Brookfield Oaktree Holdings LLC

Previous 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.

Current wording

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. 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

As a global investment manager, Oaktree is affected by a wide range of factors, including the condition of the global economy and financial markets; the relative attractiveness of Oaktree’s investment strategies and investors’ demand for them; and regulatory or other governmental policies or actions. Global economic conditions can significantly impact the values of Oaktree’s and its funds’ investments and the ability to make new investments or sell existing investments for these funds. Historically, however, Oaktree’s diversified nature, of both its investment strategies and revenue mix, has generally allowed it to benefit from both strong and weak economic environments. Weak economies and the declining financial markets that typically accompany them tend to dampen revenues from asset-based management fees, investment realizations or price appreciation, but their prospect can present opportunities to raise relatively larger amounts of capital for certain strategies, especially opportunistic credit. Additionally, weak financial markets may also present more opportunities for funds to make investments at reduced prices. Conversely, strong financial markets generally increase the value of fund investments, which positions Oaktree for growth in management fees that are based on asset value, and typically create favorable exit opportunities that enhance the prospect for incentive income and fund-related realized investment income proceeds for Oaktree and us. Those same markets may delay or diminish opportunities to deploy capital and thus management fees paid to Oaktree from certain funds.

Current wording

The Company, Brookfield and Oaktree are affected by a wide range of factors, including the condition of the global economy and financial markets; the relative attractiveness of Brookfield and Oaktree’s investment strategies and investors’ demand for them; and regulatory or other governmental policies or actions. Global economic conditions can significantly impact the values of fund investments and the ability to make new investments or sell existing investments for these funds. Historically, however, Brookfield and Oaktree’s diversified nature, of both investment strategies and revenue mix, has generally allowed them to benefit from both strong and weak economic environments. Weak economies and the declining financial markets that typically accompany them tend to dampen revenues from asset-based management fees, investment realizations or price appreciation, but their prospect can present opportunities to raise relatively larger amounts of capital for certain strategies, especially opportunistic credit. Additionally, weak financial markets may also present more opportunities for funds to make investments at reduced prices. Conversely, strong financial markets generally increase the value of fund investments, which typically create favorable exit opportunities that enhance the prospect for incentive income and fund-related realized investment income proceeds for Oaktree and us.

Previous wording

The ongoing Russia-Ukraine conflict, including global sanctions imposed on Russia, and more recent conflict between Israel and Hamas, create continued uncertainty and volatility in the global financial markets and economy and, as a result, may adversely impact Oaktree’s business and its funds’ and their respective portfolio companies’ business. As of the date of this filing, we are not aware of any material risk to the stability of our condensed consolidated financial statements caused by the Russia-Ukraine conflict or the Israel-Hamas conflict or the materiality of any effect such uncertainties may have on our business and operations.

Current wording

business. As of the date of this filing, we are not aware of any material risk to the stability of our condensed consolidated financial statements caused by the Russia-Ukraine conflict or the conflict in the Middle East or the materiality of any effect such uncertainties may have on our business and operations.

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.

Current wording

Historically, we had the potential to earn incentive income from many of the closed-end funds and certain evergreen funds managed by Oaktree in Oaktree Capital I’s 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 were 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 were generally earning 100% of the incentive income attributable to Oaktree Capital I in respect of our closed-end funds established prior to 2022. Subsequent to the 2024 Restructuring,

Previous wording

Investment income represents our pro-rata share of income or loss from our investments, generally in our capacity as general partner in certain Oaktree funds and as an investor in our CLOs and third-party managed funds and companies. Investment income, as reflected in our condensed consolidated statements of operations, excludes investment income earned by us from our consolidated funds. Subsequent to the 2022 Restructuring, we no longer hold investments in CLOs whose direct ownership interests are held by OCM Cayman.

Current wording

We earn revenue from investment income, which represents our pro-rata share of income or loss from our investments. Historically, investment income was generally from Oaktree Capital I’s capacity as general partner in Oaktree funds and as an investor in our CLOs and third-party managed funds and companies. Subsequent

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

Current wording

Our consolidated revenues reflect the elimination of all revenues, if any, related to funds that are consolidated

Previous wording

Operation of Our Business—Structure of Funds” in our annual report for a detailed discussion of the structure of Oaktree funds.

Current wording

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.

Previous wording

Incentive income compensation expense primarily reflects compensation directly related to incentive income, which generally consists of percentage interests (sometimes referred to as “points” or an allocation of shares received upon the completion of a successful SPAC merger) that are granted to Oaktree investment professionals associated with the particular fund or SPAC that generated the incentive income, and secondarily, compensation directly related to investment income. There is no fixed percentage for the incentive income-related portion of this compensation, either by fund, SPAC or strategy. The percentage that consolidated incentive income compensation expense represents of the particular period’s consolidated incentive income may not be meaningful because incentive income from consolidated funds or SPACs is eliminated in consolidation, whereas no incentive income compensation expense is eliminated in consolidation.

Current wording

Compensation has historically primarily reflected compensation expense directly related to incentive income, which generally consists of percentage interests (sometimes referred to as “points” or an allocation of shares received upon the completion of a successful SPAC merger) that are granted to Oaktree investment professionals associated with the particular fund or SPAC that generated the incentive income, and secondarily, compensation directly related to investment income. There was no fixed percentage for the incentive income-related portion of this compensation, either by fund, SPAC or strategy. The percentage that consolidated incentive compensation expense represented of the particular period’s consolidated incentive income may not have been meaningful because incentive income from consolidated funds or SPACs was eliminated in consolidation, whereas no incentive income compensation expense was eliminated in consolidation.

Previous 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.

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. Subsequent to the 2024 Restructuring and deconsolidation of Oaktree Capital I, the Company no longer directly incurs costs related to derivative and hedging activity.

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. 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 has historically primarily reflected 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. Subsequent to the 2024 Restructuring, as a result of the deconsolidation of Oaktree Capital I, the Company no longer records interest expense for debt obligations of Oaktree Capital I or funds that were consolidated due to interests held by Oaktree Capital I.

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. 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. In comparison to net income, this measure excludes our operating results and other items solely attributable to the Company. Following the 2024 Restructuring, with the deconsolidation of Oaktree Capital I, which acts as or controls the general partner of certain Oaktree funds and which holds a majority of Oaktree’s investments in its funds, the funds consolidated by Oaktree Capital I are accounted for as part of the equity investment in Oaktree Capital I; 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 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. Subsequent to the 2024 Restructuring, we no longer reflect the economic interest owned by OCGH and OEP.

Previous wording

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

Current wording

Third Quarter Ended September 30, 2024 Compared to the Third Quarter Ended September 30, 2023

Previous 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.

Current wording

Interest and dividend income increased $28.1 million, or 32.3%, to $115.0 million for the third quarter of 2024, from $86.9 million for the third quarter of 2023. The increase was primarily attributable to increases in income from our investments in Opps XI and Opps XII, partially offset by the decrease in income due to deconsolidation of Oaktree Capital I as a result of the 2024 Restructuring.

Previous 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.

Current wording

Consolidated fund expenses increased $4.7 million, or 31.5%, to $19.6 million for the third quarter of 2024, from $14.9 million for the third 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, partially offset by the decrease due to deconsolidation of Oaktree Capital I’s consolidated funds as a result of the 2024 Restructuring.

Previous 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.

Current wording

Interest expense increased $15.7 million, or 266.1%, to $21.6 million for the third quarter of 2024, from $5.9 million for the third quarter of 2023. The increase is primarily due to interest on debt outstanding at Opps XII which was not consolidated in the third quarter of 2023.

Previous 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.

Current wording

Net realized gain (loss) on consolidated funds’ investments increased $18.4 million, from a gain of $14.1 million for the third quarter of 2023 to a gain of $32.5 million for the third quarter of 2024. The net realized gain during the third 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 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.

Current wording

Net change in unrealized appreciation (depreciation) on consolidated funds’ investments increased $61.9 million, to a gain of $52.5 million for the third quarter of 2024, from a loss of $9.4 million for the third 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 $80.3 million, to a net gain of

Previous 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.

Current wording

Net income attributable to non-controlling interests in consolidated funds increased $86.3 million, to $139.4 million for the third quarter of 2024, from $53.1 million for the third 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 “—Net Change in Unrealized Appreciation (Depreciation) on Consolidated Funds’ Investments” above.

Previous wording

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Current wording

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Previous wording

Interest and dividend income increased $97.9 million, or 61.2%, to $257.8 million for the first six months of 2024, from $159.9 million for the first six months 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 $126.0 million, or 51.1%, to $372.8 million for the first nine months of 2024, from $246.8 million for the first nine months of 2023. The increase was primarily attributable to increases in income from our investments in Opps XI and Opps XII partially offset by the decrease in income due to deconsolidation of Oaktree Capital I as a result of the 2024 Restructuring.

Previous wording

Investment Income increased $24.9 million, or 251.5%, to $34.8 million for the first six months of 2024, from $9.9 million for the first six months of 2023, primarily due to increases in the values of our Credit investments.

Current wording

Investment income increased $24.6 million, or 69.5%, to $60.0 million for the first nine months of 2024, from $35.4 million for the first nine months of 2023, primarily due to increases in the values of our Credit investments.

Previous wording

Consolidated fund expenses increased $17.4 million, or 63.7%, to $44.7 million for the first six months of 2024, from $27.3 million for the first six months 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 $22.1 million, or 52.4%, to $64.3 million for the first nine months of 2024, from $42.2 million for the first nine months of 2023. The increase is primarily due to the general costs incurred by Opps XII, which was consolidated beginning the fourth quarter of 2023, partially offset by the decrease due to deconsolidation of Oaktree Capital I consolidated funds as a result of the 2024 Restructuring.

Previous wording

Interest expense increased $22.5 million, or 78.4%, to $51.2 million for the first six months of 2024, from $28.7 million for the first six months 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 six months of 2023, partially offset by a decrease in interest incurred by Opps XI due to lower debt balance.

Current wording

Interest expense increased $38.2 million, or 110.4%, to $72.8 million for the first nine months of 2024, from $34.6 million for the first nine months 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 nine months of 2023, partially offset by a decrease in interest incurred by Opps XI due to a lower debt balance.

Previous wording

Net realized gain (loss) on consolidated funds’ investments decreased by $59.3 million, from a gain of $62.4 million for the first six months of 2023 to a gain of $3.1 million for the first six months of 2024. The net realized gain during the first six months 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 decreased by $40.8 million, from a gain of $76.4 million for the first nine months of 2023 to a gain of $35.6 million for the first nine months of 2024. The net realized gain during the first nine months of 2024 reflects our consolidated funds’ performance on investments sold and the decline is primarily due to Opps XI and Opps XII.

Previous wording

Net change in unrealized appreciation on consolidated funds’ investments increased $133.2 million, to an appreciation of $95.2 million for the first six months of 2024, from a depreciation of $38.0 million for the first six months 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 $73.9 million, to a net gain of $98.3 million for the first six months of 2024, from a net gain of $24.4 million for the first six months of 2023, primarily resulting from our investment in Opps XI.

Current wording

Net change in unrealized appreciation on consolidated funds’ investments increased $194.9 million, to an appreciation of $147.6 million for the first nine months of 2024, from a depreciation of $47.3 million for the first nine months 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 $154.2 million, to a net gain of $183.3 million for the first nine months of 2024, from a net gain of $29.1 million for the first nine months of 2023, primarily resulting from our investment in Opps XI and Opps XII.

Previous wording

Net income attributable to non-controlling interests in consolidated funds increased $109.2 million, to $197.5 million for the first six months of 2024, from $88.3 million for the first six months 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 $195.4 million, to $336.8 million for the first nine months of 2024, from $141.4 million for the first nine months 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 “—Net Change in Unrealized Appreciation (Depreciation) on Consolidated Funds’ Investments” above.

Previous wording

Net income (loss) attributable to Brookfield Oaktree Holdings, LLC Class A unitholders increased $82.2 million, or 252.1%, to net income of $114.8 million for the first six months of 2024, from net income of $32.6 million for the first six months 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 (loss) attributable to Brookfield Oaktree Holdings, LLC Class A unitholders increased $93.8 million, or 162.6%, to net income of $151.5 million for the first nine months of 2024, from net income of $57.7 million for the first nine months of 2023, primarily reflecting improved unrealized performance of our consolidated funds’ investments and higher interest and dividend income. These effects are described in more detail under “—Net Change in Unrealized Appreciation (Depreciation) on Consolidated Funds’ Investments ” and “—Interest and Dividend Income” above.

Previous wording

We manage our financial condition without the consolidation of the Oaktree funds in which we serve as general partner. Since Oaktree’s founding, Oaktree and, by extension, we have managed our financial condition in a way that builds our capital base and maintains sufficient liquidity for known and anticipated uses of cash. Our assets do not include accrued incentives, an off-balance sheet metric. As a result of the 2022 Restructuring, we no longer directly hold an economic interest in OCM Cayman or a voting interest in its general partner and therefore OCM Cayman was deconsolidated as of the Effective Date of the 2022 Restructuring. Additionally, we concluded that we were no longer the primary beneficiary for CLOs whose direct ownership interests are held by OCM Cayman. Assets and liabilities related to OCM Cayman and those CLOs are not reflected on our consolidated statement of financial condition as of June 30, 2024.

Current wording

We manage our financial condition without the consolidation of Oaktree and Brookfield funds. Since Oaktree’s founding, Oaktree and, by extension, we have managed our financial condition in a way that builds our capital base and maintains sufficient liquidity for known and anticipated uses of cash.

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 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.

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. Prior to the 2024 Restructuring, our primary cash flow activities on an unconsolidated basis involve (a) generating cash flow from operations, (b) generating realized income and return of principal from investment activities, including strategic investments in certain third parties, (c) funding capital commitments that we have made to Oaktree funds, (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. Subsequent to the 2024 Restructuring, our primary cash flow activities on an unconsolidated basis involve (a) generating realized income and return of principal from investment activities, (b) funding capital commitments that we have made to Oaktree funds, (c) distributing cash flow to our Class A unitholders, (d) issuances of, and distributions made on, our preferred units, and (e) equity contribution from the investors of the Company to fulfill certain contractual capital commitments to its subsidiaries. As of September 30, 2024, the Company on an unconsolidated basis had $20.8 million of cash and cash-equivalents.

Previous wording

Ongoing sources of cash include incentive income, which is volatile and largely unpredictable as to amount and timing, and distributions stemming from our corporate investments in funds and companies. We primarily use cash flow from operations and distributions from our corporate investments to pay compensation and related expenses, service fees under the Services Agreement with OCM, debt service and distributions. This same cash flow, together with proceeds from equity and debt issuances, is also used to fund corporate investments, fixed assets and other capital items. Subject to applicable law and certain consent rights contained in our operating agreement, pursuant to a covenant in our operating agreement Oaktree plans to cause its operating group entities to distribute, on a quarterly basis, at least 85% of its adjusted distributable earnings, as defined in our operating agreement, and we plan to distribute amounts we receive in respect of such distributions, less any tax and tax receivable obligations, to holders of our Class A units. Distributions from each Operating Group entity may not be proportionate to its share of adjusted distributable earnings.

Current wording

Ongoing sources of cash include distributions stemming from our equity method corporate investments. We primarily use distributions from our corporate investments to pay compensation and related expenses, service fees under the Services Agreement with OCM, and distributions. This same cash flow is also used to fund corporate investments. Subject to applicable law and certain consent rights contained in our operating agreement, pursuant to a covenant in our operating agreement Oaktree plans to cause its operating group entities to distribute, on a quarterly basis, at least 85% of its adjusted distributable earnings, as defined in our operating agreement, and we plan to distribute amounts we receive in respect of such distributions, less any tax and tax receivable obligations, to holders of our Class A units. Distributions from each Oaktree Operating Group entity may not be proportionate to its share of adjusted distributable earnings.

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 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.

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

Previous wording

We have subscribed for a limited partner interest in, and made a capital commitment of, $750 million to Oaktree Opportunities Fund XII, L.P., a parallel investment vehicle thereof or a feeder fund in respect of one of the foregoing (such limited partner interest, the “Opps XII Investment” and such fund entities collectively, “Opps XII”). In order to fund the Opps XII Investment, our sole Class A unitholder, or one of its affiliates, will contribute cash as a capital contribution (the “Opps XII Investment Cash”) as and to the extent required to satisfy our obligations to Opps XII. We will use the Opps XII Investment Cash solely to fund the Opps XII Investment and satisfy our obligations in respect of Opps XII. Distributions from the Opps XII 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 XII Investment for payment of distributions on or redemption of the preferred units. As of June 30, 2024, the Company has not funded any of its capital commitment.

Current wording

We have subscribed for a limited partner interest in, and made a capital commitment of, $750 million to Oaktree Opportunities Fund XII, L.P., a parallel investment vehicle thereof or a feeder fund in respect of one of the foregoing (such limited partner interest, the “Opps XII Investment” and such fund entities collectively, “Opps XII”). In order to fund the Opps XII Investment, our sole Class A unitholder, or one of its affiliates, will contribute cash as a capital contribution (the “Opps XII Investment Cash”) as and to the extent required to satisfy our obligations to Opps XII. We will use the Opps XII Investment Cash solely to fund the Opps XII Investment and satisfy our obligations in respect of Opps XII. Distributions from the Opps XII 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 XII Investment for payment of distributions on or redemption of the preferred units. As of September 30, 2024, the Company has funded in the aggregate $37.5 million of the $750.0 million capital commitment.

Previous wording

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

Current wording

As of September 30, 2024, the carrying value of NTR included in corporate investments was $304.3 million.

Previous wording

Because our consolidated funds are either treated as investment companies for accounting purposes or represent CLOs whose primary operations are investing activities, their investing cash flow amounts are included in our cash flows from operations. We believe that we and each of the consolidated funds has sufficient access to cash to fund our and their respective operations in the near term. Subsequent to the 2022 Restructuring, the Company no longer consolidates CLOs whose direct ownership interests are held by OCM Cayman.

Current wording

Because our consolidated funds are either treated as investment companies for accounting purposes or represent CLOs whose primary operations are investing activities, their investing cash flow amounts are included in our cash flows from operations. We believe that we and each of the consolidated funds has sufficient access to cash to fund our and their respective operations in the near term. Subsequent to the 2022 Restructuring, the Company no longer consolidates CLOs whose direct ownership interests are held by OCM Cayman. As a result of the 2024 Restructuring, the Company no longer consolidates Oaktree Capital I, and the cash inflows and outflows related to Oaktree Capital I are now presented under the investing activities of BOH’s cash flow.

Previous wording

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

Current wording

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

Previous 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.

Current wording

Operating activities used $508.6 million and $288.7 million of cash for the first nine 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 $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:

Current wording

Investing activities used $44.3 million and $354.8 million of cash for the first nine months of 2024 and 2023, respectively. Corporate investments in funds and companies of $36.8 million and $451.7 million for the first nine months of 2024 and 2023, respectively, consisted of the following:

Previous 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:

Current wording

Distributions and proceeds from corporate investments in funds and companies of $162.5 million and $96.9 million for the first nine months of 2024 and 2023, respectively, consisted of the following:

Previous 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.

Current wording

Financing activities provided $0.9 billion and $0.7 billion of cash for the first nine months of 2024 and 2023, respectively, and included: (a) net distributions to non-controlling interests of $127.8 million and net contributions from non-controlling interests of $1.1 billion; (b) distributions to unitholders of $314.3 million and $158.0 million; (c) net capital contributions of $37.2 million and $582.0 million; and (d) payments of debt issuance costs of $3.4 million and $0.1 million. Additionally, the first nine months of 2024 and 2023 included borrowings of $2.2 billion and $0.2 billion, respectively, and $0.9 billion and $1.0 billion of repayments, respectively, related to consolidated funds.