Brookfield Asset Management Announces Fourth Quarter Realization Items and Third Quarter Results

Brookfield Asset Management Inc. (TSX: BAM)(NYSE: BAM) -

Investors, analysts and other interested parties can access Brookfield Asset Management's 2007 Third Quarter Results as well as the Shareholders' Letter and Supplemental Financial Information on Brookfield's web site under the Investor Centre/Financial Reports section at www.brookfield.com .

The Third Quarter 2007 Results conference call can be accessed via webcast on November 2, 2007 at 11 a.m. EST at www.brookfield.com or via teleconference at 1-800-319-4610 toll free in North America. For overseas calls please dial 604-638-5340, at approximately 10:50 a.m. EST. The teleconference taped rebroadcast can be accessed at 1-800-319-6413 or 604-638-9010 (Password 2810).

Brookfield Asset Management Inc. (TSX: BAM)(NYSE: BAM) today announced the following:

- two recently completed initiatives that will result in meaningful gains being recorded in the fourth quarter, covered in the following section; and

- the financial and operating results for the periods ending September 30, 2007, which are covered in the balance of the release and the attached financial statements.

Fourth Quarter Realization Items

On October 31, 2007, the company closed the sale of its shares of Stelco to U.S. Steel. Brookfield's Tricap Restructuring Fund was the largest shareholder of Stelco, having taken the company out of a formal restructuring process, and played a leadership role in the sale process. Brookfield realized proceeds of nearly eight times the original investment and expects to record a pre-tax gain of approximately $250 million in the fourth quarter of 2007.

Also on October 31, 2007, a secondary offering of the major Brazilian stock exchange (the "Bovespa") closed. The Bovespa was taken public through an initial public offering that raised $3.7 billion. Brookfield owned a number of seats on the Bovespa which were converted to common shares and monetized. Proceeds were approximately $160 million, and Brookfield expects to record a substantial gain in the fourth quarter of 2007.

Third Quarter Financial Results

"For the period ending September 30, 2007, we achieved our targets in most of our operations and exceeded expectations in some," said Brookfield Asset Management's Managing Partner, Bruce Flatt. "In particular, we achieved record results in our Canadian residential property operations and realized meaningful gains in our investment activities. Our results were impacted by lower generation levels within our power generation operations due to abnormally low water conditions, continued weakness in the U.S. housing markets, and an industry strike in the Canadian coastal forest products sector."

The company advanced a number of important transactions during the quarter, including the acquisition of Multiplex in Australia, the sale of a large restructuring fund investment and the refinancing of its One Liberty Plaza property in lower Manhattan.

Brookfield continues to expand its fee-bearing assets under management. At quarter end, base management fees, which are an important component of overall fee revenues, totalled approximately $90 million on an annualized basis. Furthermore, the company accumulated $82 million of additional performance fees and carried interests during the quarter, that were not recorded in the cash flows or net income of the company due to its current accounting conventions.

Flatt commented: "We continue to be on target this year to record the highest cash flows in our history."

Cash Flow from Operations

Cash flow from operations on a year-to-date basis increased substantially. Cash flow from operations prior to realization and major disposition gains for the third quarter increased 18% to $342 million, compared to $289 million last year. Total cash flow from operations for the third quarter was $321 million compared with $368 million last year.

                            Three months ended        Nine months ended
                                  September 30             September 30
                            -------------------------------------------
US$ millions (except per
 share amounts)                2007       2006          2007       2006
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Cash flow from operations
- prior to realization and
   major disposition gains   $  342     $  289      $  1,274     $  786
- total                         321        368         1,332        942
- per share(1)               $ 0.52     $ 0.60      $   2.17     $ 1.53
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(1) Adjusted to reflect three-for-two stock split

Net Income

On a comparable basis, net income prior to realization and major disposition gains for the third quarter was $175 million compared with $202 million last year. The increase in operating cash flows noted above were offset by depreciation on newly acquired assets, which reduced income by $76 million in the quarter ($217 million year to date). The depreciation is significantly higher than projected annualized sustaining capital expenditures for these assets, due to their high quality, long life and value appreciation potential. This is why the company focuses on operating cash flow as a more appropriate measure in managing and measuring our operating performance.