests in Primary Wave to the Asset Management Company. This was partially offset by the mark-to-market of a put option held by third parties associated with our investment in Oaktree. Due to Affiliates Due to affiliates of $1.1 billion reflects amounts owed to affiliates. The increase of $106 million or 11% relative to December 31, 2023 was the result of a new related party loan to fund a warehoused investment, and higher share-based compensation owed to related parties. This was partially offset by the repayment of BAM's credit facility with BN and payments on certain of our loans payable to related parties. Non-Recourse Borrowings of Consolidated Funds Non-recourse borrowings in consolidated funds represents borrowings used to finance investments within certain of our funds where the asset management company is required to consolidate the fund due to our economic interest. These borrowings are non-recourse to the asset management business and may fluctuate with the timing of new investments. Preferred Shares Redeemable Non-Controlling Interest Our asset management business recognizes carried interest generated and associated carried interest allocation expense on mature funds within our Consolidated and Combined Statements of Operations. As the net carried interest generated on mature funds is all attributable to BN, this balance primarily represents the accumulated unrealized carried interest, net of carried interest allocation expense and taxes on mature funds owing to BN. Preferred shares redeemable non-controlling interest was $2.1 billion as at December 31, 2024, a decrease of $63 million compared to $2.2 billion as at December 31, 2023. This movement was due to a decrease in unrealized carried interest on mature funds during the year, partially offset by redeemable preferred share issuances to BN and BAM. Non-Controlling Interest Non-controlling interest was $336 million as at December 31, 2024, an increase of $163 million compared to $173 million as at December 31, 2023. This increase was primarily due to carried interest generated by new funds that is owed to BN, non-controlling interests associated with our equity-settled share-based compensation and other non-controlling interests associated with various entities within our asset management business. 66 Cash Flow Statement Analysis Review of Consolidated Statements of Cash Flows The following table summarizes the changes in BAM’s cash for the years ended December 31, 2024, 2023 and the period from July 4, 2022 to December 31, 2022: FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 AND FOR THE PERIOD JULY 4, 2022 TO DECEMBER 31, 2022 (MILLIONS) 2024 2023 2022 Operating activities $ 627 $ 508 $ (2) Investing activities (41) (41) — Financing activities (583) (459) 3 Change in cash and cash equivalents $ 3 $ 8 $ 1 This statement reflects activities within our consolidated operations and therefore excludes activities within non-consolidated entities. For the years ended December 31, 2024 and 2023 Operating Activities During the year ended December 31, 2024, BAM generated operating cashflows of $627 million primarily attributable to the share of income from its investment in the Asset Management Company. During the year ended December 31, 2023, BAM's operating cashflows were $508 million. The increase from the prior year was primarily due to the higher ownership interest held by BAM in the Asset Management Company as well as the impact of the annual dividend increase by the Asset Management Company of 19%. Investing Activities Net cash outflows from investing activities totaled $41 million during the year ended December 31, 2024, and $41 million in the prior year. The activity in both years primarily reflects the purchase of an option to acquire additional shares of the Asset Management Company. Financing Activities Net cash outflows from financing activities totaled $583 million, primarily attributed to the distributions paid to BAM's shareholders. These outflows were partially offset by prepayments of certain share-based compensation from the Asset Management Company. During the year ended December 31, 2023, net cash outflows from financing activities totaled $459 million, primarily attributed to distributions paid to BAM's shareholders and share repurchases, partially offset by draws on our revolving credit facility with the Asset Management Company and prepayments received for certain of our share-based compensation programs. For the year ended December 31, 2023 and period ended December 31, 2022 Operating Activities During the year ended December 31, 2023, BAM's operating activities generated positive cashflows of $508 million primarily attributable to the share of income driven from its investment in the Asset Management Company. During the period from July 4, 2022 to December 31, 2022, BAM's operating cash outflows were $2 million. Investing Activities During the year ended December 31, 2023, net cash outflows from investing activities totaled $41 million, primarily reflecting the purchase of an option to acquire additional shares of the Asset Management Company. Financing Activities During the year ended December 31, 2023, net cash outflows from financing activities totaled $459 million, primarily attributed to the distributions paid to BAM's shareholders and share buybacks. These outflows were partially offset by cash drawn on the credit facility between BAM and the Asset Management Company. During the period from July 4, 2022 to December 31, 2022, net cash inflows from financing activities totaled $3 million, primarily attributed to movements of loan balances from an affiliate of BN as a result of the 2022 Arrangement and share subscriptions of BN. These inflows were partially offset by share repurchases. 67 Review of Consolidated and Combined Statements of Cash Flows Refer to the following table that summarizes the Consolidated and Combined Statements of Cash Flows for our asset management business for the years ended December 31, 2024, 2023, and 2022: FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Operating activities $ 1,863 $ 1,439 $ (374) Investing activities (1,995) (475) 1,706 Financing activities (2,119) (1,842) (280) Change in cash and cash equivalents $ (2,251) $ (878) $ 1,052 This statement reflects activities within our consolidated operations and therefore excludes activities within non-consolidated entities. For the years ended December 31, 2024 and 2023 Operating Activities During the year ended December 31, 2024, the Asset Management Company's operating activities generated cash inflows of $1.9 billion, compared to cash inflows of $1.4 billion in the prior year. The increase in operating cash flows compared to the prior year was primarily driven by higher cash generated from growth of our asset management business, partially offset by settlement of amounts due to related parties and working capital outlays. Investing Activities Net cash outflows from investing activities totaled $2.0 billion, compared to outflows of $475 million in the prior year. The increase from the prior year was primarily due to the closing of our strategic investment in Castlelake for $489 million, a minority position in Pretium for $351 million, and a net cash outflow associated with the acquisition of a warehoused investment in GEMS Education for $249 million. In addition, the acquisition of Pinegrove Ventures along with a related wholly-owned fund for $258 million, our incremental investment in Oaktree, and $251 million of investment acquisitions within our consolidated funds further added to current year outflows. This increase in outflows were partially offset by higher dispositions of investment assets and lower net advances to related parties in the current year. Financing Activities Net cash outflows from financing activities totaled $2.1 billion, compared to outflows of $1.8 billion in the prior year. The increase in outflows were primarily due to a 19% increase in dividends compared to the prior year and the settlement of our revolving credit facility with BN. The increase in outflows were partially offset by non-recourse borrowings within our consolidated funds and the issuance of a related party loan for the acquisition of a warehoused investment. For the years ended December 31, 2023 and 2022 Operating Activities During the year ended December 31, 2023, the Asset Management Company's operating activities generated positive cashflows of $1.4 billion, compared to cash outflows of $374 million in the year ended December 31, 2022. Excluding the net change in working capital and other non-cash operating items, operating cash inflows were $2.1 billion, representing an increase of $76 million or 4% compared to the year ended December 31, 2022, primarily driven by the impact of the 2022 Arrangement. Investing Activities During the year ended December 31, 2023, net cash outflows from investing activities totaled $475 million compared to inflows of $1.7 billion in the year ended December 31, 2022. The year ended December 31, 2023 investing activity primarily consists of the purchase of the incremental 4% ownership interest in Oaktree and advances provided to BAM on its credit facility. The year ended December 31, 2022 investing activity inflow was predominantly driven by the disposition of financial assets as part of the 2022 Arrangement. Financing Activities During the year ended December 31, 2023, net cash outflows from financing activities totaled $1.8 billion, compared to outflows of $280 million in the year ended December 31, 2022. The year ended December 31, 2023 primarily consists of distributions to shareholders of $2.1 billion, partially offset by borrowings from related parties of $197 million. The year ended December 31, 2022 outflows were primarily as a result of distributions to parent, distributions to redeemable non-controlling interests and capital borrowings, partially offset by inflows from contributions from the parent. 68 Key Financial and Operating Measures BAM and the Asset Management Company prepare their financial statements in conformity with U.S. GAAP. This report discloses a number of non-GAAP financial and supplemental financial measures which are utilized in monitoring our asset management business, including for performance measurement, capital allocation and valuation purposes. BAM believes that providing these performance measures is helpful to investors in assessing the overall performance of our asset management business. These non-GAAP financial measures should not be considered as the sole measure of BAM’s or our asset management business’ performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in conformity with U.S. GAAP financial measures. These non-GAAP financial measures are not standardized financial measures and may not be comparable to similar financial measures used by other issuers. The asset management business includes the asset management activities of Oaktree, an equity accounted affiliate, in its key financial and operating measures for our asset management business. See “Reconciliation of U.S. GAAP to Non-GAAP Measures”, in this report. Non-GAAP Measures Utilized by Our Asset Management Business Fee Revenues Fee Revenues is a key metric analyzed by management to determine the growth in recurring cash flows from our asset management business. Fee Revenues include base management fees, incentive distributions, performance fees and transaction fees. Fee Revenues exclude carried interest and revenues of consolidated funds, but include Fee Revenues earned by Oaktree. The most directly comparable measure of Fee Revenues disclosed in the financial statements is base management and advisory fees. See “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Fee Revenues. Fee-Related Earnings Fee-Related Earnings is used to provide additional insight into the operating profitability of our asset management activities. Fee-Related Earnings are recurring in nature and not based on future realization events. Fee-Related Earnings is comprised of Fee Revenues less direct costs associated with earning those fees, which include employee compensation and professional fees as well as business related technology costs, and other shared services costs. Fee-Related Earnings exclude revenues and expenses of consolidated funds. The most directly comparable measure of Fee-Related Earnings disclosed in the primary financial statements is net income. See “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Fee-Related Earnings. Distributable Earnings BAM intends to pay out approximately 90% of its Distributable Earnings to shareholders quarterly and reinvest the balance back into the business. The asset management business intends to pay dividends to BAM on a quarterly basis sufficient to ensure that BAM can pay its intended dividend. Distributable Earnings used by our asset management business provides insight into earnings that are available for distribution or to be reinvested by our asset management business. It is calculated as the sum of its Fee-Related Earnings, realized carried interest, returns from our corporate cash and financial assets, interest expense, cash taxes, and general and administrative expenses excluding equity-based compensation expenses. The most directly comparable measure disclosed in the primary financial statements of our asset management business for Distributable Earnings is net income. See “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of U.S. GAAP to Non-GAAP Measures” for our reconciliation of Distributable Earnings. Supplemental Financial Measures Utilized by Our Asset Management Business Assets Under Management AUM refers to the total fair value of assets managed, calculated as follows: • Investments that Brookfield, which includes BN, the asset management business, or their affiliates, either: ◦ Consolidates for accounting purposes (generally, investments in respect of which Brookfield has a significant economic interest and unilaterally directs day-to-day operating, investing and financing activities), or ◦ Does not consolidate for accounting purposes but over which Brookfield has significant influence by virtue of one or more attributes (e.g., being the largest investor in the investment, having the largest representation on the investment’s 69 governance body, being the primary manager and/or operator of the investment, and/or having other significant influence attributes), ◦ Are calculated at 100% of the total fair value of the investment taking into account its full capital structure — equity and debt — on a gross asset value basis, even if Brookfield does not own 100% of the investment, with the exception of investments held through our perpetual funds, which are calculated at its proportionate economic share of the investment’s net asset value. • All other investments are calculated at Brookfield’s proportionate economic share of the total fair value of the investment taking into account its full capital structure — equity and debt — on a gross asset value basis. Our methodology for determining AUM differs from the methodology that is employed by other alternative asset managers as well as the methodology for calculating regulatory AUM that is prescribed for certain regulatory filings (e.g., Form ADV and Form PF). Fee-Bearing Capital Fee-Bearing Capital represents the capital committed, pledged, or invested in our permanent capital vehicles, private funds and liquid strategies that we manage which entitles us to earn Fee Revenues. Fee-Bearing Capital includes both called (“invested”) and uncalled (“pledged” or “committed”) amounts. When reconciling period amounts, we utilize the following definitions: • Inflows include capital commitments and contributions to our private and liquid strategies funds, and equity issuances from the permanent capital vehicles. • Outflows represent distributions and redemptions of capital from within the liquid strategies capital. • Distributions represent quarterly distributions from the permanent capital vehicles as well as returns of committed capital (excluding market valuation adjustments), redemptions and expiry of uncalled commitments within our private funds. • Market valuation includes gains (losses) on portfolio investments, the permanent capital vehicles and liquid strategies based on market prices. • Other includes changes in net non-recourse leverage included in the determination of the permanent capital vehicle capitalizations and the impact of foreign exchange fluctuations on non-U.S. dollar commitments. Uncalled Fund Commitments Total Uncalled Fund Commitments includes capital callable from fund investors, including funds outside of their investment period, for which capital is callable for follow-on investments. 70 Fee-Bearing Capital Diversification AS AT DEC 31 (BILLIONS) Long-term Private Funds As of December 31, 2024, we managed approximately $262 billion of Fee-Bearing Capital across a diverse range of long-term private funds that target opportunistic (20%+, gross), value-add (15%-16%, gross), core and core plus (9%-13%, gross) returns. These funds are generally closed-end and have a long duration, typically committed for 10 years with 2 one-year extension options. On these products, we earn: • Diversified and long-term base management fees, typically on committed capital or invested capital, depending on the nature of the fund and where the fund is in its life, • Transaction and advisory fees on co-investment capital that we raise and deploy alongside our long-term private funds, which vary based on transaction agreements, and • Carried interest or performance fees, which entitle us to a portion of overall fund profits, provided that investors receive a minimum prescribed preferred return. Carried interest is typically paid towards the end of the life of a fund after capital has been returned to investors and may be subject to “clawback” until all investments have been monetized and minimum investment returns are sufficiently assured. BN is entitled to receive 33.3% of the carried interest on new sponsored funds of our asset management business and will retain all of the carried interest earned on our existing mature funds. Permanent Capital and Perpetual Strategies As of December 31, 2024, we managed approximately $209 billion of Fee-Bearing Capital across our permanent capital vehicles, perpetual core, and core plus private funds. On these products, we earn: • Long-term perpetual base management fees, which are based on the market capitalization or net asset value of our permanent capital vehicles and on the net asset value of our perpetual private funds. 71 • Stable incentive distribution fees from BEP and BIP, which are linked to the growth in cash distributions paid to investors above a predetermined hurdle. Both BEP and BIP have a long-standing track record of growing distributions annually within their target range of 5-9%. • Performance fees from BBU are based on unit price performance above a prescribed high-water mark price, which are not subject to clawback, as well as carried interest on our perpetual private funds. Liquid Strategies As of December 31, 2024, we managed approximately $68 billion of Fee-Bearing Capital across our liquid strategies, which included capital that we manage on behalf of our publicly listed funds and separately managed accounts, with a focus on fixed income and equity securities across real estate, infrastructure, and natural resources. On these products, we earn: • Base management fees, which are based on committed capital or fund net asset value, and • Performance income based on investment returns above a minimum prescribed return. 72 Analysis of Key Non-GAAP Financial and Operating Measures of our Asset Management Business The following section contains a discussion and analysis of key financial and operating measures utilized in managing our asset management business, including for performance measurement, capital allocation, and valuation purposes. For further detail on our non-GAAP and performance measures, please refer to “Part II—Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Financial and Operating Measures”, in this report. Fee-Bearing Capital The following tables summarize Fee-Bearing Capital as at December 31, 2024, 2023 and 2022: AS AT (MILLIONS) Long-term private funds Permanent capital and perpetual strategies Liquid strategies Total Renewable power and transition $ 34,813 $ 23,044 $ — $ 57,857 Infrastructure 45,738 51,312 — 97,050 Real estate 69,689 23,940 — 93,629 Private equity 37,123 8,067 — 45,190 Credit 74,697 102,193 67,925 244,815 December 31, 2024 $ 262,060 $ 208,556 $ 67,925 $ 538,541 AS AT (MILLIONS) Long-term private funds Permanent capital and perpetual strategies Liquid strategies Total Renewable power and transition $ 29,663 $ 22,700 $ — $ 52,363 Infrastructure 47,345 47,290 — 94,635 Real estate 66,038 27,406 — 93,444 Private equity 33,249 5,600 — 38,849 Credit 69,046 45,723 62,938 177,707 December 31, 2023 $ 245,341 $ 148,719 $ 62,938 $ 456,998 AS AT (MILLIONS) Long-term private funds Permanent capital and perpetual strategies Liquid strategies Total Renewable power and transition $ 25,902 $ 20,510 $ — $ 46,412 Infrastructure 40,316 42,436 — 82,752 Real estate 63,832 31,801 — 95,633 Private equity 31,500 7,816 — 39,316 Credit 56,245 34,209 63,296 153,750 December 31, 2022 $ 217,795 $ 136,772 $ 63,296 $ 417,863 73 The changes in Fee-Bearing Capital are set out in the following tables for the years ended December 31, 2024, 2023 and 2022: AS AT AND FOR THE YEAR ENDED (MILLIONS) Renewable power and transition Infrastructure Real estate Private equity Credit Total December 31, 2023 $ 52,363 $ 94,635 $ 93,444 $ 38,849 $ 177,707 $ 456,998 Inflows 8,670 5,313 9,074 3,714 102,211 128,982 Outflows — (11) (481) — (27,396) (27,888) Distributions (1,594) (2,378) (4,054) (1,302) (8,700) (18,028) Market valuation (704) 3,669 (2,169) 1,610 6,074 8,480 Other (878) (4,178) (2,185) 2,319 (5,081) (10,003) Change 5,494 2,415 185 6,341 67,108 81,543 December 31, 2024 $ 57,857 $ 97,050 $ 93,629 $ 45,190 $ 244,815 $ 538,541 AS AT AND FOR THE YEAR ENDED (MILLIONS) Renewable power and transition Infrastructure Real estate Private equity Credit Total December 31, 2022 $ 46,412 $ 82,752 $ 95,633 $ 39,316 $ 153,750 $ 417,863 Inflows 5,612 12,523 10,168 4,424 40,455 73,182 Outflows — (6) (127) — (20,228) (20,361) Distributions (1,442) (2,929) (4,690) (1,201) (5,989) (16,251) Market valuation 1,757 2,241 (2,841) (816) 7,703 8,044 Other 24 54 (4,699) (2,874) 2,016 (5,479) Change 5,951 11,883 (2,189) (467) 23,957 39,135 December 31, 2023 $ 52,363 $ 94,635 $ 93,444 $ 38,849 $ 177,707 $ 456,998 AS AT AND FOR THE YEAR ENDED (MILLIONS) Renewable power and transition Infrastructure Real estate Private equity Credit Total December 31, 2021 $ 47,141 $ 66,219 $ 76,642 $ 34,382 $ 139,749 $ 364,133 Inflows 6,351 24,929 17,117 9,135 50,137 107,669 Outflows — — (343) — (21,699) (22,042) Distributions (1,409) (3,361) (4,149) (808) (2,434) (12,161) Market valuation (5,873) (5,053) 1,545 (2,546) (8,320) (20,247) Other 202 18 4,821 (847) (3,683) 511 Change (729) 16,533 18,991 4,934 14,001 53,730 December 31, 2022 $ 46,412 $ 82,752 $ 95,633 $ 39,316 $ 153,750 $ 417,863 For the year ended December 31, 2024 Fee-Bearing Capital was $539 billion as at December 31, 2024 compared to $457 billion as at December 31, 2023. The increase of $81.5 billion, or 18% was primarily attributable to fundraising and capital deployments across our strategies, including our fifth real estate flagship fund, the second vintage of our global transition fund, and follow-on investments in earlier vintages of certain of our flagship funds. The AEL Mandate resulted in $49 billion of inflows of Fee-Bearing Capital, as well as annuity-related inflows and other insurance capital generated in BWS also added to our Fee-Bearing Capital. In addition, Fee-Bearing Capital increased due to the higher market valuations attributable to higher trading prices of BIP and BBU, and our strategic investments in Castlelake and Pinegrove Ventures completed during the year. These increases were partially offset by the lower market capitalization of BEP, lower net asset value of BPG, distributions to our clients, and outflows due to redemptions within our liquid and perpetual strategies. For the year ended December 31, 2023 Fee-Bearing Capital was $457 billion as at December 31, 2023 compared to $418 billion as at December 31, 2022. The increase of $39 billion was primarily attributable to fundraising and capital deployments across our strategies, including our fifth real estate and infrastructure flagship funds, and our sixth private equity flagship fund. Inflows within our credit strategy were due to capital deployed within our closed-end funds and other investments in BWS. The overall increase of Fee-Bearing Capital was partially offset by distributions to our clients and outflows due to redemptions within our credit funds and liquid strategies. 74 Distributable Earnings of the Asset Management Business FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Base management fees 1 $ 4,233 $ 3,956 $ 3,620 Incentive distributions 424 378 335 Transaction and advisory fees 49 47 93 Fee Revenues 4,706 4,381 4,048 Less: direct costs 1,2 (2,136) (2,014) (1,792) 2,570 2,367 2,256 Less: Fee-Related Earnings not attributable to the asset management business (114) (126) (148) Fee-Related Earnings 3 $ 2,456 $ 2,241 $ 2,108 Add back: equity-based compensation costs and other income 4 208 199 86 Cash taxes (301) (196) (98) Distributable Earnings $ 2,363 $ 2,244 $ 2,096 1. Base management fees and direct costs are presented on a 100% basis. Base management fees and direct costs for Oaktree totaled $955 million and $660 million for the year ended December 31, 2024 (2023 – $897 million and $618 million, respectively). Refer to Note 3 “Investments” of the Consolidated and Combined Financial Statements for additional disclosures related to Oaktree revenues, expenses, and net income. 2. Direct costs include compensation expense, other operating expenses and general, administrative, and other expenses, and related Oaktree direct costs at 100%. 3. Fee-Related Earnings include Oaktree’s Fee-Related Earnings at our approximate 73% ownership interest (December 31, 2023 – 68%). 4. This adjustment adds back equity-based compensation and other income associated with the Asset Management Company's portion of partly owned subsidiaries’ investment income, realized carried interest, interest income received and charges paid on related party loans, and other income. For the years ended December 31, 2024 and 2023 Fee Revenues for the year ended December 31, 2024 were $4.7 billion, an increase of $325 million or 7% compared to the prior year. This increase was predominantly due to an increase in base management fees of $277 million or 7%, driven by incremental fees in credit as a result of earnings from our strategic partnerships. Fee Revenues also increased from capital raised in BWS, capital deployed across our credit strategies, higher market capitalization of BBU, the AEL Mandate, and higher net asset values in certain of our credit funds. In addition, fees earned from fundraising across the latest vintages of our flagship funds over the last twelve months also generated incremental Fee Revenues, specifically our fifth real estate and infrastructure flagship funds, the second vintage of our global transition fund, and the sixth vintage of our private equity flagship fund. These increases in base management fees were partially offset by lower fees from our listed permanent capital vehicles due to a decrease in the net asset value of BPG and lower market capitalization of BIP, and the end of investment periods in certain of our older vintage funds. Incentive distributions increased by $46 million or 12% as a result of an increase in BEP and BIP's quarterly dividend over the prior year of 5% and 6%, respectively. Direct costs increased by $122 million or 6% from the prior year as we continue to scale our asset management business. Distributable Earnings were $2.4 billion for the year ended December 31, 2024, an increase of $119 million compared to the prior year. The increase was primarily driven by higher Fee-Related Earnings and higher investment income in certain of our strategic investments, partially offset by a decrease in other income due to lower interest earned on our deposit with BN and higher cash taxes on Fee-Related Earnings. For the years ended December 31, 2023 and 2022 Fee Revenues for the year ended December 31, 2023 were $4.4 billion, an increase of $333 million or 8% compared to prior year. This increase was predominantly due to an increase in base management fees of $336 million or 9%, driven by fees earned from fundraising for our latest infrastructure, real estate and private equity flagship funds and incremental fees earned in our credit platform as a result of capital deployed across our opportunistic credit funds. In addition, fees from our perpetual strategy increased due to the increase in net asset values of underlying assets. The increase in base management fees was partially offset by lower fees from our listed permanent capital vehicles due to decreases in market capitalizations. Incentive distributions increased by $43 million or 13% as a result of an increase in BEP and BIP's quarterly dividend over the prior year of 5% and 6%, respectively. Direct costs increased by $222 million or 12% from the prior year as we continue to scale our asset management business and higher equity-based compensation. 75 Distributable Earnings were $2.2 billion for the year ended December 31, 2023, an increase of $148 million or 7% compared to the prior year. The increase was driven by higher Fee-Related Earnings and higher equity-based compensation costs and other income of $113 million , primarily driven by higher interest income on our deposit with BN. The overall increase in Distributable Earnings was partially offset by an increase in Cash taxes of $98 million due to higher Fee-Related Earnings . Investment Strategy Results In each of our product categories, we invest globally in various investment strategies, each benefiting from strong secular tailwinds that provide an expanding multi-trillion dollar investa ble universe. Our investment strategies are (a) renewable power and transition, (b) infrastructure, (c) real estate, (d) private equity, and (e) credit. The following tables summarize Fee-Bearing Capital and Fee Revenues by investment strategy: Fee-Bearing Capital AS AT DECEMBER 31, (MILLIONS) 2024 2023 2022 Renewable power and transition $ 57,857 $ 52,363 $ 46,412 Infrastructure 97,050 94,635 82,752 Real estate 93,629 93,444 95,633 Private equity 45,190 38,849 39,316 Credit 244,815 177,707 153,750 Total Fee-Bearing Capital $ 538,541 $ 456,998 $ 417,863 FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Balance, beginning $ 456,998 $ 417,863 $ 364,133 Inflows 128,982 73,182 107,669 Outflows (27,888) (20,361) (22,042) Distributions (18,028) (16,251) (12,161) Market valuation 8,480 8,044 (20,247) Other (10,003) (5,479) 511 Change 81,543 39,135 53,730 Balance, ending $ 538,541 $ 456,998 $ 417,863 Fee Revenues FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Renewable power and transition $ 642 $ 595 $ 576 Infrastructure 1,202 1,216 1,045 Real estate 968 920 871 Private equity 470 475 434 Credit 1,424 1,175 1,122 Total Fee Revenues $ 4,706 $ 4,381 $ 4,048 76 Renewable Power and Transition Summary of Key Financial and Operating Measures The following charts provide the Fee-Bearing C apital of o ur renewable power and transition investment strategy as at December 31, 2024, 2023 and 2022, and Fee Revenues for the years then ended. Fee-Bearing Capital Fee Revenues AS AT DEC 31 (BILLIONS) FOR THE YEARS ENDED DEC 31 (MILLIONS) ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies The following provides explanations of significant movements in Fee-Bearing Capital for the years then ended. Fee-Bearing Capital AS AT DECEMBER 31, (MILLIONS) 2024 2023 2022 Long-term private funds $ 34,813 $ 29,663 $ 25,902 Permanent capital and perpetual strategies 23,044 22,700 20,510 Total Fee-Bearing Capital $ 57,857 $ 52,363 $ 46,412 FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Balance, beginning $ 52,363 $ 46,412 $ 47,141 Inflows 8,670 5,612 6,351 Outflows — — — Distributions (1,594) (1,442) (1,409) Market valuation (704) 1,757 (5,873) Other (878) 24 202 Change 5,494 5,951 (729) Balance, ending $ 57,857 $ 52,363 $ 46,412 77 For the year ended December 31, 2024 During the year ended December 31, 2024, Fee-Bearing Capital increased by $5.5 billion or 10% to $58 billion. This increase was driven by fundraising for the second vintage of our global transition fund, capital deployments across our fund strategies, as well as inflows from BEP's issuance of medium term and perpetual green subordinated notes. These increases were partially offset by distributions to BEP's unitholders and limited partners of our permanent and long-term private funds and the lower market capitalization of BEP due to the decrease in its share price. Additionally, Fee-Bearing Capital decreased due to the end of the investment period in one of our earlier vintage funds during the year. For the year ended December 31, 2023 During the year ended December 31, 2023, Fee-Bearing Capital increased by $6.0 billion or 13% to $52 billion. This increase was driven by inflows attributable to fundraising for the second vintage of our global transition fund, capital deployments across our fund strategies, as well as BEP's $650 million equity offering in the second quarter of 2023. In addition, the market capitalization of BEP increased due to an increase in its share price during the year. These increases were partially offset by distributions paid to BEP’s unitholders and limited partners of our long-term private funds. Fee Revenues FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Management and advisory fees Long-term private funds Flagship funds $ 259 $ 239 $ 206 Co-investment and other funds 2 11 15 261 250 221 Perpetual strategies BEP 1 204 205 245 Co-investment and other funds 20 9 — 224 214 245 Catch-up fees 9 10 13 Transaction and advisory fees 19 9 2 Total management and advisory fees 513 483 481 Incentive distributions 129 112 95 Total Fee Revenues $ 642 $ 595 $ 576 1. BEP Fee-Bearing Capital as at December 31, 2024 is $21.5 billion (December 31, 2023 – $22.1 billion; December 31, 2022 – $20.5 billion) For the year ended December 31, 2024 Fee Revenues increased by $47 million for the year ended December 31, 2024 relative to the year ended December 31, 2023. Incentive distributions from BEP increased by $17 million due to a 5% increase in distributions compared to the prior period. Fees from our perpetual strategies increased $10 million predominantly due to fundraising from co-investors in certain of our perpetual funds. In addition, higher management fees and transaction fees were earned on the second vintage of our global transition fund, and other follow-on investments during the year. These increases were partially offset by lower fees earned from co-investment capital in our long-term private funds. For the year ended December 31, 2023 Fee Revenues increased by $19 million, or 3% for the year ended December 31, 2023 relative to the year ended December 31, 2022. Fees from our long-term private funds increased $29 million relative to the prior year due to an increase in fees earned on our first global transition fund, which benefitted from a full year of fee revenues from 2022 fundraising, as well as an increase in fundraising and capital deployments across our other private funds. Incentive distributions from BEP increased by $17 million, due to a 5% increase in distributions compared to the prior year. These increases were partially offset by a decrease in perpetual strategy fees of $31 million predominantly due to lower fees earned from BEP resulting from a decrease in its average market capitalization relative to the prior year. 78 Infrastructure Summary of Key Financial and Operating Measures The following charts provide the Fee-Bearing Capital of our Infrastructure investment strategy as at December 31, 2024, 2023 and 2022, and Fee Revenues for the years then ended. Fee-Bearing Capital Fee Revenues AS AT DEC 31 (BILLIONS) FOR THE YEARS ENDED DEC 31 (MILLIONS) ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies The following provides explanations of significant movements in Fee-Bearing Capital for the years then ended. Fee-Bearing Capital AS AT DECEMBER 31, (MILLIONS) 2024 2023 2022 Long-term private funds $ 45,738 $ 47,345 $ 40,316 Permanent capital and perpetual strategies 51,312 47,290 42,436 Total Fee-Bearing Capital $ 97,050 $ 94,635 $ 82,752 FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Balance, beginning $ 94,635 $ 82,752 $ 66,219 Inflows 5,313 12,523 24,929 Outflows (11) (6) — Distributions (2,378) (2,929) (3,361) Market valuation 3,669 2,241 (5,053) Other (4,178) 54 18 Change 2,415 11,883 16,533 Balance, ending $ 97,050 $ 94,635 $ 82,752 For the year ended December 31, 2024 During the year ended December 31, 2024, Fee-Bearing Capital increased by $2.4 billion or 3% to $97 billion. This increase was predominantly due to the higher market capitalization of BIP due to the increase in its share price, fundraising for co-investments alongside our fifth flagship fund as well as capital deployed and valuation increases across our perpetual strategies. These increases were partially offset by the end of the investment period of our fourth flagship fund, distributions paid to BIP unitholders, and distributions paid to limited partners in our long-term private funds and perpetual strategies. For the year ended December 31, 2023 During the year ended December 31, 2023, Fee-Bearing Capital increased by $11.9 billion or 14% to $95 billion. This increase was predominantly due to capital raised for our fifth flagship fund, as well as capital deployed for follow-on investments within our third flagship fund. Additionally, Fee-Bearing Capital increased as a result of debt issuances from BIP, follow-on investments within our other perpetual and long-term strategies, and an increase in market valuations as a result of a higher market capitalization of BIP and other perpetual strategies. These increases were partially offset by distributions paid to limited partners in our long-term private funds and to BIP and other unitholders across our permanent capital vehicles. 79 Fee Revenues FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Management and advisory fees Long-term private funds Flagship funds $ 369 $ 371 $ 274 Co-investment and other funds 6 18 20 375 389 294 Perpetual strategies BIP 1 393 401 421 Co-investment and other funds 133 99 55 526 500 476 Catch-up fees 1 37 2 Transaction and advisory fees 5 24 33 Total management and advisory fees 907 950 805 Incentive distributions 295 266 240 Total Fee Revenues $ 1,202 $ 1,216 $ 1,045 1. BIP Fee-Bearing Capital as at December 31, 2024 is $31.9 billion (December 31, 2023 – $31.2 billion; December 31, 2022 – $29.2 billion). For the year ended December 31, 2024 Fee Revenues decreased by $14 million or 1% for the year ended December 31, 2024 relative to the year ended December 31, 2023. The decrease was driven by one-time catch-up fees and transaction and advisory fees in the prior year and lower fees earned from BIP due to a lower average market capitalization in the current year. This was partially offset by higher Fee Revenues from an increase in incentive distributions of $29 million predominantly due to a 6% increase in BIP's quarterly dividend, as well as capital raised and deployed by certain of our perpetual strategies. For the year ended December 31, 2023 Fee Revenues increased by $171 million or 16% for the year ended December 31, 2023 relative to the year ended December 31, 2022. Fees from our long-term private funds increased by $95 million primarily due to capital raised for our fifth flagship fund. Fee Revenues from our perpetual strategies increased by $24 million, driven by capital deployed, partially offset by lower fees earned from BIP due to a lower average market capitalization compared to the prior year. Catch-up fees increased by $35 million due to follow on closes for our fifth flagship fund and incentive distributions increased by $26 million due to an increase in BIP's quarterly dividend. The increases were partially offset by a decrease of $9 million of transaction and advisory fees as the prior year benefited from higher fees on co-investment transactions. 80 Real Estate Summary of Key Financial and Operating Measures The following charts provide the Fee-Bearing Capital for our Real Estate investment strategy as at December 31, 2024, 2023 and 2022, and Fee Revenues for the years then ended. Fee-Bearing Capital Fee Revenues AS AT DEC 31 (BILLIONS) FOR THE YEARS ENDED DEC 31 (MILLIONS) ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies The following provides explanations of significant movements in Fee-Bearing Capital for the years then ended. Fee-Bearing Capital AS AT DECEMBER 31, (MILLIONS) 2024 2023 2022 Long-term private funds $ 69,689 $ 66,038 $ 63,832 Permanent capital and perpetual strategies 23,940 27,406 31,801 Total Fee-Bearing Capital $ 93,629 $ 93,444 $ 95,633 FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Balance, beginning $ 93,444 $ 95,633 $ 76,642 Inflows 9,074 10,168 17,117 Outflows (481) (127) (343) Distributions (4,054) (4,690) (4,149) Market valuation (2,169) (2,841) 1,545 Other (2,185) (4,699) 4,821 Change 185 (2,189) 18,991 Balance, ending $ 93,629 $ 93,444 $ 95,633 81 For the year ended December 31, 2024 During the year ended December 31, 2024, Fee-Bearing Capital increased by $185 million to $94 billion. This increase was predominantly due to inflows attributable to fundraising within our fifth flagship fund, follow-on investments in our third flagship fund, and equity issuances in BPG. Additional closes and capital deployed across various other fund strategies also contributed to our Fee-Bearing Capital. These increases were partially offset by distributions from our permanent and perpetual strategies, flagship and other private funds. Additionally, Fee-Bearing Capital for BPG and certain long-term and perpetual strategies decreased due to a net decline in valuations. For the year ended December 31, 2023 During the year ended December 31, 2023, Fee-Bearing Capital decreased by $2.2 billion or 2% to $93 billion, predominantly due to distributions from our perpetual strategies, flagship and other private funds. Additionally, our long-term private funds Fee-Bearing Capital decreased due to the change in the fee base of one of our flagship funds from committed capital to invested capital as a result of the end of its commitment period. Our permanent capital vehicles and perpetual strategies decreased due to a decline in the market valuation of certain assets. These decreases were partially offset by inflows attributable to fundraising within our fifth flagship fund, follow-on investments in our third flagship fund, and capital deployed across various other fund strategies. Fee Revenues FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Management and advisory fees Long-term private funds Flagship funds $ 457 $ 396 $ 354 Co-investment and other funds 217 228 166 674 624 520 Perpetual strategies BPG 1 195 196 225 Co-investment and other funds 74 93 93 269 289 318 Catch-up fees 25 4 33 Transaction and advisory fees — 3 — Total Fee Revenues $ 968 $ 920 $ 871 1. BPG Fee-Bearing Capital as at December 31, 2024 is $16.6 billion (December 31, 2023 – $17.9 billion; December 31, 2022 – $20.8 billion). For the year ended December 31, 2024 During the year ended December 31, 2024, Fee Revenues increased by $48 million or 5% relative to the year ended December 31, 2023. This was primarily from fees earned from our long-term private funds, driven by fundraising and catch-up fees for our fifth flagship fund and follow-on investments in our third flagship fund. These increases were partially offset by lower net asset values in certain of our perpetual strategies and long-term private funds. For the year ended December 31, 2023 During the year ended December 31, 2023, Fee Revenues increased by $49 million or 6% due to the increase in revenues earned from fundraising for our fifth flagship fund and commitments throughout 2022 to our fourth flagship fund. In addition, fees increased from capital invested in our residential, U.S., and other fund investments. These increases were partially offset by catch-up fees recognized on our fourth flagship fund in the prior year and a decrease in fees earned by our perpetual vehicle due to the decrease in Fee-Bearing Capital of BPG as well as the disposition of investments within earlier vintages of our flagship funds. 82 Private Equity Summary of Key Financial and Operating Measures The following charts provide the Fee-Bearing Capital for our Private Equity investment strategy as at December 31, 2024, 2023 and 2022, and Fee Revenues for the years then ended. Fee-Bearing Capital Fee Revenues AS AT DEC 31 (BILLIONS) FOR THE YEARS ENDED DEC 31 (MILLIONS) ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies ■ Long-term Private Funds ■ Permanent Capital Vehicles and Perpetual Strategies The following provides explanations of significant movements in Fee-Bearing Capital for the years then ended. Fee-Bearing Capital AS AT DECEMBER 31, (MILLIONS) 2024 2023 2022 Long-term private funds $ 37,123 $ 33,249 $ 31,500 Permanent capital and perpetual strategies 8,067 5,600 7,816 Total Fee-Bearing Capital $ 45,190 $ 38,849 $ 39,316 FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Balance, beginning $ 38,849 $ 39,316 $ 34,382 Inflows 3,714 4,424 9,135 Outflows — — — Distributions (1,302) (1,201) (808) Market valuation 1,610 (816) (2,546) Other 2,319 (2,874) (847) Change 6,341 (467) 4,934 Balance, ending $ 45,190 $ 38,849 $ 39,316 For the year ended December 31, 2024 During the year ended December 31, 2024, Fee-Bearing Capital increased by $6.3 billion or 16% to $45 billion. The increase was primarily driven by our acquisition of Pinegrove Ventures, and capital deployments and fundraising for co-investments in certain of our long-term private funds. In addition, growth of Fee-Bearing Capital was attributable to the higher market capitalization of BBU as a result of an increase in its share price. These increases were partially offset by distributions from other long-term strategies. For the year ended December 31, 2023 During the year ended December 31, 2023, Fee-Bearing Capital decreased by $467 million or 1% to $39 billion. The expiration of the management fee period of a mature flagship fund and distributions to our investors was partially offset by inflows of $4.4 billion for our long-term private funds. This was largely driven by capital raised for our sixth flagship private equity fund and capital deployed across other strategies. 83 Fee Revenues FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Management and advisory fees Long-term private funds Flagship funds $ 162 $ 177 $ 137 Other long-term funds 175 174 186 Co-investment and other funds 10 10 8 347 361 331 Perpetual strategies BBU 1 92 87 94 92 87 94 Catch-up fees 7 16 — Transaction and advisory fees 24 11 9 Total Fee Revenues $ 470 $ 475 $ 434 1. BBU Fee-Bearing Capital as at December 31, 2024 was $8.1 billion (December 31, 2023 – $5.6 billion; December 31, 2022 – $7.8 billion). For the year ended December 31, 2024 Fee Revenues decreased by $5 million for the year ended December 31, 2024 relative to the year ended December 31, 2023. This decrease was primarily due to the end of the investment period for our fifth flagship fund, realizations and returns of capital in our fourth flagship fund, and catch-up fees recognized in the prior period related to our sixth flagship fund. These decreases were partially offset by capital raised for our sixth flagship fund, higher market capitalization of BBU, capital deployed across several of our other funds, and higher transaction fees related to certain of our long-term private funds. For the year ended December 31, 2023 Fee Revenues increased by $41 million or 9% for the year ended December 31, 2023 relative to the year ended December 31, 2022. This increase was primarily due to capital raised for our sixth flagship fund which experienced a $59 million increase in Fee Revenues and catch up fees attributable to the timing of fundraising. This increase was partially offset by a decrease in fees earned within our other funds due to the end of the management fee period for certain earlier vintage funds. 84 Credit Summary of Key Financial and Operating Measures The following charts provide the Fee-Bearing Capital for our Credit investment strategy as at December 31, 2024, 2023 and 2022, and Fee Revenues for the years then ended. Fee-Bearing Capital Fee Revenues AS AT DEC 31 (BILLIONS) FOR THE YEARS ENDED DEC 31 (MILLIONS) ■ Long-term Private Funds ■ Perpetual Strategies ■ Liquid Strategies ■ Long-term Private Funds ■ Perpetual Strategies ■ Liquid Strategies The following provides explanations of significant movements in Fee-Bearing Capital for the years then ended. Fee-Bearing Capital AS AT DECEMBER 31, (MILLIONS) 2024 2023 2022 Long-term private funds $ 74,697 $ 69,046 $ 56,245 Permanent capital and perpetual strategies 102,193 45,723 34,209 Liquid strategies 67,925 62,938 63,296 Total Fee-Bearing Capital $ 244,815 $ 177,707 $ 153,750 FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Balance, beginning $ 177,707 $ 153,750 $ 139,749 Inflows 102,211 40,455 50,137 Outflows (27,396) (20,228) (21,699) Distributions (8,700) (5,989) (2,434) Market valuation 6,074 7,703 (8,320) Other (5,081) 2,016 (3,683) Change 67,108 23,957 14,001 Balance, ending $ 244,815 $ 177,707 $ 153,750 For the year ended December 31, 2024 During the year ended December 31, 2024, Fee-Bearing Capital increased by $67.1 billion or 38% to $245 billion, primarily due to the AEL Mandate, resulting in $49 billion of inflows of Fee-Bearing Capital. BWS also contributed inflows of insurance-related capital. Inflows of Fee-Bearing Capital also included our investment in Castlelake, capital deployed in our Oaktree credit, liquid credit, and other platform credit funds, as well as valuation gains in certain Oaktree liquid credit funds. These increases were partially offset by annuity-related outflows in BWS, redemptions in our liquid and perpetual strategies, and returns of capital within our Oaktree, infrastructure, and real estate debt strategies. 85 For the year ended December 31, 2023 During the year ended December 31, 2023, Fee-Bearing Capital increased by $24 billion or 16% to $178 billion, due to growth across all strategies. The increase in our long-term private funds was driven by deployments within our eleventh and twelfth flagship opportunistic credit funds, and capital deployed in certain of our debt funds. In addition, our perpetual strategies increased primarily due to capital deployments and inflows from BWS as well as higher market valuations in our liquid strategy and open-end credit portfolios. This overall increase was partially offset by redemptions adversely impacting our liquid strategies. Fee Revenues FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Management and advisory fees Long-term private funds $ 781 $ 678 $ 604 Permanent and perpetual strategies 400 266 206 Liquid strategies 1 242 231 263 Transaction and advisory fees 1 — 49 Total Fee Revenues $ 1,424 $ 1,175 $ 1,122 1. Represents open-end funds within our credit strategies, and Oaktree's investment in a fixed income manager, as well as in publicly listed securities. For the year ended December 31, 2024 Fee Revenues increased by $249 million or 21% for the year ended December 31, 2024 relative to the year ended December 31, 2023. The increase was attributable to incremental fees earned on our perpetual strategies and long-term private funds. Fees from perpetual strategies increased by $134 million as a result of higher Fee-Bearing Capital driven by the AEL Mandate, and capital deployed across these strategies. In addition, fees from our long-term private funds increased due to deployments across our credit flagship and other debt funds and higher fees earned from our strategic partnerships. For the year ended December 31, 2023 Fee Revenues increased by $53 million or 5% for the year ended December 31, 2023 relative to the year ended December 31, 2022. The increase was predominately attributable to incremental fees earned on our long-term private funds and perpetual strategies. Fees from our long-term private funds increased due to deployments across our credit flagship and other debt funds. In addition, fees from perpetual strategies increased by $60 million as a result of higher Fee-Bearing Capital driven by valuation increases and capital deployed across these strategies. These increases were partially offset by a $32 million decrease in our liquid strategies due to redemptions. 86 Reconciliation of U.S. GAAP to Non-GAAP Measures Reconciliations of Distributable Earnings, Fee-Related Earnings and Fee Revenues to the most directly comparable financial measures calculated and presented in conformity with U.S. GAAP are presented below. In addition to net income and revenue, management assesses the performance of its business based on these non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, net income or other financial measures presented in conformity with U.S. GAAP. Reconciliation of Net Income to Fee-Related Earnings and Distributable Earnings The following presents a reconciliation of net income to Fee-Related Earnings and Distributable Earnings for the years presented for the asset management business. FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Net Income $ 2,108 $ 2,137 $ 2,865 Add or subtract the following: Provision for taxes (a) 438 417 627 Depreciation and amortization (b) 14 14 13 Carried interest allocations (c) (16) (399) (490) Carried interest allocation compensation (c) 93 86 200 Other income and expenses (d) 93 129 (1,090) Interest expense paid to related parties (e) 22 14 154 Interest and dividend revenue (e) (143) (172) (258) Other revenues (f) (372) (300) (44) Share of income from equity method investments (g) (339) (167) (146) Fee-related earnings of partly owned subsidiaries at our share (g) 330 271 252 Costs recovered from affiliates (h) 218 156 — Non-recurring restructuring costs (i) — 35 — Fee Revenues from BSREP III & other (j) 10 20 25 Fee-Related Earnings $ 2,456 $ 2,241 $ 2,108 Cash taxes (k) (301) (196) (98) Equity-based compensation expense and other (l) 208 199 86 Distributable Earnings $ 2,363 $ 2,244 $ 2,096 (a) This adjustment removes the impact of income tax provisions on the basis that we do not believe this item reflects the present value of the actual tax obligations that we expect to incur over the long-term due to the substantial deferred tax assets of our asset management business. (b) This adjustment removes the depreciation and amortization on property, plant and equipment and intangible assets, which are non-cash in nature and therefore excluded from Fee-Related Earnings. (c) These adjustments remove the impact of both unrealized and realized carried interest allocations and the associated compensation expense. Unrealized carried interest allocations and associated compensation expense are non-cash in nature. Carried interest allocations and associated compensation costs are included in Distributable Earnings once realized. (d) This adjustment removes other income and expenses associated with fair value changes. (e) This adjustment removes interest and charges paid or received from related party loans. (f) This adjustment adds back other revenues earned that are non-cash in nature. (g) These adjustments remove our share of partly owned subsidiaries' earnings, including items (a) to (f) above and include its share of partly owned subsidiaries' Fee-Related Earnings. (h) This item adds back compensation costs that will be borne by affiliates. (i) This item represents non-recurring restructuring costs that are not considered as part of the ongoing asset management business. (j) This adjustment adds base management fees earned from funds that are eliminated upon consolidation and other items. (k) Represents the impact of cash taxes paid by the business. (l) This adjustment adds back equity-based compensation and other income associated with the Company's portion of partly owned subsidiaries’ investment income, realized carried interest, interest income received and charges paid on related party loans, and other income. 87 Reconciliation of Revenues to Fee Revenues The following presents our reconciliation of management fee revenues to Fee Revenues for the years presented. FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 Base management and advisory fees $ 2,957 $ 2,766 $ 2,500 Incentive fees (a) 424 376 335 Fee Revenues from equity method investments (b) 1,335 1,240 1,165 BSREP III Fees & other (c) (10) (1) 48 Fee Revenues $ 4,706 $ 4,381 $ 4,048 (a) This adjustment adds incentive distributions that are included in Fee Revenues. (b) This adjustment adds management fees at 100% ownership. (c) This adjustment involves base management fees earned from BSREP III and other funds that are eliminated upon consolidation. 88 Fee Revenues by Geography The majority of our revenues are earned in the U.S. The following tables set out Fee Revenues disaggregated by investment strategy and geography. FOR THE YEAR ENDED DECEMBER 31, 2024 (MILLIONS) Renewable power and transition Infrastructure Real estate Private equity Credit Total Management and advisory fees, net United States of America $ 111 $ 124 $ 634 $ 227 $ 1,055 $ 2,151 Canada 159 354 40 74 40 667 United Kingdom 156 182 16 84 206 644 Other 87 247 278 85 123 820 Incentive distributions 129 295 — — — 424 $ 642 $ 1,202 $ 968 $ 470 $ 1,424 $ 4,706 FOR THE YEAR ENDED DECEMBER 31, 2023 (MILLIONS) Renewable power and transition Infrastructure Real estate Private equity Credit Total Management and advisory fees, net United States of America $ 103 $ 210 $ 642 $ 222 $ 864 $ 2,041 Canada 176 422 44 104 12 758 United Kingdom 151 204 191 69 148 763 Other 53 114 43 80 151 441 Incentive distributions 112 266 — — — 378 $ 595 $ 1,216 $ 920 $ 475 $ 1,175 $ 4,381 FOR THE YEAR ENDED DECEMBER 31, 2022 (MILLIONS) Renewable power and transition Infrastructure Real estate Private equity Credit Total Management and advisory fees, net United States of America $ 131 $ 201 $ 573 $ 223 $ 900 $ 2,028 Canada 182 346 46 89 8 671 United Kingdom 125 167 139 71 156 658 Other 43 91 113 51 58 356 Incentive distributions 95 240 — — — 335 $ 576 $ 1,045 $ 871 $ 434 $ 1,122 $ 4,048 89 Liquidity and Capital Resources Liquidity BAM undertakes limited activities, primarily receiving dividends from our asset management business as its main source of income and, in turn, making distributions to shareholders in accordance with its dividend policy. It employs a limited number of resources which provide services to our asset management business and for whom associated costs are largely reimbursed. Additional liquidity is available through a credit facility that is provided by our asset management business. BAM Credit Facility with the Asset Management Company On November 8, 2022, the Asset Management Company, as lender, established a five-year revolving credit facility with BAM for the amount of $500 million. This is available in U.S. and Canadian dollars, where U.S. dollar borrowings are subject to the U.S. Base Rate or SOFR plus a margin of 165 basis points, and Canadian Dollar borrowings are subject to the Canadian Prime Rate or Canadian Overnight Repo Rate Average (“CORRA”) plus a margin of 165 basis points. As at December 31, 2024, BAM has drawn $219 million from this credit facility. Our Asset Management Business Liquidity Our asset management business maintains sufficient liquidity at all times, enabling it to participate in opportunities as they arise, withstand sudden adverse changes in economic conditions, and sustain distributions to BAM and BN. Its primary sources of liquidity, which we refer to as corporate liquidity, consist of cash, short-term financial assets, as well as the undrawn portions of the $300 million revolving credit facility established on November 8, 2022, with BN as lender, and a $750 million five-year revolving credit facility established on August 29, 2024 through bilateral agreements with a group of lenders. Both facilities are available in U.S. and Canadian dollars. U.S. dollar draws from the $300 million facility are subject to the U.S. Base Rate or SOFR plus a margin of 165 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 165 basis points. U.S. dollar draws from the $750 million facility are subject to the U.S. Base Rate or SOFR plus a margin of 110 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 110 basis points. As at December 31, 2024 both the $300 million and the $750 million facilities are undrawn. As at December 31, 2024, corporate liquidity for our asset management business is $1.8 billion. This consists of $792 million in cash and short term financial assets, including cash on deposit with BN and investments that are convertible to cash within twelve months, as well as $1.1 billion in undrawn credit facilities. This liquidity can be deployed for use without any material tax consequences to support our asset management business in funding strategic transactions as well as seeding new investment products. The following table presents deployable capital of our asset management business: Corporate Group (a) AS AT (MILLIONS) December 31 December 31 December 31 December 31 2024 2023 2024 2023 Cash and financial assets, net $ 792 $ 2,847 $ 54,329 $ 29,222 Undrawn committed credit facilities 1,050 103 7,928 5,764 Corporate liquidity $ 1,842 $ 2,950 $ 62,257 $ 34,986 Uncalled private fund commitments — — 91,463 85,658 Total deployable capital $ 1,842 $ 2,950 $ 153,720 $ 120,644 (a) Group deployable capital consists of: (1) corporate liquidity of the Company and the perpetual affiliates, and (2) uncalled private fund commitments, which are third-party commitments available for drawdown in the private funds of our asset management business. 90 Uncalled Fund Commitments The following presents our Uncalled Fund Commitments as of December 31, 2024 by period and December 31, 2023: AS AT DECEMBER 31, (MILLIONS) 2025 2026 2027 2028 2029 + Total 2024 Dec. 2023 Renewable power and transition $ 181 $ — $ — $ 753 $ 20,081 $ 21,015 $ 17,129 Infrastructure 234 — — 255 12,359 12,848 14,264 Real estate 701 1,834 — — 13,110 15,645 22,507 Private equity 471 — 112 1,190 9,587 11,360 8,788 Credit 1,394 2,022 914 126 26,139 30,595 22,970 $ 2,981 $ 3,856 $ 1,026 $ 2,324 $ 81,276 $ 91,463 $ 85,658 Approximately $53 billion of the Uncalled Fund Commitments are currently not earning fees, but will become fee-bearing once the capital is invested. Once invested, we expect these commitments will earn approximately $530 million of additional Fee Revenues. Capital Resources Clawback Obligations Performance allocations are subject to clawback to the extent that the performance allocations received to date with respect to a fund exceeding the amount due to our asset management business based on cumulative results of that fund. The amounts and nature of our clawback obligations are described in Note 2 “Summary of Significant Accounting Policies” of the Consolidated and Combined Financial Statements of the Asset Management Company as at December 31, 2024, and December 31, 2023, and for the years ended December 31, 2024, December 31, 2023, and December 31, 2022. Capital Requirements Certain U.S. and non-U.S. entities of BAM are subject to various investment advisor and other financial regulatory rules and requirements that may include minimum net capital requirements. These requirements have been met for the year ended December 31, 2024. Contractual Obligations On January 31, 2019, a subsidiary of the Company committed $2.8 billion to BSREP III, of which $2.1 billion has been funded as at December 31, 2024 (December 31, 2023 – $2.1 billion). The remainder of the commitment will be funded by BN. In the normal course of business, the Company enters into contractual obligations which include commitments to provide bridge financing and other equity commitments. As at December 31, 2024, the Company had $3.3 billion of such commitments outstanding (2023 – $ 2.1 billion). The Company established a $750 million five-year revolving credit facility on August 29, 2024 through bilateral agreements with a group of lenders. The facility is available in U.S. and Canadian dollars, where U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 110 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 110 basis points. As at December 31, 2024, the Company has not made any draws on the $750 million facility. 91 The following table presents the contractual obligations of BAM and the asset management business by payment periods: Payments Due by Period of BAM AS AT DEC. 31, 2024 (MILLIONS) Less than 1 Year 1 – 3 Years 4 – 5 Years After 5 Years Total Accounts payable and other, net $ 175 $ 226 $ 207 $ 271 $ 879 Due to affiliates 229 — — — 229 Payments Due by Period of the Company AS AT DEC. 31, 2024 (MILLIONS) Less than 1 Year 1 – 3 Years 4 – 5 Years After 5 Years Total Accounts payable and other, net $ 716 $ 27 $ 70 $ 489 $ 1,302 Due to affiliates 891 60 62 80 1,093 Lease obligations 9 14 22 2 47 Accounts payable and other, net of BAM represent amounts owing to employees for carried interest compensation and share based compensation, both of which have vesting periods of up to 5 years. Due to affiliates of BAM represents amount due to the asset management business associated with the revolving credit facility established with the Company. This revolving credit facility is due on demand. Accounts payable and other, net of the Company represents amounts due to employees for equity-based compensations costs and carried interest compensation costs. Most awards have a vesting period of up to 5 years. Due to affiliates represents amounts owed to related parties associated with equity and liability-based compensation as well as carried interest compensation. Lease obligations represent expected payments associated with current leases entered into by the Company. Exposures to Financial Instruments As discussed elsewhere in this report, we utilize various financial instruments in our business to manage risk and make better use of our capital. The fair values of these instruments that are reflected on our balance sheets are disclosed in Note 5 “ Fair Value Measurements of Financial Instruments ” to our Consolidated and Combined Financial Statements of the Asset Management Company as at December 31, 2024, and December 31, 2023 and for the years ended December 31, 2024, December 31, 2023, and December 31, 2022. Off-Balance Sheet Arrangements BAM may from time to time enter into guarantees given in respect of co-investments in which there is carried interest. The amount guaranteed is up to the carry amount paid to the General Partner, net of taxes. No known amounts are currently due or owed under these guarantees. Related Party Transactions BAM and our asset management business entered into a number of related party transactions with BN and other affiliates. See Note 17 “ Related Party Transactions ” of the Consolidated and Combined Financial Statements of the Asset Management Company and Note 7 “ Related Party Transactions ” of the Consolidated Financial Statements of BAM as at December 31, 2024, and 2023 and for the years ended December 31, 2024, 2023, and the period from July 4, 2022 to December 31, 2022. BAM Dividends The dividends paid by BAM on outstanding securities for the years ended December 31, 2024, 2023, and 2022 are summarized in the table below. Distribution per Security 2024 2023 2022 Per Class A Share and Class B Share $ 1.52 $ 1.28 $ — 92 Summary of Significant Accounting Policies Critical Accounting Policies, Critical Accounting Estimates and Judgements of BAM BAM prepares consolidated financial statements in conformity with U.S. GAAP. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates that affect the amounts reported. Management believes that estimates utilized in the preparation of the consolidated financial statements are presented fairly, in all material respects. Such estimates include those used in the valuation of investments and the measurement of deferred tax balances (including valuation allowances) and the determination of control or significant influence. Actual results could differ from those estimates and such differences could be material. BAM believes the following critical accounting policies could potentially produce materially different results of BAM, if underlying assumptions, estimates and/or judgments were to be changed. For a full description of accounting policies, see Note 2 “Summary of Significant Accounting Policies” of the Consolidated Financial Statements of BAM as at December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023, and the period from July 4, 2022 to December 31, 2022. All intercompany balances and transactions have been eliminated on consolidation. Equity Method Investments Investments in which BAM is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting. BAM has significant influence over the Asset Management Company and therefore accounts for its investment under the equity method. The carrying value of equity method investments is determined based on amounts invested by BAM, adjusted for the equity in earnings or losses of the investee allocated based on the relevant agreements, less distributions received. Further, the carrying value of the equity method investment is adjusted as a result of any share-based awards granted by BAM to employees of the Asset Management Company. Under the equity method of accounting, BAM's share of earnings from equity investments is included in the share of income from equity investments in the Consolidated Statements of Comprehensive Income. BAM evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Refer to Note 3 “ Investments ” of the Consolidated Financial Statements of BAM for further details of BAM's equity method investments. Critical Accounting Estimates and Judgements of BAM Management is required to make critical judgements and estimates when applying its accounting policies. The following judgements and estimates have the most significant effect on the consolidated financial statements. Control or Level of Influence When determining the appropriate basis of accounting for BAM's and the asset management business’ investees, BAM makes judgments about the degree of influence that it exerts directly or through an arrangement over the investees’ relevant activities. This may include the ability to elect investee directors or appoint management. Control is obtained when BAM has the power to direct the relevant investing, financing and operating decisions of an entity and does so in its capacity as principal of the operations, rather than as an agent for other investors. Operating as a principal includes having sufficient capital at risk in any investee and exposure to the variability of the returns generated as a result of the decisions of BAM as principal. Judgment is used in determining the sufficiency of the capital at risk or variability of returns. In making these judgments, BAM considers the ability of other investors to remove BAM as a manager or general partner in a controlled partnership. Indicators of Impairment Judgment is applied when determining whether indicators of impairment exist when assessing the carrying values of BAM ULC’s assets, including: the determination of BAM’s ability to hold financial assets; the determination of discount and capitalization rates; and when an asset’s carrying value is above the value derived using publicly traded prices which are quoted in a liquid market. Income Taxes BAM makes judgments when determining the future tax rates applicable and identifying the temporary differences. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply during the year when the assets are realized or the liabilities settled, using the tax rates and laws enacted or substantively enacted at the consolidated balance sheet dates. 93 Carried Interest Allocations - Unrealized The change in the fair value of investments is a significant input into carried interest allocations - unrealized. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds. See “Fair Value” below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments. Fair Value The asset management business uses fair value throughout the reporting process. For details of our accounting policies related to fair value refer to Note 2. “ Summary of Significant Accounting Policies — Fair Value of Financial Instruments ” and “ Summary of Significant Accounting Policies — Revenue Recognition ” in the “ Notes to Consolidated and Combined Financial Statements ”. The following discussion is intended to provide supplemental information about how the application of fair value principles impact our financial results, and management’s process for implementing those principles including areas of significant judgment. The fair value of the investments held by the asset management business's funds is the primary input to the calculation of certain of our management fees, incentive fees, performance fees and the related compensation we recognize. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For investments where little market activity exists management’s determination of fair value is based on the best information available in the circumstances, which may incorporate management’s own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. Management has elected the fair value option for certain equity method investments. Additionally, management is required to measure specific financial instruments at fair value, including debt instruments, equity securities, and freestanding derivatives. Our primary approach to determining the fair value of our investments is generally the income approach, which estimates fair value based on the present value of expected future cash flows generated by a business. The most commonly used method within this approach is the discounted cash flow method, which incorporates key assumptions about the investment’s projected net earnings or cash flows, discount rate, capitalization rate, and exit multiple. Alternatively, management uses the market approach as a secondary methodology. This approach primarily relies on valuations of comparable public companies, transactions, or assets, requiring judgment in selecting appropriate comparables. Depending on the specific facts and circumstances of the investment, alternative primary and secondary methodologies may be applied, including option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, discount to sale, probability-weighted methods, or recent financing rounds. Assessments and Changes in Internal Control over Financial Reporting Management has evaluated the effectiveness of BAM’s internal control over financial reporting (as defined in the applicable U.S. and Canadian securities laws) as of December 31, 2024 and based on that assessment concluded that, as of December 31, 2024, our internal control over financial reporting was effective. Refer to “Part II—Item 9A. Controls and Procedures—Management’s Report on Internal Control Over Financial Reporting.” There have been no changes in our internal control over financial reporting during the quarter or year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management, including the CEO and Chief Financial Officer, has evaluated the effectiveness of BAM's disclosure controls and procedures (as defined in the applicable U.S. and Canadian securities laws) as of December 31, 2024. Based on that evaluation, the CEO and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of December 31, 2024. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and Qualitative Risk Disclosures BAM has limited activities and operations. BAM’s 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, 2023. Please refer to Item 1A of this report for a detailed description of BAM’s financial risk exposure and risk management activities. Market Risk 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. Specifically, with respect to the market risk related to base management fees earned based on the market capitalization of BEP, BIP and BBU. 94 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: FOR THE YEARS ENDED DECEMBER 31, (MILLIONS) 2024 2023 2022 BEP $ 20 $ 22 $ 19 BIP 33 32 33 BBU 7 4 7 Revenues $ 60 $ 58 $ 59 Foreign Currency Risk We have very limited exposure to foreign currency risk as a majority of our private funds are denominated in USD. This means that a majority of the Fee Revenues that we earn are paid in USD, irrespective of the local currency of our underlying investment base. Additionally, the majority of our revenues are earned in the U.S. Interest Rate Risk BAM has interest rate exposure through balances held with affiliates and does not hold debt or term deposits with third parties. BAM incurs interest expense on its revolving credit facility borrowings with the Asset Management Company at variable rates. 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. 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. 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. 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. The Asset Management Company incurs interest expense on its revolving credit facility borrowings with BN. Interest income and expenses on these balances are at variable rates. 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. 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. Credit Risk Investors in our private funds make capital commitments to these vehicles via subscription agreements. When a private fund makes an investment, these capital commitments are then satisfied by our investors via capital contributions as prescribed under these subscription agreements. Investors in our private funds may default on their capital commitment obligations, which could have an adverse impact on our earnings or result in other negative implications to our businesses such as the requirement to deploy our own capital to cover such obligations. This impact would be magnified if the investor that does so is in multiple funds. Given the diversity and creditworthiness of our over 2,300 clients, including some of the world’s largest institutional investors, sovereign wealth funds and pension plans, we are of the view that there is not a material credit risk present in our asset management business. 95 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Brookfield Asset Management Ltd. Consolidated Financial Statements Report of Independent Registered Public Accounting Firm ( Deloitte LLP , Toronto, Canada , PCAOB ID No. 1208 ) 97 Consolidated Balance Sheets as at December 31, 2024 and 2023 100 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and for the Period from July 4, 2022 to December 31, 2022 101 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2024, 2023 and for the Period from July 4, 2022 to December 31, 2022 102 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and for the Period from July 4, 2022 to December 31, 2022 103 Notes to the Consolidated Financial Statements 104 Index to Brookfield Asset Management ULC Consolidated and Combined Financial Statements Independent Auditor's Report (Deloitte LLP, Toronto, Canada, PCAOB ID No. 1208 ) 117 Consolidated and Combined Balance Sheets as at December 31, 2024 and 2023 118 Consolidated and Combined Statements of Operations for the Years Ended December 31, 2024 , 2023 and 2022 119 Consolidated and Combined Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022 120 Consolidated and Combined Statements of Changes in Equity for the Years Ended December 31, 2024, 2023 and 2022 121 Consolidated and Combined Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 122 Notes to the Consolidated and Combined Financial Statements 124 Index to Oaktree Asset Management Operating Group Combined and Consolidated Financial Statements Report of Independen t Auditors (E rn st & Yo ung LLP, L os Angeles, California ) 153 C ombined and C onsolidated Statements of Financial Condition as at December 31, 2024 and 2023 154 C ombine d and C onsolidated Statement s of Operations for the Years Ended December 31, 2024 , 2023 and 2022 155 C ombin ed and C onsolidated Statement s of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022 156 C ombined and C onsolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 157 C ombined and C onsolidated Statement s of Unitholders ' Capital for the Years Ended December 31, 2024, 2023 and 2022 159 Notes to the Combined and Consolidated Financial Statements 160 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Brookfield Asset Management Ltd. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Brookfield Asset Management Ltd. and subsidiaries (“BAM”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, BAM maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as at and for the year ended December 31, 2024, of BAM and our report dated March 17, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion BAM’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on BAM’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to BAM in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte LLP Chartered Professional Accountants Licensed Public Accountants Toronto, Canada March 17, 2025 97 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Brookfield Asset Management Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Brookfield Asset Management Ltd. and subsidiaries (“BAM”) as at December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in equity, and cash flows, for each of the two years in the period ended December 31, 2024 and for the period from July 4, 2022 to December 31, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of BAM as at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024 and for the period from July 4, 2022 to December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), BAM's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2025, expressed an unqualified opinion on BAM's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of