PART 3 – OPERATING SEGMENT RESULTS BASIS OF PRESENTATION How We Measure and Report Our Operating Segments Our operations are organized into four operating platforms in addition to our corporate and asset management activities, which  collectively represent eight operating segments. We measure performance primarily using the funds from operations generated  by each operating segment and the amount of capital invested by the Corporation in each segment. Our operating segments are described below: i.  Asset management operations consist of managing our listed entities, private funds and public securities on behalf of our  clients and ourselves. We generate contractual base management fees for these activities and we also are entitled to earn  performance fees, including incentive distributions, performance fees and carried interests. We also provide transaction  and advisory services. ii.  Property operations include the ownership and operation of office properties, retail properties, industrial, multifamily,  and other property investments located primarily in major North American, Australian, Brazilian and European cities.  iii.  Renewable energy operations include the ownership and operation of primarily hydroelectric power generating facilities  on river systems in North America and Brazil, and wind power generating facilities in North America.  iv.  Infrastructure operations include the ownership and operation of utilities, transport, energy, and timberlands and  agricultural operations located in Australia, North America, Europe and South America. v.  Private equity operations include the investments and activities overseen by our private equity group. These include direct  investments and investments in our private equity funds. Our private equity funds have a mandate to invest in a broad  range of industries.  vi.  Residential development operations consist predominantly of homebuilding and land development in North America, and  condominium development in Brazil.  vii.  Service activities include construction management and contracting, and property services operations which include  global corporate relocation, facilities management and residential brokerage services. viii.  Corporate activities include the investment of the company’s cash and financial assets, as well as the management of our  corporate capitalization, including corporate borrowings, capital securities and preferred equity which fund a portion of  the capital invested in our other operations. Certain corporate costs such as technology and operations are incurred on  behalf of all of our operating segments and allocated to each operating segment based on an internal pricing framework. During the current year, we changed the internal organization and supervision of our operating businesses to align our structure  more closely with the nature of the operations of our investments, which gave rise to changes in how we report information for  management reporting and decision making purposes. We have restated the comparative information in this MD&A to conform  with the new presentation. The following section contains a description of key performance measures that we employ in discussing our segmented results  and elsewhere in our MD&A on a selective basis. As noted below, these measures include non-IFRS financial measures. The  non-IFRS measures are reconciled to the most comparable financial statement component in Note 3 to our consolidated financial  statements beginning on page 97 of this report. Funds from Operations (“FFO”)  is a key measure of our financial performance and we use FFO to assess operating results and  our business.  FFO includes gains or losses arising from transactions during the reporting period adjusted to include fair value changes and  revaluation surplus recorded in prior periods net of taxes payable or receivable, as well as amounts that are recorded directly in  equity, such as ownership changes, as opposed to net income because they result from a change in ownership of a consolidated  entity (“realized disposition gains”). We include realized disposition gains in FFO because we consider the purchase and sale of  assets to be a normal part of the company’s business. When determining funds from operations, we include our proportionate  share of the FFO of equity accounted investments and exclude transaction costs incurred on business combinations.  Our definition of funds from operations may differ from the definition used by other organizations, as well as the definition of  funds from operations used by the Real Property Association of Canada (“REALPAC”) and the National Association of Real  Estate Investment Trusts, Inc. (“NAREIT”), in part because the NAREIT definition is based on U.S. GAAP, as opposed to  IFRS. The key differences between our definition of funds from operations and the determination of funds from operations by  REALPAC and/or NAREIT, are that we include the following: realized disposition gains or losses that occur as normal part of  our business and cash taxes payable on those gains, if any; foreign exchange gains or losses on monetary items not forming part  of our net investment in foreign operations; and gains or losses on the sale of an investment in a foreign operation.  Segment Financial Measures 34 BROOKFIELD ASSET MANAGEMENT 