Consolidated Financial Statements and Notes - Brookfield Asset ...

(c) Timberlands and InfrastructureMILLIONS 2005 2004Timberlands $ 888 $ 87Infrastructure 130 97Total $ 1,018 $ 184During 2005, the company completed the acquisition of timberlands on the Canadian west coast for an aggregate purchase price of$775 million. The acquisition included approximately 600,000 acres of freehold timberlands and 35,000 acres of rural developmentlands for $655 million and $120 million, respectively. The company holds a 50% interest in these assets and the 50% ownershipheld by institutional investors is refl ected in non-controlling interests in net assets.The company’s infrastructure assets are comprised of power transmission and distribution networks which are operated undera regulated rate base arrangement that is applied to the company’s invested capital.(d) Other Plant and EquipmentOther plant and equipment includes capital assets of $316 million (2004 – $188 million) associated primarily with the company’stwo private forest products companies, Cascadia and Katahdin Paper. The Cascadia acquisition was completed during 2005 andincluded 3.6 million cubic metres of annual crown harvest rights, sawmills and remanufacturing facilities.6. SECURITIESMILLIONS 2005 2004Government bonds $ 930 $ 684Corporate bonds 480 170Asset backed securities 195 142Common shares 197 311Canary Wharf Group common shares 267 450Total $ 2,069 $ 1,757Securities represent holdings that are actively deployed in the company’s fi nancial operations and include $1,570 million(2004 – $917 million) owned through the company’s Insurance operations, as described in Note 15(g).The securities are carried at the lower of cost and their net realizable value. The fair value of securities at December 31, 2005 was$2,220 million (2004 – $1,895 million). During 2005, the company received dividends of $183 million from Canary Wharf Group(2004 – $nil) which were accounted for as a return of investment.Corporate bonds include fi xed rate securities totalling $284 million (2004 – $172 million) with an average yield of 5.5% (2004 – 6.5%)and an average maturity of approximately fi ve years. Government bonds and asset backed securities include predominantly fi xedrate securities.7. LOANS AND NOTES RECEIVABLELoans and notes receivable include corporate loans, bridge loans and other loans, either advanced directly or acquired in thesecondary market.The fair value of the company’s loans and notes receivable at December 31, 2005 and 2004 approximated their carrying valuebased on expected future cash fl ows, discounted at market rates for assets with similar terms and investment risks.The loan portfolio matures over the next three years, with an average maturity of approximately one year and includes fi xed rateloans totalling $39 million (2004 – $67 million) with an average yield of 5.8% (2004 – 6.5%).74Brookfield Asset Management | 2005 Annual Report