Consolidated Financial Statements and Notes - Brookfield Asset ...

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(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
8. NON-RECOURSE BORROWINGS(a)Property Specific MortgagesMILLIONS 2005 2004Commercial and residential properties $ 5,881 $ 4,534Power generation 2,365 1,411Timberlands and infrastructure 510 100Total $ 8,756 $ 6,045Property specifi c mortgages include $2,247 million (2004 – $1,786 million) repayable in Canadian dollars equivalent to C$2,606 million(2004 – C$2,143 million), $194 million (2004 – $113 million) in Brazilian reais equivalent to R$454 million (2004 – R$301 million)and $404 million (2004 – $nil) in British pounds equivalent to £234 million (2004 – £nil). The weighted average interest rate atDecember 31, 2005 was 6.9% (2004 – 6.4%).Principal repayments on property specifi c mortgages due over the next fi ve years and thereafter are as follows:Timberlands &MILLIONS Commercial Properties Power Generation Infrastructure Annual Repayments2006 $ 284 $ 30 $ — $ 3142007 674 29 — 7032008 358 27 — 3852009 841 83 — 9242010 343 12 — 355Thereafter 3,381 2,184 510 6,075Total $ 5,881 $ 2,365 $ 510 $ 8,756(b)Subsidiary BorrowingsMILLIONS 2005 2004Residential properties $ 1,137 $ 814Power generation 474 617Timberlands and infrastructure 37 37Other 862 905Total $ 2,510 $ 2,373Subsidiary borrowings include $805 million (2004 – $883 million) repayable in Canadian dollars equivalent to C$934 million(2004 – C$1,059 million) and $13 million (2004 – $14 million) in Brazilian reais equivalent to R$30 million (2004 – R$38 million).The weighted average interest rate at December 31, 2005 was 6.9% (2004 – 6.8%).Residential properties debt represents amounts drawn under construction fi nancing facilities which are typically established ona project by project basis. Amounts drawn are repaid from the proceeds on the sale of building lots, single family homes andcondominiums and redrawn to fi nance the construction of new homes.Subsidiary borrowings include obligations pursuant to fi nancial instruments which are recorded as liabilities. These amountsinclude $434 million (2004 – $393 million) of subsidiary obligations relating to the company’s international operations subjectto credit rating provisions, which are supported by corporate guarantees.Brookfield Asset Management | 2005 Annual Report 75
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 14 and 15: (b)Prepaid Expenses and Other Asset
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
Page 28 and 29: 18. FUTURE INCOME TAXES AND OTHER P
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

Consolidated Financial Statements and Notes - Brookfield Asset ...

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