Stockwatch...TELUS reports operational and financial results for first quarter 2025

Stockwatch...TELUS reports operational and financial results for first quarter 2025

MAY 9, 2025

Industry-leading total Mobile and Fixed customer growth of 218,000, up 9,000 over last year, and our strongest first quarter on record

TTech, including new TELUS Health reportable segment, Operating Revenue and Adjusted EBITDA growth of 3 and 4 per cent, respectively, reflecting the economic resiliency of our business within a dynamic operating environment; Consolidated free cash flow up 22 per cent and cash from operations higher by 13 per cent

Consistent with dividend growth program, quarterly dividend raised to $0.4163, an increase of 7 per cent over the same period last year, representing a yield of approximately 8 per cent

Extending dividend growth program targeting 3 to 8 per cent annual growth for 2026 through 2028, supported by strong Adjusted EBITDA growth outlook, moderating capex and continued free cash flow expansion

Reaffirming our 2025 Financial Targets; TTech Operating Revenues and Adjusted EBITDA growth, including TELUS Health reportable segment, of 2 to 4 per cent and 3 to 5 per cent, respectively, Consolidated Capital Expenditures, excluding real estate, of approximately $2.5 billion and Free Cash Flow of approximately $2.15 billion

-----------------------------------

Vancouver, B.C. – TELUS Corporation today released its unaudited results for the first quarter of 2025. Effective with our first quarter 2025 results, we have evolved our reporting structure, and introduced a TELUS health reportable segment (TELUS Health). Our TELUS Health results were previously included with the TELUS technology solutions segment (TTech) results. The new TELUS Health segment will now be reported alongside our existing TTech segment, which now excludes TELUS Health, as well as our TELUS digital experience segment (TELUS Digital). Consolidated operating revenues and other income increased by 3 per cent over the same period a year ago to $5.1 billion. This growth was driven by higher service revenues in our TTech and TELUS Health reportable segments, as well as higher external revenues in our TELUS Digital segment. See First Quarter 2025 Operating Highlights within this news release for a discussion on TTech, TELUS Health and TELUS Digital results.

"In the first quarter of 2025, our team’s unwavering commitment to operational excellence and cost efficiency has empowered TELUS to deliver another quarter of industry-leading customer growth and strong financial performance,” said Darren Entwistle, President and CEO. “These results were achieved within a dynamic operating environment, demonstrating the resiliency of our business and strength of our leading portfolio of services. Our mobile and fixed customer growth underscores the strong demand for TELUS’ bundled services and leading broadband networks. Notably, we achieved total mobile and fixed customer growth of 218,000, driven by mobile phone and connected device additions of 168,000, alongside fixed customer additions of 50,000. This performance highlights the strength of our bundled product offerings across Mobile and Home, powered by our leading PureFibre and wireless broadband networks. The dedication and passion of our team in delivering customer service excellence contributed to continued strong loyalty across our key product lines, once again this quarter. Notably, postpaid mobile phone churn was 0.84 per cent, as we begin the twelfth consecutive year below the one per cent level.”

“Our technology-centric growth businesses continue to demonstrate impressive momentum. TELUS Health achieved revenue and Adjusted EBITDA growth of 12 and 30 per cent, respectively, and drove a 7 per cent year-over-year increase in global lives covered to 76.5 million. This was fueled by strategic investments, product enhancements, expanding sales channels, and effective cost management through technology optimization and synergy optimization - underpinned by a deeply rooted dedication to putting customers first. We are excited to maintain and build on this momentum throughout 2025 and beyond. Notably, since acquiring LifeWorks, we have realized $376 million in combined annualized synergies - $306 million from cost efficiencies and $70 million from successful cross-selling strategies. We remain on track to meet our goal of $427 million by the end of 2025. In May, TELUS acquired Workplace Options, a leading global provider of integrated employee wellbeing solutions, with 88 million employees served across 200 countries and territories. Together, we will offer the most comprehensive suite of health and wellbeing solutions globally, powered by innovative technology and delivered with unmatched service excellence. Furthermore, this acquisition will be made in partnership with a leading private equity investor within the healthcare vertical, with deep expertise across the healthcare landscape who will be a value-added partner, supporting our efforts to accelerate growth. Moreover, within TELUS Agriculture & Consumer Goods, our team demonstrated strong performance, with a 20 per cent revenue increase supported by enhanced profitability and margin improvements. The results we are achieving in these businesses reflect our dedicated efforts to deliver outstanding customer experiences, maximizing shareholder value and driving our initiatives in social capitalism.”

Darren further commented, “The consistency of our results are underpinned by our dedicated team who are passionate about delivering superior customer experiences over our world-leading wireless and PureFibre broadband networks. In addition to driving extensive socio-economic benefits for Canadians in communities from coast-to-coast, for decades to come, the significant broadband network investments we have made enable the continued advancement of our operational, financial and customer experience performance, and the long-term sustainability of our industry-leading dividend growth program. Today, we are announcing a 7 per cent dividend increase, reflecting our unwavering commitment to delivering superior value to our shareholders and building on our consistent track record of delivering on our multi-year dividend growth program established in 2011. Furthermore, we announced today, for the fifth time, the extension of our industry-best dividend growth program targeting 3 to 8 per cent annual growth for 2026 through 2028. Dividend growth and affordability will be supported by a strong EBITDA growth outlook in combination with moderating capex, yielding a meaningful resulting free cash flow expansion. This is augmented by significant value creation in our emerging growth businesses and a succession of asset monetization opportunities that will reduce TELUS’ leverage and interest outlays.”

“Reflecting our TELUS team’s long-standing dedication to putting our customers and communities first, this month we will celebrate our 20th annual TELUS Days of Giving in 33 countries,” continued Darren. “Over the past two decades, thanks to the support of our valued clients, we have led our corporate peers globally by contributing 2.4 million volunteer days in the communities where we live and work…striving to make the future friendly for all,” concluded Darren.

Doug French, Executive Vice-president and CFO said, "Our first quarter results in 2025 are a testament to our disciplined operational execution and cost management amidst a dynamic competitive landscape and macroeconomic environment. Within TTech, including our new TELUS Health reportable segment, Operating Revenues increased by 3 per cent and Adjusted EBITDA was higher by 4 per cent. These results were driven by our consistent emphasis on profitable customer growth, the benefits from our ongoing focus on cost efficiency and effectiveness, gains from asset divestitures, as well as our real estate and copper monetization program, as well as increasing margin contribution from TELUS Health and TELUS Agriculture & Consumer Goods. Additionally, our robust free cash flow generation of 22 per cent, alongside 13 per cent growth in cash from operations, underscores our solid financial foundation and our ability to continue investing in strategic growth initiatives."

“Additionally, our financial position remains robust and as we progress through 2025 and beyond, we are committed to improving our leverage ratio, targeting a net debt to EBITDA ratio of 3-times by 2027, alongside removing the discount associated with our dividend reinvestment program. In April, we successfully raised $1.6 billion in hybrid debt securities, with the net proceeds being entirely directed to debt repayment, and 50 per cent of the proceeds receiving equity credit treatment by credit rating agencies, further demonstrating our commitment to deleveraging our balance sheet. On a pro-forma basis, when including the benefit of our hybrid offering, leverage at the end of the quarter would be approximately 3.8-times. Our efforts to strengthen our balance sheet will be further supported by sustained organic operational growth, including continued EBITDA growth, declining capital intensity and free cash flow expansion. Furthermore, ongoing monetization initiatives, including the divestiture of non-core assets, as well as continued real estate and copper monetization, coupled with other key strategic levers actively being considered, including the potential monetization of wireless towers, will further enhance our efforts to strengthen our balance sheet. Deleveraging will be done alongside reducing the dividend reinvestment plan discount from the current 2 per cent by half a percentage point in each of 2026 and 2027, before removing it completely at the end of 2027.”

“As we progress through the remainder of 2025, we are well-positioned to drive strong, sustainable growth. Our leading asset mix and robust business strategy underpin our confidence in achieving our full year financial targets that we reiterated today. We continue to leverage our formidable strengths to deliver unparalleled value and performance for our stakeholders, firmly positioning TELUS as an industry leader in operational excellence and financial resilience,” concluded Doug.

---------------------

Source

https://www.telus.com/en/about/news-and-events/media-releases/telus-reports-operational-and-financial-results-for-first-quarter-2025

Brookfield Corporation Shareholders, 1st Quarter, 2025

Brookfield Corporation Shareholders, 1st Quarter, 2025

Overview

Our business performed well, with good progress across each of our core operations. Our asset management business had inflows of $25 billion and we added to our real asset credit franchise by agreeing to acquire a majority stake in an alternative private credit manager. Our operating businesses generated strong earnings, driven by their resilient cash flows, and we strengthened our capital, successfully financing over $30 billion of debt across our operations. Wealth solutions continued to deliver strong financial performance, and it received its regulatory license to launch in the U.K.—the first dedicated PRT license granted in the U.K. since 2007.

We advanced a number of important large-scale investments across the business, deploying $16 billion, and have an active pipeline. We monetized approximately $22 billion of assets, delivering strong risk-adjusted returns to our clients. We also increased the pace of our share buybacks in the quarter with the pull-back in the stock markets. To date this year, we acquired approximately $850 million of shares, adding intrinsic value to each remaining share.

While the geopolitical environment is more uncertain than three months ago, our focus remains the same: find great businesses to acquire, buy them when we can acquire for value, and operate them well once we own them. History has proven, through all economic conditions, that owning great businesses for long periods of time is the cornerstone of wealth creation.

Global Markets Were Volatile; Our Business Strong

We started the year with positive economic momentum. To date, growth and labor market data have remained resilient, but changes in U.S. trade policy have created uncertainty in capital markets. While our businesses and operations are not immune, they are generally insulated from the current environment. This is because our business focus is on providing essential products and services, which do not rely on the cross-border movement of goods; they serve customers locally and generally pass through increased input costs contractually to the end consumer.

As we have experienced in previous periods of stress, markets move for reasons that often don’t reflect underlying fundamentals. This creates opportunities for experienced, well-capitalized investors to invest for value. Regardless of how the current administration’s trade policy develops, the U.S. remains a premier destination for investment globally. It is energy independent, boasts the largest GDP in the world, has the deepest and most liquid capital markets, and is a leader in technology and entrepreneurship. The administration’s objectives focus on lower taxes, deregulation and industrialization, which on balance are positive from a long-term investment perspective. We will all get to the other side of this.

Staying the Course – Hold or Draw; Do Not Fold

Reflecting on periods of uncertainty over the last number of decades, we would like to offer our perspective on long-term investing. While it always feels like the first time in the moment, we have managed through many periods similar to the one we are seeing today. Our objective always remains the same: to create long-term value for our shareholders by buying, operating and owning businesses for long periods of time.

While price fluctuations in the moment seem significant, in the fullness of time they are likely to represent small deviations in the overall trajectory of the long-term compounding of wealth. Consider that the S&P 500 has delivered an annualized return of 10% over the past 30 years. Comparatively, our shareholders have earned an annualized return of 18% over that same 30 years by simply staying invested in Brookfield. Below is the S&P 500 chart over the past 30 years. Remember this next time you feel the urge to sell.

With a franchise that spans 30 countries, we have the operating expertise to navigate change. Our consistent investment and operating approach has allowed us to deliver stable and growing results for decades. This includes taking a measured approach to risk, focusing on execution over sentiment, and investing in the backbone of the global economy, especially in periods of greater uncertainty.

Crucial to this success over the years has also been the effective allocation and reinvestment of our free cash flow. We have a broad perspective on the relative investment opportunities and capital needs across our entire franchise. Our philosophy has always been to largely distribute out all free cash flow from our operating companies to the Corporation and to centralize cash flow reinvestment decisions. This approach becomes even more valuable during periods of uncertainty, when price can diverge substantially from value and we are presented with attractive value investment opportunities—not least repurchasing our own shares in the market. So far this year, we have capitalized on the market volatility to repurchase approximately $850 million of our shares at a significant discount to our view of intrinsic value. Warren Buffett articulated this point about capital allocation well:

“Charlie [Munger] and I mainly attend to capital allocation and the care and feeding of our key managers. Most of these managers are happiest when they are left alone to run their businesses, and that is customarily just how we leave them. That puts them in charge of all operating decisions and of dispatching the excess cash they generate to headquarters. By sending it to us, they don't get diverted by the various enticements that would come their way were they responsible for deploying the cash their businesses throw off. Furthermore, Charlie and I are exposed to a much wider range of possibilities for investing these funds than any of our managers could find in his or her own industry.”

This deliberate approach to capital allocation has been a key contributor to our ability to scale our business, and to withstand economic cycles across all the sectors in which we invest. This flexibility is one of our greatest strengths—and is something we created methodically and meticulously over many years.

Over the long term, price always meets value—market fluctuations are a natural part of the economic cycle, and the returns of a great business compound through all markets, good or bad.

Operating Results Were Strong and Should Continue to Be

Our first quarter financial results were strong. Each of our businesses continues to generate stable and growing cash flow. Each demonstrated resilience, supported by strong underlying fundamentals.

Financial Results

Distributable earnings (DE) before realizations were $1.3 billion, or $0.82 per share, in the quarter and $5.2 billion, or $3.26 per share, over the last 12 months. This represents an increase of 30% per share over the prior year quarter.

Asset Management – Our asset management business generated distributable earnings of $684 million, or $0.43 per share, in the quarter and $2.7 billion, or $1.71 per share, over the last 12 months. We raised $25 billion during the quarter, continuing our strong fundraising momentum. We closed on our flagship opportunistic credit strategy at $16 billion and held the final institutional close for the fifth vintage of our flagship opportunistic real estate strategy. We closed on $5.9 billion in the quarter in that strategy, increasing total capital raised to date to approximately $16 billion, already exceeding our goal. With the final close-out of clients in wealth and regional sleeves expected over the balance of the year, we are set to have by far our largest pool of capital for opportunistic real estate to date. We continue to see strong interest for our second global transition strategy and expect to hold the final close in the coming months. Fundraising helped drive fee-bearing capital to $549 billion, representing an increase of 20% from a year ago. Subsequent to quarter end, we announced the acquisition of a majority stake in Angel Oak, a leading origination platform and asset manager delivering innovative mortgage and consumer products with over $18 billion in assets under management.

Wealth Solutions – Our wealth solutions business generated distributable operating earnings of $430 million, or $0.27 per share, in the quarter and $1.5 billion, or $0.95 per share, over the last 12 months, benefiting from strong investment performance and the growth of the insurance asset base. We continue to build our insurance float by raising predictable, long-duration liabilities. During the quarter, we originated $4 billion of retail and institutional annuity sales, increasing insurance assets to $133 billion at quarter end. Leveraging the broader Brookfield ecosystem, we continue to gradually rotate the investment portfolio into higher quality investments and were able to generate an average investment portfolio yield of 5.7%, 1.8% higher than the average cost of funds, maintaining a 15% return on our invested capital. We anticipate increasing annualized earnings from approximately $1.7 billion today to $2 billion in the near term. Through our combined wealth solutions platforms, we are raising close to $2 billion of retail capital per month, which includes over $650 million a month from our private wealth channel.

Operating Businesses – Our operating businesses continue to deliver resilient and stable cash flows, generating distributable earnings of $426 million, or $0.27 per share, in the quarter and $1.7 billion, or $1.08 per share, over the last 12 months. Cash distributions from our renewable power and transition, infrastructure and private equity businesses were underpinned by their strong operating earnings. Additionally, in our North American residential business, we generated approximately $640 million of proceeds through the sale of master plan communities as we execute on our plan to shift the business to a more capital-light model. Our core real estate portfolio continues to benefit from increased demand for the highest-quality assets. Positive demand drivers are further supported by a muted supply outlook, contributing to higher occupancy and strong rental growth. As a result, we are seeing same-store NOI growth of 3% over the prior year quarter. We remain well- positioned to capitalize on these favorable market dynamics, which should drive sustained growth across our real estate portfolio.

Monetizations and Carried Interest – We continue to implement our investment business plans and value creation strategies. Accumulated unrealized carried interest increased by 14% over the last 12 months to $11.6 billion. As we execute on our monetization pipeline, we expect to realize much of this into income over the next five years. While uncertainty in the current environment may impact transaction activity, we continue to see strong demand for the globally diversified portfolio of high-quality, cash-generating assets and businesses we own. We closed approximately $22 billion of asset sales across the business in the quarter, with substantially all sales being completed at prices in line or above our carrying values.

In our infrastructure business, we completed the sale of a minority stake in a portfolio of fully contracted containers within our global intermodal logistics operation, and we sold two regulated natural gas transmission pipelines in Mexico. We agreed to sell the remaining 25% interest in NGPL, a U.S. gas pipeline. This closed out an extremely successful exit from the business, generating total gross proceeds of over $1.7 billion, crystallizing an 18% IRR and a 3x multiple of capital. We also agreed to sell a minority stake in a portfolio of operating sites from our European hyperscale data center platform for approximately $460 million, and are progressing the sale of an additional stake in the portfolio.

In our real estate business, we closed the previously announced sale of our luxury 360-key hotel and golf club in Florida. This transaction marked one of the largest single U.S. hospitality transactions in the last 12 months. We completed the sale of an office asset in Sydney, a portfolio of U.S. manufactured housing assets, and agreed to sell two shopping malls in Brazil for approximately $450 million. We also agreed to sell a logistics asset in Sydney for approximately A$330 million—the largest single-asset logistics transaction ever completed in Australia.

In our renewable power and transition business, we closed the sale of the first phase of our Indian solar and wind portfolio, as well as an electricity generation and storage facility in the U.K. We also reached an agreement to sell an additional 25% stake in one of our U.S. wind portfolios. In our private equity business, we sold the shuttle tanker segment of our offshore oil services operation.

As we execute monetizations and return capital to investors over the course of 2025 and beyond, we will be well-positioned to realize significant carried interest into earnings in the coming years.

Balance Sheet and Liquidity – We continue to maintain a conservatively capitalized balance sheet and high levels of liquidity. At quarter end, our perpetual capital base was approximately $170 billion, with a modest amount of long-dated corporate debt at the Corporation. This positions us well to capitalize on attractive growth opportunities, protects us from downside risks through market cycles, and enables us to continue to repurchase shares opportunistically. We executed on over $30 billion of financings across the business.

A few highlights include:

• The Corporation issued $500 million of 30-year senior unsecured notes, achieving its tightest 30-year spread to date. Similarly, Brookfield Renewable Partners issued C$450 million of medium-term notes during the quarter at its tightest new-issue spread in almost 20 years.
• In our private equity business, we completed an upfinancing at Clarios, our battery business, which funded a $4.5 billion special distribution to shareholders representing an approximate 1.5x realized multiple on our original investment, while retaining our entire share of the business.
• We issued €500 million of bonds at our German office REIT, a $360 million financing of a high-quality shopping center in the U.S., and approximately C$430 million of bonds on a core office asset in Canada.
• In our infrastructure business, we closed $885 million and $940 million of investment-grade asset-backed securities at our U.S. hyperscale and U.S. colocation data center businesses, respectively. These financings underscore the continued demand from lenders for digitalization opportunities.

Wealth Solutions Is Our “Newest” Engine of Growth

Five years ago, we established Brookfield Wealth Solutions (BWS). From the outset, our objective was building a business that can generate a durable 15%+ return on equity through economic cycles. Our goal is to source low-risk liabilities and earn our extra returns by drawing on our differentiated core competencies across real assets to invest a portion of the capital into real-asset credit and equity.

Real assets are ideal investments for insurance balance sheets because they generate long-term, inflation- protected cash flows. We have a unique capability in this area; our investment approach allows us to operate with conservative leverage and we have capitalized our insurance entities with more than $11 billion of equity capital. Our insurance operating companies are stronger and far better capitalized under our ownership than they were before, and we expect to build on this as we expand the business’ presence globally.

After growing through several acquisitions in the U.S. over the past few years, we are now beginning our international expansion. We were recently granted the first dedicated pension risk transfer license in the U.K.— the first such license to be granted since 2007—and plan to bring our strong track record of servicing policyholders to the region. With over £500 billion of corporate pension transfers to insurance companies expected over the next decade in the U.K., this represents a key market for continued growth.

One of our great advantages is our ability to leverage the Brookfield ecosystem, including our vast network for sourcing investment opportunities. We can offer our insurance pools access to transactions that are available to few other insurance companies. This includes acquiring investments in real assets, including real estate, to deliver attractive risk-adjusted returns through economic cycles to policyholders and our shareholders.

Real estate has been a widely held asset class across the insurance industry for many years, and the insurance companies we acquired already had a significant concentration of real estate in their investment portfolio. Our real estate business is one of the world’s highest-quality, largest and most established platforms, and as owners and operators over many decades, we have curated a portfolio of the best real estate assets around the world. These properties are premier assets in gateway cities and are exceptionally compatible with the long-dated nature of the insurance liabilities we manage on behalf of our policyholders. For these reasons, our intention is to slowly migrate some of these assets into BWS’ insurance accounts without materially impacting the overall allocation to real estate.

By rotating the incumbent real estate portfolio into a higher quality class of real estate, we are positioning our business for continued growth and attractive risk-adjusted earnings. As we execute our strategy it is important to note a few key points:

• Brookfield Wealth Solutions (NYSE: BNT, TSX: BNT) is a paired security to BN, meaning that both securities (BNT and BN) share the same underlying economic value—the value of overall Brookfield. This means that there is no winner or loser in any transactions done because the shareholders of BN and BNT share the same economic value. The tax profile for the shareholder is the only differentiating economic factor in owning one security or the other.
• For our insurance accounts, all transactions are subject to a robust review process—both internal and external, which includes conflicts committee approval, third-party pricing validation and regulatory oversight. Rest assured, we are building this business for the long term and therefore err on the side of conservatism in terms of pricing and process with our regulated accounts.

Our rigorous process ensures these transactions are always conducted with integrity and at arm’s length, and everything we do to strategically support the growth of our wealth solutions business reflects our long-term commitment to our policyholders.

Artificial Intelligence Is Here, But We Are Still in The Early Innings

Artificial intelligence (AI) is going to drive remarkable advancements in productivity, and we are just starting to witness its transformative impact. Based on the evolution of other technologies, we expect to see ever-increasing improvement in software and the application to robotics. Simply stated, this will make companies more productive, and while it is obvious that the major technology companies will be winners, the less obvious, real winners, will be those that apply these technologies wisely to everyday businesses.

As AI advances and becomes more efficient, companies will be able to introduce it at lower costs. Before long, we expect businesses will be able to create models tailored to their specific needs—and trained on their own data—to enhance many aspects of their operations. We are already leveraging the productivity benefits of AI within our portfolio companies, particularly in private equity, but this is just the beginning.

The U.S. is set to lead AI breakthroughs, supported by policies promoting the reshoring of key manufacturing, supply chains and technologies. These initiatives aim to secure America's technological edge and boost its economy, markets, and defense. Industrial businesses are investing heavily to reshore their manufacturing processes, reinforcing their domestic supply chains. We see many attractive opportunities for disciplined investors like us to continue providing much-needed capital to fund these initiatives.

These AI and related industrial opportunities won’t be limited to the United States. Countries around the world require sovereign AI and are looking to build many gigawatts of capacity to support their industries. France, for example, aims to be a data center leader in Europe, given its surplus of carbon-free nuclear power, and we have announced a €20 billion infrastructure investment program to support this buildout.

Digitalization remains a key driver of our infrastructure business’ current investment pipeline, with strong data center growth expected from both current and future use cases. A very large amount of capital is required to support this, and we are well positioned to be a leader in digitalization and AI infrastructure, while maintaining our consistent and disciplined investment approach.

The World Needs All the Power It Can Get

Market fundamentals remain exceptionally strong for power. Digitalization, reindustrialization and electrification are driving robust demand that far outpaces supply, favoring platforms of operational scale and diversification like ours.

The low cost of renewables, along with their ability to be deployed quickly in most markets, means that they continue to offer the most viable solution to meet growing energy demand. Despite recent weakness in market sentiment, we expect the significant supply-demand imbalance to help insulate industry leaders like us who are strategically positioned to expand our market position as power demand continues to rise.

While shifting U.S. policy does introduce some risk to the renewable power sector, it also presents significant opportunity. The new U.S. administration's actions to boost industrial, manufacturing, and data center activity are expected to increase electricity demand even more. We believe the growth prospects for low-cost, mature renewable technologies are stronger than ever, as they will play a crucial role in meeting these increasing generation capacity requirements.

As growing energy demand accelerates, development of energy storage solutions will be critical to ensure transmission availability and grid stability. This represents an attractive investment opportunity for investors of scale that have the ability to deliver comprehensive solutions to support the electrification of the global energy grid. The recent blackout in Spain and Portugal highlights the clear need for robust grid infrastructure and stability measures. We see large-scale battery energy storage systems and distributed generation as increasingly important parts of the solution—an area where we have been building and adding to our suite of capabilities.

The robust growth of our renewables pipeline is broad and includes projects driven by a “corporate pull” from global technology companies investing substantial capital in data center development to support digitalization and AI applications, as well as opportunities driven by the development of energy storage solutions aimed at supporting the electrification of the global grid.

As energy demand accelerates, the largest buyers of power will increasingly seek credible partners like us who have the operating expertise to secure their electricity needs. Our global team, capabilities and access to capital mean that we can deliver scalable solutions across technologies and regions few others can, and this reinforces our position as a partner of choice among all leading players in the sector.

In Conclusion

Over decades of operations, we have successfully navigated through many periods of uncertainty. We remain committed to our core competencies—investing in high-quality assets and businesses that compound strong cash returns on equity, while emphasizing downside protection for the capital employed. Our primary objective continues to be generating increased cash flows on a per share basis, thereby enhancing intrinsic value per share over the long term.

Thank you for your interest in Brookfield, and please do not hesitate to contact any of us should you have suggestions, questions, comments, or ideas you wish to share.

Sincerely,

Bruce Flatt, Chief Executive Officer

May 8, 2025

-----------------------

Source

https://bn.brookfield.com/reports-filings/letters-shareholders/q1-2025-letter-to-shareholders

Brookfield Asset Management Shareholders, 1st Quarter, 2025

Brookfield Asset Management Shareholders, 1st Quarter, 2025

Overview

We had a strong start to the year, marking our highest quarterly earnings growth since we went public as a standalone business. Despite recent market volatility, our long-term growth outlook is strong. The secular trends that underpin our strategy continue to accelerate, including rising demand for AI infrastructure, surging global electricity needs, and the growing role of private credit. Brookfield has a leadership position in these areas and deep competitive advantages, built on our long-standing expertise and the capabilities we have added to the firm in recent years.

This positioning continues to translate into strong performance. We raised $25 billion of capital in the quarter, bringing inflows to more than $140 billion over the past year. This reflects a growing client demand for our strategies and the reach of our globally diversified fundraising platform. Notably, we had success in the quarter raising nearly $6 billion for our flagship real estate strategy, bringing total capital to $16 billion. With final closings from clients in wealth and regional sleeves still ahead, this will be our largest real estate strategy ever.

Fee-bearing capital grew to $549 billion, up 20% over the past year. This contributed to a 26% increase in fee- related earnings (FRE) for the first quarter to a record $698 million, or $0.43 per share, and a 20% increase in distributable earnings (DE) to $654 million, or $0.40 per share.

Our diversified global footprint, with investments and operating professionals in over 30 countries, gives us the flexibility to allocate capital to the best opportunities wherever they may arise. Our franchise is built for environments like today, and we remain focused on delivering strong results for investors and clients.

The Current Environment Favors Those with Scale, Expertise and Capital

Periods of uncertainty are inevitable. While every cycle is different, they tend to rhyme. The last time market volatility reached current levels was during the onset of COVID. During that period, we stayed focused on our strategy, continued to deploy capital with discipline, and strengthened our market position. Since then, we have raised more than $400 billion and grown fee-related earnings by 90%. That experience underscores a core belief of ours: maintaining the course through disruption enables us to continue compounding value and emerge stronger over time. As Howard Marks wrote in his most recent memo, Nobody Knows (Yet Again), “When unfavorable developments are raining down, that’s often the best time to step up.”

Today, the macro environment is defined by heightened geopolitical uncertainty. Equity markets responded sharply, and our shares were not immune. Stock prices often overreact during periods of uncertainty, and we believe the recent volatility reflects sentiment more than substance. In response and based on the conviction we have in our growth outlook, we repurchased over two million shares during the first quarter.

While the near-term outlook remains uncertain, our long-term strategy is unchanged, and we are well-positioned to navigate this environment. Our cash flows are 100% comprised of fee-related earnings, and approximately 95% of our fee-related revenues are derived from capital that is either long-term or perpetual in nature, providing a stable and predictable foundation for distributable earnings. In addition, our investments are focused on essential assets—power, infrastructure, real estate, and critical business services. These businesses operate domestically and serve local demand, making them less exposed to tariffs and other global trade shocks. Many are also highly contracted or regulated—characteristics that support durable valuations and liquidity, especially when capital is scarce and investors seek defensive positioning. Together with our client relationships, scale, brand, access to capital and track record, these attributes allow us to stay the course through periods of volatility, while continuing to grow and execute our strategy.

Private Markets Offer More Stability—and the Opportunity to Capitalize on Dislocation

Despite heightened volatility in public markets, private market conditions have remained constructive. Our scale, flexible capital base, and long-term orientation enable us to continue deploying and monetizing significant amounts of capital with discipline.

In times of uncertainty, investors turn to proven global platforms with strong track records, where they have built trusted relationships. That has always been our core strength. A prime example is our results in raising capital for our real estate strategy this quarter. Despite the environment, we secured commitments from many of the world’s largest and most sophisticated investors, demonstrating their strong conviction in our strategy and platform, and providing us with substantial fresh capital to invest at an especially attractive point in the cycle.

While parts of the industry may be more directly affected by today’s volatility, our diversification across strategies, sectors, and geographies provides us resilience. It also allows us to continue raising and investing capital behind the global secular themes of decarbonization, deglobalization, digitalization, and the growing role of private credit.

In particular, we benefit from distinct advantages in the current environment:

• Essential assets are resilient through cycles. Our portfolio is well-positioned to manage the implications of new tariffs. While no one is completely immune to the various effects of these changes, the nature of our investments in essential real assets and critical business services provides meaningful insulation. Most of our assets are local businesses that serve a domestic customer. Further, many of these assets benefit from inflation-linked revenues and tariff adjusters that allow us to pass through rising input costs. This resilience was tested and proven during COVID and the inflationary cycle of 2022 and 2023, when cash flows across many of our assets not only kept pace with inflation but, in many cases, exceeded it
  
  We have been discussing the macro trend of deglobalization in recent years; at the same time, across our business, we have proactively diversified parts of our supply chain in anticipation of more protectionist policy shifts. For example, in our renewables business, where tariffs have been in place for several years, we adopted a domestic procurement strategy in the U.S. supported by long-term agreements with local suppliers. These steps provide important cost certainty and, we believe, position us more favorably than most market participants.
• Our flexible, scale capital is more valuable in times of uncertainty. Historically, these periods have provided us with some of the best opportunities to deploy capital given our long-term mindset, capital scale and ability to move decisively. With nearly $120 billion of uncalled capital, we are well-positioned and fully intend to capitalize opportunistically on market dislocations. This is both in the public markets, where a pullback in valuations is creating more opportunities to acquire high-quality assets at attractive entry points, and in credit, where private market strategies are playing an even more meaningful role and generating opportunities to provide liquidity when there is less available.
  
  At the same time, governments, corporates, and institutions are increasingly seeking partners who can deliver not only capital but also operating expertise and execution at scale. These counterparties are turning to us because of our ability to move with speed, offer tailored solutions, be a value-add partner, and offer confidence to ensure transactions close. This dynamic is creating a proprietary and differentiated pipeline of strategic investment opportunities—such as the €20 billion AI infrastructure commitment we announced alongside the French government this quarter, and the recent partnership with Barclays to grow their payment acceptance business.
  
  The Brookfield ecosystem provides our investment teams with access to deep sector expertise, proprietary insights, and global operating capabilities, allowing us to deploy capital quickly and with conviction when others may be constrained. With fundraising now complete for the latest vintage of our highly successful Opportunities strategy, our Oaktree franchise is similarly well-positioned to take advantage with significant capital to deploy in this environment. Periods like this, marked by uncertainty and dislocation, are where Oaktree’s disciplined, value-oriented approach is particularly powerful. Throughout every cycle in our history, we have successfully turned volatility into opportunity. We believe this time will be no different.

Business Group Updates

The first quarter of 2025 was another strong period for capital formation and investment activity across our business. We raised $25 billion of capital during the quarter. We also continued to invest capital into attractive opportunities, deploying $16 billion during the quarter. We generated approximately $10 billion of equity through monetizations, many reflecting the value created by our operational enhancements over recent years. Highlights of our activities across each of our business groups this quarter include:

Renewable Power & Transition

• Fundraising: We raised $1.5 billion of capital, including $700 million for the second vintage of our flagship global transition strategy, bringing the capital raised to date to over $14 billion. We expect to hold a final close for this flagship in the coming months.
• Deployment: We deployed $3.5 billion of capital, including the completion of our privatization of Neoen, a leading, global renewable development business. In addition, we committed $1.2 billion toward the acquisition of the U.S. renewables business of National Grid. The deal is expected to close in the second quarter of 2025.
• Monetizations: We monetized over $600 million of equity capital. In addition, we signed an agreement to sell an additional 25% of our ownership in a U.S. wind project for $200 million ($1.8 billion of enterprise value). The sale is expected to close in the second quarter of 2025.

Infrastructure

• Fundraising: We raised $800 million of capital, including over $500 million raised for our private wealth infrastructure vehicle. Additionally, we held the final close for our inaugural infrastructure structured solutions fund of $300 million, which in total raised approximately $1.0 billion of capital commitments.
• Deployment: We deployed approximately $500 million of capital. In addition, subsequent to the end of the quarter, we signed an agreement to acquire the midstream asset portfolio of Colonial Enterprises for $3.4 billion of equity capital ($9.0 billion of enterprise value). The portfolio includes the Colonial Pipeline, the largest refined products pipeline in the U.S. The deal is expected to close in the second half of 2025.
• Monetizations: We monetized over $1.0 billion of equity capital, including the sale of two Mexican regulated natural gas transmission pipelines. In addition, we signed an agreement to sell our remaining 25% interest in Natural Gas Pipeline Company of America’s U.S. natural gas pipeline for nearly $400 million of equity ($5.6 billion of enterprise value).

Private Equity

• Fundraising: We raised $1.2 billion of capital, including $300 million in our growth and venture secondaries business.
• Deployment: We deployed $1.1 billion of capital, including the acquisition of Chemelex, a global leader in the design and manufacturing of electric heat trace systems. In addition, we committed $800 million toward the acquisition of Antylia Scientific, a leading manufacturer and distributor of specialty consumable products and testing equipment used in quality control and research applications. The deal is expected to close in the second quarter of 2025.

Real Estate

• Fundraising: We raised $7.1 billion of capital, including $5.9 billion for the final institutional close of the fifth vintage of our flagship real estate fund.
• Deployment: We deployed $1.8 billion of capital, including into global logistics platforms in North America, Europe and Asia. In addition, we invested over $100 million of equity capital into a portfolio of 3,800 U.S. single-family rental properties.
• Monetizations: We monetized $1.2 billion of equity capital, which includes the disposition of select assets related to our acquisition of Tritax, a property firm focused on large-scale logistics assets in Europe, and the sale of PGA National Resort.

Credit

• Fundraising: We raised $14 billion of capital, including $6.7 billion from insurance accounts. We completed the final close on the twelfth vintage of our opportunistic credit flagship fund, bringing the total capital raised for the strategy to $16 billion—on par with our largest opportunistic credit strategy to date.
• Deployment: We deployed $9.2 billion of capital, including $2.3 billion out of our opportunistic credit flagship strategy, and $1.3 billion across our other credit partner managers.
• Monetizations: We monetized $6.0 billion, including Castlelake’s sale of over 100 aircraft.

Robust Liquidity to Drive Growth

Our access to liquidity remains strong. We are a top-tier client for our banks and continue to maintain a diversified mix of funding sources to support growth. This is especially important as we continue to use our strong balance sheet to establish new investment products and pursue strategic M&A that grows our earnings and enhances our capabilities.

Since the spin-off of Brookfield Asset Management, we have announced three new partnerships with leading managers and increased our ownership stake in Oaktree, totaling over $1.4 billion of investment. Looking ahead, we have a compelling opportunity to increase our ownership in these partner managers—excellent businesses that we know well—through existing options we have in place. This increased ownership could add more than $250 million to our fee-related earnings over the next five years.

At the same time, we continue to demonstrate strong alignment with our clients by investing meaningful capital alongside them. Since our spin-out, the Brookfield group has collectively committed $16 billion to our funds, with Brookfield Asset Management’s share focused primarily on seeding smaller, new complementary strategies.

To further support our growth initiatives, we completed our inaugural bond offering in April, bolstering our liquidity position and providing us with additional flexibility to invest further in our business. We issued $750 million of 10- year senior notes and were pleased with the strong institutional demand, which reflects our robust access to the capital markets. In connection with the offering, we received high investment grade credit ratings of “A” from Fitch and “A-“ from S&P, reflecting the strength of our asset-light balance sheet and the durability of our long-term earnings. Pro forma for the offering, we have $2.1 billion of available liquidity, comprising cash, financial assets and capacity on our revolving credit facility. At our current high investment-grade ratings, we have capacity to raise over $4.0 billion of additional debt capital, and that capacity should only go up as our distributable earnings grow. This capacity provides us a significant, low-cost source of capital to fund our growth, either through acquisition or seeding further strategies that will expand our business over time.

Expanding Partnerships and Enhancing Our Credit Capabilities

Today, we are one of the largest private credit managers globally, with a comprehensive, multi-strategy platform. We have made meaningful progress in expanding our credit platform to meet growing client demand and broadening our ability to originate and manage private credit across strategies and geographies.

We have recently completed several initiatives in this regard, which complement our existing direct investment capabilities:

• We announced an agreement to acquire a majority stake in Angel Oak, a leading origination platform and asset manager delivering innovative mortgage and consumer products with over $18 billion in assets under management. Angel Oak brings deep origination strength, a vertically integrated model, and a decade-long track record in structured residential credit. Angel Oak’s platform enhances our capabilities in the fast-growing U.S. mortgage credit market and complements our broader credit offering. We expect to close this transaction over the next few months.
• We increased our ownership interest in Oaktree by 1.5%, bringing our total stake to 74% and reinforcing our long-standing partnership. With fundraising for the latest vintage of our highly successful Opportunities strategy now complete, Oaktree has significant capital to deploy on behalf of clients. Periods of uncertainty and dislocation are where Oaktree’s disciplined, value-oriented approach is most powerful.

Each of these actions reflects our broader objective: to build a world-class credit platform capable of delivering scaled, flexible capital solutions across market cycles. With over $320 billion of credit AUM, we are well-positioned to meet growing demand and drive continued expansion.

Closing

We remain committed to being a world-class asset manager by investing our capital in high-quality assets that earn solid returns, while emphasizing downside protection. The primary objective of the company continues to be to generate increasing cash flows on a per-share basis, and to distribute that cash to you by dividend or share repurchases.

Thank you for your interest in Brookfield, and please do not hesitate to contact any of us should you have suggestions, questions, comments, or ideas you wish to share.

Sincerely,

Bruce Flatt, Chief Executive Officer

Connor Teskey, President

May 6, 2025

----------------------------------

Source

https://bam.brookfield.com/reports-filings/letters-shareholders/q1-2025-letter-to-shareholders