Source - Brookfield Asset Management

Security holders’ and managers’ interests are aligned• Base management fee +/- covers manager’s overhead• Equity enhancement and incentive distribution fees reward equity appreciation and dividenddistribution increases only• Brookfield retains +/-$11B in invested equity in BPY making returns on equity the focus• No fees paid by downstream entities (e.g. BPO, GGP, Rouse) for their activitiesExample if market value and distributions increase by 25%Component Basis Initial FeesFees if market value& distributions increaseby 25%IncrementalFeesBase Management FeeEquity Enhancement FeeCompensation for overhead and managementinfrastructure1.25% of increase in market capitalization ofBPY$50m $ 50m None- $ 38m $ 38mIncentive Distribution Fee15% of distributions over $1.10 per share25% of dividends over $1.20 per share--$ 6m$ 5m$ 6m$ 5mTotal FeesFees as % of Equity Base$ 50m0.4%$ 99m0.7%$ 49m+0.3%Equity Value of BPY $ 12.0b $ 15.0b +3.0b31