Consolidated Financial Statements and Notes - Brookfield Asset ...

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