Brookfield Finance Inc. 4.625% Q3 FY2025 earnings call

• Financial Results: Delivered strong Q3 results with distributable earnings before realizations of $1.3 billion ($0.56 per share) and $5.4 billion ($2.27 per share) over the last 12 months, an 18% increase y/y.
• Markets and Policy: Economic activity and corporate earnings healthy, capital markets open, Fed policy easing; structural forces shaping debt burden policies.
• Business Initiatives: Wealth Solutions acquired Just Group in UK and signed reinsurance in Japan; agreed to acquire remaining Oaktree; partnerships in nuclear, Bloom Energy, and Figure for AI.
• Fundraising and Products: Asset Management raised $30 billion in inflows, launched large energy transition and AI funds. Wealth Solutions focused on long-duration annuity liabilities.
• Monetizations: $75 billion in asset sales YTD, including $35 billion in past few months; completed Rockpoint Gas Storage IPO and sold US manufactured housing portfolio.
• Capital Allocation: Reinvested cash, repurchased over $950 million in shares, returned $180 million to shareholders.

Asset Management: Distributable earnings were $687 million ($0.29 per share) for the quarter and $2.7 billion ($1.14 per share) over the last 12 months. Fee-related earnings increased 17% to a record $754 million with fee-bearing capital at $581 billion. Strong fundraising led to $30 billion in inflows, including over $6 billion from retail and wealth clients. Wealth Solutions: Distributable earnings were $420 million ($0.18 per share) for the quarter and $1.7 billion ($0.70 per share) over the last 12 months, representing 15% organic growth year-over-year. Originated $5 billion of retail and institutional annuities, with insurance assets at $139 billion. Deployed $4 billion into Brookfield managed strategies at an average net yield of 9%. Operating Businesses: Distributable earnings were $336 million ($0.15 per share) for the quarter and $1.7 billion ($0.72 per share) over the last 12 months, with infrastructure and renewables leading in secular trends.

• Expect continued growth in distributable earnings, with Wealth Solutions targeting a 200 basis point net investment yield spread long term. - Oaktree acquisition expected to close in H1 2026, strengthening the global credit platform.

Forward-looking statements are subject to known and unknown risks; future results may differ materially from predictions. Risks detailed in company filings with securities regulators.

Q: Talk about how humanoid and AI broadly potentially create another leg of the stool for Brookfield over time.

A: Focus on building backbone infrastructure for AI, investing in compute capacity, power, and data centers. Figure partnership for being at the forefront of technological advances.

Q: How long do you think it may take to get to your approximate 200 basis point target net investment yield spread?

A: Long-term target, takes time to deploy capital into real assets; barbell approach to deployment balances short-term liquidity and investment into real assets.

Q: Has the composition of the $3 billion purchase price between BAM BN shares and cash been settled, and impact on share repurchases?

A: $250 million of BN shares elected, balance in cash; no impact on broader share buyback strategy.

Q: What downside protection would be sought for nuclear investment, and where it fits in strategies?

A: Structured to provide downside protection, part of Westinghouse business which is scaling as a global nuclear champion.

Q: How is carry generation shaping up for 2026?

A: Carry expected to step up in 2026, strong transaction market supports activity, with monetizations in pipeline.

Q: Drivers of real estate NOI?

A: Disposition gains from monetization driving FFO increase in the real estate portfolio.

Q: Concern about law of large numbers affecting growth?

A: Opportunities for capital deployment continue to grow quicker than the underlying business can grow, with strong quality opportunities.

Q: Annuities earnings and yield movements in Wealth Solutions?

A: Minor movements, capital parked in cash awaiting real asset investments; spread will increase as capital is deployed into real assets.