Calgary, Alberta – Brookfield Residential Properties Inc. (BRP: NYSE/TSX) today announced its financial results for the three and nine months ended September 30, 2014. The results are based on U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).

“Building on our progress from the first six months of 2014, we continued to achieve positive results in the third quarter of 2014. While the U.S. market has ‘paused’, we believe slower household formation, lack of mortgage availability, weakness in the overall quality of jobs being created and a degree of trepidation on the part of the first-time home buyer are all contributing to this. It is our belief that this represents substantial unfilled pent up demand where it is expected that as rents rise and the job situation improves, home ownership will again become more attractive,” commented Alan Norris, President and Chief Executive Officer of Brookfield Residential.

Three Months Ended September 30, 2014

• Net income attributable to Brookfield Residential increased to $86 million, or $0.73 per diluted share in the third quarter of 2014, from $35 million, or $0.29 per diluted share, when compared to the same period in 2013
• Included in net income was the release of the valuation allowance on our U.S. deferred tax assets of $45 million, which resulted in a recovery of income taxes of $38 million for the third quarter of 2014
• Income before income taxes increased to $48 million in the third quarter of 2014, from $45 million, when compared to the same period in 2013
• Third quarter revenue increased 7% to $355 million from the same quarter of 2013
• The average home selling price increased 19% to $516,000 in the third quarter, compared to $432,000 during the same period in 2013

Nine Months Ended September 30, 2014

• Net income attributable to Brookfield Residential increased to $153 million, or $1.30 per diluted share, from $63 million, or $0.54 per diluted share, during the same period last year
• Income before income taxes increased to $131 million, from $81 million, compared to the same period last year
• Year to date revenue increased 10% to $885 million compared to the same period in 2013
• The average home selling price increased 22% to $516,000, compared to $422,000 for the same period in 2013
• As at September 30, 2014, backlog of housing units, including our share of unconsolidated entities, increased 5% to 1,401 units, while backlog value increased 12% to $715 million, compared to September 30, 2013

Three Months Ended September 30, 2014

Land revenue totalled $64 million for the three months ended September 30, 2014, a decrease of $7 million when compared to the same period in 2013, primarily due to 95 fewer lot closings, partially offset by higher average lot selling prices when compared to the same period in 2013.

Housing revenue increased to $291 million for the three months ended September 30, 2014, compared to $262 million for the same period in 2013. The increase was due to increased average home selling prices resulting from both improved market conditions leading to price escalation and the mix of product sold across all operating segments. This was partially offset by marginally lower home closings.

Nine Months Ended September 30, 2014

Land revenue was $190 million for the nine months ended September 30, 2014, a decrease of $37 million compared to the same period in 2013. The decrease in land revenue was due to the mix of lots sold with fewer raw and partially finished acre sales when compared to the same period in 2013. This was partially offset by higher single-family lot revenue. Our land revenue may vary significantly from period to period due to the nature and timing of land sales. Revenues are also affected by local product mix and market conditions, which have an impact on the selling price per lot.

Housing revenue was $695 million for the nine months ended September 30, 2014 compared to $574 million for the same period in 2013. The increase was the result of higher average home selling prices, partially offset by a slight decrease in home closings.

DEFERRED TAX ASSET VALUATION ALLOWANCE

At each reporting period, we evaluate the recoverability of our U.S. deferred tax asset. The Company records net deferred tax assets to the extent it believes these assets will more-likely-than-not be realized. For our U.S. operations, we established a valuation allowance against our deferred tax assets in 2011 at the date of our merger transaction.

After evaluating the recoverability of our deferred tax assets as of September 30, 2014, we determined that the factors in favor of releasing the valuation allowance against our deferred tax assets in the U.S. outweighed the factors in favor of maintaining it. Therefore, we released a significant portion of our valuation allowance as of September 30, 2014, except for amounts that will be released against income before income taxes for the remainder of the year.

Accordingly, we reversed $45 million of valuation allowance for the three-month period ended September 30, 2014. This reversal is reflected in our income tax benefit in the condensed consolidated statement of operations.

We expect that the remaining valuation allowance with respect to our U.S. deferred tax asset will be released in the last quarter of 2014. The timing of the reduction of this remaining valuation allowance will be determined by the timing of our estimated income in our U.S. operations for 2014. Income before income taxes recorded for the remainder of 2014 may be greater or less than our current estimate. If income before income taxes recorded for the remainder of 2014 is different than our current estimate, we will recognize a provision or benefit for income taxes in the fourth quarter of 2014. Starting in 2015, we expect that our effective tax rate will approach the statutory tax rate.

For further information on the release of the deferred tax asset valuation allowance, please refer to our interim report for the period ended September 30, 2014.

REGIONAL HIGHLIGHTS

Over the last several years, we have continued our focus on bringing lots from a raw state through the approval and entitlement process. As a result of our efforts, we have increased our number of active housing communities to 58 at September 30, 2014, from 47 at the end of 2013.

Highlights from our operations during the third quarter included:

• In Canada, we opened the Fox Trail community in Uxbridge, Ontario which consists of upscale bungalow townhomes and builds on the growth in our infill platform. In Alberta, we received structure plan approval for our South Seton project and planning commission approval for our Livingston project, both of which are located in Calgary.
• In our Central & Eastern U.S. markets, we commenced selling lots in our Addison community to builder partners in Austin. In the Washington D.C. area, we continued to expand our new plans and design offerings to meet customer needs by introducing the “Soho” collection at Goose Creek Preserve.
• In California, development commenced in our new communities of Five Knolls in Santa Clarita, New Haven in Ontario and Stonebrae Country Club in Hayward. We opened Windrift at River Islands in Lathrop and will open Camellia at Rosedale and El Paseo at Foothill Ranch in the fourth quarter.

NORMAL COURSE ISSUER BID UPDATE

For the three months ended September 30, 2014, we repurchased for cancellation approximately 966,000 Common Shares at an average price of $19.88 per share under our normal course issuer bid. Since we initiated the program on May 1, 2014, we repurchased for cancellation approximately 1,500,000 Common Shares at an average price of $19.97 per share.

BROOKFIELD ASSET MANAGEMENT’S PROPOSAL

On October 23, 2014, Brookfield Asset Management Inc. announced that it had made a proposal to the Company to acquire the approximately 30% of the common shares of Brookfield Residential that it does not already own for $23.00 cash per share. The board of directors of Brookfield Residential has established a special committee of independent directors to review and consider the proposal and the Company will provide an update at the appropriate time. The Company’s shareholders do not need to take any action with respect to the proposal at this time.

OUTLOOK

Our outlook for the year remains positive. As has occurred in many past years, we anticipate that our income before taxes for the 2014 fiscal year will be somewhat back-end loaded. Based on current forecasts, and subject to the timing risk, we project fourth quarter income before income taxes will be at levels equal to or approaching the income before income taxes for the entire first nine months of 2014, resulting in the 2014 fiscal year results being significantly higher than 2013.

ADDITIONAL INFORMATION

The attached financial statements are based primarily on information extracted from our condensed consolidated financial statements for the three and nine months ended September 30, 2014. The financial statements were prepared using the standards and interpretations currently issued under U.S. GAAP.

The interim report and our corporate profile for the quarter ended September 30, 2014 contain further information on our strategy, operations, financial results and outlook. Shareholders are encouraged to read these documents, which are available on our website at www.brookfieldrp.com.

RELATED LINKS

• Q3 2014 Press Release
• Q3 2014 Corporate Profile
• Q3 2014 Interim Report
• Q3 2014 MP3 Recording
• Q3 2014 Transcript