Brookfield Asset Management .(BAM) - 2024 Q4 - Annual Results

Executive Summary & Highlights Overall Performance and Strategic Milestones Brookfield Asset Management achieved record 2024 results with significant capital inflows and deployment, driving growth in earnings and dividends while simplifying its corporate structure - Capital inflows exceeded $135 billion and capital deployment reached $48 billion in 2024[1][2] - Quarterly Fee-Related Earnings (FRE) grew by 17% year-over-year to a record $677 million[1][2] - The quarterly dividend was increased by 15%[1][2] - BAM completed the acquisition of the 73% interest in the asset management business held by Brookfield Corporation, achieving 100% ownership and simplifying its corporate structure for potential inclusion in broader global equity indices[2][3] Key Financial Metrics (Summary) The company reported significant growth in Fee-Related Earnings, Distributable Earnings, and Net Income for the fourth quarter and full year of 2024 | Metric | Q4 2024 (millions of USD) | Q4 2023 (millions of USD) | Full Year 2024 (millions of USD) | Full Year 2023 (millions of USD) | | :--- | :--- | :--- | :--- | :--- | | Fee-Related Earnings (FRE) | 677 | 581 | 2,456 | 2,241 | | Distributable Earnings (DE) | 649 | 586 | 2,363 | 2,244 | | Net Income Attributable to BAM | 688 | 374 | 2,168 | 1,839 | | FRE per Share | 0.42 | 0.36 | 1.51 | 1.37 | | DE per Share | 0.40 | 0.36 | 1.45 | 1.37 | Operating Results (100% Asset Management Business) Fee-Bearing Capital (FBC) Fee-Bearing Capital grew 18% year-over-year, driven by successful fundraising, strategic deployment, and asset value appreciation - Fee-Bearing Capital (FBC) reached $539 billion at quarter-end, an increase of $82 billion or 18% year-over-year[6] - FBC growth was primarily driven by fundraising for transition and real estate flagship funds, deployment of infrastructure debt funds, and NAV appreciation in Oaktree's perpetual credit funds[6] Fee-Related Earnings (FRE) and Distributable Earnings (DE) Both Fee-Related Earnings and Distributable Earnings saw strong growth in the fourth quarter and full year of 2024, supported by increased Fee-Bearing Capital | Metric | Q4 2024 | YoY Growth | Full Year 2024 | YoY Growth | | :--- | :--- | :--- | :--- | :--- | | Fee-Related Earnings (FRE) | $677 million | 17% | $2.5 billion | 10% | | FRE per Share | $0.42 | - | $1.51 | - | | Distributable Earnings (DE) | $649 million | 11% | $2.4 billion | 5% | | DE per Share | $0.40 | - | $1.45 | - | Fundraising Activities The company raised $29 billion in the fourth quarter and $137 billion for the full year, with strong contributions from renewable power, transition, and credit funds - Raised $29 billion in Q4 2024 and $137 billion for the full year[8] - Key Q4 fundraising highlights: * Renewable Power: $4.2 billion, including $3.5 billion for the second global transition flagship fund * Infrastructure: $2.5 billion, including $700 million for the super-core infrastructure strategy and nearly $700 million for a private wealth infrastructure fund * Private Equity: $1.8 billion, including $1 billion for a Middle East fund and $500 million for the second special investments fund * Real Estate: Over $700 million, including nearly $500 million for the fifth flagship real estate fund * Credit: Approximately $20 billion, including $9.2 billion for Oaktree funds and strategies and $6.6 billion from insurance clients[9] Capital Deployment Capital deployment totaled $16 billion in the fourth quarter and $48 billion for the full year, with significant investments in renewable energy, real estate, and credit - Deployed $16 billion of capital in Q4 2024 and $48 billion for the full year[8] - Recent key deployment highlights: * Renewable Power and Transition: $4.5 billion, including the acquisition of global renewable developer Neoen ($3.2 billion) and an $850 million investment in U.S. developer Origis Energy * Real Estate: $2.4 billion, including investments in a U.S. multifamily portfolio, a U.S. student housing portfolio, and the pan-European logistics REIT Tritax * Credit: $7.7 billion, including $2.4 billion for the opportunistic credit flagship series and over $900 million for the strategic credit private wealth fund[9] Monetization Activities The company monetized approximately $9 billion of assets in the fourth quarter and $30 billion for the full year, primarily from renewable energy and real estate sectors - Monetized approximately $9 billion of capital in Q4 2024 and $30 billion for the full year[8] - Recent key monetization highlights: * Renewable Power and Transition: $1.4 billion, including the sale of Saeta Yield and a partial sale of Shepherds Flat * Real Estate: $1.8 billion, including the sale of a U.K. shopping center portfolio * Private Equity: Post-quarter, Clarios completed a refinancing, distributing $4.5 billion[9] Uncalled Fund Commitments and Liquidity As of year-end 2024, the company held $115 billion in uncalled fund commitments and maintained a strong liquidity position of $1.8 billion - Total uncalled fund commitments were $115 billion as of December 31, 2024[10] - Of this total, $53 billion is not currently earning fees but is expected to generate approximately $530 million in annual fees upon deployment[10] - Corporate liquidity stood at $1.8 billion as of December 31, 2024, including cash, short-term financial assets, and undrawn credit facilities[10] Strategic Transactions and Corporate Announcements Corporate Structure Simplification BAM acquired the remaining 73% interest in its asset management business from Brookfield Corporation, achieving 100% ownership and enhancing its corporate governance - BAM acquired the 73% private interest in the asset management business held by BN, with BAM Class A shares as consideration[11] - The transaction simplifies the corporate structure, enhances governance, and gives BAM 100% ownership of the asset management business[11] - This move positions BAM for potential inclusion in broader global equity indices[11] Dividend Declaration The Board of Directors declared a 15% increase in the quarterly dividend to $0.4375 per share, payable in March 2025 - The Board of Directors declared a quarterly dividend of $0.4375 per share, a 15% increase year-over-year[12] - The dividend is payable on March 31, 2025, to shareholders of record as of the close of business on February 28, 2025[12] Share Purchase Agreement BAM approved an agreement to purchase 2 million of its own shares from BN to fund its escrowed stock plan - BAM has approved an agreement to purchase 2 million of its own shares from BN to fund its escrowed stock plan[28] - The share purchase is expected to be completed on or after February 21, 2025[28] Financial Statements (Brookfield Asset Management Ltd. - Public Entity) Statement of Financial Position (BAM Ltd.) As of December 31, 2024, Brookfield Asset Management Ltd. reported total assets of $4.39 billion and total equity of $3.28 billion | Metric | Dec 31, 2024 (millions of USD) | Dec 31, 2023 (millions of USD) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 12 | 9 | | Investment in Brookfield Asset Management | 3,331 | 2,270 | | Amounts receivable from related parties | 968 | 886 | | Other assets | 75 | 40 | | Total Assets | 4,386 | 3,205 | | Liabilities | | | | Accounts payable and other | 879 | 859 | | Amounts payable to related parties | 229 | 261 | | Total Liabilities | 1,108 | 1,120 | | Equity | | | | Total Equity | 3,278 | 2,085 | Statement of Operating Results (BAM Ltd.) For Q4 2024, Brookfield Asset Management Ltd. recorded net income of $186 million, a 95.8% increase, and full-year net income of $541 million, a 19.9% increase | Metric | Q4 2024 (millions of USD) | Q4 2023 (millions of USD) | Full Year 2024 (millions of USD) | Full Year 2023 (millions of USD) | | :--- | :--- | :--- | :--- | :--- | | Equity accounted earnings | 192 | 104 | 570 | 470 | | Compensation and other expenses | (6) | (9) | (29) | (19) | | Net Income | 186 | 95 | 541 | 451 | | Diluted net income per share | 0.42 | 0.24 | 1.28 | 1.13 | | Basic net income per share | 0.44 | 0.24 | 1.31 | 1.15 | Financial Statements (Brookfield Asset Management - 100% Basis) Statement of Financial Position (100% Basis) On a 100% basis, Brookfield Asset Management reported total assets of $14.16 billion and total equity of $9.09 billion as of December 31, 2024 | Metric | Dec 31, 2024 (millions of USD) | Dec 31, 2023 (millions of USD) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 404 | 2,667 | | Accounts receivable and other | 713 | 588 | | Investments | 9,606 | 7,522 | | Amounts receivable from related parties | 2,501 | 2,504 | | Deferred income tax assets and other | 933 | 1,009 | | Total Assets | 14,157 | 14,290 | | Liabilities | | | | Accounts payable and other | 1,829 | 1,799 | | Amounts payable to related parties | 1,091 | 986 | | Deferred income tax liabilities and other | 2,149 | 2,206 | | Total Liabilities | 5,069 | 4,991 | | Equity | 9,088 | 9,299 | | Total Liabilities and Equity | 14,157 | 14,290 | Statement of Operating Results (100% Basis) On a 100% basis, the company generated total revenues of $1.06 billion and net income of $680 million in Q4 2024 | Metric | Q4 2024 (millions of USD) | Q4 2023 (millions of USD) | Full Year 2024 (millions of USD) | Full Year 2023 (millions of USD) | | :--- | :--- | :--- | :--- | :--- | | Revenues | | | | | | Management fees and incentive distributions | 901 | 803 | 3,381 | 3,142 | | Carried interest income, net of amount attributable to Corporation | 78 | (13) | 257 | 109 | | Other income, net | 84 | 340 | 342 | 811 | | Total Revenues | 1,063 | 1,130 | 3,980 | 4,062 | | Expenses | | | | | | Compensation, operating and general & administrative | (407) | (415) | (1,565) | (1,446) | | Interest expense | (5) | (4) | (22) | (14) | | Total Expenses | (412) | (419) | (1,587) | (1,460) | | Other income (expenses) | 13 | (137) | (186) | (215) | | Share of earnings from equity accounted investments | 145 | 73 | 339 | 167 | | Income before income tax | 809 | 647 | 2,546 | 2,554 | | Income tax expense | (129) | (116) | (438) | (417) | | Net Income | 680 | 531 | 2,108 | 2,137 | | Net loss (income) attributable to Brookfield Corporation | 8 | (157) | 60 | (298) | | Net Income Attributable to Brookfield Asset Management | 688 | 374 | 2,168 | 1,839 | | Diluted net income per share | 0.42 | 0.23 | 1.33 | 1.12 | | Basic net income per share | 0.42 | 0.23 | 1.33 | 1.12 | Reconciliation of Net Income to FRE and DE This table reconciles net income to the non-GAAP measures of Fee-Related Earnings (FRE) and Distributable Earnings (DE) by adjusting for various non-cash and non-operating items | Metric | Q4 2024 (millions of USD) | Q4 2023 (millions of USD) | Full Year 2024 (millions of USD) | Full Year 2023 (millions of USD) | | :--- | :--- | :--- | :--- | :--- | | Net income | 680 | 531 | 2,108 | 2,137 | | Add or deduct the following: | | | | | | Provision for taxes | 129 | 116 | 438 | 417 | | Depreciation and amortization | 3 | 4 | 14 | 14 | | Carried interest allocation | (29) | (137) | (16) | (399) | | Carried interest allocation compensation | 11 | (2) | 93 | 86 | | Other (income) expenses | (24) | 139 | 93 | 129 | | Interest expense paid to related parties | 5 | 4 | 22 | 14 | | Interest and dividend income | (26) | (45) | (143) | (172) | | Other income | (59) | (96) | (372) | (300) | | Share of earnings from equity accounted investments | (145) | (73) | (339) | (167) | | FRE from partially owned subsidiaries (our share) | 95 | 73 | 330 | 271 | | Compensation costs recovered from related parties | 34 | 45 | 218 | 156 | | Non-recurring restructuring costs | — | 35 | — | 35 | | Fee revenues from BSREP III and other funds | 3 | (13) | 10 | 20 | | Fee-Related Earnings (FRE) | 677 | 581 | 2,456 | 2,241 | | Cash taxes | (88) | (45) | (301) | (196) | | Add back: Equity-based compensation costs and other | 60 | 50 | 208 | 199 | | Distributable Earnings (DE) | 649 | 586 | 2,363 | 2,244 | Company Overview About Brookfield Asset Management Brookfield Asset Management is a leading global alternative asset manager with over $1 trillion in assets under management across a diverse range of sectors - Brookfield Asset Management Ltd. is a leading global alternative asset manager with over $1 trillion in assets under management[29] - Investment sectors include renewable power and transition, infrastructure, private equity, real estate, and credit[29] - The company offers alternative investment products to a global client base including public and private pension plans, sovereign wealth funds, and financial institutions[29] Non-GAAP and Performance Measures Definitions and Usage The company utilizes non-GAAP financial measures such as Distributable Earnings (DE) and Fee-Related Earnings (FRE) to evaluate its operational performance and business value - Distributable Earnings (DE) is the sum of fee-related earnings, realized carried interest, realized principal investments, interest expense, and general and administrative expenses, excluding equity-based compensation and depreciation[32] - Fee-Related Earnings (FRE) and Distributable Earnings (DE) are used to assess the company's operating performance and business value[33] - The company advises that these non-GAAP measures are not standardized under U.S. GAAP, may differ from those of other companies, and should not be considered in isolation or as a substitute for GAAP financial measures[34] Important Notices Forward-Looking Statements This press release contains forward-looking statements based on current management estimates and assumptions, which are subject to significant business, economic, and competitive uncertainties - This press release contains "forward-looking information" and "forward-looking statements" that involve predictions of future results, events, or conditions based on management's current estimates, beliefs, and assumptions[37] - Forward-looking statements are inherently subject to significant business, economic, competitive, and other uncertainties, and actual results may differ materially[37][38] - The company advises readers to evaluate risks carefully and undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[39][40] Disclaimers Past performance is not indicative of future results, and there is no assurance that targeted returns, growth objectives, or investment strategies will be achieved - Past performance is not indicative of future results, and there is no guarantee that future investments will be similar to historical ones or that target returns and growth objectives will be achieved[41] - Target returns and growth objectives in this press release are for illustrative purposes and are based on various assumptions; actual performance may differ materially due to risks and uncertainties beyond the company's control[42] - Some information is sourced from independent third parties, and the company makes no representation or warranty as to its accuracy, reasonableness, or completeness[43]