Brookfield Asset Management Ltd.

Good day, ladies and gentlemen, and welcome to the 2018 Year-End Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. If anyone should require operator assistance, please press star then zero on your touch-on telephone. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host for today, Suzanne Fleming, Managing Partner, Branding and Communication. You may begin.

Thank you, Operator, and good morning, everyone. Welcome to Brookfield's 2018 year-end conference call. On the call today are Bruce Flatt, our Chief Executive Officer, and Brian Lawson, our Chief Financial Officer, as well as Leo van den Tillert, Head of Client Relationship Management. Brian will start off by discussing the highlights of our financial and operating results for the quarter, and Leo will then give an update on fundraising. And finally, Bruce will give an update on the business. After our formal comments, we'll turn the call over to the Operator and take analyst questions. In order to accommodate all those who want to ask questions, we ask that you refrain from asking multiple questions at one time in order to provide an opportunity for others in the queue. We'll be happy to respond to additional questions later in the call, time permitting. I'd like to remind you that in responding to questions and in talking about new initiatives and our financial and operating performance, we may make forward-looking statements, including forward-looking statements within the meaning of applicable Canadian and U.S. securities laws. These statements reflect predictions of future events and trends and do not relate to historic events. They're subject to known and unknown risks, and future events may differ materially from such statements. For further information on these risks and their potential impact on our company, please see our filings with the securities regulators in Canada and the U.S. and the information available on our website. And with that, I'll turn the call over to Brian.

Thank you, Suzanne, and good morning to all of you on the call. So let me start out by saying that we're very pleased with the results for 2018. We achieved record net income and record FFO for the year. We also had a record fundraising year, closing $26 billion of private fund capital as we continue to raise capital across our three flagship fund strategies and also added capital to our newer long life fund strategies. Net income was $7.5 billion for the year. And funds from operations, or FFO, total $4.4 billion for the year. The FFO result represents a 16% increase over last year. And in fact, it would have been an additional 11 cents higher if not for the impact of year-end volatility on our financial assets. And much of this is already reversed with the market recovery in the first quarter. So turning to our asset management results first, fee-related earnings increased by 26% to $1.1 billion for the year. This is due to growth in fee-bearing capital, which now stands at $138 billion, as well as strong performance fees. We generated $661 million of unrealized carried interest before costs. That reflects continued favorable investment performance within the private funds. And, in fact, we also booked $254 million of this carry interest and recorded it in our FFO as realized because we felt there was no longer any meaningful risk of clawback. So this was driven by some of the carry that was built up in our first flagship real estate fund and our fourth flagship private equity fund, and both of these recognized carry for the first time. In each case, we've now returned 100% of the capital originally invested in these funds, along with the preferred return to our investors. Looking forward, we expect to earn additional carried interest in 2019 from both of these funds, and more generally expect that realized carry could reach nearly $1 billion in 2019 across all funds. So turning to invested capital, excluding disposition gains FFO from invested capital for the year increased to $1.6 billion. In particular, we benefited from the contributions from acquisitions made across our businesses over the past two years, But we also had strong organic growth across the portfolio, notably in our private equity business as a result of improved pricing within our industrial operations. We monetized several investments across the portfolio in 2018, including the recent sale of an Australian energy company in our private equity business and a logistics business within our North American real estate operations. These gains contributed towards the $1.5 billion of realized disposition gains recorded, including FFO, and also impacted carry. At year end, we had approximately $35 billion of deployable capital, and this should grow as we continue to raise capital across flagship and other strategies. Our capitalization also remains very strong, with a low debt-to-cap level and elevated levels of cash and undrawn lines. Cash flow available for distribution reinvestment was $2.3 billion for the year at BAM itself, and that's a 27% increase over 2017. The asset management franchise generated over $1.3 billion as recent fundraising drove growth in fee-related earnings, and the invested capital generated $1.7 billion in distributions, reflecting strong growth, underlying growth in FFO per unit. And we expect this to continue to increase in 2019 as all of our listed partnerships announce 2019 distribution increases in line with the 5% and 9% target ranges. So finally, I'm pleased to confirm that our Board of Directors has declared a $0.16 per share quarterly dividend payable at the end of February or at the end of March, and this represents a 7% increase over the prior year. And with that, I will hand the call over to Leo, who's going to provide an update on fundraising.