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

NOI is used as a key indicator of performance as it represents a measure over which management has acertain degree of control. We evaluate the performance of our office segment by evaluating NOI from “Existingproperties”, or “same store” basis, and NOI from “Additions, dispositions and other.” NOI from existingproperties compares the performance of the property portfolio by excluding the effect of current and prior perioddispositions and acquisitions, including developments and “one-time items”, which for the historical periodspresented consists primarily of lease termination income. NOI presented within “Additions, dispositions andother” includes the results of current and prior period acquired, developed and sold properties, as well as the onetimeitems excluded from the “Existing properties” portion of NOI. We do not evaluate the performance of theoperating results of the retail segment on a similar basis as the majority of our investments in the retail segmentare accounted for under the equity method and, as a result, are not included in NOI. Similarly, we do not evaluatethe operating results of its other segments on a same store basis based on the nature of the investments. Weprovide the components of NOI by segment below under “— Reconciliation of Performance measures to IFRSMeasures”.We also consider FFO an important measure of our operating performance. FFO is a widely recognizedmeasure that is frequently used by securities analysts, investors and other interested parties in the evaluation ofreal estate entities, particularly those that own and operate income producing properties. Our definition of FFOincludes all of the adjustments that are outlined in the NAREIT definition of funds from operations, including theexclusion of gains (or losses) from the sale of real estate property, the add back of any depreciation andamortization related to real estate assets and the adjustment for unconsolidated partnerships and joint ventures. Inaddition to the adjustments prescribed by NAREIT, we also exclude any unrealized fair value gains (or losses)that arise as a result of reporting under IFRS, certain other non-cash items, if any, and income taxes that arise ascertain of our subsidiaries are structured as corporations as opposed to REITs. Because FFO excludes fair valuegains (losses), including equity accounted fair value gains (losses), realized gains (losses) and income taxes, itprovides a performance measure that, when compared year over year, reflects the impact to operations fromtrends in occupancy rates, rental rates, operating costs and interest costs, providing perspective not immediatelyapparent from net income. We provide a reconciliation of net income attributable to parent company to FFObelow under “— Reconciliation of Performance Measures to IFRS Measures”. We reconcile FFO to net incomeattributable to Brookfield rather than cash flow from operating activities as we believe net income is the mostcomparable measure.We use Total Return as key indicator as we believe that our performance is best assessed by consideringFFO plus the increase or decrease in the value of our assets over a period of time, because that is the basis onwhich we make investment decisions and operate our business. We provide reconciliation of net incomeattributable to parent company to Total Return below under “ — Reconciliation of Performance Measures toIFRS Measures”.We use IFRS Value as a key indicator of performance as it represents one of the principal valuationmetrics for real estate entities. IFRS Value is driven primarily by the valuation of our properties together with theeffect of leverage. We use IFRS Value to measure our performance in increasing our equity in net assets. Weprovide the components of IFRS Value by segment below in this MD&A.We do not utilize net income on its own as a key metric in assessing the performance of our businessbecause, in our view, it does not provide a consistent or complete measure of the ongoing performance of theunderlying operations. Nevertheless, we recognize that others may wish to utilize net income as a key measureand therefore provide a discussion of net income and a reconciliation to FFO in this MD&A.Overview of our BusinessOur business entails owning, operating and investing in commercial property both directly and throughoperating entities. We focus on well-located, high quality assets that generate or have the potential to generatelong-term, predictable and sustainable cash flows, require relatively minimal capital to maintain and, by virtue of67