UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 6-K
__________________________
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2022
Commission File Number:
001-15160
__________________________
BROOKFIELD ASSET MANAGEMENT INC.
(Translation of registrant’s name into English)
__________________________
Suite 300, Brookfield Place, 181 Bay Street, P.O. Box 762, Toronto, Ontario, Canada M5J 2T3
(416) 363-9491
(Address and Telephone Number of Registrant’s Principal Executive Office)
__________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40‑F.
Form 20-F  ¨            Form 40-F  þ
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨








EXHIBIT LIST
 
Exhibit  Description
  Annual Report for the year ended December 31, 2021































SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BROOKFIELD ASSET MANAGEMENT INC.
Date: March 30, 2022
By:
 /s/ Justin B. Beber
Name: Justin B. Beber
Title: Chief Legal Officer


Document

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FIVE-YEAR FINANCIAL RECORD

AS AT AND FOR THE YEARS ENDED DEC. 3120212020201920182017
PER SHARE1
Net income (loss)$2.39 $(0.12)$1.73 $2.27 $0.89 
Funds from operations2
4.67 3.27 2.71 2.90 2.49 
Distributable earnings2
3.962.741.791.631.42
Dividends3
Cash0.52 0.48 0.43 0.40 0.37 
Special0.36 — — — 0.07 
Market trading price – NYSE1
60.38 41.27 38.53 25.57 29.03 
1.Adjusted to reflect the three-for-two stock split effective April 1, 2020.
2.See definition in the MD&A Glossary of Terms beginning on page 136.
3.See Corporate Dividends on page 58.











































2021 ANNUAL REPORT    1




CONTENTS
Brookfield at a Glance
Letter to Shareholders
Management’s Discussion & Analysis
PART 1 – Our Business and Strategy
PART 2 – Review of Consolidated Financial Results
PART 3 – Operating Segment Results
PART 4 – Capitalization and Liquidity
PART 5 – Accounting Policies and Internal Controls
PART 6 – Business Environment and Risks
Glossary of Terms
Internal Control Over Financial Reporting
Consolidated Financial Statements
Shareholder Information
Board of Directors and Officers
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20    BROOKFIELD ASSET MANAGEMENT


NOTICE TO READERS
Pages 1 through 20 of the 2021 Annual Report must be read in conjunction with the cautionary statements included elsewhere in the 2021 Annual Report. Except where otherwise indicated, the information provided herein is based on matters as they exist as of December 31, 2021 and not as of any future date.
In addition, for pages 1 through 20 of the 2021 Annual Report, the following terms have the definitions provided below:
Current fee-related earnings are annualized fee revenues net of associated direct costs. Annualized fee revenues are the sum of (i) base management fees on current fee-bearing capital based on the associated contractual fee rates; (ii) incentive distributions based on BEP and BIP current annual distribution policies; (iii) performance fees from BBU assuming a 10% annualized unit price appreciation; and (iv) transaction and public securities performance fees equal to a simple average of the last two years’ revenues. We assume that direct costs represent 40% of current fee revenues from Brookfield funds and 70% on Oaktree funds.
Target carried interest, net is target carried interest net of associated direct costs. Target carried interest represents the carried interest we will earn, straight-lined over the life of the fund, assuming that we achieve the target fund returns. This is calculated by multiplying carry eligible fund capital by the net target return of a fund and the fund’s carried interest percentage. Target gross returns are typically 20%+ for opportunistic funds; 10% to 15% for value add funds; 10% to 15% for credit and core funds. Fee terms vary by investment strategy (carried interest is approximately 15% to 20% subject to a preferred return and catch-up) and may change over time. Target carried interest on uncalled fund commitments is discounted for two years at 10%. We assume that direct costs represent 30% of target carried interest on Brookfield funds and 50% on Oaktree funds. There can be no assurance that targeted returns will be met.
2021 ANNUAL REPORT    21


MANAGEMENT’S
DISCUSSION AND ANALYSIS

ORGANIZATION OF MANAGEMENT’S DISCUSSION AND ANALYSIS (“MD&A”)
PART 1 – OUR BUSINESS AND STRATEGY
Real Estate
OverviewResidential Development
PART 2 – REVIEW OF CONSOLIDATED
Corporate Activities
FINANCIAL RESULTS
PART 4 – CAPITALIZATION AND LIQUIDITY
OverviewCapitalization
Income Statement AnalysisLiquidity
Balance Sheet AnalysisReview of Consolidated Statement of Cash Flows
Consolidation and Fair Value AccountingContractual Obligations
Foreign Currency TranslationExposures to Selected Financial Information
Corporate Dividends
PART 5 – ACCOUNTING POLICIES AND INTERNAL
Summary of Quarterly ResultsCONTROLS
PART 3 – OPERATING SEGMENT RESULTS
Accounting Policies, Estimates and Judgments
Basis of PresentationManagement Representations and Internal
Summary of Results by Operating SegmentControls
Asset ManagementRelated Party Transactions
Renewable Power and Transition
PART 6 – BUSINESS ENVIRONMENT AND RISKS
InfrastructureGLOSSARY OF TERMS
Private Equity

“Brookfield,” the “company,” “we,” “us” or “our” refers to Brookfield Asset Management Inc. and its consolidated subsidiaries. The “Corporation” refers to our asset management business which is comprised of our asset management and corporate business segments. Our “invested capital” includes our “perpetual affiliates” Brookfield Renewable Partners L.P., Brookfield Infrastructure Partners L.P. and Brookfield Business Partners L.P., which are separate issuers included within our Renewable Power and Transition, Infrastructure and Private Equity segments, respectively, and also includes issuers in the Brookfield Property Group, which are included in our Real Estate segment. Additional discussion of their businesses and results can be found in their public filings. We use “private funds” to refer to our real estate funds, transition funds, infrastructure funds and private equity funds. Our other businesses include Residential Development and Corporate.

Please refer to the Glossary of Terms beginning on page 136 which defines our key performance measures that we use to measure our business.
Additional information about the company, including our Annual Information Form, is available on our website at www.brookfield.com, on the Canadian Securities Administrators’ website at www.sedar.com and on the EDGAR section of the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
We are incorporated in Ontario, Canada, and qualify as an eligible Canadian issuer under the Multijurisdictional Disclosure System and as a “foreign private issuer” as such term is defined in Rule 405 under the U.S. Securities Act of 1933, as amended, and Rule 3b-4 under the U.S. Securities Exchange Act of 1934, as amended. As a result, we comply with U.S. continuous reporting requirements by filing our Canadian disclosure documents with the SEC; our annual report is filed under Form 40-F and we furnish our quarterly interim reports under Form 6-K.


Information contained in or otherwise accessible through the websites mentioned throughout this report does not form part of this report. All references in this report to websites are inactive textual references and are not incorporated by reference. Any other reports of the company referred to herein are not incorporated by reference unless explicitly stated otherwise.
22    BROOKFIELD ASSET MANAGEMENT


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
This Report contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of 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 provide such information and make such statements in the Report, in other filings with Canadian regulators or the U.S. Securities and 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, include statements which reflects 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, 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.”
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 contained in this Report. The statements and information involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
Factors that could 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 and the related global economic disruptions; (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; (viii) the effect of applying future accounting changes; (ix) business competition; (x) operational and reputational risks; (xi) technological change; (xii) changes in government regulation and legislation within the countries in which we operate; (xiii) governmental investigations; (xiv) litigation; (xv) changes in tax laws; (xvi) ability to collect amounts owed; (xvii) catastrophic events, such as earthquakes, hurricanes, or pandemics/epidemics; (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 and transition, infrastructure, private equity, and other alternatives, including credit; 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.com and EDGAR at www.sec.gov.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. 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.
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, that future investments will be similar to the historic investments discussed herein (because of economic conditions, the availability of investment opportunities or otherwise), that targeted returns, diversification or asset allocations will be met or that an investment strategy or investment objectives will be achieved.
2021 ANNUAL REPORT    23


STATEMENT REGARDING USE OF NON-IFRS MEASURES
We disclose a number of financial measures in this Report 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 financial measures 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. Reconciliations of these non-IFRS financial measures to the most directly comparable financial measures calculated and presented in accordance with IFRS, where applicable, are included within this Report. Please refer to our Glossary of Terms beginning on page 136 for all non-IFRS measures.
24    BROOKFIELD ASSET MANAGEMENT


PART 1
OUR BUSINESS AND STRATEGY
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OVERVIEW
We are a premier global alternative asset manager1 with a history spanning over 100 years. We have approximately $690 billion of assets under management (“AUM”)1 across a broad portfolio of renewable power and transition, infrastructure, private equity, real estate and credit. Our $364 billion in fee-bearing capital1 is invested on behalf of some of the world’s largest institutional investors, sovereign wealth funds and pension plans, along with thousands of individuals.
We provide a diverse product mix of private funds1 and dedicated public vehicles, which allow investors to invest in our five key asset classes and participate in the strong performance of the underlying portfolio. We invest in a disciplined manner, targeting returns of 12-15% over the long-term with strong downside protection, allowing our investors and their stakeholders to meet their goals and protect their financial futures.
ü    Investment Focus
    We predominantly invest in real assets across renewable power and transition, infrastructure, private equity, real estate and credit.
ü    Diverse Products Offering
    We offer public and private vehicles to invest across a number of product lines, including core, value-add, and opportunistic equity and credit strategies in both closed-end and perpetual vehicles.
ü    Focused Investment Strategies
    We invest where we can bring our competitive advantages to bear, such as our strong capabilities as an owner-operator, our large-scale capital and our global reach.
ü    Disciplined Financing Approach
    We employ leverage1 in a prudent manner to enhance returns while preserving capital throughout business cycles. Underlying investments are typically funded at investment-grade levels on a standalone and non-recourse basis, providing us with a stable capitalization. Only 6% of the total leverage reported in our consolidated financial statements has recourse to the Corporation.
ü    Sustainability
We are committed to ensuring that the assets and businesses in which we invest are set up for long-term success, and we seek to have a positive impact on the environment and the communities in which we operate.
1.See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    25


In addition, we maintain significant invested capital1 on the Corporation’s balance sheet where we invest alongside our investors. This capital generates annual cash flows that enhance the returns we earn as an asset manager, creates a strong alignment of interest, and allows us to bring the following strengths to bear on all our investments:
1.Large-scale capital
    We have approximately $690 billion in assets under management and $364 billion in fee-bearing capital.
2.Operating expertise
    We have approximately 180,000 operating employees worldwide who maximize value and cash flows from our operations.
3.Global reach
We operate in more than 30 countries on five continents around the world.
The value of the business is comprised of two key components: Our asset management activities that we refer to as Asset Management, and our balance sheet investments that we refer to as Invested Capital. Our financial returns are represented by the combination of the earnings of our Asset Management business, as well as capital appreciation and distributions from our Invested Capital. The primary performance measure we use is funds from operations (“FFO”)1 which we use to evaluate the performance of our segments.
ASSET MANAGEMENT
Our Asset Management business oversees $364 billion of fee-bearing capital across a broad portfolio of renewable power and transition, infrastructure, private equity, real estate and credit. Today, we have approximately 2,100 unique institutional investors and have approximately $40 billion of additional committed capital that will be fee-bearing when invested. Within each of our investment verticals, we manage capital in a variety of products that broadly fall into one of three categories: i) long-term private funds, ii) perpetual strategies and iii) liquid strategies1. Products within these three strategies have similar base management fee1 and carried interest1 or performance fee1 drivers.
Fee-Bearing Capital Diversification
AS AT DEC. 31, 2021 (BILLIONS)
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1.See definition in Glossary of Terms beginning on page 136.
26    BROOKFIELD ASSET MANAGEMENT


Long-term Private Funds – $169 billion fee-bearing capital
We manage and earn fees on a diverse range of renewable power and transition, infrastructure, private equity, real estate and credit funds. These funds have a long duration, are closed-end and include opportunistic, value-add, core and core plus investment strategies.
On long-term private fund capital, we earn:
1.Diversified and long-term base management fees on capital that is typically committed for 10 years with two one-year extension options.
2.Carried interest, which enables us to receive a portion of overall fund profits provided that investors receive a minimum prescribed preferred return. Carried interest is recognized when a fund’s cumulative returns are in excess of preferred returns and when it is highly probable that a significant reversal will not occur.
3.Transaction and advisory fees are one-time fees earned on co-investment capital related to the close of transactions, and vary based on transaction agreements.
Perpetual Strategies – $115 billion fee-bearing capital
We manage perpetual capital in our perpetual affiliates1, as well as in our core and core plus private funds, which can continually raise new capital. From our perpetual strategies, we earn:
1.Long-term perpetual base management fees, which are based on total capitalization or net asset value (“NAV”) of our perpetual affiliates and the NAV of our perpetual private funds.
2.Stable incentive distribution1 fees which are linked to cash distributions from perpetual affiliates (BEP/BEPC and BIP/BIPC) that exceed pre-determined thresholds. These cash distributions have a historical track record of growing annually and each of these perpetual affiliates target annual distribution growth rates within a range of 5-9%.
3.Performance fees based on unit price performance (BBU) and carried interest on our perpetual private funds.
Liquid Strategies – $80 billion fee-bearing capital
We manage publicly listed funds and separately managed accounts, focused on fixed income and equity securities across real estate, infrastructure and natural resources. We earn base management fees, which are based on committed capital and fund NAV, and performance income based on investment returns.
INVESTED CAPITAL
We have approximately $68 billion of invested capital on our balance sheet as a result of our history as an owner and operator of real assets. This capital provides attractive financial returns and important stability and flexibility to our asset management business.
Key attributes of our invested capital:
Transparent – a significant portion of our invested capital is in our publicly traded investments. The remainder is primarily held in our recently privatized real estate perpetual affiliate, a residential homebuilding business, and a few other directly held investments.
Diversified, long-term, stable cash flows – received from our underlying perpetual affiliates. These cash flows are underpinned by investments in real assets which should provide inflation protection and less volatility compared to traditional equities, and higher yields compared to fixed income.
Strong alignment of interests – we are the largest investor in each of our perpetual affiliates, and in turn, the perpetual affiliates are typically the largest investor in each of our private funds.
Refer to Parts 2 and 3 of this MD&A for more information on our operations and performance.
1.See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    27


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COMPETITIVE ADVANTAGES
We have three distinct competitive advantages that enable us to consistently identify and acquire high-quality assets and create significant value in the assets that we own and operate.
LARGE-SCALE CAPITAL
We have approximately $690 billion in assets under management.
We offer our investors a large portfolio of private funds that have global mandates and diversified strategies. Our access to large-scale, flexible capital enables us to pursue transactions of a size that lessens competition. In addition, investing significant amounts of our own capital either through our perpetual affiliates or through our own balance sheet ensures strong alignment of interest with our investors.
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OPERATING EXPERTISE
We have approximately 180,000 operating employees worldwide who are instrumental in maximizing the value and cash flows from our operations.
We believe that strong operating experience is essential in maximizing efficiency and productivity – and ultimately, returns. We do this by maintaining a culture of long-term focus, alignment of interest and collaboration through the people we hire and our operating philosophy. This in-house operating expertise developed through our heritage as an owner-operator is invaluable in underwriting acquisitions and executing value-creating development and capital projects.
GLOBAL REACH
We operate in more than 30 countries on five continents around the world.
Our global reach allows us to diversify and identify a broad range of opportunities. We are able to invest where capital is scarce, and our scale enables us to move quickly and pursue multiple opportunities across different markets. Our global reach also allows us to operate our assets more effectively: we believe that a strong on-the-ground presence is critical to operating successfully in many of our markets, and many of our businesses are truly local. Furthermore, the combination of our strong local presence and global reach allows us to bring global relationships and operating practices to bear across markets to enhance returns.
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INVESTMENT CYCLE
Raise Capital
As an asset manager, the starting point is establishing new funds and other investment products for investors. This in turn provides the capital to invest, from which we earn base management fees, incentive distributions and performance-based returns such as carried interest. Accordingly, we create value by increasing our amount of fee-bearing capital and by achieving strong investment performance that leads to increased cash flows and asset values.
Identify and Acquire High-Quality Assets
We follow a value-based approach to investing and allocating capital. We believe that our disciplined approach, global reach and our operating expertise enable us to identify a wide range of potential opportunities, and allow us to invest at attractive valuations and generate superior risk-adjusted returns. We also leverage our considerable expertise in executing recapitalizations, operational turnarounds and large development and capital projects, providing additional opportunities to deploy capital.
Secure Long-Term Financing
We finance our operations predominantly on a long-term investment-grade basis, and most of our capital consists of equity and standalone asset-by-asset financing with minimal recourse to other parts of the organization. We utilize relatively modest levels of corporate debt to provide operational flexibility and optimize returns. This provides us with considerable stability, improves our ability to withstand financial downturns and enables our management teams to focus on operations and other growth initiatives.
Enhance Value and Cash Flows Through Operating Expertise
Our strong, time-tested operating capabilities enable us to increase the value of the assets within our businesses and the cash flows they produce, and they help to protect capital in adverse conditions. Our operating expertise, development capabilities and effective financing can help ensure that an investment’s full value creation potential is realized, which we believe is one of our most important competitive advantages.
Realize Capital from Asset Sales or Refinancings
We actively monitor opportunities to sell or refinance assets to generate proceeds; in our limited life funds that capital is returned to investors, and in the case of our perpetual funds, we then redeploy the capital to enhance returns. In many cases, returning capital from private funds completes the investment process, locks in investor returns and gives rise to performance income.
Our Operating Cycle Leads to Value Creation
We create value from earning robust returns on our investments that compound over time and grow our fee-bearing capital. By generating value for our investors and shareholders, we increase fees and carried interest received in our asset management business, and grow cash flows that compound value in our invested capital.
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LIQUIDITY AND CAPITAL RESOURCES
The Corporation has $5.1 billion of core liquidity1 and $92.1 billion of total liquidity1 on a group basis as at December 31, 2021. We manage our liquidity and capitalization on a group-wide basis, which we organize into three principal tiers:
i)The Corporation:
Strong levels of liquidity are maintained to support growth and ongoing operations.
Capitalization consists of a large common equity base, supplemented with perpetual preferred shares, long-dated corporate bonds and, from time to time, draws on our corporate credit facilities.
Negligible guarantees are provided on the financial obligations of perpetual affiliates and managed funds.
High levels of cash flows are available after payment of common share dividends.
ii)Our perpetual affiliates (BEP/BEPC, BIP/BIPC, BBU and BPG):
Strong levels of liquidity are maintained at each of the perpetual affiliates to support their growth and ongoing operations.
Perpetual affiliates are intended to be self-funding with stable capitalization through market cycles.
Financial obligations have no recourse to the Corporation.
iii)Managed funds, or investments, either held directly or within perpetual affiliates:
Each underlying investment is typically funded on a standalone basis.
Fund level borrowings are generally limited to subscription facilities backed by the capital commitments to the fund.
Financial obligations have no recourse to the Corporation.
APPROACH TO CAPITALIZATION
We maintain a prudent level of long-dated capitalization in the form of common equity, perpetual preferred shares and corporate bonds, which provides a very stable capital structure. In addition, we maintain appropriate levels of liquidity throughout the organization to fund operating, development and investment activities as well as unforeseen requirements.
A key element of our capital strategy is to maintain significant liquidity at the corporate level, primarily in the form of cash, financial assets and undrawn credit lines. 
Within our perpetual affiliates and private funds, we strive to:
Ensure our perpetual affiliates can finance their operations on a standalone basis without recourse to or reliance on the Corporation.
Structure borrowings and other financial obligations associated with assets or portfolio companies in our private funds to provide a stable capitalization at levels that are attractive to investors, are sustainable on a long-term basis and can withstand business cycles.
Ensure the vast majority of this debt is at investment-grade levels; however, periodically, we may borrow at sub-investment grade levels in certain parts of our business where the borrowings are carefully structured and monitored.
1.See definition in Glossary of Terms beginning on page 136.
30    BROOKFIELD ASSET MANAGEMENT


Provide recourse only to the specific businesses or assets being financed, without cross-collateralization or parental guarantees.
Match the duration of our debt to the underlying leases or contracts and match the currency of our debt to that of the assets such that our remaining exposure is on the net equity of the investment.
As at December 31, 2021, only $10.9 billion of long-term debt has recourse to the Corporation. The remaining debt on our consolidated balance sheet is held within managed entities and has no recourse to the Corporation but is consolidated under IFRS.
LIQUIDITY
The Corporation has very few capital requirements. Nevertheless, we maintain significant liquidity ($5.1 billion in the form of cash and financial assets and undrawn credit facilities as at December 31, 2021) at the corporate level to bridge larger fund transactions, seed new fund products, invest in businesses alongside our fund investors or participate in equity issuances by our perpetual affiliates.
On a group basis, we have approximately $92.1 billion of liquidity, which includes corporate liquidity, perpetual affiliate liquidity and uncalled private fund commitments. Uncalled private fund commitments are third-party commitments available for drawdown in our private funds.
AS AT DEC. 31, 2021 (MILLIONS)Corporate LiquidityGroup Liquidity
Cash and financial assets, net$3,522 $6,233 
Undrawn committed credit facilities1,618 8,778 
Core liquidity5,140 15,011 
Third-party uncalled private fund commitments— 77,079 
Total liquidity$5,140 $92,090 
CAPITAL MANAGEMENT
We utilize a metric we call the Corporation’s Capital to manage the business in a number of ways, including operating performance, value creation, credit metrics and capital efficiency. The performance of the Corporation’s Capital is closely tracked and monitored by the company’s key management personnel and evaluated against management’s objectives. The primary goal of the company is to earn a 12-15% return compounded over the long-term while always maintaining excess capital to support ongoing operations.
The Corporation’s Capital consists of the capital invested in its asset management activities, including investments in entities that it manages, its corporate investments that are held outside of managed entities and its net working capital, and is computed as follows:
AS AT DEC. 31 (MILLIONS)20212020
Cash and cash equivalents$1,197 $1,283 
Other financial assets3,430 3,809 
Common equity in managed investments46,248 33,732 
Other assets and liabilities of the Corporation6,585 6,321 
Corporation’s Capital$57,460 $45,145 
2021 ANNUAL REPORT    31


The Corporation’s Capital is funded with common equity, preferred equity and corporate borrowings issued by the Corporation.
AS AT DEC. 31 (MILLIONS)20212020
Common equity$42,210 $31,693 
Preferred shares4,145 4,145 
Non-controlling interest230 230 
Corporate borrowings10,875 9,077 
Corporation’s Capital$57,460 $45,145 
We maintain a prudent level of capitalization at the Corporation with 81% of our book capitalization in the form of common and preferred equity. Consistent with our conservative approach, our corporate borrowings represent only 17% of our corporate book capitalization and equate to just 6% of our consolidated debt.
The remaining 94% of our consolidated debt is non-recourse and is held within managed entities and has virtually no cross-collateralization or parental guarantees by the Corporation.
The following table presents our total capitalization on a corporate and consolidated basis. Total capitalization also includes amounts payable under long-term incentive plans, fixed annuity liabilities fully backed by financial asset portfolios, deferred tax liabilities and other working capital balances:
AS AT DEC. 31 (MILLIONS)CorporateConsolidated
2021202020212020
Corporate borrowings$10,875 $9,077 $10,875 $9,077 
Non-recourse borrowings
Subsidiary borrowings — 13,049 10,768 
Property-specific borrowings — 152,008 128,556 
10,875 9,077 175,932 148,401 
Corporation’s Capital, excluding corporate borrowings46,585 36,068 46,585 36,068 
Accounts payable, deferred taxes and other5,403 5,395 168,486 159,227 
Total capitalization$62,863 $50,540 $391,003 $343,696 
Debt to capitalization17 %18 %45 %43 %
CASH FLOW GENERATION FROM OUR CAPITAL
Our Corporation’s Capital generates significant, recurring cash flows at the corporate level, which may be used for (i) reinvestment into the business; or (ii) returning cash to shareholders. These cash flows are underpinned by:
Fee-related earnings1 that are supported by long-term and perpetual contractual agreements.
Distributions from investments which are stable and backed by high-quality operating assets.
These cash flows are supplemented with carried interest as we monetize mature investments and return capital to our investors.






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Distributable Earnings (“DE”)1 was $6.3 billion for 2021, and over the past five years has grown at a 32% compound annual growth rate.
FOR THE YEARS ENDED DEC. 31 (MILLIONS)20212020
Fee-related earnings1
$1,899 $1,428 
Distributions from investments2,198 1,846 
Corporate activities(592)(539)
Preferred share dividends2
(157)(142)
(749)(681)
Add back: equity-based compensation costs119 94 
Distributable earnings before realizations3,467 2,687 
Realized carried interest, net3, 4
715 348 
Disposition gains from principal investments2,100 1,185 
Distributable earnings$6,282 $4,220 
1.Includes $250 million (2020 – $186 million) of fee-related earnings from Oaktree at our share.
2.Includes $9 million (2020 – $1 million) of dividends paid on perpetual subordinated notes for the year ended December 31, 2021.
3.Includes our share of Oaktree’s distributable earnings attributable to realized carried interest.
4.See definition in Glossary of Terms beginning on page 136.








































































1.See definition in Glossary of Terms beginning on page 136.
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RISK MANAGEMENT
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OUR APPROACH
Managing risk is an integral and critical part of our business. We have a well-established, proactive and disciplined risk management approach that is based on clear operating methods and a strong risk management culture. We ensure that we have the necessary capacity and resilience to respond to changing environments by evaluating both current and emerging risks. We adhere to a robust risk management framework and methodology that is designed to enable comprehensive and consistent management of risk across the organization. We use a thorough and integrated risk assessment process to identify and evaluate risk areas across the business such as human capital, climate change, liquidity, disruption, regulatory compliance and other strategic, financial, and operational risks. Management and mitigation approaches and practices are tailored to the specific risk areas and executed by business and functional groups for their businesses and areas of responsibility, with appropriate coordination and oversight through monitoring and reporting processes.
FOCUS ON RISK CULTURE
A strong risk culture is the cornerstone of our risk management program: one that promotes measured and appropriate risk-taking, addresses current and emerging risks and ensures employees conduct business with a long-term perspective and in a sustainable and ethical manner. This culture is reinforced by strong commitment and leadership from our senior executives, as well as the policies and practices we have implemented, including our compensation approach.
SHARED EXECUTION
Given the diversified and decentralized nature of our operations, we seek to ensure that risk is managed as close to its source as possible and by the management teams that have the most knowledge and expertise in the specific
34    BROOKFIELD ASSET MANAGEMENT


business or risk area. As such, business specific risks—such as safety, environmental and other operational risks—are generally managed at the operating business level, as the risks vary based on the nature of each business. At the same time, we monitor key risks organization-wide to ensure adequacy of risk management, adherence to applicable Brookfield policies, and sharing of best practices.
For risks that are more pervasive and correlated in their impact across the organization—such as liquidity, foreign exchange and interest rates or where we can bring specialized knowledge—we utilize a coordinated approach that is centralized amongst our corporate and business groups. Management of strategic, reputational and regulatory compliance risks are similarly coordinated to ensure consistent focus and implementation across the organization.
Oversight & Coordination
We have implemented strong governance practices to monitor and oversee our risk management program. Management committees bring together required expertise to manage key risk areas, ensuring appropriate application and coordination of approaches and practices across our business and functional groups, and include the following:
Risk Management Steering Committee – supports the overall corporate risk management program, and coordinates risk assessment and mitigation on an enterprise-wide basis
Investment Committees – oversees the investment process and reviews and approves investment transactions
Conflicts Committee – resolves potential conflict situations in the investment process and other corporate transactions
Financial Risk Oversight Committee – reviews and monitors financial exposures
Environmental, Social and Governance (ESG) Steering Committee oversees ESG initiatives, with a focus on health, safety, security and environmental matters
Disclosure Committee – oversees the public disclosure of material information
Brookfield’s Board of Directors (the “Board”) oversees risk management with a focus on more significant risks, and leverages management’s monitoring processes. The Board has delegated responsibility for oversight of specific risks to the following board committees:
Risk Management Committee – oversees the management of Brookfield’s significant financial and non-financial risk exposures, including review of risk assessment and risk management practices, and confirms that the company has an appropriate risk-taking philosophy and suitable risk capacity
Audit Committee – oversees the management of risks related to Brookfield’s systems and procedures for financial reporting, as well as for associated internal and external audit processes
Management Resources and Compensation Committee – oversees risks related to Brookfield’s management resource planning, including succession planning, executive compensation and senior executives’ performance
Governance and Nominating Committee – oversees risks related to Brookfield’s governance structure, including the effectiveness of board and committee activities and potential conflicts of interest
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) MANAGEMENT
ESG AT BROOKFIELD
Our business philosophy is based on our conviction that acting responsibly toward our stakeholders is foundational to operating a productive, profitable and sustainable business, and that value creation and sustainable development are complementary goals. This view has been underpinned by what we have learned throughout our 100+ year heritage as an owner and operator of long-term assets, many of which form the backbone of the global economy. Our long-term focus lends itself to implementing robust ESG programs throughout our asset management business and underlying operations, which has always been a key priority for us.
Our approach to ESG is based on the following
guiding principles:
ESG Governance
Brookfield’s Board of Directors, through its Governance and Nominating Committee, has ultimate oversight of Brookfield’s ESG strategy and receives regular updates on the company’s ESG initiatives throughout the year. Each aspect of ESG is overseen by select senior executives from BAM and each of our business groups, who are charged with driving ESG initiatives based on our business imperatives, industry developments and best practices, in each case supported by asset management professionals from each of these constituencies.
ESG Integration into the Investment Process
During the initial due diligence phase of an investment, we proactively identify material ESG risks and opportunities relevant to the particular asset. We leverage our investment and operating expertise and utilize industry-specific guidelines that incorporate Sustainability Accounting Standards Board guidance. In addition, we have developed a comprehensive climate change risk assessment, driven by our alignment with the Task Force on Climate-related Financial Disclosures (“TCFD”) and our commitment to net zero. This risk assessment provides a framework for evaluating climate change risks and opportunities—both for physical as well as transition risks. We also have added a separate human rights and modern slavery risk assessment to our due diligence process with the objective of mitigating the risks of modern slavery and human rights violations for potential investments, including supply chains. Where required, we perform deeper due diligence, working with internal experts and third-party consultants as needed.

Mitigate the impact of our operations on the environment:
Strive to minimize the environmental impact of our operations and improve our efficient use of resources over time
Support the goal of net zero greenhouse gas (GHG) emissions by 2050 or sooner
Ensure the well-being and safety of employees:
Foster a positive work environment based on respect for human rights, valuing diversity, and zero tolerance for workplace discrimination, violence or harassment
Operate with leading health and safety practices to support the goal of zero serious safety incidents
Uphold strong governance practices:
Operate to the highest ethical standards by conducting business activities in accordance with our Code of Business Conduct and Ethics
Maintain strong stakeholder relationships through transparency and active engagement
Be good corporate citizens:
Ensure the interests, safety and well-being of the communities in which we operate are integrated into our business decisions
Support philanthropy and volunteerism by our employees
All investments made by Brookfield must be approved by the applicable Investment Committee, which makes its decision based on a set of predetermined criteria. To facilitate this, investment teams outline for the Committee the
36    BROOKFIELD ASSET MANAGEMENT


merits of the transaction and material risks, mitigants and significant opportunities for improvement, including those related to ESG, such as bribery and corruption risks, health and safety risks, and environmental and social risks.
As part of each acquisition, investment teams create a tailored integration plan that includes, among other things, material ESG-related matters for review or execution. Brookfield looks to advance ESG initiatives and improve ESG performance to drive long-term value creation, as well as to manage any associated risks. This is because we have witnessed and continue to see a strong correlation between managing these considerations and enhancing investment returns. It is the responsibility of the management teams within each portfolio company to manage ESG risks and opportunities through the investment’s life cycle, supported by the applicable investment team. The combination of having local accountability and expertise in tandem with Brookfield’s investment and operating capabilities is important when managing a wide range of asset types across jurisdictions.
When preparing an asset for divestiture, we create robust business plans outlining potential value creation deriving from several different factors, including ESG considerations. We also prepare both qualitative and quantitative data that summarize the ESG performance of the investment and provide a holistic understanding of how Brookfield has managed the investment during the holding period.
Below is a summary of some of the ESG initiatives that we undertook in 2021. For additional information, please refer to Brookfield’s latest ESG report, which is available on the Responsibility page at brookfield.com.
ENVIRONMENTAL
Commitment to Net Zero
We support the goal of net zero greenhouse gas (“GHG”) emissions by 2050 or sooner. We believe that the transition to net zero represents an enormous investment opportunity estimated at $3.5–$5.0 trillion annually and will require large economic adjustments and potential rewiring of virtually every industry. We are committed to doing our part to support the global decarbonization effort.
To formalize our support, in March 2021, Brookfield became a signatory to the Net Zero Asset Managers (“NZAM”) initiative. As part of joining this initiative, we will (i) work on decarbonization goals, consistent with an ambition to reach net-zero emissions by 2050 or sooner across all assets under management; (ii) set an interim target of a specific proportion of our assets to be managed in line with net zero, with targeted emissions reduction by 2030; and (iii) review this interim target at least every five years, with a view to increasing the proportion of AUM covered until 100% of assets are included. As an initial step, we are working on creating a consistent GHG emissions inventory across our portfolio companies and are in the process of setting an interim target that outlines the proportion of assets to be managed in line with net zero by 2030.
We believe many of our operating businesses are well-positioned to play a critical role in the transition to net zero. We are one of the largest pure-play global owners and operators of hydroelectric, wind and solar power generation facilities, and we have a significant development portfolio. In addition, we are one of the world’s largest owners of real estate, and the majority of our office and retail assets have earned green building certificates, thereby meeting stringent environmental sustainability standards. Finally, our infrastructure and private equity businesses encompass a diverse range of assets, many of which not only help form the backbone of the global economy but are well positioned to generate positive environmental outcomes.
In 2021, we launched the Brookfield Global Transition Fund, Brookfield’s first dedicated impact fund, which will invest in the global transition to net zero. Specifically, the fund will focus on investments that contribute to the decarbonization of the global economy across three main themes: (i) new-build renewable power generation and related technologies that provide additional capacity to the energy mix; (ii) business transformation of companies in industries, such as steel, cement and chemicals, which require both renewable power generation to lower their carbon footprint and capital to decarbonize their production processes; and (iii) the provision of capital to electricity generators to enable them to shift from coal to gas and from gas to renewables. We are in the final stages of closing this $15 billion fund and have already started putting capital to work.
2021 ANNUAL REPORT    37


Sustainable Finance
We have continued to be active in the sustainable finance market, with issuances in 2021 reaching $8 billion across green bonds and hybrid securities, sustainability-linked debt and sustainability-linked loans, up from $3.6 billion in 2020. We also published the Brookfield Asset Management Green Bond and Preferred Securities Framework, which lays out the process for evaluating and selecting the eligible investments, the use and management of the proceeds, and the reporting frequency and format.
TCFD Alignment
In 2021, we became supporters of the TCFD, and many of the above-mentioned initiatives also relate to our continued effort to align with the TCFD recommendations. This applies to embedding climate change considerations into our strategy through our net-zero commitment, our sustainable financing efforts and the launch of our inaugural transition fund. In addition, in 2021 we also undertook a climate risk assessment to better understand the potential physical and transition risks, as well as opportunities, across all our businesses. We are leveraging those results to identify ways to improve our approach to climate change mitigation and adaptation and continue to integrate these considerations into our business and investment strategies.
Finally, we continue to align our business with the TCFD recommendations and are targeting to publish TCFD disclosures for the 2022 fiscal year in 2023.
SOCIAL
Diversity, Equity and Inclusion
We recognize that our people drive our success. Developing our 2,300 asset management employees and ensuring their continued engagement is one of our top priorities. We aim to create an environment that is built on strong relationships and conducive to developing our workforce, and where individuals from diverse backgrounds can thrive. In 2021, we continued to work on ensuring that our talent attraction and retention efforts and our diversity, equity and inclusion efforts are in line with best practices.
Our approach to diversity, equity and inclusion has been deliberate and is integrated into our human capital development processes and initiatives. Specifically, over the last five years, we have more than doubled our employee population and during this period we have increased our female representation at the most senior levels of the organization by 140%; female representation among managing partners/managing directors increased from 7% to 19%, and among senior vice presidents from 15% to 33%.
Further, in 2021, we launched a global process for employees to self-identify their ethnicity. This information will assist us in identifying specific areas of focus related to increasing ethnic diversity. Our response rate in countries with more than 100 employees (U.S., Canada, Australia, the U.K. and Brazil) was 92%. These results demonstrate our current state of diversity:
Global Ethnic Diversity Metrics
White55 %
Asian21 %
Black%
Hispanic%
Two or More Races%
Did Not Respond or Declined to Self-Identify10 %
Having a diverse workforce reinforces our culture of collaboration and strengthens our ability to develop team members and maintain an engaged workforce. We seek to foster a diverse and inclusive workplace by ensuring our leaders understand their role in creating an inclusive environment and by maintaining a focus on disciplined talent management processes that seek to mitigate the impact of unconscious bias. We believe that these priorities are foundational to our success in enhancing diversity and inclusion within our workplace, where career advancement is
38    BROOKFIELD ASSET MANAGEMENT


directly tied to performance and to alignment with our values of making decisions with intense collaboration and a long-term focus.
Occupational Health and Safety
Occupational health and safety continues to be integral to how we manage our businesses. As health and safety risk varies across industries, sectors, and the nature of operations, we emphasize the importance of our operating businesses having direct accountability and responsibility for managing and reporting risks within their operations, with Brookfield providing support and strategic oversight at the business’ board (or similarly situated governance body.) For details on our health and safety framework, as it relates to our operating businesses, please refer to Brookfield’s latest ESG report.
Human Rights and Modern Slavery
Our approach to addressing modern slavery is designed to be commensurate with the risks we face, which vary based on jurisdiction, industry and sector. In 2021, we expanded our U.K. modern slavery and human trafficking policy to a global modern slavery policy that covers all Brookfield entities and provides guidance on measures to prevent and detect modern slavery. In addition, we have several other policies and procedures that provide guidance on the identification of modern slavery risks and the steps to be taken to mitigate these risks. These include our Code of Conduct, Vendor Management Guidelines, ESG Due Diligence Guidelines, ABC Program, Anti-Money Laundering Program and Whistleblowing Program. Our portfolio companies’ senior management teams are each responsible for identifying and managing the modern slavery and human rights risks for their individual businesses.
Employees in certain jurisdictions and functions receive modern slavery training as part of the onboarding process and access ongoing training, as necessary. In particular, we regularly train employees involved in higher-risk functions, such as procurement. We also encourage employees, suppliers and business partners to report concerns in accordance with our Whistleblowing Policy.
We are cognizant of the fact that the risks of modern slavery and human trafficking are complex and evolving, and we will continue to work on addressing these risks in our business.
COVID-19 Update
The pandemic placed high demands on all of our people, requiring close coordination across the organization, increased communication with investors and employees, and deep engagement with communities and other stakeholders around the world. Over this period, our experience reinforced for us what we consider to be the core strengths of Brookfield: adhering to a business model that supports resilience, keeping a long-term perspective—especially during periods of uncertainty and volatility—maintaining a collaborative corporate culture, and putting our assets and resources to good use for the community. It will likely take years to understand the full extent of the pandemic’s global impact; however, we believe that we have emerged more resilient, more flexible and, in some ways, more connected than ever.
GOVERNANCE
We recognize that strong governance is essential to sustainable business operations, and we aim to conduct our business according to the highest ethical and legal standards.
Proxy Voting Guidelines
In 2021, Brookfield formally established Proxy Voting Guidelines, which apply when Brookfield votes proxies for its own accounts and those of its clients. These guidelines ensure that we vote in our investors’ best interests, in accordance with any applicable proxy voting agreements and consistent with the investment mandate. While our public securities holdings are modest relative to our assets under management, we considered it important to formally record the variety of ESG factors that we assess in determining whether voting a proxy is in the client’s best interests, including gender equality, board diversity, ecology and sustainability, climate change, ethics, human rights,
2021 ANNUAL REPORT    39


and data security and privacy. As part of our Proxy Voting Guidelines, Brookfield has created a Proxy Voting Committee that comprises senior executives across Brookfield and oversees proxy voting across our holdings.
ESG Regulation
We aim to uphold strong governance practices, and we actively monitor proposed and evolving ESG legislation, regulation and market practices in all jurisdictions in which we operate. This includes, for example, the EU Sustainable Finance Disclosure Regulation and EU Taxonomy Regulation as well as the newly announced International Sustainability Standards Board. We seek to continuously improve and refine our processes by actively participating in the development and implementation of new industry standards and best practices.
Data Privacy and Cybersecurity
Data privacy and cybersecurity remain key ESG focus areas for us. In 2022, we undertook initiatives to further enhance our data protection and threat-intelligence capabilities, and we worked on improving our processes for third-party risk management. We review and update our cybersecurity program annually and conduct regular external-party assessments of our program maturity based on the NIST Cybersecurity Framework. The results of the NIST Cybersecurity Maturity Assessment conducted in 2021 validated the strength of our program. Finally, in addition to continued mandatory cybersecurity education for all employees, we enhanced our phishing simulations to include social engineering.
ESG Affiliations and Partnerships
Finally, we continue to align our business practices with leading frameworks for responsible investing and are an active participant in industry forums and other organizations. We are a signatory to the United Nations-supported Principles for Responsible Investment (“PRI”), which demonstrates our ongoing commitment to responsible investment and ESG best practices. As a participant in organizations like the PRI, the TCFD and NZAM, we are committed to ongoing engagement and stewardship and the promotion of leading ESG practices—both with our portfolio companies and with the broader asset management industry—that are designed to enhance the value of our assets and businesses. In addition, through our membership in these organizations and other industry forums, we remain actively involved in discussions aimed at advancing ESG awareness across private and public markets and enhance our reporting and protocols in line with evolving best practices.
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PART 2
REVIEW OF CONSOLIDATED FINANCIAL RESULTS
The following section contains a discussion and analysis of line items presented within our consolidated financial statements. The financial data in this section has been prepared in accordance with IFRS. Starting on page 55 we provide an overview of our fair value accounting process and why we believe it provides useful information for investors about our performance. We also provide an overview of our application of the control-based model under IFRS used to determine whether or not an investment should be consolidated.
OVERVIEW
During 2021, our operating performance was strong, with most of our businesses generating solid financial results. The market environment was strong and continues to get stronger in most, if not all, of the key markets that we operate in.
Net income was $12.4 billion in the current year, with $4.0 billion attributable to common shareholders ($2.39 per share) and the remaining income attributable to non-controlling interests.
The $11.7 billion increase in consolidated net income and the $4.1 billion increase in net income attributable to common shareholders were primarily attributable to:
fair value gains of $5.2 billion compared to a loss of $1.4 billion in the prior year, primarily driven by valuation gains on our investment properties;
an increase in equity accounted income of $2.5 billion from valuation gains on investment properties held in our equity accounted investments; and
contributions from acquisitions during the year and same-store1 growth across our operations; partially offset by
income tax expense of $2.3 billion compared to $837 million in 2020, predominantly attributable to an increase in tax rates in the U.K. and Colombia, higher taxable income relative to the prior year and the tax impact of the aforementioned fair value uplifts; and
higher depreciation expense primarily as a result of recent acquisitions.
Our consolidated balance sheet primarily increased as a result of assets acquired, net of liabilities. Further increases relate to net valuation gains and revaluations of our investment properties and property, plant and equipment (“PP&E”) primarily within our Real Estate and Renewable Power and Transition segments. Equity accounted investments also increased due to additions and our share of comprehensive income generated in those businesses. These increases were partially offset by dispositions during the year of our West Fraser Timber Co. (“West Fraser”)1 shares, other financial assets and a portfolio of investment properties.
1.See definition in Glossary of Terms beginning on page 136.
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INCOME STATEMENT ANALYSIS
The following table summarizes the financial results of the company for 2021, 2020 and 2019:
FOR THE YEARS ENDED DEC. 31 (MILLIONS, EXCEPT PER SHARE AMOUNTS)Change
2021202020192021 vs. 20202020 vs. 2019
Revenues$75,731 $62,752 $67,826 $12,979 $(5,074)
Direct costs1
(64,000)(53,177)(57,604)(10,823)4,427 
Other income and gains3,099 785 1,285 2,314 (500)
Equity accounted income (loss)2,451 (79)2,498 2,530 (2,577)
Expenses
Interest(7,604)(7,213)(7,227)(391)14 
Corporate costs(116)(101)(98)(15)(3)
Fair value changes5,151 (1,423)(831)6,574 (592)
Income tax expense(2,324)(837)(495)(1,487)(342)
Net income12,388 707 5,354 11,681 (4,647)
Non-controlling interests(8,422)(841)(2,547)(7,581)1,706 
Net income (loss) attributable to shareholders$3,966 $(134)$2,807 $4,100 $(2,941)
Net income (loss) per share2
$2.39 $(0.12)$1.73 $2.51 $(1.85)
1.During the fourth quarter of 2021, the company reclassified $6.4 billion of depreciation and amortization, which were previously presented as a separate line item, to direct costs. Prior period amounts were also adjusted to reflect this change, which resulted in an increase to direct costs by $5.8 billion and $4.9 billion for the years ended December 31, 2020 and 2019, respectively, with equal and offsetting decreases to depreciation and amortization. This reclassification had no impact on revenues, net income, or basic and diluted earnings per share.
2.Adjusted to reflect the three-for-two stock split effective April 1, 2020.

2021 vs. 2020
Revenues for the year were $75.7 billion, an increase of $13.0 billion or 21% compared to 2020, primarily due to the recovery from the pandemic related economic shutdowns in 2020, including:
higher volumes and prices at our road fuels and our advanced energy storage operations within our Private Equity segment. Included within revenues and direct costs of our road fuels operation are import duties that are passed through to their customers;
higher occupancy at our hospitality and core portfolios within our Real Estate segment;
additional contributions from our wind assets and our gas storage business in our Renewable Power and Transition and Infrastructure segments, respectively, as a result of higher realized market prices and operational strength through the extreme weather conditions experienced in the U.S. during the first quarter of 2021; and
revenues from acquisitions during the year, net of the absence of contributions from businesses fully or partially sold; partially offset by
lower generation at our hydroelectric facilities in North America in our Renewable Power and Transition segment, as well as lower revenues at our offshore oil services operations in our Private Equity segment.
A discussion of the impact on revenues and net income from recent acquisitions and dispositions can be found on page 45.
Direct costs increased by 20% or $10.8 billion primarily due to:
the aforementioned higher volumes and prices at our road fuels operation in our Private Equity segment, as well as incremental costs associated with organic growth initiatives at our Infrastructure segment;
an increase in depreciation and amortization expense due to an increase in the carrying value of our PP&E from the impact of revaluation gains as part of our year-end revaluation process; and

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higher direct costs related to recent acquisitions, net of dispositions; partially offset by
cost saving initiatives across our businesses.
Other income and gains of $3.1 billion primarily relate to the sale of our Canadian and U.S. district energy operations in our Infrastructure segment.
Equity accounted income increased by $2.5 billion primarily due to:
valuation gains in our retail and office portfolios held in our equity accounted investments; and
strong operating performance at Oaktree Capital Management (“Oaktree”)1; partially offset by
the absence of contributions from Norbord Inc. (“Norbord”)1 after our investment was converted into West Fraser’s shares as part of the West Fraser — Norbord strategic business combination. Since the first quarter of 2021, our interest in West Fraser has been accounted for as a financial asset.
Interest expense of $7.6 billion increased by $391 million due to additional borrowings associated with acquisitions, partially offset by the impact of dispositions and the refinancing of debt across our operations.
We recorded fair value gains of $5.2 billion, compared to losses of $1.4 billion in the prior year, primarily as a result of valuation gains on our LP investments, partially offset by valuation losses of certain retail portfolios across our real estate business. Refer to pages 46 and 47 for a discussion on fair value changes.
We recorded an income tax expense of $2.3 billion for the year compared to $837 million in the prior year mainly due to an increase in tax rates in the U.K. and Colombia, higher taxable income and the tax impact of the aforementioned fair value uplifts.
2020 vs. 2019
Revenues decreased by $5.1 billion in 2020 primarily due to the impact of the economic shutdowns, including lower volumes and lower contributions at our road fuels operations and our construction operations within our Private Equity segment, respectively. These decreases also related to lower revenues at our hospitality assets within our Real Estate segment as a result of reduced occupancy levels, partially offset by a full year of contributions from acquisitions completed in 2019, including businesses acquired within our Private Equity segment, and acquisitions completed in 2020. Furthermore, the benefits of organic growth within our Infrastructure segment, net of the foreign exchange impact, contributed to our revenues in 2020.
Direct costs decreased by $4.4 billion in 2020 due to the aforementioned lower volumes at our road fuels operations and cost saving initiatives across a number of our businesses. These decreases were partially offset by higher direct costs related to recent acquisitions, net of dispositions, incremental costs associated with organic growth initiatives at our operations and an increase in depreciation and amortization expense, due to an increase in the carrying value of our PP&E from the impact of revaluation gains as part of our year-end revaluation process.
Other income and gains of $785 million in 2020 primarily relate to the sales of our cold storage logistics business and the pathology business within our healthcare service operations in our Private Equity segment, as well as the sale of our self-storage business in our Real Estate segment.
Equity accounted income decreased from $2.5 billion to a loss of $79 million. This decrease primarily related to valuation losses in our real estate retail portfolio as a result of adjusted discounted cash flows in light of the economic shutdown, partially offset by a deferred tax recovery at our Brazilian data center operations in our Infrastructure segment and strong operating performance at Norbord.



1.See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    43


Interest expense of $7.2 billion remained consistent in 2020 versus 2019 as the benefits from lower interest rates on issued borrowings and our variable rate debt held at our real estate operations were partially offset by additional interest expense paid on new debt offerings.
We recorded fair value losses of $1.4 billion in 2020, compared to $831 million in 2019, primarily as a result of:
valuation losses due to revised valuation assumptions, including rental growth and leasing assumptions, in our retail and office portfolios; partially offset by
valuation gains in our LP investments portfolio, including our life sciences portfolio held within our Real Estate segment.
Income tax expense increased by $342 million to $837 million in 2020, primarily due to the absence of the 2019 deferred income tax recovery of $475 million, related to the recognition of deferred tax assets due to the projected utilization of net operating loss carryforwards.












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SIGNIFICANT ACQUISITIONS AND DISPOSITIONS
We have summarized below the impact of recent significant acquisitions and dispositions on our results for 2021:
AcquisitionsDispositions
FOR THE YEAR ENDED DEC. 31, 2021 (MILLIONS)RevenueNet
Income
(Loss)
RevenueNet
Income
(Loss)
Renewable Power and Transition$205 $24 $(89)$48 
Infrastructure1,929 171 (511)(39)
Private Equity1,678 (12)(1,183)(413)
Real Estate682 468 (478)(907)
$4,494 $651 $(2,261)$(1,311)
ACQUISITIONS
Acquisitions in 2021 and 2020 contributed incremental revenues and net income of $4.5 billion and $651 million, respectively, in the current year.
Renewable Power and Transition
Within our Renewable Power and Transition segment, recent acquisitions contributed to incremental revenues and net income of $205 million and $24 million, respectively. These contributions were primarily due to the acquisitions of a distributed generation platform and a wind portfolio in the U.S. in the first quarter of 2021.
Infrastructure
Recent acquisitions contributed incremental revenues of $1.9 billion and net income of $171 million. These contributions were primarily from Inter Pipeline Ltd. (“IPL”)1 which was acquired in 2021, as well as our Indian telecom towers operation and our U.S. LNG export terminal, which were both acquired in the third quarter of 2020.
Private Equity
Within our Private Equity segment, recent acquisitions contributed to incremental revenues of $1.7 billion and net loss of $12 million. These contributions and net loss were primarily from acquisitions of a technology services operation, a solar power solutions operation and an engineered components manufacturer in the first, third and fourth quarter of 2021, respectively.
Real Estate
Recent acquisitions contributed incremental revenues of $682 million and net income of $468 million. These contributions were primarily from the acquisition of hospitality assets made through our Brookfield Strategic Real Estate Partners III fund (“BSREP III”)1.
DISPOSITIONS
Recent asset sales reduced revenues and net income by $2.3 billion and $1.3 billion, respectively, in the current year. The assets that most significantly impacted our results were the dispositions of our life science portfolio in our Real Estate segment and our North American district energy operations in our Infrastructure segment, as well as the partial dispositions of our graphite electrode operations in our Private Equity segment and our Australian export terminal in our Infrastructure segment.



1.    See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    45


FAIR VALUE CHANGES
The following table disaggregates fair value changes into major components to facilitate analysis: 
FOR THE YEARS ENDED DEC. 31 (MILLIONS) 20212020Change
Investment properties$5,073 $(269)$5,342 
Transaction related gains, net of expenses714 20 694 
Financial contracts984 686 298 
Impairment and provisions(654)(808)154 
Other fair value changes
(966)(1,052)86 
Total fair value changes
$5,151 $(1,423)$6,574 
INVESTMENT PROPERTIES
Investment properties are recorded at fair value with changes recorded in net income. We present the investment properties of our Real Estate segment within three sub-segments. The sub-segments are based on our strategy to maintain an irreplaceable portfolio of trophy mixed-use precincts in global gateway cities (“Core”), maximize returns through a development or buy-fix-sell strategy (“Transitional and Development”), or recycle capital from our private funds (“LP Investments”).
The following table disaggregates investment property fair value changes by asset type:
FOR THE YEARS ENDED DEC. 31 (MILLIONS) 20212020Change
Core$(174)$(345)$171 
Transitional and Development(259)(1,433)1,174 
LP Investments and Other5,506 1,509 3,997 
$5,073 $(269)$5,342 
We discuss the key valuation inputs of our investment properties on pages 102 and 103.
Core
Valuation losses of $174 million are mainly due to lower cash flow and leasing assumptions on certain retail assets, as well as changes in market leasing assumptions on our downtown New York office portfolio. These losses were partially offset by valuation gains at our office portfolio in Canada.
Valuation losses of $345 million in the prior year were primarily due to changes to leasing assumptions as a result of the impacts from the pandemic related economic shutdowns in our downtown New York office portfolio, partially offset by gains as certain assets neared completion and met development milestones at our London and Toronto office portfolios, respectively.
Transitional and Development
Valuation losses of $259 million primarily relate to:
valuation losses on retail assets due to updated leasing and cash flow assumptions; partially offset by
an increase in values on certain office assets in Australia as a result of higher external appraisal values.
Valuation losses of $1.4 billion in the prior year were primarily related to changes in assumptions on a space-by-space basis to reflect the impacts of the pandemic related economic shutdowns.
LP Investments and Other
Valuation gains of $5.5 billion primarily relate to:
an increase in values of our U.S. manufactured housing business as a result of higher external appraisals;
46    BROOKFIELD ASSET MANAGEMENT


capitalization rate compression in our multi-family assets mainly within our Forest City Realty Trust Inc. (“Forest City”)1 portfolio and our U.S. multi-family REIT;
fair value uplifts at our mixed-use property in Seoul to reflect higher comparable market pricing;
a higher valuation at our Australian senior living business due to an increase in unit prices, as well as increased market rent assumptions at our U.S. logistics portfolio; and
an increase in operating income at our U.K. student housing business due to improved cash flows; partially offset by
valuation losses on certain retail assets in the U.S. as a result of changes to cash flow assumptions.
In the prior year, valuation gains of $1.5 billion were primarily due to gains on our life science assets in our Forest City portfolio, our mixed-use property in China, our Brazil office portfolio, our U.K. student housing portfolio and our U.S. manufactured housing portfolio. These gains were partially offset by updated cash flow assumptions on our retail and office assets as a result of the impact of the pandemic related economic shutdown.
TRANSACTION RELATED GAINS, NET OF EXPENSES
Transaction related gains, net of expenses, totaled $714 million for the year. This was primarily due to a gain on the deconsolidation of our investment in our graphite electrode operations, within our Private Equity segment. This gain was partially offset by transaction costs related to recent acquisitions, as well as restructuring costs incurred in our Private Equity segment.
The prior year transaction related gains, net of expenses, of $20 million primarily relate to restructuring gains at our Infrastructure and Private Equity segments, partially offset by the early redemption of debt across a number of our businesses and transaction costs related to acquisitions.
FINANCIAL CONTRACTS
Financial contracts include mark-to-market gains and losses related to foreign currency, interest rate and pricing exposures that are not designated as hedges.
The gain of $984 million in 2021 is primarily attributable to gains on our toehold positions in our Infrastructure and Real Estate businesses, as well as fair value gains on our venture investments. These gains were partially offset by the mark-to-market movement on short-term financial contracts to hedge power prices in our Renewable Power and Transition business.
Unrealized gains of $686 million in the prior year primarily related to gains on our financial contracts in our Private Equity segment and mark-to-market movements on market and currency hedges, partially offset by losses on interest rate and cross-currency swaps, which did not qualify for hedge accounting.
IMPAIRMENT PROVISIONS
Impairment and provisions expense for the year of $654 million is primarily attributable to the impairment of PP&E and goodwill in our offshore oil services operations and provisions taken at our advanced energy storage operations within our Private Equity segment. In addition, legal provisions at our Brazil residential development business are included in this balance.
OTHER FAIR VALUE CHANGES
Other fair value losses of $1.0 billion were reported for the year. These losses primarily relate to accretion expenses and amortization of deferred financing fees across most operations. The remainder of the losses are various one-time charges across our segments.

1.    See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    47


INCOME TAXES
We recorded an aggregate income tax expense of $2.3 billion in 2021 (2020 – $837 million), including current tax expenses of $1.1 billion (2020 – $756 million) and deferred tax expense of $1.2 billion (2020 – $81 million).
Our income tax provision does not include a number of non-income taxes paid that are recorded elsewhere in our consolidated financial statements. For example, a number of our operations in Brazil are required to pay non-recoverable taxes on revenue, which are included in direct costs as opposed to income taxes. In addition, we pay considerable property, payroll and other taxes that represent an important component of the tax base in the jurisdictions in which we operate, which are also predominantly recorded in direct costs.
Our effective income tax rate is different from the Canadian domestic statutory income tax rate due to the following differences:
FOR THE YEARS ENDED DEC. 3120212020Change
Statutory income tax rate   26 %26 %   — %
(Reduction) increase in rate resulting from:
Portion of gains subject to different tax rates(3)(10)
Change in tax rates and new legislation3 12 (9)
Taxable income attributed to non-controlling interests(10)(31)21 
International operations subject to different tax rates(1)52 (53)
Recognition of deferred tax assets(2)(10)
Non-recognition of the benefit of current year’s tax losses2 (6)
Other1 (6)
Effective income tax rate16 %54 %(38 %)
The increase in income tax expense is primarily attributed to higher net income generated in 2021. This year, we recorded realized disposition gains1 that were subject to tax rates that were different compared to our statutory income tax rate. This contributed to a 3% reduction in our effective tax rate. This reduction was offset by a non-recurring deferred tax expense due to an increase in tax rates in jurisdictions we operate in, which increased our effective tax rate by 3%.
As an asset manager, many of our operations are held in partially owned “flow-through” entities, such as partnerships, and any tax liability is incurred by the investors as opposed to the entity. As a result, while our consolidated earnings include income attributable to non-controlling ownership interests in these entities, our consolidated tax provision includes only our proportionate share of the associated tax provision of these entities. In other words, we are consolidating all the net income, but only our share of the associated tax provision. This reduced our effective tax rate by 10% this year.
We operate in countries with different tax rates, most of which vary from our domestic statutory rate and we also benefit from tax incentives introduced in various countries to encourage economic activity. Differences in global tax rates resulted in a 1% decrease in our effective tax rate this year. The difference will vary from period to period depending on the relative proportion of income in each country.






1.See definition in Glossary of Terms beginning on page 136.
48    BROOKFIELD ASSET MANAGEMENT


BALANCE SHEET ANALYSIS
The following table summarizes the statement of financial position of the company as at December 31, 2021, 2020 and 2019:
Change
AS AT DEC. 31 (MILLIONS) 2021202020192021 vs. 20202020 vs. 2019
Assets
Property, plant and equipment$115,489 $100,009 $89,264 $15,480 $10,745 
Investment properties100,865 96,782 96,686 4,083 96 
Equity accounted investments46,100 41,327 40,698 4,773 629 
Cash and cash equivalents12,694 9,933 6,778 2,761 3,155 
Accounts receivable and other21,760 18,928 18,469 2,832 459 
Intangible assets30,609 24,658 27,710 5,951 (3,052)
Goodwill20,227 14,714 14,550 5,513 164 
Other assets43,259 37,345 29,814 5,914 7,531 
Total assets$391,003 $343,696 $323,969 $47,307 $19,727 
Liabilities
Corporate borrowings$10,875 $9,077 $7,083 $1,798 $1,994 
Non-recourse borrowings of managed entities165,057 139,324 136,292 25,733 3,032 
Other non-current financial liabilities27,718 28,524 23,997 (806)4,527 
Other liabilities52,612 44,129 39,751 8,483 4,378 
Equity
Preferred equity4,145 4,145 4,145 — — 
Non-controlling interests88,386 86,804 81,833 1,582 4,971 
Common equity42,210 31,693 30,868 10,517 825 
Total equity134,741 122,642 116,846 12,099 5,796 
$391,003 $343,696 $323,969 $47,307 $19,727 
2021 vs. 2020
Total assets increased by $47.3 billion since December 31, 2020 to $391.0 billion as at December 31, 2021. The increase is driven by business combinations and asset acquisitions, which added total assets of $62.8 billion during the year. Net valuation gains recognized on our PP&E during the year also contributed to the increase in total assets. These increases were partially offset by amortization and depreciation as well as assets sold during the year.










2021 ANNUAL REPORT    49


We have summarized the impact of business combinations as well as equity accounted investment, investment properties and PP&E additions for the year ended December 31, 2021 in the table below:
FOR THE YEAR ENDED DEC. 31, 2021 (MILLIONS) Private EquityInfrastructureReal Estate Renewable Power and Transition and OtherTotal
Cash and cash equivalents$288 $217 $78 $$586 
Accounts receivable and other826 455 104 100 1,485 
Inventory690 23 721 
Equity accounted investments1,360 — 3,104 1,505 5,969 
Investment properties— 106 14,408 31 14,545 
Property, plant and equipment3,984 11,504 4,212 4,847 24,547 
Intangible assets4,535 3,734 67 — 8,336 
Goodwill3,960 2,400 113 118 6,591 
Deferred income tax assets— — 15 
Total Assets15,649 18,448 22,088 6,610 62,795 
Less:
Accounts payable and other(1,811)(3,271)(131)(188)(5,401)
Non-recourse borrowings(132)(6,698)(1,452)(975)(9,257)
Deferred income tax liabilities(1,215)(1,430)(113)— (2,758)
Non-controlling interests1
(22)(156)(3)(2)(183)
(3,180)(11,555)(1,699)(1,165)(17,599)
Net assets acquired$12,469 $6,893 $20,389 $5,445 $45,196 
1.Includes non-controlling interests recognized on business combinations measured as the proportionate share of fair value of the identifiable assets and liabilities on the date of acquisition.
We have summarized below the major contributors to the year-over-year variances for the statement of financial position.
PP&E increased by $15.5 billion primarily as a result of:
additions of $24.5 billion, primarily related to the acquisition of IPL in our Infrastructure segment; and
revaluation surplus of $6.1 billion with the majority of the increase attributable to our Renewable Power and Transition segment, which benefited from higher power prices across most markets in which we operate and the expected growth in demand for renewable power; partially offset by
dispositions and assets reclassified as held for sale of $7.1 billion, most notably from the sales of our North American district energy operations within our Infrastructure segment, wind portfolios in the U.S. and Europe within our Renewable Power and Transition segment, and mixed-use and hospitality assets within our Real Estate segment;
depreciation of $5.0 billion in the year; and
the adverse impact of foreign currency translation of $2.2 billion.
We provide a continuity of PP&E in Note 12 of the consolidated financial statements.

50    BROOKFIELD ASSET MANAGEMENT


Investment properties consist primarily of the company’s real estate assets. The balance as at December 31, 2021 increased by $4.1 billion, primarily due to:
additions of $14.5 billion, mainly through the purchase of investment properties within our real estate funds; and
net valuation gains of $5.1 billion, primarily driven by valuation gains on our LP investments; partially offset by
asset sales and reclassifications to assets held for sale of $15.0 billion, primarily in our real estate funds; and
the negative impact of foreign currency translation of $1.1 billion.
We provide a continuity of investment properties in Note 11 of the consolidated financial statements.
Equity accounted investments increased by $4.8 billion to $46.1 billion in the current year, mainly due to:
additions of $4.0 billion, net of dispositions, primarily due to the acquisition of an additional interest in our German Office portfolio within our Real Estate segment, the spin-out of our reinsurance business, and the change in accounting basis of our interest in our graphite electrode operations within our Private Equity segment, as a result of the partial sale of our stake in the business in 2021; and
our proportionate share of comprehensive income of $3.4 billion; partially offset by
distributions and returns of capital received of $2.0 billion; and
foreign currency translation and other items of $668 million.
We provide a continuity of equity accounted investments in Note 10 of the consolidated financial statements.
Cash and cash equivalents increased by $2.8 billion as at December 31, 2021. For further information, refer to our Consolidated Statements of Cash Flows and to the Review of Consolidated Statements of Cash Flows within Part 4 – Capitalization and Liquidity.
Increases of $6.0 billion and $5.5 billion in our intangible assets and goodwill balances, respectively, are related to additions from acquisitions, net of dispositions, primarily in our Infrastructure and Private Equity segments, partially offset by the amortization of certain intangible assets.
Other assets are comprised of inventory, deferred income tax assets, assets classified as held for sale and other financial assets. The increase of $5.9 billion is primarily a result of:
an increase in assets held for sale of $6.0 billion largely attributable to the reclassification of our office assets and other properties within our Real Estate segment to held for sale, partially offset by the derecognition of our investment in Norbord within our Private Equity segment in the first quarter of 2021; and
an increase in inventory of $1.1 billion mainly due to the acquisition of our engineered components manufacturer and increased prices and inventory at our advanced energy storage operations within our Private Equity segment; partially offset by
a decrease in other financial assets of $1.2 billion as a result of the sale of a portion of our securities portfolio and toehold positions during the year.
Corporate borrowings increased by $1.8 billion from the $600 million green bond issuance and $250 million re-opening of our 2051 notes during the year, in addition to net draws of $912 million of commercial paper issuances and credit facility draws.
Non-recourse borrowings of managed entities increased by $25.7 billion, net of borrowings reclassified to held for sale, largely attributable to recent acquisitions across our business segments.

2021 ANNUAL REPORT    51


Other non-current financial liabilities consist of our subsidiary equity obligations, non-current accounts payable and other long-term financial liabilities that are due after one year. The decrease of $806 million was primarily due to a decrease in insurance contract liabilities as a result of the deconsolidation of our annuities business as part of the Brookfield Asset Management Reinsurance Partners Ltd. (“BAMR”)1 spin-out in the second quarter of 2021.
The increase of $8.5 billion in other liabilities, was primarily due to the increase in deferred income tax liabilities mainly as a result of acquisitions completed in the year, the aforementioned fair value uplifts in our Real Estate segment and revaluation of PP&E in our Renewable Power and Transition segment. Refer to Part 4 – Capitalization and Liquidity for more information.
2020 vs. 2019
Consolidated assets as at December 31, 2020 were $343.7 billion, compared to $324.0 billion as at December 31, 2019. Year-over-year increases were primarily due to business combinations and asset acquisitions completed in 2020, as well as net valuation gains recognized on our PP&E. These increases were partially offset by assets sold in 2020.
PP&E increased by $10.7 billion in 2020 primarily as a result of acquisitions completed across our segments and revaluation gains largely in our Renewable Power and Transition segment. These increases were partially offset by depreciation and the deconsolidation of our hospitality investments and other businesses in 2020.
Investment properties were $96 million higher at the end of 2020 compared to 2019 primarily due to capital expenditures, the purchase of investment properties and the positive impact of foreign currency translation. These increases were partially offset by asset sales, including a self-storage portfolio and an office asset in London within our Real Estate segment, as well as reclassifications to assets held for sale.
Equity accounted investments were $41.3 billion as at December 31, 2020, an increase of $629 million compared to 2019. The increase was mainly due to the acquisition of an interest in the work access services operation and the U.S. LNG export terminal within our Private Equity and Infrastructure segments, respectively. In addition, the increase was due to our proportionate share of the comprehensive income in 2020. These increases were partially offset by the reclassification of our interest in Norbord to held for sale, as well as distributions and returns of capital received.
Cash and cash equivalents increased by $3.2 billion as at December 31, 2020 compared to 2019 primarily due to net proceeds from corporate debt issuances, the secondary offerings of BEP units, BEPC and BIPC shares, as well as cash received from asset sales. These items were partially offset by cash used in business combinations completed in 2020.
Intangible assets decreased by $3.1 billion due to the impact of foreign currency translation and amortization, partially offset by additions from acquisitions in our Infrastructure segment in 2020. Goodwill increased by $164 million due to the acquisition of new businesses, partially offset by the sale of the pathology business in our healthcare services operation in 2020.
Other assets increased by $7.5 billion primarily as a result of strategic investments acquired and opportunistic financial asset positions entered into across most of our segments in 2020, as well as an increase in assets held for sale mainly attributable to the reclassification of retail and office assets within our Real Estate segment and our equity investment in Norbord within our Private Equity segment. These items were partially offset by the sale of the Australian portion of our rail operation and a Colombian regulated distribution operation within our Infrastructure segment in 2020.





1.See definition in Glossary of Terms beginning on page 136.
52    BROOKFIELD ASSET MANAGEMENT


Corporate borrowings increased by $2.0 billion due to issuances of a $600 million 30-year note, a $750 million 10-year note, a $500 million 31-year note and a $400 million 60-year note in 2020. These were partially offset by a repayment of a $251 million (C$350 million) note in 2020.
Non-recourse borrowings increased by $3.0 billion in 2020 as a result of an increase in subsidiary borrowings across the businesses to take advantage of the low interest rate environment to strengthen liquidity, as well as an increase in property-specific borrowings mainly related to the aforementioned acquisitions in 2020.
Other non-current financial liabilities increased by $4.5 billion in 2020 primarily due to the aforementioned acquisitions in 2020 as well as an increase in lease obligations in our Real Estate segment.
Other liabilities increased by $4.4 billion in 2020 primarily attributable to an increase in financial liabilities associated with hedges in our Infrastructure segment as well as liabilities associated with assets held for sale in our Real Estate segment.
2021 ANNUAL REPORT    53


EQUITY
The significant variances in common equity and non-controlling interests are discussed below. Preferred equity is discussed in Part 4 – Capitalization and Liquidity.
COMMON EQUITY
The following table presents the major contributors to the year-over-year variances for common equity:
AS AT AND FOR THE YEARS ENDED DEC. 31 (MILLIONS)20212020
Common equity, beginning of year$31,693 $30,868 
Changes in year
Net income (loss) attributable to shareholders3,966 (134)
Common dividends(800)(726)
Common dividends - special distribution(538)— 
Preferred dividends(148)(141)
Other comprehensive income1,844 818 
Share issuances, net of repurchases2,813 (270)
Ownership changes and other3,380 1,278 
10,517 825 
Common equity, end of year$42,210 $31,693 
Common equity increased by $10.5 billion to $42.2 billion during the year. The change includes:
net income attributable to common shareholders of $4.0 billion;
ownership changes and other of $3.4 billion primarily related to gains recorded directly in equity associated with the privatization of BPY, a secondary offering of BEPC shares, issuances of BIPC shares, and the partial sell-down of our graphite electrode operations;
share issuances, net of repurchases, of $2.8 billion, primarily related to the issuance of 60.9 million Class A Limited Voting Shares (“Class A shares”) as part of the BPY privatization, net of the repurchase of 9.7 million Class A shares for the year;
other comprehensive income of $1.8 billion, consisting of gains from revaluation surplus and other of $2.2 billion, primarily attributable to valuation gains on our PP&E within our Renewable Power and Transition and Infrastructure segments, partially offset by foreign currency translation of $318 million; and
the above items were somewhat offset by distributions of $1.5 billion to shareholders as common and preferred share dividends, including the $538 million distribution as part of the spin-out of our reinsurance business in the second quarter of 2021.
NON-CONTROLLING INTERESTS
Non-controlling interests in our consolidated results primarily consist of third-party interests in BEP, BIP, BBU, BPG and their consolidated entities as well as co-investors and other participating interests in our consolidated investments as follows:
AS AT DEC. 31 (MILLIONS)20212020
Brookfield Renewable $19,355 $17,194 
Brookfield Infrastructure 23,695 19,753 
Brookfield Business Partners10,197 9,162 
Brookfield Property Group28,064 33,345 
Other participating interests7,075 7,350 
$88,386 $86,804 
54    BROOKFIELD ASSET MANAGEMENT


Non-controlling interests increased by $1.6 billion during the year, primarily due to:
comprehensive income attributable to non-controlling interests, which totaled $11.8 billion; and
an increase in non-controlling interests as a result of acquisitions, primarily attributable to IPL in the third quarter of 2021; partially offset by
a decrease in non-controlling interests related to the privatization of BPY in the third quarter of 2021; and
distributions, net of equity issuances, of $5.7 billion.
CONSOLIDATION AND FAIR VALUE ACCOUNTING
As a Canadian domiciled public corporation, we report under IFRS, while many of our alternative asset manager peers report under U.S. GAAP. There are many differences between U.S. GAAP and IFRS, but the two principal differences affecting our consolidated financial statements compared to those of our peers are consolidation and fair value accounting.
In particular, U.S. GAAP allows some of our alternative asset manager peers to report certain investments, which qualify as variable interest entities, at fair value on one line in their balance sheet on a net basis as opposed to consolidating the funds. This approach is not available under IFRS. This can create significant differences in the presentation of our financial statements as compared to our alternative asset manager peers.
CONSOLIDATION
Our consolidation conclusions under IFRS may differ from our peers who report under U.S. GAAP for two primary reasons:
U.S. GAAP uses a voting interest model or a variable interest model to determine consolidation requirements, depending on the circumstances, whereas IFRS uses a control-based model. We generally have the contractual ability to unilaterally direct the relevant activities of our funds; and
we generally invest significant amounts of capital alongside our investors and partners, which, in addition to our customary management fees and incentive fees, means that we earn meaningful returns as a principal investor in addition to our asset management returns compared to a manager who acts solely as an agent.
As a result, in many cases, we control entities in which we hold only a minority economic interest. For example, a Brookfield-sponsored private fund to which we have committed 30% of the capital may acquire 60% of the voting interest in an investee company. The contractual arrangements generally provide us with the irrevocable ability to direct the funds’ activities. Based on these facts, we would control the investment because we exercise decision-making power over a controlling interest of that business and our 18% economic interest provides us with exposure to the variable returns of a principal.
All entities that we control are consolidated for financial reporting purposes. As a result, we include 100% of these entities’ revenues and expenses in our Consolidated Statements of Operations, even though a substantial portion of their net income is attributable to non-controlling interests. Furthermore, we include all of the assets, liabilities, including non-recourse borrowings, of these entities in our Consolidated Balance Sheets, and include the portion of equity held by others as non-controlling interests.
Intercompany revenues and expenses between Brookfield and its subsidiaries, such as asset management fees, are eliminated in our Consolidated Statements of Operations; however, these items affect the attribution of net income between shareholders and non-controlling interests. For example, asset management fees paid by our listed affiliates to the Corporation are eliminated from consolidated revenues and expenses. However, as the common shareholders are attributed all of the fee revenues1 while only attributed their proportionate share of the listed affiliates’ expenses, the amount of net income attributable to common shareholders is increased with a corresponding decrease in net income attributable to non-controlling interests.
1.    See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    55


FAIR VALUE ACCOUNTING
Under U.S. GAAP, many of our alternative asset manager peers account for their funds as investment companies and reflect their investments at fair value.
Under IFRS, as a parent company, we are required to look through our consolidated and equity accounted investments and account for their assets and liabilities under the applicable IFRS guidance. We reflect a large number of assets at fair value, namely our commercial properties, renewable power facilities and certain infrastructure assets which are typically recorded at amortized cost under U.S. GAAP. However, there are other assets that are not subject to fair value accounting under IFRS and are therefore carried at amortized cost, which would be more consistent with U.S. GAAP.
Under both IFRS and U.S. GAAP, the value of asset management activities is generally not reflected on the balance sheet despite being material components of the value of these businesses.
For additional details on the valuation approach for the relevant segments, critical assumptions and related sensitivities, refer to Part 5 – Accounting Policies and Internal Controls.

FOREIGN CURRENCY TRANSLATION
Approximately half of our capital is invested in non-U.S. currencies and the cash flows generated from these businesses, as well as our equity, are subject to changes in foreign currency exchange rates. From time to time, we utilize financial contracts to adjust these exposures. The most significant currency exchange rates that impact our business are shown in the following table:
AS AT DEC. 31Year End Spot RateChangeAverage RateChange
2021202020192021
vs. 2020
2020 vs. 20192021202020192021 vs. 20202020 vs. 2019
Australian dollar0.7262 0.7694 0.7018 (6)%10 %0.7515 0.6908 0.6953 9 %(1)%
Brazilian real1
5.5804 5.1975 4.0306 (7)%(22)%5.3969 5.1546 3.9463 (4)%(23)%
British pound1.3532 1.3670 1.3255 (1)%%1.3759 1.2838 1.2767 7 %%
Canadian dollar0.7913 0.7853 0.7699 1 %%0.7979 0.7464 0.7538 7 %(1)%
Colombian peso1
4,064.9 3,428.3 3,287.2 (16)%(4)%3,747.7 3,695.4 3,280.8 (1)%(11)%
Euro1.1370 1.2217 1.1214 (7)%%1.1831 1.1416 1.1194 4 %%
1.Using Brazilian real and Colombian peso as the price currency.
Currency exchange rates relative to the U.S. dollar at the end of 2021 were lower than December 31, 2020 for all of our significant non-U.S. dollar investments with the exception of the Canadian dollar. As at December 31, 2021, our common equity of $42.2 billion was invested in the following currencies: U.S. dollars – 55% (2020 – 58%); Brazilian reais – 6% (2020 – 8%); British pounds – 16% (2020 – 12%); Canadian dollars – 7% (2020 – 7%); Australian dollars – 6% (2020 – 7%); Colombian pesos – 1% (2020 – 2%); and other currencies – 9% (2020 – 6%).







56    BROOKFIELD ASSET MANAGEMENT


The following table disaggregates the impact of foreign currency translation on our equity by the most significant non-U.S. currencies:
FOR THE YEARS ENDED DEC. 31 (MILLIONS) 20212020Change
Australian dollar$(495)$775 $(1,270)
Brazilian real(391)(3,215)2,824 
British pound(127)370 (497)
Canadian dollar269 186 83 
Colombian peso(815)(103)(712)
Euro(430)593 (1,023)
Other(341)291 (632)
Total cumulative translation adjustments(2,330)(1,103)(1,227)
Currency hedges1
441 (228)669 
Total cumulative translation adjustments net of currency hedges$(1,889)$(1,331)$(558)
Attributable to:
Shareholders$(318)$(332)$14 
Non-controlling interests(1,571)(999)(572)
$(1,889)$(1,331)$(558)
1.Net of deferred income tax recovery of $21 million (2020 – income tax expense of $37 million).
The foreign currency translation of our equity, net of currency hedges, for the year ended December 31, 2021 generated a loss of $1.9 billion. This was primarily attributable to lower year end rates for the Colombian peso, Australian dollar and Euro, partially offset by gains on the higher year end and average rates for the Canadian dollar.
We seek to hedge foreign currency exposure where the cost of doing so is reasonable. Due to the high historical costs associated with hedging the Brazilian real, Colombian peso and other emerging market currencies, hedge levels against those currencies were low at year end.
2021 ANNUAL REPORT    57


CORPORATE DIVIDENDS
The dividends paid by Brookfield on outstanding securities during 2021, 2020 and 2019, are summarized in the following table. Dividends to the Class A and B Limited Voting Shares have been adjusted to reflect a three-for-two stock split on April 1, 2020.
 Distribution per Security
 202120202019
Class A and B1 Limited Voting Shares (“Class A and B shares”)2
$0.52 $0.48 $0.43 
Special distribution to Class A and B shares3
0.36 — — 
Class A Preferred Shares
Series 20.34 0.38 0.52 
Series 4 0.34 0.38 0.52 
Series 80.47 0.54 0.74 
Series 90.55 0.51 0.52 
Series 130.34 0.38 0.52 
Series 150.12 0.24 0.46 
Series 170.95 0.89 0.89 
Series 180.95 0.89 0.89 
Series 240.62 0.56 0.57 
Series 254
0.24 0.60 0.75 
Series 260.69 0.65 0.65 
Series 280.54 0.51 0.51 
Series 300.93 0.87 0.88 
Series 321.01 0.94 0.95 
Series 345
0.89 0.83 0.82 
Series 360.97 0.90 0.91 
Series 370.98 0.91 0.92 
Series 386
0.71 0.70 0.83 
Series 407
0.80 0.75 0.83 
Series 428
0.71 0.72 0.85 
Series 441.00 0.93 0.94 
Series 460.96 0.90 0.90 
Series 480.95 0.89 0.90 
1.Class B Limited Voting Shares (“Class B shares”).
2.Adjusted to reflect the three-for-two stock split effective April 1, 2020.
3.Distribution of one class A exchangeable limited voting share of Brookfield Asset Management Reinsurance Partners Ltd. for every 145 Class A shares and Class B shares held as of the close of business of June 18, 2021.
4.Dividend rate reset commenced the last day of each quarter. All Series 25 shares were converted into Series 24 on a one-for-one basis effective June 30, 2021.
5.Dividend rate reset commenced March 31, 2019.
6.Dividend rate reset commenced March 31, 2020.
7.Dividend rate reset commenced September 30, 2019.
8.Dividend rate reset commenced June 30, 2020.
Dividends on the Class A and B shares are declared in U.S. dollars whereas Class A Preferred share dividends are declared in Canadian dollars.
58    BROOKFIELD ASSET MANAGEMENT


SUMMARY OF QUARTERLY RESULTS
The quarterly variances in revenues over the past two years are due primarily to acquisitions and dispositions. Variances in net income to shareholders relate primarily to the timing and amount of non-cash fair value changes and deferred tax provisions, as well as seasonality and cyclical influences in certain businesses. Changes in ownership have resulted in the consolidation and deconsolidation of revenues from some of our assets, particularly in our Real Estate and Private Equity businesses. Other factors include the impact of foreign currency on non-U.S. revenues, net income attributable to non-controlling interests, and the global economic shutdown.
Our Real Estate business typically generates consistent results on a quarterly basis due to the long-term nature of contractual lease arrangements subject to the intermittent recognition of disposition and lease termination gains. Our retail properties typically experience seasonally higher retail sales during the fourth quarter, and our resort hotels tend to experience higher revenues and costs as a result of increased visits during the first quarter. We fair value our real estate assets on a quarterly basis which results in variations in net income based on changes in the value.
Renewable power hydroelectric operations are seasonal in nature. Generation tends to be higher during the winter rainy season in Brazil and spring thaws in North America; however, this is mitigated to an extent by prices, which tend not to be as strong as they are in the summer and winter seasons due to the more moderate weather conditions and reductions in demand for electricity. Water and wind conditions may also vary from year to year. Our infrastructure operations are generally stable in nature as a result of regulation or long-term sales contracts with our investors, certain of which guarantee minimum volumes.
Revenues and direct costs in our private equity operations vary from quarter to quarter primarily due to acquisitions and dispositions of businesses, fluctuations in foreign exchange rates, business and economic cycles, and weather and seasonality in underlying operations. Broader economic factors and commodity market volatility may have a significant impact on a number of our businesses, in particular within our industrials portfolio. For example, seasonality affects our contract drilling and well-servicing operations as the ability to move heavy equipment safely and efficiently in western Canadian oil and gas fields is dependent on weather conditions. Within our infrastructure services, the core operating plants business of our service provider to the power generation industry generates the majority of its revenue during the fall and spring, when power plants go offline to perform maintenance and replenish their fuel. Some of our business services operations will typically have stronger performance in the latter half of the year whereas others, such as our fuel marketing and road fuel distribution businesses, will generate stronger performance in the second and third quarters. Net income is impacted by periodic gains and losses on acquisitions, monetization and impairments.
Our residential development operations are seasonal in nature and a large portion is correlated with the ongoing strength of the U.S. housing market and, to a lesser extent, economic conditions in Brazil. Results in these businesses are typically higher in the third and fourth quarters compared to the first half of the year, as weather conditions are more favorable in the latter half of the year which tends to increase construction activity levels.
2021 ANNUAL REPORT    59


Our condensed statements of operations for the eight most recent quarters are as follows:
 20212020
FOR THE PERIODS ENDED (MILLIONS, EXCEPT PER SHARE AMOUNTS)Q4Q3Q2Q1Q4Q3Q2Q1
Revenues$21,787 $19,248 $18,286 $16,410 $17,088 $16,249 $12,829 $16,586 
Net income (loss)3,461 2,722 2,429 3,776 1,815 542 (1,493)(157)
Net income (loss) to shareholders1,118 797 816 1,235 643 172 (656)(293)
Per share1
– diluted$0.66 $0.47 $0.49 $0.77 $0.40 $0.10 $(0.43)$(0.20)
– basic0.69 0.49 0.51 0.79 0.41 0.10 (0.43)(0.20)
1.Adjusted to reflect the three-for-two stock split effective April 1, 2020.
The following table shows fair value changes and income taxes for the last eight quarters, as well as their combined impact on net income:
 20212020
FOR THE PERIODS ENDED (MILLIONS)Q4Q3Q2Q1Q4Q3Q2Q1
Fair value changes$1,980 $700 $377 $2,094 $175 $(31)$(1,153)$(414)
Income taxes(516)(717)(547)(544)(243)(225)(5)(364)
Net impact$1,464 $(17)$(170)$1,550 $(68)$(256)$(1,158)$(778)
Over the last eight quarters, the factors discussed below caused variations in revenues and net income to shareholders on a quarterly basis:
In the fourth quarter of 2021, revenues increased relative to the prior quarter due to increased contributions from recent acquisitions across our operating segments as well as same-store growth in most of our businesses. The higher net income in the quarter is primarily attributable to higher fair value gains in our Real Estate segment and lower income taxes, partially offset by lower gains from asset sale activities.
In the third quarter of 2021, revenues increased in comparison to the prior quarter due to same-store growth in most of our businesses. The higher net income in the quarter is primarily attributable to higher fair value gains in our Real Estate segment partially offset by higher income taxes.
In the second quarter of 2021, revenues increased in comparison to the prior quarter due to same-store growth in most of our businesses. The lower net income in the quarter as compared to the first quarter of 2021, is a result of lower fair value gains partially offset by asset sale activity within our Infrastructure segment.
In the first quarter of 2021, revenues decreased in comparison to the prior quarter primarily due to lower same-store results due in part to seasonality across certain operating segments. The higher net income in the quarter is a result of gains from asset sale activities.
In the fourth quarter of 2020, revenues increased in comparison to the prior quarter due to same-store growth in most of our businesses. The higher net income in the quarter is a result of gains from asset sales in the quarter as well as a positive contribution from our equity accounted investments and fair value changes.
In the third quarter of 2020, revenues increased relative to the prior quarter due to increased contributions from recent acquisitions across our businesses. We had net income in the quarter, relative to the prior quarter’s net loss, as a result of improved performance across many of our businesses and a positive contribution from fair value changes within our consolidated investment properties, particularly within our BSREP III fund.



60    BROOKFIELD ASSET MANAGEMENT


In the second quarter of 2020, our revenues decreased in comparison to the prior quarter, due to the impact of the economic shutdown for a large part of the quarter. The higher net loss in the quarter is primarily attributed to a decline in the valuation of our investment property portfolio as cash flow assumptions were adjusted downwards to reflect the impact of the shutdown.
The decrease of revenues in the first quarter of 2020 is primarily attributable to lower same-store growth as a result of seasonality and the impact of the economic shutdown. Contributions from acquisitions across our operating segments were partially offset by recent asset sales from our Private Equity and Renewable Power and Transition segments. Net income also decreased due to unrealized fair value changes brought about by the pandemic related economic shutdowns.

2021 ANNUAL REPORT    61


PART 3
OPERATING SEGMENT RESULTS
BASIS OF PRESENTATION
HOW WE MEASURE AND REPORT OUR OPERATING SEGMENTS
Our operations are organized into our asset management business, five operating businesses and our corporate activities, which collectively represent seven operating segments for internal and external reporting purposes. We measure operating performance primarily using FFO generated by each operating segment and the amount of capital invested by the Corporation in each segment using common equity. Common equity relates to invested capital allocated to a particular business segment which we use interchangeably with segment common equity. To further assess operating performance for our Asset Management segment we also provide unrealized carried interest1 which represents carried interest generated on unrealized changes in value of our private fund investment portfolios, net of realized carried interest.
Our operating segments are global in scope and are as follows:
i.Asset Management business includes managing our long-term private funds, perpetual strategies and liquid strategies on behalf of our investors and ourselves, as well as our share of the asset management activities of Oaktree. We generate contractual base management fees for these activities as well as incentive distributions and performance income, including performance fees, transaction fees and carried interest.
ii.Renewable Power and Transition business includes the ownership, operation and development of hydroelectric, wind, solar and energy transition power generating assets.
iii.Infrastructure business includes the ownership, operation and development of utilities, transport, midstream, data and sustainable resource assets.
iv.Private Equity business includes a broad range of industries, and is mostly focused on business services, infrastructure services and industrials.
v.Real Estate business includes the ownership, operation and development of core investments, transitional and development investments, and our share of LP investments, which sit within our private funds.
vi.Residential Development business consists of homebuilding, condominium development and land development.
vii.Corporate Activities include the investment of cash and financial assets, as well as the management of our corporate leverage, including corporate borrowings 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 our operating segments and allocated to each operating segment based on an internal pricing framework.
In assessing operating performance and capital allocation, we separately identify the portion of FFO and common equity within our segments that relate to our perpetual affiliates (BEP, BIP, BBU, BPG). We believe that identifying the FFO and common equity attributable to our perpetual affiliates enables investors to understand how the results of these entities are integrated into our financial results and is helpful in analyzing variances in FFO between reporting periods. Additional information with respect to these perpetual affiliates is available in their public filings. We also separately identify the components of our asset management FFO and realized disposition gains included within the FFO of each segment in order to facilitate analysis of variances in FFO between reporting periods.


1.See definition in Glossary of Terms beginning on page 136.
62    BROOKFIELD ASSET MANAGEMENT


SUMMARY OF RESULTS BY OPERATING SEGMENT
The following table presents revenues, FFO and common equity by segment on a year-over-year basis for comparative purposes:
AS AT AND FOR THE YEARS ENDED DEC. 31 (MILLIONS)
Revenues1
FFOCommon Equity
20212020Change20212020Change20212020Change
Asset Management$5,236 $3,524 $1,712 $2,614 $1,776 $838 $4,905 $4,947 $(42)
Renewable Power and Transition4,580 4,085 495 1,044 1,044 — 5,264 5,154 110 
Infrastructure11,947 9,301 2,646 797 569 228 3,022 2,552 470 
Private Equity46,683 37,775 8,908 2,030 935 1,095 3,565 3,965 (400)
Real Estate9,955 8,883 1,072 1,185 876 309 32,004 19,331 12,673 
Residential Development2,560 2,243 317 258 66 192 2,392 2,730 (338)
Corporate Activities151 871 (720)(370)(86)(284)(8,942)(6,986)(1,956)
Total segments$81,112 $66,682 $14,430 $7,558 $5,180 $2,378 $42,210 $31,693 $10,517 
1.Revenues include inter-segment revenues which are adjusted to arrive at external revenues for IFRS purposes. Please refer to Note 3(c) of the consolidated financial statements for further details.
Total revenues and FFO were $81.1 billion and $7.6 billion in the current year, compared to $66.7 billion and $5.2 billion in the prior year, respectively. FFO includes realized disposition gains of $3.1 billion, compared to $1.6 billion in the prior year. Excluding disposition gains, FFO increased by $848 million from the prior year.
Revenues increased primarily due to organic growth initiatives across our businesses and from acquisitions completed in the year across most segments. These increases were partially offset by sales of operating businesses in the year.
The increase in FFO is primarily a result of:
increased fee-related earnings in our Asset Management segment driven by significant capital inflows and strong capital deployment efforts, as well as an increase in realized carried interest1 from monetizations;
increased volumes across most operations in our Infrastructure segment;
higher contributions from our residential mortgage insurer in Canada within our Private Equity segment as a result of our increased ownership and strong business performance;
improved contributions from our hospitality portfolio within our Real Estate segment;
organic growth in other businesses, as well as contributions from recent acquisitions net of the impact of asset sales; and
realized disposition gains of $3.1 billion primarily from the disposition of our stake in West Fraser, the partial sale of our graphite electrode operations within our Private Equity segment, the secondary offering of BEPC shares in our Renewable Power and Transition segment, and the sale of our Canadian and U.S. district energy operations within our Infrastructure segment; partially offset by
the absence of contributions from Norbord within our Private Equity segment as a result of the West Fraser -Norbord strategic business combination in February 2021; and
mark-to-market losses on our financial assets portfolio in our Corporate segment.
Common equity increased by $10.5 billion during 2021 to $42.2 billion, primarily as a result of net income attributable to shareholders, shares issued and a gain recorded directly into equity associated with the privatization of BPY and annual revaluation gains of our PP&E in our Renewable Power and Transition segment. These items were partially offset by dividends paid and foreign currency translation losses.

1.See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    63


ASSET MANAGEMENT
BUSINESS OVERVIEW
Our asset management business is a premier global alternative asset manager, with approximately $690 billion in assets under management and operations spanning more than 30 countries on five continents. We have over 1,000 investment professionals that employ a disciplined investment approach to create value and deliver strong risk-adjusted returns for our clients across market cycles.
With an over 100-year heritage as a global owner and operator of real assets, we focus on investing in the backbone of the global economy across renewable power and transition, infrastructure, private equity, real estate and credit.
We put our own capital to work alongside our investors’ in virtually every transaction, aligning interests and bringing the strengths of our operational expertise, global reach and large-scale capital to bear on everything we do.
We offer our clients a large and growing number of investment products to assist them in achieving their financial goals, providing a diverse set of long-term and perpetual private funds and dedicated public vehicles across each of the asset classes in which we invest and spanning various investment strategies.
As the asset manager of these investment products, we earn base management fees in addition to incentive distributions, performance fees, or carried interest depending on the product offering.
Our asset management business focuses on raising capital by establishing new investment products for our clients, identifying and acquiring high-quality assets, delivering strong underlying investment performance and executing timely monetizations or refinancings. If we execute in these areas, this should equate to growth in fee-bearing and carry eligible capital1 and in turn higher fee revenues, fee-related earnings and realized carried interest over time.
















1.See definition in Glossary of Terms beginning on page 136.
64    BROOKFIELD ASSET MANAGEMENT


FIVE-YEAR REVIEW
Our asset management business has grown considerably over the past five years, nearly tripling in size. We have scaled our flagship private funds and the capitalization or NAV of our perpetual affiliates has grown as a result of strong investment and operating performance leading to higher market prices and increased capital market activity. Our liquid credit strategies have also grown significantly, benefitting from the partnership with Oaktree in late 2019. The result has been a 30% compound annual growth rate in fee-bearing capital, which has contributed to both higher base management fee revenues and higher incentive distributions. Total fee-related earnings over the last five years have grown by a CAGR of 23% as a result.
Over that same time period, our earlier vintage funds have matured, allowing us to realize significant amounts of carried interest. Our accumulated unrealized carried interest1 has increased from $2.1 billion to $6.8 billion over the past five years due to strong investment performance, as well as the growth in our fund sizes, the addition of new products and the aforementioned partnership with Oaktree. As our asset management business has grown and become more diversified, so has the nature of our carried interest. We expect to realize an increasing amount of carried interest as our funds continue to monetize investments and return significant capital to investors.
mda_barchartsxnew.jpg

1.See definition in Glossary of Terms beginning on page 136.
2021 ANNUAL REPORT    65


OUTLOOK AND GROWTH INITIATIVES
Alternative assets provide an attractive investment opportunity to institutional and high net worth investors. In periods when global interest rates are low, alternatives continue to be an attractive investment as they have demonstrated the ability to provide attractive risk adjusted returns and retain their value across cycles. These asset classes also provide investors with alternatives to fixed income investments by providing a strong, inflation-linked return profile. Institutional investors, in particular pension funds, must earn and generate returns to meet their long-term obligations while protecting their capital. As a result, inflows to alternative asset managers are continuing to grow and managers are focused on new product development to meet this demand.
Our business model has proven to be resilient through economic cycles, due to our strong foundation and discipline. Overall, our business is stronger and more diversified than ever and well positioned to deliver continued growth.
During 2021, we raised $71 billion of capital across our flagship and complementary strategies, and looking forward, our business plan remains essentially unchanged. We are making good progress on our $100 billion fundraising target related to this round of our flagship funds. We have held a final close for our $16 billion opportunistic credit fund and raised $12 billion each for our inaugural transition fund and our fourth flagship real estate fund.
In addition to our flagship funds, we are actively progressing our growth strategies, including insurance solutions, secondaries, technology and transition. These new initiatives, in addition to our five flagship funds and new, innovative products are expected to have a very meaningful impact on our growth trajectory in the long term.
We continue to expand our investor base through existing relationships and new channels. As of the end of 2021, we have approximately 2,100 investors with a strong base in North America and a growing proportion of third-party commitments from Asia, Europe, the Middle East and Australia. Our high-net-worth channel also continues to grow and is now close to 10% of current commitments today. We have a dedicated team of 70+ people that are focused on distributing and developing catered products to the private wealth channel.
Long-term Private Funds – $169 billion fee-bearing capital
We manage and earn fees on a diverse range of renewable power and transition, infrastructure, private equity, real estate and credit funds. These funds have a long duration, are closed-end and include opportunistic, value-add, core and core plus investment strategies.
On long-term private fund capital, we earn:
1.Diversified and long-term base management fees on capital that is typically committed for 10 years with two one-year extension options.
2.Carried interest, which enables us to receive a portion of overall fund profits provided that investors receive a minimum prescribed preferred return. Carried interest is recognized when a fund’s cumulative returns are in excess of preferred returns and when it is highly probable that a significant reversal will not occur.
3.Transaction and advisory fees are one-time fees earned on co-investment capital related to the close of transactions, and vary based on transaction agreements.
Perpetual Strategies – $115 billion fee-bearing capital
We manage perpetual capital in our perpetual affiliates, as well as in our core and core plus private funds, which can continually raise new capital. From our perpetual strategies, we earn:
1.Long-term perpetual base management fees, which are based on total capitalization or NAV of our perpetual affiliates and the NAV of our perpetual private funds.
2.Stable incentive distribution fees which are linked to cash distributions from perpetual affiliates (BEP/BEPC and BIP/BIPC) that exceed pre-determined thresholds. These cash distributions have a historical track record of growing annually and each of these perpetual affiliates target annual distribution growth rates within a range of 5-9%.
66    BROOKFIELD ASSET MANAGEMENT


3.Performance fees based on unit price performance (BBU) and carried interest on our perpetual private funds.
Liquid Strategies – $80 billion fee-bearing capital
We manage publicly listed funds and separately managed accounts, focused on fixed income and equity securities across real estate, infrastructure and natural resources. We earn base management fees, which are based on committed capital and fund NAV, and performance income based on investment returns.
FEE-BEARING CAPITAL
The following table summarizes fee-bearing capital:
AS AT DEC. 31 (MILLIONS) Long-Term
Private Funds
Perpetual
Strategies
Liquid StrategiesTotal 2021Total 2020
Renewable power and transition$20,682 $26,843 $— $47,525 $45,440 
Infrastructure31,119 36,617 — 67,736 62,535 
Private equity26,079 8,316 — 34,395 30,931 
Real estate52,332 29,950 — 82,282 61,519 
Credit and other39,067 12,898 80,230 132,195 111,195 
December 31, 2021$169,279 $114,624 $80,230 $364,133 n/a
December 31, 2020$135,462 $103,361 $72,797 n/a$311,620 
We have approximately $40 billion of additional committed capital that does not currently earn fees but will generate approximately $400 million in annual fees once deployed.
Fee-bearing capital increased by $52.5 billion during the year. The changes are set out in the following table:
AS AT AND FOR THE YEAR ENDED DEC. 31, 2021 (MILLIONS)Renewable Power and TransitionInfrastructurePrivate EquityReal EstateCredit and OtherTotal 
Balance, December 31, 2020$45,440 $62,535 $30,931 $61,519 $111,195 $311,620 
Inflows10,510 4,619 2,435 16,406 28,821 62,791 
Outflows— — — (385)(8,970)(9,355)
Distributions(1,427)(3,708)(1,175)(2,943)(1,855)(11,108)
Market valuation(6,169)5,426 1,922 6,707 4,921 12,807 
Other(829)(1,136)282 978 (1,917)(2,622)
Change2,085 5,201 3,464 20,763 21,000 52,513 
Balance, December 31, 2021$47,525 $67,736 $34,395 $82,282 $132,195 $364,133 
Renewable Power and Transition fee-bearing capital increased by $2.1 billion, due to:
$10.5 billion of inflows largely driven by the $9.3 billion of third-party capital raised for our global transition fund; partially offset by
$6.2 billion decrease in market valuations largely as a result of the lower market capitalization of BEP; and
$1.4 billion of distributions, including quarterly distributions paid to BEP’s unitholders.
Infrastructure fee-bearing capital increased by $5.2 billion, due to:
$5.4 billion increase in market valuations as a result of a higher market capitalization of BIP; and
$4.6 billion of inflows with $3.5 billion raised from capital market issuances and capital deployed in our long-term private funds within the segment; partially offset by
$3.7 billion of distributions, including quarterly distributions paid to BIP’s unitholders and capital returned to investors.
2021 ANNUAL REPORT    67


Private Equity fee-bearing capital increased by $3.5 billion, due to:
$2.4 billion of inflows from capital deployed in our long-term private funds within the segment; and
$1.9 billion increase in market valuations as a result of the higher market capitalization of BBU; partially offset by
$1.2 billion of distributions, including quarterly distributions paid to BBU’s unitholders and capital returned to investors.
Real Estate fee-bearing capital increased by $20.8 billion, due to:
$16.4 billion of inflows mainly relating to capital raised for our fourth flagship fund as well as capital deployed across various other strategies; and
$6.7 billion increase from higher valuations in our perpetual strategies during the year; partially offset by
$2.9 billion of distributions, including quarterly distributions paid to unitholders.
Credit and Other fee-bearing capital increased by $21.0 billion, due to:
$28.8 billion of inflows from our credit and insurance solutions strategies as a result of reinsurance agreements closed during the year, capital deployed in our closed-end credit funds, and capital raised in our open-end funds; and
$4.9 billion increase in market valuations across our perpetual private and liquid strategies; partially offset by
$9.0 billion of outflows primarily due to redemptions within open-end credit funds and our liquid strategies; and
$1.9 billion of distributions largely from our credit long-term private funds.
CARRY ELIGIBLE CAPITAL
Carry eligible capital increased by $34.7 billion during the year to $174.3 billion as at December 31, 2021 (2020 – $139.6 billion). The increase was related to new commitments for our fourth flagship real estate fund, our first global transition fund, our sixth real estate debt fund, and other perpetual private funds raised during the year, partially offset by the return of capital across various funds.
As at December 31, 2021, $112.7 billion of carry eligible capital was deployed (2020 – $90.8 billion). This capital is either currently earning carried interest or will begin earning carried interest once its related funds have reached their preferred return threshold. There are currently $61.6 billion of uncalled fund commitments that will begin to earn carried interest once the capital is deployed and fund preferred returns are met (2020 – $48.8 billion).
OPERATING RESULTS
Asset management FFO includes fee-related earnings and realized carried interest earned by us in respect of capital managed for our investors. Fee-related earnings also include fees earned on the capital invested by us in the perpetual affiliates. This is representative of how we manage the business and measure the returns from our asset management activities.
To facilitate analysis, the following table disaggregates our Asset Management segment revenues and FFO into fee-related earnings and realized carried interest, net, as these are the measures that we use to analyze the performance of the Asset Management segment. We also analyze unrealized carried interest, net, to provide insight into the value our investments have created in the period.




68    BROOKFIELD ASSET MANAGEMENT


We have provided additional detail, where referenced, to explain significant variances from the prior year.
FOR THE YEARS ENDED DEC. 31 (MILLIONS)RevenuesFFO
Ref.2021202020212020
Fee-related earningsi$3,523 $2,840 $1,899 $1,428 
Realized carried interestii1,713 684 715 348 
Asset management$5,236