bam brook field asset management june 2009 presentation

8/14/2019 BAM Brook Field Asset Management June 2009 Presentation

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Brookfield Asset Management Inc.

Focused on Property, Renewable Power and Other Infrastructure Assets

Brookfield Asset Management Investor Day

September 15, 2009


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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 meaningof 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, build, maintain, expand, opportunities, will, stable, contracted, expect, believe and should, derivations thereof and other expressionsthat are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements. We may make suchstatements in this presentation, in other filings with Canadian securities regulators or the Securities Exchange Commission (SEC) and in other communications. Theseforward-looking statements include, among others, statements with respect to our financial and operating objectives and strategies to achieve those objectives; our ability togenerate going concern values from our assets; our views on the intrinsic value of our business and the shares of the company;acquisition and growth opportunities in thereal estate, renewable power and infrastructure sectors; our future operating performance, earnings and cash flows; the effects of IFRS on our financial statements in thefuture; our currency and interest rate views; our outlook for the renewable power market in North America and Brazil; growth targets for our renewable power business; ouroutlook for the office, retail and residential real estate sectors; our outlook for the transmission and timber sectors as well as the overall infrastructure sector; and otherstatements 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 arebased upon reasonable assumptions and expectations, investors and potential investors should not place undue reliance on forward-looking statements and informationbecause they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially fromanticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. Factors that could cause actual resultsto differ materially from those contemplated or implied by forward-looking statements include: economic and financial conditions in the countries in which we do business;the behaviour of financial markets including fluctuations in interest and exchange rates; availability of equity and debt financing for the company and its affiliates; strategicactions including dispositions; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits; our continuedability to attract institutional partners to invest in our funds; adverse hydrology conditions; tenant bankruptcies; recovery of timber markets; regulatory and political factorswithin the countries in which we operate; acts of God, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments including

| Brookfield Asset Management Inc.2

terrorist acts; and other risks and factors detailed from time to time in the companys form 40-F filed with the Securities and Exchange Commission as well as otherdocuments filed by the company with the securities regulators in Canada and the United States including in the companys mostrecent year end Management Discussionof Financial Results under the heading Business Environment and Risks.

We caution that the forgoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions withrespect to Brookfield Asset Management and its affiliated, 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 maybe as a result of new information, future events or otherwise.

Currency

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

Agenda

Overview Bruce Flatt

Real Estate Ric Clark

Infrastructure Sam Pollock

Financial Review Brian Lawson

Closing Remarks & Q&A Bruce Flatt


Tour of Bay Adelaide Centre Bob MacNicol

Reception


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Overview Bruce Flatt

Brookfield TodayA global asset management company with over $80 billion of AUM


Property Renewable Power Infrastructure


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A Global Asset Manager

Long-term, value-oriented investor

100 years of experience investing, operating and managing high quality assets

globally

Substantial capitalization $20 billion permanent equity capitalization

Sponsor and manage 20 private equity funds and partnerships since 2001 with

capital commitments of ~ $19 billion

Manage ~ $20 billion of public securities for clients

Positioned to offer specialty investment products to clients


STOCK EXCHANGE LISTINGS

NYSE, TSX, EuronextTicker: BAM, BAM.A, BAMA

SOLID RATINGS

DBRS: A(low) Moodys: Baa2S&P: A- Fitch: BBB+

Focused Global Reach

Operating locations


50 offices or locations 400 investment professionals 14,000 operating employees


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Business Strategy Long Term Objectives are Unchanged

Build and maintain best-in-class operating platforms

Own high quality assets through leading operating platforms that generate high

levels of sustainable free cash flow

Finance assets on a conservative, long-term basis, with limited recourse to the

corporation

Maintain high level of financial liquidity and operational flexibility to capitalize

on growth opportunities

Expand and foster strong client relationships


Brookfield Resilient During Last Two Years

Global markets were highly capital constrained and many businesses faced

significant operating volatility

However, Brookfield was able to finance over $10 billion of debt, continued to

generate ~ $1.5 billion of annual free cash flow and invested over $2.0 billion

opportunistically to increase future cash flow per share growth

This was possible because

Revenue streams in our core businesses are largely contracted to providestable cash flows


sse s pr mar y nance on non-recourse as s, suppor e y ransparencash flows

Overall leverage is 15% on a deconsolidated basis and 44% on a proportionalbasis providing ample equity support during volatile times

Majority of our assets are readily monetizable for value, ensuring that we canreallocate capital into higher return opportunities


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Moving to 2010 and Beyond

All of our major businesses have performed as expected

Our franchise, with institutions and financial counterparties, is better than ever

The investment environment favours better returns than normal


Acquisition Opportunities

Over $3 billion of our own liquidity and $7 billion of third-party capital to invest

in potentially higher-yielding opportunities

We are well positioned to pursue major acquisition opportunities

Strong global relationships and reputation as a reliable sponsor and counterparty

Breadth and depth of operating platforms

Well established and experienced investment teams



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Current Opportunities

Acquiring high quality assets that are being sold into illiquid markets due

to financial distress

Utilizing strength of operating platforms to capture new businesses and

build value

Expanding institutional relationships by demonstrating strong relative

performance of our strategies through the recent turmoil


Institutional Relationships are Growing

~ $20 billion of public securities are managed for clients

e currentl have 20 rivate funds and investment ro rams with ~ 19 bil lion

of commitments with 60 institutional investors

Our investment strategies align well with needs of institutional clients

Moderate risk, higher yield, maximum visibility, real returns

Pension funds and institutional clients are re-establishing investment programs

Brookfield represents an attractive manager


e cap a ze Leading operating platforms

Strong governance and transparency

Alignment of interests due to Brookfields own capital commitments in funds


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Recently Announced Initiatives

$5B Real Estate Turnaround Consortium

International pension funds and sovereign wealth funds

Allocations of $300 million to $1 billion

Global focus with emphasis on North America, Europe and Australasia

C$1B Debtor-In-Possession Fund

Economic Development Canada, CIBC and Sun Life

Focus on Canadian companies and U.S. subsidiaries


$400M Colombian Infrastructure Fund

Colombian institutional investors Focus on Colombian infrastructure

Largest private equity and infrastructure fund in the country


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Renewable Power Richard Legault

Agenda

Overview of Portfolio

Priorities

Market Dynamics and Outlook

North America

Brazil

Operating Profile Positioned for Growth


Conclusion

Q&A


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Renewable Power Overview

One of the worlds largest privately-held hydro portfolios $12 billion*

3 countries: United States, Canadaand Brazil

4,150 MW total installed capacity

63 river systems

9 power markets

~1,000 employees

4,150 Installed Capacity (MW)

63 River Systems

9 Power Markets

~1000 Employees


* Indicative value derived for IFRS purposes

Growth potential through

development pipeline

and acquisitions

Renewable Power Overview

Low operating costs provide sustainable

cost advantage

Well positioned in current market with high quality assets

Simple, proven and highly reliable technology

High barriers to entry; difficult to replicate

Long-life assets with minimal capex

Reservoirs provide flexibility to capture

premium pricing


Zero carbon emissions

Well positioned to realize asset value appreciation

over time as gas and carbon prices riseMcphail, Ontario 13 MW


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Priorities


Priorities

Operations

Deliver power to highest-value markets through secured transmission rights

Continue to optimize portfolio and maximize revenues by generating during

peak demand

20% premium to market prices based on prior years track record

Maintain operating costs at current level

Manage our capital programs on schedule and budget

Securing Value for Shareholders


Continue to expand our renewable platform Expand Brazil renewable generation portfolio

Continue to build on North American platform

Increase long-term contracted profile

Generation development in Canada, U.S. and Brazil supported by contracts

Contract current merchant portfolio in Ontario, Quebec and New York


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Market Outlook Key Drivers in North America

Reducedindustrial activity

Supply responseto reduced

Outlook for2010-2011

Decrease in demand

15% - 20% in North

America

Gas surplus of

2-4 Bcf/d

Significant reduction in

new investments in gas

production

Short-term gas prices

decreased but longer

erm forward rices not

Load growth expected to

return with economy set

to recover in 2010

Reduced exploration and

drilling in 2009 will reduce

roduction of natural as


storage

Lower gas and

electricity prices

impacted as significantly

$7-$8/MMBtu required to

stimulate new invest-

ments; $10-$12/MMBtu

to attract LNG supply in

mid to long-term

for next 12-18 months

With more balanced gas

market in 2010, gas and

electricity prices are

expected to recover

Bcf/d = billions of cubic feet per dayMMBtu = millions of British thermal units


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New power plants needed in northeast North America

Market Outlook Gas Prices and Power Market

15,000 20,000 MW needed annually

for load growth, post recessionForward Prices vs. CCGT(1) All-in Cost

$/MWh

Shut-down of ageing plants

(400,000 MW of capacity 30 years or older)

Current recession will either delay

requirement for new capacity or

accelerate shutdown of older plants

Prices need to rise to between

$40

$52

$60

40

60

80

100 New England (Mass Hub)All-hours Forward Prices

Energy Only

$108

$8 Gas

$10 Gas


$95-$110/MWh in the northeast to

support construction of new gas-fired

facilities 0

20

2009 2010 2011 CCGT All-inCost

Fuel Cost (Henry Hub)Capital CostFixed Opex

Variable OpexCarbon Cost

(1) Combined cycle gas turbine

Market Outlook Impact of Carbon Legislation

CO2 cap-and-trade likely to be implemented in U.S. and Canada in next few years

-- . .

be challenging

Congress estimates carbon price of about $14/t in 2012 and $32/t in 2020

CO2 prices to increase cost of dispatch of oil, gas and coal-fired plants

Power price estimated to rise in northeast by $4/MWh for each $10/t carbon price



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Market Outlook Key Drivers in Brazil

Demand was lessimpacted than in

Market willremain very tight

Outlook for2010-2011

Industrial demand

impacted by

recession: drop of 11%

in first half of 2009

Residential and

Large hydro projects

have long lead times

and are insufficient to

meet demand

Critical need for

Economic recovery leads

to resumption of 4-5%

annual electricity demand

growth (4,000 - 5,000 MW)

Increased use of thermal


resilient: demand

growth of more than

5% in same period

resulting in build-out

of short lead time oil

and gas-fired plants

will drive power prices

higher

Hydro facilities remain

the low-cost choice for

new supply

Market Outlook New Build Costs in Brazil

Small hydro facilities receive a significant premium to larger hydro facilities

Users of power generated from small hydro facilities are eligible for a rebate for part ofheir transmission and distribution char es

120

140

160

180

Trend Line

Upward pressure on system costs, leading to power prices rising faster than

inflation

Current prices support new build of small hydro

Results of Hydro and Biomass Energy Auctions


0

20

40

60

80

May-05 Oct-06 Feb-08 Jul-09 Nov-10

R$/MW

Auction Date

Source: CCEE (Cmara de Comercializacin de EnergaElctrica - Brazil's Electric Energy Commercialization Clearing House)


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Operating Profile Positioned for Growth


Operating Profile

Stable cash flows and increasing operating margins

Contract profile provides downside protection

y o cons s en y genera e prem um revenues rom un-con rac e asse s

Low and stable operating costs and no need to purchase fuel to generate

Benefits from rising electricity prices driven by increasing cost of fuels and

carbon compliance cost

Long-term capital re-investment program to maintain assets and capture

incremental generation opportunities

($ / megawatt hour) 2004 2005 2006 2007 2008 2009E(1)


(1) 2009E based on results to June 30, 2009 and assuming long-term hydrology and committed power prices for balance of year

Hydroelectric generation (MWh)Realized price $ 65 $ 66 $ 67 $ 71 $ 77 $ 69

Operating costs (20) (20) (18) (22) (21) (19)

$ 45 $ 46 $ 49 $ 49 $ 56 $ 50


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Operating Profile Current Hydroelectric andWind Contract Profile

76% of LTA generation is under contract or hedged in 2010 and >45% contracted

long term

80% of contracted revenue is with investment-grade counterparties

Opportunity to capture value from un-contracted generation as energy prices rise

2010 2011 2012

Generation (GWh)

PPAs(1) 7,372 6,887 6,125Financial Contracts 3,276


n-con rac e , , ,

14,297 14,340 14,335

% Contracted 76% 48% 43%

Price ($/MWh) $ 75 $ 79 $ 83

(1) Power Purchase Agreements

Operating Profile Storage Flexibility

Generation not sold under a long-term contract is sold in the wholesale power

markets in northeastern North America

Value of water storage and asset flexibility

Medium-term hedges typically protect pricing on majority of un-contracted power

In addition to earning energy revenues, our un-contracted assets generate:

Annual Revenues(1)

~$100 million

PeakingPremiums

Maximizing value of storageto generate in highest

price hours


(1) Based on average realized ancillary revenue from 2006 - 2009

per year or+/- $14/MWh

AncillaryRevenues

Providing services to gridoperators such as voltage

support, capacity andspinning reserves


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Operating Profile Sensitivity Analysis

We have significant leverage to increasing power prices with a low-cost position

that protects us from downside risks

Opportunity to capture value with rising energy prices

ase u y

Volume(1) Price(2) Total

Sensitivity$1/mmbtu or

$7/MWh

(TWh) ($/MWh) ($millions) ($millions)

Hydroelectric and wind

Revenue

Contracted generation 6.9 80 552

Un-contracted generation


ea ng an anc ar es

Wholesale energy sales 7.4 60 444 52

Total 14.3 1,100

Operating costs 14.3 (20) (286)

Operating cash flow hydroelectric and wind 814

(1) Based on long-term averages for capacity in place as at June 30, 2009

(2) Based on contracts, forward markets, Brookfield estimates and historical experience

Growth Platform



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The Renewable Power Opportunity

Widespread acceptance of climate change

Recognition of the impact of greenhouse gases

Key trends supporting continued growth in renewable power generation

ew regu a ons ame a re uc ng coa - re power; emergence ocap-and-trade

Rising prices from fossil fuels and new-build requirements

Rising oil and gas prices and volatility, with increased resource scarcity

Significant need for new generation

Desire for energy independence and security

Reliance on small number of major oil and natural gas regions has increased


energy security concerns worldwide; driving search for more local, renewable

energy sources

Hydro offer best alternative for long-term price certainty

Renewables becoming more cost-competitive with fossil-fuel generation dueto low operating costs and steady improvements in technology

Growth PlatformExpand platform from 4,150 to 6,000 MW in next five years through acquisitions anddevelopment activities

Track Record Outlook Strategy

Build

14 projects (500 MW)built on time and onbudget

Invested $800 million

80 professionals

125 MW inconstruction

600 MW late stagedevelopment

Target high growthmarkets with scarcityvalue

Contract framework toreduce risk

Long-term PPAs withcreditworthy counterparty


Acquire

Invested nearly$3 billion in over20 transactions

Added 2,600 MW

More than 20,000 MWof hydro owned bynon-strategics

Wind is fastestgrowing renewablesegment

Leverage operatingplatform strengths

Value creation throughrising prices

Target wind assets withlong-term strategic value


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Conclusion


Conclusion

Hydro assets benefit from sustainable competitive advantages and a particularly

strong credit profile in low-priced markets

Renewable energy is the fastest growing segment in the power business

, -

Ability to generate strong margins in all market conditions

Storage to mitigate low hydrology and realize peak pricing

No environmental fuel cost risk

Positioned to benefit from rising fuel prices and carbon costs

Long-term market outlook remains attractive

Need for new supply and rising electricity prices


Fossil fuel prices rising

Carbon legislation is inevitable and will benefit hydro

Brookfield is very well positioned in this sector with large scale operating

platform in North America and Brazil with development, operating and power

marketing capabilities


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Q & A


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Property Ric Clark

Agenda


Office

Development

Retail

Residential


Accomplishments and Future Growth

Conclusion

Q & A


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Global Reach With Local Insight

One of the largest property investors worldwide


BAM Global Real Estate Offices:Number of Offices 30Number of Professionals 7,000 +Head OfficesOperating Offices

Global Property Operations$38 billion of property assets under management across the real estate spectrum

Office Retail ServicesResidentialDevelopment

Commercial Properties Development and Other Operations


120 properties

North America,Europe and

Australia

25 retail malls

Australia, Braziland Europe

20 m sq. ft.commercial

North America,Brazil, Europe and

Australia

130,000 building lots,61 m sq. ft.

condo density

North America,Australia and

Brazil

Property /brokerage

North America andAustralia


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Global Office Operating Profile and Market Dynamics


Office Portfolio

United States Canada Australia UK

120 commercial property assets and 85 million square feet under management


60 Properties

47 m sq. ft.

7 Year Avg.Lease Term

29 Properties

20 m sq. ft.


20 Properties

10 m sq. ft.


11 Properties

8 m sq. ft.



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Outlook in United States

Challenges

Office fundamentals continue to weaken

and consumer confidence

Employment figures could continue to

decline into 2010 putting pressure on

vacancy rates and economic fundamentals

Tight credit constricting liquidity, pushing

near-term cap rates up, values down

Opportunities


Although rising, vacancies are still well below

normal in most markets

Bid/Ask rental spreads have been covered inmajor markets activity increasing

Distressed deals are expected to hit the market in 2010 and 2011 as maturities

occur and lenders are no longer able to delay action

New York

Outlook in Canada

Challenges

Commercial property markets are reflective

o e economy

Vacancy rates have begun to rise

Significant new supply in Calgary and Toronto

will strain these markets

Opportunities

Vacancies are still on landlords side of

equilibrium and below peak in 1990s


Canadian financial institutions have heldup better than their U.S. and international peers

Energy/Commodities will rebound first

Development activity remains frozen (outside Calgary and Toronto)

Toronto


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Outlook in Australia

Challenges

Foreign banks have retreated home, making

en ng un verse sma er

Remaining banks reluctant to lend on new deals even

at higher interest rates

Loan-to-value covenants continue to trigger mortgage

pay-down requirements on otherwise stable assets

Illiquid environment pushing near-term cap rates

up and values down


Opportunities

Economy has not gone into a technical recession, and

long-term fundamentals with commodity-based economy remain strong Fresh infrastructure spending, started in second half of 2009, should aid recovery

Headline office vacancy rates are low and office development has been restrained

in most markets

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Sydney

Outlook in United Kingdom

Challenges

Office fundamentals continue to weaken

City speculative development will further

erode supply fundamentals, enhancing

the vacancy spike predicted during 2009

and early 2010

Sublease inventory impacting market

Opportunities London


Economy expected to emerge more quickly from recession than continentalEurope

Real estate has re-priced more rapidly and aggressively, than many markets,

attracting greater investor interest

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Global Office Operating Profile

Average occupancy: 95.4%

Avera e annual lease rollover over next 3 ears: 5.7%

Well positioned to ride out market downturn

Average lease duration: 8 years

Average tenant quality: A rated

Average net rent: 15% below current market

Non-recourse financing: 93%


Exchange Tower & First Canadian PlaceToronto

Long-term Lease ProfileOur proactive leasing strategy produced over 2.6 million square feet of leases inthe first half of 2009. The current portfolio has an average lease term of 8 years,with minimal near-term expiries and an occupancy rate of 95.4%

acancy Rate by MarketAverage Lease Term

7 78

16

6%5%

12%

6%

8% 8%


Brookfield Market

U.S. Canada Australia UK

2% 2%

U.S. Canada Australia UK


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Low Rollover Profile

000's Sq. Ft.Country

CurrentOccupancy Current 2009 2010 2011 2012 2013 2014 2015 2016+ Total

Limited vacancy and minimal rollover exposure ensures continuity of cash flow,

low capital expenditures and leasing costs

U.S. 94% 2,659 605 1,607 2,623 3,497 7,143 2,975 3,922 17,402 42,433

Canada 98% 281 147 881 1,353 1,327 3,208 490 2,610 6,002 16,299

Australia 98% 180 504 459 434 293 364 715 803 6,322 10,074

UK 95% 87 7 53 17 57 24 304 _ 1,112 1,661

Total 95% 3,207 1,263 3,000 4,427 5,174 10,739 4,484 7,335 30,838 70,467


% of Total 5% 2% 4% 6% 7% 15% 6% 11% 44% 100%

* Excludes parking, developments and non-managed properties

Market Rent UpsideAverage in-place rents across portfolio are 15% lower than comparable marketrents, representing a mark-to-market opportunity for new leases

Market

Square

Feet

In-Place

Rent

Market

Rent

Mark to

Market

% Leases Rolling

2009-2011

U.S. 42,433 $ 23.95 $ 29.00 $ 5.05 11%

Canada 16,299 19.60 23.19 3.59 15%

Australia 10,074 30.00 33.00 3.00 14%

UK 1,661 61.67 58.33 (3.37) 5%

Total 70,467 $ 24.70 $ 28.92 $ 4.22 12%


Note: Rents have been converted into US$ on the following basis: US$1 = C$1.10, A$1.20, 0.60


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High Quality Cash Flows

Focus on high credit quality tenants ensures long duration cash flows

47% of leasable area is comprised of tenants rated A or better

The balance of leasable area includes some of the worlds largest professional

service firms

Invested in markets with resilient economies that produce stable demand

Diverse Tenant Base 2000 NOI % 2009 NOI %

Financial 74% 59%


Government 10

Energy 13% 18%

Services + Other 13% 18%

Total 100% 100%

Long Duration Financing

Well diversified debt maturity profile with average term of five years

U.S. minimal refinancing requirement until 2011

93% of financing is non-recourse to the company

Australia predominantly financed with bank debt on shorter term basis, the

norm in the country

No near term financing exposure in Canada or UK

Average interest rate of 5.2%

Successfully refinanced $1.2 billion of property level debt in 2009 and $2.9 billion


n


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Frequently Asked Questions

Questions Response

U.S. Office Fund Brookfields share of the mezzanine debt is $0.8 billion

refinancing in 2011 By 2011, net operating income of the Fund is expected to increase by

37% from acquisition

Brookfield is well capitalized to fund any shortfall of the mezzaninedebt, if needed

Merrill Lynch

exposure Merrill Lynch leases 4.9 million square feet in Brookfield Properties

WFC portfolio

3.1 million square feet is occupied by Merrill Lynch and 1.8 millionsquare feet is sublet


,amortized

Merrill Lynch owns a 49% interest in Tower Four reducing Brookfield

Properties net exposure to 2.5 million square feet and Brookfields to1.25 million square feet

High quality and low cost basis of WFC renders WFC a valueproposition

Frequently Asked Questions contd

Questions Response

Persistent decline Current in-place rents are 15% below market averages

in rental rates Minimal exposure due to low vacancy rate and low near term lease

rollover exposure (see below)

Significant increase

in vacancy Office portfolio is 95.4% leased

Annual lease roll over of only 5% for the next three years

Tenant bankruptcies High quality tenant base

High quality class AA and A space which experience flight to quality inthese market conditions


Only 500,000 square feet of tenant bankruptcies in the worst twoyears in decades, of which 400,000 square feet re-let at higher rents


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Development Profile


Property Active DevelopmentsApproximately four million square feet of active developments which is 74% pre-leased

*

Market Sq. Ft. % Leased Sq. Ft. % Leased Sq. Ft. % Leased

U.S. 781 42% 781 42%

Canada 1,425 78% 1,425 78%

Australia 486 87% 1,398 85% 1,884 86%

Total 2,692 70% 1,398 85% 4,090 74%


* No active development in UK except 15% i nterest in Canary Wharf Developments. Excludes square feet under construction forthird parties


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Property Held for Development

16.3 million square feet in pipeline which will be

selectively built out

14.0 million square feet in North America

2.3 million square feet in Australia

Total capital invested to date of $0.8 billion

Minimal ongoing capital expenditure required


u ou w en mar e con ons mprove

and return expectations of +20% can be achievedManhattan West, New York


Questions Response

Increased risks with Began to shut down development 24 months ago

development Only commence construction of a development site on a risk-

adjusted basis

1.4 million square feet remaining under construction which is 85%pre-leased

Significant costs of

holding development Low cost basis for the 16 million square feet of development capacity

Add sites selectively and only on an opportunistic basis

Decreased overhead and holding costs to a bare-bones basis

Utilize key resources in development group to organically re-work


current assets and density

3rd party construction

activity is dependent

on the economy

Benefiting significantly from increased government stimulusspending

External construction workbook has increased from $3.5 billion atDecember 2008 to $4.1 billion

External construction workbook is 47% complete, representingapproximately three years of scheduled construction activity


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Retail Operating Profile


Global Retail Operating Profile

25 centres

Brazil 14

er

Average occupancy: 94%

Brazil 94%

Other 94 %

Average lease duration: 7 years


Brazil 5 years Other 10 years

World Square Retail, Sydney


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Retail Outlook

Challenges

Vacancy rates in Latin America have moved up

moderately while rental rates have flattened

and in a few instances, declined

Opportunities

Continued growth in retail sales per square foot

Brazil has overtaken Mexico as the most

transparent real estate market in Latin America


Emerging middle class continues to increase

while unemployment decreased from 8.8% to 8.1% in June

64

Shopping Patio Paulista, Sao Paulo

Residential Operating Profile



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Residential Portfolio

U.S. Canada Australia

130,000 residential lot equivalents and 61 million square feet of condominium

density provide the basis for future growth

Brazil


Master plannedcommunities

California,Washington DC Area,

Colorado, Texas,Missouri

56,200 lots owned /optioned

Master plannedcommunities

Alberta, Ontario

57,300 lots owned

Condominiums

61 million sq. ft ofdevelopment

Master plannedcommunities and

apartments

16,500 lots andapartments

Residential Outlook

Challenges

In developed countries, the continued lack of

nanc ng as s gn can y re uce nves men

in the housing sector

Most distressed properties coming to market

are residential and land deals

Opportunities

Multi-housing properties continue to outperform

other commercial property types, but are not


Total existing U.S. home sales rose

7.2 percent in July 2009, the biggest gain

since record keeping began in 1999 for existing

home sales and condos

Brazil sales are over 50% higher than last year markets are very strong

Heartland Homes, Calgary


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Residential Operating Profile

Quality developments and strong competitive positions in each market

Brazil Leading developer in Sao Paulo and Rio de Janeiro with over61 million square feet of condo development

Western Canada leading developer with 23% market share and over6,000 acres held for development in Alberta

U.S. Top five developers with approximately 7,000 acres held fordevelopment

Local teams with depth of experience in marketing, permitting and development


Historical low cost land bank with opportunities in current environment to expand

holdings at significant discounts

Strategy of optioning land and lots to position for growth with reduced risk

Selective capital deployment should earn many multiples of capital


Questions Response

Lack of mortgage Diversified residential real estate operations in four countries;

availability affects

sales

operations in the U.S. have been impacted the most by mortgageavailability

Rates at all-time lows affordability for consumers

The Brazilian operations are experiencing tremendous sales growthdue to an increase in mortgage availability

Brookfields

Canadian operations

are dependent on the

Canadian operations have a very low land cost basis

The operations continue to perform well and expect to earnapproximately a 10% return on equity in 2009


Significant holding

costs of land

inventory

Brookfield is a long-term investor, using low-cost options toselectively gain control of large parcels of land

Brookfield has the capital necessary to prudently develop the land ona risk-adjusted basis


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2009 Accomplishments

Enhanced current returns through proactive management

,

and on budget

Leased over 2.6 million square feet

Refinanced $1.2 billion of debt

Issued $1 billion of fresh equity capital


Raised $5 billion of institutional capital


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Investment Opportunities

Lack of funding, bleak investor sentiment and deteriorating coverage under loan-

to-value covenants have reduced property valuations and pressured debt to

As a result of challenging environment for real estate operators globally, there will

be opportunities to buy assets or platforms at attractive returns

equity ratios

Lenders have virtually ceased funding in an effort to restore capital and improve

regulatory ratios

Many real estate owners and debt holders require substantial portfolio

de-leveraging in an illiquid market

Shortage of experienced global real estate operators with balance sheet capacity


an s s o qu c y comp e e arge sca e res ruc ur ngs an ransac ons

Real Estate Turnaround Consortium

$5 billion consortium to invest in underperforming/undervalued real estate

properties and companies

Brookfield is leveraging its real estate and restructuring expertise to take advantageof investment opportunities in the current environment

Investors include large pension funds, sovereign wealth funds and other

institutional investors

Allocations of $300 million $1 billon each

Global focus with emphasis on North America, Europe and Australia

Transactions will include companies or assets requiring

Financial and o erational restructurin


Strategic direction

Re-development

Other active asset management


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Conclusion


Conclusion

Well located, highest quality commercial property portfolio generating stable

cash flows

Brookfield is very well positioned to benefit from the current environment

One of the worlds largest real estate operating platforms providing unparalleled

access to opportunities across the real estate spectrum

Dedicated team of operating and investment professionals focused on value

enhancement



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Priorities

Invest consortium capital in high return real estate opportunities

,

solidify current operations to maximize profitability

Capitalize on U.S. housing woes as stabilizing market should yield opportunities

Continue to diversify investments beyond North America and office sector

Capitalize on market illiquidity and selectively look for value where owners are

overleveraged


Q & A


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Infrastructure Sam Pollock

Agenda


ar e ynam cs an u oo


Conclusion

Q & A



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Infrastructure Current Portfolio~$7 billion of assets under management in the Americas, UK and Australia

SocialAgrilands

Infrastructure


2.5 million acres ofhigh quality

timberlands inNorth and South

America

8,800 km inCanada and Chile

$3.5 billion $300 million $350 million

400,000 acres ofagrilands in Brazil:sugar cane, rubber,

soya, corn,pineapple, and cattle

Development andmanagement of

assets in UK andAustralia

$3 billion


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Infrastructure Strategy

Acquire high quality

Long-life assets

Minimal sustaining capital requirementsn ras ruc ure asse s Stable cash flow due to barriers to entry or equivalent

competitive advantage

Apply disciplined

approach to investing,

focused on value

Proactive business development to originate transactions

Focus on complex opportunities where we can buy forbetter value

Use operations-


oriented approach to

enhance returns

Active management to earn superior returns

Operating Profile Transmission

8,800 km of transmission lines in Ontario and Chile

480 km development project in Texas

Brookfield has established a strong presence in two key markets

Brookfield capital investment $0.3 billion

Investment Thesis

Stable and predictable cash flow governed by

regulated frameworks and long-term contracts

Revenue and margins increase with inflation

Critical link between power production and


consumption

Attractive capital projects to deliver growth

from existing businesses


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Operating Profile Timber

2.5 million acres of high quality timberlands in eastern and western

North America and Brazil

Brookfield has built the sixth largest timberland estate in North America

Focus primarily on high quality Douglas fir and Whitewood

33,000 acres of higher and better use land

Brookfield capital investment $0.5 billion

Investment Thesis

Total return value proposition is a combination of capital appreciation and


cas re urns

Operating flexibility and access to export markets provide opportunity to

maximize pricing and adjust harvest levels in response to market conditions




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Market Dynamics and Outlook Transmission

Transmission business continues to produce solid results despite impact of

global recession

-

Favourable regulatory environments and growing electricity demand in our

markets are increasing value of existing assets

Development required to expand and/or upgrade transmission grid in North

America and Chile

70% of the U.S. transmission grid is over 25 years old, requiring significantupgrades


. . v u u u vrenewable power which presents opportunities for build-out of transmission

system

In Chile, continued build-out of infrastructure to support growth of miningand industrial companies

Market Dynamics and Outlook Timber

Anticipate that medium-term pricing will increase and operating results will

significantly improve, starting late 2010

Timber markets have been more volatile and experienced greater softness thanexpected, but long-term outlook positive

Wood remains a critical building material for U.S. residential and commercialconstruction

Year-to-date 2009 U.S. housing starts at 0.5 million(1) are significantly belownormalized levels

Long-term demographics support a return to normalized U.S. housing startsin the 1.6 to 1.8 million units per year range

Longer term, we expect attractive pricing to be supported by a number of factors


Mountain pine beetle infestation reducing North American SPF lumber supplyby 20%

Increase in global demand from Asian markets and rapidly expanding bio-fuelindustry

Withdrawals of timberlands for conservation/environmental purposes

(1) Annualized, seasonally adjusted


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Market Dynamics and Outlook Timber contd

Favourable market conditions will allow implementation of our elevated

harvest plan

- -sustainable yield level

Elevated harvest levels x 30% increase in pricing cash flows increaseby $75 million annually

Private market transactions remain at high valuations despite recent market

conditions

Asset class continues to attract significant institutional interest





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2009 Accomplishments

Completed sale of Brazilian Transmission investment (TBE) for after tax proceeds

of $275 million

Awarded $500 million, 480 km transmission development project in Texas

Launched $400 million Colombia Infrastructure Fund

Issued $300 million of long-term notes at Transelec


Listed Brookfield Infrastructure Partners on the Toronto Stock Exchange

Compelling Investment Opportunity

Global InfrastructureTrend Toward

Historically

Gap

DeficitPrivatization

Performance

Chronic under-

spending and budget

constraints

Aging assets

needing replacement

Public private

partnerships and

private financial

initiatives

On relative and risk

adjusted return basis

Inflation linked

revenues

$25 trillion over next25 years(1)

Driven by populationand economicgrowth


(1) OECD estimates


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Growth Opportunities Current Transmission Operations

Existing network provides opportunities for

participation in

Expected capacity upgrades in both markets

Customer-initiated expansion projects

In second year of a five-year capital investment

plan to invest $1 billion in upgrades and expansions

to Chilean transmission system

Expansion required to support local miningand industrial companies


$370 million booked to date

Commenced development of Texas Transmission

project

Growth Opportunity Leveraging our Transmission Platform

U.S. transmission grid upgrade required to maintain integrity of system

U.S. power grid is a patch-work consisting of a 300,000 mile system with

, su s a ons an , e ec r c power p an s

$200 billion of investment(1) will be required to upgrade and expand the

transmission grid

Returns supported by attractive rate-based framework (FERC)

Transmission investment required to support growth in renewable power

Wind energy only represents 1% of U.S. electricity supply(2) but 35% of electricity


genera on capac y a ons n e . . Renewables currently comprise 10% of U.S. generation mix; the Obama

administration is targeting 25% by 2025

Construction of new transmission capacity required to transmit renewable

generation to population centres

(1) Estimate by former FERC Chairman Kelliher(2) In 2007


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Growth Opportunity Leveraging our Transmission Platform

Texas Transmission Development Project

In January 2009, Brookfield and a partner

awarded the right to build, own and operate

$500 million of transmission lines in Texas

Only participant without existing power

operations in Texas to win an award

Investment Thesis

Low development risk due to regulatory


Essentially acquiring licensed utility at

1X rate base Opportunity to grow by participating in future build-out of Texas grid as an

incumbent

Growth Opportunities Timber

Current focus in Brazil and smaller value

opportunities around existing operations

,in Brazil through a Brookfield-sponsored

timberlands partnership

Identifying potential distressed opportunities

in North America

Value of timberlands has held up



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Current Investment Focus

North America South America Global Opportunistic

Regulated electricity and Regulated electricity and Regulated electricity and

Transmission systems

Oil and gas pipelines

Storage facilities

Timber


Ports

Toll Roads

Airports

Timber


Transportation

Return Expectations

Return Expectations

Return Expectations

+


With lower levels of leverage and higher equity returns, the current environmentoffers very attractive risk-adjusted returns for infrastructure investments

Pipelines, Generationand Storage: 15% to 17%

Transportation: 17%+

Distressed Investment Opportunities

Brookfields strategy is to pursue distressed infrastructure investments in

companies with

Large scale, high quality assets

Complex and/or highly levered capital structures

Strong underlying cash flows

Trading at low valuations

Brookfield can benefit from expertise in corporate restructuring, liquidity

available to pursue these opportunities and its global operating presence



50/65

Brookfield Infrastructure Partners L.P.

Established as Brookfields primary vehicle to own and operate certain infrastructure

assets on a global basis

Publicl - raded artnershi Current ield~ 6.5%

~ 38 million*

$0.265 per unit

NYSE: BIPTSX: BIP.UN

managed by Brookfield

ruc ure

Market Symbol

Fully-dilutedUnits

QuarterlyDistribution

Social

Portfolio by Asset Class

.

Recently sold investment in Brazilian

transmission for a $68 million gain

Substantial growth within existing

portfolio


$23.94*Book Value

per unit

* as at June 30, 2009

ElectricityTransmission40%57%Timber

$16.84Unit Price(Sept. 14/09)

Conclusion



51/65

Conclusion

Global investors are increasingly embracing infrastructure as an asset class with

compelling investment opportunities

Growth in spending in this sector expected to average US$2 trillion annually

through 2015 with increasing need for private vs. government investment

Brookfield is well positioned within the current environment

Embedded growth in existing asset base, especially as economy recovers

Focus and ability to execute large scale transactions


Q & A


52/65

Financial Review Brian Lawson

Agenda

Operating Performance

n r ns c a ues

Capitalization

Currency and Interest Rates

Liquidity


Q & A


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Operating Performance

We are benefiting from

Locked-in long-term revenues

rong opera ng marg ns

Stable financing platform

Commercial office

95% leased with 8 year average term

Market rents exceed in-place rents by approximately 15%

Renewable power

80% of revenues sold forward until 2011 50% with avera e term of 12 ears


Low cost producer

Several short duration businesses not contributing In our view, have reached bottom in most cases

Poised for increasing contributions

Earnings Profile

Adjusted IFRS valuation $ 16,650

Blended equity IRR 14%

Annualized return $ 2,300

IRR returns accrue in two forms:

Net operating income (50%) $ 1,150

Value appreciation (50%) 1,150

$ 2,300


By way of reference, operating cash flows during 2008 and 2007, excluding major

disposition gains, were $1.2 billion and $1.1 billion, respectively

Under IFRS, we will record an increased proportion of unrealized value

appreciation in our financial statements


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Future Earnings Potential

Our base returns should be supplemented in the future by the following

Normalized contributions from development assets and cyclical businesses

Reinvestment of free cash flow

Expansion of institutional fund activities and fees contributed


Underlying Values

Equity values, reflecting asset appraisal value

s a ecem er , m o ns , ex cep p er s ar e am ou n s o a er are

Book value per share under historical accounting at 12/31/08 $ 4,911 $ 8.92

Add: Appraisal value adjustments pursuant to IFRS 9,240 15.40

14,151 24.32

Add: Estimated excess value of assets over book value that are notincluded within the IFRS fair value framework(1)

1,500 2.50

Add: Increase due to cash flows and currency movements 1,000 1.67


Does not include capitalized value of management fees, or value of franchise

to deploy capital in the future or the true selling value of assets compared with

IFRS values

Underlying value 16,651 28.49

(1) Management estimate


55/65

Underlying Values Going Concern Value Illustrative*

Adjusted to Normalized Valuations(1)

$8.00

$36.50

Values Not Recorded Under IFRS

$2.50

IFRS Values(2)

$4.00$22.00

$26.00

28.50


$22.00

* For illustrative purposes only; not intended to be a forecast of future results(1) Estimate based on 150 basis point IRR change on values(2) As at December 31, 2008, adjusted for cash flows and currency adjustments to June 30, 2009

Solid Capitalization

$20 billion of permanent equity capitalization

Conservative debt levels

15% deconsolidated; 44% across operations

Long-dated maturities reduces need to access markets

Negligible wholesale overnight funding

Diversified maturity profile


Continued access to capital

Straight-forward financings backed by high quality assets and visiblecash flows


56/65


Solid Capitalization contd

Liabilities

(billions) Assets Corporate SubsidiaryPropertySpecific

ShareholderCapital

Debt toCapital

Deconsolidated

Book value $ 10.6 $ 2.3 $ 0.7 $ $ 6.3 28%

Add: Underlying value adjustments 9.3 9.2

Underlying value 19.9 2.3 0.7 15.5 15%

Add: Pro rata interest in operations 21.1 2.9 12.0 0.5

Proportionate 41.0 2.3 3.6 12.0 16.0 44%

Add: Other partners interests 27.0 1.5 10.9 9.6

Consolidated $ 68.0 $ 2.3 $ 5.1 $ 22.9 $ 25.6 45%


Currencies and Interest Rates

Our equity values are impacted by changes in currencies and long-term interest

rates

There has been considerable volatility in currencies and rates over the past year

We typically match fund our assets, which results in natural hedges through the

associated financing

From time to time, we will layer on additional mitigation through financial

contracts and other means, recognizing that this may result in net income

volatility

All of our currency and interest rate positions are covered by a comprehensive

risk management framework


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Currency Views

We are naturally long foreign currencies

BAM Equity

We hedge foreign investments if we believe the currencies are meaningfully

U.S. 50%

Canada 20%

Brazil 15%

Australia 10%

UK 5%

100%


over-va ue . erw se, we s ay na ura y ong

We are comfortable with U.S. dollar exposure because we believe it will be an

extremely important global currency for many decades

Canada, Brazil and Australia are healthy commodity-based countries with

currencies, we believe, should perform well relative to the U.S. dollar

Interest Rate Views

Background

The valuation of our long-lived assets are sensitive to long-term interest rates

We generally match fund long-term liabilities against our long-term assets,

where possible

To the extent we have equity in assets, this portion of our investment is

un-hedged and therefore at risk to increases in rates of return

Current View


recent fiscal stimulus

We will consider taking steps to further lock-in long-term rates over the next

number of years


58/65

Liquidity and Capital Deployment

Over the past two years, we have completed over $10 billion of financings and

asset monetizations

Our ability to do this is a direct result of the stability of our operating cash flows,

the high quality of our assets, the conservative nature and flexibility of our

financing structure and the strength of our relationships

Proceeds were used largely to refinance short-term debt maturities, invest in our

business and new opportunities, and to increase surplus liquidity


Financial Flexibility

Over the last two years, we generated and invested approximately $2 billion of

capital in our operations to drive higher future cash flow per share growth

(billions) Sources Uses

U.S. northwest timber $ 0.6 U.S. residential $ 0.3

Renewable power 0.6 Brazil hydro 0.4

Commercial office 0.2 Brazil residential 0.2

Brazil transmission 0.3 Commercial office 0.4


Insurance + other 0.4 Brookfield common shares 0.3

$ 2.1 Other value opportunities 0.4

$ 2.0


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Significant Capital to Pursue Growth Opportunities

Currently over $3 billion of core liquidity

Looking forward, we have over $10 billion of available capital to take advantage

of the current environment and opportunities

Access to additional $7 billion of capital from partners to fund growth

$5 billion Real Estate Turnaround Consortium

C$1 billion Debtor-In-Possession Fund

$400 million Colombia Infrastructure Fund

$2.8 billion financings and monetizations since March 31st

Continued access to debt markets


Brookfield Properties equity issue

~ $1.5 billion of free cash flow per year

Continued ability to monetize assets

Q & A


60/65

Conclusion Bruce Flatt

Current Environment Improving

Positive signs of a global economic recovery

Globall central banks are su l in li uidit

Cost of capital and credit spreads are normalizing

The rapid deterioration of business fundamentals has stopped

Access to capital markets has improved for well capitalized issuers

U.S. housing market is stabilizing


Institutional investors are once again committing capital to private funds


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Current Environment Improving contd

Though not all benefiting equally

Man com anies and assets are overlevera ed or oorl financed

Demand still lagging in consumer spending-related sectors

Labour market recovery still required for sustained recovery to take hold

Opportunities for investment for those with capital

Turnaround/restructurin ex ertise


High quality assets for significant discount values

Existing operations benefit from contractual cash flow streams

Well Positioned in the Current Environment

Permanent equity

Solid Capitalizationwith Downside

Protection

SubstantialLiquidity and CashFlow Generation

Growth Potential

Over $3 billion liquidity

-

Strong and growing


Low parent company

debt

Conservative financing

-

commitments

Significant and

sustainable cash flows

and capital turnover

relationships

Significant pipeline of

opportunities

Leading operating

platforms


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Significant Franchise Value

Our operations are able to leverage corporate expertise and the Brookfield brand to

enhance underlying value over the long term

BROOKFIELD

OPERATING PLATFORMS

Strategic direction

Capital allocation

Global relationships


Access to deal flow

Transaction execution

Operational excellenceFocus on profitability

Non-recourse financing

Summary Priorities

Put to work the recently raised $6 billion in capital commitments to take

advantage of the current environment

Continue to generate substantial funds for investment strategies

Foster organic growth of each operating platform through continued proactive

asset management



63/65

Final Thoughts

This is an unprecedented period in recent history to acquire high quality assets

and create value for investors

Few companies have the capital, geographic presence, scale and depth of

operations to take advantage of opportunities

Brookfield has track record of expanding our operating platforms at exceptional

values during turbulent times

The past two years have only strengthened our franchise support from

employees who see us as a survivor and want to be with us


institutions who view that we were prudent with their capital and our

model aligns well today with them

banks want to lend to risk averse, good investors

shareholders who we hope view us as prudent stewards of their capital

Q & A


64/65


65/65

Management Team Presenting Today

Management Team Presenting TodayRic Clark, Senior Managing PartnerRic is the Senior Managing Partner, Property Operations. Ric joined Brookfield in 1996 and is responsible for the company's realestate operations. He is the CEO of Brookfield Properties and formerly was the President of the company's U.S. CommercialOperations. Ric has been employed with the company's predecessors since 1984 in various executive roles. A Certified PublicAccountant in the United States, Ric holds a Business degree from the University of Pennsylvania.

Bruce Flatt, Senior Managing Partner & CEOi i i i i i i i i i iBruce is the Senior Managing Partner and Chief Executive Officer of the company. He was appointed to this position in February

2002, following eight years in various senior executive positions in Brookf ield's property operations. Bruce joined Brookfield in 1990and worked in a number of the company's operations prior to joining the real estate business in 1994. He holds a Business degreefrom the University of Manitoba.

Brian Lawson, Senior Managing Partner & CFOBrian is Senior Managing Partner and Chief Financial Officer. Brian has held senior management positions within Brookfield since theearly 1990s. As Chief Financial Officer, Brian is responsible for Brookfield's financial reporting, corporate finance and overall fundingactivities of the organization. Brian graduated from the University of Toronto and subsequently qualified as a Chartered Accountant.

Richard Legault, Senior Managing PartnerRichard is Senior Managing Partner, and President and Chief Executive Officer of Brookfield Renewable Power. Appointed in 2000,Richard is responsible for the power generation operations at Brookfield. Richard was previously Vice-President, Energy Division ofJames Maclaren Industries, an affiliate of Norbord, where he formerly held various senior energy and financial positions. Richard has

a Bachelor of Accounting from the Universit du Qubec in Hull, and is a member of the Canadian Institute of Chartered Accountants.Sam Pollock, Senior Managing PartnerSam is a Senior Managing Partner and Head of Infrastructure. Sam is responsible f or the expansion of our infrastructure operatingplatform Sam joined Brookfield's financial services operation in 1994 and has held various senior positions in the organization

bam brook field asset management june 2009 presentation

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