FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

The company and Brookfield intend for the company to have control over the property partnership and PropertyGP following the spin-off. Accordingly, the company will enter into a voting agreement with Brookfield (the“Voting Agreement”) pursuant to which any voting rights Brookfield holds with respect to the election ofdirectors of the property partnership or the Property GP will be voted in favor of directors approved by thecompany. Also under the Voting Agreement, the company will have the right to approve or reject major strategicdecisions relating to the property partnership, including the liquidation of its assets, business combinations orother material corporate transactions involving the property partnership, any proposed dissolution of the propertypartnership, amendments to the limited partnership agreements of the property partnership or the Property GPand the removal of the Property GP.Prior to the spin-off, the company is expected to enter into a three-year unsecured credit facility with Brookfieldthat will provide borrowings on a revolving basis of up to $500 million, which will be used for working capitalpurposes. The credit facility will be guaranteed by the company, the property partnership and each of the HoldingEntities. It is expected that no amounts will be drawn on the facility as of the date of the spin-off.2. BASIS OF PRESENTATIONThe company’s unaudited pro forma balance sheet as March 31, 2012 and unaudited pro forma statements ofincome for the three months ended March 31, 2012 and year ended December 31, 2011 have been preparedassuming the transactions described herein had each occurred as of March 31, 2012, in the case of the unauditedpro forma balance sheet, and as of January 1, 2011 in the case of the unaudited pro forma statements of income.The company’s unaudited pro forma financial statements have been prepared using the carve-out financialstatements of the Business (the “Brookfield Carve-out financial statements”) for the three months endedMarch 31, 2012 and the year ended December 31, 2011 included elsewhere in this Form 20-F/A.The unaudited pro forma financial statements have been prepared for informational purposes only and should beread in conjunction with the Brookfield Carve-out financial statements and related disclosures. The preparationof these unaudited pro forma financial statements requires management to make estimates and assumptionsdeemed appropriate. The unaudited pro forma financial statements are not intended to represent, or be indicativeof, the actual financial position and results of operations that would have occurred if the transactions describedbelow had been effected on the dates indicated, nor are they indicative of the company’s future results.3. SIGNIFICANT ACCOUNTING POLICIESThe company presents its financial statements in accordance with International Financial Reporting Standards asissued by the International Accounting Standards Board (“IFRS”). The accounting policies used in thepreparation of the company’s unaudited pro forma financial statements are those that are set out in the BrookfieldCarve-out financial statements for the year ended December 31, 2011. Accounting policies applied in accountingfor the impacts of the reorganization and spin-out transactions in the unaudited pro forma financial statements aresummarized herein.(a) Basis of ConsolidationThe unaudited pro forma financial statements include the accounts of the company and its subsidiaries, which arethe entities over which the company has control. Control exists when the company has the power, directly orindirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.The company will control the strategic financial and operating policy decisions of the property partnershippursuant to the Voting Agreement described in Note 1 to these unaudited pro forma financial statements and,through its ownership of the limited partnership units of the property partnership, benefit from the propertypartnerships activities. Accordingly, the company has consolidated the property partnership in the unaudited proforma financial statements.PF-7