News Release

Investors, analysts and other interested parties can access Brookfield Asset Management’s 2006 Second Quarter Results as well as the Shareholders’ Letter and Supplemental Financial Information on Brookfield’s web site under the Investor Centre/Financial Reports and Investor Presentations section at www.brookfield.com.

The Second Quarter 2006 Results conference call can be accessed via webcast on August 3, 2006 at 3 p.m. EST at www.brookfield.com or via teleconference at 1-888-789-0150, toll free in North America. For overseas calls please dial 416-695-5261, at approximately 2:50 p.m. EST. The teleconference taped rebroadcast can be accessed at 1-888-509-0081 or 416-695-5275 (password: 626906).

BROOKFIELD ASSET MANAGEMENT REPORTS 23% INCREASE

IN SECOND QUARTER CASH FLOW FROM OPERATIONS

TORONTO, August 3, 2006 -Brookfield Asset Management Inc. (TSX/NYSE: BAM) today announced:

· A 23% increase in operating cash flow for the second quarter ended June 30, 2006. Operating cash flow totalled $267 million ($0.64 per share), compared with $215 million ($0.52 per share) reported in the same quarter last year.

· $10 billion of assets under management were added to operations including:

- $5 billion of core office properties,

- $2.5 billion of transmission infrastructure assets,

- $0.5 billion of power generation assets, and

- $2.0 billion of fixed income and real estate securities.

· Continued growth was achieved in our management platforms across our property, power, timber and transmission infrastructure sectors.

Bruce Flatt, Managing Partner and CEO of Brookfield Asset Management commented: “Our results in the second quarter of 2006 reflect strong performance across almost all of our operations and success in advancing a number of our strategic initiatives over the last few quarters.”

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The following table presents the results on a total and per share basis.

	Three months ended June 30				Six months ended June 30
US$ millions (except per share amounts)	2006		2005		2006		2005
Cash flow from operations	$	267	$	215	$	574	$	370
-per share 1	$	0.64	$	0.52	$	1.39	$	0.89
Net income	$	135	$	610	$	314	$	775
-per share 1	$	0.31	$	1.51	$	0.74	$	1.90

¹Adjusted to reflect three-for-two stock split

Net income for the quarter was $135 million. This is not comparable to the $610 million of net income recorded in the same period last year, as the 2005 results include $508 million of after-tax gains and equity earnings from an investment which was sold during that year.

Dividend Declaration

The Board of Directors declared a dividend of US$0.16 per Class A Share, payable on November 30, 2006, to shareholders of record as at the close of business on November 1, 2006.

Information on Brookfield Asset Management’s common and preferred share dividends can be found on the company’s web site under Investor Centre/Stock Information.

Additional Information

The Letter to Shareholders and the company’s Supplemental Financial Information for the six months ended June 30, 2006 contains further information on the company’s strategy, operations and financial results. Shareholders are encouraged to read these documents, which are available on the company’s web site.

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Brookfield Asset Management Inc., focused on property, power and infrastructure assets, has over $50 billion of assets under management and is co-listed on the New York and Toronto Stock Exchanges under the symbol BAM. For more information, please visit our web site at www.brookfield.com.

For more information, please visit our web site at www.brookfield.com or contact:

Katherine C. Vyse

Senior Vice-President

Investor Relations and Communications

Tel: 416-369-8246    e-mail: kvyse@brookfield.com

Note: This press release, Letter to Shareholders and Supplemental Information referred to herein contain forward-looking information and other “forward looking statements”, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The words “expect”, “will”, “positioned”, “expansion”, “scheduled”, “should” and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements.  Although Brookfield Asset Management believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.  Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include: general economic conditions; interest rate changes; availability of equity and debt financing; the ability to effectively integrate acquisitions into existing operations; and other risks and factors described from time to time in the documents filed by the company with the securities regulators in Canada and the United States including in the Annual Information Form under the heading “Business Environment and Risks.” The company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise

2 | Brookfield Asset Management Inc. – Q2-2006 Results

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)		Three months ended June 30				Six months ended June 30
US$ millions, except per share amounts		2006		2005		2006		2005
Total revenues	$	1,405		1,174	$	2,588	$	2,148
Fees earned	$	69	$	58	$	123	$	106
Revenues less direct operating costs
Property		337		257		619		479
Power generation		156		115		356		249
Timberlands		23		14		62		18
Transmission infrastructure		7		6		14		12
Specialty funds		29		13		68		26
Investment and other income		84		98		174		173
		705		561		1,416		1,063
Expenses
Interest		250		235		474		434
Asset management and other operating costs		84		63		155		128
Current income taxes		37		30		51		46
Non-controlling interests in net income before the following		118		78		218		161

		216			155			518			294
Other items
Equity accounted income (loss) from investments		3			73			(19	)		176
Gain on disposition of investment		—			565			—			565
Depreciation and amortization		(127	)		(92	)		(231	)		(169	)
Future income taxes and other provisions		(16	)		(121	)		(67	)		(149	)
Non-controlling interests in the foregoing items		59			30			113			58
Net income	$	135		$	610		$	314		$	775
Net income per common share
Diluted	$	0.31		$	1.51		$	0.74		$	1.90
Basic	$	0.32		$	1.54		$	0.76		$	1.95

CONSOLIDATED STATEMENT OF CASH FLOW FROM OPERATIONS

(Unaudited)		Three months ended June 30				Six months ended June 30
US$ millions		2006		2005		2006		2005
Income before non-cash items1	$	216	$	155	$	518	$	294
Dividends from Falconbridge		—		12		—		24
Dividends from Norbord		51		48		56		52
Cash flow from operations	$	267	$	215	$	574	$	370

¹Net income excluding other items

3 | Brookfield Asset Management Inc. – Q2-2006 Results

CONSOLIDATED BALANCE SHEET

	June 30		December 31
US$ millions	2006		2005
Assets
Operating assets
Securities	$	1,563	$	1,802
Loans and notes receivable		455		348
Property, plant and equipment
Property		11,891		11,141
Power generating		4,044		3,568
Timberlands		1,044		888
Transmission infrastructure		1,930		130
Other plant and equipment		650		316
		21,577		18,193
Cash and cash equivalents		676		951
Financial assets		1,648		2,171
Investments		524		595
Accounts receivable and other		5,622		4,148
	$	30,047	$	26,058
Liabilities and Shareholders’ Equity
Liabilities
Corporate borrowings	$	1,780	$	1,620
Non-recourse borrowings
Property specific mortgages		10,508		8,756
Other debt of subsidiaries		3,188		2,510
Accounts payable and other liabilities		5,126		4,561
Capital securities		1,651		1,598
Minority interests of others in assets		2,558		1,984
Preferred equity		515		515
Common equity		4,721		4,514
	$	30,047	$	26,058

Note 1

The press release and accompanying consolidated financial statements make reference to cash flow from operations on a total and per share basis. Management uses cash flow from operations as a key measure to evaluate performance and to determine the underlying value of its businesses. The consolidated statement of cash flow from operations provides a full reconciliation between this measure and net income. Readers are encouraged to consider both measures in assessing Brookfield Asset Management’s results. In addition, the consolidated balance sheet above presents the company’s cost accounted investment in Canary Wharf Group as part of its property operations, consistent with management’s determination of business segments, whereas it is included in “Securities” in the company’s statutory financial statements.

4 | Brookfield Asset Management Inc. - Q2-2006 Results