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Se tember 27 2011
DAY2011
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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
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Current Environment: Half Empty Half Full?
Macro Challenges Brookfield Opportunity
Well capitalized with significant drypowder
U.S. economy is shaky
Increasing client capital
Stable and growing cash flows
Stock, interest rate and currency
markets are volatile
Unparalleled operating platforms
Global footprint to reallocate capital
Credit crunch exists for some
where opportunities are best
Track record of investing througheconomic turmoil
for capital
Significant depth of restructuring
expertise
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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
e are cap a z ng on a remen ous num er
of acquisition and development opportunities
Our global footprint is expanding in a measured way
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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
$4 billion AUM
Asia & Australasia
$18 billion AUM
South America16 billion AUM
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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
e are e er a e o mee e nee s o our n erna ona c en s
It diversifies our cash flows
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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
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Investment Performance
Private Funds
Committed Capital(millions) Vintage Gross IRR1
ore us
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 inprivate funds, which in the aggregate reduce the actual returns experienced by an investor.
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Recognition as Leading Alternative Asset Manager
#1 ranked Global Real Estate Investment Manager byInstitutional 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)
(by Total Funds Raised1)
#9 Real Estate Fund Manager
#7 Real Estate Fund Manager(by Total Funds Raised1)
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1 Total funds raised in last 10 years
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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
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Brookfield 2012
Brookfield
28% 73% 100% 100%
Brookfield PrivateEquity Partners
BrookfieldProperty Partners
Brookfield RenewableEnergy Partners
(BREP)
BrookfieldInfrastructure Partners
(BIP)
Brookfield AmericasInfrastructure FundBrookfield AmericasInfrastructure Fund
BrookfieldReal Estate
Opportunity Funds
BrookfieldReal Estate
Opportunity Funds
Brookfield SpecialSituation Funds
Brookfield SpecialSituation Funds
+ legacy / nichefunds
+ legacy / nichefunds
+ legacy / nichefunds
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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 havecoming 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
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Expansion in Private Funds
2005 2011
Number of Fund Investors
Third-Party Capital ($ billions)
Number of Funds 5 21
Average Commitment ($ millions) 156 163
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High Quality, Diversified International Client Base1
Investors by Geography2
ana a
USA 42%
Asia15%
12%
Australia/New ZealandEurope &
Middle East
South America1%
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1 Includes Private Fund and Public Securities clients2 Based on dollars committed to Private Funds and Public Securities and Equity Strategies
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Role of Private Funds
We are placing considerable emphasis on establishing very large capitalization listed funds
w c w own a su s an a par o e cap a n our ma or us nesses
Private funds, however, will continue to be an important part of our business, for thefollowing 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
, ,
as well as selected niche strategies
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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 Brookfields
principal capital
Over 30 rofessionals worldwide committed to rovidin the
highest level of service to investors
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BusinessValue Creation
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Value Creation
We dont need Transformational deals to create value
#1 #2Operational Improvementsfor Revenue and Expenses
Incremental Expansion ofExisting Operations
#3#4
Re-financings toAcquisitions Surface Liquidity and
Reduce Costs
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Operational Improvements#1
Leased 4.4 million square feet of office space in
rs s x mon s
Accessed higher value markets for output from
renewable ower assets eneratin over 25 millionof incremental cash flow this year
Increased Brazil retail lease rates by 13% on renewals
Investing 30 million to double container capacity atUK 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)
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Acquisitions#3
Two Chilean toll roads $340 million
30 MW hydro facility in Brazil + $200 million
,
Two office towers in Australia +$250 million
75% interest in 1.8 million square foot office property in
Midtown Manhattan $520 million
,
St. Louis, MO
Timber and agricultural land acquisitions in ourBrazil Funds
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Re-financing to Surface Liquidity and Lower Rates#4
$4.5 billion of unsecured corporate borrowings
comp e e
$8.2 billion of asset specific financings completed,
>$2 billion of retail property mortgages
$3 billion of office ro ert mort a es
$1.5 billion of common share issuances
$900 million of equity/asset sales
$235 million of preferred share issuances
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InvestmentEnvironment
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Our View of the Investment Environment
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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
Construction company expansion
e are se ec ve y pursu ng acqu s ons
Completed tuck-in office property acquisitions at attractive valuations
but some public market assets trading at discounts
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Investment Environment Brazil and Chile
Like Australia, benefitting from incredible growth drivers from resource industry,
u a so rom s rong emograp c grow
Our established presence, together with less developed private investing market,
ives us a com etitive advanta e over man in ursuin ac uisitions
We continue to launch private funds targeting opportunities in a number of asset classes
Particular areas of interest 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
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Investment Environment Canada
Relative strength and stability of economy and capital markets has
resu e n ewer acqu s ons oppor un es
Focused on organic growth through
Very strong office leasing markets
Continued energy driven strength in Alberta residential business
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
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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 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 into quality assets that require refinancing and/or redevelopment activity
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
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Our size offers us opportunities most dont have
I E i E
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Investment Environment Europe
We have been building our presence in Europe for three years with few
ransac ons o a e, u wa ng or e r g oppor un y
While the ongoing sovereign debt crisis has created considerable paralysis, it has also created
ur enc and distress that roactive owners will have to res ond 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 abilit to ac uire on a value basis rovides a reater mar in of safet for investin in
continental Europe
Like always, the pay-offs could be significant but they are not without risk the number one,a uro rea -up
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L ki Ah d St P t f C ti d G th
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Looking Ahead: Strong Prospects for Continued Growth
Developments
Expanded & New Platforms
Client Capital Additions
Organic Growth
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Agenda
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Agenda
Key Themes
Financial Profile
Asset Management Update
Growth Potential
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Key Themes
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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 c cle businesses rivate e uit and develo ment will benefit from eventualU.S. recovery
Liquidity profile remains high numerous acquisition and development opportunities
Poised to reap meaningful returns from asset management contracts
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Three Interconnected Parts of the Business
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Three Interconnected Parts of the Business
Intrinsic Cash
Brookfield (LTM1) 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 andcorporate relocations
Manager
Services Principal Capital75%12%5%Intrinsic Value
Corporate 8%($33 billion total2):
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1 Last 12 months2 Includes corporate of $2.8 billion
Manager
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Manager
20+ private funds and 3 externally managed listed entities
LTM Performance:
(millions)Base Fees $ 189
Transaction and advisory39
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
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Financial Profile
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(billions)Brookfields
Invested CapitalClient
CapitalTotal
CapitalTotal
Assets+ =enewa e ower
Commercial Properties Office 6 16 22 40
Retail 4 5 9 37
n ras ruc ure
Development 3 2 5 15
Private Equity & Finance 2 18 20 22
25 53 78 148
Services 2
2 2
Corporate 2 2 4
Office 19%Renewable Power27%
7%
14%Retail
Private Equity
Brookfields Invested Capital($29 billion total):
| Brookfield Asset Management Inc.40
12%InfrastructureDevelopment
ServicesCorporate
5%10%
Cash Flow Stability Office
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y
(millions) 2010 2009 2008
Net operating income1 $ 1,053 $ 1,020 $ 997
% occupancy 95% 95% 97%
verage ne ren ps . . .
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
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Cash Flow Stability Power
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(millions) 2010 2009 2008
Revenues 1,182 1,036 1,079
Average realized price $ 80 $ 72 $ 79
ong- erm con rac s
Contract price $ 86 $ 75 $ 72
-
Total $ 29 $ 43 $ 50% of total revenues 2.5% 4.2% 4.6%
Average term of long-term contracts 13 years
1 Normalized or constant currency exchange rates and long-term average hydrology
o coun erpar y cre qua y
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Cash Flow Stability Infrastructure
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Q2 Q1 Q4
Net operating income1
Utilities $ 117 $ 113 $ 106
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
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Client Capital $53 Billion
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Other
(billions)
Funds Issuers
Securities
Entities Total
Renewable power $ 0.6 $ 1.7 $ $ $ 2.3
321
ommerc a proper es . . . . .
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
1 Private funds capital includes $8.1 billion of uninvested capital2 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)
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Average Fee Structure
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1
Carried Return2
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 funds2 Carried interest in Private Funds represents interest in excess distributions over invested capital; in Listed Funds represents interest in
distributions over redetermined hurdle
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Increasing Base Management Fees
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$50$300
$40$250
n
t2
$32$56
$36 $30
$150
200
rManagem
illions)
venues1
illions)
$189
$20
$100apitalu
nde($b
Fe
eR
($
$134 $131 $10$50
$0$0
2008 2009 2010 2011 LTM
Base Mana ement Fees Transaction & Investment Bankin Fees Ca ital under Mana ement
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1 Excludes capital under management in Other Listed Entities2 Transaction and Investment Banking Fees are activity based and include commitment fees, work fees, exit fees and advisory fees
Increasing Performance Revenue Streams
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$300
Significant upside opportunity as earlier vintage funds begin to earn carried interest
$250
$260
$399$200
nues1
ns)
$100
$150
FeeRev
($
milli
$65
$36$50
$6$22 $25
$0
2008 2009 2010 1H 2011
Realized Cumulative Unrealized
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1 Carried interest is generated by Private Funds, and Incentive fees generated by listed entity and public securities
Dry Powder
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We have $8.1 billion of un-invested capital allocations from our clients
UN-INVESTED CLIENT CAPITAL
$8.1 billion
Infrastructureand
Real EstateRenewable Power
$3.1$2.6
$2.4
Private Equity & Finance
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Long Contractual Life of Capital Under Management1
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Average remaining duration of invested capital for private funds of approximately nine years2
57% of fee-earning capital under management is subject to long-term lock ups
(10 years or permanent)
Time Period3 Private Funds Listed Issuers Percentage
10 Years 5.9 b - 25%
Permanent 1.6 b 6.2 b 33%
1
2 Weighted based on net annualized base management fee3 Time periods are measured from initial inception of a fund or account
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Outlook for Growth
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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 eventualDevelopment 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 increasesin client capital
$33.4 b $2,018 m
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Potential Values of Manager
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The potential value of manager based on 15x multiple of varying gross margins on various
(billions, except bps) Client Capital1
eve s o c en cap a s se ou n e o ow ng a e
Gross Margin2
$25 b $50 b $75 b $100 b
75bps 2.8 5.6 8.4 11.3
. . . .
200bps 7.5 15.0 22.5 30.0
1
2 Base fees and performance income less direct expenses
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Agenda
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Global Platform and Environment
Growth Drivers
Recent Growth Initiatives
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andEnvironment
Global Reach with Local Expertise
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EUROPE & MIDDLE EASTCANADAREAL ESTATE OFFICESNumber of Offices 30
Regional property teams dedicated to some of the worlds most dynamic & resilient markets
$1.6 billion RE AUM
34 RE Professionals
2,455 RE Employees
. on
44 RE Professionals
2,350 RE Employees
um er o mp oyees ,
U.S.
$59.6 billion RE AUM108 RE Professionals
3,545 RE Employees
BRAZIL
$8.6 billion RE AUM
27 RE Professionals5,045 RE Employees
AUSTRALIA & ASIA
$8.5 billion RE AUM
30 RE Professionals
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, mp oyees
Key Regional Investment Drivers
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North America
Market conditions provide attractive growth and consolidation opportunities
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
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
-
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,
markets
Key Regional Investment Drivers
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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
oc a m gra on con nues. e c ass now accoun s or over o e popu a on
Credit availability increasing with consumer credit defaults at historic lows
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Brookfield Property Platforms
O f h l l b ll bi i bli h d l f
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One of the largest property owners globally, combining established property platforms
and operational expertise with prudent investing
REAL ESTATE
$87 BILLION255 million square feet
BROOKFIELDPROPERTY PARTNERS
RESIDENTIAL &CONSTRUCTION SERVICES
OFFICE
37.0 BILLION
INDUSTRIAL
1.4 BILLION
MULTI-FAMILY
5.3 BILLION
RETAIL
34.2 BILLION
RESIDENTIAL
9.1 BILLION
CONSTRUCTIONSERVICES
OPPORTUNISTICFUNDS
125 properties88 million sq. ft.
DevelopmentPotential24 million s . ft.
Emerging assetclass for Brookfield
10,000 ownedapartments
47,650 manageda artments
180 regional malls165 million sq. ft.
Development
120,000 lotequivalents
64 million sq. ft.condo densit
Constructionworkbook of $8.7B
27 million sq. ft.under construction
BREOF I, IIRETIP/ProtocolBREF I, II
Office Properties
. .1 million sq. ft.
Incorporaes
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Brazil Retail
Residential
Brookfield Property Partners Advantages
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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
Unparalleled Operating Capabilities
88 million square foot office platform
165 million square foot retail platform
row ng mu - am y an n us r a p a orms
Global Scale
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Global operations
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Recent Achievements
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Office Leasing Pipeline
2011 has potential to be best leasing year in our history
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~4.4 million square feet leased through June 2011, with ~7 million square feet in seriousdiscussions
2011 has potential to be best leasing year in our history
Could result in an increase in NOI on an annual basis of $45 $50 million
Could improve lease rollover exposure through 2016 by 12%
8,000
10,000
12,000
are
feet
-
2,0004,000
6,000
000's,squ
2007 2008 2009 2010 2011E
Leasing to Date Serious Discussions
(000s, 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%
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Australia 335 500 835 99.3% 99.8%
Total 4,443 7,000 11,443 93.3% 95.2%
Office Market Rent Upside
Mark to market opportunities support NOI growth
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Average in-place rents across the portfolio are 20% lower than comparable market rents
Mark to market opportunities support NOI growth
$50
$55
$60
$65
Rents by MarketRents by Market
$25
$30
$35
$40
$45
$20
United States Canada Australia
In Place Market
(US$)
In-PlaceNet Rent
MarketNet 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%
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Office Recycling of Capital
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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
Sellin assets where we have maximized value Targeting, on a conservative basis, minimum unlevered returns of 8% and levered
returns of 12%
US millions Total Bu ers Total BrookfieldsProperty Market
Amount IRR1
Equity
IRR2
Dispositions
Completed U.S. (3) $ 595 8% $ 240 47%
arge e us ra a, . . ,
Total $ 1,695 8% $ 820 29%
Acquisitions
, . . ,
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
| Brookfield Asset Management Inc.65
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
Office Active Development Pipeline
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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
1 Targeted yield on cost of 8% - 10%
Targeted levered IRRs of 15% - 20%
(millions) Sq. Ft.
City Square South Perth 345
Manhattan West New York 5,400
Bay Adelaide Centre Toronto 900
Herald Block Cal ar 1 200
Other 1,000
Total 9,795
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1 Assumes a 50% equity partner in Manhattan West
Multi-family Strong Demand
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Actively pursuing organic and acquisitive growth strategies to capitalize on strong demand for
mu - am y asse s
Recently closed on approximately $1 billion of core-plus and development properties
Nine new construction projects with total project costs of more than $700 million
. - -
Leveraging Fairfields operating expertise to pursue other multi-family portfolios and
o eratin latforms
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1 Reported on stabilized assets
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Recent Achievements
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GrowthInitiatives
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Mathrani
Agenda
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Overview
Financial Review
Portfolio Operations
ap a ruc ure
Conclusion
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Current Strategic Focus
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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
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High Quality, Nationally Diversified Portfolio
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GGP Malls Portfolio: 136 malls / 57.7 million square feetALA MOANA CENTER
Honolulu, HI
,Occupancy: 98.4%
FASHION SHOW MALL
Las Vegas, NVa es : ~
Occupancy: 96.6%
TYSONS GALLERIA
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Note: Includes only U.S. regional malls. Excludes Rouse Properties, Office, Strip, and Special Consideration properties
,Sales PSF: ~$800
Occupancy: 91.6%
Current Portfolio Composition1
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No. of Total Mall & % % of n t ousan s ropert es reestan ng ease
GGP Malls 136 136,930 57,724 93.3 89.6
Rouse Properties 30 21,067 9,085 87.7 7.1
Post Rouse PropertiesSpin-off = 97% of total
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
Office 26 2,748 40 64.2 1.0
Total 222 168,507 72,472 91.9 100.0
-months
1 Information presented as of / for the six months ended June 30, 2011, except % of NOI based on trailing 12 months ended June 30, 20112 Gross Leasable Area (GLA): Total gross leasable space at 100%3 Total in-line mall shop and out-parcel retail locations
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Review
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Operations
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Strong Improvement in Tenant Sales Trends
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Tenant sales are nearing the 2007 peak, with GGP Malls approaching $500 per square foot
Sales growth has outpaced rents. Assuming last years 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
$484$488
$480
$500
$446
$457
$465
$449 $450
$458$460
alesP
SF
Peak sales $471 PSF including Rouse Properties (2007)
$419
$426$430
$437$438
420
$440
omparativeS
$400
Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11
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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
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2011 Leasing Done, Good Progress Towards 2012 Targets
Th i li ibl i i 2011 l i ti
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There is negligible remaining 2011 lease expiration exposure
For 2012, approximately one-half of the lease expiration exposure has been addressed
6.3
6.0
7.0
Expiring Lease Exposure 2011-2012
~250 K4.0
5.0
t(inmillions)
2.3remainingexposure
~ 50%
2.0
3.0
SquareFee
-
.
July 2011 - Dec 2011 2012
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pprove ommencement ema n ng xp rat ons
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Structure
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Key Take-Aways
Lease, lease, lease
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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
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Overview of Infrastructure Business
Brookfield Infrastructure Group is a global asset manager
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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 inNorth and South
$3 billion
Diversified port, rail and
ener o erations in
$4 billion
2.6 million acres of
hi h ualit timberlandsAmerica, Europe andAustralasia
North America,Europe and Australia
in North and SouthAmerica
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on o
Overview of Infrastructure Business contd
Financial results reflect strong year-over-year growth Operating Cash Flow
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Driven by acquisition of Prime Infrastructure
80% of cash flow is contracted or regulated
$106
$100
$120
US$ millions
Investment initiatives to date have been extremely successful
$64
$40
$60
Investors are attracted to strong current yield
$-
$20
H1 2010 H1 2011
EntityTicker
Symbol1-YearReturn
3-YearReturn Yield
Brookfield Infrastructure Partners L.P.
~
BIP 67% 16% 5%
As at June 30, 2011
Brookfield Americas Infrastructure Fund$2.7 billion private infrastructure fund
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 borne by investors in
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private funds, which in the aggregate reduce the actual returns experienced by an investor.2 Annualized as at December 31, 2010
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Stability
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Utilities Highlights
$1.1 billion of refinancing in H1 2011, taking advantage of low interest rate environment
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Operation Refinancing
Australian terminal operations $600 million financing, 9/12-year U.S. privateplacement
S.A. electricity transmission operations $305 million loan, 18-year (avg) local bond offering
operations
, . .placement
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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
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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
Annual units (millions)18
China: Annual Housing Starts
8
10
12
14
0
2
4
6
1 7
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`9 `9 `0 `0 `0 `0 `0 `0 `0 `0 `0 `0 `1`11
Year
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Growth in Utilities
Brookfield has highly attractive growth opportunities in its utility project pipeline of $1.4 billion
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ImmediateOpportunities
North AmericanTransmissionAcquisition
TexasTransmission
Project
330 MW, 39 km transmission cablesserving Long Island
Regulated revenue framework
Partnership to build, own and operate~ 600 km of transmission lines in Texas
Closed $580 million construction financing
Capacity contracted for 30 years, indexedto inflation
Acquired in August 2011 for $188 million
Construction of $750 million project tocommence early 2012
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Growth in Utilities Spotlight on Australia Coal Terminal Expansion
Land located 4 km north of Brookfields existing Australiancoa erm na opera ons
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Brookfield named as one of two preferred proponents
Current terminal
Expansion
capacity of 150 Mtpa1
Undergoing land allocation process
Brookfield has received access requests for 162 Mtpa
Long Term
-Timing: Targeting early 2017 for first coal shipments
Costs: Development costs estimated at A$5 billion
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1 Million tonnes per annum
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Growth in Transport & Energy Spotlight on Brookfield Rail
14.5 Mtpa of further potential volume growth from existing customers
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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 infrastructuredevelopment
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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
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pp y g gavailable 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
2,500
U.S. Housing Starts
In thousands
0
500
1,000
1,5002,000 Average
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1990 1995 2000 2005 2010
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Acquisitions Strategy
Utilities
Acquire businesses within current franchise areas andUtiliti
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Acquire businesses within current franchise areas andgeographical footprint
Utilities
T&EEstablish new operating platforms(i.e., toll roads, airports, storage facilities)Transport
& EnerPursue value opportunities in distressed markets
Timber
Focus on emerging markets and government privatizationsTimber
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Recent Acquisition Chilean Toll Roads
Brookfield consortium acquiring majority interests in two toll roadsor m on
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Direct result of European outreach program
Attractive investment key arteries in Santiagos urban roadway Rapid economic growth in Chile in last 20 years
Metropolitan region represents 48% of total GDP1Autopista Vespucio Norte (AVN)
Cash flow growth from above inflation tariff increases and
excess road capacity
arge e o genera e evere , a er- ax re urns o -
Expected to close in fourth quarter, subject to third-party consents
Tunel San Cristobal (TSC)
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1 Instituto Nacional de Estadisticas
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Priorities
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Renewable
Power Business
One of the Largest Pure-play Renewable Platforms
4,800 MW of installed capacity1
Primarily hydroelectric, the highest value renewable asset
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y y , g
,
67 river systems across 10 markets in 3 countries
Predominantly Hydro Profile2 Portfolio Well-Balanced to Core Markets2 Strong Regional Diversification2
Generation by Market
More than 18,000 GWh
Generation by Technology
4,800 MW
Generation by Region
67 river systems
Brazil20%
BC
Ontario
Brazil South
Brazil Southeast
Brazil Midwest
Wind10%
Other 4%
40%
U.S.40% Qubec
New York
NewEngland
Louisiana
Hydro86%
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California
U.S. Midwest
1 Includes 400 MW of projects under construction 2 Assumes long-term average generation
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Stable, High Quality Cash Flow
Stable cash flows Approximately 80% of 2012 generation is contracted with PPAs andsuppor e y g ycontracted
nanc a con rac s, m ga ng pr ce r s
PPAs have 13-year average duration with highly creditworthy
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portfolio PPAs have 13-year average duration with highly creditworthycounterparties and built-in inflation adjustments
Significant diversification and water storage in North America
No material hydrology exposure in Brazil
21%Uncontracted
41%
11%
Government
Financial Contracts
19%
8%
Distribution Companies
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Industrial & Retail
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Drivers and
Outlook
Power Markets Key Drivers
Gas markets in Shale gas production creating ongoing surpluses in North Americaor mer ca
will continue to beoversupplied through
Lower gas prices continue to push electricity prices to cyclical lows
Gas prices expected to increase with need to invest new capital in
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oversupplied through2012
p p pshale operations
Key drivers for Wide acceptance of need to reduce carbon footprint on a global basis
growth remainstrong
gn can ssues w compe ng ec no og es coa nuc ear
Strong need for energy self sufficiency driving renewable policy
Emerging marketsin LATAM need new
Brazils strong economic growth continues to drive demand
Ex ect dela s in commissionin of lar e scale h dro ro ects
supply to meet strongdemand growth
Policy is pushing diversification of supply base to biomass and wind
Fundamentals continue to be very strong in Brazil and other emergingmarkets in the region
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Outlook for 2012-2016 in Our Core Markets
Canada Renewable programs may experience short-term political pressureressure o con a n
rate increases Growth will continue to be driven by need to replace aging infrastructure
Incentives will continue to be in the form of long-term contracts
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Major regional differences: role of gas likely to increase in British Columbia,so ar expec e o come own n n ar o, ransm ss on u -ou n ue ec
expected to export renewable power to U.S. markets
Pace of renewable capacity additions expected to rise with increasingUnited States
Gas prices expected to increase to sustainable levels by 2013-2014
Expect need for baseload capacity by mid-decade, and will likely berenewables or as fired facilities
sustainable gasprices
Wild cards are: form of renewable incentives; growth of U.S. economy;and timing of plant retirements
Perfect stormin 2014
,investments expected to support 2014 Soccer World Cup, 2016 Olympics
Expecting significant delays in supply pipeline (large hydro and wind) andtightening reserve margins in 2013-2014
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Wild cards are use of gas in supply mix (LNG or other imports) and growingmiddle class
1 Renewable Power Standards
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and Opportunity
Growth Strategy
Our goal is to double our renewable power portfolio over five years
Markets with High value regional markets with strong barriers to entrya rac ve ynam csand high barriersto entry
United States: West coast and East coast markets
Canada: primarily in Ontario, British Columbia and Saskatchewan
Bra il So thern states dri ing the co ntr s gro th
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y Brazil: Southern states driving the countrys growth
Highest value,longest-life
Maintain predominant hydroelectric focus
Wind in markets where the resource has high scarcity and terminal valuerenewa etechnologies
Arbitrage build
Add renewable technology which complements current portfolio
Flexibility and expertise to invest across the spectrum of development,or uy ooptimize returnson capital
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 globalBrookfield platformin transaction
Leverage Brookfields global reach to secure transactions
In the next five years, secure acquisition of scale portfolio or platform
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outreach program ene o roa er ransac on exper se res ruc ur ng an cap a mar e s
Projects Under Construction
We continue to make progress on seven construction projectsA significant part of our
Projects are on scope, schedule and budget
Adds 431 MW or about 10% to our overall portfolio
grow nwill be from projects tobe commissioned
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dds 3 o about 0% to ou o e a po t o o
.
ProjectCapacity
(MW)Generation
(GWh) LocationCommercial
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
Wind
Comber Wind 166 535 Ontario Q4 2011
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Coram 102 264 California Q1 2012
Granite Reliable 99 275 New Hampshire Q4 2011
Development Pipeline
Positioned to acquire, build and integrate additional third-party projectsBrookfield will continue
2,000 MW pipeline of organic development potential
Hydro wind and pumped storage opportunities
o oo or a e s ageopportunities or willbuild out our project
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Hydro, wind and pumped storage opportunitiespipeline
Opportunities in each core market provide for development flexibility
Hydro Wind Pump Storage Total
Development Pipeline (MW)1
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
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Brookfield Approach Granite Reliable Wind
Acquired majority interest in 99 MW wind project from a distressed seller (Q4 2010)
Leveraged Brookfields restructuring expertise and resources
U S power platform completed remaining development activities
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U.S. power platform completed remaining development activities
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
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Combination ofRenewable
PowerBusinesses
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Relationship with Brookfield
BREP will benefit from the continued sponsorship and management of Brookfield
Continue strong BREP will be Brookfields primary vehicle through which it willrelationshipwith Brookfield
acquire renewable power assets on a global basis
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roo e w e e
Managing GeneralPartner of BREP
anag ng genera par ner w e a w o y-owne su s ary o
Brookfield
Brookfield will be entitled to incentive-based distributions providing
provideasset managementservices
led the renewable power business since the 1990s
Brookfield will provide services relating to the origination ofac uisitions, financin s and oversi ht of the business
Brookfield will be entitled to receive a base management fee of$20 million plus 1.25% of future increases in total capitalization1
| Brookfield Asset Management Inc.140
1
Market capitalization, recourse borrowings and preferred equity
Key Commercial Agreements
Brookfield retains New PPA for New York generation will cover 3,500 GWh annuallyu ure ups e andownsideon energy prices
$75/MWh escalated annually at 40% of inflation
25 years with 20-year extension
Th h th E k ti t BAM ill ti t k t
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Through the Energy marketing agreement, BAM will continue to marketBREPs energy portfolio
Profile
8% New U.S. PPA1
55%
26%
11% Brookfield
Governments
Industrial & Retail
1 Incremental PPA provided by BAM for U.S. portfolio at $75/MWh
Existing Fund PPAs2
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roo e w re a n prev ous y ex s ng s prov e o e un w c are pre om nan yoffset with third-party contracts
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Transaction Benefits
Establishes a global flagship vehicle well positioned to grow on a global basis
The combination provides numerous benefits to Brookfield
Enhances liquidity and access to capital for the renewable business
Provides competitive cost of capital and currency to grow in this sector
Li ti th N Y k d T t t k h
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Listin s on the New York and Toronto stock exchan es
Simplifies corporate structure and expands BAMs 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 ro osition with res ect to future ower rices
BAM retains 73% ownership and same economic interest
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Priorities
Priorities for 2012
Drive financial
Long-term dynamics for renewable power remain favourable
Deliver on BREPs financial expectations including $1.1 billion in EBITDAan opera ngresults of BREP
Maximize value of asset flexibility and manage costs
Secure long-term contracts for un-contracted volumes if long-termprice is attractive
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Deploy capital tohigh quality, high valueopportunities in the
Develop inventory of top acquisition targets and opportunistically executeon transactions
renewable power sector
Deliver construction programs on scope, schedule and budget
Advance development projects and begin construction of 45 MW hydroro ect on Kokish River in British Columbia
Implement effectivefunding strategies to
Launch BREP and promote awareness of it as the leading pure-playrenewable ower business on a lobal basis
maximize financialflexibility and minimizecost of capital
Achieve listing on the New York Stock Exchange for BREP
Strategic refinancing of project debt to enhance returns and minimize risk
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Agenda
Private Equity & Distress in Profile
Case Studies
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Private Equity in Brazil
Distress Investing Environment
Conclusion Outlook
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Private Equity & Distress Investing Overview
25 Professionals inPrivate Equity &North America
s ress nves ng roup
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$8 billion AUM Sourcing opportunities
Transaction execution
Private Equity Real Estate Infrastructure Renewable Power
Funds DirectInvestments
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A Strong History of Distress Investing
Over three decades of distress investing and operational turnarounds
armaCorporationResidential landdeveloper
Development Co.Commercial realestate developer
1980s
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O&Y (US) Inc.Commercialreal estatedeveloper
CatalystEnergyUtility holdingcompany
NorthgateMineralsGold miningcompany
TriathlonLeasingCanadas largestlessor of fleet vehicles
GentraMortgage lender1990s Royal LePageCommercial andresidential brokerage
Concert IndustriesGlobalmanufacturer of
QueenswayFinancialProperty and
WesternForestProducts
StelcoLargediversified
LongviewFibreIntegrated
MAAXProductsManufacturer
Criimi MaeFull servicecommercial
HammerstoneCorporationIndustrial
2000s
-fabrics
forestproductscompany
producer
company
of bathroomfixtures andspas
company
company
Prime (BBI)Global utilities,and transportationinfrastructure
GGPPremier retail shoppingmall portfolio
2010 >
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Case Study: Armtec Infrastructure
Investment Type $125 million senior secured loan
Business Overview
Manufacturer of pre-cast concrete, steel and plastic pipe products
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End markets: infrastructure, commercial and residential
construction
47 manufacturing and sales facilities across Canada$80
$100
($millions)
o mar e con ons com ne w opera ona c a enges
resulted in substantial but temporary impairment to earnings
Investment Thesis
$30
$20
$40
$60
ep acemen o an en er group an opera ng sc p ne
are expected to return the company to historical profitability
Seven-year warrants provide upside if company outperforms
0
2009EBITDA
TTMEBITDA
1
1 Trailing 12 months
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
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Target Return: 25%
Case Study: Ember Resources
Investment Type $50 million initial equity investment
Business Overview
Financially distressed natural gas producer focused
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on coal bed methane and shallow gas in central Alberta
Extensive land holdings include 435 net producingwells and long-life gas reserves
highly depressed natural gas prices
Investment Thesis nanc a s ress ena e roo e o par ner w pr nc pa s are o er o a e e 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
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Case Study: Longview Fibre Paper & Packaging
Investment Type $114 million equity investment to acquire 100% of operations
Business Overview
Washington State-based producer of Kraft paper and
i t t d f t f t d t i
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integrated manufacturer of corrugated containers
One million ton pulp/paper mill and seven containerboard plants
Poorly managed with low productivity
Investment Thesis
Acquisition price represented working capital value only
Reduced headcount by over 700 (30%) and focused Asset ValueEnhancements
LongviewValue Creation Summary
OperationalImprovements
on high margin products
Preserved a $130 million pension surplus by revising
the allocation of fund assets from equities to bonds
69% 31%
.
generated $550 million in proceeds to-date Excellent sale candidate given recent industry consolidation
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Other Distress Investments
Real Estate
We assist our operating platforms to execute on distress opportunities
Fairfield Residential
Recapitalization of a best-in-class integrated asset
manager focused on multi-family development and services
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450 West 33rd Street
Recapitalization of sponsor in return for 75% ownershipFairfield Residential
.
Legacy Office Vehicles
.
of office space
Infrastructure
Cross Sound Cable
Acquisition of a 330 MW electrical transmission cable
Cross Sound Cable, New England
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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
f
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Fifth most populous and second youngest country among the worlds
10 largest economies
Demographics, stable democracy and developing credit markets
support increasing income and expenditure on discretionary items
Current rowth is stron and ex ected to continue over the lon 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
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Private Equity in Brazil
Brookfield is well positioned to generate proprietary investment opportunities and executegrow n a ves w n our us nesses
Targeting opportunities in growth sectors with simple and scalable business models
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Financing for organic growth, modernization and acquisitions
Ability to create value by solving strategic operational, financial and governance
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
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InvestingEnvironment
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Distress Investing Environment Europe
Sovereign default risk significant concern with INDEX PERFORMANCE
INDEX PERFORMANCEg o a mp ca ons
Weak economic data in Europe has added to
negative sentiment German economy grew by100
125
150MSCI Euro MSCI EUR Bank
on y . n
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Bank liquidity risk remains a concern with
regulators failing to address market fears 50
75
- - - - - Recent bank trading values and corporate
and high yield spreads have weakened
substantially
Source: www.oanda.com, CapitalIQ, Economis t
BOND SPREADS BOND SPREADS
Opportunities for distress across sectors, but
particularly those dependent on bank financing
Potential bank asset sales represent 1500
2000Euro bb-b non-financial f ixed and f loating rateEuro non-periphery non-financial
Brookfield is very well positioned to pursue
distressed real estate and infrastructure0
500
1000
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1/4/2008 1/4/2009 1/4/2010 1/4/2011
Investing China
China continues to experience strong growth DEX PERFORMANCE
INDEX PERFORMANCE
an s expec e o e e wor s arges economy
within 10 years
Government leaders have mandated slowin100
125
150MSCI China China RTO
growth and inflation75
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growth and inflation
Banks to reduce growth in loans on real estate 25
50
Stock markets have declined over past 12 months
Several Chinese companies with North American
-
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11
in valuation amid governance concerns
$US debt markets for many Chinese issuers have closed
Potential opportunities to assist liquidity constrained companies in industrieswell known to Brookfield
| Brookfield Asset Management Inc.163
Investing Environment India
High growth economy with favourable INDEX PERFORMANCE
INDEX PERFORMANCE
emograp cs, nves men gra e sovere gn ra ng
and developing capital markets
Interest rates have risen over the last 18 months 7585
95
105
n response o very g n a on 65
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Bank lending has tightened markedly, particularly
in real estate, in response to Reserve Bank of India
55Dec-10 Feb-11 Apr-11 Jun-11 Aug-11
Sensex NSE Inf ra NSE Realty
requirements
Economic growth has slowed and stock markets
have weakened
FOREIGN DIRECT INVESTMENT INFLOWS ($BN)
$40
$50
FOREIGN DIRECT INVESTMENT INFLOWS ($B)
Market weakness exacerbated by foreign capital
outflows and investor concerns around governance
and corruption $10$20
$30
Potential opportunities for Brookfield ininfrastructure and real estate in a liquidity
constrained environment
Source: Economis t, Standard & Poors, UNCTAD2005 2006 2007 2008 2009 2010
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Positive Outlook for Distress Investing
Current environment suits Brookfields style of investing
Our strategy and approach to distress investing gives us a competitive advantage
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High quality assets are available in numerous global jurisdictions
Our investment teams are actively pursuing opportunities
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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
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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 increasin l seen as a leadin alternative asset mana er with a solid track recordand a differentiating expertise in real assets
We have an outstanding team in place
In-depth operating, restructuring and financial expertise and years of experience
working together
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DAY
2011
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