2020 Third Quarter Highlights

$578B

$290B

$76B

TOTAL ASSETS

FEE-BEARING CAPITAL

DEPLOYABLE CAPITAL

UNDER MANAGEMENT

ASSET MANAGEMENT

Fee-bearing capital as at September 30, 2020 was $290 billion, an increase of $16 billion over the LTM, driving fee-related earnings growth of 22% over the prior year quarter and 36% over the prior LTM.

  • Over the LTM period, we added $43 billion to fee-bearing capital, including $22 billion from Oaktree, $4 billion from our latest infrastructure flagship fund, and additional fundraising and deployment across our perpetual private funds, private credit funds, co-investments and separately managed accounts. During this period, we also returned more than $18 billion of capital to investors.
    • We raised $18 billion of private fund capital during the quarter, including $12 billion of capital raised for the first close of our latest flagship distressed debt fund, as well as $6 billion of additional fundraising across the other strategies. The majority of the capital raised during the quarter becomes fee bearing when invested. Today, in total we have approximately $30 billion of additional capital that is committed and will earn annual fees of approximately $300 million once invested.
  • Growth in fee-bearing capital during the quarter included $10 billion of growth across our listed affiliates, as well as $4 billion of capital invested across our credit and perpetual private funds.
  • Fee-relatedearnings were $372 million during the quarter and $1.4 billion for the LTM, an increase of 22% and 36% from the prior periods, and included contributions from our credit business of $49 million during the quarter, and $161 million over the LTM period.

We realized $42 million ($27 million, net of costs) of carried interest during the quarter and $482 million ($252 million attributable to Brookfield, net of costs) over the LTM. Current unrealized carried interest now totals $3.5 billion ($2.3 billion attributable to Brookfield, net of costs).

  • We generated unrealized carried interest of $703 million in the quarter from value enhancements within operating businesses in our private funds and value uplifts on publicly traded securities within our credit strategies.
  • Real asset transactions slowed meaningfully over the last six months as a result of the economic shutdown, but we expect asset sale activity to increase in the coming quarters, which will lead to higher levels of carried interest being recognized into income.

We invested a total of $14 billion in the quarter and $48 billion over the LTM.

  • During the quarter we invested $9 billion of private fund capital and $3 billion of co-investment capital, bringing our latest infrastructure, real estate and private equity flagship funds to approximately 60% invested or committed, in aggregate, positioning us to be in the market with our next round of these funds in early 2021.
  • Outside of our funds, we deployed approximately $1 billion of capital, including third-partyco-investment capital, into purchasing BPY units through substantial and normal-course issuer bids. We also repurchased approximately $100 million of BAM shares since quarter-end, and we will remain active with repurchases as long as the shares continue to trade at such a significant discount to their underlying value.
  • Since quarter-end, we announced a strategic partnership with American Equity Life, a leading retirement planning annuity provider, in which we will acquire a 19.9% interest and reinsure up to $10 billion in annuity liabilities. We believe our alternative asset strategies will enable us to earn strong returns on this capital.

2 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

2020 Third Quarter Highlights cont'd

OPERATING RESULTS

We generated a record $2.8 billion of free cash flow in the LTM, including $747 million during the quarter.

  • Cash available for distribution or reinvestment ("CAFDR")1 increased by 32% in the quarter and 13% over the LTM, driven by higher earnings from our asset management business and increased distributions from our listed affiliates and directly held investments. Our listed affiliates and private funds continue to contribute stable distributions and fee revenues that are perpetual or long-dated which are resilient through cycles.

FFO1 was $1.0 billion in the quarter and $4.3 billion over the LTM.

  • Total FFO for the quarter was 26% higher than the prior year quarter. Included in the quarter was a $140 million gain on the sale of 5 million shares of Brookfield Infrastructure Corporation.
  • Our operating FFO increased by 28%, driven by strong performance across the majority of our businesses, particularly our asset management business and Norbord within our private equity segment.
  • For the LTM, our operating FFO increased by 11%, as higher fee-related earnings in our asset management business, contributions from new businesses acquired and same-store growth were partially offset by decreased FFO from invested capital due to the disruption from the economic shutdown in the first half of 2020.

Net income to BAM1 shareholders was $172 million in the quarter and $69 million over the LTM.

  • Net income was lower in the quarter and over the LTM, as the prior periods benefited from fair value gains and deferred income tax recoveries.

LIQUIDITY

Deployable capital at September 30, 2020 was $76 billion, benefiting from strong private fundraising.

  • At September 30, 2020, we had $16 billion of core liquidity which includes $6 billion at BAM, as well as $60 billion of uncalled private fund commitments. Subsequent to the quarter-end, we further enhanced our liquidity at BAM by completing a secondary offering of Brookfield Renewable Corporation for proceeds of approximately $285 million and issuing $400 million of green subordinated notes, the proceeds of which will be invested in eligible green projects.

Our balance sheet continues to be extremely conservatively capitalized, with a corporate debt to market capitalization ratio of 14% at quarter-end.

  • As of September 30, 2020, our corporate debt totaled $9 billion, with a weighted-average interest rate of 4.4% and a weighted-average remaining term of 12 years, which was extended to 14 years with the issuance of the green subordinated notes subsequent to the quarter-end.
  • Our corporate debt is supplemented with $4 billion of perpetual preferred shares, which carry an average cost of 3.9%.

1. Refer to the Glossary of Terms.

CONTENTS

Highlights and Overview

2

Reconciliation of IFRS to non-IFRS Measures

32

Detailed Analysis

Common Share Information

33

Asset Management Operating Results

14

Glossary of Terms

37

Invested Capital - Overview

25

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 3

Performance Highlights

$290

Fee-Related Earnings1

$274

FOR THE LTM ENDED SEP. 30 (MILLIONS)

$114

$102

$1,411

$120

$141

$1,034

$111

$80

$77

$823

$67

$690

$720

$58

$51

$80

$85

$58

$48

$49

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

Long-term private funds

Perpetual strategies

Public securities

Credit strategies

1. Excludes performance fees.

Carry Eligible Capital

Accumulated Unrealized Carried Interest

AS AT SEP. 30 (BILLIONS)

AS AT SEP. 30 (MILLIONS)

$135

$3,602

$3,519

$115

$51

$2,612

$39

$50

$83

$1,561

$2,358

$2,281

$76

$38

$41

$983

$1,809

$50

$38

$41

$1,082

$653

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

Brookfield

Oaktree

Accumulated unrealized carried interest, net

Accumulated unrealized carried interest, gross

Cash Available for Distribution and/or Reinvestment1

Distributions to Common Shareholders1

FOR THE LTM ENDED SEP. 30 (MILLIONS)

$2,750

$706

$2,428

$2,439

$603

$2,562

$1,981

$530

$566

$1,738

$2,012

$1,965

$489

$1,738

$1,779

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

  • Realized carried interest, net, and performance fees

1. Excludes special dividends.

1. Excludes special dividends.

4 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Financial Profile

We measure value creation for business planning and performance measurement using a consistent set of metrics as set out in the table below. This analysis is similar to that used by our management team and board of directors when assessing performance and growth in our business. We provide it to you in order to assist you in understanding how we think about our business. These plan values are for illustrative purposes only and not intended to forecast or predict future events, or measure intrinsic value.

Plan Value

Sep. 30

Dec. 31

Sep. 30

Base1

Factor2

2020

2019

2019

(MILLIONS)

(BILLIONS, EXCEPT PER SHARE AMOUNTS)

Asset management activities

Annualized fee-related earnings3

$

1,419

25x

$

35.5

$

35.9

$

33.4

Target carried interest, net3

1,684

10x

16.8

15.5

14.9

Accumulated unrealized carried interest, net

2.3

2.4

2.4

54.6

53.8

50.7

Invested capital4

Listed investments

41.2

37.8

35.8

Unlisted investments and net working capital

10.6

9.2

9.2

Invested capital

51.8

47.0

45.0

Total asset management activities and invested capital

106.4

100.8

95.7

Debt and preferred capital

(12.7)

(11.2)

(11.2)

Total plan value

$

93.7

$

89.6

$

84.5

Total plan value (per share)

$

59.65

$

56.73

$

53.43

  1. Base fee-related earnings and carried interest represent our annualized fee revenues and target carried interest, as at September 30, 2020. We assume a fee-related earnings margin of 60% and 30% for Brookfield and Oaktree, respectively. We assume a 70% and a 50% margin on gross target carried interest for Brookfield and Oaktree, respectively. See further details on annualized fees and target carry details on page 6.
  2. Reflects our estimates of appropriate multiples applied to fee-related earnings and carried interest in the alternative asset management industry based on, among other things, current industry reports. These factors are used to translate earnings metrics into value in order to measure performance and value creation for business planning purposes.
  3. See definition in the Glossary of Terms starting on page 37.
  4. See Invested Capital details on page 7.

Plan Value

AS AT SEP. 30 (BILLIONS)

$94

$85

$39

$34

$54

$58

$49

$30

$31

$28

$55

$51

$21

$23

$28

2016

2017

2018

2019

2020

Asset management

Invested capital1

1. Invested capital is presented net of total debt and preferred capital.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 5

Asset Management

Fee-bearing capital totaled $290 billion as at September 30, 2020, with approximately $30 billion additional capital committed that will become fee bearing when invested

LONG-TERM PRIVATE FUNDS ($85 billion)

  • Long-termprivate funds fee-bearing capital increased by $5 billion during the LTM with growth coming from our latest round of flagship funds, as well as other fund strategies and co-investments. This was partially offset by the investment period ending for three flagship funds which resulted in capital becoming non-fee bearing until it is invested.

PERPETUAL STRATEGIES ($80 billion)

  • Perpetual strategies fee-bearing capital increased by $2 billion over the LTM as a result of higher market valuation, inflows relating to capital market issuances across our listed affiliates and capital raised across our core real estate and infrastructure private fund strategies, partially offset by distributions to unitholders/shareholders and higher working capital balances in the listed affiliates.

CREDIT STRATEGIES ($114 billion)

  • Oaktree fee-bearing capital increased by $12 billion over the LTM as a result of fundraising and deployment activity.

PUBLIC SECURITIES ($11 billion)

  • Public securities fee-bearing capital decreased due to market valuation impacts across the funds.

AS AT AND FOR THE LTM ENDED SEP. 30

Fee-Bearing Capital1

Actual

Annualized

2020

2019

2020

2019

2020

2019

(MILLIONS)

Fee revenues2

Base management fees

Long-term private funds3

$

84,766

$

79,527

$

794

$

685

$

766

$

770

Perpetual strategies

79,520

77,248

707

593

807

750

Credit Strategies4

113,897

102,061

860

-

911

805

Public securities

11,430

15,257

90

113

79

115

Incentive distributions

n/a

n/a

296

249

305

264

Performance fees

n/a

n/a

-

-

90

65

Transaction and advisory fees

n/a

n/a

48

26

37

18

$

289,613

$

274,093

2,795

1,666

2,995

2,787

Direct costs5

(1,282)

(632)

(1,471)

(1,357)

1,513

1,034

1,524

1,430

Oaktree earnings not attributable to BAM

(102)

-

(105)

(94)

1,411

1,034

1,419

1,336

Carried interest

Carried interest6,7,8

353

761

3,097

2,640

Direct costs5

(163)

(178)

(1,176)

(975)

190

583

1,921

1,665

Oaktree carried interest not attributable to BAM

(16)

-

(237)

(178)

174

583

1,684

1,487

Total fee-related earnings and carried interest, net

$

1,585

$

1,617

$

3,103

$

2,823

  1. Fee-bearingcapital from Oaktree is shown on a 100% basis.
  2. We use a 55% - 65% range for margin on Brookfield fee revenue and a range of 25% - 35% on Oaktree fee revenue for planning purposes. We have assumed a mid-pointfee-related earnings margin of 60% and 30% for Brookfield and Oaktree, respectively. Refer to pages 16, 17 and 18 for details on the determination of annualized fees.
  3. Long-termprivate fund fees included $34 million of catch-up fees related to funds that held their first closes in the prior year period.
  4. Includes fee revenues from Oaktree shown on a 100% basis.
  5. Direct costs related to annualized fee revenues and annualized carried interest include $638 million and $617 million related to Oaktree, respectively.
  6. Actual carried interest is unrealized carried interest generated in the period (refer to page 19). Annualized carried interest is target carried interest.
  7. Annualized carried interest includes $1.2 billion of target carried interest related to Oaktree, shown on a 100% basis.
  8. We use a margin range of 65% - 75% on Brookfield carried interest and a range of 45% - 55% on Oaktree carried interest for planning purposes. We have assumed a mid-point target carried interest margin of 70% and 50% for Brookfield and Oaktree funds, respectively. Refer to page 20.

6 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Invested Capital

Invested capital was $51.8 billion on a blended basis as at September 30, 2020 with 80% invested in our public affiliates (BPY, BIP, BEP, BBU) and other publicly traded investments, in which we earn diversified, long-term, stable cash flows via dividends. We received $1.7 billion in distributions from our investments over the last twelve months (September 30, 2019 - $1.5 billion) representing an approximate 4% yield on invested capital. The balance of the cash flow was retained for reinvestment.

Unlisted investments include a commercial office portfolio in New York, residential development operations in North America and Brazil, opportunistic real estate, energy contracts, timber and agricultural assets and other corporate investments.

The following table provides a breakdown of our invested capital as at September 30, 2020 and December 31, 2019. We provide three methods for you to review: quoted prices, our IFRS values, and the blended values. We recommend you focus on the blended values as we do have control over these assets and believe we could liquidate for IFRS values. To the extent quoted prices are less than IFRS values, those values may be relevant to a stock investor, but not to us as a control investor. Nonetheless, we provide this information so you can choose how to assess the numbers.

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Quoted1

IFRS

Blended2

Cash

(MILLIONS)

Flow

No. of

2020

2019

2020

2019

2020

2019

Current3

Units

BPY

560.4

$

6,742

$

9,564

$

15,193

$

15,786

$

15,193

$

15,786

$

745

BEP4

222.7

11,971

8,784

3,856

4,810

11,971

8,784

387

BIP5

132.5

6,376

6,189

1,674

2,141

6,376

6,189

257

BBU

94.5

2,847

3,901

1,891

2,389

2,847

3,901

24

Other listed

Various

1,177

930

1,390

1,368

1,177

930

67

29,113

29,368

24,004

26,494

37,564

35,590

1,480

Corporate cash and financial

Various

3,675

2,181

3,675

2,181

3,675

2,181

221

assets6

Total listed investments

$

32,788

$

31,549

27,679

28,675

41,239

37,771

1,701

Unlisted investments7

8,250

8,024

9,654

8,740

56

Working capital, net

895

470

895

470

n/a

Invested capital

36,824

37,169

51,788

46,981

$

1,757

Debt and preferred capital

(12,732)

(11,228)

(12,732)

(11,228)

Invested capital, net

$

24,092

$

25,941

$

39,056

$

35,753

1

  1. Quoted based on September 30, 2020 and December 31, 2019 public pricing, respectively.
  2. For performance measurement purposes, we consider the value of invested capital to be the quoted value of listed investments and IFRS value of unlisted investments, subject to two adjustments. First, we reflect BPY at its IFRS value as we believe that this best reflects the fair value of the underlying properties. Second, we adjust Brookfield Residential values to approximate public pricing using industry comparables.
  3. Distributed cash flow (current) from our listed investments is calculated by multiplying units held as at September 30, 2020 by the current distribution rates per unit. Corporate cash and financial asset distribution is calculated by applying an 8% total return on the average balance over the last four quarters. Distributions on our unlisted investments is four times the current quarter's distribution.
  4. On July 30, 2020, we completed the creation of BEPC in which the holders of BEP's LP units received one class A share of BEPC for every four BEP units held. As at September 30, 2020, we held approximately 44.5 million of BEPC class A shares (December 31, 2019 - nil) and 178.1 million of BEP units (December 31, 2019 - 188.4 million).
  5. On March 31, 2020, we completed the creation of BIPC in which the holders of BIP's LP units received one class A share of BIPC for every nine BIP units held. On July 29, 2020, we completed the sale of approximately 5.1 million class A shares of BIPC for gross proceeds of approximately C$316 million (or $237 million). As at September 30, 2020, we held approximately 8.7 million of BIPC class A shares (December 31, 2019 - nil) and 123.8 million of BIP units (December 31, 2019 - 123.8 million).
  6. Corporate cash and financial assets is inclusive of $2.3 billion of cash and cash equivalents (December 31, 2019 - $789 million).
  7. Includes $654 million of investments related to our share of Oaktree.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 7

Summary of Results - Funds from Operations

We generated $4.3 billion in FFO over the last twelve months, including $1.0 billion in the current quarter

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

Page

2020

2019

2020

2019

(MILLIONS, EXCEPT PER SHARE AMOUNTS)

Ref.

Operating FFO

Fee-related earnings

Long-term private funds

$

180

$

183

$

760

$

651

page 16

- Catch-up fees

-

1

34

34

page 16

Perpetual strategies

202

174

707

593

page 16

Credit strategies

232

-

860

-

page 17

Public securities

20

29

90

113

page 17

Base management fees

634

387

2,451

1,391

Incentive distributions ("IDRs")

77

67

296

249

Transaction and advisory fees

17

14

48

26

Total fee revenues

728

468

2,795

1,666

Direct costs

(325)

(162)

(1,282)

(632)

Fee-related earnings

403

306

1,513

1,034

Fee-related earnings not attributable to BAM

(31)

-

(102)

-

page 15

372

306

1,411

1,034

Invested capital

Listed affiliates

BPY

79

168

522

740

page 28

BEP

72

72

409

449

page 28

BIP

90

84

349

351

page 28

BBU

132

132

466

479

page 28

373

456

1,746

2,019

Other listed investments

106

19

170

100

page 29

Corporate cash and financial assets

80

(32)

236

57

page 29

Unlisted investments

559

443

2,152

2,176

Residential

37

42

104

90

Energy contracts

(11)

(31)

(158)

(185)

Other

28

(2)

90

119

page 29

Corporate activities

54

9

36

24

Corporate interest expense

(98)

(87)

(370)

(342)

Corporate costs and taxes

(37)

(9)

(166)

(139)

page 26

(135)

(96)

(536)

(481)

478

356

1,652

1,719

Total operating FFO

850

662

3,063

2,753

Realized carried interest, net

Realized carried interest

42

59

482

595

Direct costs

(13)

(20)

(191)

(168)

page 19

29

39

291

427

Realized carried interest, net, not attributable to BAM

(2)

-

(39)

-

27

39

252

427

Disposition gains

162

125

973

1,161

page 27

Total funds from operations1,2

$

1,039

$

826

$

4,288

$

4,341

Per share

-

Total operating FFO

$

0.53

$

0.42

$

1.90

$

1.78

Total FFO

0.65

0.54

2.70

2.86

  1. FFO excludes preferred share distributions of $34 million (2019 - $38 million) for the three months ended September 30 and $144 million (2019 - $150 million) for the LTM.
  2. Refer to page 32 for reconciliations of IFRS to non-IFRS measures.

8 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Cash Available for Distribution and/or Reinvestment

We generated $2.6 billion in CAFDR before carried interest, an increase of 27% over the last twelve months

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

Annualized1

2020

2019

2020

2019

(MILLIONS, EXCEPT PER SHARE AMOUNTS)

Fee-related earnings, excluding Oaktree2

$

323

$

306

$

1,250

$

1,034

$

1,250

Our share of Oaktree's distributed earnings3

41

-

196

-

164

Distributions from investments

Listed affiliates4

342

337

1,377

1,349

1,413

Corporate cash and financial assets5

94

(32)

250

57

221

Other investments6

Norbord

8

11

19

48

63

Other

15

17

60

85

60

Other invested capital earnings

459

333

1,706

1,539

1,757

Corporate activities

(135)

(96)

(536)

(481)

(576)

Other wholly owned investments

46

1

(3)

(14)

(3)

(89)

(95)

(539)

(495)

(579)

Preferred share dividends

(34)

(38)

(144)

(150)

(136)

Add back: equity-based compensation costs

23

20

93

84

92

Cash available for distribution and/or reinvestment before

723

526

2,562

2,012

$

2,548

carried interest

Realized carried interest, net, excluding Oaktree2

24

39

188

427

Cash available for distribution and/or reinvestment7

$

747

$

565

$

2,750

$

2,439

Cash available for distribution and/or reinvestment per share

$

0.49

$

0.38

$

1.79

$

1.66

  1. Current distributions are calculated by multiplying units held as at September 30, 2020 by the current distribution rates per unit.
  2. Excludes our share of Oaktree's fee-related earnings and carried interest. See page 15 and page 19 for details.
  3. Oaktree's policy is to distribute 85% of distributable earnings each period. Oaktree annualized distributable earnings is based on 85% of the last twelve month distributable earnings, at our share.
  4. Inclusive of distributions received from BPY preferred shares, which distributed nominal amounts (2019 - nominal amounts) for the three months ended September 30 and nominal amounts (2019 - $21 million) for the LTM. We redeemed substantially all our BPY preferred shares in Q2-19.
  5. FFO for the three months ended September 30, 2020 includes realized disposition gains of $14 million. Annualized distributions for corporate cash and financial assets is calculated as an estimated 8% total return on the weighted average balance of the last four quarters.
  6. Includes cash distributions from our other listed investments and BAM-sponsored real estate venture that owns operating and development properties in New York. See definitions of our publicly listed investments in the Invested Capital - Overview section on page 25.
  7. Refer to page 32 for reconciliations of IFRS to non-IFRS measures.
  • CAFDR represents the deconsolidated earnings of the corporation. It is predominantly made up of the asset manager earnings as well as the cash flow we receive from the investments on our balance sheet.
  • Cash flow from invested capital primarily relates to distributions from the listed affiliates that target annual distribution growth rates of 5% - 9% and payout ratios of approximately 70% (BPY, BIP, and BEP) of FFO.
  • Unlike BPY, BIP and BEP which pay out a meaningful portion of their FFO, BBU pays a modest distribution as the majority of its FFO is reinvested within the business. For comparability across these entities and industry metrics, below we have provided a proxy distribution for BBU as an indication of the cash flows attributable to BAM based on its ownership in BBU that, for simplicity, is calculated using an assumed payout ratio of 70% of BBU's FFO and disposition gains that is aligned to the payout ratios of the other listed affiliates.

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

2020

2019

2020

2019

(MILLIONS, EXCEPT PER SHARE AMOUNTS)

Cash available for distribution and/or reinvestment

$

747

$

565

$

2,750

$

2,439

Add: proxy for BBU distribution payout, at our share

92

93

325

336

Add: proxy for payout of disposition gains at BBU, at our share

-

4

73

188

Less: distributions from BBU currently within CAFDR

(6)

(6)

(24)

(22)

Distributable earnings

$

833

$

656

$

3,124

$

2,941

Distributable earnings per share

$

0.54

$

0.45

$

2.04

$

2.01

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 9

Funds from Operations and Net Income

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

FFO1

Net Income1

FFO1

Net Income1

(MILLIONS, EXCEPT PER SHARE AMOUNTS)

2020

2019

2020

2019

2020

2019

2020

2019

Operating activities

Fee-related earnings

$

372

$

306

$

372

$

306

$

1,411

$

1,034

$

1,411

$

1,034

Invested capital

478

356

478

356

1,652

1,719

1,652

1,719

850

662

850

662

3,063

2,753

3,063

2,753

Realized carried interest, net

27

39

27

39

252

427

252

427

Realized disposition gains2

162

125

13

(46)

973

1,161

102

296

Fair value changes3

-

-

(340)

114

-

-

(1,693)

339

Depreciation and amortization3

-

-

(446)

(347)

-

-

(1,694)

(1,289)

Deferred income taxes3

-

-

68

525

-

-

39

1,319

$

1,039

$

826

$

172

$

947

$

4,288

$

4,341

$

69

$

3,845

Per share

$

0.65

$

0.54

$

0.10

$

0.61

$

2.70

$

2.86

$

(0.02)

$

2.48

  1. Net of non-controlling interests. Refer to page 32 for reconciliations of IFRS to non-IFRS measures.
  2. FFO includes gains (net of losses) recorded in net income, directly in equity and the realization of appraisal gains and losses recorded in prior periods.
  3. Includes amounts attributable to consolidated entities and equity accounted investments.

10 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Liquidity and Capital Structure

We manage our liquidity and capital resources on a group-wide basis; however, it is organized into three principal tiers:

  1. The Corporation1;
  2. Our listed affiliates (BPY, BEP, BIP and BBU); and
  3. Managed funds or investments, either held directly or within listed affiliates.

LIQUIDITY

The Corporation has very few non-discretionary capital requirements. We maintain significant liquidity ($6 billion in the form of corporate cash and financial assets and undrawn credit facilities) at the corporate level to further enable the growth of the broader business. This does not include our ability to issue debt at the Corporation to replenish our cash resources on an otherwise very low leveraged corporate balance sheet.

On a group basis, as at September 30, we had approximately $76 billion of group liquidity, which included corporate liquidity, listed affiliate liquidity, and uncalled private fund commitments. Uncalled fund commitments include third-party commitments available for drawdown in our private funds.

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Corporate Liquidity

Group Liquidity

2020

2019

2020

2019

(MILLIONS)

Cash and financial assets, net

$

3,675

$

2,181

$

5,637

$

3,575

Undrawn committed credit facilities

2,525

2,524

10,212

9,808

Core liquidity

6,200

4,705

15,849

13,383

Third-party uncalled private fund commitments

-

-

59,864

50,735

Total liquidity

$

6,200

$

4,705

$

75,713

$

64,118

CAPITAL STRUCTURE

Virtually all of the debt within our business is issued by entities within the funds or other investing entities that we manage, which are predominantly at the operating asset level which generally has no recourse to the Corporation. Only 6% of our consolidated debt is issued by, or has recourse to, the Corporation.

Our Corporate capitalization was $46 billion as at September 30, 2020, with a debt to capitalization level of ~19% at the corporate level based on book values, which excludes virtually all of the value of our asset management operations (see page 30 for details). Based on our market capitalization the corporate debt to capitalization level was 14%.

  • Corporate borrowings totaled $9 billion, with a weighted-average term of 12 years, and a weighted-average interest rate of 4.4%.
  • Our corporate borrowings are supplemented by $4 billion of perpetual preferred shares with a weighted-average cost of 3.9%.

AS AT SEP. 30, 2020 (MILLIONS)

Corporate borrowings Term debt Revolving facilities2

Perpetual preferred shares

Average

Maturity

Term

(Years)

Total

2020

2021

2022

2023

2024

2025+

12

$

8,587

$

-

$

-

$

-

$

450

$

1,125

$

7,012

4

-

-

-

-

-

-

-

8,587

-

-

-

450

1,125

7,012

perp.

4,145

-

-

-

-

-

n/a

$

12,732

$

-

$

-

$

-

$

450

$

1,125

$

7,012

  1. Refer to the Glossary of Terms.
  2. Revolving credit facilities of $2.6 billion support commercial paper issuances.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 11

Liquidity Profile

CORE AND TOTAL LIQUIDITY

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Corporate1

Real

Renewable

Infrastructure

Private

Oaktree

Total

Dec.

(MILLIONS)

Estate1

Power

Equity1

2020

2019

Cash and financial assets, net

$

3,675

$

17

$

512

$

435

$

348

$

650

$

5,637

$

3,575

Undrawn committed credit facilities

2,525

2,246

1,892

1,162

1,737

650

10,212

9,808

Core liquidity

6,200

2,263

2,404

1,597

2,085

1,300

15,849

13,383

Uncalled private fund commitments2

-

12,702

3,531

10,860

6,204

26,567

59,864

50,735

Total liquidity

$

6,200

$

14,965

$

5,935

$

12,457

$

8,289

$

27,867

$

75,713

$

64,118

  1. We secured an incremental $1 billion two-year credit facility in April 2020 to support growth initiatives; BBU and BPY can each draw up to $500 million or BAM can draw up to $1 billion. Undrawn commitments of $500 million are reported within each Real Estate and Private Equity, respectively.
  2. Third-partyprivate fund uncalled commitments.
  • Corporate credit facilities totaled $2.6 billion, of which $nil was utilized for short-term bank or commercial paper borrowings and $65 million was drawn and utilized for letters of credit as at September 30, 2020.
  • Core liquidity represents our principal sources of short-term liquidity (consists of our cash and financial assets, net of deposits and other associated liabilities, and undrawn committed credit facilities).

UNCALLED FUND COMMITMENTS - EXPIRY PROFILE

AS AT SEP. 30, 2020 AND DEC. 31, 2019

2020

2021

2022

2023

2024+

Total 20201

Dec. 2019

(MILLIONS)

Real estate

$

-

$

-

$

-

$

379

$

12,323

$

12,702

$

13,113

Infrastructure and renewable power

-

6

304

-

14,081

14,391

14,119

Private equity

-

-

37

-

6,167

6,204

7,597

Oaktree

-

236

601

111

25,619

26,567

15,906

$

-

$

242

$

942

$

490

$

58,190

$

59,864

$

50,735

1. Total uncalled fund commitments includes capital callable from fund investors, including funds outside of their investment period, for which capital is callable for follow-on investments. As at September 30, 2020, $10.1 billion of uncalled fund commitments related to funds outside of their investment period.

  • Approximately $22 billion of the uncalled fund commitments are currently earning fees. The remainder will become fee bearing once the capital is invested.
    • During the quarter, approximately $2.5 billion of uncalled commitments became no longer fee earning as a result of the end of the investment period of our third infrastructure flagship fund. The majority of this capital was reserved for expected follow-on investments and will become fee bearing once invested.
  • We invested approximately $9.3 billion of third-party fund capital (including private funds and co-investments) during the quarter and $32.7 billion during the last twelve months.
  • $4.3 billion of third-party capital is committed to investments not yet funded as at September 30, 2020 (real estate - $2.4 billion; infrastructure and renewable power - $0.5 billion; private equity - $0.4 billion; and Oaktree - $1.0 billion).

12 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Asset Management Operating Results

FEE-BEARING CAPITAL

Three Months

LTM

AS AT AND FOR THE PERIODS

Long-Term

Perpetual

Public

Credit

Long-Term

Perpetual

Public

Credit

ENDED SEP 30, 2020

Private Funds1

Strategies1

Securities

Strategies

Private Funds1

Strategies1

Securities

Strategies

Total

(MILLIONS)

Opening

$

84,620

$

69,201

$

11,693

$ 111,688

$

79,527

$

77,248

$

15,257

$ 102,061

$

274,093

Inflows

2,350

2,963

586

2,050

11,592

5,456

3,961

21,579

42,588

Outflows

-

-

(843)

(1,326)

-

-

(4,309)

(6,593)

(10,902)

Distributions

(110)

(1,082)

-

(783)

(1,035)

(4,443)

-

(2,086)

(7,564)

Market valuation

(16)

10,656

(4)

1,432

2

3,243

(3,461)

1,360

1,144

Other

(2,078)

(2,218)

(2)

836

(5,320)

(1,984)

(18)

(2,424)

(9,746)

Change

146

10,319

(263)

2,209

5,239

2,272

(3,827)

11,836

15,520

End of period2

$

84,766

$

79,520

$

11,430

$ 113,897

$

84,766

$

79,520

$

11,430

$ 113,897

$

289,613

  1. Long-termprivate funds and perpetual strategies include $22.3 billion of co-investment capital (Jun. 30, 2020 - $20.4 billion, Sep. 30, 2019 - $16.5 billion), which earns minimal or no base fees.
  2. Fee-bearingcapital includes Brookfield capital of $34 billion (Jun. 30, 2020 - $28 billion, Sep. 30, 2019 - $33 billion) in perpetual strategies and $0.2 billion (Jun. 30, 2020 - $0.2 billion, Sep. 30, 2019 - $0.2 billion) in long-term private funds.

Inflows to fee-bearing capital represent additional capital which began earning fees in the period. Today, we have an additional $30 billionof committed capital not currently within fee-bearing capital, that will earn approximately $300 million of fees once invested.

Long-termprivate funds: Inflows in the third quarter relate to $2.0 billion of co-investment capital for new investments, primarily from our investment in the Indian Telecom Tower Business, $0.3 billion of capital invested within separately managed accounts, as well as $0.1 billion invested in our second infrastructure debt fund.

Over the LTM period, we had inflows that totaled $11.6 billion, which included $4.1 billion from our latest flagship infrastructure fund, $6.2 billion of co-investment capital, and $1.3 billion of capital across numerous other strategies.

The decrease in other of $5.3 billion primarily relates to uninvested capital in three flagship funds that ended their investment periods during the LTM. This capital will become fee-earning again once it is invested.

Perpetual strategies: Price appreciation at our listed affiliates increased fee-bearing capital by $10.7 billion and $3.2 billion over the quarter and LTM, respectively. Inflows of $3.0 billion and $5.5 billion during the quarter and over the LTM, respectively, were primarily from capital market transactions at BIP, BPY and BEP, as well as capital deployed across our core and core plus perpetual funds.

This was partially offset by the decrease in third-partyfee-bearing capital as a result of the TERP privatization in the quarter and quarterly distributions from our listed affiliates, as well as redemptions made by investors in our core and core plus perpetual funds over the LTM. For further details on listed affiliate fee-bearing capital in the period, refer to page 16.

Public securities: Fee-bearing capital decrease in the quarter is primarily due to net outflows of $0.3 billion. Decrease in LTM fee-bearing capital of $3.8 billion is mainly due to market valuation impacts and $0.3 billion of net outflows.

Credit strategies: Fee-bearing capital growth during the quarter reflects inflows and capital deployed across various strategies of $2.1 billion, as well as $1.4 billion of increases in market valuation since June 2020, partially offset by outflows and distributions. Over the LTM, inflows of $21.6 billion relate to fundraising and deployment, including $7 billion from the previous distressed debt fund, which became fee earning on committed capital in the period.

Fee-Bearing Capital Diversification

AS AT SEP. 30, 2020

Real estate

Long-term private funds

17%

46%

Infrastructure

20%

Perpetual strategies

30%

Renewable power

13%

Public securities

4%

Private equity

7%

Other1

20%

Public securities

4%

Oaktree

39%

1. Other represents Oaktree's open-end funds and Oaktree's share of its investment in DoubleLine's fee-bearing capital.

14 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Asset Management Operating Results cont'd

FEE-RELATED EARNINGS

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

2020

2019

Variance

2020

2019

Variance

(MILLIONS)

Base management fees

Long-term private funds

$

180

$

183

$

(3)

$

760

$

651

$

109

- Catch-up fees

-

1

(1)

34

34

-

Perpetual strategies

202

174

28

707

593

114

Credit strategies

232

-

232

860

-

860

Public securities

20

29

(9)

90

113

(23)

Incentive distributions

77

67

10

296

249

47

Transaction and advisory fees

17

14

3

48

26

22

Direct costs

728

468

260

2,795

1,666

1,129

Compensation and benefits

(251)

(121)

(130)

(980)

(453)

(527)

Other expenses

(74)

(41)

(33)

(302)

(179)

(123)

Fee-related earnings1

(325)

(162)

(163)

(1,282)

(632)

(650)

$

403

$

306

$

97

$

1,513

$

1,034

$

479

Margin

55%

65%

54%

62%

Fee-related earnings attributable to:

Brookfield

$

372

$

306

$

66

$

1,411

$

1,034

$

377

Non-Brookfield shareholders2

31

-

31

102

-

102

Total fee-related earnings

$

403

$

306

$

97

$

1,513

$

1,034

$

479

Margin - at our share3

58%

65%

57%

62%

  1. Oaktree contributed fee revenues of $232 million for the three months ended September 30, 2020 and $860 million over the LTM. Included in the fee-related earnings are Oaktree's compensation and benefits of $119 million and $452 million for the three months and LTM period, respectively, and other direct costs of $33 million and $145 million for the three months and LTM period, respectively.
  2. Represents Oaktree fee-related earnings attributable to the 38% of Oaktree not held by Brookfield.
  3. Margin at our share is calculated using our 62% share of Oaktree's fee revenues and costs. Brookfield margin on a standalone basis was 65% for the three months ended September 30, 2020 (2019 - 65%) and 65% for the LTM ended September 30, 2020 (2019 - 62%).

Long-termprivate funds: Growth in fee revenues over the LTM is attributable to capital raised within our latest series of flagship funds. See page 16 for further details.

Perpetual strategies: Higher fee revenues as a result of increased capitalization from higher prices at BEP and BIP, capital market transactions within the listed affiliates, and new capital raised and deployed in our perpetual private fund strategies. See page 16 for further details.

Credit strategies: Fee revenues are attributable to the inclusion of Oaktree's management fees, following the acquisition on September 30, 2019.

Public securities: Fee revenues decreased due to lower fee-bearing capital compared to the prior year periods. See page 17 for further details.

Incentive distributions: Reflects increased distribution levels at BIP, BEP and BPY. See page 18 for further details.

Transaction and advisory fees: Transaction fees in the quarter relate to the close of a co-investment in our latest infrastructure flagship fund.

Direct costs: Direct costs increased as we continue to grow our asset management franchise, both in fundraising, client service and new product development. Our investment in Oaktree also contributed to additional increases in direct costs.

Fee Revenue Diversification

FOR THE LTM ENDED SEP. 30, 2020

Long-term private funds base fees

28%

Real estate

18%

Perpetual strategies base fees

25%

Infrastructure

27%

Credit strategies base fees

31%

Renewable power

13%

Public securities base fees

3%

Private equity

8%

Incentive distributions

11%

Public securities

3%

Transaction fees

2%

Oaktree

31%

Asset Management Inc. 15

Fee Revenues

LONG-TERM PRIVATE FUNDS

AS AT AND FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

Annualized1

2020

2019

2020

2019

2020

2019

(MILLIONS)

Base management fees

Flagship funds

Real estate

$

53

$

59

$

224

$

233

$

215

$

232

Infrastructure

76

68

320

208

313

318

Private equity

29

30

125

112

128

135

158

157

669

553

656

685

Co-investments and other funds

22

26

91

98

110

85

Total base management fees

180

183

760

651

766

770

Catch-up fees

-

1

34

34

-

-

Transaction and advisory fees

17

14

48

26

37

18

$

197

$

198

$

842

$

711

$

803

$

788

1. Refer to details on annualized fees on page 22.

  • Flagship fee revenues were in line with the prior year quarter. Additional capital raised over the LTM was offset as a result of three flagship funds ending their investment periods during the LTM. This capital will become fee-generating again once invested. Over the LTM, our flagship funds generated $116 million of additional fees from third-party commitments raised within our latest flagship infrastructure and private equity funds.
  • Co-investmentsand other fund fees were relatively stable on a quarterly and LTM basis, primarily due to lower fees earned on our sustainable resources funds, partially offset by new co-investment capital raised.
  • Annualized fees increased due to co-investment and separately managed account capital raised in the current quarter, as well as higher transaction fees.

PERPETUAL STRATEGIES

AS AT AND FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

Annualized1

2020

2019

2020

2019

2020

2019

(MILLIONS)

Base management fees

Listed affiliates

BPY

$

30

$

43

$

117

$

152

$

126

$

215

BEP

59

30

159

87

239

120

BIP

83

73

284

242

335

290

BBU

15

14

66

55

61

55

Other

4

6

33

24

-

30

191

166

659

560

761

710

Core and core plus funds

11

8

48

33

46

40

Total base management fees

202

174

707

593

807

750

Incentive distributions

77

67

296

249

305

264

Performance fees

-

-

-

-

90

65

$

279

$

241

$

1,003

$

842

$

1,202

$

1,079

1. Refer to details on annualized fees on page 22.

  • Listed affiliate base management fees increased by $25 million from the prior year quarter as a result of price increases at BEP and BIP and capital markets activity across the affiliates. Fee revenues increased by $99 million over the LTM as a result of the strong price performance over the period.
  • Other listed affiliate fees decreased by $2 million from the prior year quarter as a result of the TERP privatization in the quarter which decreased third-partyfee-bearing capital. This was offset by increased fees from equity issued by BEP to fund the privatization.
  • Core and core plus funds increased by $3 million and $15 million over the prior year quarter and LTM, respectively, as a result of fees earned from fundraising and deployment across our perpetual private real estate and infrastructure funds.
  • Base management fee revenues from listed affiliates include $84 million (2019 - $76 million) and $297 million (2019 - $262 million) from Brookfield capital for the three months and LTM period, respectively.
  • The increase in incentive distributions reflects higher distributions per unit at BIP, BEP and BPY.

16 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Fee Revenues

CREDIT STRATEGIES

AS AT AND FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

Annualized1

2020

2019

2020

2019

2020

2019

(MILLIONS)

Long-term private funds

$

147

$

-

$

547

$

-

$

584

$

488

Perpetual strategies

35

-

124

-

129

124

Other2

50

-

189

-

198

193

$

232

$

-

$

860

$

-

$

911

$

805

Fee revenues attributable to:

Brookfield

$

143

$

-

$

530

$

-

$

561

$

492

Non-Brookfield shareholders3

89

-

330

-

350

313

$

232

$

-

$

860

$

-

$

911

$

805

  1. Refer to details on annualized fees on page 22.
  2. Represents Oaktree's open-end funds and its share of DoubleLine's net fee revenues.
  3. Represents Oaktree fee revenues attributable to the 38% of Oaktree not held by Brookfield.
  • Base management fee revenue of $232 million was earned during the quarter, or $143 million at our share. Annualized fees on Oaktree's fee-bearing capital are $911 million, or $561 million at our share.
  • As of September 30, 2020, we own an approximate 62% interest in Oaktree.

PUBLIC SECURITIES

AS AT AND FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

Annualized1

2020

2019

2020

2019

2020

2019

(MILLIONS)

Mutual funds

$

9

$

16

$

46

$

69

$

33

$

65

Separately managed accounts

10

11

40

38

41

45

Other

1

2

4

6

5

5

$

20

$

29

$

90

$

113

$

79

$

115

1. Refer to details on annualized fees on page 22.

  • Fee revenues decreased as a result of lower fee-bearing capital over the LTM period, predominantly in our mutual fund strategies.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 17

Incentive Distributions

We receive a portion of increases in the distributions by BIP, BEP and BPY as an incentive to increase FFO per unit, which should lead to increased unitholder distributions over time. The following table provides the current distribution levels of BIP, BEP and BPY:

ANNUALIZED INCENTIVE DISTRIBUTIONS

Per Unit

Annualized

AS AT SEP. 30, 2020

Annualized

Distribution

Incentive

Units

Incentive

Distributions

Hurdles

Distributions1

Outstanding

Distributions

(MILLIONS, EXCEPT PER UNIT)

Brookfield Infrastructure (BIP)2

$

1.94

$ 0.73

/ $0.79

15% / 25%

465.0

$

181

Brookfield Renewable (BEP)3

1.74

1.20

/

1.35

15% / 25%

430.3

67

Brookfield Property (BPY)4

1.33

1.10

/

1.20

15% / 25%

935.8

57

$

305

  1. Incentive distributions equate to 18% and 33% of limited partner distribution increases over the first and second hurdles, respectively.
  2. Incentive distributions from Brookfield Infrastructure are earned on distributions made by BIP and BIPC.
  3. Incentive distributions from Brookfield Renewable are earned on distributions made by BEP and BEPC.
  4. Incentive distributions from Brookfield Property are earned on distributions made by BPY and BPYU.

LISTED AFFILIATE DISTRIBUTIONS (PER UNIT)

BPY/BEP/BIP

BPY

BEP

BIP

Long-term target:

FFO payout

80%

70%

60% to 70%

Distribution growth

5% to 8%

5% to 9%

5% to 9%

  • Distribution policies target a distribution level that is sustainable on a long-term basis while retaining sufficient liquidity for capital expenditures and general purposes.

20201

$

1.33

$

1.74

$

2019

1.32

1.65

2018

1.26

1.57

2017

1.18

1.50

2016

1.12

1.42

1. Annualized based on the most recently announced distribution levels.

1.94 BBU

1.81

1.69 • BBU's performance fee is calculated as 20% of the increase in weighted average

1.57

unit price for the quarter, over the highest

1.40

previous threshold. There are 149.6 million

BBU units outstanding and the current

threshold is $41.96.

Incentive Distributions (LTM)

$296 $305

$249

$190 $140

$95

2016

2017

2018

2019

2020

Annualized

1. Annualized IDR based on most recently announced distribution levels.

18 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Carried Interest

Carried interest represents our share, as manager, of investment performance in our private funds

We generated carried interest of $502 million during the LTM based on investment returns. Cumulative gross unrealized carried interest now stands at $4.0 billion

UNREALIZED CARRIED INTEREST CONTINUITY1,2

AS AT AND FOR THE PERIODS ENDED SEP. 30, 2020 (MILLIONS)

Three Months

LTM

Unrealized

Direct

Unrealized

Direct

Carried

Net

Carried

Net

Interest

Costs

Interest

Costs

Accumulated unrealized, beginning of period

$

3,334

$

(1,244)

$

2,090

$

4,124

$

(1,517)

$

2,607

In period change

Generated in period

679

(254)

425

502

(208)

294

Foreign currency revaluation

24

(4)

20

(149)

45

(104)

703

(258)

445

353

(163)

190

Less: realized

(42)

13

(29)

(482)

191

(291)

661

(245)

416

(129)

28

(101)

Accumulated unrealized, end of period

3,995

(1,489)

2,506

3,995

(1,489)

2,506

Oaktree carried interest not attributable to

(476)

251

(225)

(476)

251

(225)

BAM shareholders

Accumulated unrealized, end of period, net

$

3,519

$

(1,238)

$

2,281

$

3,519

$

(1,238)

$

2,281

  1. Amounts dependent on future investment performance are deferred. Represents management estimate of carried interest if funds were wound up at period end.
  2. Carried interest in respect of third-party capital.

Unrealized Carried Interest - Expected Realization Timeline

AS AT SEP. 30, 2020 (MILLIONS)

$2,216

$1,073

$230

0 - 3 years

4 - 7 years

8 years +

  • Of the $1.1 billion of carried interest expected to be recognized within the next three years, $0.9 billion relates to carried interest from our flagship real estate, infrastructure and private equity funds, and $0.2 billion relates to Oaktree's funds, at our share.

THREE MONTHS

  • Unrealized carried interest before foreign exchange and associated costs increased $679 million during the current quarter. The increase is primarily related to increased valuations in our infrastructure, private equity and credit funds during the quarter.
  • We realized $42 million of carried interest in the quarter, primarily from the sale of shares in one of our private equity businesses.

LTM

  • In addition to the realized carried interest noted above, over the LTM we earned carried interest income from the return of capital from our fourth flagship private equity fund and real estate funds, as well as realization within the Oaktree funds.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 19

Target Carried Interest

Target carried interest reflects our estimate of the carried interest earned on a straight-line basis over the life of a fund, assuming target returns are achieved

Gross

Average

Annualized

Carry Eligible

Target

Carried

Target Carried

AS AT SEP. 30, 2020 (MILLIONS)

Capital1

Return2,3

Interest

Interest4

Opportunistic

$

21,093

18% - 23%

~20%

$

706

Value add

20,641

10% - 15%

~20%

420

Credit, core plus and other

13,763

10% - 15%

~15%

168

Oaktree

30,331

10% - 20%

~20%

779

Uncalled fund commitments5,6

85,828

2,073

Brookfield

27,977

569

Oaktree

20,831

455

Total carry eligible capital/target carried interest

$

134,636

3,097

Target carried interest not attributable to BAM shareholders7

(474)

$

2,623

  1. As at September 30, 2020, $85.8 billion of carry eligible capital has been invested and an additional $48.8 billion of committed capital will become carry eligible once invested.
  2. Carried interest is generated once a private fund exceeds its preferred return typically ranging from 5% - 9%. It will typically go through a catch-up period until the manager and limited partner (LP) are earning carry at their respective allocation.
  3. Gross target return is before annual fund management fees ranging from 90 bps for core plus funds to 200 bps for certain opportunistic funds.
  4. Based on carry eligible capital.
  5. Uncalled fund commitments from carry eligible funds.
  6. Target carry on uncalled fund commitments is discounted for two years at 10%, reflecting gross target return and average carried interest rate for uncalled fund commitments.
  7. Represents Oaktree target carried interest attributable to the 38% of Oaktree not held by Brookfield.

ANNUALIZED TARGET CARRIED INTEREST

For planning purposes, we use current carry eligible capital multiplied by target fund returns and our average carried interest rate to determine annualized carried interest, and then subtract associated direct costs to arrive at a 70% margin for Brookfield, and 50% margin for Oaktree, which is "net target carried interest."

Target carried interest on capital currently invested is $2.1 billion per annum, and $1.0 billion on capital not yet invested. Total target carried interest is $2.6 billion at our share, or $1.7 billion net of costs.

Target Carried Interest

Target Carry Diversification

AS AT SEP. 30, 2020

$3,097

$2,640

$1,195

$830 $860

Real estate

28%

Infrastructure

20%

Private equity & other

12%

Oaktree

40%

2016

2017

2018

2019

2020

20 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Private Funds Carried Interest

Virtually all of our funds are tracking to meet or exceed target returns

The below returns are actuals and illustrate how we are tracking toward target:

Target

Gross

Uncalled

Accumulated

Unrealized

Gross

Actual

Fund

Invested

Invested

AS AT SEP. 30, 2020

Strategy

Vintage1

Total

Carried

(MILLIONS)

IRR2,3

IRR4

Commitments5

< 3 years

> 3 years

Interest

Real estate

Opportunistic -

2013 - 2019

20%

17%

$

6,792

$

8,051

$

3,871

$

18,714

$

649

BSREP

Credit - BREF

2005 - 2017

12% - 15%

9%

1,196

1,573

179

2,948

52

Other6

2008 - 2018

2,317

6,193

4,163

12,673

49

Infrastructure

Value add - BIF

2010 - 2020

13% - 15%

14%

8,875

10,493

9,133

28,501

1,244

Other6

2008 - 2018

3,257

2,390

679

6,326

23

Private equity

Opportunistic -

2007 - 2019

20%

28%

3,918

3,347

1,675

8,940

693

BCP

Other6

2015 - 2018

1,622

1,721

2,029

5,372

81

Oaktree

20,831

17,935

12,396

51,162

728

Total private fund carry eligible capital

48,808

$

51,703

$

34,125

134,636

$

3,519

Non-carry eligible capital7

11,056

82,265

$

59,864

$

216,901

  1. Year of final close.
  2. Gross target return is before annual fund management fees ranging from 90 bps for core plus funds to 200 bps for certain opportunistic funds.
  3. Carried interest is generated once a private fund exceeds its preferred return. It will typically go through a catch-up period until the manager and LP are earning carry at their respective allocation.
  4. On existing carry eligible funds, excluding perpetual funds.
  5. Uncalled fund commitments from carry eligible funds. Additional $11.1 billion of uncalled fund commitments relate to funds not eligible to earn carry.
  6. Other represents funds and co-investments across the asset classes.
  7. Non-carryeligible capital includes various co-investments, separately managed accounts and funds that are not entitled to carry.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 21

Annualized Fees and Target Carried Interest

ANNUALIZED FEES AND TARGET CARRY

AS AT

Sep. 30, 2020

Dec. 31, 2019

Sep. 30, 2019

(MILLIONS)

Base management fees

Long-term private funds

$

766

$

823

$

770

Perpetual strategies1,2

807

753

750

Credit strategies

911

910

805

Public securities

79

118

115

Incentive distributions3

305

298

264

Performance fee4

2,868

2,902

2,704

90

90

65

Transaction and advisory5

37

29

18

Fee revenues

2,995

3,021

2,787

Target carried interest6

Brookfield funds

1,863

1,801

1,720

Oaktree funds

1,234

959

920

3,097

2,760

2,640

Oaktree revenues not attributable to

6,092

5,781

5,427

BAM shareholders

Management fees

(350)

(353)

(313)

Target carried interest

(474)

(372)

(357)

$

5,268

$

5,056

$

4,757

  1. Perpetual strategies base management fees include $333 million of annualized base fees on Brookfield capital from listed affiliates.
  2. For details on perpetual strategies base fee calculations, refer to the Glossary of Terms on page 38.
  3. Based on most recent quarterly distributions declared.
  4. Annualized BBU performance fees assume 10% annualized unit price appreciation from the $25.00 initial spin-out value in 2016, adjusted for current BBU units outstanding.
  5. Annualized transaction and advisory fees based on simple average of the last two years' results.
  6. Based on prescribed carried interest for private funds and target gross return. Includes only third-party capital.

$5,427

$6,092

$1,992

$2,210

$2,700

2016

2017

2018

2019

2020

Fee revenues

Target carried interest

  • We have approximately $30 billion of additional capital not in fee-bearing capital today that will earn approximately $300 million of fees and $200 million of target carried interest once invested.
  • BBU's performance fee is calculated as 20% of the increase in weighted average unit price for the quarter, over the highest previous threshold. There are 149.6 million BBU units outstanding and the current threshold is $41.96.
  • We include base fees on the capital invested by us in our listed affiliates in order to present operating margins and investment returns on a consistent basis. FFO from the associated invested capital is shown net of these fees.
  • We use a margin range of 55% - 65% on Brookfield fee revenue and a range of 25% - 35% on Oaktree fee revenue for planning purposes.
  • We use a margin range of 65% - 75% on Brookfield carried interest and a range of 45% - 55% on Oaktree carried interest for planning purposes.

Fee Revenue Diversification1

AS AT SEP. 30, 2020

Infrastructure

Long-term private funds

26%

27%

Perpetual strategies

28%

Real estate

17%

Credit strategies

32%

Renewable power

14%

Public securities

3%

Private equity

7%

Incentive distributions

11%

Public securities

3%

Oaktree

32%

1. Fee revenues based on annualized fees as at September 30, 2020, excluding transaction fees, performance fees and target carried interest.

22 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Private Fund Listing1

AS AT SEP. 30, 2020

Committed

Brookfield

Capital2

Participation2

Year3

(MILLIONS, USD UNLESS OTHERWISE NOTED)

BROOKFIELD REAL ESTATE FUNDS

Opportunistic

Real Estate Turnaround

$

5,570

18%

2010

Strategic Real Estate Partners I4

4,350

31%

2013

Strategic Real Estate Partners II4

9,000

26%

2016

Strategic Real Estate Partners III4

15,000

25%

2019

Thayer VI

306

48%

2014

Opportunity Zone

1,011

-%

2019

Value Add

U.S. Multifamily Value Add II

$

805

37%

2014

U.S. Multifamily Value Add III

1,005

30%

2018

Core Plus

U.S. Office

$

2,200

83%

2006

DTLA

1,100

45%

2013

Premier Real Estate Partners5

3,363

12%

2016

Premier Real Estate Partners Australia5

A $

676

39%

2018

BROOKFIELD INFRASTRUCTURE FUNDS

Value Add

Global Infrastructure I4

$

2,660

25%

2010

Global Infrastructure II4

7,000

40%

2013

Global Infrastructure III4

14,000

29%

2016

Global Infrastructure IV4

20,000

25%

2020

Core

Super-Core Infrastructure Partners5

$

3,288

2%

2018

Sustainable Resources

Timberlands Fund V

$

351

25%

2013

Brazil Timber I

280

18%

2008

Brazil Timber II

95

19%

2013

Brazil Agriculture I

330

31%

2010

Brazil Agriculture II

500

22%

2016

BROOKFIELD PRIVATE EQUITY FUNDS

Opportunistic

Capital Partners II4

C $

1,000

40%

2007

Capital Partners III4

1,000

25%

2012

Capital Partners IV4

4,000

26%

2016

Capital Partners V4

9,000

33%

2019

BROOKFIELD CREDIT FUNDS

Credit Funds

Real Estate Finance I

$

600

33%

2005

Real Estate Finance IV

1,375

18%

2014

Real Estate Finance V

2,949

14%

2017

Senior Mezzanine Real Estate Finance5

1,193

1%

2017

Infrastructure Debt

884

17%

2017

Infrastructure Debt - Euro

202

30%

2018

Peninsula Brookfield India Real Estate

95

-%

2013

  1. Excludes Oaktree funds. Includes discretionary funds managed by Brookfield Asset Management Inc. or a management affiliate thereof and all investments made by a consortium of investors formed and managed by Brookfield. Excludes direct investments made through managed accounts, joint ventures, co-investments, publicly listed affiliates or investment funds for which Brookfield did not serve as the manager during the investment period. Also excludes closed-end funds currently in the market and fully divested funds.
  2. Inclusive of Brookfield commitments; Brookfield participation includes commitments from Brookfield directly held as well as BPY, BEP, BIP and BBU.
  3. Year of final close. For perpetual funds, year of first close.
  4. Flagship funds.
  5. Perpetual funds.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 23

Capital Invested or Committed

Invested $48 billion of capital during the LTM including $14 billion in the quarter

CAPITAL INVESTED OR COMMITTED (FUNDING SOURCE)

FOR THE LTM ENDED SEP. 30

Renewable

Private Equity

Real Estate

Infrastructure

Power

and Other

Oaktree

Total

(MILLIONS)

Perpetual strategies1

$

3,193

$

2,790

$

2,166

$

2,195

$

4,911

$

15,255

Long-term private funds2

3,088

6,131

744

1,142

12,585

23,690

Co-investments2

324

4,894

-

2,020

710

7,948

Direct3

-

-

-

1,431

-

1,431

Total invested

6,605

13,815

2,910

6,788

18,206

48,324

Committed - new4

3,696

483

645

999

961

6,784

Committed - invested4

(3,195)

(6,540)

(541)

(2,955)

-

(13,231)

Total4

$

7,106

$

7,758

$

3,014

$

4,832

$

19,167

$

41,877

  1. Includes investments made by listed affiliates (BPY, BIP, BEP and BBU) and Oaktree on their balance sheets, or investments in perpetual private funds.
  2. Reflects third-party investments in long-term private funds managed by Brookfield and Oaktree.
  3. Investments made by Brookfield in financial assets or on balance sheet assets other than the listed affiliates.
  4. New commitments represent those commitments entered into during the period. Invested commitments represent the amounts invested during the period for commitments which were entered into during the prior period (shown as an outflow to commitments and an inflow to invested). Where capital was both committed and invested in the same period, it will be presented as invested only.

CAPITAL INVESTED (GEOGRAPHY)

FOR THE LTM ENDED SEP. 30

Real Estate

Infrastructure

Renewable

Private Equity

Oaktree

Total

(MILLIONS)

Power

and Other

North America

$

4,198

$

8,150

$

204

$

5,106

$

14,498

$

32,156

South America

26

255

58

104

711

1,154

Europe

1,102

798

2,391

2

2,386

6,679

Asia and other

1,279

4,612

257

1,576

611

8,335

Total invested

$

6,605

$

13,815

$

2,910

$

6,788

$

18,206

$

48,324

Capital Invested (by capital type)

SIGNIFICANT INVESTMENTS

FOR THE LTM ENDED SEP. 30, 2020

• Genesee & Wyoming ($5.3 billion)

• Indian Telecom Towers ($3.4 billion)

TerraForm privatization ($1.9 billion)

• Sagen (formerly "Genworth Canada") ($1.7 billion)

Cheniere Energy ($1.3 billion)

BrandSafway ($1.3 billion)

BPY repurchases ($0.7 billion)

Aveo ($0.7 billion)

  • Perpetual Strategies 32%
  • Co-investments16%

SIGNIFICANT COMMITMENTS

  • New York real estate project ($0.6 billion)
  • JC Penney ($0.2 billion)
  • Brazil solar development ($0.2 billion)
  • Long-termprivate funds 49%
  • Direct3%

24 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Invested Capital - Overview

LISTED INVESTMENTS

Our listed affiliates are BPY, BEP, BIP and BBU, the flagship entities that hold most of the investments in our four largest operating segments. Each of our flagship entities is publicly traded in the United States and Canada.

  • We own 60% (56% fully diluted) of Brookfield Property Partners (BPY), a diversified global real estate company that owns, operates and develops one of the largest portfolios of office, retail, multifamily, logistics, hospitality, triple net lease, self-storage, student housing and manufactured housing assets.
  • We own 52% of Brookfield Renewable Partners (BEP), one of the world's largest publicly traded renewable power platforms with generating facilities in North America, South America, Europe and Asia. During the third quarter of 2020, we completed the privatization of TERP in conjunction with the distribution of BEPC units. As a result, Brookfield's ownership in BEP decreased from 57% to 52%.
  • We own 28% of Brookfield Infrastructure Partners (BIP), one of the largest owners and operators of critical and diverse global infrastructure networks which facilitate the movement and storage of energy, water, freight, passengers and data.
  • We own 63% of Brookfield Business Partners (BBU), our flagship private equity perpetual strategy that invests primarily in business services and industrial companies focused on long-term capital appreciation.

In addition to our flagship entities, we have the following investments that are also publicly traded:

  • Norbord Inc. ("Norbord"): an international producer of wood-based panels which trades on the TSX and the NYSE. We own 43% of Norbord's shares and equity account for the investment as we exercise significant influence.
  • Vistra: an integrated power company based in Texas that trades on the NYSE. Together with our institutional partners, we own approximately 4% of the company which is treated as a financial asset on our balance sheet.

Our corporate cash and financial assets portfolio includes corporate cash, assets held as part of our liquidity management operations, seeding investments in new strategies and financial contracts to manage market risk.

UNLISTED INVESTMENTS

  • Residential: in North America, we develop land for building homes or selling lots to other homebuilders while in Brazil we develop and construct residential and commercial towers.
  • Energy contracts: our contractual arrangement with BEP to purchase power generated by certain North American hydro assets at a fixed price that is then resold on a contracted or uncontracted basis.
  • Other real estate: BAM's direct investment in the third flagship real estate fund, a 27.4% interest in a BAM-sponsored venture that owns operating and development properties in New York and investments in assets in the multifamily sector.
  • Sustainable resources and other: investments in sustainable resources, mainly timber and agricultural assets, in Brazil.
  • Other private equity: direct investments in various operating companies within the Private Equity segment.
  • Other corporate investments: includes our share of Oaktree's balance sheet investments and investments in insurance businesses whose investment portfolios are primarily held in support of the insurance premium liabilities.

CORPORATE ACTIVITIES

  • Our corporate borrowings reflect the amount of recourse debt held in the corporation.
  • Net working capital includes accounts receivable, accounts payable, other assets and other liabilities, including deferred tax assets and liabilities; FFO includes corporate costs and cash taxes.
  • Preferred equity represents permanent, non-participating equity that provides leverage to our common equity.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 25

Invested Capital - Operating Results

Funds from Operations1

AS AT SEP.30, 2020 AND DEC. 31, 2019

Invested Capital

Three Months

LTM

AND FOR THE PERIODS ENDED SEP. 30

(MILLIONS, EXCEPT PER SHARE AMOUNTS)

2020

2019

2020

2019

2020

2019

Listed investments

Listed affiliates

BPY

$

15,177

$

15,770

$

79

$

168

$

522

$

719

BPY preferred shares

16

16

-

-

-

21

BEP

3,856

4,810

72

72

409

449

BIP

1,674

2,141

90

84

349

351

BBU

1,891

2,389

132

132

466

479

Other listed investments

Norbord

1,239

1,185

105

15

166

80

Other

151

183

1

4

4

20

Corporate cash and financial assets2

3,675

2,181

80

(32)

236

57

27,679

28,675

559

443

2,152

2,176

Unlisted investments

Residential

2,525

2,859

37

42

104

90

Energy contracts

509

510

(11)

(31)

(158)

(185)

Other

5,216

4,655

28

(2)

90

119

8,250

8,024

54

9

36

24

Corporate activities

Corporate borrowings / Interest expense

(8,587)

(7,083)

(98)

(87)

(370)

(342)

Working capital / Corporate costs and taxes3

895

470

(37)

(9)

(166)

(139)

Perpetual preferred shares4

(4,145)

(4,145)

-

-

-

-

(11,837)

(10,758)

(135)

(96)

(536)

(481)

Invested capital, net / FFO

$

24,092

$

25,941

$

478

$

356

$

1,652

$

1,719

Per share

$

15.34

$

16.43

$

0.29

$

0.22

$

0.98

$

1.07

  1. Excludes realized disposition gains.
  2. Corporate cash and financial assets is inclusive of $2.3 billion of cash and cash equivalents (2019 - $789 million).
  3. Invested capital includes net deferred income tax asset of $2.0 billion (2019 - $2.2 billion); FFO includes current tax expense of $12 million (2019 - tax recovery of $14 million) for the three months ended September 30, 2020 and current tax expense of $64 million (2019 - $39 million) for the LTM.
  4. FFO excludes preferred shares distributions of $34 million (2019 - $38 million) for the three months ended September 30, 2020 and $144 million (2019 - $150 million) for the LTM.

26 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Disposition Gains

Three Months

LTM

FOR THE PERIODS ENDED SEP. 30

FFO1,2

Net Income2

FFO1,2

Net Income2

2020

2019

2020

2019

2020

2019

2020

2019

(MILLIONS)

Real estate

Core office

$

-

$

143

$

-

$

(8)

$

60

$

338

$

12

$

(21)

Core retail portfolio

1

12

1

12

36

18

6

9

LP investments

IDI

-

-

-

-

-

135

-

(29)

Other LP investments

(12)

(16)

2

(6)

32

84

(30)

1

Other Directly Held

4

(39)

2

(49)

6

123

43

63

(7)

100

5

(51)

134

698

31

23

Infrastructure

BIPC Secondary Offering

140

-

-

-

140

-

-

-

WETT

12

-

5

-

12

-

5

-

EBSA

-

-

-

-

19

-

1

-

AVN (Chilean toll road)

-

-

-

-

28

91

-

-

Other infrastructure

-

16

-

(1)

11

(14)

8

6

152

16

5

(1)

210

77

14

6

Private equity

BGIS

-

-

-

-

-

66

-

93

BGRS

-

-

-

-

-

142

-

109

Nova Cold

-

-

-

-

26

-

26

-

GrafTech

-

-

-

-

55

-

-

-

Other Private Equity

-

6

-

6

23

61

27

60

-

6

-

6

104

269

53

262

Renewable power

BEP Secondary Offering

-

-

-

-

479

-

-

-

Other Renewable Power

3

3

3

-

32

117

4

5

3

3

3

-

511

117

4

5

Corporate

Other Corporate

14

-

-

-

14

-

-

-

14

-

-

-

14

-

-

-

$

162

$

125

$

13

$

(46)

$

973

$

1,161

$

102

$

296

  1. FFO includes gains (net of losses) recorded in net income, directly in equity, as well as the realization of appraisal gains recorded in prior years.
  2. Net of non-controlling interests.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 27

Listed Affiliates Results

BPY (NASDAQ: BPY, TSX: BPY.UN) - 60% (56% fully diluted) ownership interest

Funds from Operations

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Invested Capital

Three Months

LTM

AND FOR THE PERIODS ENDED SEP. 30

2020

2019

2020

2019

2020

2019

(MILLIONS)

Core office

$

13,867

$

14,240

$

141

$

150

$

587

$

647

Core retail

12,915

14,138

97

201

649

825

LP investments

4,973

5,126

23

74

147

316

Corporate

(6,466)

(4,974)

(100)

(101)

(356)

(406)

Attributable to unitholders

25,289

28,530

161

324

1,027

1,382

Non-controlling interests

(10,112)

(12,760)

(67)

(146)

(453)

(633)

Segment reallocation and other1

-

-

(15)

(10)

(52)

(30)

Brookfield's interest

15,177

15,770

79

168

522

719

Preferred shares

16

16

-

-

-

21

$

15,193

$

15,786

$

79

$

168

$

522

$

740

BEP (NYSE: BEP, TSX: BEP.UN) - 52% ownership interest

Funds from Operations

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Invested Capital

Three Months

LTM

AND FOR THE PERIODS ENDED SEP. 30

2020

2019

2020

2019

2020

2019

(MILLIONS)

Proportionate generation (GWh)

Actual

n/a

n/a

5,753

5,213

25,446

27,113

Long-term average (LTA)

n/a

n/a

6,618

5,821

27,205

26,308

Hydroelectric generation

$

7,971

$

8,961

$

113

$

125

$

679

$

747

Wind energy

2,011

1,591

50

36

189

184

Solar, storage and other

1,732

1,081

78

42

176

125

Corporate

(4,260)

(3,681)

(84)

(70)

(267)

(260)

Attributable to unitholders

7,454

7,952

157

133

777

796

Incentive distributions

-

-

(17)

(12)

(60)

(46)

Non-controlling interests

(3,598)

(3,142)

(65)

(49)

(294)

(296)

Segment reallocation and other2

-

-

(3)

-

(14)

(5)

Brookfield's interest

$

3,856

$

4,810

$

72

$

72

$

409

$

449

BIP (NYSE: BIP, TSX: BIP.UN) - 28% ownership interest

Funds from Operations

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Invested Capital

Three Months

LTM

AND FOR THE PERIODS ENDED SEP. 30

2020

2019

2020

2019

2020

2019

(MILLIONS)

Utilities

$

1,802

$

2,178

$

139

$

145

$

567

$

563

Transport

3,578

3,991

135

128

491

531

Energy

2,953

3,128

115

100

445

393

Data infrastructure

1,832

1,318

50

36

177

114

Corporate and other

(4,421)

(3,486)

(74)

(71)

(266)

(249)

Attributable to unitholders

5,744

7,129

365

338

1,414

1,352

Incentive distributions

-

-

(46)

(41)

(179)

(151)

Non-controlling interests

(4,070)

(4,988)

(226)

(210)

(874)

(847)

Segment reallocation and other2

-

-

(3)

(3)

(12)

(3)

Brookfield's interest

$

1,674

$

2,141

$

90

$

84

$

349

$

351

BBU (NYSE: BBU, TSX: BBU.UN) - 63% ownership interest

Funds from Operations

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Invested Capital

Three Months

LTM

AND FOR THE PERIODS ENDED SEP. 30

2020

2019

2020

2019

2020

2019

(MILLIONS)

Business services

$

2,082

$

2,161

$

62

$

31

$

170

$

427

Infrastructure services

753

470

78

95

332

322

Industrials

893

947

86

103

368

403

Corporate and other

(642)

214

(18)

(10)

(52)

(45)

Attributable to unitholders

3,086

3,792

208

219

818

1,107

Non-controlling interests

(1,195)

(1,403)

(76)

(82)

(304)

(367)

Segment reallocation and other2

-

-

-

(5)

(48)

(261)

Brookfield's interest

$

1,891

$

2,389

$

132

$

132

$

466

$

479

  1. Reflects fee-related earnings and net carried interest reclassified to asset management segment and asset management expenses not included in operating FFO.
  2. Relates to disposition gains, net of NCI, included in operating FFO.

28 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Other Investments

In addition to being invested in our four flagship listed affiliates, we hold a number of other listed and unlisted investments

OTHER LISTED INVESTMENTS AND CORPORATE CASH AND FINANCIAL ASSETS

AS AT SEP. 30, 2020 AND DEC. 31, 2019

AND FOR THE PERIODS ENDED SEP. 30 (MILLIONS)

Other listed

Norbord

Other listed

Corporate cash and financial assets

Funds from Operations

Invested Capital

Three Months

LTM

Segment

2020

2019

2020

2019

2020

2019

Private Equity

$

1,239

$

1,185

$

105

$

15

$

166

$

80

Private Equity

151

183

1

4

4

20

1,390

1,368

106

19

170

100

Corporate

3,675

2,181

80

(32)

236

57

$

5,065

$

3,549

$

186

$

(13)

$

406

$

157

UNLISTED INVESTMENTS

Funds from Operations

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Invested Capital

Three Months

LTM

AND FOR THE PERIODS ENDED SEP. 30

Segment

2020

2019

2020

2019

2020

2019

(MILLIONS)

Residential development

North America

Residential

$

1,983

$

2,083

$

36

$

41

$

109

$

137

Brazil and other

Residential

542

776

1

1

(5)

(47)

2,525

2,859

37

42

104

90

Energy contracts

Renewable Power

509

510

(11)

(31)

(158)

(185)

Sustainable resources and other

Infrastructure

563

651

2

2

11

21

Other corporate

Corporate

726

680

(3)

(5)

(11)

(2)

Other unlisted

Various

3,927

3,324

29

1

90

100

$

8,250

$

8,024

$

54

$

9

$

36

$

24

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 29

Capitalization

Our corporate debt has a weighted-average term to maturity of 12 years, while our recourse debt to corporate capitalization remains below 20%

AS AT SEP. 30, 2020 AND DEC. 31, 2019

Average

Average

Leverage

Rate

Term (Years)

2020

2019

(MILLIONS)

Corporate borrowings

Term debt

4.4%

12

$

8,587

$

7,083

Revolving facilities1

n/a

4

-

-

Total corporate borrowings

8,587

7,083

Perpetual preferred shares

3.9%

perp.

4,145

4,145

Debt and preferred capital

$

12,732

$

11,228

1. Revolving credit facilities of $2.6 billion support commercial paper issuances.

DEBT TO CAPITALIZATION

Corporate

Consolidated

AS AT SEP. 30, 2020 AND DEC. 31, 2019 (MILLIONS)

2020

2019

2020

2019

Corporate borrowings

$

8,587

$

7,083

$

8,587

$

7,083

Non-recourse borrowings

Subsidiary borrowings

-

-

10,584

8,423

Property specific borrowings

-

-

129,646

127,869

8,587

7,083

148,817

143,375

Accounts payable and other

4,196

4,708

45,153

43,077

Deferred income tax liabilities

383

279

14,314

14,849

Subsidiary equity obligations

-

-

3,989

4,132

Liabilities associated with assets held for sale

-

-

1,503

1,690

Equity

Non-controlling interests

-

-

80,156

81,833

Preferred equity

4,145

4,145

4,145

4,145

Common equity

29,006

30,868

29,006

30,868

33,151

35,013

113,307

116,846

Total capitalization

$

46,317

$

47,083

$

327,083

$

323,969

Debt to capitalization1

19%

15%

45%

44%

1. Determined as the aggregate of corporate borrowings and non-recourse borrowings divided by total capitalization. Subsequent to September 30, 2020, we issued $400 million of 4.625% green subordinated notes with a 2080 maturity. Factoring in this issuance, our debt to capitalization at Corporate and Consolidated would be 19% and 46%, respectively.

30 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Sources and Uses of Cash

We continue to source significant cash flows with few corporate borrowing maturities in the near term

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

2020

2019

2020

2019

(MILLIONS)

Corporate cash and financial assets, beginning of period

$

3,229

$

4,023

$

1,641

$

2,341

Sources

Cash available for distribution and/or reinvestment1

747

565

2,750

2,439

Secondary offerings of listed affiliates

227

-

706

-

Disposition of investments

117

143

722

497

BPY preferred share redemption

-

-

-

985

1,091

708

4,178

3,921

Uses

Acquisition of Oaktree, net of distribution2

-

(2,095)

-

(2,095)

Share repurchases3

(17)

(25)

(485)

(336)

Dividends paid to common shareholders

(182)

(153)

(706)

(603)

Temporary and other investments4

(387)

(171)

(2,009)

(1,229)

Listed affiliate unit/share purchases

(433)

(250)

(479)

(668)

(1,019)

(2,694)

(3,679)

(4,931)

Net financing activities

495

-

1,554

446

Other sources / (uses)5

(121)

(396)

(19)

(136)

In-period change

446

(2,382)

2,034

(700)

Corporate cash and financial assets, end of period

$

3,675

$

1,641

$

3,675

$

1,641

  1. Refer to page 32 for reconciliations of IFRS to non-IFRS measures.
  2. Net of a $306 million dividend received from Oaktree subsequent to our acquisition.
  3. Includes repurchases of BAM common and preferred shares.
  4. This includes cash used to fund capital calls, seed investments and cash used on various risk management trades.
  5. Includes adjustments for accrued items, carried interest proceeds subject to clawback, financial asset mark-to-market changes and other items.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 31

Reconciliation of IFRS to Non-IFRS Measures

FOR THE THREE MONTHS ENDED SEP. 30

2020

2019

(MILLIONS)

Net income

$

542

$

1,756

Financial statement components not included in FFO

Equity accounted fair value changes and other non-FFO items

602

180

Fair value changes

31

(394)

Depreciation and amortization

1,470

1,299

Deferred income taxes

21

(464)

Realized disposition gains in fair value changes or prior periods

161

190

Non-controlling interests

(1,788)

(1,741)

Funds from operations

1,039

826

Less: total disposition gains

(162)

(125)

Less: net invested capital FFO

(478)

(356)

Less: realized carried interest, net

(27)

(39)

Corporate activities

(135)

(96)

Other wholly owned investments1

46

1

Distributions from investments

459

333

Our share of Oaktree's fee-related earnings

(49)

-

Our share of Oaktree's distributable earnings

41

-

Equity-based compensation

23

20

Preferred share dividends

(34)

(38)

Cash available for distribution and/or reinvestment before realized carried interest

723

526

Realized carried interest, net, excluding Oaktree

24

39

Cash available for distribution and/or reinvestment2

$

747

$

565

  1. Relates to FFO from other wholly owned investments used as a proxy for cash generated.
  2. Comparative numbers have been revised to reflect new definition. Refer to Glossary of Terms starting on page 37.

OVERVIEW

We disclose certain non-IFRS financial measures in these supplemental schedules. Reconciliations of these non-IFRS financial measures to the most directly comparable financial measures calculated and presented in accordance with IFRS are presented above. Management assesses the performance of its business based on these non-IFRS financial measures. These non-IFRS financial measures should be considered in addition to, and not as a substitute for or superior to, net income or other financial measures presented in accordance with IFRS.

32 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Common Share Information

COMMON SHARE CONTINUITY

FOR THE PERIODS ENDED SEP. 30

Three Months

LTM

2020

2019

2020

2019

(MILLIONS)

Outstanding at beginning of period

1,511.5

1,433.8

1,510.8

1,438.3

Issued (repurchased)

Issuances

-

79.1

-

79.1

Repurchases

(0.7)

(3.9)

(9.8)

(13.6)

Long-term share ownership plans

1.4

1.8

11.1

6.8

Dividend reinvestment plan

0.1

-

0.2

0.2

Outstanding at end of period

1,512.3

1,510.8

1,512.3

1,510.8

Unexercised options and other share-based plans

58.6

70.7

58.6

70.7

Total diluted shares at end of period

1,570.9

1,581.5

1,570.9

1,581.5

  • The company holds 61.5 million common shares for management share ownership plans, which have been deducted from the total number of shares outstanding.
    • 8.7 million shares would be issued in respect of these plans if exercised based on current market prices and the balance would be canceled.
  • Cash value of unexercised options as at September 30, 2020 was $1.2 billion (September 30, 2019 - $1.2 billion).
  • The company completed the previously announced 3-for-2 stock split on April 1, 2020. All share amounts are presented on a post-split basis.

FFO AND EARNINGS PER SHARE INFORMATION

FOR THE THREE MONTHS ENDED SEP. 30

Funds from Operations

Net Income

2020

2019

2020

2019

(MILLIONS, EXCEPT PER SHARE AMOOUNTS)

FFO / Net income

$

1,039

$

826

$

172

$

947

Preferred share dividends

(34)

(38)

(34)

(38)

Dilutive effect of conversion of subsidiary preferred shares

-

-

9

(17)

FFO / Net income available for shareholders

$

1,005

$

788

$

147

$

892

Weighted average shares

1,511.7

1,434.1

1,511.7

1,434.1

Dilutive effect of the conversion of options and other share-

24.7

36.1

24.7

36.1

based plans using treasury stock method

Shares and share equivalents

1,536.4

1,470.2

1,536.4

1,470.2

Per share

$

0.65

$

0.54

$

0.10

$

0.61

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 33

Entity Basis - Reconciliation to Reportable Segments - Invested Capital

Reportable Segments

AS AT SEP. 30, 2020

Asset

Real Estate

Renewable

Infrastructure

Private

Residential

Corporate

Total

(MILLIONS)

Management

Power

Equity

Asset management

$

4,914

$

-

$

-

$

-

$

-

$

-

$

-

$

4,914

Invested capital

Listed investments

Brookfield Property Partners1

-

15,193

-

-

-

-

-

15,193

Brookfield Renewable Partners

-

-

3,856

-

-

-

-

3,856

Brookfield Infrastructure Partners

-

-

-

1,674

-

-

-

1,674

Brookfield Business Partners

-

-

-

-

1,891

-

-

1,891

Other listed investments

Norbord

-

-

-

-

1,239

-

-

1,239

Other listed - private equity

-

-

-

-

151

-

-

151

-

15,193

3,856

1,674

3,281

-

-

24,004

Financial assets

-

-

-

-

-

-

3,675

3,675

Unlisted investments

-

15,193

3,856

1,674

3,281

-

3,675

27,679

Residential development

-

-

-

-

-

2,525

-

2,525

Energy contracts

-

-

509

-

-

-

-

509

Other

-

3,590

-

563

337

-

726

5,216

-

3,590

509

563

337

2,525

726

8,250

Net working capital

-

-

-

-

-

-

895

895

Debt and preferred capital

Corporate borrowings

-

-

-

-

-

-

(8,587)

(8,587)

Perpetual preferred shares

-

-

-

-

-

-

(4,145)

(4,145)

-

-

-

-

-

-

(12,732)

(12,732)

$

4,914

$

18,783

$

4,365

$

2,237

$

3,618

$

2,525

$

(7,436)

$

29,006

1. Includes 16 million of BPY preferred shares.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 34

Entity Basis - Reconciliation to Reportable Segments - Three Months FFO

FOR THE THREE MONTHS ENDED SEP. 30, 2020 (MILLIONS)

Asset management

Fee-related earnings

Carried interest, net

Reportable Segments

Asset

Real Estate

Renewable

Infrastructure

Private

Residential

Corporate

Total

Management

Power

Equity

$

372

$

-

$

-

$

- $

- $

- $

- $

372

27

-

-

-

-

-

-

27

399

-

-

-

-

-

-

399

Invested capital

Listed investments

Brookfield Property Partners1

-

79

-

-

-

-

-

79

Brookfield Renewable Partners

-

-

72

-

-

-

-

72

Brookfield Infrastructure Partners

-

-

-

90

-

-

-

90

Brookfield Business Partners

-

-

-

-

132

-

-

132

Other listed investments

Norbord

-

-

-

-

105

-

-

105

Other listed - private equity

-

-

-

-

1

-

-

1

-

79

72

90

238

-

-

479

Financial assets

-

-

-

-

-

-

80

80

-

79

72

90

238

-

80

559

Unlisted investments

Residential development

-

-

-

-

-

37

-

37

Energy contracts

-

-

(11)

-

-

-

-

(11)

Other

-

18

-

2

11

-

(3)

28

-

18

(11)

2

11

37

(3)

54

Disposition gains

-

(7)

3

152

-

-

14

162

Corporate activities2

Interest expense

-

-

-

-

-

-

(98)

(98)

Corporate costs and taxes

-

-

-

-

-

-

(37)

(37)

-

-

-

-

-

-

(135)

(135)

$

399

$

90

$

64

$

244

$

249

$

37

$

(44)

$

1,039

  1. Includes nominal amounts of BPY preferred share distributions.
  2. Excludes $34 million of preferred share distributions for the three months, which are included in determining per share results.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 35

Entity Basis - Reconciliation to Reportable Segments - LTM FFO

FOR THE LTM ENDED SEP. 30, 2020 (MILLIONS)

Asset management Fee-related earnings Carried interest, net

Reportable Segments

Asset

Real Estate

Renewable

Infrastructure

Private

Residential

Corporate

Total

Management

Power

Equity

$ 1,411

$

-

$

-

$

- $

- $

- $

- $

1,411

252

-

-

-

-

-

-

252

1,663

-

-

-

-

-

-

1,663

Invested capital

Listed investments

Brookfield Property Partners1

-

522

-

-

-

-

-

522

Brookfield Renewable Partners

-

-

409

-

-

-

-

409

Brookfield Infrastructure Partners

-

-

-

349

-

-

-

349

Brookfield Business Partners

-

-

-

-

466

-

-

466

Other listed investments

Norbord

-

-

-

-

166

-

-

166

Other listed - private equity

-

-

-

-

4

-

-

4

-

522

409

349

636

-

-

1,916

Financial assets

-

-

-

-

-

-

236

236

Unlisted investments

-

522

409

349

636

-

236

2,152

Residential development

-

-

-

-

-

104

-

104

Energy contracts

-

-

(158)

-

-

-

-

(158)

Other

-

90

-

11

-

-

(11)

90

-

90

(158)

11

-

104

(11)

36

Disposition gains

-

134

511

210

104

-

14

973

Corporate activities2

Interest expense

-

-

-

-

-

-

(370)

(370)

Corporate costs and taxes

-

-

-

-

-

-

(166)

(166)

1,513

-

-

-

-

-

-

(536)

(536)

$ 1,663

$

746

$

762

$

570

$

740

$

104

$

(297)

$

4,288

  1. Includes nominal amounts of BPY preferred share distributions.
  2. Excludes $144 million of preferred share distributions for the LTM, which are included in determining per share results.

Q3 2020 Supplemental Information

Brookfield Asset Management Inc. 36

Glossary of Terms

The "Corporation," "Brookfield" or "BAM" refers to our asset management business which is comprised of our asset management and corporate business segments.

This Supplemental Information contains key performance measures that we employ in analyzing and discussing our results. These measures include non-IFRS measures. We describe our key financial measures below and include a complete list of our performance measures on pages 115 through 120 of our December 31, 2019 annual report.

  • Fee-bearingcapital represents the capital committed, pledged or invested in the listed affiliates, private funds and public securities that we manage which entitles us to earn fee revenues. Fee-bearing capital includes both called ("invested") and uncalled ("pledged" or "committed") amounts. When reconciling period amounts, we utilize the following definitions:
    • Inflows include capital commitments and contributions to our private and public securities funds and equity issuances in our listed affiliates.
    • Outflows represent distributions and redemptions of capital from within the public securities capital.
    • Distributions represent quarterly distributions from listed affiliates as well as returns of committed capital (excluding market valuation adjustments), redemptions and expiry of uncalled commitments within our private funds.
    • Market activity includes gains (losses) on portfolio investments, listed affiliates and public securities based on market prices.
    • Other include changes in net non-recourse debt included in the determination of listed affiliate capitalization and the impact of foreign exchange fluctuations on non-U.S. dollar commitments.
  • Cash available for distribution and/or reinvestment ("CAFDR") is a non-IFRSmeasure that provides insight into earnings received by the Corporation that are available for distribution to common shareholders or to be reinvested into the business. It is calculated as the sum of our Asset Management segment FFO (i.e., fee-relatedearnings and realized carried interest, net); distributions from our listed affiliates, other investments that pay regular cash distributions and FFO from our corporate cash and financial assets; other invested capital earnings, which include FFO from our residential operations, energy contracts, sustainable resources and other real estate, private equity, corporate investments that do not pay regular cash distributions, corporate costs and corporate interest expense, excluding equity compensation; net of preferred share dividend payments.
  • Annualized fees include annualized base management fees, which are determined by the contractual fee rate multiplied by the current level of fee-bearing capital, annualized incentive distributions based on our listed affiliates' current annual distribution policies, annualized transaction and public securities performance fees equal a simple average of the last two years' revenues.
  • Fee-relatedearnings is comprised of fee revenues less direct costs associated with earning those fees, which include employee expenses and professional fees as well as business related technology costs, other shared services and taxes. We use this measure to provide additional insight into the operating profitability of our asset management activities.
  • Carried interest is a contractual arrangement whereby we receive a fixed percentage of investment gains generated within a private fund provided that the investors receive a pre-determined minimum return. Carried interest is typically paid towards the end of the life of a fund after the capital has been returned to investors and may be subject to "clawback" until all investments have been monetized and minimum investment returns are sufficiently assured. This is referred to as realized carried interest. We defer recognition of carried interest in our financial statements until they are no longer subject to adjustment based on future events. Unlike fees and incentive distributions, we only include carried interest earned in respect of third-party capital when determining our segment results.
    • Accumulated unrealized carried interest is based on carried interest that would be receivable under the contractual formula at the period end date as if a fund was liquidated and all investments had been monetized at the values recorded on that date. Unrealized carry refers to the change in unrealized carry during a specified period, adjusted for realized carry.
    • Annualized target carried interest represents the annualized carried interest we would earn on third-party private fund capital subject to carried interest based on the assumption that we achieve the targeted returns on the private funds. It is determined by multiplying the target gross return of a fund by the percentage carried interest and by the amount of third-party capital, and discounted by a utilization factor representing the average invested capital over the fund life.

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Brookfield Asset Management Inc. 37

Glossary of Terms cont'd

  • Invested capital is the amount of common equity in our operating segments.
  • Fee revenues include base management fees, incentive distributions, performance fees and transaction fees presented within our Asset Management segment. Fee revenues exclude carried interest.
  • Funds from operations ("FFO") is a key measure of financial performance. FFO includes the fees that we earn from managing capital as well as our share of revenues earned and costs incurred within our operations, which include interest expense and other costs. FFO is defined as net income attributable to shareholders prior to fair value changes, depreciation and amortization, deferred income taxes, and includes disposition gains that are not recorded in net income as determined under IFRS. FFO also includes the company's share of equity accounted investments' funds from operations on a fully diluted basis. Brookfield uses FFO to assess its operating results and believes that many of its shareholders and analysts also find this measure valuable to them.
    FFO and its per share equivalent are non-IFRS measures which do not have any standard meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Net income is reconciled to FFO on page 32.
    • FFO from operating activities represents the company's share of revenues less operating costs and interest expenses: it excludes realized carried interest, disposition gains, fair value changes, depreciation and amortization, deferred income taxes, and includes our proportionate share of similar items recorded by equity accounted investments. We present this measure as we believe it assists in describing our results and reconciling variances within FFO.
    • Realized carried interest represents our share of investment returns based on realized gains within a private fund. Realized carried interest earned is recognized when an underlying investment is profitably disposed of and the fund's cumulative returns are in excess of preferred returns, in accordance with the respective terms set out in the fund's governing agreements, and when the probability of clawback is remote. Realized carried interest is determined on third-party capital that is no longer subject to future investment performance.
    • Performance fees are paid to us when we exceed predetermined investment returns within BBU. BBU performance fees are accrued quarterly based on the volume-weighted average increase in BBU unit price. Performance fees are not subject to clawback.
    • Realized disposition gains/losses are included in FFO as the purchase and sale of assets is a normal part of the company's business. They include gains or losses arising from transactions during the reporting period together with any fair value changes and revaluation surplus recorded in prior periods and are presented net of cash taxes payable or receivable. Realized disposition gains include amounts that are recorded in net income, other comprehensive income and as ownership changes in our consolidated statements of equity, and exclude amounts attributable to non-controlling interests unless otherwise noted.
  • Incentive distributions are determined by contractual arrangements and are paid to us by BPY, BEP and BIP and represent a portion of distributions paid by listed affiliates above a predetermined hurdle.
  • Base management fees are determined by contractual arrangements, are typically equal to a percentage of fee-bearing capital and are accrued quarterly.
    • Private fund base fees are typically earned on fee-bearing capital from third-party investors only and are earned on invested and/or uninvested fund capital, depending on the stage of the fund life.
    • Listed affiliate base fees are earned on the total capitalization of the listed affiliates, which includes our investment. Base fees for BPY, BEP and TERP include a quarterly fixed fee amount of $12.5 million, $5 million and $3 million, respectively. BPY and BEP each pay additional fees of 1.25% on the increase in capitalization above their initial capitalization of $11.5 billion and $8 billion, respectively. TERP paid an additional fee of 1.25% on the increase above initial unit price at the time of acquisition. As of July 31, 2020, TERP was privatized by BEP and will no longer pay base fees upon the privatization. Base fees for BPYU, BIP and BBU are 1.25% of total capitalization. Listed affiliate capitalization as at September 30, 2020, was as follows: BPY/BPYU - $16.7 billion; BEP/BEPC - $25.7 billion; BIP/BIPC - $26.6 billion; and BBU - $5.0 billion.
  • Internal rate of return ("IRR") is the annualized compounded rate of return of the fund, calculated since initial investment date.

38 Brookfield Asset Management Inc.

Q3 2020 Supplemental Information

Notice to Readers

Brookfield is not making any offer or invitation of any kind by communication of this Supplemental Information and under no circumstance is it to be construed as a prospectus or an advertisement.

This Supplemental Information contains "forward-looking information" within the meaning of Canadian provincial securities laws and "forward-looking statements," within the meaning of certain securities laws including Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. We may make such statements in this profile, in other filings with Canadian regulators and the Securities Exchange Commission or in other communications. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions and include statements which reflect management's expectations regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the corporation and its subsidiaries, capital committed to our funds, our liquidity and ability to access and raise capital, our ability to capitalize on investment opportunities, the potential growth of our asset management business and the related revenue streams therefrom, the prospects for increasing our cash flow from or continued achievement of targeted returns on our investments, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods, and include words such as "expects," "anticipates," "plans," "believes," "estimates," "seeks," "intends," "targets," "projects," "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may," "will," "should," "would" and "could." In particular, the forward-looking statements contained within this Supplemental Information include statements referring to the future state of the economy or the securities market and expected future deployment of capital, dispositions and associated realized carried interest, as well as statements regarding the results of future fundraising efforts.

Although we believe that our anticipated future results, performance or achievements expressed or implied by the forward- looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control (including the ongoing and developing COVID-19 pandemic), which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information.

Some of the factors, many of which are beyond Brookfield's control and the effects of which can be difficult to predict, but may cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: (i) investment returns that are lower than target; (ii) the impact or unanticipated impact of general economic, political and market factors in the countries in which we do business, including as a result of COVID-19; (iii) the behavior of financial markets, including fluctuations in interest and foreign exchange rates; (iv) global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; (v) strategic actions including dispositions; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits; (vi) changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); (vii) the ability to appropriately manage human capital;

  1. the effect of applying future accounting changes; (ix) business competition; (x) operational and reputational risks;
  1. technological change; (xii) changes in government regulation and legislation within the countries in which we operate;
  1. governmental investigations; (xiv) litigation; (xv) changes in tax laws; (xvi) ability to collect amounts owed;
  1. catastrophic events, such as earthquakes, hurricanes and epidemics/pandemics; (xviii) the possible impact of international conflicts and other developments including terrorist acts and cyberterrorism; (xix) the introduction, withdrawal, success and timing of business initiatives and strategies; (xx) the failure of effective disclosure controls and procedures and internal controls over financial reporting and other risks; (xxi) health, safety and environmental risks; (xxii) the maintenance of adequate insurance coverage; (xxiii) the existence of information barriers between certain businesses within our asset management operations; (xxiv) risks specific to our business segments including our real estate, renewable power, infrastructure, private equity, and residential development activities; and (xxv) factors detailed from time to time in our documents filed with the securities regulators in Canada and the United States, including in "Part 6 - Business Environment and Risks" of our Annual Report available on SEDAR at www.sedar.comand EDGAR at www.sec.gov.

We caution that the foregoing list of important factors that may affect future results is not exhaustive and other factors could also adversely affect its results. Investors and other readers are urged to consider the foregoing risks, as well as other uncertainties, factors and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. Except as required by law, the corporation undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

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Brookfield Asset Management Inc. 39

Notice to Readers cont'd

STATEMENT REGARDING PAST AND FUTURE PERFORMANCE AND TARGET RETURNS

Past performance is not indicative nor a guarantee of future results. There can be no assurance that comparable results will be achieved in the future, or that future investments or fundraising efforts will be similar to the historic results presented herein (because of economic conditions, the availability of investment opportunities or otherwise).

The target returns set forth herein are for illustrative and informational purposes only and have been presented based on various assumptions made by Brookfield in relation to, among other things, the investment strategies being pursued by the funds, any of which may prove to be incorrect. Due to various risks, uncertainties and changes (including changes in economic, operational, political or other circumstances) beyond Brookfield's control, the actual performance of the funds could differ materially from the target returns set forth herein. In addition, industry experts may disagree with the assumptions used in presenting the target returns. No assurance, representation or warranty is made by any person that the target returns will be achieved, and undue reliance should not be put on them. Prior performance is not indicative of future results and there can be no guarantee that the funds will achieve the target returns or be able to avoid losses.

STATEMENT REGARDING USE OF NON-IFRS MEASURES

We disclose a number of financial measures in this Supplemental Information that are calculated and presented using methodologies other than in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). We utilize these measures in managing the business, including for performance measurement, capital allocation and valuation purposes and believe that providing these performance measures on a supplemental basis to our IFRS results is helpful to investors in assessing the overall performance of our businesses. These non-IFRS measures have limitations as analytical tools and should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, similar financial measures calculated in accordance with IFRS. We caution readers that these non-IFRS financial measures or other financial metrics may differ from the calculations disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities.

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Q3 2020 Supplemental Information

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Brookfield Asset Management Inc. published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 17:10:06 UTC