Brookfield Oaktree Holdings LLC

Previous wording

The Company’s current ownership and operational structure were the results of the Mergers with Brookfield, the 2019 Restructuring and the 2022 Restructuring. See Part I, Item I included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020 for more information regarding the Mergers and the 2019 Restructuring. See Item 1.01 of the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2022 and Part I, Item I included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 21, 2023 for more information about the 2022 Restructuring. During the second quarter of 2024, an internal reorganization (the “2024 Restructuring”) is expected to be effected. See Item 8.01 of the Company’s Current Report on Form 8-K filed with the SEC on March 5, 2024 for more information about the 2024 Restructuring.

Current wording

The Company’s ownership and operational structure through June 30, 2024 were the result of the Mergers, the 2019 Restructuring and the 2022 Restructuring. See Part I, Item I included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020 for more information regarding the Mergers and the 2019 Restructuring. See Item 1.01 of the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2022 and Part I, Item I included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 21, 2023 for more information about the 2022 Restructuring. Effective July 1, 2024, the Company subsequently implemented the 2024 Restructuring. See Item 8.01 of the Company’s Current Report on Form 8-K filed with the SEC on July 1, 2024 for more information about the 2024 Restructuring.

Previous wording

Subsequent to the 2022 Restructuring, we no longer consolidate CLOs whose direct ownership interests are held by OCM Cayman.

Current wording

Subsequent to the 2022 Restructuring, we no longer consolidate CLOs whose direct ownership interests are held by OCM Cayman. The significant components of our results of operations, as discussed below, do not reflect any changes resulting from the 2024 Restructuring, which was effective July 1, 2024

Previous wording

We have the potential to earn incentive income from many of the closed-end funds and certain evergreen funds managed by Oaktree in our capacity as the general partner of those funds. These closed-end funds generally provide that we receive incentive income only after we have returned to our investors all of their contributed capital plus an annual preferred return, typically 8%. Once this occurs, we generally receive as incentive income 80% of all distributions otherwise attributable to our investors, and those investors receive the remaining 20% until we have received, as incentive income, 20% of all such distributions in excess of the contributed capital from the inception of the fund. Thereafter, all such future distributions attributable to our investors are distributed 80% to those investors and 20% to us as incentive income. As a result of the 2022 Restructuring, we are generally only entitled to earn one-third of the incentive income attributable to Oaktree Capital I in respect of our closed-end funds established in 2022 or later and in respect of incentive income from our evergreen funds earned subsequent to January 1, 2023. We will generally continue to earn 100% of the incentive income attributable to Oaktree Capital I in respect of our closed-end funds established prior to 2022. We also earn revenue from investment income, which represents our pro-rata share of income or loss from our investments, generally in our capacity as general partner in Oaktree funds and as an investor in our CLOs and third-party managed funds and companies. Subsequent to the 2022 Restructuring, the Company no longer consolidates CLOs whose direct ownership interests are held by OCM Cayman.

Current wording

We have the potential to earn incentive income from many of the closed-end funds and certain evergreen funds managed by Oaktree in our capacity as the general partner of those funds. These closed-end funds generally provide that we receive incentive income only after we have returned to our investors all of their contributed capital plus an annual preferred return, typically 8%. Once this occurs, we generally receive as incentive income 80% of all distributions otherwise attributable to our investors, and those investors receive the remaining 20% until we have received, as incentive income, 20% of all such distributions in excess of the contributed capital from the inception of the fund. Thereafter, all such future distributions attributable to our investors are distributed 80% to those investors and 20% to us as incentive income. As a result of the 2022 Restructuring, we are generally only entitled to earn one-third of the incentive income attributable to Oaktree Capital I in respect of our closed-end funds established in 2022 or later and in respect of incentive income from our evergreen funds earned subsequent to January 1, 2023. We will generally continue to earn 100% of the incentive income attributable to Oaktree Capital I in respect of our closed-end funds established prior to 2022. We also earn revenue from investment income, which represents our pro-rata share of income or loss from our investments, generally in our capacity as general partner in Oaktree funds and as an investor in our CLOs and third-party managed funds and companies.

Previous wording

Our consolidated revenues reflect the elimination of all management fees, if any, incentive income and investment income earned related to consolidated Oaktree funds. Investment income is presented within the other income (loss) section of our condensed consolidated statements of operations. Please see “Business—Structure and Operation of Our Business—Structure of Funds” in our annual report for a detailed discussion of the structure of Oaktree funds.

Current wording

Our consolidated revenues reflect the elimination of all management fees, if any, incentive income and investment income earned related to consolidated Oaktree funds. Investment income is presented within the other income (loss) section of our condensed consolidated statements of operations. Please see “Business—Structure and

Previous wording

General and administrative expense has historically included costs related to occupancy, outside auditors, tax professionals, legal advisers, research, consultants, travel and entertainment, communications and information services, business process outsourcing, foreign-exchange activity, insurance, placement costs, changes in the contingent consideration liability, and other general items related directly to the Company’s operations. These expenses are net of amounts borne by fund investors and are not offset by credits attributable to fund investors’ non-controlling interests in consolidated funds. General and administrative expense reflects the gross-up of reimbursable costs incurred on behalf of Oaktree funds in which the Company has determined it is the principal. Subsequent to the 2019 Restructuring, general and administrative expenses primarily include direct and reimbursable expenses incurred by Oaktree Capital I and OCM Cayman and the Company's share of certain expenses through the Services agreement with OCM. Subsequent to the 2022 Restructuring, general and administrative expenses no longer includes direct and reimbursable expenses incurred by OCM Cayman due to the deconsolidation, and generally includes costs related tooutside auditors, tax professionals, derivative and hedging activity, and other general items related directly to the Company’s operations.

Current wording

Subsequent to the 2022 Restructuring, general and administrative expenses generally includes costs related tooutside auditors, tax professionals, derivative and hedging activity, and other general items related directly to the Company’s operations.

Previous wording

Interest expense primarily reflects the interest expense of the consolidated funds, as well as the interest expense of Oaktree and its operating subsidiaries. After the 2019 Restructuring, our financial statements reflected debt obligations, interest expense or related liabilities associated with our operating subsidiaries only if one of the two remaining Oaktree Operating Group entities then owned by us directly borrowed under Oaktree’s credit agreements, issued private placement notes or entered into another debt arrangement. Subsequent to the 2022 Restructuring, our financial statements reflect debt obligations, interest expense or related liabilities associated with our operating subsidiary when Oaktree Capital I directly borrows under Oaktree’s credit agreements, issues private placement notes or enters into another debt arrangement.

Current wording

Interest expense primarily reflects the interest expense of the consolidated funds, as well as the interest expense of Oaktree and its operating subsidiaries. Subsequent to the 2022 Restructuring, our financial statements reflect debt obligations, interest expense or related liabilities associated with our operating subsidiary when Oaktree Capital I directly borrows under Oaktree’s credit agreements, issues private placement notes or enters into another debt arrangement.

Previous wording

•Net Income Attributable to Non-controlling Interests in Consolidated Funds. This category represents the economic interests of the unaffiliated investors in the consolidated funds, as well as the equity interests held by third-party investors in CLOs that had not yet priced as of the respective period end. Subsequent to the 2022 Restructuring, we no longer consolidate CLOs whose direct ownership interests are held by OCM Cayman. The net income of these interests is primarily driven by the investment performance of the consolidated funds and CLOs. In comparison to net income, this measure excludes our operating results and other items solely attributable to the Company; and,

Current wording

•Net Income Attributable to Non-controlling Interests in Consolidated Funds. This category represents the economic interests of the unaffiliated investors in the consolidated funds, as well as the equity interests held by third-party investors in CLOs that had not yet priced as of the respective period end. The net income of these interests is primarily driven by the investment performance of the consolidated funds and CLOs. In comparison to net income, this measure excludes our operating results and other items solely attributable to the Company; and,

Previous wording

•Net Income Attributable to Non-controlling Interests in Consolidated Subsidiaries. This category primarily represents the economic interest in the Oaktree Operating Group owned by OCGH and OEP (“OCGH and other non-controlling interest”), as well as the economic interest in certain consolidated subsidiaries held by third parties. Subsequent to the 2019 Restructuring, this category includes only the OCGH and other non-controlling interest in Oaktree Capital I and OCM Cayman and subsequent to the 2022 Restructuring, this category includes only the OCGH and other non-controlling interest in Oaktree Capital I. The OCGH and other non-controlling interest is determined at the Oaktree Operating Group level based on the weighted average proportionate share of Oaktree Operating Group units held by OCGH and other unitholders. Inasmuch as the number of outstanding Oaktree Operating Group units corresponds with the total number of outstanding Class A, OCGH and OEP units, changes in the economic interest held by the OCGH and other unitholders are driven by our additional issuances of Class A, OCGH and OEP units, as well as repurchases and forfeitures of, and exchanges between Class A, OCGH and OEP units. Certain of our expenses, such as income tax and related administrative expenses of Brookfield Oaktree Holdings, LLC and the holding companies through which we hold interests in Oaktree Capital I, are solely attributable to the Class A unitholders. Please see note 10 to our condensed consolidated financial statements included elsewhere in this quarterly report for additional information on the economic interest in the Oaktree Operating Group owned by OCGH.

Current wording

•Net Income Attributable to Non-controlling Interests in Consolidated Subsidiaries. This category primarily represents the economic interest in the Oaktree Operating Group owned by OCGH and OEP (“OCGH and other non-controlling interest”), as well as the economic interest in certain consolidated subsidiaries held by third parties. Subsequent to the 2022 Restructuring, this category includes only the OCGH and other non-controlling interest in Oaktree Capital I. The OCGH and other non-controlling interest is determined at the Oaktree Operating Group level based on the weighted average proportionate share of Oaktree Operating Group units held by OCGH and other unitholders. Inasmuch as the number of outstanding Oaktree Operating Group units corresponds with the total number of outstanding Class A, OCGH and OEP units, changes in the economic interest held by the OCGH and other unitholders are driven by our additional issuances of Class A, OCGH and OEP units, as well as repurchases and forfeitures of, and exchanges between, Class A, OCGH and OEP units. Certain of our expenses, such as income tax and related administrative expenses of Brookfield Oaktree Holdings, LLC and the holding companies through which we hold interests in Oaktree Capital I, are solely attributable to the Class A unitholders. Please see note 10 to our condensed consolidated financial statements included elsewhere in this quarterly report for additional information on the economic interest in the Oaktree Operating Group owned by OCGH.

Previous wording

First Quarter Ended March 31, 2024 Compared to the First Quarter Ended March 31, 2023

Current wording

Second Quarter Ended June 30, 2024 Compared to the Second Quarter Ended June 30, 2023

Previous wording

Consolidated fund expenses increased $6.5 million, or 46.1%, to $20.6 million for the first quarter of 2024, from $14.1 million for the first quarter of 2023. The increase is primarily due to the general costs incurred by Opps XII, which was consolidated beginning the fourth quarter of 2023.

Current wording

Consolidated fund expenses increased $10.9 million, or 82.6%, to $24.1 million for the second quarter of 2024, from $13.2 million for the second quarter of 2023. The increase is primarily due to the general costs incurred by Opps XII, which was consolidated beginning the fourth quarter of 2023.

Previous wording

Interest expense increased $5.7 million, or 34.5%, to $22.2 million for the first quarter of 2024, from $16.5 million for the first quarter of 2023. The increase is primarily due to interest on debt outstanding at Opps XII, and the CLO equity fund, neither of which were consolidated in the first quarter of 2023.

Current wording

Interest expense increased $16.7 million, or 136.9%, to $28.9 million for the second quarter of 2024, from $12.2 million for the second quarter of 2023. The increase is primarily due to interest on debt outstanding at Opps XII, and the CLO equity fund, neither of which were consolidated in the second quarter of 2023.

Previous wording

Interest and dividend income increased $54.6 million, or 81.7%, to $121.4 million for the first quarter of 2024, from $66.8 million for the first quarter of 2023. The increase was primarily attributable to increases in income from our investments in Opps XI and Opps XII, as well as the new CLO equity fund.

Current wording

Interest and dividend income increased $43.3 million, or 46.5%, to $136.4 million for the second quarter of 2024, from $93.1 million for the second quarter of 2023. The increase was primarily attributable to increases in income from our investments in Opps XI and Opps XII, as well as the new CLO equity fund.

Previous wording

Net realized gain (loss) on consolidated funds’ investments decreased $83.5 million, to a loss of $51.8 million for the first quarter of 2024, from a gain of $31.7 million for the first quarter of 2023. The net realized loss during the first quarter of 2024 reflects our consolidated funds’ performance on investments sold and the decline is primarily due to Opps XI.

Current wording

Net realized gain (loss) on consolidated funds’ investments increased $24.2 million, from a gain of $30.7 million for the second quarter of 2023 to a gain of $54.9 million for the second quarter of 2024. The net realized gain during the first quarter of 2024 reflects our consolidated funds’ performance on investments sold and the increase is primarily due to Opps XI.

Previous wording

Net change in unrealized appreciation (depreciation) on consolidated funds’ investments increased $142.7 million, to a gain of $117.5 million for the first quarter of 2024, from a loss of $25.2 million for the first quarter of 2023. Excluding the impact of the reversal of net realized gain (loss) on consolidated funds’ investments, the net change in unrealized appreciation (depreciation) on consolidated funds’ investments increased $59.2 million, to a net gain of $65.7 million for the first quarter of 2024, from a net gain of $6.5 million for the first quarter of 2023, primarily resulting from our investment in Opps XI.

Current wording

Net change in unrealized appreciation (depreciation) on consolidated funds’ investments decreased $9.5 million, to a loss of $22.3 million for the second quarter of 2024, from a loss of $12.8 million for the second quarter of 2023. Excluding the impact of the reversal of net realized gain (loss) on consolidated funds’ investments, the net change in unrealized appreciation (depreciation) on consolidated funds’ investments increased $14.7 million, to a net gain of $32.6 million for the second quarter of 2024, from a net gain of $17.9 million for the second quarter of 2023, primarily resulting from our investment in Opps XI.

Previous wording

Net income attributable to non-controlling interests in consolidated funds increased $83.9 million, to net income of $111.6 million for the first quarter of 2024, from net income of $27.7 million for the first quarter of 2023. The increase reflected our consolidated funds’ performance attributable to third-party investors in each period. These effects are described in more detail under “—Other Income (Loss)” above.

Current wording

Net income attributable to non-controlling interests in consolidated funds increased $25.3 million, to $85.9 million for the second quarter of 2024, from $60.6 million for the second quarter of 2023. The increase reflected our consolidated funds’ performance attributable to third-party investors in each period. These effects are described in more detail under “—Other Income (Loss)” above.

Previous wording

Net income attributable to Brookfield Oaktree Holdings, LLC Class A unitholders increased $37.9 million, to $76.8 million for the first quarter of 2024, from $38.9 million for the first quarter of 2023, primarily reflecting higher incentive income and other income. These effects are described in more detail under “—Incentive Income” and “—Other Income (Loss)” above.

Current wording

Net income attributable to Brookfield Oaktree Holdings, LLC Class A unitholders increased $44.3 million, or 703.2%, to net income of $38.0 million for the second quarter of 2024, from net loss of $6.3 million for the second quarter of 2023, primarily reflecting higher investment income and other income. These effects are described in more detail under “—Incentive Income” and “—Other Income (Loss)” above.

Previous wording

Incentive income increased $55.9 million to $115.3 million for the first quarter of 2024, from $59.4 million for the first quarter of 2023. The increase in incentive income was primarily due to larger tax-related distributions in the first quarter of 2024 from Credit and Private Equity closed-end funds.

Current wording

Incentive income increased $56.0 million to $117.5 million for the first six months of 2024, from $61.5 million for the first six months of 2023. The increase in incentive income was primarily due to larger tax-related distributions in the first quarter of 2024 from Credit and Private Equity closed-end funds.

Previous wording

Incentive income compensation expense decreased $32.2 million to $26.3 million for the first quarter of 2024, from $58.5 million for the first quarter of 2023. The decrease was primarily due to SPAC incentive compensation fully amortized in 2023 and the write off of incentive compensation liability related to liquidated funds that the Company is no longer liable.

Current wording

Incentive income compensation expense decreased $34.8 million to $22.2 million for the first six months of 2024, from $57.0 million for the first six months of 2023. The decrease was primarily due to SPAC incentive compensation fully amortized in 2023 and the write off of incentive compensation liability related to liquidated funds for which the Company is no longer liable.

Previous wording

Incentive-creating AUM increased $0.6 billion, or 1.1%, to $55.4 billion as of March 31, 2024, from $54.8 billion as of December 31, 2023. This increase reflected $1.2 billion of market appreciation, inclusive of the impact of foreign currency fluctuations, partially offset by $0.6 billion of net distributions in the first quarter of 2024.

Current wording

Incentive-creating AUM decreased $0.5 billion, or 0.9%, to $54.9 billion as of June 30, 2024, from $55.4 billion as of March 31, 2024. This decrease reflected $1.8 billion of net distributions, partially offset by $1.3 billion of market appreciation, inclusive of the impact of foreign currency fluctuations, in the second quarter of 2024.

Previous wording

As of March 31, 2024 and 2023, the portion of net accrued incentives represented by funds that were currently paying incentives was $4.4 million (or 0.4%) and $10.2 million (or 0.9%), respectively, with the remainder arising from funds that as of that date were not at the stage of their cash distribution waterfall where Oaktree was entitled to receive incentives, other than possibly tax-related distributions.

Current wording

As of June 30, 2024 and 2023, the portion of net accrued incentives represented by funds that were currently paying incentives was $4.3 million (or 0.4%) and $21.0 million (or 2.0%), respectively, with the remainder arising from funds that as of that date were not at the stage of their cash distribution waterfall where Oaktree was entitled to receive incentives, other than possibly tax-related distributions.

Previous wording

As of March 31, 2024, $743.1 million, or 65.3%, of the net accrued incentives were in evergreen or closed-end funds that were incentive paying or in their liquidation period. Please see “—Critical Accounting Policies—Fair Value of Financial Instruments” for a discussion of the fair-value hierarchy level established by GAAP.

Current wording

As of June 30, 2024, $873.5 million, or 66.6%, of the net accrued incentives were in evergreen or closed-end funds that were incentive paying or in their liquidation period. Please see “—Critical Accounting Policies—Fair Value of Financial Instruments” for a discussion of the fair-value hierarchy level established by GAAP.

Previous wording

Incentives created was $192.3 million for the first quarter of March 31, 2024, primarily reflecting $229.6 million from Credit partially offset by a loss of $39.4 million from Private Equity.

Current wording

Incentives created was $186.4 million for the second quarter of 2024, primarily reflecting $307.1 million from Credit funds, offset by $(117.3) million from Private Equity funds.

Previous wording

We manage our liquidity and capital requirements by focusing on our cash flows before the consolidation of Oaktree funds and the effect of normal changes in short-term assets and liabilities. Our primary cash flow activities on an unconsolidated basis involve (a) generating cash flow from operations, (b) generating income from investment activities, including strategic investments in certain third parties, (c) funding capital commitments that we have made to Oaktree funds in which we act as general partner, (d) funding our growth initiatives, (e) distributing cash flow to our Class A unitholders and to OCGH and OEP, (f) borrowings, interest payments and repayments under credit agreements, our senior notes and other borrowing arrangements, and (g) issuances of, and distributions made on, our preferred units. As of March 31, 2024, the Company on an unconsolidated basis had $308.1 million of cash and U.S. Treasury and other securities and $217.0 million of outstanding debt.

Current wording

We manage our liquidity and capital requirements by focusing on our cash flows before the consolidation of Oaktree funds and the effect of normal changes in short-term assets and liabilities. Our primary cash flow activities on an unconsolidated basis involve (a) generating cash flow from operations, (b) generating income from investment activities, including strategic investments in certain third parties, (c) funding capital commitments that we have made to Oaktree funds in which we act as general partner, (d) funding our growth initiatives, (e) distributing cash flow to our Class A unitholders and to OCGH and OEP, (f) borrowings, interest payments and repayments under credit agreements, our senior notes and other borrowing arrangements, and (g) issuances of, and distributions made on, our preferred units. As of June 30, 2024, the Company on an unconsolidated basis had $184.9 million of cash and U.S. Treasury and other securities and $213.2 million of outstanding debt.

Previous wording

We have subscribed for a limited partner interest in, and made a capital commitment of, $750 million to Oaktree Opportunities Fund XI, L.P., a parallel investment vehicle thereof or a feeder fund in respect of one of the foregoing (such limited partner interest, the “Opps XI Investment” and such fund entities collectively, “Opps XI”). In order to fund the Opps XI Investment, our sole Class A unitholder, or one of its affiliates, will contribute cash as a capital contribution (the “Opps XI Investment Cash”) as and to the extent required to satisfy our obligations to Opps XI. We will use the Opps XI Investment Cash solely to fund the Opps XI Investment and satisfy our obligations in respect of Opps XI. Distributions from the Opps XI Investment are intended for the benefit of the Class A unitholder, subject to applicable law. Our preferred unitholders should not rely on distributions received by us in respect of the Company’s Opps XI Investment for payment of distributions on or redemption of the preferred units. As of March 31, 2024, $638 million of the $750 million capital commitment was funded.

Current wording

We have subscribed for a limited partner interest in, and made a capital commitment of, $750 million to Oaktree Opportunities Fund XI, L.P., a parallel investment vehicle thereof or a feeder fund in respect of one of the foregoing (such limited partner interest, the “Opps XI Investment” and such fund entities collectively, “Opps XI”). In order to fund the Opps XI Investment, our sole Class A unitholder, or one of its affiliates, will contribute cash as a capital contribution (the “Opps XI Investment Cash”) as and to the extent required to satisfy our obligations to Opps XI. We will use the Opps XI Investment Cash solely to fund the Opps XI Investment and satisfy our obligations in respect of Opps XI. Distributions from the Opps XI Investment are intended for the benefit of the Class A unitholder, subject to applicable law. Our preferred unitholders should not rely on distributions received by us in respect of the Company’s Opps XI Investment for payment of distributions on or redemption of the preferred units. As of June 30, 2024, $637.5 million of the $750 million capital commitment was funded. Additionally, $428.9 million of the investment interest was pledged as collateral for two non-recourse credit facilities of an affiliate. The potential exposure is limited to the pledged interests.

Previous wording

As of March 31, 2024, the carrying value of NTR included in corporate investments was $299.6 million.

Current wording

As of June 30, 2024, the carrying value of NTR included in corporate investments was $300.7 million.

Previous wording

Significant amounts from our condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are discussed below.

Current wording

Significant amounts from our condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 are discussed below.

Previous wording

Operating activities used $236.9 million and $156.6 million of cash for the first three months of 2024 and 2023, respectively. These amounts principally reflected net income (loss), purchases of securities, net of non-cash adjustments, and net realized and unrealized (gain) loss from consolidated fund investments in each of the respective periods as well as net purchases of securities of the consolidated funds.

Current wording

Operating activities used $771.2 million and $369.9 million of cash for the first six months of 2024 and 2023, respectively. These amounts principally reflected net income (loss), purchases of securities, net of non-cash adjustments, and net realized and unrealized (gain) loss from consolidated fund investments in each of the respective periods as well as net purchases of securities of the consolidated funds.

Previous wording

Investing activities used $132.9 million and provided $28.0 million of cash for the first three months of 2024 and 2023, respectively. During the first quarter of 2024, the Company placed $250.0 million on deposit with BAM ULC which was included in the U.S. Treasury and other securities. Corporate investments in funds and companies of $3.6 million and $43.5 million for the first three months of 2024 and 2023, respectively, consisted of the following:

Current wording

Investing activities used $80.5 million and $330.0 million of cash for the first six months of 2024 and 2023, respectively. During the first six months of 2024, the Company placed $170.0 million on deposit with BAM ULC which was included in the U.S. Treasury and other securities. Corporate investments in funds and companies of $34.9 million and $409.5 million for the first six months of 2024 and 2023, respectively, consisted of the following:

Previous wording

Distributions and proceeds from corporate investments in funds and companies of $120.7 million and $71.6 million for the first three months of 2024 and 2023, respectively, consisted of the following:

Current wording

Distributions and proceeds from corporate investments in funds and companies of $124.5 million and $79.5 million for the first six months of 2024 and 2023, respectively, consisted of the following:

Previous wording

Financing activities provided $480.0 million and $409.7 million of cash for the first three months of 2024 and 2023, respectively, and included: (a) net contributions from non-controlling interests of $63.5 million and $577.0 million; (b) distributions to unitholders of $29.2 million and $14.7 million; (c) net capital distributions of $0.3 million and net capital contributions of $149.2 million; and (d) payments of debt issuance costs of $1.7 million and $0.0. Additionally, the first three months of 2024 and 2023 included borrowings of $871.5 million and $50.3 million, respectively, and repayments of $423.7 million and $352.1 million, respectively, related to consolidated funds.

Current wording

Financing activities provided $1.0 billion and $0.8 billion of cash for the first six months of 2024 and 2023, respectively, and included: (a) net contributions from non-controlling interests of $10.9 million and $1.0 billion; (b) distributions to unitholders of $248.6 million and $136.8 million; (c) net capital distributions of $0.3 million and net capital contributions of $568.4 million; and (d) payments of debt issuance costs of $3.4 million and $0.1 million. Additionally, the first six months of 2024 and 2023 included borrowings of $2.2 billion and $76.7 million, respectively, and $907.7 million and $767.1 million of repayments, respectively, related to consolidated funds.

Previous wording

In December 2017, OCM issued and sold to certain accredited investors $250 million of 3.78% senior notes due 2032 (the “2032 Notes”). The 2032 Notes are senior unsecured obligations of OCM, jointly and severally guaranteed by Oaktree Capital I, Oaktree Capital II, Oaktree AIF and OCM Cayman. The proceeds from the sale of the 2032 Notes and cash on hand were used to redeem the $250 million of 6.75% Senior Notes due 2019 and to pay the related make-whole premium to holders thereof. The 2032 Notes provide for certain affirmative and negative covenants, including financial covenants relating to the issuer’s and guarantors’ combined leverage ratio and minimum assets under management. In addition, the 2032 Notes contain customary representations and warranties of the issuer and the guarantors, and customary events of default, in certain cases, subject to cure periods. The issuer may prepay all, or from time to time any part of, the 2032 Notes at any time, subject to the issuer’s payment of the applicable make-whole amount determined with respect to such principal amount prepaid. Upon the occurrence of a change of control, the issuer will be required to make an offer to prepay the 2032 Notes together with the applicable make-whole amount determined with respect to such principal amount prepaid. As OCM is the issuer of the 2032

Current wording

In December 2017, OCM issued and sold to certain accredited investors $250 million of 3.78% senior notes due 2032 (the “2032 Notes”). The 2032 Notes are senior unsecured obligations of OCM jointly and severally guaranteed by Oaktree Capital I, Oaktree Capital II, Oaktree AIF and OCM Cayman. The proceeds from the sale of the 2032 Notes and cash on hand were used to redeem the $250 million of 6.75% Senior Notes due 2019 and to pay the related make-whole premium to holders thereof. The 2032 Notes provide for certain affirmative and negative covenants, including financial covenants relating to the issuer’s and guarantors’ combined leverage ratio and minimum assets under management. In addition, the 2032 Notes contain customary representations and warranties of the issuer and the guarantors, and customary events of default, in certain cases, subject to cure periods. The issuer may prepay all, or from time to time any part of, the 2032 Notes at any time, subject to the issuer’s payment of the applicable make-whole amount determined with respect to such principal amount prepaid. Upon the occurrence of a change of control, the issuer will be required to make an offer to prepay the 2032 Notes together with the applicable make-whole amount determined with respect to such principal amount prepaid. As OCM is the issuer of the 2032 Notes, the outstanding principal and interest payments guaranteed by Oaktree Capital I will not be included in our financial statements unless an event of default occurs.

Previous wording

(2) Interest obligations include interest on outstanding indebtedness. All figures are based on the conversion of amounts from EUR to USD using the foreign exchange spot rate of 1.09 as of March 31, 2024.

Current wording

(2) Interest obligations include interest on outstanding indebtedness. All figures are based on the conversion of amounts from EUR to USD using the foreign exchange spot rate of 1.07 as of June 30, 2024.

Previous wording

We prepare our condensed consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe our critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates or judgments. Our most significant assumptions and estimates are related to the valuation of our corporate investments and the investments of our consolidated funds. For a summary of our significant accounting policies and estimates, please see the notes to our condensed consolidated financial statements included elsewhere in this quarterly report. For a summary of our critical accounting policies, please see “Management’s Discussion and Analysis of Financial Condition and Result of Operations—Critical Accounting Estimates” in our annual report.

Current wording

We prepare our condensed consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our condensed consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. We believe our critical accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates or judgments. Our most significant assumptions and estimates are related to the valuation of our corporate investments and the investments of our consolidated funds. For a summary of our significant accounting policies and estimates, please see the notes to our condensed consolidated financial statements included elsewhere in this quarterly report. For a summary of our critical accounting policies, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our annual report.