A SPECIALIST ASSET MANAGEMENT COMPANY

FOCUSED ON PROPERTY, POWER AND

INFRASTRUCTURE ASSETS

Brookfield’s Activities in the Timberlands and

Restructuring Side of the Industry

Presentation to:

PWC 19th Annual Global Forest and Paper Industry Conference

11 May 2006

Private & Confidential1

ABOUT BROOKFIELD

Brookfield Asset Management (NYSE: BAM; TSX: BAM.LV.A) isan asset management company, focused on property, power andinfrastructure assets

Formerly known as Brascan

Our clients include pension funds, life insurance companies, financial institutions,corporations, high net-worth individuals and retail investors

Nearly US$50 billion of assets owned and under management

– Greater than US$800 million of annual free cash flow

– S&P and DBRS ratings of A- and A(low)– US$4 billion of cash, short-term financial assets and undrawn bank lines

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ABOUT BROOKFIELD

Headquartered in Toronto and NewYork

– 10 offices worldwide

Group-wide more than 3,500employees

– Over 80 investmentprofessionals

Current operations include:

– 95 commercial properties withover 65 million square feet

– Over 130 power generatingfacilities with 3,300 MW ofinstalled capacity

– Extensive timber operationsSao Paulo

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FOCUS ON WHAT WE KNOW…

Currently a global surplus of capital; challenge is to identify positive opportunities forinvestment

Passive investment and participation in auctions offer few opportunities for value creation.As a result, Brookfield aims to actively identify and create investment opportunities

Our investment platform allows us to capitalize on unique market opportunities

– Entrepreneurial senior management team with long tenure

– Investments managed by experienced professionals with operational expertise

Expertise is in Property, Power, and Infrastructure as well as business restructuring, M&Aand asset management

A basic tenet is that we target companies in businesses we understand with assets wewould be comfortable owning at the right price

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BROOKFIELD’S INTEREST IN THE PAPER & FOREST

PRODUCTS SECTOR

Timberlands

– Non-depreciating asset class capable of providing stable returns

– Focus is on Canada, U.S. and Brazil

Bridge Lending

– Strategic, asset-backed lending to businesses with tangible assets we would becomfortable owning

» Bridge Loans

» Debtor-in-possession loans

» Long-term debt

» Equity, or equity type securities

Restructuring Opportunities

– Companies with attractive tangible assets, proven operating histories in short termdistress, requiring:

» Financial resources or operational assistance

» Strategic redirection

» Management expertise

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TIMBERLANDS INVESTMENT CONSIDERATIONS

Timberlands’ attractive investment characteristics include:

Diversification attributes

Total return

Inflation hedge

Renewable growing asset

Available investment management expertise

Accepted asset with strong appeal

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TIMBERLANDS INVESTMENT

Timberlands investments have become increasingly popular

Pension funds began investing + 20 years ago, followed by Endowments (+ 15 years)and high net worth individuals (5-10 years)

Historic capital appreciation reflects change in ownership from low multiple P&FPindustrial companies to higher multiple institutional ownership with a focus on HBUvalue capture and move from larger, “wholesale” timberlands to “retail” parcels

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Morgan Stanley REIT Index

PCL

TWF.UN

Five-Year Cash Yield Of Plum Creek & TimberWest Shows

Trend of Declining Cash Yields Relative to US REITs

The popularity of Timberlandsinvestments reflects:

– A conscious effort to invest innon-depreciating, hard assets

– An expectation of moderatecapital appreciation reflecting abelief in a future scarcity of supply

– Expectations of additional cashyields from carbon credits

This popularity has led to significantcap rate compression for timberlandsinvestments over the past 5+ years

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BROOKFIELD’S TIMBERLANDS PORTFOLIO

Brookfield currently has investments in North American and Brazilian timberlandstotaling over $1.2 billion

– 1.8 million acres of B.C. Coastal, Northeastern North American and Braziliantimberlands

Two new North American timberland ventures have been launched in past year:currently creating a US$500 million Brazilian timberlands fund

ACADIAN TIMBER

INCOME FUND LP

1,086,000 acres

Public timberlands fund (ADN.UN)established in 2006 focused oneastern Canada and the NE US

765,000 acres of freeholdtimberlands in New Brunswick

311,000 acres offreehold timberlands in Maine

Brookfield acts as Managerand owns 29% equity

BRAZILIAN COMFLORESTA

TIMBERLANDS

150,000 acres

A leading fibre sourcefor solid-wood focused forest

products companies insouthern Brazil.

Actively managed freeholdtimberlands in Brazil (50,000 acresin pine and eucalyptus plantations).

100% owned since 1971

ISLAND TIMBERLANDS

635,000 acres

Recent acquisition ofhighly productive timberlands

distinguished by their productivity,species value and market access.

Actively managed freeholdtimberlands in coastal British

Columbia.

100% owned since 2005.

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BRIDGE LENDING AND

RESTRUCTURING OPPORTUNITIES

Very little interest in pulp and paper:

– Too capital intensive

Look for:

– Good fibre and deep, competitive markets

– Internal opportunities for cost savings through active management and/or scale-related synergies

– Exit opportunities must exist

Must be patient and prepared to act quickly

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BC COASTAL EXAMPLE…

WEYERHAEUSER’S COASTAL BUSINESS

• Acquired May 2005

• Offered Weyerhaeuser a clean exit from its coastal business

• Deal risk was reduced by BAM providing a fully financed

offer

ISLAND TIMBERLANDS

• High quality large scaletimberlands investmentopportunity (255,000 ha)

• Target investment category

• Manage the business forinstitutional investors for thevery long-term

• Focus on operationsexcellence

Core private equity investment

where Brookfield can deploy its

own capital and grow its asset

management business

CASCADIA FOREST

PRODUCTS

• 3.6Mm3 Coastal AAC

• 5 sawmills (+ 600mmfbm/yr)

• 4 Remanufacturing plants

• 2100 employees

• Wholly-owned by Brookfield

Non-Core Business Options

• Wholly owned by BAM

• Sell as is

• Restructure and operate or

exit

• Amalgamate with WFP

DOMAN INDUSTRIES

• 3.2Mm3 Crown AAC

• 5 sawmills (± 850mmfbm/yr)

• 1 pulp mill

• Public company

• No real access to capital

• Tricap owns 20% of shares

CCAA process led by Tricap

• Senior secured bond holders paidout

• Unsecured bond holdersconverted to equity

• New high yield bond secured• Interim capital structure

established• New management team in place

Tricap Restructuring Fund

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BC COASTAL EXAMPLE…

Cascadia Forest Products

3.6M m3 AAC

5 Sawmills; 4 Reman. Plants

Specialty wood products focus

Canfor’s Coastal Business

950,000 m3 AAC

• 7.7Mm3 AAC

• 9 Sawmills; 5 Remanufacturing Plants

• Balanced Product Focus

• Estimated $65M in Synergies

• Improved Capital Structure

• Debt to Total Cap. + 48% (before returnof duties)

• WACC + 12.5%

• Improved Market Cap (+ $430M)

• Public Company (Tricap owns + 70%)

• WFP Management acquisition initiative

• Added 950,000 m3 AAC

• Allowed closure of Squamish Pulp mill

• $35M Cash paid to WFP as price premiumon future chip deliveries

• Improved fibre security for WFP mills

• Improved fibre security for HSPP

• WFP Management negotiates Cascadiaacquisition

• BAM Bridge Fund secures $308 M facility toreplace US$221 M15% Secured Bonds

• Tricap underwrites $295M Rights Offering

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FOR THOSE WONDERING WHY THIS TAKES

SO LONG..?

WFP, Tricap and BAM have been very busy

A short list of significant initiatives that have required very significant attention:

– External Initiatives:

» Negotiate all aspects of transactions (Weyco, WFP, Tricap, BAM, CFP)

» HSR and Competition Canada Review

» Approval of tenure transfer

» Arranging Bridge loan

» Arranging Rights Offering

– Internal Initiatives:

» DoC anti-dumping investigation

» Sarbanes-Oxley compliance preparation

» Trying to successfully integrate three large companies into an effective organization

» … all in a very difficult operating environment

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WHY..?

Brookfield’s decision to invest in the Coastal business reflects:

– Opportunity to acquire a high quality private timberlands

– Valuations of Coastal integrated P&FP companies had declined by + 65% (badnews was largely priced in)

– Operating environment was improving

» Friendlier government

» Improving regulatory environment

» Improved flexibility (removal of appurtenant obligations and divisibility and salability oftenure)

– A belief that an integrated Coastal business was still viable…