##### 



Managements Responsibility for Financial Statements
    
 Jamie C. Sokalsky
 
 76n Managements Responsibility
    
    Barrick Annual Report 2005




---



##### 



To the Shareholders of Barrick Gold Corporation
     
 Chartered Accountants
 
 Comments by Auditors for US Readers On Canada-US Reporting Differences
   
 Chartered Accountants
 
  Barrick Annual Report 2005
    
    Auditors Report n 77




---



##### 



Exhibit
2
 
 Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars, except per share data)
    
    2005
    
    
    2004
    
    
    2003Gold sales(notes 4 and 5)
    
    $
    2,350
    
    
    $
    1,932
    
    
    $
    2,035Costs and expensesCost of
sales1 (note 6)
    
    
    1,214
    
    
    
    1,047
    
    
    
    1,069Amortization (note 4)
    
    
    427
    
    
    
    452
    
    
    
    522Corporate administration
    
    
    71
    
    
    
    71
    
    
    
    73Exploration, development and business development
    
    
    141
    
    
    
    141
    
    
    
    1371,853
    
    
    
    1,711
    
    
    
    1,801Other (income) expenseInterest income
    
    
    (38
    )
    
    
    (25
    )
    
    
    (31
    )Equity in investees (note 11)
    
    
    6
    
    
    
    
    
    
    
    Interest expense (note 16b)
    
    
    7
    
    
    
    19
    
    
    
    44Impairment of long-lived assets (note 7a)
    
    
    
    
    
    
    139
    
    
    
    5Other (note 7b)
    
    
    67
    
    
    
    43
    
    
    
    (6
    )42
    
    
    
    176
    
    
    
    12Income before income taxes and other items
    
    
    455
    
    
    
    45
    
    
    
    222Income tax (expense) recovery (note 8)
    
    
    (60
    )
    
    
    203
    
    
    
    (5
    )Income before cumulative effect of changes in accounting principles
    
    
    395
    
    
    
    248
    
    
    
    217Cumulative effect of changes in accounting principles (note 2e)
    
    
    6
    
    
    
    
    
    
    
    (17
    )Net income for the year
    
    $
    401
    
    
    $
    248
    
    
    $
    200Earnings per share data(note 9)Income before cumulative effect of changes in accounting principlesBasic
    
    $
    0.74
    
    
    $
    0.47
    
    
    $
    0.40Diluted
    
    $
    0.73
    
    
    $
    0.46
    
    
    $
    0.40Net incomeBasic
    
    $
    0.75
    
    
    $
    0.47
    
    
    $
    0.37Diluted
    
    $
    0.75
    
    
    $
    0.46
    
    
    $
    0.37
    78 n Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars)
    
    2005
    
    
    2004
    
    
    2003Operating ActivitiesNet income
    
    $
    401
    
    
    $
    248
    
    
    $
    200Amortization (note 4)
    
    
    427
    
    
    
    452
    
    
    
    522Deferred income tax recovery (notes 8 and 19)
    
    
    (30
    )
    
    
    (225
    )
    
    
    (49
    )Inmet litigation settlement (note 7b)
    
    
    
    
    
    
    
    
    
    
    (86
    )Impairment of long-lived assets (note 7a)
    
    
    
    
    
    
    139
    
    
    
    5Gains on sale of long-lived assets (note 7b)
    
    
    (5
    )
    
    
    (36
    )
    
    
    (36
    )Other items (note 10)
    
    
    (67
    )
    
    
    (69
    )
    
    
    (37
    )Net cash provided by operating activities
    
    
    726
    
    
    
    509
    
    
    
    519Investing ActivitiesProperty, plant and equipmentCapital expenditures (note 4)
    
    
    (1,104
    )
    
    
    (824
    )
    
    
    (322
    )Sales proceeds
    
    
    8
    
    
    
    43
    
    
    
    40Cash receipt from Kabanga transaction (note 7b)
    
    
    15
    
    
    
    
    
    
    
    Purchase of equity method investments (note 11)
    
    
    (58
    )
    
    
    (40
    )
    
    
    (46
    )Available-for-sale securities (note 11)Purchases
    
    
    (31
    )
    
    
    (7
    )
    
    
    (14
    )Sales proceeds
    
    
    10
    
    
    
    9
    
    
    
    8Other investing activities
    
    
    (20
    )
    
    
    (2
    )
    
    
    Net cash used in investing activities
    
    
    (1,180
    )
    
    
    (821
    )
    
    
    (334
    )Financing ActivitiesCapital stockProceeds from shares issued on exercise of stock options
    
    
    92
    
    
    
    49
    
    
    
    29Repurchased for cash (note 20a)
    
    
    
    
    
    
    (95
    )
    
    
    (154
    )Long-term debt (note 16b)Proceeds
    
    
    179
    
    
    
    973
    
    
    
    Repayments
    
    
    (59
    )
    
    
    (41
    )
    
    
    (23
    )Dividends (note 20a)
    
    
    (118
    )
    
    
    (118
    )
    
    
    (118
    )Other financing activities
    
    
    (1
    )
    
    
    (28
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    93
    
    
    
    740
    
    
    
    (266
    )Effect of exchange rate changes on cash and equivalents
    
    
    
    
    
    
    
    
    
    
    7Net (decrease) increase in cash and equivalents
    
    
    (361
    )
    
    
    428
    
    
    
    (81
    )Cash and equivalents at beginning of year(note 16a)
    
    
    1,398
    
    
    
    970
    
    
    
    1,044Cash and equivalents at end of year(note 16a)
    
    $
    1,037
    
    
    $
    1,398
    
    
    $
    970
    Barrick Annual Report 2005
    
    Financial Statements n 79




---



##### 



Barrick Gold CorporationAt December 31 (in millions of United States dollars)
    
    2005
    
    
    2004AssetsCurrent assetsCash and equivalents (note 16a)
    
    $
    1,037
    
    
    $
    1,398Accounts receivable (note 12)
    
    
    54
    
    
    
    58Inventories (note 12)
    
    
    402
    
    
    
    215Other current assets (note 12)
    
    
    255
    
    
    
    2881,748
    
    
    
    1,959Available-for-sale securities (note 11)
    
    
    62
    
    
    
    61Equity method investments (note 11)
    
    
    138
    
    
    
    86Property, plant and equipment (note 13)
    
    
    4,146
    
    
    
    3,391Capitalized mining costs (note 2e)
    
    
    
    
    
    
    226Non-current ore in stockpiles (note 12)
    
    
    251
    
    
    
    65Other assets (note 14)
    
    
    517
    
    
    
    499Total assets
    
    $
    6,862
    
    
    $
    6,287Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    386
    
    
    $
    335Current part of long-term debt (note 16b)
    
    
    80
    
    
    
    31Other current liabilities (note 15)
    
    
    94
    
    
    
    54560
    
    
    
    420Long-term debt (note 16b)
    
    
    1,721
    
    
    
    1,655Asset retirement obligations (note 17)
    
    
    409
    
    
    
    334Other long-term obligations (note 18)
    
    
    208
    
    
    
    165Deferred income tax liabilities (note 19)
    
    
    114
    
    
    
    139Total liabilities
    
    
    3,012
    
    
    
    2,713Shareholders equityCapital stock (note 20)
    
    
    4,222
    
    
    
    4,129Deficit
    
    
    (341
    )
    
    
    (624
    )Accumulated other comprehensive income (loss) (note 21)
    
    
    (31
    )
    
    
    69Total shareholders equity
    
    
    3,850
    
    
    
    3,574Contingencies and commitments (notes 8 and 13d)Total liabilities and shareholders equity
    
    $
    6,862
    
    
    $
    6,287
   -s- Gregory C. Wilkins
    
    -s- Steven J. ShapiroGregory C. Wilkins, Director
    
    Steven J. Shapiro, Director
 80 nFinancial Statements
    
    Barrick Annual Report 2005




---



##### 



Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars)
    
    2005
    
    
    2004
    
    
    2003Common shares(number in millions)At January 1
    
    
    534
    
    
    
    535
    
    
    
    542Issued on exercise of stock options (note 22a)
    
    
    4
    
    
    
    3
    
    
    
    2Repurchased (note 20a)
    
    
    
    
    
    
    (4
    )
    
    
    (9
    )At December 31
    
    
    538
    
    
    
    534
    
    
    
    535Common sharesAt January 1
    
    $
    4,129
    
    
    $
    4,115
    
    
    $
    4,148Issued on exercise of stock options (note 22a)
    
    
    93
    
    
    
    49
    
    
    
    34Repurchased (note 20a)
    
    
    
    
    
    
    (35
    )
    
    
    (67
    )At December 31
    
    $
    4,222
    
    
    $
    4,129
    
    
    $
    4,115DeficitAt January 1
    
    $
    (624
    )
    
    $
    (694
    )
    
    $
    (689
    )Net income
    
    
    401
    
    
    
    248
    
    
    
    200Dividends (note 20a)
    
    
    (118
    )
    
    
    (118
    )
    
    
    (118
    )Adjustment on repurchase of common shares (note 20a)
    
    
    
    
    
    
    (60
    )
    
    
    (87
    )At December 31
    
    $
    (341
    )
    
    $
    (624
    )
    
    $
    (694
    )Accumulated other comprehensive income (loss) (note 21)
    
    $
    (31
    )
    
    $
    69
    
    
    $
    60Total shareholders equity at December 31
    
    $
    3,850
    
    
    $
    3,574
    
    
    $
    3,481
 
 Barrick Gold CorporationFor the years ended December 31 (in millions of United States dollars)
    
    2005
    
    
    2004
    
    
    2003Net income
    
    $
    401
    
    
    $
    248
    
    
    $
    200Other comprehensive income (loss), net of tax (note 21)
    
    
    (100
    )
    
    
    9
    
    
    
    185Comprehensive income
    
    $
    301
    
    
    $
    257
    
    
    $
    385
   Barrick Annual Report 2005
    
    Financial Statements n 81




---



##### 



Barrick Gold Corporation. 
 1 n Nature of Operations
 
  2 n Significant Accounting Policies
 
 a) Basis of Preparation
  b) Consolidation
      82 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



c) Foreign Currency Translation
  n
    
    non-monetary assets and liabilities using historical rates;n
    
    monetary assets and liabilities using closing rates
with translation gains and losses recorded in
earnings; andn
    
    income and expenses using average exchange rates, except for expenses that relate to
non-monetary assets and liabilities measured at
historical rates.
 d) Use of Estimates
  n
    
    the treatment of mine development costs as either an asset or an expense;n
    
    whether long-lived assets are impaired, and if so, estimates of the fair value of those assets and any corresponding impairment charge;n
    
    our ability to realize deferred income tax assets;n
    
    the useful lives of long-lived assets and the measurement of amortization;n
    
    the fair value of asset retirement obligations;n
    
    the likelihood of loss contingencies occurring and the amount of any potential loss;n
    
    whether investments are impaired; andn
    
    the amount of stock option expense included in pro forma stock option disclosures.
  e) Accounting Changes
 Cumulative Effect of Accounting Changes on Earnings
 Earnings increase (decrease)
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Adoption of FAS 1431
    
    $
    
    
    
    $
    
    
    
    $
    4Underground mine development costs2
    
    
    
    
    
    
    
    
    
    
    (21
    )Adoption of EITF-04-63
    
    
    6
    
    
    
    
    
    
    
    Total
    
    $
    6
    
    
    $
    
    
    
    $
    (17
    )
 
 1.
    
    On adoption of FAS 143 on January 1, 2003,
we recorded an increase in property, plant and
equipment of $39 million; an increase in other
long-term obligations of $32 million; and an
increase in deferred income tax liabilities of
$3 million; as well as a $4 million credit in
earnings for the cumulative effect of this
change.2.
    
    On January 1, 2003, we changed our accounting
policy for amortization of underground mine
development costs to exclude estimates of
future underground development costs. On
January 1, 2003, we recorded a decrease in
property, plant and equipment of $19 million;
an increase in deferred income tax liabilities
of $2 million; and a $21 million charge to
earnings for the cumulative effect of this
change.3.
    
    In second quarter 2005, we adopted EITF 04-6
and changed our accounting policy for stripping
costs incurred in the production phase. Prior to
adopting EITF 04-6, we capitalized stripping
costs incurred in the production phase, and we
recorded amortization of the capitalized costs
as a component of the cost of inventory produced
each period. Under EITF 04-6, stripping costs
are recorded directly as a component of the cost
of inventory produced each period. Using an
effective date of adoption of January 1, 2005,
we recorded a decrease in capitalized mining
costs of $226 million; an increase in the cost
of inventory of $232 million; and a $6 million
credit to earnings for the cumulative effect of
this change. For the year ended December 31,
2005, the effect of adopting EITF 04-6 compared
to the prior policy was an increase in net
income of $44 million ($0.08 per share),
excluding the cumulative effect on prior
periods. FSP FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments
  Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 83




---



##### 



FIN 47, Accounting for Conditional Asset Retirement Obligations (AROs)
  f) Accounting Developments
 FAS 123R, Accounting for Stock-Based Compensation
  FAS 151, Inventory Costs
  84 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



FAS 154, Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20
and FAS 3
  Exposure Draft, Accounting for Uncertain Tax Positions
   g) Changes in Estimates
 Gold Mineral Reserves
  Asset Retirement Obligations (AROs)
  Tax Valuation Allowances
  Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 85




---



##### 



h) Other Significant Accounting Policies
 Note
    
    
    PageBusiness combinations
    
    
    3
    
    
    
    86Segment information
    
    
    4
    
    
    
    93Revenue and gold sales contracts
    
    
    5
    
    
    
    95Cost of sales
    
    
    6
    
    
    
    96Other (income) expense
    
    
    7
    
    
    
    96Income tax (recovery) expense
    
    
    8
    
    
    
    98Earnings per share
    
    
    9
    
    
    
    99Operating cash flow  other items
    
    
    10
    
    
    
    100Investments
    
    
    11
    
    
    
    100Accounts receivable, inventories
and other current assets
    
    
    12
    
    
    
    102Property, plant and equipment
    
    
    13
    
    
    
    103Other assets
    
    
    14
    
    
    
    105Other current liabilities
    
    
    15
    
    
    
    105Financial instruments
    
    
    16
    
    
    
    106Asset retirement obligations
    
    
    17
    
    
    
    114Other long-term obligations
    
    
    18
    
    
    
    114Deferred income taxes
    
    
    19
    
    
    
    115Capital stock
    
    
    20
    
    
    
    116Other comprehensive income (loss)
    
    
    21
    
    
    
    117Stock-based compensation
    
    
    22
    
    
    
    118Post-retirement benefits
    
    
    23
    
    
    
    121Litigation and claims
    
    
    24
    
    
    
    123Joint ventures
    
    
    25
    
    
    
    124
 3 n Business Combinations
 
 a) Acquisition of Placer Dome Inc. (Placer Dome)
 Placer Dome Offer and Acceptance
    Barrick Annual Report 2005
    
    86 n Notes to Consolidated Financial Statements




---



##### 



Accounting for the Placer Dome Acquisition
  Value of 322.8 million Barrick common shares at $27.14 per share
    
    $
    8,761Cash
    
    
    1,344Transaction costs
    
    
    25$
    10,130
   Condensed Balance Sheet at Acquisition 1
 Cash
    
    $
    880Other current assets
    
    
    738Property, plant and equipment
    
    
    2,371Goldcorp assets
    
    
    298Other assets
    
    
    696Unallocated purchase price
    
    
    8,652Total assets
    
    
    13,635Current liabilities
    
    
    522Goldcorp liabilities
    
    
    77Long-term debt
    
    
    1,107Other long-term obligations
    
    
    1,799Total liabilities
    
    
    3,505Net assets acquired
    
    $
    10,130
 1.
    
    For the purposes of presenting a summary of
assets and liabilities acquired, the balance
sheet of Placer Dome at December 31, 2005 has
been used as a proxy for the balance sheet on
January 19, 2006. We do not expect any material
differences between the balance sheet at
January 19, 2006 and the balance sheet at
December 31, 2005. b) Sale of Operations to Goldcorp
   Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 87




---



##### 



c) Pro Forma Information (Unaudited)
 Pro Forma Consolidated Statement of Income
 Pro formaconsolidated
    
    
    Pro formaBarrick before
    
    
    adjustments forFor the year ended December 31, 2005
    
    
    
    
    
    
    
    
    
    Pro forma
    
    
    
    
    
    
    sale of certain
    
    
    sale of certain
    
    
    
    
    
    
    Pro forma($ millions of US dollars,
    
    As reported
    
    
    purchase
    
    
    
    
    
    
    operations to
    
    
    operations to
    
    
    
    
    
    
    consolidatedexcept per share data in dollars)
    
    Barrick
    
    
    Placer Dome
    
    
    adjustments1
    
    
    
    
    
    Goldcorp
    
    
    Goldcorp2
    
    
    
    
    
    BarrickSales
    
    $
    2,350
    
    
    $
    1,978
    
    
    
    
    
    
    
    
    
    
    $
    4,328
    
    
    $
    (251
    )
    
    
    (e
    )
    
    $
    4,077Costs and expensesCost of sales3
    
    
    1,214
    
    
    
    1,271
    
    
    
    
    
    
    
    
    
    
    
    2,485
    
    
    
    (177
    )
    
    
    (e
    )
    
    
    2,308Amortization
    
    
    427
    
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    691
    
    
    
    (35
    )
    
    
    (e
    )
    
    
    656Corporate administration
    
    
    71
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    139
    
    
    
    
    
    
    
    
    
    
    
    139Exploration, development and business development
    
    
    141
    
    
    
    178
    
    
    
    
    
    
    
    
    
    
    
    319
    
    
    
    (28
    )
    
    
    (e
    )
    
    
    2911,853
    
    
    
    1,781
    
    
    
    
    
    
    
    
    
    
    
    3,634
    
    
    
    (240
    )
    
    
    
    
    
    
    3,394Other (income) expenseInterest income
    
    
    (38
    )
    
    
    (44
    )
    
    
    (5
    )
    
    
    (a
    )
    
    
    (87
    )
    
    
    
    
    
    
    
    
    
    
    (87
    )Equity in investees
    
    
    6
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    4
    
    
    
    (e
    )
    
    
    6Interest expense
    
    
    7
    
    
    
    92
    
    
    
    48
    
    
    
    (b
    )
    
    
    147
    
    
    
    (49
    )
    
    
    (b
    )
    
    
    98Impairment of long-lived assets
    
    
    
    
    
    
    Other
    
    
    67
    
    
    
    40
    
    
    
    (21
    )
    
    
    (c
    )
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    8642
    
    
    
    84
    
    
    
    22
    
    
    
    
    
    
    
    148
    
    
    
    (45
    )
    
    
    
    
    
    
    103Income before income taxes
and other items
    
    
    455
    
    
    
    113
    
    
    
    (22
    )
    
    
    
    
    
    
    546
    
    
    
    34
    
    
    
    
    
    
    
    580Income tax expense
    
    
    (60
    )
    
    
    (21
    )
    
    
    10
    
    
    
    (d
    )
    
    
    (71
    )
    
    
    (14
    )
    
    
    (f
    )
    
    
    (85
    )Minority interest
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Income before cumulative
effect of changes in
accounting principles
    
    
    395
    
    
    
    94
    
    
    
    (12
    )
    
    
    
    
    
    
    477
    
    
    
    20
    
    
    
    
    
    
    
    497Cumulative effect of changes
in accounting principles, net of tax
    
    
    6
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )Net income
    
    $
    401
    
    
    $
    80
    
    
    $
    (12
    )
    
    
    
    
    
    $
    469
    
    
    $
    20
    
    
    
    
    
    
    $
    489Earnings per share data:Net incomeBasic and diluted
    
    $
    0.75
    
    
    $
    0.18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.57
 1.
    
    Adjustments to reflect certain estimated effects of purchase accounting.2.
    
    Adjustments to reflect the estimated effects of the sale of certain Placer Dome operations to Goldcorp.3.
    
    Exclusive of amortization. 88 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Pro Forma Consolidated Balance Sheet
 Pro formaconsolidated
    
    
    Pro formaBarrick before
    
    
    adjustments forPro forma
    
    
    
    
    
    
    sale of certain
    
    
    sale of certain
    
    
    
    
    
    
    Pro formaAs at December 31, 2005
    
    As reported
    
    
    purchase
    
    
    
    
    
    
    operations to
    
    
    operations to
    
    
    
    
    
    
    consolidated($ millions of US dollars)
    
    Barrick
    
    
    Placer Dome
    
    
    adjustments1
    
    
    
    
    
    Goldcorp
    
    
    Goldcorp2
    
    
    
    
    
    BarrickAssetsCurrent assetsCash and equivalents
    
    $
    1,037
    
    
    $
    880
    
    
    
    152
    
    
    
    (g
    )
    
    $
    2,069
    
    
    $
    1,500
    
    
    
    (t
    )(1,344
    )
    
    
    (u
    )
    
    $
    2,225Restricted cash
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    150Accounts receivable
    
    
    54
    
    
    
    152
    
    
    
    
    
    
    
    
    
    
    
    206
    
    
    
    (6
    )
    
    
    (v
    )
    
    
    200Inventories
    
    
    402
    
    
    
    310
    
    
    
    
    
    
    
    
    
    
    
    712
    
    
    
    (25
    )
    
    
    (v
    )
    
    
    687Other current assets
    
    
    255
    
    
    
    157
    
    
    
    
    
    
    
    
    
    
    
    412
    
    
    
    
    
    
    
    
    
    
    
    4121,748
    
    
    
    1,649
    
    
    
    152
    
    
    
    
    
    
    
    3,549
    
    
    
    125
    
    
    
    
    
    
    
    3,674Available-for-sale securities
    
    
    62
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    84Equity method investments
    
    
    138
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    171
    
    
    
    (33
    )
    
    
    (v
    )
    
    
    138Property, plant and equipment
    
    
    4,146
    
    
    
    2,592
    
    
    
    
    
    
    
    
    
    
    
    6,738
    
    
    
    (221
    )
    
    
    (v
    )
    
    
    6,517Capitalized mining costs
    
    
    
    
    
    
    240
    
    
    
    (240
    )
    
    
    (h
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-current ore in stockpiles
    
    
    251
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    314
    
    
    
    (11
    )
    
    
    (v
    )
    
    
    303Other assets
    
    
    517
    
    
    
    641
    
    
    
    (17
    )
    
    
    (i
    )
    
    
    1,141
    
    
    
    (2
    )
    
    
    (v
    )
    
    
    1,139Goodwill
    
    
    
    
    
    
    454
    
    
    
    (454
    )
    
    
    (j
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unallocated purchase price
    
    
    
    
    
    
    
    
    
    
    8,500
    
    
    
    (k
    )
    
    
    8,500
    
    
    
    (1,279
    )
    
    
    (w
    )
    
    
    7,221Total assets
    
    
    6,862
    
    
    
    5,694
    
    
    
    7,941
    
    
    
    
    
    
    
    20,497
    
    
    
    (1,421
    )
    
    
    
    
    
    
    19,076Liabilities and shareholders equityCurrent liabilitiesAccounts payable
    
    
    386
    
    
    
    305
    
    
    
    25
    
    
    
    (l
    )
    
    
    716
    
    
    
    (24
    )
    
    
    (v
    )
    
    
    692Short-term debt
    
    
    
    
    
    
    
    
    
    
    1,344
    
    
    
    (m
    )
    
    
    1,344
    
    
    
    (1,344
    )
    
    
    (u
    )
    
    
    Current portion of long-term debt
    
    
    80
    
    
    
    152
    
    
    
    
    
    
    
    
    
    
    
    232
    
    
    
    
    
    
    
    
    
    
    
    232Other current liabilities
    
    
    94
    
    
    
    89
    
    
    
    
    
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    183560
    
    
    
    546
    
    
    
    1,369
    
    
    
    
    
    
    
    2,475
    
    
    
    (1,368
    )
    
    
    
    
    
    
    1,107Long-term debt
    
    
    1,721
    
    
    
    1,107
    
    
    
    
    
    
    
    
    
    
    
    2,828
    
    
    
    
    
    
    
    
    
    
    
    2,828Asset retirement obligations
    
    
    409
    
    
    
    294
    
    
    
    
    
    
    
    
    
    
    
    703
    
    
    
    (21
    )
    
    
    (v
    )
    
    
    682Other long-term obligations
    
    
    208
    
    
    
    260
    
    
    
    1,051
    
    
    
    (n
    )
    
    
    1,519
    
    
    
    (32
    )
    
    
    (v
    )
    
    
    1,487Deferred income tax liabilities
    
    
    114
    
    
    
    247
    
    
    
    
    
    
    
    
    
    
    
    361
    
    
    
    
    
    
    
    
    
    
    
    361Total liabilities
    
    
    3,012
    
    
    
    2,454
    
    
    
    2,420
    
    
    
    
    
    
    
    7,886
    
    
    
    (1,421
    )
    
    
    
    
    
    
    6,465Shareholders equity Capital stock
    
    
    4,222
    
    
    
    2,555
    
    
    
    152
    
    
    
    (g
    )(2,707
    )
    
    
    (o
    )8,761
    
    
    
    (p
    )
    
    
    12,983
    
    
    
    
    
    
    
    
    
    
    
    12,983Retained earnings (deficit)
    
    
    (341
    )
    
    
    624
    
    
    
    (624
    )
    
    
    (q
    )
    
    
    (341
    )
    
    
    
    
    
    
    
    
    
    
    (341
    )Accumulated other comprehensive income
    
    
    (31
    )
    
    
    (12
    )
    
    
    12
    
    
    
    (r
    )
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    (31
    )Contributed surplus
    
    
    
    
    
    
    73
    
    
    
    (73
    )
    
    
    (s
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total shareholders equity
    
    
    3,850
    
    
    
    3,240
    
    
    
    5,521
    
    
    
    
    
    
    
    12,611
    
    
    
    
    
    
    
    
    
    
    
    12,611Total liabilities and shareholders equity
    
    $
    6,862
    
    
    $
    5,694
    
    
    
    7,941
    
    
    
    
    
    
    $
    20,497
    
    
    $
    (1,421
    )
    
    
    
    
    
    $
    19,076
 1.
    
    Adjustments to reflect certain estimated effects of purchase accounting.2.
    
    Adjustments to reflect the estimated effects of the sale of certain Placer Dome operations to Goldcorp. Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 89




---



##### 



Basis of Presentation
      Pro Forma Assumptions and Adjustments
   90 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Pro Forma Adjustments
  (a)
    
    An increase in interest
income by $5 million for the year ended December
31, 2005 to reflect interest income earned on the
cash proceeds generated by the assumed exercise of
Placer Dome stock options.(b)
    
    An increase in
interest expense by $48 million for the year ended
December 31, 2005 to reflect the interest costs
(net of amounts that would have been capitalized to
Barrick development projects) relating to the cash
component of the Offer that will be
financed through temporary credit facilities. A
decrease in interest expense by $49 million for
the year ended December 31, 2005 to reflect the
assumed avoidance of interest on the temporary
financing for the cash component of the Offer
assuming the repayment of such financing from
the receipt of cash proceeds from the sale of
certain Placer Dome operations to Goldcorp.(c)
    
    A decrease in other expense by $21 million to
de-recognize non-recurring transaction costs
recorded by Placer Dome relating to the Barrick
offer.(d)
    
    A credit to tax expense of $10 million for
the year ended December 31, 2005 to reflect the
tax effect of the pro forma purchase adjustments
in (a) through (c).(e)
    
    Adjustments to de-recognize the revenues
and expenses for the year ended December 31,
2005 relating to the Placer Dome operations
that will be sold to Goldcorp.(f)
    
    Adjustments to de-recognize income tax expense
for the operations that will be sold to Goldcorp
for the year ended December 31, 2005 and to record
the tax effect of other pro forma adjustments
relating to the sale of certain Placer Dome
operations to Goldcorp.
  (g)
    
    An increase in cash and
equivalents by $152 million with a corresponding
increase in Placer Domes capital stock, to reflect
the proceeds received by Placer Dome on exercise of
10.1 million in-the-money Placer Dome stock
options.(h)
    
    A reduction in capitalized mining costs by $240
million to de-recognize this asset of Placer Dome,
which will not be recorded as a separate
identifiable asset on acquisition.(i)
    
    A reduction in other assets by $17 million to
de-recognize deferred debt issue costs of Placer
Dome that will not be recorded as a separate
identifiable asset on acquisition.(j)
    
    The de-recognition of goodwill of $454 million
that was recorded by Placer Dome for previous
business combinations.(k)
    
    An adjustment of $8,500 million to reflect
the unallocated purchase price.
 Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 91




---



##### 



(l)
    
    An increase in accounts payable by $25
million to record estimated transaction costs
relating to the acquisition of Placer Dome.(m)
    
    An increase in short-term debt by $1,344
million to reflect temporary financing by Barrick
for the cash component of the Offer.(n)
    
    An increase in other long-term obligations
by $1,051 million to record the estimated fair
value of Placer Domes metal sales contracts
at December 31, 2005.(o)
    
    A reduction in capital stock of $2,707 million
to de-recognize Placer Domes historic capital
stock (including the adjustment for the assumed
exercise of in-the-money stock options).(p)
    
    An increase in capital stock by $8,761 million
to record the value of common shares of Barrick
issued in respect of the assumed share component
of the Offer.(q)
    
    An adjustment of $624 million to
de-recognize Placer Domes historic retained
earnings. (r) An adjustment of $12 million to
de-recognize Placer Domes historic
accumulated other comprehensive income.(r)
    
    An adjustment of $12 million to
de-recognize Placer Domes historic
accumulated other comprehensive income.(s)
    
    An adjustment of $73 million to de-recognize
Placer Domes historic contributed surplus. (t) An
increase in cash and equivalents by $1,500 million
to record the assumed cash receipts by Barrick for
the sale of the Placer Dome operations to
Goldcorp.(t)
    
    An increase in cash and equivalents by $1,500 million
to record the assumed cash receipts by Barrick for
the sale of the Placer Dome operations to
Goldcorp.(u)
    
    A decrease in cash and equivalents by $1,344
million and a corresponding decrease in short-term
debt to reflect the assumed repayment of the
temporary financing used to fund the cash component
of the Offer upon the receipt of the cash proceeds
from Goldcorp relating to the sale of certain Placer
Dome operations.(v)
    
    Adjustments to de-recognize the estimated
carrying amount of the Placer Dome assets and
liabilities included in the Placer Dome operations
that will be sold to Goldcorp.(w)
    
    A reduction in the unallocated purchase price by
$1,279 million to adjust for the unallocated
purchase price relating to the sale of Placer Dome
operations to Goldcorp.
 Pro Forma Earnings Per Share
 For the year ended December 31, 2005(millions of shares or US dollars, except per share data in dollars)Actual weighted average number of Barrick
common shares outstanding
    
    
    536Assumed number of Barrick common shares
issued to Placer Dome shareholders
    
    
    323Pro forma weighted average number
of Barrick common shares outstanding
    
    
    859Pro forma net income
    
    $
    489Pro forma earnings per share  basic
    
    $
    0.57Pro forma weighted average number
of Barrick common shares outstanding
    
    
    859Dilutive effect of stock options
    
    
    2Pro forma weighted average number of Barrick
common shares outstanding  diluted
    
    
    861Pro forma earnings per share  diluted
    
    $
    0.57
 d) Summary Historical Placer Dome Financial Information (Unaudited)
  For the years ended December 31
    
    2005
    
    
    2004Income statement informationTotal revenues
    
    $
    1,978
    
    
    $
    1,888Net income
    
    $
    80
    
    
    $
    284Balance sheet informationCurrent assets
    
    $
    1,649
    
    
    $
    1,636Non-current assets
    
    
    4,045
    
    
    
    3,908Current liabilities
    
    
    546
    
    
    
    453Non-current liabilities
    
    
    1,908
    
    
    
    1,927Net assets
    
    $
    3,240
    
    
    $
    3,164
 e) Acquisition of Mineral Interest in Pakistan
  92 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



4 n Segment Information
 
   Income Statement Information
 Gold sales
    
    
    Segment expenses1
    
    
    Segment income (loss)For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Goldstrike
    
    $
    877
    
    
    $
    745
    
    
    $
    813
    
    
    $
    510
    
    
    $
    478
    
    
    $
    533
    
    
    $
    217
    
    
    $
    118
    
    
    $
    120Round Mountain
    
    
    164
    
    
    
    148
    
    
    
    139
    
    
    
    93
    
    
    
    85
    
    
    
    68
    
    
    
    54
    
    
    
    46
    
    
    
    51Eskay Creek
    
    
    72
    
    
    
    112
    
    
    
    130
    
    
    
    8
    
    
    
    9
    
    
    
    18
    
    
    
    38
    
    
    
    52
    
    
    
    65Other producing mines
    
    
    136
    
    
    
    135
    
    
    
    148
    
    
    
    84
    
    
    
    79
    
    
    
    90
    
    
    
    32
    
    
    
    34
    
    
    
    33North America
    
    
    1,249
    
    
    
    1,140
    
    
    
    1,230
    
    
    
    695
    
    
    
    651
    
    
    
    709
    
    
    
    341
    
    
    
    250
    
    
    
    269Kalgoorlie
    
    
    177
    
    
    
    183
    
    
    
    153
    
    
    
    101
    
    
    
    109
    
    
    
    88
    
    
    
    56
    
    
    
    54
    
    
    
    45Plutonic
    
    
    109
    
    
    
    122
    
    
    
    120
    
    
    
    66
    
    
    
    69
    
    
    
    62
    
    
    
    33
    
    
    
    42
    
    
    
    48Bulyanhulu
    
    
    129
    
    
    
    135
    
    
    
    109
    
    
    
    108
    
    
    
    96
    
    
    
    74
    
    
    
    (13
    )
    
    
    5
    
    
    
    (2
    )Other producing mines
    
    
    165
    
    
    
    101
    
    
    
    91
    
    
    
    97
    
    
    
    60
    
    
    
    55
    
    
    
    37
    
    
    
    27
    
    
    
    24Cowal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    1
    
    
    
    
    
    
    
    (9
    )
    
    
    (1
    )
    
    
    Australia/Africa
    
    
    580
    
    
    
    541
    
    
    
    473
    
    
    
    381
    
    
    
    335
    
    
    
    279
    
    
    
    104
    
    
    
    127
    
    
    
    115Pierina
    
    
    273
    
    
    
    251
    
    
    
    332
    
    
    
    87
    
    
    
    72
    
    
    
    79
    
    
    
    114
    
    
    
    72
    
    
    
    87Lagunas Norte
    
    
    248
    
    
    
    
    
    
    
    
    
    
    
    62
    
    
    
    12
    
    
    
    29
    
    
    
    157
    
    
    
    (12
    )
    
    
    (29
    )Veladero
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5
    
    
    
    18
    
    
    
    (5
    )
    
    
    (5
    )
    
    
    (18
    )Pascua-Lama
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    4
    
    
    
    
    
    
    
    (6
    )
    
    
    (4
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    South America
    
    
    521
    
    
    
    251
    
    
    
    332
    
    
    
    160
    
    
    
    96
    
    
    
    126
    
    
    
    260
    
    
    
    48
    
    
    
    40Exploration group
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109
    
    
    
    96
    
    
    
    67
    
    
    
    (109
    )
    
    
    (96
    )
    
    
    (67
    )Segment total
    
    $
    2,350
    
    
    $
    1,932
    
    
    $
    2,035
    
    
    $
    1,345
    
    
    $
    1,178
    
    
    $
    1,181
    
    
    $
    596
    
    
    $
    329
    
    
    $
    357
 1.
    
    In 2005, we revised our internal definition of segment expenses to include accretion
expense. Segment information for all the years presented reflects this change in the
measurement of segment expenses. Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 93




---



##### 



Geographic Information
 For the years ended
    
    Assets
    
    
    Gold salesDecember 31
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2003United States
    
    $
    1,991
    
    
    $
    1,976
    
    
    $
    1,073
    
    
    $
    911
    
    
    $
    970Canada
    
    
    531
    
    
    
    406
    
    
    
    176
    
    
    
    229
    
    
    
    260North America
    
    
    2,522
    
    
    
    2,382
    
    
    
    1,249
    
    
    
    1,140
    
    
    
    1,230Australia
    
    
    1,010
    
    
    
    838
    
    
    
    401
    
    
    
    406
    
    
    
    364Tanzania
    
    
    787
    
    
    
    774
    
    
    
    179
    
    
    
    135
    
    
    
    109Australia/Africa
    
    
    1,797
    
    
    
    1,612
    
    
    
    580
    
    
    
    541
    
    
    
    473Peru
    
    
    675
    
    
    
    811
    
    
    
    521
    
    
    
    251
    
    
    
    332Argentina
    
    
    1,001
    
    
    
    645
    
    
    
    
    
    
    
    
    
    
    
    Chile
    
    
    222
    
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    South America
    
    
    1,898
    
    
    
    1,576
    
    
    
    521
    
    
    
    251
    
    
    
    332Other
    
    
    645
    
    
    
    717
    
    
    
    
    
    
    
    
    
    
    
    $
    6,862
    
    
    $
    6,287
    
    
    $
    2,350
    
    
    $
    1,932
    
    
    $
    2,035
 Reconciliation of Segment Income
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Segment income
    
    $
    596
    
    
    $
    329
    
    
    $
    357Other expenses at producing mines
    
    
    
    
    
    
    8
    
    
    
    (8
    )Amortization of corporate assets
    
    
    (18
    )
    
    
    (27
    )
    
    
    (25
    )Business development costs
    
    
    (10
    )
    
    
    (18
    )
    
    
    (17
    )Corporate administration
    
    
    (71
    )
    
    
    (71
    )
    
    
    (73
    )Equity in investees
    
    
    (6
    )
    
    
    
    
    
    
    Interest income
    
    
    38
    
    
    
    25
    
    
    
    31Interest expense
    
    
    (7
    )
    
    
    (19
    )
    
    
    (44
    )Impairment of long-lived assets
    
    
    
    
    
    
    (139
    )
    
    
    (5
    )Other income (expense)
    
    
    (67
    )
    
    
    (43
    )
    
    
    6Income before income taxes and other items
    
    $
    455
    
    
    $
    45
    
    
    $
    222
 Asset Information
 Segment assets
    
    
    Amortization1
    
    
    Segment capital expendituresFor the years ended December 31
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Goldstrike
    
    $
    1,395
    
    
    $
    1,290
    
    
    $
    150
    
    
    $
    149
    
    
    $
    160
    
    
    $
    162
    
    
    $
    72
    
    
    $
    51Round Mountain
    
    
    52
    
    
    
    67
    
    
    
    17
    
    
    
    17
    
    
    
    20
    
    
    
    1
    
    
    
    5
    
    
    
    6Eskay Creek
    
    
    66
    
    
    
    91
    
    
    
    26
    
    
    
    51
    
    
    
    47
    
    
    
    2
    
    
    
    7
    
    
    
    5East Archimedes
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    Other operating segments
    
    
    82
    
    
    
    91
    
    
    
    20
    
    
    
    22
    
    
    
    25
    
    
    
    18
    
    
    
    20
    
    
    
    18North America
    
    
    1,631
    
    
    
    1,539
    
    
    
    213
    
    
    
    239
    
    
    
    252
    
    
    
    218
    
    
    
    104
    
    
    
    80Plutonic
    
    
    106
    
    
    
    92
    
    
    
    10
    
    
    
    11
    
    
    
    10
    
    
    
    20
    
    
    
    15
    
    
    
    44Kalgoorlie
    
    
    354
    
    
    
    277
    
    
    
    20
    
    
    
    20
    
    
    
    20
    
    
    
    12
    
    
    
    10
    
    
    
    14Cowal
    
    
    412
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258
    
    
    
    73
    
    
    
    24Bulyanhulu
    
    
    574
    
    
    
    566
    
    
    
    34
    
    
    
    34
    
    
    
    37
    
    
    
    37
    
    
    
    46
    
    
    
    36Tulawaka
    
    
    80
    
    
    
    70
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    48
    
    
    
    1Other operating segments
    
    
    93
    
    
    
    89
    
    
    
    16
    
    
    
    14
    
    
    
    12
    
    
    
    18
    
    
    
    12
    
    
    
    21Australia/Africa
    
    
    1,619
    
    
    
    1,224
    
    
    
    95
    
    
    
    79
    
    
    
    79
    
    
    
    353
    
    
    
    204
    
    
    
    140Pierina
    
    
    236
    
    
    
    269
    
    
    
    72
    
    
    
    107
    
    
    
    166
    
    
    
    20
    
    
    
    8
    
    
    
    17Lagunas Norte
    
    
    384
    
    
    
    220
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    182
    
    
    
    4Veladero
    
    
    783
    
    
    
    443
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    266
    
    
    
    284
    
    
    
    68Pascua-Lama
    
    
    389
    
    
    
    286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98
    
    
    
    35
    
    
    
    9South America
    
    
    1,792
    
    
    
    1,218
    
    
    
    101
    
    
    
    107
    
    
    
    166
    
    
    
    525
    
    
    
    509
    
    
    
    98Segment total
    
    
    5,042
    
    
    
    3,981
    
    
    
    409
    
    
    
    425
    
    
    
    497
    
    
    
    1,096
    
    
    
    817
    
    
    
    318Cash and equivalents
    
    
    1,037
    
    
    
    1,398
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other items not allocated to segments
    
    
    783
    
    
    
    908
    
    
    
    18
    
    
    
    27
    
    
    
    25
    
    
    
    8
    
    
    
    7
    
    
    
    4Enterprise total
    
    $
    6,862
    
    
    $
    6,287
    
    
    $
    427
    
    
    $
    452
    
    
    $
    522
    
    
    $
    1,104
    
    
    $
    824
    
    
    $
    322
 1.
    
    Includes amortization on assets under capital lease. 94 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



5 n Revenue and Gold Sales Contracts
 
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Gold bullion salesSpot market sales
    
    $
    1,940
    
    
    $
    1,111
    
    
    $
    426Gold sales contracts
    
    
    300
    
    
    
    709
    
    
    
    1,5042,240
    
    
    
    1,820
    
    
    
    1,930Concentrate sales
    
    
    110
    
    
    
    112
    
    
    
    105$
    2,350
    
    
    $
    1,932
    
    
    $
    2,035
  Bullion Sales
      Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 95




---



##### 



Concentrate Sales
  6 n Cost of Sales
 
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Cost of goods sold1
    
    $
    1,265
    
    
    $
    1,128
    
    
    $
    1,118By-product revenues2
    
    
    (132
    )
    
    
    (146
    )
    
    
    (114
    )Royalty expense
    
    
    63
    
    
    
    53
    
    
    
    50Mining taxes
    
    
    18
    
    
    
    12
    
    
    
    15$
    1,214
    
    
    $
    1,047
    
    
    $
    1,069
 1.
    
    Cost of goods sold includes accretion
expense at producing mines of $11 million
(2004: $11 million; 2003: $10 million). The
cost of inventory sold in the period reflects
all components capitalized to inventory,
except that, for presentation purposes the
component of inventory cost relating to
amortization of property, plant and equipment
is classified in the income statement under
amortization. Some companies present this
amount under cost of sales. The amount
presented in amortization rather than cost of
sales was $409 million in 2005; $425 million
in 2004 and $497 million in 2003. In 2004,
cost of goods sold includes the reversal of
$15 million of accrued costs on resolution of
the Peruvian tax assessment (see note 8).2.
    
    We use silver sales contracts to sell a
portion of silver produced as a by-product.
Silver sales contracts have similar delivery
terms and pricing mechanisms as gold sales
contracts. At December 31, 2005, we had
fixed-price commitments to deliver 14.8 million
ounces of silver at an average price of $5.92
per ounce and floating spot price silver sales
contracts for 7.5 million ounces over periods
primarily of up to 10 years. The mark-to-market
on silver sales contracts (at December 31,
2005) was negative $52 million. Royalties
   7 n Other (Income) Expense
 
 a) Impairment of Long-lived Assets
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Eskay Creek1
    
    $
    
    
    
    $
    58
    
    
    $
    Peruvian exploration properties2
    
    
    
    
    
    
    67
    
    
    
    Other
    
    
    
    
    
    
    14
    
    
    
    5$
    
    
    
    $
    139
    
    
    $
    5
 1.
    
    The asset group that comprises the Eskay Creek
mine was tested for impairment effective
December 31, 2004. The principal factors that
caused us to test this asset group for
impairment included: downward revisions to
proven and probable reserves; the impact of the
continued strengthening of the C$ against the
US$ and upward revisions to expected asset
retirement costs in the fourth quarter of 2004.
An impairment charge of $58 million was
recorded, which represents the amount by which
the carrying amount of the asset group exceeds
its estimated fair value. Fair value was
estimated using the method described in note
13c.2.
    
    At the end of 2004, upon completion of the
exploration program for the year, we assessed
the results and updated our future plans for
various exploration properties in Peru that
were originally acquired through the Arequipa
acquisition in 1996. We concluded that the
results and future potential did not merit any
further investment for these properties.
The assets were tested for impairment, and an
impairment charge of $67 million was recorded that
reflects the amounts by which their carrying
amounts exceed their estimated fair values. The
fair value of this group of assets was judged to
be minimal due to the unfavorable results of
exploration work on the properties.
 96 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



b) Other
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Non-hedge derivative gains (note 16c)
    
    $
    (6
    )
    
    $
    (5
    )
    
    $
    (71
    )Gains on sale of mining property,
plant and equipment1
    
    
    (5
    )
    
    
    (36
    )
    
    
    (36
    )Gains on sale of investments (note 11)
    
    
    (17
    )
    
    
    (6
    )
    
    
    (4
    )Gain on Kabanga transaction
    
    
    (15
    )
    
    
    
    
    
    
    Environmental remediation costs2
    
    
    28
    
    
    
    36
    
    
    
    48Accretion expense at closed mines (note 17)
    
    
    10
    
    
    
    7
    
    
    
    7Impairment charges on investments (note 11)
    
    
    16
    
    
    
    5
    
    
    
    11World Gold Council fees
    
    
    10
    
    
    
    9
    
    
    
    10Inmet settlement
    
    
    
    
    
    
    
    
    
    
    16Legal costs for major litigation
    
    
    8
    
    
    
    5
    
    
    
    3Currency translation (gains) losses
    
    
    (3
    )
    
    
    1
    
    
    
    (2
    )Pension expense (note 23b)
    
    
    1
    
    
    
    
    
    
    
    4Peruvian tax assessment
    
    
    
    
    
    
    (6
    )
    
    
    Severance at closed mines
    
    
    
    
    
    
    4
    
    
    
    Other items3
    
    
    40
    
    
    
    29
    
    
    
    8$
    67
    
    
    $
    43
    
    
    $
    (6
    )
 1.
    
    In 2005, we sold some land positions in
Australia. In 2004 we sold various mining
properties, including the Holt-McDermott mine
in Canada and certain land positions around
our inactive mine sites in the United States.
In 2003 we sold various mining properties,
including several land positions around
inactive mine sites in the United States, as
well as the East Malartic Mill and Bousquet
mine in Canada. The majority of these land
positions were fully amortized in prior years
and therefore any proceeds generate gains on
sale, before selling costs and taxes.2.
    
    Includes costs at development projects and
closed mines and changes in the expected
costs of AROs at closed mines.3.
    
    Includes certain costs incurred at regional
business units that are not direct or
indirect production costs. Kabanga Transaction
   Environmental Remediation Costs
   Inmet Settlement
  Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 97




---



##### 



8 n Income Tax Expense (Recovery)
 
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003CurrentCanada
    
    $
    (3
    )
    
    $
    19
    
    
    $
    40International
    
    
    93
    
    
    
    24
    
    
    
    14$
    90
    
    
    $
    43
    
    
    $
    54DeferredCanada
    
    $
    (15
    )
    
    $
    (26
    )
    
    $
    (32
    )International
    
    
    22
    
    
    
    7
    
    
    
    45$
    7
    
    
    $
    (19
    )
    
    $
    13Income tax expense before elements below1
    
    $
    97
    
    
    $
    24
    
    
    $
    67Outcome of tax uncertainties
    
    
    
    
    
    
    (141
    )
    
    
    Change in tax status in Australia
    
    
    (5
    )
    
    
    (81
    )
    
    
    Net release of beginning of year valuation allowances
    
    
    (32
    )
    
    
    (5
    )
    
    
    (62
    )Total expense (recovery)
    
    $
    60
    
    
    $
    (203
    )
    
    $
    5
 1.
    
    All amounts are deferred tax items except for
a $21 million portion of the $141 million
recovery on resolution of the Peruvian tax
assessment in 2004, which is a current tax
item. Outcome of Tax Uncertainties
 Peruvian Tax Assessment
   Changes in Tax Status in Australia
   Release of Beginning of Year Valuation Allowances
  98 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Reconciliation to Canadian Federal Rate
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003At 38% statutory federal rate
    
    $
    173
    
    
    $
    17
    
    
    $
    84Increase (decrease) due to:Allowances and special tax deductions1
    
    
    (92
    )
    
    
    (70
    )
    
    
    (47
    )Impact of foreign tax rates2
    
    
    (51
    )
    
    
    (5
    )
    
    
    (42
    )Expenses not tax-deductible
    
    
    9
    
    
    
    10
    
    
    
    11Release of beginning of year valuation allowances
    
    
    (32
    )
    
    
    (5
    )
    
    
    (62
    )Impact of changes in tax status in Australia
    
    
    (5
    )
    
    
    (81
    )
    
    
    Valuation allowances set up against current year tax losses
    
    
    59
    
    
    
    65
    
    
    
    53Outcome of tax uncertainties
    
    
    
    
    
    
    (141
    )
    
    
    Mining taxes
    
    
    1
    
    
    
    5
    
    
    
    9Other items
    
    
    (2
    )
    
    
    2
    
    
    
    (1
    )Income tax expense (recovery)
    
    $
    60
    
    
    $
    (203
    )
    
    $
    5
 1.
    
    We are able to claim certain allowances
and tax deductions unique to extractive
industries that result in a lower effective
tax rate.2.
    
    We operate in multiple foreign tax
jurisdictions that have tax rates
different than the Canadian federal rate. Income Tax Returns
  9 n Earnings per Share
 
 For the years ended December 31($ millions, except shares in millionsand per share amounts in dollars)
    
    2005
    
    
    2004
    
    
    2003Income before cumulative effect of changes in accounting principles
    
    $
    395
    
    
    $
    248
    
    
    $
    217Cumulative effect of changes in accounting principles
    
    
    6
    
    
    
    
    
    
    
    (17
    )Income available to common stockholders
    
    $
    401
    
    
    $
    248
    
    
    $
    200Weighted average shares outstandingBasic
    
    
    536
    
    
    
    533
    
    
    
    539Effect of dilutive stock options
    
    
    2
    
    
    
    1
    
    
    
    Diluted
    
    
    538
    
    
    
    534
    
    
    
    539Earnings per shareIncome before cumulative effect of changes in accounting principlesBasic
    
    $
    0.74
    
    
    $
    0.47
    
    
    $
    0.40Diluted
    
    $
    0.73
    
    
    $
    0.46
    
    
    $
    0.40Net incomeBasic
    
    $
    0.75
    
    
    $
    0.47
    
    
    $
    0.37Diluted
    
    $
    0.75
    
    
    $
    0.46
    
    
    $
    0.37
   Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 99




---



##### 



10 n Operating Cash Flow  Other Items
 
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Income statement items:Currency translation (gains) losses
    
    $
    (3
    )
    
    $
    1
    
    
    $
    5(Gains) losses on investments (note 11)
    
    
    (17
    )
    
    
    (6
    )
    
    
    (4
    )Gain on Kabanga transaction
    
    
    (15
    )
    
    
    
    
    
    
    Impairment charges on investments
    
    
    16
    
    
    
    5
    
    
    
    11Accounting changes (note 2e)
    
    
    (6
    )
    
    
    
    
    
    
    17Equity in investee
    
    
    (6
    )
    
    
    
    
    
    
    Accretion expense (note 17)
    
    
    21
    
    
    
    18
    
    
    
    17Non-hedge derivative gains (note 16c)
    
    
    (6
    )
    
    
    (5
    )
    
    
    (71
    )Inmet litigation (note 7b)
    
    
    
    
    
    
    
    
    
    
    16ARO charges at closed mines (note 17)
    
    
    15
    
    
    
    22
    
    
    
    10Amortization of debt issue costs
    
    
    2
    
    
    
    3
    
    
    
    1Write-downs of inventory (note 12)
    
    
    15
    
    
    
    9
    
    
    
    3Changes in:Accounts receivable
    
    
    4
    
    
    
    (2
    )
    
    
    3Inventories
    
    
    (151
    )
    
    
    (51
    )
    
    
    (1
    )Capitalized mining costs
    
    
    
    
    
    
    9
    
    
    
    37Goods and services taxes
    
    
    (16
    )
    
    
    (68
    )
    
    
    (14
    )Accounts payable
    
    
    80
    
    
    
    4
    
    
    
    4Other assets and liabilities
    
    
    
    
    
    
    (8
    )
    
    
    (75
    )Other items
    
    
    
    
    
    
    
    
    
    
    4Other net operating activities
    
    $
    (67
    )
    
    $
    (69
    )
    
    $
    (37
    )Operating cash flow includes net receipts (payments) for:Asset retirement obligations
    
    $
    (30
    )
    
    $
    (33
    )
    
    $
    (40
    )Income taxes
    
    
    (80
    )
    
    
    (45
    )
    
    
    (111
    )Pension plan contributions
    
    
    (20
    )
    
    
    (22
    )
    
    
    (23
    )Interest
    
    
    (112
    )
    
    
    (57
    )
    
    
    (48
    )
 11 n Investments
 
 Available-for-sale Securities
 2005
    
    
    2004Fair
    
    
    Gains in
    
    
    Fair
    
    
    Gains inAt December 31
    
    value
    
    
    OCI
    
    
    value
    
    
    OCIBenefit plans:1Fixed-income securities
    
    $
    4
    
    
    $
    
    
    
    $
    11
    
    
    $
    Equity securities
    
    
    17
    
    
    
    1
    
    
    
    19
    
    
    
    10Other investments:Equity securities2
    
    
    38
    
    
    
    11
    
    
    
    29
    
    
    
    11Restricted cash
    
    
    3
    
    
    
    
    
    
    
    2
    
    
    
    $
    62
    
    
    $
    12
    
    
    $
    61
    
    
    $
    21
 1.
    
    Under various benefit plans for certain
former Homestake executives, a portfolio of
marketable fixed-income and equity securities
are held in a rabbi trust that is used to
fund obligations under the plans.2.
    
    At December 31, 2005, there were no
available-for-sale securities in an
unrealized loss position.  Gains (Losses) on Investments Recorded in Earnings
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Realized on saleGains
    
    $
    17
    
    
    $
    6
    
    
    $
    5Losses
    
    
    
    
    
    
    
    
    
    
    (1
    )17
    
    
    
    6
    
    
    
    4Impairment charges
    
    
    (16
    )
    
    
    (5
    )
    
    
    (11
    )$
    1
    
    
    $
    1
    
    
    $
    (7
    )
 Investment in Celtic Resources Holdings PLC (Celtic)
  100 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Equity Method Investments
 2005
    
    
    2004Fair
    
    
    Carrying
    
    
    Fair
    
    
    Carryingvalue1
    
    
    amount
    
    
    value1
    
    
    amountHighland Gold Mining PLC
    
    $
    134
    
    
    $
    131
    
    
    $
    75
    
    
    $
    86Diamondex Resources Ltd.
    
    
    6
    
    
    
    7
    
    
    
    
    
    
    
    $
    140
    
    
    $
    138
    
    
    $
    75
    
    
    $
    86
 1.
    Based on the closing market stock price.  Highland Gold Mining PLC (Highland)
       Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 101




---



##### 



Diamondex Resources Limited (Diamondex)
  12 n Accounts Receivable, Inventories and Other Current Assets
 
 At December 31
    
    2005
    
    
    2004Accounts receivableAmounts due from concentrate sales
    
    $
    18
    
    
    $
    29Other receivables
    
    
    36
    
    
    
    29$
    54
    
    
    $
    58InventoriesOre in stockpiles1
    
    $
    360
    
    
    $
    107Ore on leach pads
    
    
    34
    
    
    
    17Gold in process
    
    
    47
    
    
    
    33Gold doré/bullion
    
    
    32
    
    
    
    20Gold concentrate
    
    
    47
    
    
    
    21Mine operating supplies
    
    
    133
    
    
    
    82653
    
    
    
    280Non-current ore in stockpiles2
    
    
    (251
    )
    
    
    (65
    )$
    402
    
    
    $
    215Other current assetsDerivative assets (note 16c)
    
    $
    128
    
    
    $
    165Taxes recoverable
    
    
    101
    
    
    
    104Prepaid expenses
    
    
    23
    
    
    
    17Other
    
    
    3
    
    
    
    2$
    255
    
    
    $
    288
 1.
    
    Effective January 1, 2005, an amount of $232
million was reclassified to ore in stockpiles
from capitalized mining costs in connection
with our adoption of EITF 04-6. See note 2e.2.
    
    Ore that we do not expect to process in the
next 12 months is classified in non-current
ore in stockpiles. Inventories
     102 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Significant Ore in Stockpiles
 At December 31
    
    2005
    
    
    2004GoldstrikeOre that requires roasting
    
    $
    182
    
    
    $
    23Ore that requires autoclaving
    
    
    98
    
    
    
    17Kalgoorlie
    
    
    53
    
    
    
    46
    13 n Property, Plant and Equipment
 
 At December 31
    
    2005
    
    
    2004Acquired mineral properties and capitalized mine development costs
    
    $
    4,792
    
    
    $
    4,489Buildings, plant and equipment1
    
    
    4,124
    
    
    
    3,2898,916
    
    
    
    7,778Accumulated amortization2
    
    
    (4,770
    )
    
    
    (4,387
    )$
    4,146
    
    
    $
    3,391
 1.
    
    Includes $122 million (2004: $44 million) of assets under capital leases.2.
    
    Includes $18 million (2004: $1 million) of
accumulated amortization for assets under capital leases. a) Acquired Mineral Properties and Capitalized Mine Development Costs
 Exploration and Development Stage Properties
  Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 103




---



##### 



Carrying
    
    
    Targeted timingamount at
    
    
    of productionDecember 31,
    
    
    start-up2005
    
    
    (unaudited)Development projectsCowal
    
    $
    406
    
    
    
    2006East Archimedes
    
    
    35
    
    
    
    2007Pascua-Lama
    
    
    340
    
    
    
    2009Buzwagi exploration project
    
    
    102
    
    
    
    Total
    
    $
    883
   Producing Mines
   104n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



b) Buildings, Plant and Equipment
   c) Impairment Evaluations  Operating
Mines and Development Projects
   n
    
    Estimated sales proceeds from the production
and sale
of recoverable ounces of gold contained in proven
and probable reserves;n
    
    Expected future commodity prices and
currency exchange rates (considering
historical and current prices, price
trends and related factors);n
    
    Expected future operating costs and capital
expenditures to produce proven and probable
gold reserves based on mine plans that assume
current plant capacity, and exclude the impact
of inflation;n
    
    Expected cash flows associated with value
beyond proven and probable reserves, which
includes the expected cash outflows required
to develop and extract the value beyond proven
and probable reserves; andn
    
    Environmental remediation costs excluded
from the measurement of asset retirement
obligations.
  d) Capital Commitments
  14 n Other Assets
 
 At December 31
    
    2005
    
    
    2004Derivative assets (note 16c)
    
    $
    177
    
    
    $
    257Goods and services taxes recoverable
    
    
    46
    
    
    
    50Deferred income tax assets (note 19)
    
    
    141
    
    
    
    97Debt issue costs
    
    
    35
    
    
    
    38Deferred share-based compensation (note 22b)
    
    
    13
    
    
    
    5Other
    
    
    105
    
    
    
    52$
    517
    
    
    $
    499
 Debt Issue Costs
  15 n Other Current Liabilities
 
 At December 31
    
    2005
    
    
    2004Asset retirement obligations (note 17)
    
    $
    37
    
    
    $
    33Derivative liabilities (note 16c)
    
    
    42
    
    
    
    11Post-retirement benefits (note 23)
    
    
    6
    
    
    
    2Deferred revenue
    
    
    8
    
    
    
    5Other
    
    
    1
    
    
    
    3$
    94
    
    
    $
    54
 Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 105




---



##### 



16 n Financial Instruments
 
  a) Cash and Equivalents
  b) Long-Term Debt
 2005
    
    
    2004
    
    
    2003At
    
    
    
    
    
    
    
    
    
    
    At
    
    
    
    
    
    
    
    
    
    
    AtDecember 31
    
    
    Proceeds
    
    
    Repayments
    
    
    December 31
    
    
    Proceeds
    
    
    Repayments
    
    
    December 31
    
    
    Proceeds
    
    
    Repayments71/2% debentures1
    
    $
    490
    
    
    $
    
    
    
    $
    
    
    
    $
    495
    
    
    $
    
    
    
    $
    
    
    
    $
    501
    
    
    $
    
    
    
    $
    54/5% notes2
    
    
    397
    
    
    
    
    
    
    
    
    
    
    
    397
    
    
    
    397
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47/8% notes3
    
    
    348
    
    
    
    
    
    
    
    
    
    
    
    348
    
    
    
    348
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Veladero financing4
    
    
    237
    
    
    
    39
    
    
    
    
    
    
    
    198
    
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Bulyanhulu financing5
    
    
    119
    
    
    
    
    
    
    
    31
    
    
    
    150
    
    
    
    
    
    
    
    24
    
    
    
    174
    
    
    
    
    
    
    
    23Variable-rate bonds6
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    17
    
    
    
    80
    
    
    
    
    
    
    
    Capital leases
    
    
    4
    
    
    
    
    
    
    
    1
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    Peru lease
facilities
First facility7
    
    
    76
    
    
    
    73
    
    
    
    27
    
    
    
    30
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Second facility8
    
    
    17
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Peruvian bonds9
    
    
    50
    
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,801
    
    
    
    179
    
    
    
    59
    
    
    
    1,686
    
    
    
    973
    
    
    
    41
    
    
    
    760
    
    
    
    
    
    
    
    23Less: current part
    
    
    (80
    )
    
    
    
    
    
    
    
    
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    $
    1,721
    
    
    $
    179
    
    
    $
    59
    
    
    $
    1,655
    
    
    $
    973
    
    
    $
    41
    
    
    $
    719
    
    
    $
    
    
    
    $
    23
 1.
    
    The 71/2% debentures have a principal amount of $500 million
and mature on May 1, 2007. The debentures have been designated in a fair value hedge
relationship and consequently the carrying amount at December 31, 2005 represents the
estimated fair value at each balance sheet date.2.
    
    On November 12, 2004, we issued $400 million of debentures at a $3 million discount that
mature on November 15, 2034.3.
    
    On November 12, 2004, we issued $350 million of debentures at a $2 million discount that
mature on November 15, 2014.4.
    
    One of our wholly owned subsidiaries, Minera Argentina Gold S.A. in Argentina has a
variable-rate limited recourse amortizing loan facility for $250 million. We have guaranteed
the loan until completion occurs, after which it will become non-recourse. The loan is insured
for political risks by branches of the Canadian and German governments.5.
    
    One of our wholly owned subsidiaries, Kahama Mining Corporation Ltd. in Tanzania, has a
variable-rate recourse amortizing loan for $119 million. The loan is insured for political
risks equally by branches of the Canadian government and the World Bank. In second quarter
2005, the terms of the financing were amended, with the lender having recourse in return for a
reduction in the spread over Libor on the financing, and the loan convenants were also
simplified.6.
    
    Certain of our wholly owned subsidiaries have issued variable-rate, tax-exempt bonds of $25
million (due 2029) and $38 million (due 2032) for a total of $63 million.7.
    
    By December 31, 2005, a total of $103 million had been drawn down under a $110 million build
to suit facility held by one of our wholly owned subsidiaries, Minera Barrick Misquichilca
(MBM). We repaid $23 million on September 30, 2005, with the remaining $80 million repayable
in 20 equal quarterly installments of $4 million commencing in fourth quarter 2005. The lease
facility has an implied interest rate of Libor plus 2.5% for the first 12 installments and
Libor plus 2.6% for the last 8 installments.8.
    
    In 2005, MBM finalized a second build to suit lease facility for $30 million, which is being
used to finance the extension of the leach pad at the Lagunas Norte mine.9.
    
    In second quarter 2005, MBM issued $50 million of public debt securities in the Peruvian
capital markets. The net proceeds were used to partially fund the construction of the Lagunas
Norte mine. The securities bear interest at Libor plus 1.72%, and mature in 2013.10.
    
    We have a credit and guarantee agreement with a group of banks (the Lenders), which requires
the Lenders to make available to us a credit facility of up to $1 billion or the equivalent amount
in Canadian currency. The credit facility, which is unsecured, matures in April 2010 and has an
interest rate of Libor plus 0.27% to 0.35% when used, and an annual fee of 0.08%. As at December
31, 2005, we had not drawn any amounts under the credit facility. In first quarter 2006, we drew
down $1 billion under this credit facility to fund a portion of the cash consideration for the
acquisition of Placer Dome  see note 3a.
 106n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



b) Long-Term Debt (contd)
 For the years ended December 312005
    
    
    2004
    
    
    2003Interest
    
    
    Effective
    
    
    Interest
    
    
    Effective
    
    
    Interest
    
    
    Effectivecost
    
    
    rate1
    
    
    cost
    
    
    rate1
    
    
    cost
    
    
    rate171/2% debentures
    
    $
    41
    
    
    
    8.2
    %
    
    $
    31
    
    
    
    6.1
    %
    
    $
    31
    
    
    
    6.1
    %54/5% notes
    
    
    24
    
    
    
    6.0
    %
    
    
    3
    
    
    
    6.0
    %
    
    
    
    
    
    
    47/8% notes
    
    
    18
    
    
    
    5.0
    %
    
    
    2
    
    
    
    5.0
    %
    
    
    
    
    
    
    Veladero financing
    
    
    20
    
    
    
    8.6
    %
    
    
    4
    
    
    
    7.5
    %
    
    
    
    
    
    
    Bulyanhulu financing
    
    
    10
    
    
    
    7.5
    %
    
    
    14
    
    
    
    8.0
    %
    
    
    15
    
    
    
    7.7
    %Variable-rate bonds
    
    
    1
    
    
    
    2.3
    %
    
    
    1
    
    
    
    1.2
    %
    
    
    1
    
    
    
    1.1
    %Peruvian bonds
    
    
    2
    
    
    
    5.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Peru lease facilities
    
    
    5
    
    
    
    6.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Australia capital leases
    
    
    1
    
    
    
    7.1
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other interest
    
    
    3
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    2125
    
    
    
    6.9
    %
    
    
    60
    
    
    
    6.0
    %
    
    
    49
    
    
    
    6.2
    %Less: interest capitalized
    
    
    (118
    )
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    (5
    )$
    7
    
    
    
    
    
    
    $
    19
    
    
    
    
    
    
    $
    44Cash interest paid
    
    $
    112
    
    
    
    
    
    
    $
    57
    
    
    
    
    
    
    $
    48Amortization of debt issue costs
    
    
    2
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    1Hedge (gains) losses
    
    
    5
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (1
    )Increase (decrease) in interest accruals
    
    
    6
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    1Interest cost
    
    $
    125
    
    
    
    
    
    
    $
    60
    
    
    
    
    
    
    $
    49
 1.
    
    The effective rate includes the stated interest rate under the debt agreement, amortization
of debt issue costs, and the impact of interest rate contracts designated in a hedging
relationship with long-term debt.
 Scheduled Debt Repayments
 2010 and2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    thereafter71/2% debentures
    
    $
    
    
    
    $
    500
    
    
    $
    
    
    
    $
    
    
    
    $
    54/5% notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40047/8% notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350Veladero financing
    
    
    28
    
    
    
    55
    
    
    
    45
    
    
    
    50
    
    
    
    59Bulyanhulu financing
    
    
    34
    
    
    
    34
    
    
    
    34
    
    
    
    17
    
    
    
    Variable-rate bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63Peruvian bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50$
    62
    
    
    $
    589
    
    
    $
    79
    
    
    $
    67
    
    
    $
    922Minimum payments under capital leases
    
    $
    19
    
    
    $
    23
    
    
    $
    19
    
    
    $
    19
    
    
    $
    17
 Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 107




---



##### 



c) Use of Derivative Instruments
(Derivatives) in Risk Management
  Item
    
    Impacted byn Cost of salesn Consumption of diesel
fuel and propane
    
    n Prices of diesel fuel
and propanen Local currency
denominated expenditures
    

n
Currency exchange rates  US dollar versus A$,
C$, and ARSn Administration costs in local currencies
    

n
Currency exchange rates  US dollar versus A$ and C$n Capital expenditures in local currencies
    

n
Currency exchange rates  US dollar versus A$, C$,
ARS, and n Interest earned on cash
    
    n US dollar interest ratesn Fair value of fixed-rate debt
    
    n US dollar interest rates
    Accounting Policy for Derivatives
    n
    
    a fair value hedge relationship with a recognized
asset or liability; orn
    
    a cash flow hedge
relationship with either a forecasted transaction
or the variable future cash flows arising from a
recognized asset or liability.
  n
    
    a derivative is
settled;n
    
    it is no longer highly probable that a
forecasted transaction will occur; orn
    
    we
de-designate a hedging relationship.
 108n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



n
    
    Fair value hedges: recorded in earnings
as well as changes in fair value of the
hedged item.n
    
    Cash flow hedges: recorded in OCI until
earnings are affected by the hedged item,
except for any hedge ineffectiveness which
is recorded in earnings immediately.n
    
    Non-hedge derivatives: recorded in earnings.
 Summary of Derivatives at December 31, 2005 1
 Accounting classification
    
    
    Fair valueNotional amount by term to maturity
    
    
    by notional amount
    
    
    (US$ millions)Within
    
    
    2 to 5
    
    
    
    
    
    
    Cash flow
    
    
    Fair value
    
    
    Non-1 year
    
    
    years
    
    
    Total
    
    
    hedge
    
    
    hedge
    
    
    hedgeUS dollar interest rate contractsReceive-fixed swaps (millions)
    
    $
    
    
    
    $
    975
    
    
    $
    975
    
    
    $
    425
    
    
    $
    500
    
    
    $
    50
    
    
    $
    (21
    )Pay-fixed swaps (millions)
    
    
    
    
    
    
    125
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    (13
    )Net notional position
    
    $
    
    
    
    $
    850
    
    
    $
    850
    
    
    $
    425
    
    
    $
    500
    
    
    $
    (75
    )
    
    $
    (34
    )Currency contractsC$:US$ contracts (C$ millions)
    
    C$
    297
    
    
    C$
    491
    
    
    C$
    788
    
    
    C$
    788
    
    
    C$
    
    
    
    C$
    
    2
    
    $
    68A$:US$ contracts (A$ millions)
    
    A$
    537
    
    
    A$
    1,676
    
    
    A$
    2,213
    
    
    A$
    2,212
    
    
    A$
    
    
    
    A$
    1
    
    
    
    61ARS:US$
contracts
(ARS millions)
    
    
    36
    
    
    
    
    
    
    
    36
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Commodity contractsWTI
contracts
(thousands of barrels)
    
    
    476
    
    
    
    1,417
    
    
    
    1,893
    
    
    
    1,502
    
    
    
    
    
    
    
    391
    
    
    $
    40MOPS
contracts
(thousands of barrels)
    
    
    121
    
    
    
    
    
    
    
    121
    
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Propane
contracts
(millions of gallons)
    
    
    17
    
    
    
    
    
    
    
    17
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    4
 1.
    
    Excludes gold sales contracts (see note 5), gold lease rate swaps (see note 5) and Celtic
Resources share purchase warrants (see note 11).2.
    
    $62 million of non-hedge currency contracts were economically closed out by entering into
offsetting positions, albeit with differing counterparties.
 US Dollar Interest Rate Contracts
 Cash Flow Hedges  Cash Balances
   Fair Value Hedges
 1 2
 Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 109




---



##### 



Non-hedge Contracts
  Currency Contracts
 Cash Flow Hedges
   Commodity Contracts
 Cash Flow Hedges
   Non-hedge Contracts
  110n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Derivative Assets and Liabilities
 2005
    
    
    2004At January 1
    
    $
    359
    
    
    $
    337Derivatives settled
    
    
    (183
    )
    
    
    (120
    )Change in fair value of:Non-hedge derivatives
    
    
    4
    
    
    
    3Cash flow hedgesEffective portion
    
    
    23
    
    
    
    147Ineffective portion
    
    
    1
    
    
    
    Share purchase warrants
    
    
    5
    
    
    
    Fair value hedges
    
    
    (5
    )
    
    
    (8
    )At December 31
    
    $
    204
    1
    
    $
    359
    1Classification:Other current assets
    
    $
    128
    
    
    $
    165Other assets
    
    
    177
    
    
    
    257Other current liabilities
    
    
    (42
    )
    
    
    (11
    )Other long-term obligations
    
    
    (59
    )
    
    
    (52
    )$
    204
    
    
    $
    359
 
 1.
    
    Derivative assets and liabilities are
presented net by offsetting related
amounts due to/from counterparties if the
conditions of FIN No. 39, Offsetting of Amounts
Related to Certain Contracts, are met. Amounts
receivable from counterparties netted against
derivative liabilities totaled $9 million at
December 31, 2005. Non-hedge Derivative Gains (Losses) 1
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Non-hedge derivativesCommodity contracts
    
    $
    4
    
    
    $
    (9
    )
    
    $
    3Currency contracts
    
    
    3
    
    
    
    (4
    )
    
    
    17Interest rate contracts
    
    
    2
    
    
    
    16
    
    
    
    32Share purchase warrants
    
    
    (5
    )
    
    
    
    
    
    
    4
    
    
    
    3
    
    
    
    52Hedge ineffectivenessOngoing hedge inefficiency
    
    
    1
    
    
    
    
    
    
    
    1Due to changes in timing
of hedged items
    
    
    1
    
    
    
    2
    
    
    
    18$
    6
    
    
    $
    5
    
    
    $
    71
 
 1.
    
    Non-hedge derivative gains (losses) are
classified as a component of other (income)
expense. Cash Flow Hedge Gains (Losses) in OCI
 Commodityprice hedges
    
    
    Currency hedges
    
    
    Interest rate hedgesGold/
    
    
    
    
    
    
    Operating
    
    
    Administration
    
    
    Capital
    
    
    Cash
    
    
    Long-termsilver
    
    
    Fuel
    
    
    costs
    
    
    costs
    
    
    expenditures
    
    
    balances
    
    
    debt
    
    
    TotalAt December 31, 2002
    
    $
    9
    
    
    $
    
    
    
    $
    26
    
    
    $
    
    
    
    $
    
    
    
    $
    26
    
    
    $
    (12
    )
    
    $
    49Effective portion of change in
fair value of hedging instruments
    
    
    4
    
    
    
    (1
    )
    
    
    251
    
    
    
    32
    
    
    
    54
    
    
    
    9
    
    
    
    (1
    )
    
    
    348Transfers to earnings:On recording hedged items in earnings
    
    
    (13
    )
    
    
    
    
    
    
    (58
    )
    
    
    (7
    )
    
    
    
    
    
    
    (18
    )
    
    
    5
    
    
    
    (91
    )Hedge ineffectiveness due to changes
in timing of hedged items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )1
    
    
    
    
    
    
    
    
    
    
    (18
    )At December 31, 2003
    
    
    
    
    
    
    (1
    )
    
    
    219
    
    
    
    25
    
    
    
    36
    
    
    
    17
    
    
    
    (8
    )
    
    
    288Effective portion of change in fair value
of hedging instruments
    
    
    
    
    
    
    7
    
    
    
    117
    
    
    
    19
    
    
    
    19
    
    
    
    5
    
    
    
    (20
    )
    
    
    147Transfers to earnings:On recording hedged items in earnings
    
    
    
    
    
    
    (4
    )
    
    
    (96
    )
    
    
    (11
    )
    
    
    (5
    )
    
    
    (19
    )
    
    
    3
    
    
    
    (132
    )Hedge ineffectiveness due to
changes in timing of hedged items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )1
    
    
    
    
    
    
    
    
    
    
    (2
    )At December 31, 2004
    
    
    
    
    
    
    2
    
    
    
    240
    
    
    
    33
    
    
    
    48
    
    
    
    3
    
    
    
    (25
    )
    
    
    301
    2Effective portion of change in fair value
of hedging instruments
    
    
    
    
    
    
    46
    
    
    
    (38
    )
    
    
    13
    
    
    
    (4
    )
    
    
    1
    
    
    
    5
    
    
    
    23Transfers to earnings:On recording hedged items in earnings
    
    
    
    
    
    
    (10
    )
    
    
    (100
    )
    
    
    (16
    )
    
    
    (4
    )
    
    
    (6
    )
    
    
    2
    
    
    
    (134
    )Hedge ineffectiveness due to changes
in timing of hedged items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )1
    
    
    
    
    
    
    
    
    
    
    (1
    )At December 31, 2005
    
    $
    
    
    
    $
    38
    
    
    $
    102
    
    
    $
    30
    
    
    $
    39
    
    
    $
    (2
    )
    
    $
    (18
    )
    
    $
    189
    2Gold
    
    
    Cost of
    
    
    Cost of
    
    
    
    
    
    
    
    
    
    
    Interest
    
    
    InterestHedge gains/losses classified within
    
    sales
    
    
    sales
    
    
    sales
    
    
    Administration
    
    
    Amortization
    
    
    expense
    
    
    costPortion of hedge gain (loss) expected
to affect 2006 earnings2
    
    $
    
    
    
    $
    11
    
    
    $
    64
    
    
    $
    11
    
    
    $
    2
    
    
    $
    (3
    )
    
    $
    (1
    )
    
    $
    84
 
 1.
    
    On determining that certain forecasted capital expenditures were no longer likely to occur
within two months of the originally specified time frame.2.
    
    Based on the fair value of hedge contracts at December 31, 2005. Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n111




---



##### 



d) Fair Value of Financial Instruments
  2005
    
    
    2004Fair Value Information
    
    Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAt December 31
    
    amount
    
    
    fair value
    
    
    amount
    
    
    fair valueFinancial assetsCash and equivalents1
    
    $
    1,037
    
    
    $
    1,037
    
    
    $
    1,398
    
    
    $
    1,398Accounts receivable1
    
    
    54
    
    
    
    54
    
    
    
    58
    
    
    
    58Available-for-sale securities2
    
    
    62
    
    
    
    62
    
    
    
    61
    
    
    
    61Equity-method investments
    
    
    138
    
    
    
    140
    
    
    
    86
    
    
    
    75Derivative assets4
    
    
    305
    
    
    
    305
    
    
    
    422
    
    
    
    422$
    1,596
    
    
    $
    1,598
    
    
    $
    2,025
    
    
    $
    2,014Financial liabilitiesAccounts payable1
    
    $
    386
    
    
    $
    386
    
    
    $
    335
    
    
    $
    335Long-term debt5
    
    
    1,801
    
    
    
    1,827
    
    
    
    1,686
    
    
    
    1,731Derivative liabilities4
    
    
    101
    
    
    
    101
    
    
    
    63
    
    
    
    63Restricted share units6
    
    
    17
    
    
    
    17
    
    
    
    6
    
    
    
    6Deferred share units6
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1$
    2,306
    
    
    $
    2,332
    
    
    $
    2,091
    
    
    $
    2,136
 
 1.
    
    Recorded at cost. Fair value approximates the carrying amounts due to the short-term nature
and generally negligible credit losses.2.
    
    Recorded at fair value. Quoted market prices are used to determine fair value.3.
    
    Recorded at cost, adjusted for our share of income/loss and dividends of equity investees.4.
    
    Recorded at fair value based on internal valuation models that reflect forward market
commodity prices, currency exchange rates and interest rates, and a discount factor that is
based on market US dollar interest rates. If a forward market does not exist, we obtain
broker-dealer quotations. Valuations assume all counterparties have an AA credit rating.5.
    
    Long-term debt is generally recorded at cost except for obligations that are designated in a
fair-value hedge relationship, which are recorded at fair value in periods where a hedge
relationship exists. The fair value of long-term debt is calculated by discounting the future
cash flows under a debt obligation by a discount factor that is based on US dollar market
interest rates adjusted for our credit quality.6.
    
    Recorded at fair value based on our period end closing market stock price. 112n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



e) Credit Risk
   n
    
    entering into derivatives with
high credit-quality counterparties;n
    
    limiting the
amount of exposure to each counterparty; andn
    
    monitoring the financial condition of
counterparties.
 S&P Credit ratingCredit Quality of Financial Assets
    
    AA-
    
    
    A- orAt December 31, 2005
    
    or higher
    
    
    higher
    
    
    B to BBB
    
    
    TotalCash and equivalents
    
    $
    962
    
    
    $
    54
    
    
    $
    21
    
    
    $
    1,037Derivatives1
    
    
    161
    
    
    
    82
    
    
    
    
    
    
    
    243Accounts receivable
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    54$
    1,123
    
    
    $
    136
    
    
    $
    75
    
    
    $
    1,334Number of counterparties2
    
    
    15
    
    
    
    10
    
    
    
    Largest counterparty (%)
    
    
    47
    %
    
    
    49
    %
    
    
    Concentrations of Credit Risk
    
    United
    
    
    
    
    
    
    OtherAt December 31, 2005
    
    States
    
    
    Canada
    
    
    International
    
    
    TotalCash and equivalents
    
    $
    879
    
    
    $
    34
    
    
    $
    124
    
    
    $
    1,037Derivatives1
    
    
    140
    
    
    
    78
    
    
    
    25
    
    
    
    243Accounts receivable
    
    
    6
    
    
    
    15
    
    
    
    33
    
    
    
    54$
    1,025
    
    
    $
    127
    
    
    $
    182
    
    
    $
    1,334
 
 1.
    
    The amounts presented reflect the net credit exposure after considering the effect of master
netting agreements.2.
    
    For cash and equivalents and derivatives combined. f) Risks Relating to the Use of Derivatives
   Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n113




---



##### 



17 n Asset Retirement Obligations
 
 Asset Retirement Obligations (AROs)
 2005
    
    
    2004At January 1
    
    $
    367
    
    
    $
    318AROs incurred in the period
    
    
    47
    
    
    
    14Impact of revisions to expected cash flowsAdjustments to carrying amount of assets
    
    
    29
    
    
    
    32Charged to earnings
    
    
    15
    
    
    
    22SettlementsCash payments
    
    
    (30
    )
    
    
    (33
    )Settlement gains
    
    
    (3
    )
    
    
    (4
    )AccretionOperating mines
    
    
    11
    
    
    
    11Closed mines
    
    
    10
    
    
    
    7At December 31
    
    
    446
    
    
    
    367Current part
    
    
    (37
    )
    
    
    (33
    )$
    409
    
    
    $
    334
  18 n Other Long-Term Obligations
 
 At December 31
    
    2005
    
    
    2004Pension benefits (note 23)
    
    $
    54
    
    
    $
    49Other post-retirement benefits (note 23)
    
    
    28
    
    
    
    26Derivative liabilities (note 16c)
    
    
    59
    
    
    
    52Restricted share units (note 22b)
    
    
    16
    
    
    
    6Other
    
    
    51
    
    
    
    32$
    208
    
    
    $
    165
 114 n Notes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



19 n Deferred Income Taxes
 
 Recognition and Measurement
   Sources of Deferred Income Tax Assets
and Liabilities
 At December 31
    
    2005
    
    
    20041Deferred tax assetsTax loss carry forwards
    
    $
    252
    
    
    $
    290Capital tax loss carry forwards
    
    
    42
    
    
    
    48Alternative minimum tax (AMT) credits
    
    
    135
    
    
    
    121Asset retirement obligations
    
    
    175
    
    
    
    106Property, plant and equipment
    
    
    297
    
    
    
    206Inventory
    
    
    57
    
    
    
    14Post-retirement benefit obligations
    
    
    5
    
    
    
    18Other
    
    
    11
    
    
    
    6Gross deferred tax assets
    
    
    974
    
    
    
    809Valuation allowances
    
    
    (656
    )
    
    
    (629
    )Net deferred tax assets
    
    
    318
    
    
    
    180Deferred tax liabilitiesProperty, plant and equipment
    
    
    (230
    )
    
    
    (127
    )Derivatives
    
    
    (61
    )
    
    
    (95
    )$
    27
    
    
    $
    (42
    )Classification:Non-current assets (note 14)
    
    $
    141
    
    
    $
    97Non-current liabilities
    
    
    (114
    )
    
    
    (139
    )$
    27
    
    
    $
    (42
    )
 
 1.
    
    2004 deferred tax asset balances for tax
loss carry forwards, for property, plant and
equipment and other have been restated with a
corresponding restatement of valuation
allowances. Expiry Dates of Tax Losses and AMT Credits
 Noexpiry2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010+
    
    
    date
    
    
    TotalTax losses1Chile
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    700
    
    
    $
    700Tanzania
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142
    
    
    
    142U.S.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    185
    
    
    
    
    
    
    
    186Other
    
    
    19
    
    
    
    4
    
    
    
    2
    
    
    
    8
    
    
    
    15
    
    
    
    26
    
    
    
    74$
    19
    
    
    $
    4
    
    
    $
    2
    
    
    $
    9
    
    
    $
    200
    
    
    $
    868
    
    
    $
    1,102AMT credits2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    135
    
    
    $
    135
 
 1.
    
    Represents the gross amount of tax loss
carry forwards translated at closing
exchange rates at December 31, 2005.2.
    
    Represents the amounts deductible against
future taxes payable in years when taxes
payable exceed minimum tax as defined by
United States tax legislation. Valuation Allowances
  n
    
    historic and expected future levels of future
taxable income;n
    
    opportunities to implement tax
plans that affect whether tax assets can be
realized; andn
    
    the nature, amount and expected
timing of reversal of taxable temporary differences.
   Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 115




---



##### 



Source of Changes in Deferred Tax Balances
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Temporary differencesProperty, plant and equipment
    
    $
    30
    
    
    $
    (86
    )
    
    $
    26Asset retirement obligations
    
    
    (69
    )
    
    
    (21
    )
    
    
    (2
    )Tax loss carry forwards
    
    
    38
    
    
    
    93
    
    
    
    (10
    )Derivatives
    
    
    (34
    )
    
    
    (4
    )
    
    
    82Other
    
    
    8
    
    
    
    (5
    )
    
    
    4$
    (27
    )
    
    $
    (23
    )
    
    $
    100Adjustment to deferred
tax balances due to change
in tax status1
    
    
    (5
    )
    
    
    (81
    )
    
    
    Release of beginning-of-year
valuation allowances
    
    
    (32
    )
    
    
    (5
    )
    
    
    (62
    )Outcome of tax uncertainties
    
    
    
    
    
    
    (120
    )
    
    
    $
    (64
    )
    
    $
    (229
    )
    
    $
    38Intraperiod allocation to:Income before income taxes
    
    $
    (30
    )
    
    $
    (225
    )
    
    $
    (49
    )Cumulative accounting changes
    
    
    
    
    
    
    
    
    
    
    5OCI
    
    
    (34
    )
    
    
    (4
    )
    
    
    82Balance sheet reclassifications
    
    
    (5
    )
    
    
    13
    
    
    
    23$
    (69
    )
    
    $
    (216
    )
    
    $
    61
 1.
    
    Relates to changes in tax status in Australia (note 8).
 20 n Capital Stock
 a) Common Shares
    b) Exchangeable Shares
   Summarized Financial Information for BGI
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Total revenues and other income
    
    $
    181
    
    
    $
    216
    
    
    $
    226Less: costs and expenses
    
    
    186
    
    
    
    287
    
    
    
    238Income (loss) before taxes
    
    $
    (5
    )
    
    $
    (71
    )
    
    $
    (12
    )Net income (loss)
    
    $
    21
    
    
    $
    (41
    )
    
    $
    (31
    )
 At December 31
    
    2005
    
    
    2004AssetsCurrent assets
    
    $
    119
    
    
    $
    67Non-current assets
    
    
    88
    
    
    
    119$
    207
    
    
    $
    186Liabilities and shareholders equityCurrent liabilities
    
    $
    25
    
    
    $
    24Intercompany notes payable
    
    
    390
    
    
    
    395Other long-term liabilities
    
    
    55
    
    
    
    56Shareholders equity
    
    
    (263
    )
    
    
    (289
    )$
    207
    
    
    $
    186
 116 nNotes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



21 n Other Comprehensive Income (Loss) (OCI)
 2005
    
    
    2004
    
    
    2003Accumulated OCI at January 1Cash flow hedge gains, net of tax of $95, $99, $17
    
    $
    206
    
    
    $
    189
    
    
    $
    32Investments, net of tax of $nil, $nil, $nil
    
    
    21
    
    
    
    25
    
    
    
    (6
    )Currency translation adjustments, net of tax of $nil, $nil, $nil
    
    
    (146
    )
    
    
    (147
    )
    
    
    (144
    )Additional minimum pension liability, net of tax of $nil, $nil, $nil
    
    
    (12
    )
    
    
    (7
    )
    
    
    (7
    )$
    69
    
    
    $
    60
    
    
    $
    (125
    )OCI for the year:Changes in fair value of cash flow hedges
    
    
    23
    
    
    
    147
    
    
    
    348Changes in fair value of investments
    
    
    (8
    )
    
    
    (3
    )
    
    
    24Currency translation adjustments
    
    
    3
    
    
    
    1
    
    
    
    (3
    )Adjustments to minimum pension liability
    
    
    (16
    )
    
    
    (5
    )
    
    
    Less: reclassification adjustments for gains/losses recorded in earnings:Transfers of cash flow hedge gains to earnings:On recording hedged items in earnings
    
    
    (134
    )
    
    
    (132
    )
    
    
    (91
    )Hedge ineffectiveness due to changes in timing of hedged items
    
    
    (1
    )
    
    
    (2
    )
    
    
    (18
    )Investments:(Gains) losses realized on sale
    
    
    16
    
    
    
    (6
    )
    
    
    11Other than temporary impairment charges
    
    
    (17
    )
    
    
    5
    
    
    
    (4
    )OCI, before tax
    
    
    (134
    )
    
    
    5
    
    
    
    267Income tax recovery (expense) related to OCI
    
    
    34
    
    
    
    4
    
    
    
    (82
    )OCI, net of tax
    
    $
    (100
    )
    
    $
    9
    
    
    $
    185Accumulated OCI at December 31Cash flow hedge gains, net of tax of $61, $95, $99
    
    
    128
    
    
    
    206
    
    
    
    189Investments, net of tax of $nil, $nil, $nil
    
    
    12
    
    
    
    21
    
    
    
    25Currency translation adjustments, net of tax of $nil, $nil, $nil
    
    
    (143
    )
    
    
    (146
    )
    
    
    (147
    )Additional minimum pension liability, net of tax of $nil, $nil, nil
    
    
    (28
    )
    
    
    (12
    )
    
    
    (7
    )$
    (31
    )
    
    $
    69
    
    
    $
    60
 Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 117




---



##### 



22 n Stock-Based Compensation
  a) Stock Options
 Employee Stock Option Activity (Number of Shares in Millions)
 2005
    
    
    2004
    
    
    2003Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageShares
    
    
    price
    
    
    Shares
    
    
    price
    
    
    Shares
    
    
    priceC$ optionsAt January 1
    
    
    19.4
    
    
    $
    28
    
    
    
    21.5
    
    
    $
    27
    
    
    
    18.9
    
    
    $
    27Granted
    
    
    
    
    
    $
    
    
    
    
    0.8
    
    
    $
    28
    
    
    
    4.8
    
    
    $
    29Exercised1
    
    
    (3.8
    )
    
    $
    25
    
    
    
    (1.7
    )
    
    $
    25
    
    
    
    (1.0
    )
    
    $
    24Forfeited
    
    
    (0.8
    )
    
    $
    27
    
    
    
    (0.7
    )
    
    $
    26
    
    
    
    (0.6
    )
    
    $
    24Cancelled/expired
    
    
    (0.1
    )
    
    $
    40
    
    
    
    (0.5
    )
    
    $
    31
    
    
    
    (0.6
    )
    
    $
    32At December 31
    
    
    14.7
    
    
    $
    28
    
    
    
    19.4
    
    
    $
    28
    
    
    
    21.5
    
    
    $
    27US$ optionsAt January 1
    
    
    5.9
    
    
    $
    22
    
    
    
    2.2
    
    
    $
    19
    
    
    
    3.0
    
    
    $
    17Granted
    
    
    2.1
    
    
    $
    25
    
    
    
    4.9
    
    
    $
    24
    
    
    
    
    
    
    $
    Exercised1
    
    
    (0.3
    )
    
    $
    15
    
    
    
    (1.0
    )
    
    $
    15
    
    
    
    (0.7
    )
    
    $
    13Forfeited
    
    
    (0.4
    )
    
    $
    28
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Cancelled/expired
    
    
    (0.4
    )
    
    $
    26
    
    
    
    (0.2
    )
    
    $
    32
    
    
    
    (0.1
    )
    
    $
    22At December 31
    
    
    6.9
    
    
    $
    24
    
    
    
    5.9
    
    
    $
    22
    
    
    
    2.2
    
    
    $
    19
 1.
    
    The exercise price of the options is the closing share price on the day before the grant
date. They vest evenly over four years, beginning in the year after granting. Options granted
in July 2004 and prior are exercisable over 10 years, whereas options granted since December
2004 are exercisable over 7 years. At December 31, 2005, 12 million (2004: 13 million; 2003: 1
million) common shares, in addition to those currently outstanding, were available for
granting options.
 Stock Options Outstanding (Number of Shares in Millions)
 Outstanding
    
    
    ExercisableAverage
    
    
    Average
    
    
    
    
    
    
    AverageRange of exercise prices
    
    Shares
    
    
    price
    
    
    life (years)
    
    
    Shares
    
    
    priceC$ options$22  $27
    
    
    6.2
    
    
    $
    24
    
    
    
    6
    
    
    
    4.9
    
    
    $
    25$28  $31
    
    
    6.5
    
    
    $
    29
    
    
    
    6
    
    
    
    4.2
    
    
    $
    29$32  $43
    
    
    2.0
    
    
    $
    39
    
    
    
    1
    
    
    
    2.0
    
    
    $
    3914.7
    
    
    $
    28
    
    
    
    5
    
    
    
    11.1
    
    
    $
    29US$ options$  9  $18
    
    
    0.2
    
    
    $
    13
    
    
    
    4
    
    
    
    0.2
    
    
    $
    13$22  $27
    
    
    6.5
    
    
    $
    24
    
    
    
    6
    
    
    
    1.1
    
    
    $
    24$28  $37
    
    
    0.2
    
    
    $
    29
    
    
    
    5
    
    
    
    0.1
    
    
    $
    316.9
    
    
    $
    24
    
    
    
    6
    
    
    
    1.4
    
    
    $
    23
  118 nNotes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Option Information
 For the years ended December 31(per share and per option amounts in dollars)
    
    2005
    
    
    2004
    
    
    2003Valuation assumptions
    
    Black-Scholes
    
    
    Lattice2
    
    
    Black-Scholes
    
    
    Black-ScholesExpected term (years)
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    6Expected volatility1,2
    
    
    23%-30
    %
    
    
    1%-38
    %
    
    
    30
    %
    
    
    40
    %Weighted average expected volatility2
    
    
    n/a
    
    
    
    33.3
    %
    
    
    30
    %
    
    
    40
    %Expected dividend yield1
    
    
    0.8%-1.0
    %
    
    
    0.9
    %
    
    
    1.0
    %
    
    
    1.0
    %Risk-free interest rate1,2
    
    
    3.8%-4.0
    %
    
    
    4.3%-4.5
    %
    
    
    3.8
    %
    
    
    4.5
    %Options granted (in millions)
    
    
    1.1
    
    
    
    1.0
    
    
    
    5.7
    
    
    
    4.8Weighted average fair value per option
    
    $
    7.30
    
    
    $
    8.13
    
    
    $
    6.87
    
    
    $
    8.50Pro forma effectsNet income, as reported
    
    
    
    
    
    $
    401
    
    
    $
    248
    
    
    $
    200Stock-option expense
    
    
    
    
    
    
    (26
    )
    
    
    (29
    )
    
    
    (24
    )Pro forma net income
    
    
    
    
    
    $
    375
    
    
    $
    219
    
    
    $
    176Net income per share:As reported  Basic
    
    
    
    
    
    $
    0.75
    
    
    $
    0.47
    
    
    $
    0.37As reported  Diluted
    
    
    
    
    
    $
    0.75
    
    
    $
    0.46
    
    
    $
    0.37Pro forma3
    
    
    
    
    
    $
    0.70
    
    
    $
    0.41
    
    
    $
    0.33
 1.
    
    Different assumptions were used for the multiple stock option grants valued under the
Black-Scholes method.2.
    
    Stock option grants issued after September 30, 2005 were valued using the Lattice valuation
model. The volatility and risk-free interest rate assumption varied over the expected term of
that stock option grant.3.
    
    Basic and diluted.
     Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 119




---



##### 



b) Restricted Share Units (RSUs) and Deferred Share Units (DSUs)
   DSU and RSU Activity
 DSUs
    
    
    Fair value
    
    
    RSUs
    
    
    Fair value(thousands)
    
    
    (millions)
    
    
    (thousands)
    
    
    (millions)At December 31, 2002
    
    
    
    
    
    $
    
    
    
    
    489
    
    
    $
    7.3Granted
    
    
    8
    
    
    
    0.2
    
    
    
    130
    
    
    
    2.9Forfeited
    
    
    
    
    
    
    
    
    
    
    (171
    )
    
    
    (2.9
    )Credits for dividends
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    0.1Change in value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.0At December 31, 2003
    
    
    8
    
    
    $
    0.2
    
    
    
    452
    
    
    $
    10.4Settled
    
    
    
    
    
    
    
    
    
    
    (293
    )
    
    
    (7.3
    )Forfeited
    
    
    
    
    
    
    
    
    
    
    (58
    )
    
    
    (1.3
    )Granted
    
    
    23
    
    
    
    0.5
    
    
    
    131
    
    
    
    3.1Credits for dividends
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    0.1Change in value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6At December 31, 2004
    
    
    31
    
    
    $
    0.7
    
    
    
    235
    
    
    $
    5.6Settled
    
    
    (3
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    (38
    )
    
    
    (0.9
    )Granted1
    
    
    19
    
    
    
    0.5
    
    
    
    415
    
    
    
    11.1Converted to stock options
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (0.1
    )Credits for dividends
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    0.1Change in value
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.6At December 31, 2005
    
    
    47
    
    
    $
    1.4
    
    
    
    611
    
    
    $
    16.4
 1.
    
    In January 2006, under our RSU plan, 18,112 restricted share units were converted to 72,448
stock options, and 9,395 units were forfeited.
 120 nNotes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



23 n Post-Retirement Benefits
 a) Defined Contribution Pension Plans
  b) Defined Benefit Pension Plans
    Pension Expense
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Return on plan assets
    
    $
    (11
    )
    
    $
    (11
    )
    
    $
    (11
    )Interest cost
    
    
    12
    
    
    
    12
    
    
    
    14Actuarial gains
    
    
    
    
    
    
    1
    
    
    
    Loss on curtailment
    
    
    
    
    
    
    (2
    )
    
    
    Gain on settlement
    
    
    
    
    
    
    
    
    
    
    1$
    1
    
    
    $
    
    
    
    $
    4
 c) Pension Plan Information
 Fair Value of Plan Assets
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Balance at January 1
    
    $
    170
    
    
    $
    166
    
    
    $
    170Actual return on plan assets
    
    
    10
    
    
    
    14
    
    
    
    19Company contributions
    
    
    10
    
    
    
    6
    
    
    
    8Benefits paid
    
    
    (24
    )
    
    
    (16
    )
    
    
    (31
    )Balance at December 31
    
    $
    166
    
    
    $
    170
    
    
    $
    166
 At December 31
    
    2005
    
    
    2004Target
    
    
    Actual
    
    
    Actual
    
    
    ActualComposition of plan assets:Equity securities
    
    
    50
    %
    
    
    49
    %
    
    $
    81
    
    
    $
    78Debt securities
    
    
    50
    %
    
    
    51
    %
    
    
    85
    
    
    
    92100
    %
    
    
    100
    %
    
    $
    166
    
    
    $
    170
 Projected Benefit Obligation (PBO)
 For the years ended December 31
    
    2005
    
    
    2004Balance at January 1
    
    $
    218
    
    
    $
    221Interest cost
    
    
    13
    
    
    
    12Actuarial losses
    
    
    17
    
    
    
    3Benefits paid
    
    
    (24
    )
    
    
    (16
    )Curtailments/settlements
    
    
    
    
    
    
    (2
    )Balance at December 31
    
    $
    224
    
    
    $
    218Funded status1
    
    $
    (58
    )
    
    $
    (48
    )Unrecognized actuarial losses
    
    
    29
    
    
    
    11Net benefit liability recorded
    
    $
    (29
    )
    
    $
    (37
    )ABO2,3
    
    $
    222
    
    
    $
    217
 1.
    
    Represents the fair value of plan assets
less projected benefit obligations. Plan
assets exclude investments held in a rabbi
trust that are recorded separately on our
balance sheet under Investments (fair value
$22 million at December 31, 2005). In the year
ending December 31, 2006, we do not expect to
make any further contributions.2.
    
    For 2005 we used a measurement date of December
31, 2005 to calculate accumulated benefit
obligations.3.
    
    Represents the ABO for all plans. The ABO for
plans where the PBO exceeds the fair value of
plan assets was $222 million (2004: $49
million).
 Expected Future Benefit Payments
 For the years ending December 312006
    
    $
    162007
    
    $
    162008
    
    $
    162009
    
    $
    162010
    
    $
    172011-2015
    
    $
    90
 Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 121




---



##### 



Total Recorded Benefit Liability
 At December 31
    
    2005
    
    
    2004Current
    
    $
    3
    
    
    $
    Non-current
    
    
    26
    
    
    
    37Benefit plan liability
    
    $
    29
    
    
    $
    37Additional minimum liability1 (note 20)
    
    
    28
    
    
    
    12$
    57
    
    
    $
    49
 1.
    
    A minimum pension liability is recognized if
the Accumulated Benefit Obligation (ABO),
exceeds the fair value of the pension plan
assets. The liability that is recorded is
calculated by subtracting the fair value of plan
assets from the ABO, adjusting this amount by
the accrued/prepaid pension cost that has
already been recorded on the balance sheet.
 d) Actuarial Assumptions
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Discount rate1Benefit obligation
    
    
    5.50
    %
    
    
    5.50
    %
    
    
    6.25
    %Pension cost
    
    
    5.50
    %
    
    
    6.25
    %
    
    
    6.50
    %Return on plan assets1
    
    
    7.00
    %
    
    
    7.00
    %
    
    
    7.00
    %Wage increases
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %
 1.
    
    Effect of a one-percent change: Discount
rate: $26 million change in ABO and $1 million
change in pension cost; Return on plan assets:
$2 million change in pension cost.
     e) Other Post-retirement Benefits
  Other Post-retirement Benefits Expense
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Interest cost
    
    $
    2
    
    
    $
    2
    
    
    $
    1Other
    
    
    5
    
    
    
    
    
    
    
    Curtailments/settlements
    
    
    
    
    
    
    
    
    
    
    (1
    )$
    7
    
    
    $
    2
    
    
    $
    
 Fair Value of Plan Assets
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Balance at January 1
    
    $
    
    
    
    $
    
    
    
    $
    Contributions
    
    
    4
    
    
    
    2
    
    
    
    2Benefits paid
    
    
    (4
    )
    
    
    (2
    )
    
    
    (2
    )Balance at December 31
    
    $
    
    
    
    $
    
    
    
    $
    
 122 nNotes to Consolidated Financial Statements
    
    Barrick Annual Report 2005




---



##### 



Accumulated
Post-retirement Benefit Obligation (APBO)
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Balance at January 1
    
    $
    29
    
    
    $
    24
    
    
    $
    28Interest cost
    
    
    2
    
    
    
    2
    
    
    
    1Actuarial losses
    
    
    11
    
    
    
    5
    
    
    
    (3
    )Benefits paid
    
    
    (3
    )
    
    
    (2
    )
    
    
    (2
    )Balance at December 31
    
    $
    39
    
    
    $
    29
    
    
    $
    24Funded status
    
    
    (38
    )
    
    
    (29
    )
    
    
    (24
    )Unrecognized net transition obligation
    
    
    1
    
    
    
    
    
    
    
    Unrecognized actuarial losses
    
    
    6
    
    
    
    1
    
    
    
    (4
    )Net benefit liability recorded
    
    $
    (31
    )
    
    $
    (28
    )
    
    $
    (28
    )
  Expected Future Benefit Payments
 For the years ending December 312006
    
    $
    32007
    
    $
    32008
    
    $
    32009
    
    $
    32010
    
    $
    32011-2015
    
    $
    13
 24 n Litigation and Claims
   Wagner complaint
  Barrick Annual Report 2005
    
    Notes to Consolidated Financial Statements n 123




---



##### 



Wilcox complaint
  25 n Joint Ventures
  Summary Financial Information (100%)
 Income Statement and Cash Flow Information
 For the years ended December 31
    
    2005
    
    
    2004
    
    
    2003Revenues
    
    $
    1,009
    
    
    $
    946
    
    
    $
    827Costs and expenses
    
    
    (796
    )
    
    
    (702
    )
    
    
    (671
    )Net income
    
    $
    213
    
    
    $
    244
    
    
    $
    156Operating activities1
    
    $
    318
    
    
    $
    316
    
    
    $
    151Investing activities1
    
    $
    (75
    )
    
    $
    (81
    )
    
    $
    (85
    )Financing activities1,2
    
    $
    (237
    )
    
    $
    (236
    )
    
    $
    (55
    )
 1.
    
    Net cash inflow (outflow).2.
    
    Includes cash flows between the joint ventures and joint venture partners.
 Balance Sheet Information
 At December 31
    
    2005
    
    
    2004AssetsInventories
    
    $
    176
    
    
    $
    110Property, plant and equipment
    
    
    504
    
    
    
    579Other assets
    
    
    87
    
    
    
    93$
    767
    
    
    $
    782LiabilitiesCurrent liabilities
    
    $
    123
    
    
    $
    93Long-term obligations
    
    
    105
    
    
    
    114$
    228
    
    
    $
    207
 124 nNotes to Consolidated Financial Statements
    
    Barrick Annual Report 2005