ii.  Property operations include the ownership and operation of predominantly office, retail, 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 timberland 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 the provision of 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 business segments and specifically allocated to each business 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. Funds from Operations (“FFO”) is the key measure of our financial performance. We define FFO as net income prior to fair value  changes, depreciation and amortization, and deferred income taxes. FFO also 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 FFO, we include our proportionate share of the FFO of equity accounted investments and exclude  transaction costs incurred on business combinations.  We use FFO to assess operating results and our business. We do not use FFO as a measure of cash generated from our operations.  We derive funds from operations for each segment and reconcile total segmented FFO to net income in Note 3(c)(v) of the  consolidated financial statements.  Our definition of FFO 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. Generally Accepted Accounting Principles, as opposed  to IFRS. The key differences between our definition of FFO 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.  The company uses common equity by operating segment as its measure of segment assets, because it is utilized by the company’s  Chief Operating Decision Maker for capital allocation decisions. Segment measures include amounts earned from consolidated entities that are eliminated on consolidation. The two principal  adjustments are to include asset management revenues charged to consolidated entities as revenues within the company’s asset  management segment with the corresponding expense recorded as corporate costs within the relevant segment; and interest  charged on loans between consolidated entities, which are presented as revenues and interest expense within the relevant  segments. These amounts are based on the in-place terms of the asset management contracts and loan agreements amongst the  consolidated entities. Inter-segment revenues are made under terms that approximate market value. The company allocates the costs of shared functions, which would otherwise be included within its corporate activities segment  such as information technology and internal audit, pursuant to formal policies. 98 BROOKFIELD ASSET MANAGEMENT  b)  Basis of Measurement i.  Funds from Operations ii.  Segment Balance Sheet Information iii.  Segment Allocation and Measurement