Investing - Brookfield Asset Management

September 27, 2011 

INVESTOR 

DAY 

2011

Cautionary Note Regarding Forward‐Looking Statements 

This presentation contains forward-looking information within the meaning of Canadian provincial securities laws and other “forward-looking statements” within 

the meaning of certain securities laws including Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act 

of 1934, as amended, “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities 

regulations. The words “strategy,” “objectives,” “outlook,” “priorities,” “build,” “maintain,” “continue,” “expand,” “opportunities,” “projected,” “expand,” “likely,” 

“expect,” “believe,” “could” and “should,” and derivations thereof and other expressions, including conditional verbs such as “will,” “can,” “may,” “would,” “could” 

and “should” are predictions of or indicate future events, trends or prospects or identify forward-looking statements. We may make such statements in this 

presentation, in other filings with Canadian securities regulators or the Securities Exchange Commission and in other communications. These forward-looking 

statements include, among others, statements with respect to: our financial and operating objectives and strategies to achieve those objectives; expansion of 

our relationships with institutional investors; our ability to capitalize on acquisition iiti and development opportunities; expansion of our global l footprint; t the 

fundraising for seven funds in 2011 and 2012; our acquisition, development and operating expansion plans and opportunities; our strategic and operating 

priorities; our view and outlook of the industry conditions and investment environment in each of our core businesses and generally; our financing plans and 

objectives; our future operating performance, earnings and cash flows; our leasing pipeline in our office portfolio; targeted yields and returns at each of our 

businesses and overall; the creation and structure of Brookfield Renewable Energy Partners, including its anticipated benefits, financial performance, growth 

prospects, distribution profile, access to capital and successful completion; our ability to complete and effectively integrate acquisitions into existing operations 

and the ability to attain expected benefits; and other statements with respect to our beliefs, outlooks, plans, expectations and intentions. 

Although Brookfield believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and 

information are based upon reasonable assumptions and expectations, investors and potential investors should not place undue reliance on forward-looking 

statements and information because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or 

achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and 

information. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include: economic and 

financiali conditions in the countries ti in which h we do business; the behaviour of financiali markets, including fluctuations ti in interest t and exchange rates; 

availability of equity and debt financing and refinancing for the company and its affiliates; adverse hydrology conditions; tenant bankruptcies; regulatory and 

political factors within the countries in which we operate; acts of God, such as earthquakes and hurricanes; the possible impact of international conflicts and 

other developments, including terrorist acts; and other risks and factors detailed from time to time in the company’s form 40-F filed with the Securities and 

Exchange Commission as well as other documents filed by the company with the securities regulators in Canada and the United States, including in the 

company’s most recent year end Management Discussion of Financial Results under the heading “Business Environment and Risks.” 

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make 

decisions with respect to Brookfield Asset Management and its affiliates, investors and others should carefully consider the forgoing factors and other 

uncertainties and potential events. Unless required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements or 

information, whether written or oral, that may be as a result of new information, future events or otherwise. 

Currency 

All dollar figures are in U.S. dollars, unless otherwise indicated. 

2 

| Brookfield Asset Management Inc.

Agenda 

• Overview Bruce Flatt 

• Financial Review Brian Lawson 

• Global Property Ric Clark 

• General Growth Sandeep Mathrani 

• Infrastructure Sam Pollock 

• Power Richard Legault 

• Private Equity & Distress Investing Cyrus Madon 

• Conclusion Bruce Flatt 

3 


Overview 

Bruce Flatt

Current Environment: Half Empty – Half Full? 

Macro Challenges 

• U.S. economy is shaky 

• Europe is unstable 

• Stock, interest rate and currency 

markets are volatile 

• Credit crunch exists for some 

• Competitive environment 

for capital 

Brookfield Opportunity 

• Well capitalized with significant dry 

powder 

• Increasing client capital 

• Stable and growing cash flows 

• Unparalleled operating platforms 

• Global footprint to reallocate capital 

where opportunities are best 

• Track record of investing through 

economic turmoil 

• Significant depth of restructuring 

expertise 

5 


We Have Momentum 

• Our core operations are performing well 

• We have established world class investment entities for offering income products to investors 

• Our relationships with institutional investors are expanding 

• We are capitalizing i on a tremendous number 

of acquisition and development opportunities 

• Our global footprint is expanding in a measured way 

6 


Today: Leading Global Franchise 

100 offices or locations | 500 investment professionals | 18,000 operating employees 

North America 

$116 billion AUM 

UK, Western Europe & 

Middle East 


Asia & Australasia 


South America 


7 


Value of Our Global Footprint 

• We have an ability to allocate capital to the business or location which offers best risk/reward 

• We are never “forced” to invest where capital is plenty 

• This offers us access to a larger pool of international investors 

• We are better able to meet the needs of our international ti clients 

• It diversifies our cash flows 

8 


Client Capital 

• We are executing a dual strategy of public listed and private institutional capital 

• The Renewable Power reorganization is a major step forward in building out our flagship 

“income oriented” listed funds 

• We also continue to grow our institutional fund offerings which largely have an 

“opportunistic return” focus 

• We are well positioned for continued growth 

• Our performance has been “good to excellent” 

9 


Investment Performance 

Private Funds 

Core Plus 

Committed Capital 

(millions) Vintage Gross IRR 1 

Real Estate $ 3,910 2004 – 2007 10% 

Infrastructure 4,020 2006 – 2010 14% 

Timber 2,130 2005 – 2009 6% 

Opportunistic 

Real Estate $ 7,050 2006 – 2009 32% 

Private Equity 1,860 2001 – 2006 26% 

1 

Gross IRR does not reflect management fees, carried interest, taxes, transaction costs and other expenses typically borne by investors in 

private funds, which in the aggregate reduce the actual returns experienced by an investor. 

10 


Recognition as Leading Alternative Asset Manager 

• #1 ranked Global Real Estate Investment Manager by 

Institutional Real Estate Managers Guide (Total AUM) 

• Ranked among top 10 Global Fund Managers by 

Preqin Alternative Assets 

– #4 Infrastructure Fund Manager 

(by Estimated Available Capital) 

– #8 Infrastructure Fund Manager 

(by Total Funds Raised 1 ) 

– #9 Real Estate Fund Manager 

(by Estimated Available Capital) 

– #7 Real Estate Fund Manager 

(by Total Funds Raised 1 ) 

1 

Total funds raised in last 10 years 

11 

| | Brookfield Asset Management Inc.

We are Always Looking at New Ways to Access Capital 

Our Goals 

• To bring more of our assets under management into fee bearing entities that are pure play real 

asset investment vehicles 

• Each of our core operations will have one major flagship public entity and one flagship private 

fund, supported by smaller niche private equity funds, if opportunities exist 

• By end of 2011 we will have two major listed “Funds” 

– Brookfield Infrastructure Partners, and 

– Brookfield Renewable Energy Partners 

12 


Brookfield – 2012 

Brookfield 

(BAM) 

28% 73% 100% 100% 


Infrastructure Partners 

(BIP) 

Brookfield Renewable 

Energy Partners 

(BREP) 


Property Partners 

Brookfield Private 

Equity Partners 

Brookfield Americas 

Infrastructure Fund 


Real Estate 

Opportunity Funds 

Brookfield Special 

Situation Funds 

+ legacy / niche 

funds 


funds 


funds 

13 


The Institutional Fund Raising Environment 

• Considerably better than it was two years ago 

– Real asset strategies are appealing for investors seeking stability and 

real returns 

– More money is being dedicated to alternatives 

– Clients are seeking fund managers with proven performance – which we have 

coming out of the recession 

– We are now recognized as one of a small group of leading global alternative 

asset managers 

Institutions need to earn more than 1% in bonds 

14 


Expansion in Private Funds 

2005 2011 

Number of Fund Investors s 13 105 

Third-Party Capital ($ billions) 2 53 

Number of Funds 5 21 

Average Commitment ($ millions) 156 163 

15 


High Quality, Diversified International Client Base 1 

Investors by Geography 2 C d 

22% Canada 

USA 

42% 

15% 

Asia 

South America 

1% 

8% 

Europe & 

Middle East 

12% 

Australia/ 

New Zealand 

1 

Includes Private Fund and Public Securities clients 

2 

Based on dollars committed to Private Funds and Public Securities and Equity Strategies 

16 


Role of Private Funds 

• We are placing considerable emphasis on establishing very large capitalization listed funds 

which h will own a substantial ti part of the capital in our major businesses 

• Private funds, however, will continue to be an important part of our business, for the 

following reasons 

– Better suited for more sophisticated investment strategies. Our listed funds 

have been positioned as lower volatility, high payout cash flow entities 

– Fee economics are likely better for certain investment strategies 

– They allow us to have deep relationships with major global investment partners 

– Capital can be drawn down over a committed period of time 

• Accordingly, we remain committed to establishing large flagship sector private funds, 

as well as selected niche strategies 

17 


Well Positioned for Growth 

• Over $24 billion institutional client commitments to private funds 

• $8 billion in dry powder 

• Seven funds in fundraising in 2011 and 2012, with target 

commitments of $7 billion – including $3 billion of Brookfield’s 

principal capital 

• Over 30 professionals worldwide committed to providing the 

highest level of service to investors 

18 | | Brookfield Asset Management Inc.

Overview 

Business 

Value Creation

Value Creation 

We don’t need “Transformational” deals to create value 

#1 #2 

Operational Improvements 

for Revenue and Expenses 

Incremental Expansion of 

Existing Operations 

#3 

Acquisitions 

#4 

Re-financings to 

Surface Liquidity and 

Reduce Costs 

20 


#1 

Operational Improvements 

• Leased 4.4 million square feet of office space in 

first six months 

• Accessed higher value markets for output from 

renewable power assets, generating over $25 million 

of incremental cash flow this year 

• Increased Brazil retail lease rates by 13% on renewals 

• Investing £30 million to double container capacity at 

UK port 

• Re-tenanted several U.S. malls with category leading 

retailers and added specialty anchor stores to increase 

traffic and sales 

• Increased operating margins by 10% in our construction 

business year-over-year (Q2) 

21 


#2 

Selective Operating Expansions 

• New rail contracts to add incrementally 

– $150 –$200 million of EBITDA 

– Throughput of 24 million tonnes per annum 

• 400 MW of hydro and wind construction – $1.2 billion 

• Texas transmission project – $750 million 

• Strong renewable development pipeline – 2,000 MW 

• $2 billion of retail mall redevelopments 

• Headquarters office property for BHP Billiton in 

Australia 

22 


#3 

Acquisitions 

• Two Chilean toll roads – $340 million 

• 30 MW hydro facility in Brazil – + $200 million 

• 370,000 square foot office property – $150 million 

• Two office towers in Australia – +$250 million 

• 75% interest in 1.8 million square foot office property in 

Midtown Manhattan – $520 million 

• 55% interest in 480,000000 square foot luxury mall in 

St. Louis, MO 

• Timber and agricultural land acquisitions in our 

Brazil Funds 

23 


#4 

Re-financing to Surface Liquidity and Lower Rates 

• $4.5 billion of unsecured corporate borrowings 

completed 

• $8.2 billion of asset specific financings completed, 

including 

– >$2 billion of retail property mortgages 

– $3 billion of office property p mortgages 

g 

• $1.5 billion of common share issuances 

• $900 million of equity/asset sales 

• $235 million of preferred share issuances 

24 


Overview 

Investment 

Environment

Our View of the Investment Environment… 

26 


Investment Environment – Australia 

• Benefitting from strong growth driven by the resource industry 

• Our focus is on expansion opportunities where we have incumbent status and benefit from 

barriers to entry… 

– Brookfield Rail 

– Expansion of our coal terminal 

– Office property developments – City Square in Perth; other Perth and Sydney opportunities 

– Construction company expansion 

• We are selectively l pursuing acquisitions 

iti 

– Completed tuck-in office property acquisitions at attractive valuations 

– Recent trophy asset transactions have received premium valuations 

but some public market assets trading at discounts 

27 


Investment Environment – Brazil and Chile 

• Like Australia, benefitting from incredible growth drivers from resource industry, 

but also from strong demographic growth 

• Our established presence, together with less developed private investing market, 

gives us a competitive advantage over many in pursuing acquisitions 

• We continue to launch private funds targeting opportunities in a number of asset classes 

• Particular areas of interest t include 

− Hydroelectric, both buy and build 

− Agriculture 

− Timberlands 

− Private equity 

• The agriculture story is incredible 

• We are seeing continued strong growth in residential and retail mall operations 

• We are focused more on complex transactions, particularly assets or 

businesses owned by European entities in distress, as trophy asset auctions 

command premium valuations 

28 


Investment Environment – Canada 

• Relative strength and stability of economy and capital markets has 

resulted in fewer acquisitions iti opportunities 

• Focused on organic growth through 

– Very strong office leasing markets 

– Continued energy driven strength in Alberta residential business 

– Selective hydroelectric and wind energy developments 

• We believe there may be favourable energy opportunities in the renewables sector 

and related infrastructure, i.e. transmission line investments 

• There are growth and selective niche opportunities which arise due to our market profile 

29 


Investment Environment – United States 

• Slow economy will favour the strongest assets 

• Housing remains weak, although opportunities are not readily apparent 

• Capital access is constrained for a number of owners – giving g rise to opportunities 

• Wind energy acquisitions and property deal developments are attractive due to excessive 

hubris in prior years, and subsequent decline in energy and property prices 

• Low interest rates increase attractiveness of cash flowing assets 

• Consequently, we are focused on monetizing “clean assets” for premium valuations and 

reinvesting i into quality assets that require refinancing i and/or redevelopment activity 

i 

• We are positioning ourselves to participate in broader infrastructure renewal and expansion 

across the U.S. 

• We would love to find another distressed GGP, where our capital 

is different from others 

• Our size offers us opportunities most don’t have 

30 


Investment Environment – Europe 

• We have been building our presence in Europe for three years with few 

transactions ti to date, but waiting for the right opportunity 

• While the ongoing sovereign debt crisis has created considerable paralysis, it has also created 

urgency and distress that proactive owners will have to respond to 

• We are particularly focused on European owners or financiers of infrastructure and energy 

businesses in Latin America 

• We are also working with a number of local entities to acquire assets or assist them recapitalize 

• Our ability to acquire on a value basis provides a greater margin of safety for investing in 

continental Europe 

• Like always, the pay-offs could be significant but they are not without risk – the number one, 

a Euro break-up 

31 


Looking Ahead: Strong Prospects for Continued Growth 

Developments 

Expanded & New Platforms 

Client Capital Additions 

Organic Growth 

32 | | Brookfield Asset Management Inc.

Financial Strength 

Brian Lawson

Agenda 

• Key Themes 

• Financial Profile 

• Asset Management Update 

• Growth Potential 

34 


Key Themes 

• Operations performing well, but below full potential 

– Core assets provide stability and downside protection, with favourable growth prospects 

through price increases and capital rotation 

– Shorter cycle businesses (private equity and development) will benefit from eventual 

U.S. recovery 

• Continued emphasis on locking in low financing rates and extending term 

• Liquidity profile remains high – numerous acquisition and development opportunities 

• Poised to reap meaningful returns from asset management contracts 

35 


Capitalization and Liquidity 

Capitalization 

• Conservative and stable debt-to-capitalization 

12% 

– Corporate 14% 

– Proportionate 44% 

13% 

• Average 8-year term at corporate level 

• Continue to extend term and lock in lower rates across capital structure 

75% 

Liquidity 

• $4.3 billion core liquidity at June 30; $3.0 billion at corporate level 

• Nearly $20 billion of our invested capital in the form of listed securities 

• $8.1 billion of “dry powder” in funds 

36 


Three Interconnected Parts of the Business 

Intrinsic 

Value to 


Cash 

Flow 

(LTM 1 ) 

Descriptions 

Manager $ 4 b $ 245 m • $53 billion of client capital under management 

Principal Capital 25 b 1,369 m • Brookfield capital invested alongside clients 

Services 1.6 b 129 m 

• Related services such as construction and 

corporate relocations 

Manager 

Intrinsic Value 

($33 billion total 2 ): 

Services 

12% 

5% 

Corporate 8% 

75% 

Principal Capital 

1 

Last 12 months 

2 

Includes corporate of $2.8 billion 

37 


Manager 

• 20+ private funds and 3 externally managed listed entities 

• LTM Performance: 

(millions) 

Base Fees $ 189 

Transaction and advisory 39 

Performance Income – recognized 17 

245 

Performance Income – unrecognized 354 

$ 599 

• Value creation through 

– Increasing capital under management Base Fees 

– Exceeding performance benchmarks Performance Income 

• Currently attributed $4 billion of intrinsic value 

38 


Principal Capital 

• $25 billion of net tangible asset value invested in operating platforms and funds alongside 

our clients 

• LTM Performance: 

(millions) 

Renewable Power $ 401 

Commercial 

office 

332 

retail 

98 

Infrastructure 172 

1,003 

Development 186 

Private Equity 180 

$ 1,369 

• Value creation through 

– Continuous improvement within operations and judicious capital allocation toward 

development, expansion projects and acquisitions 

39 


Financial Profile 

Brookfield’s Client 

Total 

Total 

(billions) 

Invested Capital + Capital = Capital Assets 

Renewable Power $ 8 $ 2 $10 $ 16 

Commercial Properties Office 6 16 22 40 

Retail 4 5 9 37 

Infrastructure t 2 10 12 18 

Development 3 2 5 15 

Private Equity & Finance 2 18 20 22 

25 53 78 148 

Services 2 2 2 

Corporate 2 2 4 

$29 $53 $82 $ 154 

40 

Brookfield’s Invested Capital 

($29 billion total): 

| Brookfield Asset Management Inc. 

Office 19% 

27% Renewable Power 

Retail 14% 

7% 

Private Equity 

7% 

Infrastructure 

12% 

10% 5% Development 

Corporate 

Services

Cash Flow Stability – Office 

(millions) 2010 2009 2008 

Net operating income 1 $ 1,053 $ 1,020 $ 997 

% occupancy 95% 95% 97% 

Average net rent (psf) $2771 27.71 $2684 26.84 $2342 

23.42 

1 

Normalized for constant currency exchange rates 

• 7-year average lease term 

• Occupancy over past 10 years 

– Max 97% 

– Min 93% 

– Avg 96% 

• In-place rents at 20% discount to market rents 

41 


Cash Flow Stability – Power 

(millions) 2010 2009 2008 

Revenues 1 $ 1,182 $ 1,036 $ 1,079 

Average realized price $ 80 $ 72 $ 79 

%l long-term contracts t 71% 52% 48% 

Contract price $ 86 $ 75 $ 72 

Impact of 10% variance in short-term term price 

Total $ 29 $ 43 $ 50 

% of total revenues 2.5% 4.2% 4.6% 

1 

Normalized for constant currency exchange rates and long-term average hydrology 

• Average term of long-term contracts – 13 years 

• Solid counterparty t credit quality 

42 


Cash Flow Stability – Infrastructure 

Q2 

Q1 

Q4 

(millions) 2011 2011 2010 

Net operating income 1 

Utilities $ 117 $ 113 $ 106 

Transport and energy 62 71 54 

Total $ 179 $ 184 $ 160 

1 

Normalized for constant currency exchange rates 

• 80% of NOI governed by regulatory regime or long-term contracts 

• Increasing stability through additional take-or-pay contracts 

• Regulatory rate reviews provide real return step-ups 

43 


Client Capital – $53 Billion 

(billions) 

Private 

Listed 

Public 

1 

Funds 

2 

Issuers Securities 

Other 

Listed 

Entities 

Total 

Renewable power $ 0.6 $ 1.7 $ $ $ 2.3 

Commercial properties 78 7.8 16 1.6 72 7.2 50 5.0 21.6 

Infrastructure 5.5 2.9 1.1 9.5 

Development 0.3 1.6 1.9 

Private equity and finance 3.4 14.0 0.7 18.1 

$ 17.6 $ 6.2 $ 22.3 $ 7.3 $ 53.4 

3 

1 

Private funds capital includes $8.1 billion of uninvested capital 

2 

Publicly listed entities that are externally managed by Brookfield (i.e. Brookfield Infrastructure Partners) 

3 

Publicly listed affiliates of Brookfield without management contracts (i.e. Brookfield Office Properties) 

44 


Average Fee Structure 

Carried 

Return 

Base Fees 1 

2 

Interest Hurdle 

Private Funds 

Core and value add 100-150 bps 17% 9% 

Opportunistic and private equity 150-200 bps 20% 12% 

Weighted Average 125-150 bps 18% 10% 

Listed Issuers 125 bps 15/25% 15/25% 

1 

Excludes Turnaround Fund which pays a carried interest only, and Bridge Lending funds 

2 

Carried interest in Private Funds represents interest in excess distributions over invested capital; in Listed Funds represents interest in 

distributions over predetermined hurdle 

45 


Increasing Base Management Fees 

$300 

$50 

$250 

$40 

evenues 1 

millions) 

Fee Re 

($ m 

$200 

$150 

$100 

$32 

$56 

$36 

$167 

$39 

$189 

$30 

$20 

r Manageme ent 2 

illions) 

Capital unde 

($ b 

$50 

$134 $131 

$10 

$0 

2008 2009 2010 2011 LTM 

$0 

Base Management Fees Transaction & Investment Banking Fees Capital under Management 

1 

Excludes capital under management in Other Listed Entities 

2 

Transaction and Investment Banking Fees are activity based and include commitment fees, work fees, exit fees and advisory fees 

46 


Increasing Performance Revenue Streams 

Significant upside opportunity as earlier vintage funds begin to earn carried interest 

$300 

$250 

Fee Reve enues 1 

($ millio ons) 

$200 

$150 

$100 

$260 

$399 

$50 

$65 

$36 

$0 

$6 

$22 $25 

2008 2009 2010 1H 2011 

Realized 

Cumulative Unrealized 

1 

Carried interest is generated by Private Funds, and Incentive fees generated by listed entity and public securities 

47 


Dry Powder 

• We have $8.1 billion of un-invested capital allocations from our clients 

UN-INVESTED CLIENT CAPITAL 

$8.1 billion 


and 

Renewable Power 

$2.6 

$3.1 

Real Estate 

$2.4 

Private Equity & Finance 

48 


Long Contractual Life of Capital Under Management 1 

• Average remaining duration of invested capital for private funds of approximately nine years 2 

• 57% of fee-earning capital under management is subject to long-term lock ups 

(≥10 years or permanent) 

Time Period 3 Private Funds Listed Issuers Percentage 

10 Years 5.9 b - 25% 

Permanent 1.6 b 6.2 b 33% 

1 Excludes capital under management in Public Securities and Other Listed Entities 

2 

Weighted based on net annualized base management fee 

3 

Time periods are measured from initial inception of a fund or account 

49 


Outlook for Growth 

Intrinsic Value LTM Cash Flow Growth Potential 

Core Assets $19.5 b $1,003 m • Increase in contracted prices 

• Capital rotation 

Private Equity and 5.5 366 • Substantial benefit from eventual 

Development 

U.S. recovery 

• Significant embedded gains 

Principal Capital 25.0 1,369 

Services 1.6 129 • Organic growth in construction 

and property services 

Corporate 2.8 275 • Investment of liquidity 

Asset Manager 4.0 245 • Highly scalable 

• Unrecognized performance income 

• Tremendous leverage to increases 

in client capital 

$33.4 b $2,018 m 

50 


Potential Values of Manager 

• The potential value of manager based on 15x multiple of varying gross margins on various 

levels l of client capital is set out in the following table 

(billions, except bps) Client Capital 1 

$25 b $50 b $75 b $100 b 

75bps 2.8 5.6 8.4 11.3 

Gross Margin 2 150bps 56 5.6 11.3 16.9 22.5 

200bps 7.5 15.0 22.5 30.0 

1 Excludes public securities 

2 

Base fees and performance income less direct expenses 

51 


Financial Strength 

Q&A

Global Commercial Properties 

Ric Clark

Agenda 

• Global Platform and Environment 

• Growth Drivers 

• Recent Growth Initiatives 

54 



Global Platform 

Global Platform 

and 

Environment

Global Reach with Local Expertise 

Regional property teams dedicated to some of the world’s most dynamic & resilient markets 

CANADA 

$8.8 8 billion RE AUM 

44 RE Professionals 

2,350 RE Employees 

EUROPE & MIDDLE EAST 

$1.6 billion RE AUM 



REAL ESTATE OFFICES 

Number of Offices 30 

Number of Employees 15,000 

U.S. 




BRAZIL 




AUSTRALIA & ASIA 



1605REE 

1,605 Employees 

56 


Key Regional Investment Drivers 

Market conditions provide attractive growth and consolidation opportunities 

North America 

• Supply and demand fundamentals remain sound in core office markets 

• Office leasing activity was strong through July; however lack of confidence in the U.S. and 

austerity measures have weakened demand since 

• Distressed assets requiring recapitalization and upcoming debt maturities through 2017 

provide opportunity 

Europe 

• Sovereign debt issues putting pressure on macro conditions and capital markets 

• Forced bank divestitures: €375bn in total assets in UK, Spain, Germany and Ireland 

• Largest debt funding gap globally 

• New regulations will impact lending and direct holdings 

• Amendments to German Investment Act (min. hold periods, redemption limitations, valuation 

regulations) will limit attractiveness of open-ended ended funds, reducing liquidity in prime investment 

markets 

57 


Key Regional Investment Drivers 

Australia 

• Supply and demand fundamentals remain sound in core office markets 

• Leasing activity remains strong and capital values of prime assets remain robust 

• Opportunities likely evolve from strategic shifts in capital allocation into "pure plays” and 

domestic investments 

• M&A activity given public REITs trading at discount to net tangible asset value 

Brazil 

• Social migration continues. Middle class now accounts for over 50% of the population 

• Credit availability increasing with consumer credit defaults at historic lows 

• Housing demand and mortgage affordability driving greenfield projects 

58 


Brookfield Property Platforms 

One of the largest property owners globally, combining established property platforms 

and operational expertise with prudent investing 

BROOKFIELD GLOBAL 

REAL ESTATE 

$87 BILLION 

255 million square feet 

BROOKFIELD 

PROPERTY PARTNERS 

RESIDENTIAL & 

CONSTRUCTION SERVICES 

OFFICE 

RETAIL 

MULTI-FAMILY 

INDUSTRIAL 

OPPORTUNISTIC 

FUNDS 

RESIDENTIAL 

CONSTRUCTION 

SERVICES 

$37.0 BILLION 

125 properties 

88 million sq. ft. 

$34.2 BILLION 

180 regional malls 


$5.3 BILLION 

10,000 owned 

apartments 

Development 

Potential 


Development 

Potential 

47,650 managed 

apartments 


$1.4 BILLION 

Emerging asset 

class for Brookfield 

BREOF I, II 

RETIP/Protocol 

BREF I, II 

$9.1 BILLION 

120,000 lot 

equivalents 


condo density 

Construction 

workbook of $8.7B 


under construction 

Office Properties 

Incorporações 

Residential 

Brazil Retail 

59 


Brookfield Property Partners Advantages 

Unmatched Access to Capital 

• Total assets of ±$78 billion 

• Equity capital of $12 billion 

• No corporate debt 

• Billions of uninvested committed capital in Opportunistic and Core Plus Funds 

• Further equity capital in “managed” entities of $20 billion 

Unparalleled Operating Capabilities 

• 88 million square foot office platform 

• 165 million square foot retail platform 

• Growing multi-family il and industrial i platforms 

Global Scale 

• Global operations 

60 


Focus for 2012 

Platforms 

• Capitalize on historically low interest rates to lower overall cost of capital 

• Recycle capital from mature or non-strategic assets into growth opportunities 

• Capitalize on supply / demand imbalance by advancing development / redevelopment once 

risk exposure has been minimized 

• Margin improvement, efficiency and leasing initiatives to increase profitability 

Investment Targets 

• Single asset acquisitions through platforms 

• Distressed debt for control 

• Recapitalizations of funds, corporate entities and operating companies 

• Existing gproperties p and investment vehicles to facilitate partners in transition 

• Share buy-backs for listed vehicles 

61 


Recent Achievements 


Growth Drivers

Office – Leasing Pipeline 

2011 has potential to be best leasing year in our history 

• ~4.4 million square feet leased through June 2011, with ~7 million square feet in serious 

discussions 

• Could result in an increase in NOI on an annual basis of $45 – $50 million 

• Could improve lease rollover exposure through 2016 by 12% 

are feet 

000's, squ 

12,000 

10,000 

8,000 

6,000 

4,000 

2,000 

- 

2007 2008 2009 2010 2011E 

Leasing to Date 

Serious Discussions 

Leasing 

Serious 

Potential 

Current 

Potential 

(000’s, square feet) 

to Date Discussions Leasing Occupancy Occupancy 

United States 2,116 3,500 5,616 91.3% 94.0% 

Canada 1,992 3,000 4,922 96.2% 96.7% 

Australia 335 500 835 99.3% 99.8% 

Total 4,443 7,000 11,443 93.3% 95.2% 

63 


Office – Market Rent Upside 

Mark to market opportunities support NOI growth 

• Average in-place rents across the portfolio are 20% lower than comparable market rents 

$65 

$60 

$55 

$50 

$45 

$40 

$35 

$30 

$25 

$20 

Rents by Market 

United States Canada Australia 

In Place 

Market 

(US$) 

In-Place 

Net Rent 

Market 

Net Rent 

Upside 

% Leases Rolling 

(2011-13) 

United States $ 24.38 $ 31.26 28% 23.1% 

Canada 26.80 30.60 14% 17.9% 

Australia 55.90 58.69 5% 7.5% 

Total $ 28.22 $ 33.73 20% 20.3% 

64 


Office – Recycling of Capital 

• A number of initiatives underway to recycle into more accretive endeavours 

– Selling assets in non-core markets when those markets are attracting significant interest 

– Selling non-core assets within core markets 

– Selling assets where we have maximized value 

– Targeting, on a conservative basis, minimum unlevered returns of 8% and levered 

returns of 12% 

(US$ millions) 

Total 

Buyers 

Total Brookfield’s 

Property 

Market 

Amount 

IRR 1 Equity 

IRR 2 

Dispositions 

Completed U.S. (3) $ 595 8% $ 240 47% 

Targeted Australia, U.S. (5) 1,100100 8% 580 22% 

Total $ 1,695 8% $ 820 29% 

Acquisitions 

Completed Australia (2), U.S. (5) $ 2,290 9% $ 350 14% 

Targeted 500 8% 200 11% 

Total $ 2,790 9% $ 550 13% 

1 

Gross projected IRR. Gross IRR does not reflect management fees, carried interest, taxes, transaction costs and other expenses 

typically borne by investors in private funds, which in the aggregate reduce the actual returns experienced by an investor. 

2 

Net IRR on sale of assets / Net projected IRR expected on acquisitions 

65 


Office – Active Development Pipeline 

• A development ready pipeline totalling ±10 million square feet 

– Total cost to build of $7 billion or $800 per square foot 

– Portfolio estimated to generate $545 million of incremental NOI once stabilized 

– New equity investment required totals $800 million 

1 

– Targeted yield on cost of 8% - 10% 

– Targeted levered IRR’s of 15% - 20% 

(millions) 

Sq. Ft. 

City Square South – Perth 345 

100 Bishopsgate – London 950 

Manhattan West – New York 5,400 

Bay Adelaide Centre – Toronto 900 

Herald Block – Calgary 1,200 

Other 1,000 

Total 9,795 

1 

Assumes a 50% equity partner in Manhattan West 

66 


Multi-family – Strong Demand 

• Actively pursuing organic and acquisitive growth strategies to capitalize on strong demand for 

multi-family il assets 

– Recently closed on approximately $1 billion of core-plus and development properties 

• Seven new apartment buildings with total project costs over $230 million 

• Nine new construction projects with total project costs of more than $700 million 

– Net operating income increased 8.6% year-on-year to June 2011 1 

– Leveraging Fairfield’s operating expertise to pursue other multi-family portfolios and 

operating platforms 

1 

Reported on stabilized assets 

67 


Brookfield’s Private Real Estate Funds 

• Brookfield’s private real estate fund platform 

– Offering performance fee-generating investment products 

(funds, JV’s, co-investment opportunities) 

– Leverage Brookfield’s operating affiliates as sponsors of specialized, 

sector-specific investment offerings 

– Expand Brookfield’s property platform by developing strategic real estate 

partnerships with best-in-class local and sector-specific operators 

68 


Recent Achievements 


Recent 

Growth 

Initiatives

Recent Growth Initiatives 

Brookfield Office Properties reorganized to become global pure-play office company 

Acquired significant portfolio of premium office assets in Australia and merged its residential business 

with Brookfield Homes to form Brookfield Residential Properties, North America’s sixth largest 

residential developer 

Brookfield Completes Recapitalization of General Growth Properties (“GGP”) 

$8 billion recapitalization 

Consortium committed $2.5 billion for 27% of GGP 

Subsequent to the recapitalization, Brookfield increased its aggregate ownership 

to approximately 40% 

Brookfield Completes Reorganization of Fairfield, a Multi-family Service Provider 

Brookfield acquired a 65% equity stake in Fairfield Residential 

Brookfield has committed to provide up to an additional $150 million to fund future 

investment opportunities 

Brookfield Completes Recapitalization of Legacy Partners Realty Fund II, LLC 

$157 million recapitalization of distressed office fund 

5.3 million sq. ft. portfolio of A and B Grade office assets in primary markets on the 

west coast of the U.S. 

Brookfield Office Properties acquired $2.3 billion of office assets over last 12 months 

Acquisitions made at average unlevered IRR of 9% 

70 



Q&A

General Growth Properties 

Sandeep 

Mathrani

Agenda 

• Overview 

• Financial Review 

• Portfolio Operations 

• Capital Structuret 

• Conclusion 

73 



Overview

Company Overview 

• Irreplaceable portfolio of world class properties 

– 166 regional malls, including 30 mall spin-off 

– Interests in international joint ventures 

• $33 billion in total assets 

• Over $3 billion in annual revenues 

• $1.3 billion of liquidity 

Note: All figures as of June 30, 2011, except revenues that are annualized six months ended June 30, 2011, Total Property Revenues at share 

75 


Exceptional Long-Term Value in the GGP Mall Franchise 

• Only a handful of mall companies in North America of size 

– GGP is number two 

– Number three is only half the size 

• Highly diversified across the U.S. in markets with strong 

supporting demographics and employment 

• NOI extremely resilient through the recession and rents 

currently rising 

• Significant redevelopment opportunities in the portfolio which 

will be highly accretive to earnings 

• Strong tenant relationships and asset management knowledge 

will be invaluable if GGP expands internationally 

76 


Current Strategic Focus 

• Focus on GGP Core Mall (“GGP Malls”) portfolio 

– Concentrate leasing efforts to maximize long-term cash flows 

• Spin-off 30 mall Rouse Properties’ portfolio, on track to be completed by year end 

• Continue to dispose of non-core strips and office 

• Allocate capital to highest return investments where opportunities arise 

• Deleverage company through contractual amortizations and corporate debt retirement 

• Continue opportunistic refinancing of debt to lock in lower rates, extend maturities and smooth 

out maturity ladder, taking advantage of unique open-at-par debt 

77 


Current Strategic Focus cont’d 

GGP Today 

Malls 

GGP Tomorrow 

GGP Malls 

Core Malls 

Offices 

Rouse Properties 

Value-Add Malls 

Strip Centres 

Divestible Assets 

Non-core Malls, Office 

& Strip Centres 

Closed and under contract to sell 

24 non-core assets, totaling 

~$1.3 billion with ~$500 million in 

net proceeds 

78 


Rouse Properties’ Spin-Off 

• Different operating, capital and geographic focus than the GGP Malls’ portfolio 

• Properties will benefit from a dedicated management team focused exclusively on 

executing specialized asset management strategies that differ from the GGP Malls’ 

portfolio 

• Key GGP metrics post-divestiture 

Tenant Sales per square foot 

Occupancy 

Core NOI Growth 

Debt 

(Based on historical i results through h June 30, 2011 or as of June 30, 2011) 

Resulting in potentially improved public market valuation metrics for GGP 

79 


High Quality, Nationally Diversified Portfolio 

GGP Malls’ Portfolio: 136 malls / 57.7 million square feet 

ALA MOANA CENTER 

Honolulu, HI 

Sales PSF : ~$1,200 

Occupancy: 98.4% 

FASHION SHOW MALL 

Las Vegas, NV 

Sales PSF: ~$950 


TYSONS GALLERIA 

Note: Includes only U.S. regional malls. Excludes Rouse Properties, Office, Strip, and Special Consideration properties 

McLean, VA 

Sales PSF: ~$800 


80 


Current Portfolio Composition 1 

No. of Total Mall & % %of 

(SF in thousands) Properties GLA 2 Freestanding 3 Leased NOI 

GGP Malls 136 136,930 57,724 93.3 89.6 

Post Rouse Properties 

Spin-off = 97% of total 

Rouse Properties 30 21,067 9,085 87.7 7.1 

Total U.S. Regional Malls 166 157,998 66,809 92.5 96.7 

International 16 5,488 5,488 97.4 1.4 

Strip Centres 14 2,273 135 84.1 0.9 Target to dispose 

within next 12-36 

Office 26 2,748 40 64.2 1.0 months 

Total 222 168,507 72,472 91.9 100.0 

1 

Information presented as of / for the six months ended June 30, 2011, except “% of NOI” based on trailing 12 months ended June 30, 2011 

2 

Gross Leasable Area (GLA): Total gross leasable space at 100% 

3 

Total in-line mall shop and out-parcel retail locations 

81 



Financial 

Review

Core NOI Summary 

• GGP Malls’ core NOI increased 

– Attributable to contractual rent bumps on in-place leases, increased occupancy 

• Total core NOI was negatively impacted 

– By lower termination fees, a major office tenant vacating, and the 2010 sale of our 

Turkish operations 

($ in Thousands) 

YTD ended 

June 2010 

Core NOI 

YTD ended 

June 2011 

Core NOI 

Percent 

Change 

QTD ended 

June 2010 

Core NOI 

QTD ended 

June 2011 

Core NOI 

Percent 

Change 

GGP Malls $ 933,644 $ 955,204 2.3% $ 472,374 $ 474,501 0.5% 

Rouse Properties 79,391 75,128 (5.4%) 39,919 37,548 (5.9%) 

International 1 15,327 16,637 8.5% 5,332 7,866 47.5% 

Termination Fees 17,654 7,783 (55.9%) 6,332 2,246 (64.5%) 

Office, Strip & Non-Recurring 2 30,147 17,612 (41.6%) 17,464 5,437 (68.9%) 

Core NOI $ 1,076,163 $ 1,072,364 (0.4%) $ 541,421 $ 527,597 (2.6%) 

1 International ti 2010 Core NOI includes income from Turkish operations which h were disposed d of in 2010 – 2010 YTD ($3.4m); 2010 QTD ($13 ($1.3m) 

2 

Non-recurring: Relates to various one-time items resulting in the 2010 YTD and QTD figures overstated by $8.7M and $9.8m, respectively 

83 


Leasing Spreads – Volumes and Comparative Cash Lease Spreads 

Square 

Feet Leased 

(in 

millions) 

3.0 

25 2.5 

2.0 

1.5 

1.0 

0.5 

- 

Commencement 2011 Commencement 2012 

2.9 

2.2 

1.5 

1.2 

0.9 

0.8 

0.6 

0.4 

0.1 0.2 0.1 0.3 

Renewal New 

New < 9 months Renewal New New < 9 months 

$20 

$15 

PSF Spread 

$ 

$10 

$5 

$- 

$7.45 

N/A 

$(3.89) $(3.85) 

$0.31 

$(2.50) 

$5.02 

N/A 

$19.32 

$0.45 

$(5) 

$(10) 

Renewal New New < 9 months Renewal New New < 9 months 

Leased prior to 2011 Leased post 2011 

84 



Portfolio 

Operations

Balanced and Manageable Lease Expirations 

• GGP Malls: Annual lease expiries average ~10% per annum from 2012 – 2016 

50.0% 

Lease Expiration Schedule 2012+ 

48.1% 49.5% 

Expiring Portfo olio SF 

Percentage of 

40.0% 

30.0% 

20.0% 

10.0% 

0.0% 

11.6% 

11.3% 10.3% 9.3% 10.4% 10.0% 9.7% 9.8% 9.9% 10.1% 

2012 2013 2014 2015 2016 Subsequent 

GGP Malls & Rouse Properties GGP Malls (Excl. Rouse Properties) 

Note: Represents contractual obligations for space in regional malls or predominantly retail centres and excludes traditional 

anchor stores and Specialty Leasing license agreements with terms in excess of 12 months as of June 30, 2011 

86 


Impact of Unemployment on Tenant Sales? 

• The GGP Malls’ demographic consists of educated middle to upper class consumers which are 

virtually it fully employed 

Total Unemployment Rate vs With College Degree 

10% 

9% 

9.1% 

8% 

7% 

6% 

5% 

4% 

4.3% 

3% 

2% 

1% 

0% 

Total 

w/College Degree 

87 


Strong Improvement in Tenant Sales Trends 

• Tenant sales are nearing the 2007 peak, with GGP Malls approaching $500 per square foot 

• Sales growth has outpaced rents. Assuming last year’s sales were applied to current rents, 

GGP Malls’ occupancy cost would increase from 13.5% to 14.4% 

– 100 bps increase in occupancy cost results in NOI in excess of $100 million 

$500 

$484 

$488 

$480 

Peak sales $471 PSF including Rouse Properties (2007) 

$472 

$465 

Comparative Sales PSF 

$460 

$440 

$420 

$419 

$438 

$426 

$449 $450 

$430 

$437 

$458 

$446 

$457 

$400 

Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 

GGP Malls & Rouse Properties 

GGP Malls (Excl. Rouse Properties) 

Note: Reflects comparative rolling 12 month tenant sales for mall stores less than 10,000 square feet 

88 


Improving Occupancy Trends 

95.0% 

• GGP Malls’ SNO 1 ~300 bps 

• GGP SNO ~ 300 bps 

• 100bp increase to occupancy ~ 

incremental NOI of $25 - 40 million 

94.5% 

ased 

Percent Le 

94.0% 

93.0% 

92.0% 

91.0% 

90.0% 

92.6% 

92.1% 

91.8% 

91.2% 

92.3% 

92.9% 

91.6% 91.6% 

93.6% 

92.9% 9% 

• GGP Malls’ Temp leases ~ 600 bps 

• GGP Temp leases ~ 700 bps 

93.2% 93.3% 

92.4% 92.5% 

93.8% 

• GGP Malls’ Temp leases ~ 600 bps 

• GGP Temp leases ~ 700 bps 

• 100bp conversion to perm ~ 

incremental NOI of $15 - 25 million 

89.0% 

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q4 2011 

Target 

GGP Malls & Rouse Properties GGP Malls (Excl. Rouse Properties) 

1 

Signed Not Opened 

Note: Prior periods have been restated to reflect discontinued operations 

89 


2011 Leasing Done, Good Progress Towards 2012 Targets 

• There is negligible remaining 2011 lease expiration exposure 

• For 2012, approximately one-half of the lease expiration exposure has been addressed 

7.0 

6.0 

Expiring Lease Exposure 2011-2012 

6.3 

Square Fee et (in millions) 

5.0 

4.0 

3.0 

2.0 

10 1.0 

2.3 

~250 K 

remaining 

exposure 

~ 50% 

- 

July 2011 - Dec 2011 2012 

Approved Commencement 

Remaining i Expirations 

90 



Capital 

Structure

Capital Structure Overview 

Flexible Capital Structure 

Highlights 

Cash $0.8b 

GGP consolidated property p level debt 

($14.6b) 

• Average debt maturity of five years 

– Only 18% matures prior to 2014 

– $2.6 billion of variable rate debt 

– $300+ million of amortization per year 

Rouse Properties’ property level • Weighted average age interest est rate of 5.28% 

secured debt ($1.1b) 

GGP unconsolidated property level 

secured debt ($2.5b) 

Total corporate and subsidiary debt 

($2.0b) 

• Majority of debt is non-recourse to GGP 

• $750 million undrawn revolving credit facility 

Equity ($12.1b) 1 

1 

Reflects the closing price per share on September 14, 2011 of $12.81 

2 

All figures as of June 30, 2011, except for share buybacks 

92 


Refinancing Progress 

• Significant refinancing progress was made in 2011 to extend term and reduce interest rates 

Prior Loans 

New Loans 

Number of loans 1 19 19 

Loan Amount at Share 2 $2.5b $3.1b 

Proceeds at Share n/a $0.6b 

$1.2b Life Company 

$1.9b CMBS 

Interest Rate 5.81% 5.10% 

Remaining Term 2.5 Years 9.9 Years 

1 Assumes ~$1.0 billion of loans currently rate locked and anticipated to close in 2011 

2 

$3.9 billion of New Loans, at 100%. $1.7 billion Life Company, $2.2 billion CMBS 

• Manageable 2012 maturities provide GPP with flexibility given the current capital markets 

dislocation 

– 2012 secured debt maturities = $2.4 billion ($1.6 billion at share) 

– Already in preliminary discussions on over $650 million of 2012 maturities 

93 


Debt Maturity Schedule 

• GGP’s near-term debt maturity exposure is manageable 

– Corporate level maturities through 2015 are comprised primarily of The Rouse Company 

LLC (“TRC” not to be confused with Rouse Properties) Bonds 

– $6.7 billion of property level debt, subsequent to 2012 is open-at-par enabling 

opportunistic refinancing 

$ billion s 

10 

9 

8 

7 

6 

5 

4 

3 

2 

1 

0 

Debt Maturity at Share 1 – Balances as of Maturity Date 

0.2 

9.3 

0.4 27 2.7 

0.6 

0.7 

1.6 

1.7 

0.5 

2012 2013 2014 2015 2016+ 

Corporate & Subsidiary Debt 

1 

Reflects balloon payment maturities as of June 30, 2011 

Property Level Debt 

94 



Conclusion

Key Take-Aways 

• Lease, lease, lease 

– Drive occupancy and lease spreads to maximize long-term cash flows 

• Focus on GGP Malls’ portfolio 

– Complete Rouse Properties’ spin-off 

– Sell non-core strip centres and office 

• Use $1.3 billion of liquidity and significant operating cash flow generation to appropriately 

allocate capital, including accretive acquisitions and redevelopment opportunities 

• Continue refinance strategy, lowering rates and appropriately laddering maturities, while 

continuing to deleverage 

• Maintain / expand Brazilian retail platform 

96 



Q&A


Sam Pollock

Agenda 

• Overview of Infrastructure Business 

• Demonstrated Stability 

• Infrastructure Investment Environment 

• Growth Pipeline and Opportunities 

• Strategic Priorities 

99 


Overview of Infrastructure Business 

• Brookfield Infrastructure Group is a global asset manager 

– Operations in North America, Europe, Australasia and South America 

– 90 investment professionals 

– 3,000 operating employees 

Diversified Portfolio of Premier Infrastructure Assets 

Utilities Transport & Energy Timber 

$9 billion 

Regulated assets in 

North and South 

America, Europe and 

Australasia 

$3 billion 

Diversified port, rail and 

energy operations in 

North America, 

Europe and Australia 

$4 billion 

2.6 million acres of 

high quality timberlands 

in North and South 

America 

$16 billion of AUM 

100 


Overview of Infrastructure Business cont’d 

• Financial results reflect strong year-over-year growth Operating Cash Flow 

– Driven by acquisition of Prime Infrastructure 

• 80% of cash flow is contracted or regulated 

• Investment initiatives to date have been extremely successful 

• Investors are attracted to strong current yield 

US$ millions 

$120 

$100 

$80 

$60 

$40 

$20 

$64 

$106 

$- 

H1 2010 H1 2011 

As at June 30, 2011 

Entity 

Ticker 

Symbol 

1-Year 

Return 

3-Year 

Return 

Yield 

Brookfield Infrastructure Partners L.P. 

Listed on TSX and NYSE; market cap of ~$4 billion 

Brookfield Americas Infrastructure Fund 

$2.7 billion private infrastructure fund 

BIP 67% 16% 5% 

Private Fund 27% 1 N/A 10% 2 

1 

Gross IRR does not reflect management fees, carried interest, taxes, transaction costs and other expenses typically y borne by investors in 

private funds, which in the aggregate reduce the actual returns experienced by an investor. 

2 

Annualized as at December 31, 2010 

101 



Demonstrated 

Stability

Utilities Platform 

• Strong performance driven by world-class regulated assets 

Operating Cash Flow Growth 

Key Attributes 

US$ in millions 

$60 

$50 

$40 

$34 

$30 

$20 

$50 

– Stable revenues with inflationary growth 

– Earn return through regulated or contractual 

framework on capital employed 

– Virtually 100% of revenues are regulated or 

contractual 

– Diversity across regulatory regimes 

$10 

$- 

H1 2010 H1 2011 

– Significant opportunities to invest in system 

expansions at attractive returns 

103 | Brookfield Asset Management Inc.

Utilities Highlights 

• $1.1 billion of refinancing in H1 2011, taking advantage of low interest rate environment 

Operation 

Australian terminal operations 

Refinancing 

$600 million financing, 9/12-year U.S. private 

placement 

S.A. electricity transmission operations 

$305 million loan, 18-year (avg) local bond offering 

Australasian energy distribution 

operations 

$245 million refinancing, 9/12/15 year U.S. private 

placement 


Transport & Energy Platform 

• Stable performance driven by access fees to critical infrastructure 

– Benefit from increased movement of energy, freight and bulk commodities 

– Favourable results despite economic head wind 



t 


$25 

$23 $23 

– High barriers to entry 

$35 – Diversity of businesses mitigates impact of 

$30 

fluctuations in demand from any one sector, 

commodity or customer 

$20 – Well positioned to benefit from increases in 

$15 

demand for commodities and the global 

$10 

movement of goods 

$5 

$- 

H1 2010 H1 2011 

– 70% of EBITDA is supported by long-term 

contractual revenues 


Transport & Energy Highlights 

• Extending contractual profile 

– Signed four contracts for expansion of Australian rail road and renewed two contracts 

with existing customers 

– 60% of rail revenue now covered by take-or-pay arrangements vs. 0% in 2009 

• Re-opening facility at UK Port for steel customer planning to restart production by 2011 

– Negotiating take-or pay contract 

– Prior to its shutdown in 2010, EBITDA contribution was £6 – £8 million annually 


Timber Platform 

• Solid performance driven by well located timberlands with high quality species 

– Cash flow growth from higher sales and prices 

– Log prices increased 13%, volumes up 30% year-over-year 



t 


$40 

$38 

$35 

$30 

$25 

– Scarce, high value, premium asset 

– Market access and location 

– Favourable industry dynamics 

$20 – Diversified product mix in highly productive 

$15 

climate 

$15 

$10 

$5 

$- 

H1 2010 H1 2011 

– High margin business with sustainable cash 

flows 

– Flexibility to adjust volumes to meet demand 


Timber Highlights 

• Expanding sales into Asia to meet market demand 

– Exports to China have increased from 0% of exports two years ago to 53% today 

• Chinese government pushing construction to increase housing affordability 

– 10 million units of affordable housing startups planned for this year 

• Continued market resiliency expected as heading into autumn which is high season for 

construction 

China: Annual Housing Starts 

Annual units (millions) 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 

`98 

`99 9 

`00 0 

`01 

`02 

`03 

`04 

`05 

`06 

`07 

`08 

`09 

`10 

`11F 

Year 

108 



Investment 

Environment

Global Investment Environment for Infrastructure 

• Commodity and energy driven infrastructure projects 

– Long-term greenfield commitments 

• Government privatization 

– Global phenomena with near-term focus on Europe 

• Deleveraging g of European construction companies 

– Knock-on effect of sovereign and bank crisis in Europe 

• Strong appetite for debt and equity of contracted cash flowing businesses 

– Significant capital searching for safe haven 



Growth Pipeline 

Growth Pipeline 

& Opportunities

Growth in Utilities 

• Brookfield has highly attractive growth opportunities in its utility project pipeline of $1.4 billion 

Immediate Opportunities 

North American 

Transmission 

Acquisition 

Texas 

Transmission 

Project 

• 330 MW, 39 km transmission cables 

serving Long Island 

• Regulated revenue framework 

• Capacity contracted for 30 years, indexed 

to inflation 

• Partnership to build, own and operate 

~ 600 km of transmission lines in Texas 

• Closed $580 million construction financing 

• Construction of $750 million project to 

commence early 2012 

• Acquired in August 2011 for $188 million 

112 


Growth in Utilities – Spotlight on Australia Coal Terminal Expansion 

• Land located 4 km north of Brookfield’s existing Australian 

coal lterminal operations 

• Brookfield named as one of two preferred proponents 

Expansion 

• New site estimated to be able to support new coal export 

Current terminal 

capacity of 150 Mtpa 1 

• Undergoing land allocation process 

• Brookfield has received access requests for 162 Mtpa 

Next Steps: 

Timing: 

Costs: 

Long Term 

Pre-feasibility study will follow land allocation 

Targeting early 2017 for first coal shipments 

Development costs estimated at A$5 billion 

1 

Million tonnes per annum 

113 


Growth in Transport & Energy 

• Over $550 million in organic growth projects underway 

Australian 

Rail Expansion 

UK Port Expansion 

• Six significant projects of which 75% 

are fully contracted to date 

• Volumes to increase by 45% 

• Remaining capital costs of A$500 million 

• $150-200 million of incremental 

EBITDA per year 

• Project will nearly double container 

capacity to 450,000 TEUs 1 

• Phase One to be completed in Q4 

• Total project costs of ~£30 million 

• Annual incremental EBITDA of 

~£5 million 

1 

Twenty foot equivalent unit 

114 


Growth in Transport & Energy – Spotlight on Brookfield Rail 

• 14.5 Mtpa of further potential volume growth from existing customers 

• New customers exploring mining opportunities in our franchise area 

– Substantial export commodity growth expected for Midwest, Yilgarn & 

Southwest regions 

– Focus primarily on new coal and 

iron ore projects 

– Working with port authority and miners 

to explore integrated infrastructure 

development 


Growth in Timber 

Prospects for log prices are very positive 

• Mountain pine beetle infestation of British Columbia, Alberta and the U.S. continues 

– ~20% of timber supply for North America structural framing lumber no longer 

available for 40-60 years 

– Our timberlands are not affected 

• Withdrawals of timberlands for conservation 

• Increasing demand from Asian markets 

• U.S. housing market recovery 

– U.S. housing markets at unsustainable low levels 

– U.S. Pacific Northwest timberlands will benefit from optimal locations 

U.S. Housing Starts 

In thousands 

2,500 

2,000 

1,500 

1,000 

500 

0 

Average 

1990 1995 2000 2005 2010 

116 


Growth in Timber – Brazil 

• Significant potential in the Brazil timber market 

– Strong civil construction activity 

• Increasing home ownership rates 

• Preparations for FIFA World Cup and Olympic events 

• Brazil timberlands are very attractive 

– Rapidly growing, competitive and well capitalized range 

of converting industries 

– Deep and growing economy 

– Reasonable land prices – can buy well outside of auctions 

• ~$215 million (77%) in Brazil Timber Fund is now invested 

– 16% gross IRR 1 since inception 

Ownership has doubled since 2009 to 98,000 ha across four Brazilian states 

1 Gross IRR does not reflect management fees, carried interest, taxes, transaction costs and other expenses typically borne by investors in private funds, 

which in the aggregate reduce the actual returns experienced by an investor. 

117 


Acquisitions Strategy 

Utilities 

Utilities 

Acquire businesses within current franchise areas and 

geographical footprint 

T&E 

Transport 

& Energy 

Establish new operating platforms 

(i.e., toll roads, airports, storage facilities) 

Pursue value opportunities in distressed markets 

Timber 

Timber 

Focus on emerging markets and government privatizations 


Recent Acquisition – Chilean Toll Roads 

• Brookfield consortium acquiring majority interests in two toll roads 

for $340 million 

• Direct result of European outreach program 

• Attractive investment – key arteries in Santiago’s urban roadway 

– Rapid economic growth in Chile in last 20 years 

Autopista Vespucio Norte (“AVN”) 

– Metropolitan region represents 48% of total GDP 1 

– Cash flow growth from above inflation tariff increases and 

excess road capacity 

• Targeted to generate levered, after-tax t returns of 12-15% 

15% 

• Expected to close in fourth quarter, subject to third-party consents 

Tunel San Cristobal (“TSC”) 

Establishes new toll road platform in a country we know well 

1 

Instituto Nacional de Estadisticas 

119 



Strategic 

Priorities

Strategic Priorities 

• Enhance stability of operating cash flow 

– Maintain a diversified business across sectors and geography 

– De-risk business by extending duration on debt and customer 

contracts 

• Pursue measured and opportunistic growth 

– Expand and upgrade existing networks 

– Acquisitions within platforms 

– Acquire new platforms on value basis 



Q&A


Richard Legault

Table of Contents 

• Overview of the Renewable Power Business 

• Power Markets – Drivers and Outlook 

• Growth Strategy and Opportunities 

• Combination of Brookfield’s Renewable Power Businesses 

• Priorities for 2012 



Overview of the 

Overview of the 

Renewable 

Power Business

One of the Largest Pure-play Renewable Platforms 

• 4,800 MW of installed capacity 1 

• Primarily hydroelectric, the highest value renewable asset 

• 2,000 MW development pipeline 

• 67 river systems across 10 markets in 3 countries 

Predominantly Hydro Profile 2 Portfolio Well-Balanced to Core Markets 2 Strong Regional Diversification 2 

Generation by Technology 

4,800 MW 

Other 4% 

Generation by Market 

More than 18,000 GWh 

Generation by Region 

67 river systems 

Brazil Midwest 

Wind 

10% 

Hydro 

86% 

Brazil 

20% 

U.S. 

40% 

Canada 

40% 

Brazil Southeast 

Brazil South 

Louisiana 

New 

England 

BC 

New York 

Ontario 

Québec 

California 

i 

U.S. Midwest 

1 

Includes 400 MW of projects under construction 2 Assumes long-term average generation 

126 


Efficient Regional Operating Platforms 

Our goal is to leverage our operating and development capabilities to create value 

in the business 

• Currently managing the construction of seven wind and hydro projects ($1.2 billion) 

• Integrated over 20 single asset and portfolio hydro acquisitions over the last 10 years 

• Built (or building) 16 hydro plants and five wind farms since 2003 

CANADA UNITED STATES BRAZIL 

• 36 generating facilities – 1,839 MW 

• Growing wind platform 

• 350 staff and NERC 1 certified control 

centre 

• 106 generating stations – 2,272 MW 

• 400 staff and NERC certified system 

control centre 

• Significant storage 

• 37 hydro generating stations – 674 MW 

• Comprehensive operating, power 

marketing and project development 

platform, which includes 250 staff 

1 

North American Electric Reliability Corporation 

127 


Stable, High Quality Cash Flow 

Stable cash flows 

supported by highly 

hl 

contracted 

portfolio 

• Approximately 80% of 2012 generation is contracted with PPAs and 

financial contracts, mitigating price risk 

• PPAs have 13-year average duration with highly creditworthy 

counterparties and built-in inflation adjustments 

• Significant diversification and water storage in North America 

• No material hydrology exposure in Brazil 

Uncontracted 

21% 

41% 

Government 

Financial Contracts 

11% 

Distribution Companies 

8% 

19% 

Industrial & Retail 

128 


Compounded Annual Growth 

Cash flows or Net 

Operating Income 

increased by an 

average of 23 % 

per year from 

2000-2010 

• Optimization and maximizing the option value of the portfolio 

• Secured long-term revenue contracts at attractive rates 

• Enhanced productivity of the facilities through planned capital program 

• Developed high value projects in North America and Brazil 

• Completed 20 transactions since 2001 and integrated them into a unified 

platform 

(millions) 

1000 

Net Operating Income 

$874 

800 

600 

400 

23% CAGR 

$469 

200 

0 

$109 

2000 2005 2010 

1 

Adjusted for long-term average generation 

2 

Excludes realization gains 

129 



Power Markets 

Power Markets 

– Drivers and 

Outlook

Power Markets – Key Drivers 

Gas markets in 

North thAmerica 

will continue to be 

oversupplied through 

2012 

• Shale gas production creating ongoing surpluses in North America 

• Lower gas prices continue to push electricity prices to cyclical lows 

• Gas prices expected to increase with need to invest new capital in 

shale operations 

Key drivers for 

renewable energy 

growth remain 

strong 

• Wide acceptance of need to reduce carbon footprint on a global basis 

• Significant ifi issues with competing technologies (coal / nuclear) 

• Strong need for energy self sufficiency driving renewable policy 

Emerging markets 

in LATAM need new 

supply to meet strong 

demand growth 

• Brazil’s strong economic growth continues to drive demand 

• Expect delays in commissioning of large scale hydro projects 

• Policy is pushing diversification of supply base to biomass and wind 

• Fundamentals continue to be very strong in Brazil and other emerging 

markets in the region 


Outlook for 2012-2016 in Our ‘‘Core Markets’’ 

Canada 

Pressure to contain 

rate increases 

United States 

A return to 

sustainable gas 

prices 

Brazil 

Perfect storm 

in 2014 

1 

Renewable Power Standards 

• Renewable programs may experience short-term political pressure 

• Growth will continue to be driven by need to replace aging infrastructure 

• Incentives will continue to be in the form of long-term contracts 

• Major regional differences: role of gas likely to increase in British Columbia, 

solar expected to come down in Ontario, transmission i build-out tin Quebec 

expected to export renewable power to U.S. markets 

• Pace of renewable capacity additions expected to rise with increasing 

RPS 1 targets 

• Gas prices expected to increase to sustainable levels by 2013-2014 

• Expect need for baseload capacity by mid-decade, and will likely be 

renewables or gas fired facilities 

• Wild cards are: form of renewable incentives; growth of U.S. economy; 

and timing of plant retirements 

• Expect demand growth to accelerate, fueled by major infrastructure 

investments expected to support 2014 Soccer World Cup, 2016 Olympics 

• Expecting significant delays in supply pipeline (large hydro and wind) and 

tightening reserve margins in 2013-2014 

• Wild cards are use of gas in supply mix (LNG or other imports) and growing 

middle class 

132 



Growth Strategy 


and Opportunity


Our goal is to double our renewable power portfolio over five years 

Markets with 

attractive ti dynamics 

and high barriers 

to entry 

Highest value, 

longest-life 

renewable 

technologies 

Arbitrage “build 

or buy” to 

optimize returns 

on capital 

• High value regional markets with strong barriers to entry 

United States: West coast and East coast markets 

Canada: primarily in Ontario, British Columbia and Saskatchewan 

Brazil: Southern states driving the country’s growth 

• Add platform in new market with similar attributes 

• Maintain predominant hydroelectric focus 

• Wind in markets where the resource has high scarcity and terminal value 

• Add renewable technology which complements current portfolio 

• Flexibility and expertise to invest across the spectrum of development, 

construction or operating phases in our core technologies 

• 2,000 MW greenfield development pipeline in Canada, United States and Brazil 

• Build on track record of acquiring late stage projects 

Leverage global • Leverage Brookfield’s global reach to secure transactions 

Brookfield platform 

in transaction 

• In the next five years, secure acquisition of scale portfolio or platform 

outreach program • Benefit of broader transaction ti expertise – restructuring t and capital markets 

134 


Projects Under Construction 

A significant part of our 

growth in 2011/2012 

will be from projects to 

be commissioned 

• We continue to make progress on seven construction projects 

• Projects are on scope, schedule and budget 

• Adds 431 MW or about 10% to our overall portfolio 

• Total investment of approximately $1.2 billion 

Project 

Capacity 

(MW) 

Generation 

(GWh) 

Location 

Commercial 

Operating Date 

Hydro 

Serra dos Cavalinhos II 29 45 Brazil Q1 2013 

Pezzi 19 99 Brazil Q1 2013 

Lower St. Anthony Falls 10 63 Minnesota Q3 2011 

Glen Ferris 6 41 West Virginia Q1 2012 

Wind 

Comber Wind 166 535 Ontario Q4 2011 

Coram 102 264 California Q1 2012 

Granite Reliable 99 275 New Hampshire Q4 2011 

135 


Development Pipeline 

Brookfield will continue 

to look for late stage 

opportunities or will 

build out our project 

pipeline 

• Positioned to acquire, build and integrate additional third-party projects 

• 2,000 MW pipeline of organic development potential 

• Hydro, wind and pumped storage opportunities 

• Opportunities in each core market provide for development flexibility 

Development Pipeline (MW) 1 

Hydro Wind Pump Storage Total 

Canada 270 960 - 1,230 

U.S. 75 - 300 375 

Brazil 400 - - 400 

Total 745 960 300 2,005 

1 

Based on 100% of total potential project capacities based on management estimates 


Brookfield Approach – Granite Reliable Wind 

• Acquired majority interest in 99 MW wind project from a distressed seller (Q4 2010) 

• Leveraged Brookfield’s restructuring expertise and resources 

• U.S. power platform completed remaining development activities 

– Secured regulatory approvals 

– Facilitated government loan guarantee program and investment tax credits grants 

– Secured project financing 

• Commercial operating date expected Q4 2011 

• U.S. power platform will integrate Granite into its operations in Boston, MA 



Combination of 

Renewable 

Power 

Businesses

Transaction Overview 

The strategic combination will establish Brookfield Renewable Energy Partners (BREP) 

as one of the world’s largest listed “pure play” renewable power businesses 

• Publicly traded partnership model that has been highly successful for BIP 

• We have requested to be listed on the Toronto Stock Exchange and will plan to file for NYSE 

listing in early 2012 

• Brookfield will receive one limited partnership unit of BREP for every Brookfield Renewable 

Power Fund (Fund) unit, and will receive additional units of BREP for contributing the assets of 

Brookfield Power 

• On completion, Brookfield will own approximately 73% of BREP on a fully-exchanged basis 

and the public unitholders of the Fund will own the remaining 27% 

• BREP will assume all obligations related to approximately C$1.1 1 billion of unsecured public 

bonds issued by Brookfield Power as well as the obligations related to the C$250 million 

preferred shares issued by a subsidiary of the Fund 


Relationship with Brookfield 

BREP will benefit from the continued sponsorship and management of Brookfield 

Continue strong 

relationship 

with Brookfield 

• BREP will be Brookfield’s primary vehicle through which it will 

acquire renewable power assets on a global l basis 

Brookfield will be the 

Managing General 

Partner of BREP 

• Managing general partner will be a wholly-owned subsidiary of 


• Brookfield will be entitled to incentive-based distributions providing 

strong incentive to increase distributions 

Brookfield will 

provide 

asset management 

services 

• Managed by the same team of experienced professionals that have 

led the renewable power business since the 1990s 

• Brookfield will provide services relating to the origination of 

acquisitions, financings and oversight of the business 

• Brookfield will be entitled to receive a base management fee of 

$20 million plus 1.25% of future increases in total capitalization 1 

1 

Market capitalization, recourse borrowings and preferred equity 

140 


Key Commercial Agreements 

Brookfield retains 

future upside and 

downside 

on energy prices 

• New PPA for New York generation will cover 3,500 GWh annually 

• $75/MWh escalated annually at 40% of inflation 

• 25 years with 20-year extension 

• Through the Energy marketing agreement, BAM will continue to market 

BREP’s energy portfolio 

Counterparty 

Profile 

8% 

New U.S. PPA 1 

11% Brookfield 

55% 

Governments 

26% 

Industrial & Retail 

Distribution Companies 

Existing Fund PPAs 2 

1 

Incremental PPA provided by BAM for U.S. portfolio at $75/MWh 

2 Brookfield will retain previously existing PPAs provided d to the Fund which h are predominantly 

offset with third-party contracts 

141 


Financial Highlights 

The business will benefit from strong operating and development platforms that have a track 

record of optimizing assets and supporting growth 

• Initial distribution of $1.35 per unit 

• Attractive payout ratio with target of approx. 80% of distributable cash and 60% of AFFO 

• Anticipate $100 million annually of surplus cash flows to reinvest in growth opportunities 

• BREP assumes corporate level debt of existing power business (BRPI) 

• BRPI’s investment grade ratings are expected to be maintained by BREP 

BREP 

Total power assets 

Next 5-year average proforma distributable cash 

Next 5-year average per unit distributable cash 

> $13 billion 

$490 million 

$1.85 per unit 

Issued units (millions) 265.2 

Project level debt (non-recourse) 

Corporate level debt 

$4.1 billion 

$1.1 billion 

Target payout ratio 80% 

Weighted average PPA term 

24 years 

1 

Includes three wind projects and four hydro projects currently under construction 

2 

Shown on a fully-exchanged basis 

142 


Transaction Benefits 

The combination provides numerous benefits to Brookfield 

• Establishes a global flagship vehicle well positioned to grow on a global basis 

– Enhances liquidity and access to capital for the renewable business 

– Provides competitive cost of capital and currency to grow in this sector 

– Listings on the New York and Toronto stock exchanges 

• Simplifies corporate structure and expands BAM’s asset management business 

– Global mandate 

– Management fees on incremental value of capital deployed by BREP 

– Incentive distributions to BAM 

• Strong value proposition to Fund unitholders 

• Brookfield continues to retain risk/reward proposition p with respect to future power prices 

• BAM retains 73% ownership and same economic interest 



Strategic 

Priorities

Priorities for 2012 

Long-term dynamics for renewable power remain favourable 

Drive financial 

and operating 

results of BREP 

• Deliver on BREP’s financial expectations including $1.1 billion in EBITDA 

• Maximize value of asset flexibility and manage costs 

• Secure long-term contracts for un-contracted volumes if long-term 

price is attractive 

Deploy capital to 

high quality, high value 

opportunities in the 

renewable power sector 

• Develop inventory of top acquisition targets and opportunistically execute 

on transactions 

• Add $1 billion in renewable assets (developments or acquisitions) 

• Deliver construction programs on scope, schedule and budget 

• Advance development projects and begin construction of 45 MW hydro 

project on Kokish River in British Columbia 

Implement effective 

funding strategies to 

maximize financial 

flexibility and minimize 

cost of capital 

• Launch BREP and promote awareness of it as the leading pure-play 

renewable power business on a global basis 

• Achieve listing on the New York Stock Exchange for BREP 

• Strategic refinancing of project debt to enhance returns and minimize risk 



Q&A

Private Equity & Distress Investing 

Cyrus Madon

Agenda 

• Private Equity & Distress in Profile 

• Case Studies 

• Private Equity in Brazil 

• Distress Investing Environment 

• Conclusion – Outlook 


Private Equity & Distress Investing – Overview 

Private Equity & 

Distress Investing Group 

25 Professionals in 

North America 


• Sourcing opportunities 

• Transaction execution 


Real Estate Infrastructure Renewable Power 

Funds 

Direct 

Investments 


A Strong History of Distress Investing 

Over three decades of distress investing and operational turnarounds 

1980s 

Carma 

Corporation 

Residential land 

developer 

BCE 

Development Co. 

Commercial real 

estate developer 

1990s 

Catalyst 

Energy 

Utility holding 

company 

O&Y (US) Inc. 

Commercial 

real estate 

developer 

Gentra 

Mortgage lender 

Triathlon 

Leasing 

Canada’s largest 

lessor of fleet vehicles 

Northgate 

Minerals 

Gold mining 

company 

Royal LePage 

Commercial and 

residential brokerage 

2000s 

Queensway 

Financial 

Property and 

casualty insurance 

Criimi Mae 

Full service 

commercial 

mortgage 

company 

Concert Industries 

Global 

manufacturer of 

non-woven airlaid 

fabrics 

Stelco 

Large 

diversified 

steel 

producer 

Western 

Forest 

Products 

Integrated 

forest 

products 

company 

Longview 

Fibre 

Integrated 

packaging 

company 

MAAX 

Products 

Manufacturer 

and distributor 

of bathroom 

fixtures and 

spas 

Hammerstone 

Corporation 

Industrial 

minerals 

company 

2010 > 

Prime (BBI) 

Global utilities, 

and transportation 

infrastructure 

GGP 

Premier retail shopping 

mall portfolio 


Competitive Advantages 

As an owner operator with a global platform, we have significant advantages in 

creating value through distress investing 

Deal 

Sourcing 

• Knowledge and access through broad Brookfield 

platform enhances proprietary deal flow 

• Operational 

improvements 

Operational 

Focus 

Depth & 

Breadth of 

Experience 

• Decades of successful distress 

investing and turnarounds 

Finance 

Legal 

Operations 

Legislation 

• Influence and control 

Active 

Management 

Differentiated 

Strategy 

• Target complex situations that 

limit competition 

• Surface hidden assets 

• Capital preservation 



Case Studies

Case Study: Armtec Infrastructure 

• Investment Type 

– $125 million senior secured loan 

• Business Overview 

– Manufacturer of pre-cast concrete, steel and plastic pipe products 

– End markets: infrastructure, commercial and residential 

construction 

– 47 manufacturing and sales facilities across Canada 

– Soft market conditions combined with operational challenges 

resulted in substantial but temporary impairment to earnings 

• Investment Thesis 

– Replacement of bank lender group and operating discipline i are expected to return the company to historical profitability 

– Seven-year warrants provide upside if company outperforms 

– Leveraged Brookfield’s operational capabilities to execute 

a proprietary transaction on an accelerated basis 

– Senior secured loan is well protected by $300 million in tangible assets 

– Opportunity to earn equity returns with limited risk 

($millions) 

$100 

$80 

$60 

$40 

$20 

$0 

$80 

2009 

EBITDA 

$30 

1 

TTM 

EBITDA 

1 

Trailing 12 months 

• Target Return: 25% 

153 


Case Study: Ember Resources 


– $50 million initial equity investment 


– Financially distressed natural gas producer focused 

on coal bed methane and shallow gas in central Alberta 

– Extensive land holdings include 435 net producing 

wells and long-life gas reserves 

– Low production costs permit positive cash flow at 

highly depressed natural gas prices 


– Financial i distress enabled Brookfield to partner with principal i shareholder h to take the company 

private at a 50% discount to NAV 

– Targeting 25% returns; significant additional upside in reserves and production should gas 

prices improve 

– Identified operational improvements, reserve enhancements and G&A savings 

– Limited risk due to low financial leverage and exceptionally low entry price 

• Target Return: 25% 

154 


Case Study: Longview Fibre Paper & Packaging 


– $114 million equity investment to acquire 100% of operations 


– Washington State-based producer of Kraft paper and 

integrated manufacturer of corrugated containers 

– One million ton pulp/paper mill and seven containerboard plants 

– Poorly managed with low productivity 


– Acquisition price represented working capital value only 

– Reduced headcount by over 700 (30%) and focused 

on high margin products 

– Preserved a $130 million pension surplus by revising 

the allocation of fund assets from equities to bonds 

– Cash flow generation and bond offering have 

generated $550 million in proceeds to-date 

– Excellent sale candidate given recent industry consolidation 

Longview 

Value Creation Summary 

Operational 

Improvements 

69% 31% 

Asset Value 

Enhancements 

. 

• IRR: 57% 

155 


Other Distress Investments 

We assist our operating platforms to execute on distress opportunities 

Real Estate 

• Fairfield Residential 

– Recapitalization of a best-in-class integrated asset 

manager focused on multi-family development and services 

• 450 West 33rd Street 

– Recapitalization of sponsor in return for 75% ownership 

ina17millionsquare 1.7 foot property 

Fairfield Residential 

• Legacy Office Vehicles 

– Recapitalization of a vehicle owning 5.3 million square feet 

of office space 


• Cross Sound Cable 

– Acquisition of a 330 MW electrical transmission cable 

from a bank lender 

Cross Sound Cable, New England 

156 





in Brazil

Private Equity in Brazil 

• Brazil is a compelling market for private equity 

• Rapid growth of domestic market and competitive advantages support 

opportunities with strong returns 

• Fifth most populous and second youngest country among the world’s 

10 largest economies 

• Demographics, stable democracy and developing credit markets 

support increasing income and expenditure on discretionary items 

• Current growth is strong and expected to continue over the long term 

• Brookfield has over 110 years of experience and a proven track record 

of building and growing businesses in Brazil 

• Deep, local relationships, regional insight, 7,000 employees and 

$13 billion in AUM 


Private Equity in Brazil 

• Brookfield is well positioned to generate proprietary investment opportunities and execute 

growth initiatives iti within our businesses 

• Targeting opportunities in growth sectors with simple and scalable business models 

– Control opportunities with growing cash flows 

– Financing for organic growth, modernization and acquisitions 

– Ability to create value by solving strategic operational, financial and governance 

challenges 

• Wide variety of industries where Brookfield has a competitive advantage 

• 12 person local team dedicated to private equity opportunities in addition to significant 

local resources 



Distress 

Investing 

Environment

Distress Investing Environment – U.S. 

• Continued macro challenges INDEX PERFORMANCE (S&P 500) 

INDEX PERFORMANCE (S&P 500) 

– High levels of unemployment and fiscal deficits 120.0 

– S&P downgrade 

110.0 

– Housing market is still in disarray 100.0 

– Political posturing 

90.0 

• Certain industries and regions remain fundamentally 

challenged (housing, forest products, merchant power, 

U.S. Southwest) 

80.0 

Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 

INTEREST INTEREST RATES RATES AND AND BOND BOND YIELDS YIELDS 

10.00 

• More recently, credit markets have weakened 

• Capital is now more expensive, or unavailable, for 

4.00 

lower grade issuers and weak sponsors 

2.00 

8.00 

6.00 

• Current environment should enable Brookfield to 

surface opportunities in property, infrastructure and 

private equity 

- 


Barclays Capital US High Yield: B 

Barclays Capital US Aggregate: Corporate Investment 

Grade 

Source: Economist, Standard & Poors 

161 


Distress Investing Environment – Europe 

• Sovereign default risk significant concern with 

global l implications 

• Weak economic data in Europe has added to 

negative sentiment – German economy grew by 

only 0.1% in Q2 

• Bank liquidity risk remains a concern with 

75 

regulators failing to address market fears 

50 

– Recent bank trading values and corporate 

and high yield spreads have weakened 

substantially 

INDEX PERFORMANCE INDEX PERFORMANCE 

150 

125 

100 

MSCI Euro 

MSCI EUR Bank 

Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 

Source: www.oanda.com, CapitalIQ, Economist 

BOND SPREADS 

BOND SPREADS 

• Opportunities for distress across sectors, but 

particularly those dependent on bank financing 

– Potential bank asset sales represent 

significant opportunity 

2000 

1500 

1000 

Euro bb-b non-financial fixed and floating rate … 

Euro non-periphery non-financial 

• Brookfield is very well positioned to pursue 

500 

distressed real estate and infrastructure 

investments in Europe 0 

1/4/2008 1/4/2009 1/4/2010 1/4/2011 

162 


Investing – China 

• China continues to experience strong growth 

and dis expected dto be the world’s largest economy 

within 10 years 

• Government leaders have mandated slowing 

growth and inflation 

NDEX PERFORMANCE INDEX PERFORMANCE 

150 

125 

100 

75 

50 

MSCI China 

China RTO 

• Banks to reduce growth in loans on real estate 

– Stock markets have declined over past 12 months 

25 

- 

Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 

– Several Chinese companies with North American 

listings have experienced severe contractions 

in valuation amid governance concerns 

– $US debt markets for many Chinese issuers have closed 

– Potential opportunities to assist liquidity constrained companies in industries 

well known to Brookfield 


Investing Environment – India 

• High growth economy with favourable 

demographics, investment t grade sovereign rating 

and developing capital markets 

• Interest rates have risen over the last 18 months 

in response to very high h inflation 

• Bank lending has tightened markedly, particularly 

in real estate, in response to Reserve Bank of India 

requirements 

• Economic growth has slowed and stock markets 

have weakened 

• Market weakness exacerbated by foreign capital 

outflows and investor concerns around governance 

and corruption 

• Potential opportunities for Brookfield in 

infrastructure and real estate in a liquidity 

constrained environment 

INDEX PERFORMANCE INDEX PERFORMANCE 

105 

95 

85 

75 

65 

55 


Sensex NSE Infra NSE Realty 

FOREIGN FOREIGN DIRECT DIRECT INVESTMENT INFLOWS ($BN) ($B) 

$50 

$40 

$30 

$20 

$10 

$0 

2005 2006 2007 2008 2009 2010 

Source: Economist, Standard & Poors, UNCTAD 



Outlook

Positive Outlook for Distress Investing 

• Current environment suits Brookfield’s style of investing 

• Our strategy and approach to distress investing gives us a competitive advantage 

• High quality assets are available in numerous global jurisdictions 

• Our investment teams are actively pursuing opportunities 



Q&A

Conclusion

The Opportunities Are Vast 

• Our core operating platforms are performing well 

• We are extremely well positioned in this environment to take advantage of growth 

opportunities 

• Our global platform opens doors inaccessible to others 

• We have a strong balance sheet, significant liquidity and dry powder to fuel our growth 

• Our funds and strategies are also performing well 

• We are increasingly seen as a leading alternative asset manager with a solid track record 

and a differentiating expertise in real assets 

• We have an outstanding team in place 

In-depth operating, restructuring and financial i expertise and years of experience 

working together 

• We remain very positive about the future 

169 



Q&A


INVESTOR 

DAY 

2011

Investing - Brookfield Asset Management

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