Brookfield Asset Management .(US:BAM)2025-08-07 22:58PART I - FINANCIAL INFORMATION Financial Statements Presents unaudited condensed consolidated financial statements for Brookfield Asset Management Ltd. as of June 30, 2025, including Balance Sheets, Statements of Operations, and Cash Flows, with detailed notes Condensed Consolidated Balance Sheets Total assets increased to $16.1 billion by June 30, 2025, with liabilities rising to $5.1 billion, while total equity remained stable at $9.2 billion Condensed Consolidated Balance Sheets (Unaudited) | AS AT | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $480 | $404 | | Due from affiliates | $3,529 | $2,500 | | Investments | $9,487 | $9,113 | | Investments of consolidated funds | $744 | $251 | | Total assets | $16,143 | $14,157 | | Liabilities | | | | Accounts payable and other, net | $2,357 | $1,349 | | Corporate borrowings | $743 | $— | | Borrowings of consolidated funds | $507 | $251 | | Total liabilities | $5,113 | $2,966 | | Total equity | $9,171 | $9,088 | Condensed Consolidated Statements of Operations Net income attributable to common stockholders rose to $620 million in Q2 2025 and $1.2 billion for the six-month period, driven by higher base management fees Condensed Consolidated Statements of Operations (Unaudited) | FOR THE PERIODS ENDED JUNE 30, | Three Months 2025 (Millions) | Three Months 2024 (Millions) | Six Months 2025 (Millions) | Six Months 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $1,090 | $916 | $2,171 | $1,800 | | Total expenses | ($557) | ($333) | ($1,059) | ($781) | | Income before taxes | $659 | $660 | $1,241 | $1,104 | | Net income | $584 | $518 | $1,091 | $891 | | Net income attributable to common stockholders | $620 | $495 | $1,201 | $936 | | Diluted EPS | $0.38 | $0.31 | $0.74 | $0.58 | Condensed Consolidated Statements of Cash Flows Cash from operating activities was $643 million for H1 2025, with investing activities using $255 million and financing activities using $314 million, resulting in a $74 million net cash increase Condensed Consolidated Statements of Cash Flows (Unaudited) | FOR THE SIX MONTHS ENDED JUNE 30, | 2025 (Millions) | 2024 (Millions) | | :--- | :--- | :--- | | Net cash from operating activities | $643 | $909 | | Net cash from investing activities | ($255) | ($458) | | Net cash from financing activities | ($314) | ($1,183) | | Change in cash and cash equivalents | $74 | ($732) | Notes to the Condensed Consolidated Financial Statements Detailed notes explain accounting policies, key investments, segment reporting, related party transactions, and subsequent events like the 2025 Arrangement and a declared dividend - On February 4, 2025, BAM completed a corporate arrangement with Brookfield Corporation (BN), where BN transferred its ~73% interest in the Asset Management Company to BAM. This transaction was accounted for as a reverse asset acquisition, with the Asset Management Company being the accounting acquirer and predecessor329799 - As of June 30, 2025, key investments include an approximate 74% economic interest in Oaktree ($4.7 billion), an economic interest in Castlelake ($758 million), and accrued carried interest in new funds ($963 million)106113 - The company operates through five segments: Renewable Power and Transition, Infrastructure, Real Estate, Private Equity, and Credit. The CODM assesses performance based on Segment Revenues and Segment Earnings, which are non-GAAP measures188193 - Subsequent to the quarter end, the board declared a quarterly dividend of $0.4375 per share. The company also agreed to acquire a 50.1% stake in Angel Oak Companies, an asset manager focused on residential mortgage strategies204206 Management's Discussion and Analysis of Financial Condition and Results of Operations Management's perspective on the company's financial condition and results of operations, covering business overview, economic environment, strategies, financial results, non-GAAP measures, and liquidity Business Overview and Environment BAM is a global alternative asset manager with over $1 trillion in AUM, operating in a Q2 2025 environment of easing U.S. inflation and moderate GDP growth - BAM is a leading global alternative asset manager with over $1 trillion of Assets Under Management across renewable power and transition, infrastructure, private equity, real estate, and credit208 - The company manages a range of public and private investment products for over 2,400 institutional and retail clients, leveraging a team of over 2,500 investment professionals209210213 - Key economic indicators for Q2 2025 include U.S. real GDP growth of 2.6%, U.S. inflation at 2.7%, and a stable Fed benchmark interest rate of 4.25%-4.50%. The S&P 500 increased by 10.6% during the quarter218219221 Products and Principal Strategies BAM's investment strategies span five principal areas: Renewable Power & Transition, Infrastructure, Real Estate, Private Equity, and Credit, with total AUM exceeding $1 trillion Assets Under Management (AUM) by Strategy (as of June 30, 2025) | Strategy | AUM (Billions) | | :--- | :--- | | Renewable Power and Transition | $137 | | Infrastructure | $222 | | Real Estate | $278 | | Private Equity | $150 | | Credit | $332 | - The Credit strategy is the largest segment by AUM and includes partnerships with leading managers like Oaktree, Castlelake, and Primary Wave237 Review of Financial Results Net income attributable to common stockholders rose to $620 million in Q2 2025 and $1.2 billion for the first half, with revenues increasing 19% and 21% respectively, driven by base management fees - Q2 2025 vs Q2 2024: - Net Income (to stockholders): Increased to $620 million from $495 million - Revenues: Increased 19% to $1.1 billion, driven by a 14% ($100 million) increase in Base Management and Advisory Fees - Base Fee Drivers: Growth came from new capital for transition and real estate funds, insurance capital inflows, and higher market values of listed partnerships (BIP)246247248 - H1 2025 vs H1 2024: - Net Income (to stockholders): Increased to $1.2 billion from $936 million - Revenues: Increased 21% to $2.2 billion, driven by an 18% ($257 million) increase in Base Management and Advisory Fees - Base Fee Drivers: Growth came from capital raised for real estate and transition funds, and insurance capital inflows from BWS268269270 Key Financial and Operating Measures Q2 2025 Fee-Related Earnings were $676 million and Distributable Earnings were $613 million, with Fee-Bearing Capital growing to $563 billion and $105.8 billion in uncalled fund commitments Key Non-GAAP Performance Measures (Q2 2025 vs Q2 2024) | Metric (Millions) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Fee Revenues | $1,285 | $1,148 | +12% | | Fee-Related Earnings | $676 | $583 | +16% | | Distributable Earnings | $613 | $548 | +12% | Fee-Bearing Capital Roll-Forward (H1 2025) | Metric (Billions) | Amount | | :--- | :--- | | Dec 31, 2024 Balance | $538.5 | | Inflows | +$42.6 | | Outflows & Distributions | ($23.9) | | Market Valuation & Other | +$5.5 | | June 30, 2025 Balance | $562.7 | - The company has $105.8 billion in uncalled fund commitments as of June 30, 2025, with approximately $54 billion not yet earning fees but expected to generate an additional $540 million in annual Fee Revenues once invested438 - Corporate liquidity stands at $1.5 billion, including $1.0 billion in undrawn credit facilities. Total group deployable capital, including uncalled commitments, is $171.8 billion436437 Quantitative and Qualitative Disclosures About Market Risk Primary market risk stems from base management fees' sensitivity to publicly listed vehicle prices, with limited foreign currency and low credit risk - Primary market risk exposure relates to base management fees earned from publicly listed vehicles (BEP, BIP, BBU), which are sensitive to their market capitalization465 - Foreign currency risk is minimal as the majority of private funds and Fee Revenues are denominated in USD466 - Credit risk from investor capital commitment defaults is considered not material due to the diversity and creditworthiness of its over 2,400 clients468 Controls and Procedures Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective at a reasonable assurance level471 - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls472 PART II - OTHER INFORMATION Legal Proceedings No material outstanding litigation was reported as of June 30, 2025 - As of June 30, 2025, there was no material outstanding litigation against the company184474 Risk Factors No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for 2024 - The report refers to the risk factors detailed in the Annual Report on Form 10-K for the year ended December 31, 2024, indicating no material changes475 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the reporting period - None476 Exhibits and Financial Statement Schedules Lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL data files - Exhibits filed include CEO and CFO certifications (Rule 13a-14(a) and Section 906 of Sarbanes-Oxley) and XBRL financial data480