Consolidated Financial Statements and Notes - Brookfield Asset ...

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(b)Prepaid Expenses and Other AssetsMILLIONS 2005 2004Property $ 504 $ 180Power generation 566 44Timberlands and infrastructure 7 14Other 464 25Total $ 1,541 $ 263Prepaid expenses and other assets includes $125 million (2004 – $70 million) of intangible assets related to leases and tenantrelationships allocated from the purchase price on the acquisition of commercial properties. The consolidation of LouisianaHydroElectric included $470 million (2004 – $nil), representing levelized receivables arising from straight-line revenue recognitionfor a contract which expires in 2031.Included in prepaid expenses and other assets is $92 million (2004 – $93 million) of goodwill principally arising from the privatizationof the company’s funds management subsidiary during 2002 and $22 million (2004 – $62 million) of goodwill and other intangiblesassociated with Brookfi eld’s business services investments including contracts and intellectual property. In addition, the companyadded $40 million of goodwill and other intangibles associated with the acquisition of its asset management operations in NewYork during 2005.(c)Restricted CashMILLIONS 2005 2004Property $ 355 $ 29Power generation 83 —Other 213 —$ 651 $ 29Restricted cash relates primarily to commercial property and power generating fi nancing arrangements including defeasement ofdebt obligations, debt service accounts and deposits held by the company’s insurance operations.5. PROPERTY, PLANT AND EQUIPMENTMILLIONS Note 2005 2004Property (a) $ 10,874 $ 8,908Power generation (b) 3,568 2,951Timberlands and infrastructure (c) 1,018 184Other plant and equipment (d) 316 188Total $ 15,776 $ 12,231(a)PropertyMILLIONS Note 2005 2004Commercial properties (i) $ 8,688 $ 7,089Residential properties (ii) 1,205 818Development properties (iii) 942 950Property services 39 51Total $ 10,874 $ 8,908(i)Commercial PropertiesMILLIONS 2005 2004Commercial properties $ 9,485 $ 7,740Less: accumulated depreciation 797 651Total $ 8,688 $ 7,08972Brookfield Asset Management | 2005 Annual Report
Commercial properties carried at a net book value of approximately $3,545 million (2004 – $2,400 million) are situated on land heldunder leases or other agreements largely expiring after the year 2069. Minimum rental payments on land leases are approximately$22 million (2004 – $22 million) annually for the next fi ve years and $959 million (2004 – $973 million) in total on an undiscountedbasis.Construction costs of $18 million (2004 – $15 million) were capitalized to the commercial property portfolio for properties undergoingredevelopment in 2005.(ii) Residential PropertiesResidential properties include infrastructure, land and construction in progress for single family homes and condominiums.(iii)Development PropertiesMILLIONS 2005 2004Commercial development properties $ 452 $ 603Residential lots – owned 264 263– optioned 62 45Rural development properties 164 39Total $ 942 $ 950Development properties include commercial development land and density rights, residential land owned and under option andrural lands held for future development in agricultural or residential purposes.During 2005, the company capitalized construction and related costs of $17 million (2004 – $26 million) and interest costs of$15 million (2004 – $14 million) to its commercial development sites, and interest costs of $38 million (2004 – $32 million) to itsresidential land operations.The company acquired 35,000 acres of rural development properties during 2005 at a cost of $120 million as further described inNote 5(c).(b) Power GenerationMILLIONS 2005 2004Hydroelectric power facilities $ 3,830 $ 2,730Cogeneration facilities 212 2394,042 2,969Less: accumulated depreciation 582 3143,460 2,655Investment in Louisiana HydroElectric Power — 244Generating facilities under development 108 52Total $ 3,568 $ 2,951Generation assets includes the cost of the company’s approximately 130 hydroelectric generating stations and two gas-fi redcogeneration facilities. The company’s hydroelectric power facilities operate under various agreements for water rights whichextend to or are renewable over terms through the years 2006 to 2044.During 2005 the company, along with a 50% partner, completed the acquisition of a 610 megawatt hydroelectric generatingpump storage facility and related assets located in New England for cash totalling $98 million. The company also completed theacquisition of two hydroelectric generating stations located in Pennsylvania and Maryland with total capacity of 48 megawatts forcash totalling $43 million which was allocated to hydroelectric power facilities.During 2004, the company completed the acquisition of 71 hydroelectric power generating plants and one cogeneration facility inupstate New York from Reliant Energy for $881 million. These facilities have a combined generating capacity of 674 megawatts.Effective January 1, 2005, the company consolidated its investment in Louisiana HydroElectric as described in Note 1(u)(i).Brookfield Asset Management | 2005 Annual Report 73
Page 3 and 4: Consolidated Statement of IncomeYEA
Page 6 and 7: (c) Property(i) Commercial properti
Page 8 and 9: Revenue from the sale of homes is r
Page 10 and 11: (q) Hedging Relationship, AcG 13AcG
Page 12 and 13: (i) Comprehensive Income, CICA Hand
Page 16 and 17: (c) Timberlands and InfrastructureM
Page 18 and 19: Principal repayments on subsidiary
Page 20 and 21: 11. CAPITAL SECURITIESThe company h
Page 22 and 23: During 2005, the company redeemed a
Page 24 and 25: The changes in the number of option
Page 26 and 27: (e) Commodity InstrumentsThe compan
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Page 30 and 31: Cash taxes paid were $172 million (
Page 32 and 33: Market value adjustments for tradin
Page 34 and 35: Market value adjustments in other c
Page 36 and 37: (v) Common equityMILLIONS 2005 2004
Page 38: Revenue, net income and assets by r

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