Thank you for standing by. This is the Chorus Call conference operator. Welcome to the Brookfield Asset Management 2014 Second Quarter Results Conference Call and Webcast. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Amar Dhotar, Investor Relations for Brookfield Asset Management. Please go ahead, Mr. Dhotar.

Good morning, ladies and gentlemen. Thank you for joining us for our second quarter webcast and conference call. On the call with me today are Bruce Flatt, our Chief Executive Officer; and Brian Lawson, our Chief Financial Officer. Brian will start this morning, discussing the highlights of our financial and operating results. Bruce will then discuss our views on the current investment and market environment, as well as a number of our major growth initiatives in the quarter. At the end of our formal comments, we will turn the call over to the operator to open up the call for questions. [Operator Instructions] I would, at this time, remind you that in responding to questions and in talking about our new 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 for investors, I would encourage you to review our annual information form or our annual report, both of which are available on our website. Thank you, and I'd like to turn the call over to Brian.

Thank you, Amar, and good morning. We had a solid quarter across all of our major businesses. And looking ahead, we are optimistic about the growth prospects for the company. Our funds from operations in the quarter increased by 24% compared to the 2013 quarter to $569 million or $0.84 a share. The increase was driven by a significant rise in our fee income, an increased level of realized disposition gains and a larger contribution from our property business following the sale of our office -- sorry, following the acquisition of our office portfolio. Disposition gains in the quarter totaled $147 million, roughly $100 million of that amount came on gains from the sale of commercial properties and around $30 million from the repayment of a distressed debt investment. We continue to look for opportunities to recycle capital by selling mature assets. Net income nearly doubled in the quarter to $1.6 billion or $1.19 per share due to substantially higher appraisal gains on U.S. office properties, in particular. Our fee revenues increased to $702 million on a trailing 12-month basis, and our annualized fee base, included target carried interest, now exceeds $1.1 billion. FFO from asset management operations during the quarter totaled $88 million, up 19% year-over-year and was $341 million over the last 12 months. The increase reflects growth in our listed partnership capital, particularly Brookfield Property Partners, and base management fees were up $36 million to $154 million in the quarter. The incentive distributions from our listed partnerships rose by $5 million to $13 million, representing our share in distribution increases to unitholders. Our fee-bearing capital was up 16% year-over-year on a comparable basis to $84 billion. The increase reflects equity issued by Brookfield Property Partners to complete the acquisition of our office property company and the continued…

Thank you, Brian, and good morning, everyone. I -- today I'll comment on 3 items before turning the line over for questions. First, we thought you'd be interested in our views just on the overall environment for investing; second, how we're responding to this environment; and third, I thought I would mention one investment, which we've been involved with. On the environment, our observation is that this current market is difficult for many investors. In fact, interest rates make it almost impossible to earn any return from a fixed income portfolio, particularly a short one. And valuations on equities are high by many measures. As a result, clients, we continue to see, are increasingly making further allocations to real assets. And we're seeing strong inflows into all the products we offer in each of our private funds, our listed partnerships and our public securities mandates. We are also finding many transactions to put money to work at very good returns. This seems incongruous, given that we adhere to value-based investment principles, but we believe it is largely because we have access to different opportunities than most, largely as a result of our vast resources and organization across the world. We believe that this is only because we're able to use the competitive advantages we have, and which we think of really in 3 ways -- or 3 things: first, the amount of capital that we can deploy; two, our global scale; and three, our operating presence. And I'll take each of those in order, but this is in contrast to a regular investor in these types of real assets that may only have access to assets being bid on in the market by vast numbers of people and significant amounts of money that are in some markets today. Because they…

[Operator Instructions] The first question is from Alex Avery from CIBC.

Bruce, on the Energy Future Holdings, I was just wondering if you could provide us with a little bit more insight into how far this restructuring process has progressed so far? Any idea of how long it might take? And I guess, how complex it might be compared to General Growth, being a private company versus a public company, and what that might imply in terms of when you could see a resolution to the restructuring?

It's Bruce. I guess, I'd say, that I'm going to limit my comments because there is only so many things that we can say about it and -- but I'd just say that we're very supportive of the company, and we've been having discussions with the groups and hope over the next 12 months a plan emerges. And we want it to happen as quick as possible and get the company properly capitalized and back in the market, doing things for all the constituents, so -- but these things are large and it will take time.

And so is it -- I guess, are there more parties involved or is it -- and I guess, just trying to compare it to the experience of General Growth?

As you would well imagine, there is -- originally, there was $40 billion of debt. So there's lots of parties involved. But there was in General Growth and many other restructurings that we've been involved in.

The next question is from Andrew Kuske of Crédit Suisse.

Just on the Energy Future Holdings, the possible transaction and your involvement in the restructuring. Could you provide any more specificity as to where your investment interest lies? Is it actually at the EFH Holdco? Or is it at Energy Future Intermediate Holding Co. or Competitive Holdings? I mean, there's number of things in the capital structure, just sort of curious as to what you will disclose at this stage.

Yes, it's in the power generation and distribution subsidiary of EFH.

So is that Texas Competitive Electricity Holdings?

That is Texas Competitive Electricity Holdings, correct.

Okay, that's very helpful. And then, I guess, a follow-up to that is, is this a natural morphing of your business? It's just within that sub, the generation exposure is predominantly coal and nuclear, 2 areas which you've never had involvement before, and a lot of power contracts on the energy retailing side. So is this a bit of the expansion of Brookfield's business lines into other areas that you really haven't been involved in before?

Yes, I guess I'd say the following: we -- firstly, we have invested in the coal business before. Today, our renewable power business is hydro and wind. But our -- the private equity business and most of the investments we make, or almost all the investments we make in our private equity business, are adjacent businesses to what we invest in. And that's really our competitive advantage, we believe, is taking the information, knowledge that we have by being in those businesses and assisting our private equity group to deploy that knowledge to make investments. And I think that's the competitive advantage that we have versus other private equity groups. So it's really just using that firm information to be able to make private equity investments for that group.

Okay, that's helpful. And so, I guess, you look at this as being a really good highlight of the crossover of knowledge among your business groups. Much as with the district heating business and your buildings, the malls and the industrials business, and this is just another case of that?

Yes, our -- we have a very -- our groups work closely together, and we try to share knowledge amongst the different businesses. And this wouldn't fit into our renewable power partnership, and I think everyone would agree with that. But it's -- these businesses are very good businesses. Texas is a very good place to invest. And therefore, it's just using that information.

[Operator Instructions]

Thank you, operator.

There are no more questions at this time. I can hand the call back over to Mr. Dhotar.

Great. Thank you, and we look forward to updating you in the third quarter.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.