Brookfield Asset Management Ltd

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION

Brookfield Asset Management Ltd. ("BAM", "we", "our", "us", or the "Company") is an alternative asset manager listed on the New York and Toronto stock exchanges under the symbol BAM. BAM focuses on renewable power and transition, infrastructure, real estate, private equity and credit, operating in various markets globally.

BAM was incorporated on July 4, 2022 and its head office is located at Brookfield Place, 250 Vesey Street, 15th Floor, New York, NY, 10281-0221 and its registered office is located at 1055 West Georgia Street, 1500 Royal Centre, P.O. Box 11117, Vancouver, British Columbia V6E 4N7.

On February 4, 2025 BAM completed a corporate arrangement with Brookfield Corporation ("BN"), whereby BN transferred its approximately 73% interest in Brookfield Asset Management ULC ("Asset Management Company") to BAM in exchange for newly issued class A limited voting shares of BAM ("Class A Shares") on a one-for-one basis (the "2025 Arrangement"). See discussion of the accounting for the 2025 Arrangement in Note 3.

The financial statements of BAM for the periods prior to the closing date of the 2025 Arrangement reflect historical financial information of Brookfield Asset Management ULC, the accounting acquirer, as the "Predecessor" entity. For the periods thereafter, the financial statements reflect the financial position and results of the combined entity.

In addition, on the date of incorporation, the Company entered into certain agreements and arrangements, including the Relationship Agreement under which carried interest generated by BAM is allocated to BN at 100% with respect to mature funds and at 33.3% with respect to current funds, new funds and open-ended funds, through the Company’s non-controlling interest and redeemable preferred shares non-controlling interest held by BN. Further, certain employee share-based and performance-based compensation costs are recovered from BN. See discussion of the accounting for this agreement in the Other Revenues accounting policy in Note 2.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of BAM have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and are presented in U.S. Dollars. The condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. The condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented in accordance with U.S. GAAP. The results reported in these condensed consolidated financial statements should not necessarily be regarded as indicative of results that may be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with the annual audited consolidated and combined financial statements of Brookfield Asset Management ULC for the year ended December 31, 2024, as filed in our Form 8-K/A dated April 3, 2025.

The preparation of the condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management believes that estimates utilized in the preparation of the condensed consolidated financial statements are reasonable. Such estimates include those used in the determining fair value of investments, equity accounting for investments, and the accounting for share-based and performance-based compensation. Actual results may differ from those estimates and such differences may be material.

Consolidation

The Company consolidates all entities that it controls through a majority voting interest and all variable interest entities (“VIE”) for which it is the primary beneficiary. An enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a variable interest entity and reconsiders that conclusion upon certain events. In determining whether the Company is the primary beneficiary, the Company evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Company. Assets of a consolidated VIE can only be used to settle obligations of the consolidated VIE and creditors and other beneficial interest holders do not have recourse to the Company with respect to liabilities of its consolidated VIEs. The Company’s other disclosures regarding VIEs are discussed in Note 5.

The Company consolidates the financial position and results of operations of certain funds, in which it is the primary beneficiary. In the current period, the Company invested in two Brookfield-sponsored funds in which it has been determined to be the primary beneficiary.

All intercompany balances and transactions have been eliminated on consolidation.

Redeemable Preferred Shares Non-Controlling Interest

The Company has outstanding various special tracking preferred shares of subsidiaries of the Company (“Tracking Shares”) which provides BN with a redemption right, upon a liquidation or redemption event, to receive a preferred amount equal to the fair value of carried interest entitlement from certain tracked assets, net of any compensation related costs. These returns are realized through the payment of cumulative dividends, as and when declared by the board of directors of the relevant BAM subsidiaries. These tracking shares are entitled to vote, together with the common shares owned indirectly by the Company, in respect of those subsidiaries. The tracking shares are presented as preferred share redeemable non-controlling interest within the condensed consolidated balance sheets, outside of permanent equity.

The first series of Tracking Shares issued by Brookfield U.S. Holdings Inc. (“BUSHI”), a subsidiary of the Company, provides BN with economic interest equal to effectively 100% of the carried interest earned in mature funds. This series of Tracking Shares has a redemption clause whereby the issuer, whose board is controlled by BN, may elect to redeem the tracking shares upon the tenth anniversary of issuance. While this series of tracking shares are not currently redeemable, the Company considers that it is probable that the instrument will become redeemable as the redemption requirement is only through passage of time. As such, the relevant redeemable non-controlling interest recognized outside of permanent equity requires remeasurement at each reporting period.

The second series of Tracking Shares issued by Brookfield Manager Holdings Ltd. (“BMHL”) provides BN with the economic interest equal to effectively a 33.3% share of similar distributions on open-ended funds. This series of Tracking Shares can only be redeemed upon exceptional circumstances that cause a materially adverse impact to the subsidiary. As the instrument is not currently redeemable and the Company considers such a triggering event to be remote and outside of the control of the entity, the relevant redeemable non-controlling interest recognized outside of permanent equity does not require remeasurement at each reporting period.

In addition to the Tracking Shares, BUSHI also has class B senior preferred shares and class B preferred shares outstanding as at March 31, 2025, all of which are held by BN. The class B senior preferred shares entitle the holder to cumulative preferential cash dividends at $1.36375 per share per annum and are ranked senior to the BUSHI Tracking Shares, class B preferred shares and common shares. The class B senior preferred shares are redeemable by the issuer, whose board is controlled by BN, upon the tenth anniversary of issuance at a redemption amount of $25 per share plus accrued and unpaid dividends. The class B preferred shares of BUSHI are redeemable at the option of both the holder and the issuer at a redemption amount of $25 per share plus declared and unpaid dividends, and title the holder to non-cumulative preferential cash dividends at 6.7% per annum on the redemption amount. These preferred shares are non-voting and rank junior to the class B senior preferred shares and the BUSHI Tracking Shares and senior to common shares of the entity. Due to the currently exercisable holder redemption option, these shares are presented as a part of preferred share redeemable non-controlling interest within the Company’s condensed consolidated balance sheets, outside of permanent equity and measured at their redemption amount plus any dividends declared and unpaid at each reporting date.

Additionally, the Company, as part of various equity-based compensation arrangements, has issued class A preferred shares to BN. The shares rank junior to the Class B senior preferred and Tracking Shares and are redeemable at the option of the holder and the issuer at a redemption amount of $25 per share plus accrued and unpaid dividends and these preferred shares are non-voting. Due to the currently exercisable holder redemption option, these shares are presented as a part of preferred share redeemable non-controlling interest within the Company’s condensed consolidated balance sheets, outside of permanent equity and measured at their redemption amount plus any dividends declared and unpaid at each reporting date.

The Company recognizes any change of the carrying amount of its preferred shares redeemable non-controlling interest in net (income) loss attributable to preferred share redeemable non-controlling interest in its condensed consolidated statements of operations.

Non-Controlling Interest

The Company has outstanding various classes of equity interests of the Company’s subsidiaries to BN which have rights to priority distributions. Net income (loss) and other comprehensive income, if applicable, generated by the respective subsidiaries is allocated to non-controlling interest in consolidated entities based on the substantive contractual terms of the subsidiaries’ governing agreements that specify the allocation of income or loss.

Revenue Recognition

Revenue is measured based on the amount the Company expects to be entitled to under the contract with the customer and excludes amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods and services) to the customer and is the unit of account in ASC 606. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue, as, or when, the performance obligation is satisfied. The Company recognizes revenue when it transfers control of a product or service to a customer.

Revenues primarily consist of management and advisory fees, incentive fees (including incentive distributions and performance fees).

Management and advisory fees — Management and advisory fees are comprised of base management fees and transaction, advisory and other fees and are accounted for as contracts with customers.

The Company earns base management fees from its customers at a fixed percentage of a calculation base which is typically committed capital or invested capital or net asset value. The Company identifies its customers on a fund-by-fund basis in accordance with the terms and circumstances of the individual fund. Generally, the customer is identified as the investor in its managed funds and investment vehicles, but for certain widely held funds or vehicles, the fund or vehicle itself may be identified as the customer. These customer contracts require the Company to provide investment management services over a period of time, which represents a performance obligation that the Company satisfies over time. Management fees are a form of variable consideration because the fees that the Company is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically quarterly) and are not subject to clawback once paid.

Transaction, advisory and other fees are principally fees charged to the investors of funds indirectly through the managed funds and portfolio companies. These fees are based on a fixed percentage of enterprise value or equity value of pooled capital raised and are earned which generally coincides with when the capital is called. These fees are not tied to performance or ongoing investment management services, are not subject to clawback and are recorded in the period in which the related transaction closes.

Accrued but unpaid management and advisory fees, net of management fee reductions and management fee offsets, as of the reporting date are included in Accounts receivable and other, net or Due from affiliates in the condensed consolidated balance sheets.

Incentive fees — Incentive fees include incentive distributions and performance fees and are accounted for as contracts with customers.

Incentive distributions are incentive payments to reward the Company for meeting or exceeding certain performance thresholds of managed entities. They are comprised of incentive distributions and performance fees.

Incentive distributions paid to us by our permanent capital vehicles are determined by contractual arrangements and represent a portion of distributions paid by the permanent capital vehicles above a predetermined hurdle. They are accrued as revenue on the respective affiliates’ distribution record dates only if the predetermined hurdle has been achieved. They are not subject to clawback.

Performance fees are generated when the unit value of a perpetual affiliate or a limited-life fund exceeds a prescribed high-water mark and are accrued on a quarterly or annual basis. These fees are not subject to clawback.

Incentive distributions and performance fees will not be recognized until (a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved.

Accrued but unpaid incentive distributions and performance fees are recorded within Due from affiliates in the condensed consolidated balance sheets as of the reporting date.

Investment income (loss)— Investment income (loss) represents the unrealized and realized gains and losses on carried interest and movements in the fair value of the Company's principal investments and is accounted for outside of ASC 606.

Carried interest is a performance fee arrangement in which the Company receives a percentage of investment returns, generated within a private fund on carry eligible capital, based on a contractual formula. We are eligible to earn carried interest from a fund once returns exceed the fund’s contractually defined performance hurdles at which point, we earn an accelerated percentage of the additional fund profit until we have earned the percentage of total fund profit, net of fees and expenses, to which we are entitled. At the end of each reporting period, the Company calculates the balance of accrued carried interest that would be due to the Company for each fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as accrued carried interest to reflect either (a) positive performance resulting in an increase in the accrued carried interest to the general partner or (b) negative performance that would cause the amount due to the Company to be less than the amount previously recognized as revenue, resulting in a negative adjustment to the accrued carried interest to the general partner. These adjustments are recorded in the condensed consolidated statements of operations as unrealized carried interest allocations in Investment income. In each scenario, it is necessary to calculate the accrued carried interest on cumulative results compared to the accrued carried interest recorded to date and make the required positive or negative adjustments. The Company ceases to record negative carried interest once previously accrued carried interest for such funds have been fully reversed. The Company is not obligated to pay guaranteed returns or hurdles, and therefore, cannot have negative carried interest over the life of a fund. Accrued carried interest as of the reporting date is reflected in Investments on the condensed consolidated balance sheets.

Carried interest is realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the preferred return or, in limited instances, after certain thresholds for return of capital are met. Carried interest is subject to clawback to the extent that the carried interest received to date exceeds the amount due to the Company based on cumulative results. The accrual for potential repayment of previously received carried interest would represent amounts previously paid to the Company that would need to be repaid if these funds accruing carry were to be liquidated based on the fair value of their underlying investments. This amount is estimated to be $nil for all periods presented and as a result no clawback provision has been recognized in the condensed consolidated financial statements.

Fair value gains (losses) on principal investments include the unrealized and realized gains and losses on the Company’s principal investments, including its investments in the funds that are not consolidated and receive pro-rata allocations and other principal investments. Income (loss) on principal investments is realized when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized income (loss) on principal investments results from changes in the fair value of the underlying investment as well as the reversal of unrealized gain (loss) at the time an investment is realized.

Interest and dividend revenue — Interest and dividend revenue comprise primarily of interest and dividend income earned on principal investments not accounted for under the equity method held by the Company.

Other revenues

Other revenues arises from the Relationship Agreement between BAM and BN. Under the Relationship Agreement, certain employee share-based and performance-based compensation costs are recovered from BN. Income generated under the Relationship Agreement relating to these instruments is recognized as Other Revenues in the condensed consolidated statements of operations on a gross basis as the instruments vest.

Certain liability classified share-based awards covered by the Relationship Agreement are required to be revalued at each balance sheet date. As a result, where the revaluation results in an increase in the share-based award liability, BN will reimburse BAM while conversely, where the revaluation results in a decrease in the share-based award liability, BAM will be responsible for reimbursing the difference to BN.

Other revenues includes certain performance fees which are accounted for as contracts with customers. Amounts are accrued on a quarterly or annual basis and are not recognized until(a) it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration is subsequently resolved. Certain amounts are subject to clawback.

Fair Value of Financial Instruments

U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

•Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities and mutual funds with quoted prices. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

•Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

•Level III — Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Level II Valuation Techniques

Financial instruments classified within Level II of the fair value hierarchy are comprised of certain equity securities.

The valuation techniques used to value financial instruments classified within Level II of the fair value hierarchy are as follows:

•Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, the Company may use certain information with respect to quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction that is embodied in the security.

Level III Valuation Techniques

In the absence of observable market prices, the Company values its investments using valuation methodologies applied on a consistent basis. For some investments where little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks.

The Company uses the discounted cash flow method or the direct capitalization method to value the investments held in consolidated funds. Valuations may be derived by referencing observable valuation measures for comparable assets and recent market transactions, adjusted for asset specific factors. Where a discounted cash flow method is used, a terminal value is derived by referencing to a stabilized exit EBITDA and a capitalization rate.

Net Asset Value

Investment funds are typically measured using Net Asset Value (“NAV”) as a practical expedient in determining fair value and are not classified in the fair value hierarchy. The carrying value reflects a pro rata ownership percentage as indicated by NAV in the investment fund financial statements, which may be adjusted if it is determined NAV is not calculated consistent with investment company fair value principles. The underlying investments of the investment funds may have significant unobservable inputs, which may include but are not limited to, comparable multiples and WACC rates applied in valuation models or a discounted cash flow model.

Derivatives

Derivative financial instruments under ASC 815, Derivative and Hedging are recognized on the condensed consolidated balance sheets at fair value with changes in fair value recognized in earnings.

Purchased or written options on equity interests of several of our equity method investments that do not meet the definition of a derivative are recognized on the condensed consolidated balance sheets on a gross basis as Financial Assets or Financial Liabilities, respectively. These financial instruments are measured at fair value with changes in fair value recognized in Other expenses, net.

Investments

Investments include (i) investments held by funds which the Company controls and consolidates and (ii) the Company’s ownership interests (typically general partner interests) in nonconsolidated funds which are accounted for as equity method investments.

(i) Investments at fair value under Consolidated Funds

Investments held in consolidated funds, which are investment companies under ASC 946, Financial Services - Investment Companies, are measured at fair value as disclosed in Note 4.

(ii) Company’s ownership interests in funds and other asset management businesses accounted for as equity method investments

Investments in which the Company is deemed to exert significant influence, but not control, are accounted for using the equity method of accounting. The Company has significant influence over certain Brookfield funds in which it invests but does not consolidate. Therefore, its investments in such Brookfield funds, which include both a proportionate and disproportionate allocation of the profits and losses, are accounted for under the equity method. The Company also has investments in equity interests of other asset management businesses that provide it with significant influence and therefore accounts for such investments using the equity method for its proportionate share of the investees' comprehensive income or losses.

When the Company acquires an additional interest in an existing equity method investment, resulting in a step-up in basis, the difference between the purchase price and the Company's proportionate share of the book value of the investee’s net assets is identified and allocated to the fair value of the identifiable assets and liabilities of the investee at the acquisition date. The excess of the purchase price over the book value of the net assets acquired is allocated to intangible assets and goodwill. The basis difference is generally amortized over the remaining useful lives of the intangible assets, while any amount allocated to goodwill is not amortized but is tested for impairment annually. The amortization of the basis difference affects the Company’s share of the investee’s net income or loss and is included in the “Share of Income from Equity Method Investments” line item in the condensed consolidated statements of operations. The amortization periods for the intangible assets to which the basis difference is allocated are consistent with the estimated useful lives of those assets. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

In cases where the Company’s equity method investments provide for a disproportionate allocation of the profits and losses, the Company’s share of earnings (losses) from equity method investments is determined using a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, at the end of each reporting period the Company calculates the accrued carried interest that would be due to the Company pursuant to fund agreements as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of the underlying investments varies between reporting periods, it is necessary to make adjustments to the amounts recorded as carried interest to reflect either a positive performance resulting in an increase in the carried interest allocated to the general partner or a negative performance that would cause the amount due to the Company to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to the general partner. In each case, such accrued carried interest will be recognized in the condensed consolidated statements of operations.

The Company has elected to account for certain equity method investments such as equity securities through the election of the fair value option under ASC 825, Financial Instruments. These are investments in limited partnerships that represent more than a minor interest in the investees where the Company does not have the practical ability to exert significant influence.

Refer to Note 4 for details in relation to equity method investments.

Other Assets

We aggregate balances for presentation in the condensed consolidated financial statements based on the nature and function of the accounts. Specifically, we combine similar assets, to provide a clearer representation of financial position and performance during the reporting period. For the purposes of the interim financial statements, Intangibles and Goodwill as well as Property Plant and Equipment have been presented as Other Assets.

Intangibles and Goodwill

Identifiable finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from eight to fifteen years, reflecting the contractual lives of such assets. Amortization expense is included within General and administrative in the condensed consolidated statements of operations. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

Goodwill is reviewed for impairment at least annually utilizing a qualitative or quantitative approach, and more frequently if circumstances indicate impairment may have occurred. The impairment testing for goodwill under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of the Company’s operating segments is less than their respective carrying values. The operating segments are considered the reporting units for testing the impairment of goodwill. If it is determined that it is more likely than not that an operating segment’s fair value is less than its carrying value or when the quantitative approach is used, an impairment loss is recognized to the extent by which the carrying value exceeds the fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Compensation, benefits and fund operating expenses — Compensation and carried interest compensation

Compensation — Compensation consists of (a) salary and bonus, and benefits paid and payable to employees, and (b) share-based compensation associated with the grants of share-based awards to employees. Compensation costs relating to the issuance of share-based awards to senior management and employees is accounted for in accordance with ASC 718, Compensation — Stock Compensation. These awards are measured at fair value at the grant date and expensed over the vesting period, except in the case of share-based awards that do not require future service, which are expensed immediately. Cash settled share-based awards and awards settled in a variable number of shares for a fixed monetary amount are classified as liabilities and are remeasured at the end of each reporting period. The Company accounts for forfeitures as they occur.

Refer to Note 11 for further details of the Company's share-based compensation.

Carried Interest Compensation— Unrealized and realized carried interest is performance-based compensation associated with realized or unrealized carried interest based on performance of investments on a fund-by-fund basis. Such compensation expense is subject to both positive and negative adjustments.

Other income (expenses), net

Other expenses, net - Other expenses, net includes net unrealized gains (losses) resulting from changes in the fair value of the Company’s investments in common shares, financial instruments associated with options to acquire additional interests in various investments, and investments in its sponsored funds.

Other income, net of consolidated funds - Other income, net of consolidated funds include net unrealized gains (losses) resulting from changes in the fair value of the Company's underlying investments in its consolidated funds.

Income taxes

The Company is an unlimited liability company organized under the provincial laws of British Columbia and is subject to Canadian federal and provincial income taxes.

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Income taxes as presented attribute deferred income taxes of the Company's standalone condensed consolidated financial statements in a manner that is systematic, rational, and consistent with the asset and liability method.

The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The Company analyzes its tax filing positions in all jurisdictions where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. Tax benefits associated with actual or expected income tax positions are recognized when the “more likely than not” recognition threshold is met. The tax benefits are measured at the largest amount of benefit that is greater than 50% likely to be realized upon settlement with the related tax authority.

The Company recognizes accrued interest and penalties related to uncertain tax positions within the provision for income taxes in the condensed consolidated statements of operations.

Related parties

In the normal course of operations, the Company enters into various transactions on market terms with related parties, including amounts in Due from/to affiliates. The Company and its subsidiaries may also transact with entities that share a common parent. Amounts owed to and by associates and joint ventures are not eliminated on consolidation.

The Company has certain loans and receivables within Due from Affiliates which are long-term in nature. These receivables are initially recognized at fair value and subsequently measured at their amortized cost bases with interest recognized using the effective interest method.

In addition to the Relationship Agreement, BN and BAM have entered into the transitional services agreement ("TSA") pursuant to which (i)the BAM agrees to provide BN, on a transitional basis, certain services to support day-to-day corporate activities (including services related to finance, treasury, accounting, legal and regulatory, marketing, communications, human resources, internal audit, information technology) and (ii) BN provides, on a transitional basis, certain services to BAM. These services are provided, at cost, for a period of three years from December 9, 2022, unless extended by mutual agreement. BAM also provides to BN, as required from time to time and on a cost recovery basis, services of its investment personnel to assist in acquisitions or other transactions undertaken by BN.

See Note 14 for further detail on related party transactions.

Recent accounting pronouncements

The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on the Company's condensed consolidated financial statements.

On March 21, 2024, the FASB issued ASU 2024-01,1 which clarifies how an entity determines whether a profits interest or similar award is within the scope of ASC 718 or not a share-based payment arrangement and therefore within the scope of other guidance. Management is currently assessing the impact of this update.

3.2025 ARRANGEMENT

On February 4, 2025, BAM and BN completed a transaction by way of a plan of arrangement whereby BN and certain of its subsidiaries exchanged all of their common shares in the Asset Management Company for newly-issued Class A Shares of BAM on a one-for-one basis. As a result of the 2025 Arrangement, BAM issued approximately 1,194 million Class A Shares to BN for approximately 1,194 million outstanding common shares of the Asset Management Company. Immediately following the completion of the 2025 Arrangement, (i) BAM held, directly and indirectly,100% of the outstanding common shares of the Asset Management Company, (ii) BN held approximately 73% of the Class A Shares of BAM, and (iii) the shareholders of BAM prior to effecting the 2025 Arrangement held the remaining approximately 27% of the Class A Shares of BAM.

As a result, the effective economic ownership interest in the Asset Management Company of BAM’s shareholders prior to effecting the 2025 Arrangement and BN has not been substantially impacted by the 2025 Arrangement.

The acquisition of substantially all of the common shares of the Asset Management Company by BAM has been accounted for as a reverse asset acquisition on the basis that the Asset Management Company, the accounting acquirer, has issued shares to acquire the net assets of BAM and substantially all of BAM's net assets represent an interest in the Asset Management Company. The Asset Management Company is therefore the predecessor of BAM whereby BAM continues to be the registrant and its consolidated financial statements, including historical results (other than legal share capital), are that of the Asset Management Company.

Accordingly, as a result of the 2025 Arrangement, the following adjustments have been reflected in the financial results of BAM:

•the acquisition of BAM’s net assets and the effective settlement of any pre-existing relationships between the Asset Management Company and BAM; and

•the allocation of the transaction price among the acquired net assets of BAM.

The following table outlines the above:

a) Consideration effectively transferred

As part of the 2025 Arrangement, BN and certain of its subsidiaries transferred approximately 1,194 million common shares with a fair value of approximately $68 billion to BAM in exchange for approximately 1,194 million Class A Shares with a fair value of approximately $68 billion on a one-for-one basis. Consideration effectively transferred by the Asset Management Company has been computed as the market price of the Class A Shares on the closing date multiplied by the number of Class A Shares owned by BAM's shareholders prior to the 2025 Arrangement.

b) BAM’s interest in the Asset Management Company

Prior to the 2025 Arrangement, BAM held an approximate 27% interest in the Asset Management Company. The fair value of this investment has been determined based on the fair value of the Class A Shares outstanding as of February 4, 2025. As part of the 2025

Arrangement, the Asset Management Company acquired BAM’s net assets from an accounting perspective and as a result its re-acquisition of its own shares are eliminated upon effecting the 2025 Arrangement.

c) Other relationships between the Asset Management Company and BAM

Prior to the 2025 Arrangement, BAM and the Asset Management Company had entered into various transactions which led to balances between the parties. As part of the 2025 Arrangement these balances were effectively settled and have been excluded from both purchase consideration and net assets acquired.

d) Intangible assets

In assessing the fair value of the assets and liabilities acquired in the 2025 Arrangement, an intangible asset associated with the assembled workforce of BAM has been identified. The fair value has been assessed as $215 million, inclusive of $57 million of deferred tax amounts associated with its recognition.

4. INVESTMENTS

Where appropriate, the accounting for the Company’s investments incorporates the changes in fair value of those investments.

a. As at March 31, 2025, common and preferred shares were $393 million (2024 – $400 million). Common shares primarily represents investments of $64 million (2024 – $64 million) in Brookfield Renewable Energy L.P. and $26 million (2024 – $25 million) in Brookfield Infrastructure Income Fund Inc. Preferred shares represent investments of $249 million (2024 – $249 million) in GEMS Education and $53 million (2024 – $50 million) in Cherry Coatings. Common and preferred share investments are carried at fair value with changes in fair value recorded in the condensed consolidated statements of operations.

b. As at March 31, 2025, investments in affiliates are primarily comprised of an interest in Brookfield Strategic Real Estate Partners III of $961 million (2024 – $1.0 billion) which is accounted for as an equity investment measured at its NAV in accordance with ASC 321, Investments– Equity Securities.

c. Accrued carried interest represents the disproportionate allocation of capital from our private funds to the extent that such interest is provided for in the relevant fund agreements. Accrued carried interest is accounted for using the equity method of accounting based on the Company’s entitlement to the funds’ net assets as if all investments were liquidated at fair value and all liabilities were satisfied, net of the cumulative amounts that have already been realized. As stipulated in the Relationship Agreement, accrued carried interest in mature funds, as defined therein, is all attributed to BN and accrued carried interest in new funds, including current funds and open-ended funds, as defined therein, is attributed to BN at 33.3%. Such attribution is achieved via Tracking Shares and non-controlling interests in certain subsidiaries that are entitled to such carried interest.

The change in BAM’s accrued carried interest for mature funds for the three months ended March 31, 2025 and 2024 is as follows:

The change in the BAM’s accrued carried interest for new funds during the three months ended March 31, 2025 and 2024 is as follows:

d. The Company has significant influence, but not control, over the operating and financial policies of its equity method investees by virtue of having the ability to appoint members of these investees' governing bodies. The Company’s equity method investments include:

i. An approximate 73% economic interest in Oaktree of $4.6 billion (2024 – $4.6 billion);

ii. An economic interest in Castlelake of $533 million (2024 – $538 million);

iii. A 49.9% economic interest in LCM Partner Group of $194 million (2024 – $186 million);

iv. A 35% economic interest in Primary Wave of $165 million (2024 – $147 million);

v. An approximate 11% economic interest in Pretium of $331 million (2024 - $351 million) for which BAM has elected the fair value option under ASC 825 Financial Instruments upon initial recognition with changes in fair value recognized in net income. For the three months ended March 31, 2025, a decrease of $20 million has been recognized on the value of the investment; and

vi. A number of general partner interests in our private funds; and other various equity method investments.

Within the Share of Income from Equity Method Investments in its condensed consolidated statements of operations, the Company recognized its share of earnings from all of its equity method investments of $58 million (2024 – $80 million) for the three months ended March 31, 2025.

The summarized financial information of all of the Company’s equity method investees, in aggregate, as for the three months ended March 31, 2025 and 2024, is as follows:

During the three months ended March 31, 2025, BAM disposed of its interest in Redwood Evergreen Fund LP for approximately $257 million. Prior to the disposal, the investment in the fund was classified as a disposal group held for sale measured at fair value less costs to sell. For the three months ended March 31, 2025, BAM recognized a gain of $15 million, reported within Other expenses, net within the condensed consolidated statements of operations.

Investments in Consolidated Funds

The summary of the Company's investments held in consolidated funds as at March 31, 2025 and December 31, 2024, is as follows:

As of March 31, 2025 and December 31, 2024, no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5% of BAM’s total assets.

Net gains (losses) from investment activities in the condensed consolidated statements of operations consist primarily of realized and unrealized gains and losses on the consolidated funds’ investments (including foreign exchange gains and losses attributable to foreign-denominated investments and related activities) and other financial instruments. Unrealized gains or losses result from changes in the fair value of these investments and other financial instruments. Upon disposition of an investment, unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period. For the three months ended March 31, 2025, there were $14 million of gains recognized from investment activities within Other income, net of consolidated funds on the condensed consolidated statements of financial operations (2024 –nil).

5. VARIABLE INTEREST ENTITIES

The Company consolidates certain VIEs for which it is the primary beneficiary either directly or indirectly, through another consolidated entity. VIEs include certain credit focused entities within the Oaktree platform, whereby the purpose of such VIEs is to provide a vehicle that allocates our share of its performance-based fees between the Company and BN, as well as certain consolidated funds where BAM is the primary beneficiary. The fundamental risks of these consolidated VIEs, mainly include loss of invested capital and performance-based fees. The Company does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs. The assets of consolidated VIEs may only be used to settle obligations of these entities. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities. As at March 31, 2025, the Company had unfunded commitments of $650 million to the consolidated funds.

The Company holds variable interests in certain VIEs which are not consolidated as it has been determined that the Company is not the primary beneficiary. VIEs that are not consolidated predominately include investment funds sponsored by or managed by the Company. The Company's investment strategies differ by investment fund; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management and performance income. The Company's maximum exposure to loss as a result of its investments in the unconsolidated investment funds is the carrying value of such investments, including the Company's capital interest and any unrealized carried interest. For the three months ended March 31, 2025 and 2024, the Company did not provide any financial and other support to unconsolidated VIEs other than its obligated commitments.

The assets and liabilities recognized in the Company's condensed consolidated balance sheets related to its maximum exposure to loss of those VIEs of which the Company is determined not to be the primary beneficiary, the non-consolidated VIEs, are as follows:

6. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Fair value approximates carrying value for the following financial instruments that are not measured at fair value in the condensed consolidated financial statements: Cash, Accounts receivable and other, net, Accounts payable and other, net, and Due to affiliates and Due from affiliates.

Financial Instruments

The following tables summarizes the fair value hierarchy of financial assets and liabilities of the Company that are measured at fair value as at March 31, 2025 and December 31, 2024:

Financial Instruments of Consolidated Funds

The following tables summarizes the fair value hierarchy of financial assets and liabilities measured at fair value for the Company's consolidated funds as at March 31, 2025 and 2024:

Level III Measurements

The fair value measurement of items categorized in Level III of the fair value hierarchy is subject to valuation uncertainty arising from the use of significant unobservable inputs. The significant unobservable inputs used in the fair value measurement of financial assets and liabilities recurringly measured at fair value are discount rates, capitalization rates, volatility assumptions, and inputs to prescribed settlement formulas on certain of our options. Significant changes in these inputs in isolation would have resulted in a significantly higher or lower fair value measurement.

The following tables summarize the quantitative inputs and assumptions used for items categorized in Level III of the fair value hierarchy as at March 31, 2025 and December 31, 2024:

(a)Unobservable inputs were weighted based on the fair value of the investments included in the range.

(b)Financial assets relate to call options held by the Company to acquire additional shares of Primary Wave and Castlelake from other investors of the investee using a prescribed valuation methodology in exchange for cash, Class A shares of BN or other forms of consideration at the discretion of the Company. The fair value of these instruments is determined quarterly using a Monte Carlo simulation and various inputs prepared by management.

(c)Common shares categorized as Level III represents investments of $64 million in Brookfield Renewable Energy L.P. (2024 – $64 million). Preferred shares represent $249 million of preferred shares in GEMS Education and $53 million preferred shares of Cherry Coatings. Common and preferred share investments are carried at fair value with changes in fair value recorded in the condensed consolidated statements of operations.

(d)Equity method investments under fair value option represents an approximate 11% economic interest in Pretium of $331 million (2024 - $351 million) for which the BAM has elected the fair value option under ASC 825 Financial Instruments upon initial recognition with changes in fair value recognized in the condensed consolidated statements of operations.

(e)During the three months ended March 31, 2025, BAM disposed of its interest in Redwood Evergreen Fund LP for approximately $257 million. The investment in the fund was classified as a disposal group held for sale measured at fair value less costs to sell. For the three months ended March 31, 2025, BAM recognized a gain of $15 million, reported with Other expenses, net within the condensed consolidated statements of operations.

(f)Financial liabilities relate to put options held by other investors of Oaktree, Castlelake and Primary Wave under which the Company may be required to purchase additional shares of these investees using a prescribed valuation methodology in exchange for cash, Class A shares of BN or other forms of consideration at the discretion of the Company. The balance also includes contingent consideration agreed to as part of the acquisition of certain investments and other financial derivatives. The fair value of these instruments is determined quarterly using a Monte Carlo simulation and various inputs prepared by management.

Level III Measurements of Consolidated Funds

Level III Changes in Fair Value

During the three months ended March 31, 2025, there have been no changes in valuation techniques within Level III that have had a material impact on the valuation of financial instruments.

The following tables summarize the changes in financial assets and liabilities measured at fair value for which the Company has used Level III inputs to determine fair value. These tables also exclude financial assets and liabilities measured at fair value on a non-recurring basis. Total realized and unrealized gains and losses recorded for Level III investments are reported in Other expenses, net in the condensed consolidated statements of operations.

Level III Changes in Fair Value of Consolidated Funds

7. CORPORATE BORROWINGS

BAM established a $750 million five-year revolving credit facility on August 29, 2024 through bilateral agreements with a group of lenders. Certain consolidated funds also maintain revolving credit facilities that are secured by the assets of the respective fund.

BAM has the following debt obligations outstanding:

The Consolidated funds of BAM have the following borrowings:

8. REVENUE

The Company offers investment products on a number of strategies, specifically renewable power and transition, infrastructure, real estate, private equity, and credit, operating in more than 30 countries. The majority of management and advisory fees, net are earned in the United States of America.

The following table sets out revenue disaggregated by investment strategy and geography.

9. INCOME TAXES

The Company’s statutory income tax rate has remained consistent at 27%during the three months ended March 31, 2025 and 2024.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. and other local tax authorities. As of March 31, 2025, certain of the Company's U.S income tax returns for 2018 through 2023 are open to or are under examination and certain of the Company's other non-U.S. income tax returns for 2018 through 2023 are open to or are under examination.

10. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. BAM applies the two-class method in calculating earnings per share for each of its two classes of shares and participating securities, based on their pro-rata share of earnings. Class A shares held under the ES Plans in one or more private wholly owned subsidiaries of BAM are classified as treasury shares and have been excluded from the calculation of earnings per share. BAM has certain dilutive securities relating to outstanding restricted stock and options held by employees and non-employees and have been reflected accordingly in diluted earnings per share figures. Basic and diluted net income per share of common stock for the three months ended March 31, 2025 and 2024 was calculated as follows:

Following weighted average potentially dilutive securities were evaluated under the treasury stock method for potentially dilutive effects and have been excluded in the above computation of diluted net income per share attributable to common shareholders for the period presented due to their anti-dilutive effect:

11. SHARE-BASED COMPENSATION

BAM and BN have granted share-based compensation awards to certain employees and directors of BAM, under a number of compensation plans (the “Equity Plans”). The Equity Plans provide for the granting of share options, restricted shares, escrowed shares and deferred share and restricted share units which contain certain service or performance requirements of BAM or BN.

The expense recognized for share-based compensation is summarized in the following table:

The share-based payment plans are described below.

Management Share Option Plan

BAM recognizes any awards associated with the existing Equity Plans for its employees irrespective of whether the awards were granted by BN or BAM. Options issued under the Management Share Option Plan (“MSOP”) of both BN and BAM vest over a period of up tofive years, expireten years after the grant date and are settled through issuance of Class A shares of BN or BAM. The exercise price is equal to the market price at the grant date.

During the three months ended March 31, 2025, BAM granted 4.8 million (2024 –6.1 million) share options at a weighted average exercise price of $59.62 (2024 – $40.07). The compensation expense was calculated using the Black-Scholes method of valuation, assuming an average 7.5 year term (2024 –7.5),29.9% volatility (2024 –29.2%), a weighted average expected dividend yield of 3.7% (2024 –4.8%) annually, a risk-free rate of 4.4% (2024 –4.2%) and a liquidity discount of 25%, with a fair value of $11.18 per unit (2024 – $6.12). The total fair value of the share options granted was $53.4 million (2024 – $29.3 million).

For the three months ended March 31, 2025, the total expense incurred with respect to MSOP totaled $11 million, respectively (2024 – $5 million).

Escrowed Stock Plan

The Escrowed Stock (“ES”) shares generally vest over five years and must be held to the fifth anniversary of the grant date. At a date no more thanten years from the grant date, all outstanding ES shares will be exchanged for Class A shares issued by BN or BAM based on the market value of the respective Class A shares at the time of the exchange. The number of Class A shares issued on exchange will be less than the Class A shares purchased under the ES Plan resulting in a net reduction in the number of Class A shares issued by BAM.

During the three months ended March 31, 2025, BAM granted 3.5 million (2024 –4.8 million) escrowed shares at a weighted average exercise price of $59.62 (2024 – $40.07). The compensation expense was calculated using the Black-Scholes method of valuation, assuming an average 7.5 year term (2024 –7.5 years),29.9% volatility (2024 –29.2%), a weighted average expected dividend yield of 3.7% (2024 –4.8%) annually, a risk-free rate of 4.4% (2024 –4.2%) and a liquidity discount of 25%, with a fair value of $11.18 per unit (2024 – $6.12). The total fair value of the escrowed shares granted was $39.6 million (2024 – $29.3 million).

For the three months ended March 31, 2025, the total expense incurred with respect to the ES Plan totaled $13 million (2024 – $6 million).

Restricted Stock Plan

The Restricted Stock Plan awards executives with Class A shares of BN and BAM purchased on the open market (“Restricted Shares”). Under the Restricted Stock Plan, Restricted Shares awarded vest over a period of up tofive years, except for Restricted Shares awarded in lieu of a cash bonus, which may vest immediately. Vested and unvested Restricted Shares are subject to a hold period of up tofive years. Holders of Restricted Shares are entitled to vote Restricted Shares and to receive associated dividends. Employee compensation expense for the Restricted Stock Plan is charged against income over the vesting period.

Compensation expense for the three months ended March 31, 2025 was $15 million (2024 – $11 million).

Deferred Share Unit Plan

The Deferred Share Unit (“DSU”) Plan provides for the issuance of DSUs. Under the DSU plan, qualifying employees and directors receive varying percentages of their annual incentive bonus or directors’ fees in the form of DSUs. The DSUs vest over periods of up tofive years, and accumulate additional DSUs at the same rate as dividends on Class A shares of BN and BAM based on the market value of the Class A Shares at the time of the dividend. Participants are not allowed to convert vested DSUs into cash until retirement or cessation of employment.

The value of the DSUs, when converted to cash, will be equivalent to the market value of the Class A shares of BN and BAM at the time the conversion takes place. The fair value of the vested DSUs as at March 31, 2025 was $591 million (December 31, 2024 – $150 million).

Employee compensation expense for these plans is charged against net income over the vesting period of the DSUs. For those awards issued as part of the 2022 Arrangement, the mark-to-market movement is recoverable from BN. The amount payable in respect of vested DSUs changes as a result of dividends and share price movements. All of the amounts attributable to changes in the amounts payable by the Company are recorded as employee compensation expense in the period of the change. For the three months ended March 31, 2025, employee compensation recovery totaled $67 million (2024 – expense of $4 million).

Restricted Share Unit Plan

The Restricted Share Unit (“RSU”) Plan provides for the issuance of RSUs. Under the RSU plan, qualifying employees and directors receive varying percentages of their annual incentive bonus or directors’ fees in the form of RSUs. The RSUs vest over periods of up tofive years. Participants are not allowed to convert RSUs into cash until retirement or cessation of employment. The value of the RSUs, when converted into cash, will be equivalent to the difference between the market price of equivalent number of Class A shares of BN or BAM at the time the conversion takes place and the market price on the date the RSUs are granted.

During the year ended December 31, 2024, the RSU Plan was settled and participating employees and directors of BAM received a cash settlement equal to the value of the RSUs at the date of settlement or an option to acquire preferred shares in subsidiaries of BN with a redemption value equal to the value of their RSUs on the date of the settlement of the RSU plan.

The value of the outstanding options associated with the settlement of the RSU plan as at March 31, 2025 was $21 million (December 31, 2024 – $21 million) and the fair value of outstanding RSUs was $nil (December 31, 2024 – $nil).

For the three months ended March 31, 2025, expense associated with the RSU's totaled $nil (2024 –$1 million).

12. PREFERRED SHARES REDEEMABLE NON-CONTROLLING INTEREST

As at March 31, 2025, subsidiaries of the Company have issued and outstanding certain classes of preferred shares which are outlined below:

The movement in the carrying value of the preferred shares redeemable non-controlling interest is as follows:

BUSHI and BMHL Tracking Shares

In December 2022, BUSHI and BMHL, subsidiaries of BAM, entered into arrangements with BN whereby BUSHI and BMHL issued preferred shares to BN in exchange for BN's holdings in BUSHI's and BMHL's common shares.

The preferred shares, which we also refer to as Tracking Shares, represent a class of ownership senior to common stock and subordinate to debt and are entitled to quarterly dividends when declared by BUSHI and BMHL. The BUSHI preferred shares are redeemable at the option of the issuer, whose board is controlled by the holder, after 10 years and the BMHL preferred shares are redeemable when a redemption triggering event has occurred. As the Company does not solely control the redemption event, these preferred shares are accounted for as redeemable non-controlling interests.

Class B senior preferred and preferred shares

In addition to the Tracking Shares, BUSHI has also issued class B senior preferred shares and class B preferred shares. The class B senior preferred shares entitle the holder to cumulative preferential cash dividends at $1.36375 per share per annum and are ranked senior to the Tracking Shares, class B preferred shares and common shares. The class B senior preferred shares are redeemable by the issuer, whose board is controlled by BN, upon the tenth anniversary of issuance at a redemption amount of $25 per share plus accrued and unpaid dividend. The class B preferred shares are redeemable at the option of both the holder and the issuer at $25 per share (the redemption amount) plus unpaid dividends. These preferred shares are non-voting and rank junior to the BUSHI tracking shares and senior to common shares of the entity, and are entitled to non-cumulative cash dividends at 6.7% per annum on their redemption amount.

Class A preferred shares

The class A preferred shares were issued by a subsidiary of BAM to BN, redeemable at the option of the holder and the issuer at a redemption amount of $25 per share plus accrued and unpaid dividends and these preferred shares are non-voting. During the three months ended March 31, 2025,1,888,059 class A preferred shares worth $47 million were deemed to have been settled upon consolidation as a result of the 2025 Arrangement.

The Company accounts for the changes in the value of the redeemable non-controlling interest in accordance with ASC 480, Distinguishing Liabilities from Equity. The Company elects for the BUSHI tracking shares and class B senior preferred shares to recognize changes in the redemption value immediately as they occur and adjust the carrying amount to equal the redemption value at the end of each reporting period. As the BMHL tracking shares are not currently redeemable and management has determined that it is not probable that the instrument will become redeemable no subsequent adjustment in the value of the preferred shares is expected. The BUSHI class B preferred shares are currently redeemable and are therefore measured at their redemption amount at each reporting date. However, no adjustment to the carrying value of the class B preferred shares is expected as dividends declared are expected to be paid on or prior to each reporting date.

13. NON-CONTROLLING INTEREST

Non-Controlling Interests in Consolidated Entities

Net income (loss) generated by the respective subsidiaries is allocated to non-controlling interest in consolidated entities based on the substantive contractual terms of the subsidiaries’ governing agreements that specify the allocation of income or loss. Majority of income attributable to non-controlling interest is comprised of BN's one third share of carried interest revenue generated on new funds.

The movement in the carrying value of non-controlling interest is as follows:

Non-Controlling Interests in Consolidated Funds

The following table sets forth a summary of changes in the non-controlling interests in consolidated funds. Dividends reinvested and in-kind contributions or distributions are non-cash in nature and have been presented on a gross basis in the table below.

14. RELATED PARTY TRANSACTIONS

In the normal course of business, BAM enters into transactions with related parties and derived the majority of its revenue from the provision of asset management services to funds. as well as subsidiaries and operating entities of BN. During the three months ended March 31, 2025, the Company recorded revenues of $1.0 billion (2024 – $850 million) derived from related party transactions on its condensed consolidated statements of operations.

In the normal course of business, the Company entered into transactions with related parties by providing and borrowing on short-term credit facilities, working capital facilities, as well as unsecured loans. The balances due and from these facilities as well as those amounts due and from share-based compensation recharge and recovery arrangements are recorded as Due from affiliates and Due to affiliates on the condensed consolidated balance sheets.

As outlined in the Relationship Agreement, BN is responsible for costs associated with certain share-based awards for certain employees, some of which are subject to revaluation at each balance sheet date, and will also bear the cost of the employee entitlement to carried interest on mature funds either directly or indirectly through reimbursement to the Company. Income generated under the Relationship Agreement relating to these instruments is recognized as Other revenues in the condensed consolidated statements of operations on a gross basis as the instruments vest. During the three months ended March 31, 2025, the BAM has recognized recharges of $39 million (2024 – $91 million) in the condensed consolidated statements of operations under this arrangement.

During the three months ended March 31, 2025 BAM settled the outstanding tracking option. As a result, as at March 31, 2025, the carrying amount of these options is $nil (December 31, 2024 – $75 million).

For the three months ended March 31, 2025 the Company recognized tax attributes purchased from a related party of $38 million (2024 – $38 million).

For the three months ended March 31, 2025, as part of a strategic partnership between the Company and Oaktree, the Company recorded $9 million (2024 - $6 million) related to reimbursements of general and administrative expense which have been recognized as Other revenues in the condensed consolidated statements of operations. As of March 31, 2025, the Company recorded $2 million (December 31, 2024 - $2 million) in due from affiliates in the condensed consolidated balance sheets.

Due from affiliates and due to affiliates consisted of the following:

Due from affiliates

Due from affiliates of $3.3 billion (2024 – $2.5 billion) consists of $1.8 billion (2024 – $1.8 billion) of loans from affiliates which are comprised of asset management fees receivables, working capital facilities, and other outstanding short-term credit facilities provided to BN and its subsidiaries in the normal course of business. Loans to affiliates are unsecured with floating rates of Secured Overnight Financing Rate published by the Federal Reserve Bank of New York (“SOFR”) plus 235 bps or a fixed interest rate of 0.9% to 3.8%. Maturities on loans to related parties range from 2025 to 2057. The loans were generally issued to finance acquisitions and fund commitments.

Due to affiliates

Due to affiliates of $917 million (2024 – $1.1 billion) consists of amounts payable to related parties for services received in the normal course of business including operating expenses payable.

15. COMMITMENTS AND CONTINGENCIES

Commitments

On January 31, 2019, a subsidiary of the Company committed $2.8 billion to BSREP III, of which $2.1 billion has been funded as at March 31, 2025 (2024 – $2.1 billion). The remainder of the commitment will be funded by BN.

In the normal course of business, the Company enters into contractual obligations which include commitments to provide bridge financing and other equity commitments. As at March 31, 2025, the Company had $2.7 billion of such commitments outstanding (2024 – $3.3 billion).

The Company established a $750 million five-year revolving credit facility on August 29, 2024 through bilateral agreements with a group of lenders. The facility is available in U.S. and Canadian dollars, where U.S. dollar draws are subject to the U.S. Base Rate or SOFR plus a margin of 110 basis points, while Canadian dollar draws are subject to the Canadian Prime Rate or CORRA plus a margin of 110 basis points. As at March 31, 2025, the Company has drawn $235 million on the $750 million facility.

Guarantees

BAM may enter into guarantees in respect of certain co-investments in which there is carried interest. The amount guaranteed is up to the carried interest amount paid to the general partners of the respective funds, net of taxes. In the event that the general partners default on their carried interest clawback obligations, BAM will make payments under the guarantees. As at March 31, 2025, BAM has not recognized any liabilities with respect to such guarantees as no carried interest has been paid in the relevant funds.

The Company may also enter into guarantees to assist the general partners of specific funds in securing financing. In the event that the general partners default on their financing obligations, the Company will be liable for outstanding payments under the guarantees. As at March 31, 2025, the Company had $315 million of such guarantees outstanding (December 31, 2024 – $300 million).

Contingencies

Carried interests clawback

Carried interests are realized when an underlying investment is profitably disposed of after the fund’s cumulative returns have met a certain threshold for return of capital. When applicable, the Company records a liability for potential clawback obligations due to changes in the unrealized value of a fund’s remaining investments and where the Company has previously received carried interest distributions.

The actual clawback liability, however, generally does not become payable until the end of a fund’s life. No liability for potential clawback obligations has been recorded associated with any of our funds as at March 31, 2025 and December 31, 2024.

Litigation

The Company may from time to time be involved in litigation and claims incidental to the conduct of its business. The Company’s businesses are also subject to extensive regulation, which may result in regulatory proceedings against the Company. As of March 31, 2025 there is no outstanding litigation.

The Company accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such legal actions, based on information known by management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

Taxation

We operate in jurisdictions with differing tax laws and tax regulations. Certain jurisdictions in which we operate have proposed draft legislation, which if not enacted in their current form, may result in a change to our effective income tax rate.

These tax laws and regulations are complex and involve uncertainties in the application to our facts and circumstances that may be open to interpretation. We recognize benefits for these uncertain tax positions based upon a process that requires judgment regarding the technical application of the laws, regulations, and various related judicial opinions. If, in our judgment, it is more likely than not (defined as a likelihood of more than 50%) that the tax uncertainty will be resolved favorably for us, we estimate an amount that ultimately will be realized. This process is inherently subjective since it requires our assessment of the probability of future outcomes. We evaluate these uncertain tax positions on a quarterly basis, including consideration of changes in facts and circumstances, such as new regulations or recent judicial opinions, as well as the status of audit activities by taxing authorities. Changes to our estimate of the amount to be realized are recorded in our provision for income taxes during the period in which the change occurred.

16. SEGMENT REPORTING

The Company operates through five distinct operating segments that earn management fees from each respective investment strategies. The performance of these segments is reviewed by the Chief Executive Officer who acts as the CODM. The CODM uses internal management reports to assess performance and allocate resources, and the information provided herein is consistent with the Company's internal reporting structure and information reviewed by the CODM on a regular basis. The Company's operating segments are comprised of:

•Renewable Power and Transition: Primarily includes managing our flagship renewable power and transition fund series focused on investments aimed at accelerating the global transition to a net-zero carbon economy and driving clean energy investments in emerging markets. In addition, we manage Brookfield Renewable Partners L.P. (“BEP”), which is listed on the NYSE and TSX.

•Infrastructure: Primarily includes managing our flagship infrastructure fund series focused on investing in high-quality infrastructure assets on a value basis. In addition, we manage permanent capital vehicles and perpetual strategies which include Brookfield Infrastructure Partners L.P. (“BIP”), listed on the NYSE and TSX.

•Real Estate: Includes the management of our opportunistic real estate flagship fund series and secondaries strategy. In addition, we manage Brookfield Property Group ("BPG") and certain other perpetual funds focused on core plus assets and a non-traded REIT.

•Private Equity: Includes managing our global opportunistic flagship funds, special investments strategy, secondaries strategy, thematic private equity strategies and regional private equity strategies. In addition, we manage Brookfield Business Partners L.P. ("BBU") which is a publicly traded global business services and industrials company focused on owning and operating high-quality providers of essential products and services listed on the NYSE and TSX.

•Credit: Includes managing our private credit strategies, opportunistic credit strategies, structured credit strategies, and liquid credit strategies. These products seek to provide flexible, specialized capital solutions to borrowers and deliver attractive risk-adjusted returns to our clients across a range of debt strategies.

Asset information by segment is not disclosed because this information is not used by the CODM to make resource deployment decisions or evaluate the performance of the Company's segments.

Segment Revenues

Segment Revenues is a key metric analyzed by the CODM to determine the growth in recurring cash flows from our asset management business. Segment Revenues include base management fees, performance fees and transaction fees, but excludes incentive distributions, carried interest and revenues of consolidated funds. In addition, Segment Revenues include management fees earned by Oaktree on a 100% basis along with our share of segment earnings of our partner managers. See below for our reconciliation of total revenues as presented on the condensed consolidated statements of operations to Segment Revenues.

(a) This adjustment adds fee revenues of equity method investments.

(b) This adjustment removes the impact of both unrealized and realized carried interest allocations.

(c) This adjustment removes the impact of compensation costs that will be borne by affiliates.

(d) This adjustment removes other revenues earned that are non-cash in nature, which include certain cost recoveries and reimbursements from affiliates.

Segment Expenses

Segment Expenses reflect direct costs associated with earning Segment Revenues, which include compensation and benefits, facilities, technology, professional fees and travel and other operating costs. Expenses such as depreciation and amortization, taxes, interest expense, mark-to-market gains (losses), transaction related costs, non-recurring gains/losses, deferred compensation, and expenses of consolidated funds are not reflective of segment performance and are therefore excluded from Segment Expenses. In addition, Segment Expenses include segment related expenditures of Oaktree on a 100% basis. See below for our reconciliation of total expenses as presented on the Condensed Consolidated Statements of Operations to Segment Expenses.

(a) This adjustment adds expenses associated with Segment Revenues of equity method investments.

(b) This adjustment removes the impact of compensation costs that will be borne by affiliates.

(c) These adjustments remove the impact of both unrealized and realized carried interest compensation expense.

(d) This adjustment removes the depreciation and amortization on property, plant and equipment and intangible assets.

(e) This adjusts for the impact of non-asset management costs related to non-recurring costs not core to the asset management business.

Total Segment Expenses is comprised of the following major categories:

Segment Earnings are computed as Segment Revenues less Segment Expenses and are used to provide additional insight into the operating profitability of our asset management activities. These earnings are recurring in nature and not based on future realization events.

The following tables present the financial data for the Company’sfive segments for the three months ended March 31, 2025 and 2024:

(a) Travel and other operating expenses include travel, sales commissions, insurance, marketing and conferences, and general and administrative costs; none of which individually are 10% or more of total Segment Expenses.

See below for our reconciliation of income before taxes as presented on the condensed consolidated statements of operations to Segment Earnings.

(a) This adjustment removes the depreciation and amortization on property, plant and equipment and intangible assets.

(b) These adjustments remove the impact of both unrealized and realized carried interest allocations and the associated compensation expense.

(c) This adjustment removes other income and expenses associated with fair value changes.

(d) This adjustment adds back other revenues related to the recovery of compensation costs.

(e) This adjustment removes the impact of other costs and non-asset management related items such as non-recurring restructuring costs that are not considered part of the ongoing asset management business.

(f) These adjustments remove our share of income from equity method investments, included in items (a) to (e) above and includes our share of Segment Earnings from equity method investments.

17. SUBSEQUENT EVENTS

Quarterly Dividend

On May 5, 2025, the Board of BAM declared a quarterly dividend of $0.4375 per share, payable on June 30, 2025 to shareholders of record as at the close of business on May 30, 2025.

Other Items

On April 1, 2025, BAM entered into an agreement to acquire a 50.1% stake in Angel Oak Companies, a leading asset manager focused primarily on residential mortgage strategies, for $145 million.

On April 7, 2025, BAM acquired an additional 1.5% interest in Oaktree, increasing its ownership interest from approximately 73% to approximately 74%. The Company paid cash consideration of $110 million, of which $40 million was provided by BN for its interest in preferred shares redeemable non-controlling interest. The net purchase price for BAM was $70 million.

On April 22, 2025, BAM completed its inaugural debt offering, raising approximately $750 million of 10-year bonds at fixed rate of 5.795%.