Consolidated Financial Statements and Notes - Brookfield Asset ...

During 2005, the company redeemed all of the outstanding Class A, Series 3 preferred shares.On December 31, 2004, the company issued 9,297,700 Series 13 preferred shares and 2,000,000 Series 15 preferred shares asa result of the amalgamation of the company and its wholly-owned funds management subsidiary.14. COMMON EQUITYThe company is authorized to issue an unlimited number of Class A Limited Voting Shares (“Class A common shares”) and 85,120Class B Limited Voting Shares (“Class B common shares”), together referred to as common shares.The company’s common shareholders’ equity is comprised of the following:MILLIONS Rate Maturity 2005 2004Convertible NotesSeries I 1 B.A. + 40 b.p. 2 2085 $ — $ 9Series II 1 3.9% 3 2088 — 2— 11Class A and B common shares 1,199 1,226Retained earnings 3,321 1,944Cumulative translation adjustment (6) 96Common equity $ 4,514 $ 3,277NUMBER OF SHARESClass A common shares 257,502,448 258,620,702Class B common shares 85,120 85,120257,587,568 258,705,822Unexercised options 12,612,987 12,181,392Reserved for conversion of subordinated notes — 824,927Total diluted common shares 270,200,555 271,712,1411 Fully converted and redeemed in 20052 Rate determined in a semi-annual auction, maximum 10%3 Rate determined as 120% of the current common share dividendB.A. – Banker’s Acceptance Rate b.p. – Basis Points(a) Convertible NotesThe Convertible Notes were subordinate to the company’s senior debt and the company could, at its option, pay principal andinterest due on the notes in Class A common shares of the company.The Series I and II Convertible Notes which were not otherwise converted were redeemed in 2005.(b) Class A and Class B Common SharesThe company’s Class A common shares and its Class B common shares are each, as a separate class, entitled to elect one-half ofthe company’s Board of Directors. Shareholder approvals for matters other than for the election of directors must be received fromthe holders of the company’s Class A common shares as well as the Class B common shares, each voting as a separate class.80Brookfield Asset Management | 2005 Annual Report