Brookfield Asset Management Inc. | Tel 416.363.9491 | |||
Brookfield Place | Fax 416.365.9642 | |||
181 Bay Street, Suite 300 | www.brookfield.com | |||
Toronto, ON M5J 2T3 |
February 22, 2017
Division of Corporation Finance
U. S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Attention: Jennifer Monick
RE: | Brookfield Asset Management Inc. |
Form 40-F for the year ended December 31, 2015 |
Filed on March 31, 2016 |
File No. 033-97038 |
Thank you for your letter dated February 22, 2016. For your reference we have included, along with our responses, each of your questions initalics using the same numbering references in your letter.
FORM 40-F FOR THE YEAR ENDED DECEMBER 31, 2015
Note 11 – Investment Properties & Note 12 – Property, Plant and Equipment
1. | We have considered your proposed disclosures in response to comment 1. Please address the following: |
a. | Please also further adjust your disclosures of fair value and key valuation metrics within note 11 and note 12 to disaggregate this information by the same asset classes that you have identified in your proposed sensitivity analysis. We believe such disaggregation to be consistent with the guidance outlined within paragraphs 93 and 94 of IFRS 13. |
We acknowledge your comment and propose to add the following disclosure within our 2016 form 40-F.
Within Note 11 – Investment properties:
The key valuation metrics for the company’s investment properties that are measured at fair value are set forth in the table below:
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
Discount Rate | Terminal Capitalization Rate | Investment horizon | Discount Rate | Terminal Capitalization Rate | Investment horizon | |||||||||||||||||||
Core Office | ||||||||||||||||||||||||
United States | ||||||||||||||||||||||||
Canada | ||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||
Europe | ||||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||
Opportunistic | ||||||||||||||||||||||||
Opportunistic Office | ||||||||||||||||||||||||
Opportunistic Retail | ||||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||
Multifamily | ||||||||||||||||||||||||
Triple Net Lease | ||||||||||||||||||||||||
Self-storage | ||||||||||||||||||||||||
Student housing |
The following table presents the company’s investment properties measured at fair value in the consolidated financial statements:
As at December 31 | ||||||||
2016 | 2015 | |||||||
Core Office | ||||||||
United States | ||||||||
Canada | ||||||||
Australia | ||||||||
Europe | ||||||||
Brazil | ||||||||
Opportunistic | ||||||||
Opportunistic Office | ||||||||
Opportunistic Retail | ||||||||
Industrial | ||||||||
Multifamily | ||||||||
Triple Net Lease | ||||||||
Self-storage | ||||||||
Student housing |
The key valuation inputs relating to the above are Level 3 of the fair value hierarchy.
2
Within Note 12 – Property Plant and equipment:
The key valuation metrics for the company’s Property, Plant and Equipment that are measured at fair value within the Renewable Power segment are set forth in the table below:
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||
Discount Rate | Terminal Capitalization Rate | Investment Horizon | Discount Rate | Terminal Capitalization Rate | Investment Horizon | |||||||||||||||||||
North America | ||||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||
Colombia | ||||||||||||||||||||||||
Europe |
The following table summarizes the percentage of total generation contracted under power purchase agreements:
As at December 31, 2016 | ||||||||
1 - 10 years | 10 - 20 years | |||||||
North America | ||||||||
Brazil | ||||||||
Colombia | ||||||||
Europe |
The following table summarizes power prices from long-term power purchase agreements that are linked specifically to the related power generating assets:
As at December 31, 2016 | ||||||||
1 - 10 years | 10 - 20 years | |||||||
North America | ||||||||
Brazil | ||||||||
Colombia | ||||||||
Europe |
3
The following table summarizes the estimates of future electricity prices:
As at December 31, 2016 | ||||||||
1 - 10 years | 10 - 20 years | |||||||
North America | ||||||||
Brazil | ||||||||
Colombia | ||||||||
Europe |
The following table presents the company’s property, plant and equipment within the renewable power segment measured at fair value in the consolidated financial statements:
As at December 31 | ||||||||
2016 | 2015 | |||||||
North America | ||||||||
Brazil | ||||||||
Colombia | ||||||||
Europe |
The key valuation inputs relating to the above are Level 3 of the fair value hierarchy.
b. | We note your statement that “sensitivity to reasonably likely changes in discount rates and terminal capitalization rates are quantitatively immaterial with respect to PP&E within the Infrastructure and Property segments.” Please confirm for us, if true, that a 25 basis point change to the relevant unobservable inputs for PP&E within Infrastructure and Property segments is quantitatively immaterial. |
We confirm that a 25 basis point change in discount rates and terminal capitalization rates for PP&E within the Infrastructure and Property segments is quantitatively immaterial.
Should you have any further questions and/or comments, please do not hesitate to contact me at (416) 363-9491.
Yours truly,
/s/ Brian D. Lawson
Brian D. Lawson
Chief Financial Officer
Brookfield Asset Management Inc.
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