Brookfield Finance Inc. 4.625% Q3 FY2024 earnings call

• Market Conditions: Reduction in short interest rates globally, capital markets liquidity returning, transaction activity picking up; over $17 billion in monetizations in past few months, $20 billion committed to new investments.
• Business Evolution: Built Wealth Solutions business when rates were zero, expanding outside North America; evolved into energy transition, digitalization, deglobalization; widened service capabilities via Wealth Solutions and private wealth platform; spun off asset management business (BAM now $85B+ market cap).
• Financial Results: Strong distributable earnings before realizations; record $1.3B in Q3, $4.6B last 12 months; total distributable earnings including realizations $1.3B Q3, $6B last 12 months.
• Operational Excellence: Asset management fundraising momentum; Wealth Solutions growth with annuity platform and $4.5B organic inflows; operating businesses resilient; over $17B in asset sales; robust balance sheet and liquidity; $203M returned to shareholders via dividends and buybacks.

Asset Management: Distributable earnings were $694 million or $0.44 per share in the quarter, and $2.6 billion or $1.64 per share over the last 12 months. Fee-bearing capital at quarter end was $539 billion, 23% higher than 12 months ago. Wealth Solutions: Earnings doubled compared to the prior year quarter. Distributable operating earnings were $364 million or $0.23 per share in the quarter and $1.2 billion or $0.75 per share over the last 12 months. Insurance assets increased over $115 billion at quarter end. Operating Businesses: Distributable earnings were $356 million or $0.23 per share in the quarter and $1.5 billion or $0.93 per share over the last 12 months. Real estate core portfolio delivered 4% growth in same-store net operating income over the prior year quarter.

• Expect continued growth in results through end of 2024 and into 2025.
• Anticipate strong fundraising through end of 2024 and 2025 for asset management.
• Expect Wealth Solutions to reach $2B annualized distributable earnings in the near-term.
• Board declared quarterly dividend of $0.08 per share payable on December 31st.

• Forward-looking statements subject to known and unknown risks; potential differences between predictions and actual results; risks related to market conditions, regulatory changes, etc.

Q: Capital allocation and share repurchases; A: Nick Goodman says no substantial change, just better illustration, and will continue share buybacks.

Q: Wealth Solutions spread and $2B distributable earnings target; A: Nick expects to hit 200 basis points spread in the next 12 months.

Q: Real estate transition and development, discount rate; A: Plan to monetize assets when market conditions are right, discount rates assessed at year end, no significant changes expected.

Q: BAM eligibility for U.S. indices, liquidity, ownership; A: Focus on BAM inclusion in U.S. indices, ownership at 73%, will be a significant owner long-term.

Q: Asset monetization opportunities, realized carried interest; A: Opportunities across businesses, carried interest realized as capital is returned and the preferred return is met.

Q: Discount to plan value, BAM share reallocation; A: Market may misunderstand components, no tax impact from BAM share reallocation.

Q: Insurance P&C business, U.S. election impact on energy transition; A: Small impact from hurricanes in Q3, no material expected in Q4; energy transition insulated from U.S. election, driven by underlying demand for clean power.