ASM 2012

May 10, 2012

Slides

Good morning, ladies and gentlemen. It is now 10:30 a. M. And time to begin the Annual and Special Meeting of Shareholders of Brookfield Asset Management Inc. My name is Frank McKenna, and I'm a recovering politician. No, actually, that's wrong. My name is Frank McKenna, and I'm Chairman of this corporation, and it's my pleasure to chair today's meeting. On behalf of the Board and my colleagues, I want to extend a warm welcome to everyone here today. We know you had choices to make, and you chose to be with us. Thank you for that. We have many as well joining us by way of webcast and thank you for that. I will now call the meeting to order when asked Canadian Stock Transfer Company Inc. By its representatives Tony Tacogna and Kay Harrison to act as scrutineers. I will also ask Brett Fox to act as secretary to today's meeting. Now my pleasure to introduce my colleagues who will be participating in today's meetings: Bruce Slat, our President and Chief Executive Officer Brian Lawson, our Chief Financial Officer. As outlined in our management information circular, there are 5 items of business to be considered today. First, to receive the consolidated financial statements of the corporation for the fiscal year ended December 31, 2011 2nd, to elect directors who will serve until the end of our next annual meeting of shareholders 3rd, to appoint the external auditor and authorize the directors to set its remuneration 4th, to consider a resolution approving the adoption of a new management share option plan and 5th, to consider an advisory resolution on the corporation's approach to executive compensation. In connection with the business to be dealt with today, unless a shareholder or proxy holder demands a ballot, all voting will be conducted by a show of hands. In order to expedite the formal part of today's meetings, I've asked certain shareholders to move and second various resolutions. Although this procedure will assist in the handling of the formal matters, it's not intended to discourage anyone from speaking in reference to any resolution after it has been proposed and seconded. I'm advised that the notice calling this meeting and the management information circular were sent to voting shareholders in accordance with all applicable requirements. I've asked the secretary to keep a copy of the notice and proof of mailing with the minutes of this meeting for legal purposes. The minutes of last year's meeting of shareholders held on May 11, 2011 are also available should any shareholder wish to review them. Based upon the Scootenear's preliminary report in attendance, the Secretary has confirmed that there is a quorum present. I therefore declare the meeting is properly constituted for the transaction of the business for which it has been called. Now turning to the first item of business, I will now table the corporation's 2011 annual report to shareholders, which includes the corporation's consolidated financial statements for the fiscal year ended December 31, 2011, together with the external auditors report. Copies of our annual report have been mailed to our shareholders who so request it and are also available here today. The second item of business at our meeting today is to elect directors who will serve until the end of our next Annual Meeting of Shareholders. Now my pleasure to introduce the 16 director nominees standing for election this year. To assist you in identifying your directors, their pictures will be shown on the screen as I read their names. The 8 proposed nominees for election by holders of the corporation's Class A Limited Voting shares are Marcel Coutu, Maureen Kempsterdarks, Lance Liebman, Jack Mintz, Youssef Nasr, Jim Pattison, Diana Taylor, myself. The 8 nominees for election by the holders of the corporation's Class B Limited Voting shares are Jack Cockwell, Trevor Eaton, Bruce Slath, Jim Gray, Robert Harding, David Kerr, Phil Linde and George Taylor. 15 of the 16 proposed nominees were elected at our last annual meeting in May 2011 and are standing for reelection today. Regretfully, one of our members, Wallace McCain, died after his election and we're deeply saddened by his loss. We're also delighted to have Diana Taylor standing for election this year. Additional information on all 16 director nominees is set out in the management information circular, which was mailed to shareholders along with the notice of this meeting. The meeting is now open to receive nominations for the election of the proposed directors. Mr. Chairman, I nominate for election as directors the 8 nominees for the Class A Limited Voting Shareholders, 8 nominees for the Class B Limited voting shareholders are contained in the management information Thank you, Derek. Mr. Chairman, I second the motion. Thank you, Catherine. Are there any further nominations? Are there any further nominations? If not, I declare the nominations closed. As there are 16 directors to be elected and the same number of nominees, I now declare that those nominated have been duly elected directors of the corporation. Ladies and gentlemen, our directors are with us here today and are wearing nametags, and I hope you'll have an opportunity to meet and talk with them after the meeting over some light refreshments. The 3rd item of formal business today is the appointment of the corporation's external auditor and authorizing the directors to set its remuneration. As stated in the management information circular, the audit committee of your Board of Directors has recommended to the shareholders that Deloitte and Touche LLP be reappointed as the corporation's external auditor. It is now in order for someone to move the resolution. Chairman, I move that Deloitte and Touche LLP be appointed the external auditor of the corporation until the next annual meeting. Directors be authorized to set its remuneration. Thank you, Catherine. Mr. Chairman, I second the motion. Thank you, Derek. The resolution has been moved and seconded and the motion is now before the meeting for discussion. Adoption of this motion requires the favorable vote of a majority of the votes cast at the meeting by the holders of both the Class A limited voting shares and the Class B limited voting shares. Management has received proxies representing approximately 67% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 99.6 percent of the Class A limited voting shares and all of the Class B limited voting shares in favor of the resolution. I will now call for the vote on the motion by a show of hands. All those in favor? Thank you. I declare the motion carried. Turning to the next item of business today, shareholders are being asked to consider a resolution to approve the adoption of a new management share option plan. The corporation's use of options to acquire Class A Limited Voting shares is an important component of its compensation arrangements. The corporation believes that this practice achieves alignment between management and shareholder interest and assist in attracting and retaining qualified and motivated senior executives and employees. Now in order for someone to move this resolution. Mr. Chairman, I move that the resolution to approve the adoption of a new management share option plan as described in the management information circular dated March 12, 2012. Thank you, Derek. Mr. Chairman, I second the motion. Thank you, Catherine. Resolution has been moved and seconded and the motion is now before the meeting for discussion. Adoption of the motion requires vote of a majority of the votes cast at the meeting by the holders of both the Class A limited voting shares and the Class B limited voting shares. Management has received proxies representing approximately 65% of the corporation's Class A limited voting shares and 100% of the Class B limited voting shares. These proxies direct me to vote over 65.6 percent of the Class A limited voting shares and all of the Class B limited voting shares in favor of the resolution. I I declare the motion carried. The next item of business is the approval of the advisory resolution on the corporation's approach to executive compensation known colloquially as say on pay. This is described in the management information circular. The corporation has adopted an advisory resolution at this meeting as part of its ongoing efforts to both meet its objectives and ensure a high level of shareholder engagement. In order for the advisory resolution to be effective, the favorable vote of a majority of the votes cast at the meeting by the holders of both the Class A limited voting shares and Class B limited voting shares is required. As this is an advisory vote, the results will not be binding upon the Board. However, the Board and Management Resources and Compensation Committee will take into account the results of the vote as appropriate when considering future compensation policies, procedures and decisions. Now in order for someone to move the resolution. Chairman, I move that the advisory resolution accepting the approach to executive compensation described in the management in particular March 12, 2012 be approved. Thank you, Catherine. Mr. Chairman, I second the motion. Thank you, Derek. Adoption of the motion requires the favorable vote of a majority of the votes cast at the meeting by holders of both the Class A limited voting shares and Class B limited voting shares. Management has received proxies representing approximately 65% of the corporation's Class A limited voting shares and 100% of the Class B voting shares. These proxies direct me to vote over 98.6% of the Class A limited voting shares and all of the Class B limited voting shares in favor of the resolution. I will now call for the vote on the motion by a show of hands. All those in favor? Thank you. Against? I declare the motion carried. Ladies and gentlemen, that completes the formal part of today's meeting and we will now move to our management's presentation. Bruce Flatt will begin today's presentation. Now at the end of the management presentation, we will welcome any questions or comments that you might have. Please note that in responding to questions and in talking about our initiatives and our financial and operating performance, we may make forward looking statements. These statements are subject to known and unknown risks and future results may differ materially. For further information on known risk factors, I would encourage you to review our management discussion and analysis in our annual report, which is available today at the registration desk or at our website. Now, Bruce, to you. Good morning and thank you. I'd reiterate what Frank said, which is to thank everyone online and people here for taking the time to listen to us. And what we thought we'd do today is I'd just give a brief overview of what we've been doing in the company and how we look today as an organization. And Brian will talk a little bit about the financial results and afterwards as Frank said we'll take questions. But we've been building as most of you know a global asset manager. And today we have about 100 offices around the world. There's 500 investment investment people and almost 25,000 operating employees around the world, which I think I say this every year, but it is one of the truly competitive advantages that we have, which is all the people that we have within the organization and that does differentiate us from a lot of the other asset managers out there. In general, we're across the globe in a number of spots, but we're very focused in a few. And we have 4 major places where we invest that are shown in here and the assets fit within our different businesses, which I'll talk about in a minute. But really our primary objective has stayed the same as we've built the business over the past 10 20 years and that's been to earn a 12% to 15% compound annual return for you in the underlying value of the business on a per share basis. And our overall return, which Brian will describe to you in a minute, it was 14% in 2011. So I'd say we met the numbers in a tough environment and things should do better going forward coming out of what we see as the global recession as it continues to evolve. The business model that we deploy is pretty simple. And sometimes the for our shareholders, the methods that we have to finance ourselves are more time consuming to understand. But what we do is very simple from a basic level. We try to use our global reach to acquire some of the very best assets in the world and I'll show them to some of them to you in a minute. We finance them on a very low risk basis And that enables us to ensure that periods of like 2,008 when you go through them that the corporation doesn't have to be in any difficult circumstances. And I'd say that's been one of the hallmarks of the organization and we continue with that. We try to use those 25,000 people in the operating businesses that we have to enhance the assets and build the businesses that we have. And I'd say that as I said earlier that continues to give us a competitive advantage. And lastly, we continue to expand the capital that we have in the business. And as opposed to issuing common equity out of the treasury of the company, we've been bringing institutional clients in as partners with us over the past 10 years. And we continue to grow the business through the capital management of the from institutional partners. So we differentiate ourselves as I said as owner operators of what we characterize as real assets. And today that word is somewhat in vogue or infrastructure is somewhat in vogue. But we've the competitive advantage that we have is that we've been doing this a long time. And the roots of this company started in Brazil. We owned the infrastructure of Brazil 100 years ago. So it really has been something which is in the overall corporate structure of the company and that gives us a tremendous advantage say when we're dealing with institutional clients and investment partners. So if you look at what we actually own within the company today, it's a tremendous array of real assets. Firstly, we own almost 100,000,000 square feet of office properties. That's the World Financial Center you see, but we have many office buildings around the world from London to Sydney to New York, Los Angeles and here in Toronto and Calgary and Canada. So we have a very high quality group of office assets. As most of you know, we added a very we had a retail business, which was on a smaller extent, but we had a major retail business to the portfolio 2.5 years ago. And we own some of the great retail centers across the United States today, which is 165,000,000 square feet of retail shopping malls in 4 different entities that we have, the largest one being general growth properties. What's listed on that slide is Ala Moana in Hawaii, which is one of the most incredible retail shopping malls in the world. 3rd, we own 170 hydropowerplants and these hydroplants are among the most unique assets in the world. They're irreplaceable in nature. They generate cash. They have high margins. And there just aren't any more of them being built other than on the exception. And we build 1 or 2 every once in a while, but very few spots in the world can you build these. So these are truly an irreplaceable group of assets, which we have in the company. We've been building a wind business and we started a couple of years ago after the distress in the market started. And we've now built or purchased 7 wind farms most of those in the United States, but a couple here in Ontario. And we continue selectively to build our wind renewable business. In the infrastructure side, we own the largest metallurgical coal shipping facility in the world. It's an incredible picture actually. And it's on the Northeast coast of Australia and it ships 20% of the seaborne metallurgical coal in the world. And it's truly again an irreplaceable asset, which is very attractive from a return perspective. We also own over 5,000 kilometers of rail tracks in Western Australia. And then again to the business model that we have, we don't operate the trains. We don't operate the business. What we own is the tracks. So our business is to rent our tracks to operators who travel over the tracks. And again that is we have a big expansion going on to ship iron ore out of Western Australia, which is consistent with the commodity boom that's going on in Australia. And lastly, we own 3,000,000 acres of Timberlands and Agrolands. The timbers in North America and in Brazil and the Agri lands are virtually or all of them are in Brazil. And these two businesses have, we think tremendous upside cash flow potential in the future. And again, they're hard assets, which are something that produces cash, but also we believe goes up in value over time. You can store the trees when values aren't as high and our cash flows have been good, but not great over the past 5 years. So we think there's tremendous upside as the U. S. Economy recovers and housing begins to recover and use structural wood, which is where a lot of this capacity has gone in past. So I guess I just I use those slides to really just say that we think we have a tremendous group of assets within the company. What's even more interesting today is that our institutional clients in the business continue to allocate capital to these type of assets and they're really doing that because their alternatives on a relatively low risk list basis are government yields at 2%. And on a relatively low risk basis, we believe we can earn for them 8% to 12% to 15% depending on what we're buying and where it is. And that is a I guess what we're seeing in the institutional client market is a tremendous amount of capital flowing to these type of assets across the world. And we believe if we're in a lower interest rate environment, and it's not to say that rates will stay exactly where they are today, but if we believe we're in a low interest rate environment that flows will continue to be allocated to these type of products across the world. And our strategy essentially is to provide these products to both our institutional clients and our public market clients through flagship entities that we have. And many of you will know we set up Brookfield Infrastructure Partners in 2,008. Last year, we amalgamated together our power business and now we have Brookfield Renewable Energy Partners. We've announced that we're going to do that with Brookfield Property Partners in the real estate business. And with each of those, we have institutional funds, which go along beside them and give us extra financial capacity to do transactions. So what we're trying to end up with 5 years from now is one of the highest quality funding models to own the type of assets, which I just described to you and to be have a competitive advantage because of cost of capital within the businesses that we operate in. And the last business being our private equity group, probably won't have a public entity, but will always be private that we do transactions in that area. Specifically turning to Brookfield Property Partners, we proposed the launch of this entity. The launch will be identical to what we did with Brookfield Infrastructure Partners in 2,008. All of our shareholders are going to receive a dividend. I guess we always believe that if you're going to start something out, give your shareholders a chance to own it first. And it worked in with Brookfield Infrastructure Partners, so we thought we'd try it again. It is being created. It will be an income and commercial property business. It will continue all of the businesses that we've run-in the commercial space for the past 20 years. We've earned over that period of time through both a combination of opportunistic investments and all of our core investments being our office buildings we own and retail malls, we've earned a 15% return over the past approximately 20 years. So obviously the past is no indication of the future, but it will continue the business that we have and we hope to be able to earn those type of returns in the business. The business will be global. And I guess one of the great advantages we think we are building within the company is if you have a global mandate and a market is overvalued, you can not have to put capital in that area and you can go somewhere else. And clearly a big focus of ours today is Europe. And we think despite all of the distress in Europe and the things that are going on that there's going to be some tremendous opportunities in the next couple of years. So just lastly describing what this entity is that shareholders will receive, it has $70,000,000,000 of assets under management or control within the businesses. It's about a $50,000,000,000 proportionate consolidated balance sheet. It has about $25,000,000,000 of total capital to support the business and just over $10,000,000,000 is in common equity of the company. And it entails all of our businesses, which is just over $30,000,000,000 of office and retail centers each. Our multifamily and industrial businesses that we continue to grow in all of our opportunity funds that we invest through, which often are the start of new businesses for us as we launch into new opportunistic investments. So I would end on tremendous access to capital that not too many others have. For Brookfield Asset Management shareholders, we'll still own 90% of it afterwards. And so we'll be highly incented to make this entity work properly. For the parent company, it also adds management fees to us. It enhances our profile as an asset manager. And we think that over time, it will show the value recognition of the assets we have within the business. With that, I'll turn it over to Brian and he'll just talk a little bit about the financial numbers within the company. Thanks, Bruce. Good morning. So I'm going to talk a bit about Financial Creation, Financial Numbers, as Bruce mentioned. So just to set the stage, starting off with how we think about value creation and what we're principally focused on as a firm is building that intrinsic value per share. At the end of the Q1, we were around $42 $42.35 And what we measure in terms of our ability to create value, our progress in creating value is what we call total return on the slide here. There's 2 principal components to it. One is the funds from operations and that's the operating cash flow that we generate from all the assets that Bruce was talking about earlier in the presentation, fact around $1,100,000,000 $1,200,000,000 a year currently. And about a third of that we pay out in the form of shareholder dividends. The balance of it we reinvest in compound in the business. The second component of it is valuation gains, which is the enhancement in value that we experience over time with these assets. Our objective with respect to total return is to generate minimum return of 12% per year. Chris mentioned we generated 14% last year, so we're on track and pleased with that result. Now when it comes to how we actually do that, I'll talk a bit more about that. But at a high level, the funds from operations remember most of these are real return assets. So there's a natural tendency for these assets to generate increasing cash flows in and of themselves. Having said that, we have those 23,000 employees that are working day in, day out to increase the cash flows from that business whether through leasing or engineering or a variety of other things. When it comes to the valuation gains, some of it's going to be market based, but there's 3 things that we really control ourselves. One is most of these assets, the values are driven by the cash flows. So as we drive the cash flows higher, we drive the values higher. 2nd, we spend a lot of time actively managing the portfolio of assets, repositioning them, expanding them and that would result in higher multiples and higher quality of assets over time. And then thirdly, a lot of it comes through how we purchase assets. And I think we've demonstrated well our ability to be a very disciplined acquirer and developer of assets over time, particularly capitalizing on times when valuations are low and we find that as a very opportune time for us to add to the asset portfolio. The business itself, we view as being really 3 interconnected parts. One is the manager portion of the business. That's us managing capital for others. We put a $4,000,000,000 intrinsic value on that. Frankly, we think that potentially it is much higher. Last year from an FFO perspective, it generated around $250,000,000 of cash flow in terms of fee income. I'll talk a bit more about that. And as it sets today, we're around $50,000,000,000 of capital that we manage for our clients in the business. The principal capital, the second component there, that's the $30,000,000,000 from our balance sheet that we have invested in all of these assets alongside our clients. That's all of the ports and the buildings and things that Bruce spoke about. About $1,300,000,000 of cash flow of FFO last year. And then we have some very profitable service businesses, construction and related property services. So as you can see down below the $42 of intrinsic value per share, a bulk of the large bulk of that is comprised of the principal capital. And what we see happening over time is we will grow that, but we think we can grow the manager portion of the business at even a faster clip. Talk a bit about why we think that is going to happen. So first of all, just in terms of the FFO on the from the manager last year, I mentioned it was about $250,000,000 that we reported on our financial statements. Most of that was the base fees. We track around $200,000,000 on an annualized basis for the fees and we are increasing that each and every year. What's notable on this slide is the performance income that's unrecognized. So last year, we realized $119,000,000 of carried interest and performance fees that accrue to us, but they don't get recognized in our financial statements until essentially until the end of the life of a fund or when at a minimum until all the clawback periods expire. We added another $100,000,000 to that in the Q1 of this year. We have about $500,000,000 that we've accumulated to date, none of which is shown up in our financial statements. We would expect to see very good FFO growth from that perspective as these as the performance income is recognized and comes into play. We continue to expand the client base. Bruce spoke about the attractiveness of the assets and the products and the investment strategies we offer to our clients and we're making very good progress on that front. And a lot of that is driven by the investment performance. As you can see from this slide, we've had very solid performance. We're very pleased with it. In particular, as some of the vintages that these funds represent were some pretty tough years, but we've also been able to capitalize on some tremendous buying opportunities through those years as well. And so that track record is going to give us a continues to help us add clients to expand that cost that capital under management. So in terms of where we go from here, in terms of building out this part of the business, we see the ability to expand the capital. We add more capital means that we're going to earn higher base fees. The fund performance, I spoke about the carried interest and the performance income As we continue to perform within the expectations of funds and particularly if we outperform, the carried interest become increasingly valuable and add more to our funds, the value of the business. And that's more in the private funds. In the listed entities like the Brookfield Infrastructure Partners, the Brookfield Renewable Energy, the Brookfield Property Partners, as we compound and grow the cash flows in those business, a portion of the increase in the dividends we earn as part of our performance income. And so those incentive distributions will increasingly contribute to Brookfield's cash flows as well. And one of the very exciting things about this business is it's very scalable. We're not capital constrained in any way. And so given the favorable track record that we have, the fact that there's reduced competition coming out of the 2,008, 2009 events gives us very strong momentum to really build this business substantially over the coming years. 2nd part I wanted to talk about was the principal capital, the $30,000,000,000 that we have invested. A good takeaway from this slide is if you look at the composition of that invested capital, more than 3 quarters of it is invested in the core high quality real return infrastructure, office property, power generating those real return assets. So it's a very stable base for the intrinsic value. It generates a lot of very stable and growing cash flows. In 2011, this is what the cash flows looked like. And again, as you'd expect from looking at the previous slide, over 70% of the cash flow that we generated, the FFO came from those three principal components the property, the renewable power and the infrastructure. Even with the sustainability of those cash flows, I think it's fair to say that we are not firing on all cylinders. There's good growth prospects for all three of those. And in particular looking at our private equity operations, several of those businesses are correlated with the U. S. Homebuilding market. We know that homebuilding market is coming back at some point in time. And so we would expect to see a very substantial growth in the cash flows from that business as well. So in terms of the growth there, as I mentioned, the real return assets, so we should expect to see growth as the economy continues to expand and through just continuing to work the FFO in that regard with the 23,000 employees and the correlation with the U. S. Homebuilding recovery. So I think we're very well set up there from an organic growth perspective. But what we also have going for us are all the investment professionals and the engineers and the folks within the firm that are doing all the capital expansions and the acquisitions. And we have the benefit that global breadth that Bruce spoke about and our ability to operate within several different industry and asset classes means that we can take advantage of situations in areas of the economy where there's deleveraging going on. So let's say Europe, certain parts of America, but we can also benefit from strong growth areas as well, Brazil or Australia. We have a substantial development pipeline. We have good liquidity and a low cost of funds. And so we believe that we're going to be able to drive significant value through the acquisition development process over the next couple of years. We think it will be 2 very good years. In 2011, we put more than $8,000,000,000 to work and in a number of different things whether it was toll roads in Chile, building out rail lines in Australia, hydro facilities in Brazil and a number of opportunities across the expanding our retail platform in the United States. So a lot of very good work done there. And then on the development side, there's a lot of potential here as well. On the property side, we have 19 office projects, dollars 7,000,000,000 of built out project costs on the renewable side. We're currently building 4 hydro facilities, dollars 400,000,000 of capital costs there and a very substantial pipeline hydro and wind opportunities behind that. And then on the infrastructure side, I mentioned the rail lines. We have a multi $1,000,000,000 expansion of the metallurgical facility that Bruce showed you on the screen there and transmission lines in Texas, a number of things on the go there. So with all that, we've got a number of opportunities to continue to grow the firm, whether it's building out the asset management side, increasing the fee base there, whether it's just organically building the FFO within the various operations and also on the acquisition and development side. And so just to close out before I hand it back to Bruce, we did put out our Q1 numbers this morning. We had a very good quarter. The funds cutting to the funds from operations for Brookfield shareholders went up from 231,000,000 dollars to $280,000,000 A lot of that happened within our property sector, but we had a lot of positive contributions from a number of the initiatives that we've talked about thus far in the meeting. We did also declare the $0.14 dividend, which is up from the 13% clip that we recorded last year. So with that, I'll hand the podium back to Bruce. So thanks very much. So with that, we would take any questions if there are anybody from anybody in the room. Bert? Specifically, special institutions in Europe trying to deleverage balance sheets. This group is taking advantage of these opportunities and what steps have you taken so far? Thank you. Hopefully, everyone heard the question. It's just what I'll paraphrase. What are we doing with respect to Europe? And are we going to take advantage of opportunities? And what have we done so far? And I'd say our view is always cautious with respect to dangerous environments like Europe when there's things going on that you really don't know. Having said that, I think we've always tried to go where others tend not to go. And those situations usually produce long term opportunities which build great organizations. And if I reflected on most of the company that we own today and the assets we own in the company today, most of those assets have emanated from restructurings that we've done in the past 25 years. So I'd say this is our sweet spot. So just specific to Europe, our last two years, we've put a lot more people in Europe than we had before. We continue to build the business up. We don't have a very large business in Europe relative to the company and we're thankful for that today. The benefit we have is that we have capital and knowledge from elsewhere in the world and enough people in Europe now that we can capitalize on some of the situations. What we focused on so far is just buying assets from companies in Europe who needed capital to execute their business plans. So for example, we bought 7 50% of 7 shopping malls from a Portuguese investor who needed capital in Portugal and the malls were in Brazil. We bought 50% of a toll road from a company in Spain who needed capital to deploy within their business and we bought their 50% of their toll road in Chile. We bought a number of loans from one of the banks in Europe that are entirely in New Zealand, but it was a European institution that sold them to us. So what we've tried to do is capitalize on the assets which are outside of Europe, but owned by Europeans and facilitate their success by giving them capital to reorganize. And what we took was some of the assets without the issues that we didn't have that much knowledge of. Today, we're actually focused on a number of more on opportunities which are larger in nature and more complex. And we hope over the next couple of years like we did in 2,009 in the United States, we hope there's 1 or 2 significant opportunities in 1 of our 1 or 2 of our businesses, which we can add major portfolios of assets in Europe. The only thing I'd say is they don't come without complications and they come with more risk than you think. And often when we do that shareholders wonder what we're doing. The only thing I can say is that if you reflect in past some of the great things we've owned have come with opportunities like that. The more interesting things that you mentioned is going to happen is putting all your property. And I'm curious to know, I presume that includes property sold by Thank you for that. So just I'll repeat the question just if everyone didn't hear it. The question is we're spinning out Brookfield Property Partners and what happens to Brookfield Properties Brookfield Office Properties once that occurs. And I would I just say that I try to answer it by saying the following. We have a lot of companies in the public markets and we care about every single one of them and we want every single one of them to make a very good return for their shareholders, because often people that invest in one entity invest in another. And we've learned from experience that if you make people money in one place, they will come along with you in another. So I'd just start off by saying that we care a lot about Brookfield Office Properties and the value of that company and the shareholders that are there. Been with us a long time. It's been a long time public company and one of our flagship entities. So this has nothing really to do with Brookfield office properties. We're floating an entity above it, which has an enormous number of assets in it across the globe and in every different asset class in real estate. And the differentiation is up top, we're creating a company that has access to capital to capitalize on opportunities across the globe in real estate in every single asset class where we have the capabilities to manage. Brookfield office is very different from that. It is a very focused downtown office company in select markets where it can run one of the best office portfolios in the world. And those are very different mandates. So the direct answer to your question is, it has nothing to do with Brookfield office properties. That company will own 50% of the shares approximately that it owns today. And Brookfield Office Properties will trade separately and will continue to trade separately afterwards and it really has nothing to do with it. The way to think about it is that we own that entity today And it's 100%. We're 100% shareholder. Afterwards, we're going to be 93% shareholder and we'll have some partners with us. So it really has nothing to do with Brookfield office as an entity. And it will continue with its mandate as it always has. And we've always been happy to have 50% of if an office asset met the characteristics of what Brookfield office does, we're always happy to have it continue to buy assets in the markets where it wants to be and support us to do that as opposed to do it ourselves and we'll continue with that afterwards. So hopefully that answers that your question. I love wind farms. Wind farms are fantastic. But what I can't understand, Canada is a huge country. Why are we building wind farms 500 feet from people's houses? And you're just courting, I don't know whether you're doing it, but why is it a causing unnecessary objections? I know you have to go where the wind is, but this is only that close to where people live? So, firstly, I don't think we're building any of those wind farms next to anybody's houses. But here's what I'd say to you is that, what's important with wind and with any amount of electricity that's generated is where the load is. And if you have to have you can't have it too far from load, which means that the best place to build it would be in Baffin Island. I'm sure because no one would see them or ever be up there to see a wind farm. The problem is you can't get the electricity down to where the people are. So they have to be relatively close to where the people are or relatively close to where transmission lines are. So I'd just say there's a with all of these things, developers of these technologies have to be careful with the environmental impact and what it does to people. I think most developers are trying to be very respectful and every day they try harder, but no one's ever happy, especially when it's near you. And I'd just say, I think if you broadly look across the industry, they try to do the best they can And but it's never perfect. Well, I'm interested to know what your thoughts are on India and China. So we have modest operations in India, although growing, but small relative to the size of the organization and small operations in China. I would say both of them are from all of our travels there and our business that we do there are amazing countries that are going to transform the world in the next 25 years. With all transformations of major things, sometimes there are it never goes in a straight line. There are hiccups along the way. And there's no doubt both countries will have their hiccups along the way. But I'd have to say that our observations as an organization is that these are incredible countries that are going to contribute in an amazing way to the world. And that often as North Americans, we take a North American view to issues. And if you look at what's going on in the emerging the old emerging market, those places have tremendous opportunity and that's what's driving the world today. So I think they're both very exciting places. It will take a long time for us to have significant amounts of capital in those countries because in what we do we have to be very comfortable with rule of law, operating capacity, capability to do things ourselves and we're just not there yet. So I think for the world at large, we think they're very positive for us. They get more interesting every day as we learn, but they won't be meaningful to the business in the short term from a direct investment perspective. Seeing no other questions, I will turn it back to Frank to deal with the end of the meeting. Thank you, Bruce, and thank you, ladies and gentlemen. If there are no further questions or comments, I'd like to thank you for your participation today. Appreciate your comments and take them seriously. And I hope that you've found the meeting and the information that you have received informative. So that brings us to the end of today's meeting unless there are any other items of business. And since there is no other item of business, I declare the meeting terminated. Thank you.