Financial Performance

Braxton´s Financial Performance

Intoduction

Braxton is a private capital (including specially asset management) and business services company. Our cash flows and earnings are based on the profits generated by our operations, as well as the fees that we earn by managing these activities on. The value of our company will grow to the extent that we increase the value of our invested capital and the contribution received from asset management fees.

We typically commit to invest between 25% and 50% of the capital in our managed companies.

We prudently finance our operations with debt and other forms of leverage that match the profile of the business and without any resource to the Corporation. The leverage employed is reflective of the liquidity and duration of the assets and operations being financedand varies from operation to operation. Our policy is not to guarantee the obligations of any fund or operating entity other than our equity commitment.

To ensure we are able to react to investment opportunities quickly and on a value basis, we typically maintain a high level of liquidity at the corporate level. This takes the form of financial assets and committed bank term facilities. We also hold a number of direct investments that are non-core and represent additional sources of liquidity. Finally, our operations generate significant free cash flows each year.

A key objective for us is to increase assets managed on behalf of others and as a result, increase the contribution from asset management fees.

Basis of Presentation
The information provided here is organized to illustrate how our capital is invested in terms of assets under management, to show which assets are beneficially owned by us, to present the net capital invested by us in each of our operations, and to show you the returns that we earn from our invested capital and our fee generating activities. This is reflective of how we manage the business.

Performance Measurement

Our single most important performance measurement is operating cash flow. Our principal objective is to increase operating cash flow per share at a reasonable annualized rate, which we currently consider to be 12%, over the long term. We believe that this is the most important measure because it reflects the value of our underlying businesses and should translate into greater intrinsic value for our company over time.