##### 



Exhibit 99.1
 
 BPO: NYSE / TSX
Q1 2006      SIGNIFICANT EVENTS OF THE FIRST QUARTER
 Closed $4 billion U.S. office fund
 Completed the sale of the Trade Center Denver
 Completed the acquisition of One Bethesda Center
 Entered into a definitive agreement to acquire the TSA buildings
 Acquired two buildings at Yonge and Adelaide Streets, Toronto,
 Acquired three ground leases in Boston and Toronto.




---



##### 



TRANSACTIONS COMPLETED SUBSEQUENT TO MARCH 31, 2006
 Acquired remaining 75% interest in Hudsons Bay Centre, Toronto,
 Increased common share dividend by 6% to $0.76 per share per annum.
 OPERATING HIGHLIGHTS
  -
    
    Renewal and expansion with Davies, Ward, Phillips and Vineberg for 120,000 square feet
at First Canadian Place for a five year term
 -
    
    Renewal with Aird & Berlis for 100,000 square feet at Bay Wellington Tower for a
nine-year term
    OUTLOOK
  -s- Gordon E. Arnell
    

-s- Richard B. ClarkGordon E. Arnell
    
    Richard B. ClarkChairman
    
    President & CEO
 
 2
    
    Q1/2006 Interim Report




---



##### 



BrookfieldEffective
    
    
    PropertiesNumber
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leasable
    
    
    Ownership
    
    
    Effectiveof
    
    
    Leased
    
    
    Office
    
    
    Retail
    
    
    Parking
    
    
    Area
    
    
    Interest
    
    
    InterestProperties
    
    
    %
    
    
    000s Sq.Ft.
    
    
    000s Sq.Ft.
    
    
    000s Sq.Ft.
    
    
    000s Sq. Ft.
    
    
    %
    
    
    000s Sq. Ft.New YorkWorld Financial CenterOne
    
    
    1
    
    
    
    87.0
    
    
    
    1,520
    
    
    
    50
    
    
    
    58
    
    
    
    1,628
    
    
    
    100
    
    
    
    1,628Two
    
    
    1
    
    
    
    100.0
    
    
    
    2,455
    
    
    
    36
    
    
    
    
    
    
    
    2,491
    
    
    
    100
    
    
    
    2,491Three
    
    
    1
    
    
    
    74.6
    
    
    
    1,179
    
    
    
    
    
    
    
    53
    
    
    
    1,232
    
    
    
    100
    
    
    
    1,232Four
    
    
    1
    
    
    
    100.0
    
    
    
    1,711
    
    
    
    43
    
    
    
    48
    
    
    
    1,802
    
    
    
    51
    
    
    
    918Retail
    
    
    
    
    
    
    67.3
    
    
    
    
    
    
    
    171
    
    
    
    122
    
    
    
    293
    
    
    
    100
    
    
    
    294One Liberty Plaza
    
    
    1
    
    
    
    94.2
    
    
    
    2,194
    
    
    
    20
    
    
    
    
    
    
    
    2,214
    
    
    
    100
    
    
    
    2,214245 Park Avenue
    
    
    1
    
    
    
    99.5
    
    
    
    1,630
    
    
    
    62
    
    
    
    
    
    
    
    1,692
    
    
    
    51
    
    
    
    863300 Madison Avenue
    
    
    1
    
    
    
    100.0
    
    
    
    1,089
    
    
    
    5
    
    
    
    
    
    
    
    1,094
    
    
    
    100
    
    
    
    1,094Development401 West 31st Street
    
    
    1
    
    
    
    
    
    
    
    2,500
    
    
    
    
    
    
    
    
    
    
    
    2,500
    
    
    
    100
    
    
    
    2,500Other
    
    
    1
    
    
    
    49.1
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7
    
    
    
    50
    
    
    
    49
    
    
    
    94.2
    
    
    
    14,278
    
    
    
    394
    
    
    
    281
    
    
    
    14,953
    
    
    
    
    
    
    
    13,238Boston53 State Street
    
    
    1
    
    
    
    86.4
    
    
    
    1,091
    
    
    
    29
    
    
    
    41
    
    
    
    1,161
    
    
    
    51
    
    
    
    59275 State Street
    
    
    1
    
    
    
    100.0
    
    
    
    742
    
    
    
    25
    
    
    
    235
    
    
    
    1,002
    
    
    
    51
    
    
    
    5112
    
    
    
    91.9
    
    
    
    1,833
    
    
    
    54
    
    
    
    276
    
    
    
    2,163
    
    
    
    
    
    
    
    1,103Washington, D.C.1625 Eye Street
    
    
    1
    
    
    
    96.2
    
    
    
    374
    
    
    
    12
    
    
    
    185
    
    
    
    571
    
    
    
    100
    
    
    
    571701 9th Street
    
    
    1
    
    
    
    100.0
    
    
    
    340
    
    
    
    24
    
    
    
    183
    
    
    
    547
    
    
    
    100
    
    
    
    547Potomac Tower
    
    
    1
    
    
    
    100.0
    
    
    
    236
    
    
    
    
    
    
    
    203
    
    
    
    439
    
    
    
    100
    
    
    
    439One Bethesda Center
    
    
    1
    
    
    
    88.4
    
    
    
    151
    
    
    
    17
    
    
    
    
    
    
    
    168
    
    
    
    100
    
    
    
    1684
    
    
    
    97.0
    
    
    
    1,101
    
    
    
    53
    
    
    
    571
    
    
    
    1,725
    
    
    
    
    
    
    
    1,725DenverRepublic PlazaOffice
    
    
    1
    
    
    
    88.1
    
    
    
    1,247
    
    
    
    
    
    
    
    
    
    
    
    1,247
    
    
    
    100
    
    
    
    1,247Development
    
    
    2
    
    
    
    
    
    
    
    1,300
    
    
    
    45
    
    
    
    503
    
    
    
    1,848
    
    
    
    100
    
    
    
    1,8483
    
    
    
    88.1
    
    
    
    2,547
    
    
    
    45
    
    
    
    503
    
    
    
    3,095
    
    
    
    
    
    
    
    3,095Minneapolis33 South Sixth Street
    
    
    2
    
    
    
    87.7
    
    
    
    1,082
    
    
    
    370
    
    
    
    325
    
    
    
    1,777
    
    
    
    100
    
    
    
    1,777Dain Plaza
    
    
    2
    
    
    
    90.5
    
    
    
    593
    
    
    
    442
    
    
    
    196
    
    
    
    1,231
    
    
    
    100
    
    
    
    1,2314
    
    
    
    88.8
    
    
    
    1,675
    
    
    
    812
    
    
    
    521
    
    
    
    3,008
    
    
    
    
    
    
    
    3,008Subtotal United States
    
    
    22
    
    
    
    93.1
    
    
    
    21,434
    
    
    
    1,358
    
    
    
    2,152
    
    
    
    24,944
    
    
    
    
    
    
    
    22,169
 Brookfield Properties Corporation
    
    3




---



##### 



BrookfieldEffective
    
    
    PropertiesNumber
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leasable
    
    
    Ownership
    
    
    Effectiveof
    
    
    Leased
    
    
    Office
    
    
    Retail
    
    
    Parking
    
    
    Area
    
    
    Interest
    
    
    InterestProperties
    
    
    %
    
    
    000s Sq. Ft.
    
    
    000s Sq. Ft.
    
    
    000s Sq. Ft.
    
    
    000s Sq. Ft.
    
    
    %
    
    
    000s Sq. Ft.TorontoBCE PlaceBay Wellington Tower
    
    
    1
    
    
    
    94.2
    
    
    
    1,299
    
    
    
    41
    
    
    
    
    
    
    
    1,340
    
    
    
    100
    
    
    
    1,340TD Canada Trust Tower
    
    
    1
    
    
    
    97.5
    
    
    
    1,126
    
    
    
    17
    
    
    
    
    
    
    
    1,143
    
    
    
    50
    
    
    
    572Retail, parking and office
    
    
    2
    
    
    
    98.9
    
    
    
    137
    
    
    
    122
    
    
    
    689
    
    
    
    948
    
    
    
    75
    
    
    
    706First Canadian Place
    
    
    1
    
    
    
    94.9
    
    
    
    2,380
    
    
    
    231
    
    
    
    170
    
    
    
    2,781
    
    
    
    25
    
    
    
    695Exchange Tower Block
    
    
    2
    
    
    
    92.5
    
    
    
    1,140
    
    
    
    73
    
    
    
    180
    
    
    
    1,393
    
    
    
    58
    
    
    
    812Atrium on Bay
    
    
    1
    
    
    
    89.0
    
    
    
    914
    
    
    
    137
    
    
    
    190
    
    
    
    1,241
    
    
    
    50
    
    
    
    621Hudson Bay Centre
    
    
    1
    
    
    
    87.7
    
    
    
    536
    
    
    
    261
    
    
    
    295
    
    
    
    1,092
    
    
    
    25
    
    
    
    2732 Queen St. E
    
    
    1
    
    
    
    91.5
    
    
    
    448
    
    
    
    16
    
    
    
    81
    
    
    
    545
    
    
    
    25
    
    
    
    136Queens Quay Terminal
    
    
    1
    
    
    
    97.1
    
    
    
    428
    
    
    
    75
    
    
    
    
    
    
    
    503
    
    
    
    100
    
    
    
    503151 Yonge St.
    
    
    1
    
    
    
    100.0
    
    
    
    289
    
    
    
    10
    
    
    
    72
    
    
    
    371
    
    
    
    25
    
    
    
    9318 King St. E
    
    
    1
    
    
    
    86.7
    
    
    
    219
    
    
    
    10
    
    
    
    23
    
    
    
    252
    
    
    
    25
    
    
    
    632 St. Clair Ave. W
    
    
    1
    
    
    
    89.7
    
    
    
    220
    
    
    
    12
    
    
    
    68
    
    
    
    300
    
    
    
    25
    
    
    
    75HSBC Building
    
    
    1
    
    
    
    98.0
    
    
    
    188
    
    
    
    6
    
    
    
    31
    
    
    
    225
    
    
    
    100
    
    
    
    22540 St. Clair Ave. W
    
    
    1
    
    
    
    96.6
    
    
    
    117
    
    
    
    5
    
    
    
    27
    
    
    
    149
    
    
    
    25
    
    
    
    37DevelopmentsBay Adelaide Centre
    
    
    3
    
    
    
    
    
    
    
    2,600
    
    
    
    
    
    
    
    
    
    
    
    2,600
    
    
    
    100
    
    
    
    2,600BCE Place III
    
    
    1
    
    
    
    
    
    
    
    800
    
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    65
    
    
    
    52020
    
    
    
    93.7
    
    
    
    12,841
    
    
    
    1,016
    
    
    
    1,826
    
    
    
    15,683
    
    
    
    
    
    
    
    9,271CalgaryBankers Hall
    
    
    3
    
    
    
    99.5
    
    
    
    1,943
    
    
    
    225
    
    
    
    525
    
    
    
    2,693
    
    
    
    50
    
    
    
    1,347Petro Canada Centre
    
    
    2
    
    
    
    100.0
    
    
    
    1,707
    
    
    
    25
    
    
    
    220
    
    
    
    1,952
    
    
    
    50
    
    
    
    9765th Avenue Place
    
    
    2
    
    
    
    99.9
    
    
    
    1,428
    
    
    
    49
    
    
    
    206
    
    
    
    1,683
    
    
    
    50
    
    
    
    842Gulf Canada Square
    
    
    1
    
    
    
    97.7
    
    
    
    1,052
    
    
    
    73
    
    
    
    20
    
    
    
    1,145
    
    
    
    25
    
    
    
    286Altius Centre
    
    
    1
    
    
    
    99.6
    
    
    
    303
    
    
    
    3
    
    
    
    72
    
    
    
    378
    
    
    
    25
    
    
    
    95840 - 7th Ave. SW
    
    
    1
    
    
    
    97.0
    
    
    
    250
    
    
    
    5
    
    
    
    32
    
    
    
    287
    
    
    
    25
    
    
    
    72McFarlane Tower
    
    
    1
    
    
    
    99.3
    
    
    
    233
    
    
    
    3
    
    
    
    41
    
    
    
    277
    
    
    
    25
    
    
    
    69Franklin Atrium
    
    
    1
    
    
    
    85.2
    
    
    
    143
    
    
    
    
    
    
    
    102
    
    
    
    245
    
    
    
    25
    
    
    
    61Altalink Place
    
    
    1
    
    
    
    100.0
    
    
    
    77
    
    
    
    
    
    
    
    28
    
    
    
    105
    
    
    
    25
    
    
    
    26Mount Royal Place
    
    
    1
    
    
    
    96.0
    
    
    
    54
    
    
    
    2
    
    
    
    26
    
    
    
    82
    
    
    
    25
    
    
    
    20Franklin Building
    
    
    1
    
    
    
    100.0
    
    
    
    51
    
    
    
    
    
    
    
    38
    
    
    
    89
    
    
    
    25
    
    
    
    22DevelopmentBankers Court
    
    
    2
    
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    50
    
    
    
    25017
    
    
    
    99.0
    
    
    
    7,741
    
    
    
    385
    
    
    
    1,310
    
    
    
    9,436
    
    
    
    
    
    
    
    4,066OttawaPlace de Ville I
    
    
    2
    
    
    
    99.7
    
    
    
    569
    
    
    
    18
    
    
    
    502
    
    
    
    1,089
    
    
    
    25
    
    
    
    272Place de Ville II
    
    
    2
    
    
    
    99.2
    
    
    
    591
    
    
    
    19
    
    
    
    433
    
    
    
    1,043
    
    
    
    25
    
    
    
    261Jean Edmonds Towers
    
    
    2
    
    
    
    100.0
    
    
    
    538
    
    
    
    13
    
    
    
    95
    
    
    
    646
    
    
    
    25
    
    
    
    1612204 Walkley
    
    
    1
    
    
    
    100.0
    
    
    
    104
    
    
    
    
    
    
    
    
    
    
    
    104
    
    
    
    25
    
    
    
    262200 Walkley
    
    
    1
    
    
    
    100.0
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    25
    
    
    
    14DevelopmentPlace de Ville III
    
    
    1
    
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    25
    
    
    
    1259
    
    
    
    99.7
    
    
    
    2,357
    
    
    
    50
    
    
    
    1,030
    
    
    
    3,437
    
    
    
    
    
    
    
    859Other CommercialRoyal Centre, Vancouver
    
    
    1
    
    
    
    92.9
    
    
    
    493
    
    
    
    95
    
    
    
    265
    
    
    
    853
    
    
    
    100
    
    
    
    853Canadian Western Bank, Edmonton
    
    
    1
    
    
    
    94.0
    
    
    
    370
    
    
    
    35
    
    
    
    91
    
    
    
    496
    
    
    
    25
    
    
    
    124Enbridge Tower, Edmonton
    
    
    1
    
    
    
    98.3
    
    
    
    178
    
    
    
    4
    
    
    
    30
    
    
    
    212
    
    
    
    25
    
    
    
    53330 St. Mary Avenue, Winnipeg
    
    
    1
    
    
    
    86.6
    
    
    
    143
    
    
    
    8
    
    
    
    26
    
    
    
    177
    
    
    
    25
    
    
    
    44175 Hargrave Street, Winnipeg
    
    
    1
    
    
    
    71.0
    
    
    
    69
    
    
    
    2
    
    
    
    3
    
    
    
    74
    
    
    
    25
    
    
    
    194342 Queen Street, Niagara Falls
    
    
    1
    
    
    
    85.4
    
    
    
    149
    
    
    
    
    
    
    
    60
    
    
    
    209
    
    
    
    25
    
    
    
    52Other
    
    
    1
    
    
    
    96.0
    
    
    
    71
    
    
    
    3
    
    
    
    
    
    
    
    74
    
    
    
    100
    
    
    
    747
    
    
    
    91.7
    
    
    
    1,473
    
    
    
    147
    
    
    
    475
    
    
    
    2,095
    
    
    
    
    
    
    
    1,219Subtotal Canada
    
    
    53
    
    
    
    95.9
    
    
    
    24,412
    
    
    
    1,598
    
    
    
    4,641
    
    
    
    30,651
    
    
    
    
    
    
    
    15,415Total portfolio
    
    
    75
    
    
    
    94.6
    
    
    
    45,846
    
    
    
    2,956
    
    
    
    6,793
    
    
    
    55,595
    
    
    
    
    
    
    
    37,584Less: non-controlling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,497
    )Brookfields net effective
ownership interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,087
 4
    
    Q1/2006 Interim Report




---



##### 



PART I  OBJECTIVES AND FINANCIAL HIGHLIGHTS
    
    
    7PART II  FINANCIAL STATEMENT ANALYSIS
    
    
    10PART III  RISKS AND UNCERTAINTIES
    
    
    28PART IV  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
    
    
    32
 FORWARD-LOOKING STATEMENTS
  Brookfield Properties Corporation
    
    5




---



##### 



Three months ended March 31(Millions, except per share amounts)
    
    2006
    
    
    2005Total revenue
    
    $
    396
    
    
    $
    335Net income
    
    
    49
    
    
    
    43Net income per share
    
    
    0.21
    
    
    
    0.18Funds from operations
    
    
    103
    
    
    
    99Funds from operations per share
    
    
    0.44
    
    
    
    0.42
 (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Total assets
    
    $
    9,609
    
    
    $
    9,513Commercial properties
    
    
    7,454
    
    
    
    7,430Commercial property debt
    
    
    5,261
    
    
    
    5,216Shareholders equity
    
    
    1,951
    
    
    
    1,943
 
  6
    
    Q1/2006 Interim Report




---



##### 



BrookfieldLeasable
    
    
    Properties
    
    
    Book
    
    
    
    
    
    
    Net BookNumber of
    
    
    Area
    
    
    Owned Interest
    
    
    Value(1)
    
    
    Debt(2)
    
    
    EquityRegion
    
    Properties
    
    
    (000s Sq.Ft.)
    
    
    (000s Sq. Ft.)
    
    
    (Millions)
    
    
    (Millions)
    
    
    (Millions)New York, New York(3)
    
    
    8
    
    
    
    12,453
    
    
    
    10,738
    
    
    $
    3,812
    
    
    $
    3,211
    
    
    $
    601Boston, Massachusetts
    
    
    2
    
    
    
    2,163
    
    
    
    1,103
    
    
    
    349
    
    
    
    158
    
    
    
    191Washington, D.C.
    
    
    4
    
    
    
    1,725
    
    
    
    1,725
    
    
    
    470
    
    
    
    356
    
    
    
    114Toronto, Ontario
    
    
    16
    
    
    
    12,283
    
    
    
    6,151
    
    
    
    1,383
    
    
    
    697
    
    
    
    686Calgary, Alberta
    
    
    15
    
    
    
    8,936
    
    
    
    3,816
    
    
    
    561
    
    
    
    404
    
    
    
    157Ottawa, Ontario
    
    
    8
    
    
    
    2,937
    
    
    
    734
    
    
    
    99
    
    
    
    49
    
    
    
    50Denver, Colorado
    
    
    1
    
    
    
    1,795
    
    
    
    1,795
    
    
    
    269
    
    
    
    170
    
    
    
    99Minneapolis, Minnesota
    
    
    4
    
    
    
    3,008
    
    
    
    3,008
    
    
    
    429
    
    
    
    179
    
    
    
    250Other
    
    
    7
    
    
    
    2,095
    
    
    
    1,219
    
    
    
    116
    
    
    
    66
    
    
    
    5065
    
    
    
    47,395
    
    
    
    30,289
    
    
    $
    7,488
    
    
    $
    5,290
    
    
    $
    2,198Office development sites
    
    
    10
    
    
    
    8,200
    
    
    
    7,295
    
    
    
    242
    
    
    
    
    
    
    
    242Total
    
    
    75
    
    
    
    55,595
    
    
    
    37,584
    
    
    $
    7,730
    
    
    $
    5,290
    
    
    $
    2,440
 (1)
    
    Includes $34 million of assets held for sale
 (2)
    
    Includes $29 million of debt related to assets held for sale
 (3)
    
    Includes corporate debt of $429 million
     New York/Boston/
    
    
    
    Toronto/Calgary/
    
    
    
    Denver/Minneapolis/Total Portfolio
    
    
    
    Washington, D. C.
    
    
    
    Ottawa
    
    
    
    OtherNet
    
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    
    NetRate
    
    
    
    
    
    
    
    
    
    
    
    Rate
    
    
    
    
    
    
    
    
    
    
    
    Rate
    
    
    
    
    
    
    
    
    
    
    
    Rate000s
    
    
    
    
    
    
    per Sq.
    
    
    
    000s
    
    
    
    
    
    
    per Sq.
    
    
    
    000s
    
    
    
    
    
    
    per Sq.
    
    
    
    000s
    
    
    
    
    
    
    per Sq.Year of Expiry
    
    Sq. Ft.
    
    
    %
    
    
    Ft.-$
    
    
    
    Sq. Ft.
    
    
    %
    
    
    Ft.-$
    
    
    
    Sq. Ft.
    
    
    %
    
    
    Ft.-$
    
    
    
    Sq. Ft.
    
    
    %
    
    
    Ft.-$Currently available
    
    
    2,195
    
    
    
    5.4
    
    
    
    
    
    
    
    
    887
    
    
    
    5.8
    
    
    
    
    
    
    
    
    741
    
    
    
    4.1
    
    
    
    
    
    
    
    
    567
    
    
    
    10.5Remainder 2006
    
    
    971
    
    
    
    2.4
    
    
    $
    16
    
    
    
    
    226
    
    
    
    1.5
    
    
    $
    26
    
    
    
    
    573
    
    
    
    2.7
    
    
    $
    14
    
    
    
    
    172
    
    
    
    3.2
    
    
    $
    92007
    
    
    1,183
    
    
    
    2.9
    
    
    
    17
    
    
    
    
    103
    
    
    
    0.7
    
    
    
    20
    
    
    
    
    841
    
    
    
    4.3
    
    
    
    17
    
    
    
    
    239
    
    
    
    4.4
    
    
    
    132008
    
    
    3,276
    
    
    
    8.1
    
    
    
    16
    
    
    
    
    719
    
    
    
    4.7
    
    
    
    27
    
    
    
    
    2,009
    
    
    
    5.6
    
    
    
    13
    
    
    
    
    548
    
    
    
    10.1
    
    
    
    122009
    
    
    1,860
    
    
    
    4.6
    
    
    
    15
    
    
    
    
    186
    
    
    
    1.2
    
    
    
    27
    
    
    
    
    1,288
    
    
    
    6.4
    
    
    
    15
    
    
    
    
    386
    
    
    
    7.1
    
    
    
    72010
    
    
    3,201
    
    
    
    7.9
    
    
    
    24
    
    
    
    
    698
    
    
    
    4.6
    
    
    
    38
    
    
    
    
    2,126
    
    
    
    11.7
    
    
    
    21
    
    
    
    
    377
    
    
    
    7.0
    
    
    
    82011
    
    
    3,150
    
    
    
    7.8
    
    
    
    24
    
    
    
    
    616
    
    
    
    4.0
    
    
    
    42
    
    
    
    
    2,298
    
    
    
    12.5
    
    
    
    18
    
    
    
    
    236
    
    
    
    4.4
    
    
    
    132012
    
    
    2,325
    
    
    
    5.7
    
    
    
    20
    
    
    
    
    664
    
    
    
    4.4
    
    
    
    20
    
    
    
    
    1,395
    
    
    
    7.7
    
    
    
    20
    
    
    
    
    266
    
    
    
    4.9
    
    
    
    172013 & beyond
    
    
    22,441
    
    
    
    55.2
    
    
    
    28
    
    
    
    
    11,114
    
    
    
    73.1
    
    
    
    38
    
    
    
    
    8,718
    
    
    
    45.0
    
    
    
    21
    
    
    
    
    2,609
    
    
    
    48.4
    
    
    
    11Parking
    
    
    6,793
    
    
    
    
    
    
    
    
    
    
    
    
    1,128
    
    
    
    
    
    
    
    
    
    
    
    
    4,167
    
    
    
    
    
    
    
    
    
    
    
    
    1,498
    
    
    
    
    
    
    
    47,395
    
    
    
    100.0
    
    
    $
    25
    
    
    
    
    16,341
    
    
    
    100.0
    
    
    $
    36
    
    
    
    
    24,156
    
    
    
    100.0
    
    
    $
    19
    
    
    
    
    6,898
    
    
    
    100.0
    
    
    $
    11Weighted average market net rent
    
    $
    26
    
    
    
    
    
    
    
    
    
    
    
    $
    34
    
    
    
    
    
    
    
    
    
    
    
    $
    21
    
    
    
    
    
    
    
    
    
    
    
    $
    14
 Brookfield Properties Corporation
    
    7




---



##### 



8
    
    Q1/2006 Interim Report




---



##### 



Number
    
    
    NumberLocation
    
    of Sites
    
    
    of Properties
    
    
    Ownership
    
    
    Sq. Ft.New York, New York
401 West 31st St.
    
    Ninth Avenue across from Moynihan Train Station
    
    
    1
    
    
    
    1
    
    
    
    100
    %
    
    
    2,500,000Toronto, Ontario
Bay Adelaide Centre
    
    Bay and Adelaide Streets
    
    
    1
    
    
    
    3
    
    
    
    100
    %
    
    
    2,600,000BCE Place III
    
    Third phase of BCE Place project
    
    
    1
    
    
    
    1
    
    
    
    65
    %
    
    
    800,000Calgary, Alberta
Bankers Court
    
    East and West Parkades adjacent to Bankers Hall
    
    
    1
    
    
    
    2
    
    
    
    50
    %
    
    
    500,000Ottawa, Ontario
Place de Ville III
    
    Third phase of Place de Ville project
    
    
    1
    
    
    
    1
    
    
    
    25
    %
    
    
    500,000Denver, Colorado
425 15th St.
    
    One block from Republic Plaza
    
    
    1
    
    
    
    1
    
    
    
    100
    %
    
    
    800,000Tremont Garage
    
    One block from Republic Plaza
    
    
    1
    
    
    
    1
    
    
    
    100
    %
    
    
    500,000Total
    
    
    
    
    7
    
    
    
    10
    
    
    
    
    
    
    
    8,200,000
 
     Under Development
    
    
    
    Housing Inventory
    
    
    
    Held for DevelopmentBook Value
    
    
    
    
    
    
    
    Book Value
    
    
    
    Estimated
    
    
    Book ValueNumber of Lots
    
    
    (Millions)
    
    
    
    Number of Units
    
    
    (Millions)
    
    
    
    Number of Lots
    
    
    (Millions)Alberta
    
    
    2,698
    
    
    $
    97
    
    
    
    
    453
    
    
    $
    22
    
    
    
    
    25,123
    
    
    $
    156Ontario
    
    
    275
    
    
    
    10
    
    
    
    
    187
    
    
    
    23
    
    
    
    
    7,785
    
    
    
    46Colorado
    
    
    780
    
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,082
    
    
    
    48Texas and other
    
    
    158
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,399
    
    
    
    13Total
    
    
    3,911
    
    
    $
    130
    
    
    
    
    640
    
    
    $
    45
    
    
    
    
    40,389
    
    
    $
    263
 Brookfield Properties Corporation
    
    9




---



##### 



(Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Commercial properties
    
    $
    7,454
    
    
    $
    7,430Development properties
    
    
    680
    
    
    
    615Receivables and other
    
    
    963
    
    
    
    955Restricted cash and deposits
    
    
    346
    
    
    
    316Marketable securities
    
    
    
    
    
    
    58Cash and cash equivalents
    
    
    129
    
    
    
    64Assets held for sale(1)
    
    
    37
    
    
    
    75Total
    
    $
    9,609
    
    
    $
    9,513
 (1)
    
    Includes $34 million of commercial properties and $3 million of other assets related
to assets held for sale at March 31, 2006 (December 31, 2005  $75 million and nil,
respectively)
 
    Brookfield PropertiesLeasable Area
    
    
    Owned Interest
    
    
    Mar. 31, 2006(1)
    
    
    Dec. 31, 2005(2)Region
    
    (000s Sq. Ft.)
    
    
    (000s Sq. Ft.)
    
    
    (Millions)
    
    
    (Millions)New York, New York
    
    
    12,453
    
    
    
    10,738
    
    
    $
    3,812
    
    
    $
    3,824Boston, Massachusetts
    
    
    2,163
    
    
    
    1,103
    
    
    
    349
    
    
    
    325Washington, D.C.
    
    
    1,725
    
    
    
    1,725
    
    
    
    470
    
    
    
    395Toronto, Ontario
    
    
    12,283
    
    
    
    6,151
    
    
    
    1,383
    
    
    
    1,399Calgary, Alberta
    
    
    8,936
    
    
    
    3,816
    
    
    
    561
    
    
    
    570Ottawa, Ontario
    
    
    2,937
    
    
    
    734
    
    
    
    99
    
    
    
    100Denver, Colorado
    
    
    1,795
    
    
    
    1,795
    
    
    
    269
    
    
    
    344Minneapolis, Minnesota
    
    
    3,008
    
    
    
    3,008
    
    
    
    429
    
    
    
    429Other
    
    
    2,095
    
    
    
    1,219
    
    
    
    116
    
    
    
    119Total
    
    
    47,395
    
    
    
    30,289
    
    
    $
    7,488
    
    
    $
    7,505
 (1)
    
    Includes $34 million of assets held for sale at March 31, 2006
 (2)
    
    Includes $75 million of assets held for sale at December 31, 2005
 
  10
    
    Q1/2006 Interim Report




---



##### 



Three months ended March 31(Millions)
    
    2006
    
    
    2005Leasing commissions
    
    $
    2
    
    
    $
    1Tenant improvements
    
    
    20
    
    
    
    33Total
    
    $
    22
    
    
    $
    34
    Three months ended March 31(Millions)
    
    2006
    
    
    2005Revenue enhancing
    
    $
    1
    
    
    $
    2Non-revenue enhancing
    
    
    2
    
    
    
    Total
    
    $
    3
    
    
    $
    2
 
    (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Assets held for saleCommercial properties
    
    $
    34
    
    
    $
    75Receivables and other
    
    
    3
    
    
    
    Total assets held for sale
    
    $
    37
    
    
    $
    75Liabilities related to assets held for saleCommercial property debt
    
    $
    29
    
    
    $
    51Accounts payable and other
    
    
    3
    
    
    
    Total liabilities related to assets held for sale
    
    $
    32
    
    
    $
    51
  
  Brookfield Properties Corporation
    
    11




---



##### 



(Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Commercial developments
    
    $
    242
    
    
    $
    224Residential development
    
    
    438
    
    
    
    391Total
    
    $
    680
    
    
    $
    615
 
  Buildable(Millions, except square feet)
    
    Sq. Ft.
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Bay Adelaide Centre, Toronto
    
    
    2,600,000
    
    
    $
    202
    
    
    $
    191Other:401 West 31st Street, New York
    
    
    2,500,000BCE Place III, Toronto
    
    
    800,000Bankers Court, Calgary
    
    
    500,000Place de Ville III, Ottawa
    
    
    500,000425 15th Street, Denver
    
    
    800,000Tremont Garage, Denver
    
    
    500,0005,600,000
    
    
    
    40
    
    
    
    33Total
    
    
    8,200,000
    
    
    $
    242
    
    
    $
    224
   Three months ended March 31(Millions)
    
    2006
    
    
    2005Construction costs
    
    $
    2
    
    
    $
    10Interest capitalized
    
    
    4
    
    
    
    5Property taxes and other
    
    
    1
    
    
    
    4Total
    
    $
    7
    
    
    $
    19
 
   (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Under development
    
    $
    130
    
    
    $
    120Housing inventory
    
    
    45
    
    
    
    46Held for development
    
    
    263
    
    
    
    225Total
    
    $
    438
    
    
    $
    391
 12
    
    Q1/2006 Interim Report




---



##### 



Number of Lots
    
    
    
    Book Value (Millions)Mar. 31,
    
    
    
    
    
    
    
    Mar. 31,Under Development
    
    2006
    
    
    Dec. 31, 2005
    
    
    
    2006
    
    
    Dec. 31, 2005Alberta
    
    
    2,698
    
    
    
    2,348
    
    
    
    $
    97
    
    
    $
    90Ontario
    
    
    275
    
    
    
    269
    
    
    
    
    10
    
    
    
    9Colorado
    
    
    780
    
    
    
    729
    
    
    
    
    21
    
    
    
    19Texas and other
    
    
    158
    
    
    
    158
    
    
    
    
    2
    
    
    
    2Total
    
    
    3,911
    
    
    
    3,504
    
    
    
    $
    130
    
    
    $
    120
 Number of Units
    
    
    
    Book Value (Millions)Mar. 31,
    
    
    
    
    
    
    
    Mar. 31,Housing Inventory
    
    2006
    
    
    Dec. 31, 2005
    
    
    
    2006
    
    
    Dec. 31, 2005Alberta
    
    
    453
    
    
    
    365
    
    
    
    $
    22
    
    
    $
    23Ontario
    
    
    187
    
    
    
    228
    
    
    
    
    23
    
    
    
    23Total
    
    
    640
    
    
    
    593
    
    
    
    $
    45
    
    
    $
    46
 Estimated Number of Lots
    
    
    
    Number of Acres
    
    
    
    Book Value (Millions)Held for Development
    
    Mar. 31, 
2006
    
    
    Dec. 31, 2005
    
    
    
    Mar. 31, 
2006
    
    
    Dec. 31, 2005
    
    
    
    Mar. 31, 
2006
    
    
    Dec. 31, 2005Alberta
    
    
    25,123
    
    
    
    24,943
    
    
    
    
    4,458
    
    
    
    4,428
    
    
    
    $
    156
    
    
    $
    156Ontario
    
    
    7,785
    
    
    
    6,983
    
    
    
    
    1,557
    
    
    
    1,364
    
    
    
    
    46
    
    
    
    39Colorado
    
    
    5,082
    
    
    
    2,931
    
    
    
    
    1,510
    
    
    
    548
    
    
    
    
    48
    
    
    
    23Texas and other
    
    
    2,399
    
    
    
    1,859
    
    
    
    
    631
    
    
    
    541
    
    
    
    
    13
    
    
    
    7Total
    
    
    40,389
    
    
    
    36,716
    
    
    
    
    8,156
    
    
    
    6,881
    
    
    
    $
    263
    
    
    $
    225
 
   (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Receivables and real estate mortgages
    
    $
    566
    
    
    $
    551Prepaid expenses and other assets
    
    
    287
    
    
    
    279Intangible assets
    
    
    110
    
    
    
    125Total
    
    $
    963
    
    
    $
    955
 
  Brookfield Properties Corporation
    
    13




---



##### 



14
    
    Q1/2006 Interim Report




---



##### 



(Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005LiabilitiesCommercial property debt
    
    $
    5,261
    
    
    $
    5,216Accounts payable and other liabilities
    
    
    658
    
    
    
    626Future income tax liability
    
    
    228
    
    
    
    188Liabilities related to assets held for sale
    
    
    32
    
    
    
    51Capital securities
    
    
    1,093
    
    
    
    1,101Non-controlling interests
    
    
    60
    
    
    
    59Preferred equity  subsidiaries
    
    
    326
    
    
    
    329Shareholders equityPreferred equity  corporate
    
    
    45
    
    
    
    45Common equity
    
    
    1,906
    
    
    
    1,898Total
    
    $
    9,609
    
    
    $
    9,513
 
    Brookfield Properties Corporation
    
    15




---



##### 



BrookfieldPropertiesInterest
    
    
    Maturity
    
    ProportionateCommercial Property
    
    Location
    
    Rate %
    
    
    Date
    
    Share (Millions)
    
    
    Mortgage DetailsAtrium on Bay
    
    Toronto
    
    
    4.82
    
    
    2006
    
    $
    34
    
    
    Non-recourse, floating rateOne Liberty Plaza(1)
    
    New York
    
    
    6.98
    
    
    2007
    
    
    245
    
    
    Non-recourse, fixed rateTD Canada Trust Tower
    
    Toronto
    
    
    6.72
    
    
    2007
    
    
    107
    
    
    Non-recourse, fixed ratePetro-Canada Centre
    
    Calgary
    
    
    6.43
    
    
    2008
    
    
    111
    
    
    Non-recourse, fixed rateOne World Financial Center
    
    New York
    
    
    5.79
    
    
    2009
    
    
    300
    
    
    Recourse, floating rateFirst Canadian Place
    
    Toronto
    
    
    8.06
    
    
    2009
    
    
    63
    
    
    Non-recourse, fixed rate245 Park Avenue
    
    New York
    
    
    6.65
    
    
    2011
    
    
    242
    
    
    Non-recourse, fixed rateOne Liberty Plaza
    
    New York
    
    
    6.75
    
    
    2011
    
    
    405
    
    
    Non-recourse, fixed rateFifth Avenue Place
    
    Calgary
    
    
    7.59
    
    
    2011
    
    
    65
    
    
    Non-recourse, fixed ratePotomac Tower
    
    Washington
    
    
    4.72
    
    
    2011
    
    
    75
    
    
    Non-recourse, fixed rateExchange Tower
    
    Toronto
    
    
    6.83
    
    
    2012
    
    
    56
    
    
    Non-recourse, fixed rateTwo World Financial Center
    
    New York
    
    
    6.91
    
    
    2013
    
    
    646
    
    
    Non-recourse, fixed rateFour World Financial Center
    
    New York
    
    
    6.95
    
    
    2013
    
    
    332
    
    
    Non-recourse, fixed rateBay Wellington Tower
    
    Toronto
    
    
    6.49
    
    
    2013
    
    
    304
    
    
    Non-recourse, fixed rateBankers Hall
    
    Calgary
    
    
    7.20
    
    
    2013
    
    
    153
    
    
    Non-recourse, fixed rateRepublic Plaza
    
    Denver
    
    
    5.13
    
    
    2014
    
    
    170
    
    
    Non-recourse, fixed rate1625 Eye Street
    
    Washington
    
    
    6.00
    
    
    2014
    
    
    129
    
    
    Non-recourse, fixed rateRoyal Centre
    
    Vancouver
    
    
    7.50
    
    
    2022
    
    
    43
    
    
    Non-recourse, fixed rate53 State Street
    
    Boston
    
    
    6.91
    
    
    2023
    
    
    72
    
    
    Non-recourse, fixed rate33 South Sixth Street
    
    Minneapolis
    
    
    6.72
    
    
    2027
    
    
    97
    
    
    Non-recourse, fixed rateDain Plaza
    
    Minneapolis
    
    
    7.37
    
    
    2027
    
    
    83
    
    
    Non-recourse, fixed rate701 9th Street
    
    Washington
    
    
    6.73
    
    
    2028
    
    
    153
    
    
    Non-recourse, fixed rate75 State Street
    
    Boston
    
    
    7.00
    
    
    2028
    
    
    86
    
    
    Non-recourse, fixed rate300 Madison Avenue
    
    New York
    
    
    7.26
    
    
    2032
    
    
    400
    
    
    Non-recourse, fixed rate300 Madison Avenue
    
    New York
    
    
    3.55
    
    
    2012
    
    
    109
    
    
    Non-recourse, floating rateCorporate credit facilities
    
    
    
    
    
    
    
    
    
    
    438
    
    
    Recourse, floating rateO&Y portfolio debt
    
    
    
    
    
    
    
    
    
    
    156
    
    
    Various termsDevelopment and other debt
    
    
    
    
    
    
    
    
    
    
    187
    
    
    Various termsTotal
    
    
    
    
    6.50
    %
    
    
    
    $
    5,261
 (1)
    
    Included in restricted cash and deposits is $256 of securities to match interest
and principal payments on this commercial property debt
  WeightedAverage(Millions)
    
    Scheduled
    
    
    
    
    
    
    
    
    
    
    Interest Rate atYear
    
    Amortization
    
    
    Maturities
    
    
    Total
    
    
    Mar. 31, 2006Remainder 2006
    
    $
    24
    
    
    $
    209
    
    
    $
    233
    
    
    
    5.0
    %2007
    
    
    210
    
    
    
    422
    
    
    
    632
    
    
    
    6.8
    %2008
    
    
    269
    
    
    
    157
    
    
    
    426
    
    
    
    5.9
    %2009
    
    
    218
    
    
    
    663
    
    
    
    881
    
    
    
    6.1
    %2010
    
    
    185
    
    
    
    4
    
    
    
    189
    
    
    
    6.4
    %2011 and thereafter
    
    
    
    
    
    
    2,900
    
    
    
    2,900
    
    
    
    6.5
    %Total
    
    $
    906
    
    
    $
    4,355
    
    
    $
    5,261
    
    
    
    6.5
    %
   16
    
    Q1/2006 Interim Report




---



##### 



Payments Due By PeriodLess Than(Millions)
    
    Total
    
    
    One Year
    
    
    1 - 3 Years
    
    
    4 - 5 Years
    
    
    After 5 YearsCommercial property debt
    
    $
    5,261
    
    
    $
    233
    
    
    $
    1,058
    
    
    $
    1,070
    
    
    $
    2,900Residential development debt
    
    
    178
    
    
    
    133
    
    
    
    35
    
    
    
    10
    
    
    
    Capital securities(1)
    
    
    922
    
    
    
    
    
    
    
    
    
    
    
    171
    
    
    
    751Interest expense(2)Commercial property debt
    
    
    2,288
    
    
    
    283
    
    
    
    538
    
    
    
    435
    
    
    
    1,032Capital securities(1)
    
    
    403
    
    
    
    37
    
    
    
    147
    
    
    
    89
    
    
    
    130
 (1)
    
    Excludes Class AAA Series E, as these are retractable at the holders option or
redeemable at our option at any time(2)
    
    Represents aggregate interest expense expected to be paid over the term of the debt,
on an undiscounted basis, based on current interest and foreign exchange rates
        (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Accounts payable
    
    $
    361
    
    
    $
    342Residential development debt
    
    
    178
    
    
    
    158Intangible liabilities
    
    
    119
    
    
    
    126Total
    
    $
    658
    
    
    $
    626
   (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Future income tax liabilities related to difference in tax and book basis, net
    
    $
    575
    
    
    $
    541Future income tax assets related to non-capital losses and capital losses
    
    
    (347
    )
    
    
    (353
    )Total
    
    $
    228
    
    
    $
    188
   Brookfield Properties Corporation
    
    17




---



##### 



Shares
    
    
    Cumulative(Millions, except share information)
    
    Outstanding
    
    
    Dividend Rate
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Class AAA Series E
    
    
    8,000,000
    
    
    70% of bank prime
    
    $
    171
    
    
    $
    172Class AAA Series F
    
    
    8,000,000
    
    
    
    6.00
    %
    
    
    171
    
    
    
    172Class AAA Series G
    
    
    4,400,000
    
    
    
    5.25
    %
    
    
    110
    
    
    
    110Class AAA Series H
    
    
    8,000,000
    
    
    
    5.75
    %
    
    
    171
    
    
    
    173Class AAA Series I
    
    
    8,000,000
    
    
    
    5.20
    %
    
    
    171
    
    
    
    172Class AAA Series J
    
    
    8,000,000
    
    
    
    5.00
    %
    
    
    171
    
    
    
    172Class AAA Series K
    
    
    6,000,000
    
    
    
    5.20
    %
    
    
    128
    
    
    
    130Total
    
    
    
    
    
    
    
    
    
    $
    1,093
    
    
    $
    1,101
 For redemption dates, refer to Note 11 of the consolidated financial statements
    (Millions)
    
    Others Equity Ownership
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Common shares of BPO Properties
    
    
    11.0
    %
    
    $
    48
    
    
    $
    47Limited partnership units of Brookfield Financial Properties
    
    
    0.6
    %
    
    
    12
    
    
    
    12Total
    
    
    
    
    
    $
    60
    
    
    $
    59
    (Millions, except
    
    Shares
    
    
    Preferred
    
    
    Cumulativeshare information)
    
    Outstanding
    
    
    Shares Series
    
    
    Dividend Rate
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005BPO Properties1,805,489
    
    
    Series G
    
    70% of bank prime
    
    $
    39
    
    
    $
    393,816,527
    
    
    Series J
    
    70% of bank prime
    
    
    81
    
    
    
    82300
    
    
    Series K
    
    30-day BA + 0.4%
    
    
    128
    
    
    
    1292,847,711
    
    
    Series M
    
    70% of bank prime
    
    
    61
    
    
    
    62800,000
    
    
    Series N
    
    30-day BA + 0.4%
    
    
    17
    
    
    
    17Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    326
    
    
    $
    329
     18
    
    Q1/2006 Interim Report




---



##### 



Shares
    
    
    Cumulative(Millions, except share information)
    
    Outstanding
    
    
    Dividend Rate
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Class A redeemable voting
    
    
    6,312,000
    
    
    
    7.50
    %
    
    $
    11
    
    
    $
    11Class AA Series E
    
    
    2,000,000
    
    
    70% of bank prime
    
    
    34
    
    
    
    34Total
    
    
    
    
    
    
    
    
    
    $
    45
    
    
    $
    45
 For detailed terms on our preferred shares, refer to our Annual Information Form.
     Mar. 31, 2006
    
    
    Dec. 31, 2005Common shares outstanding
    
    
    231,373,841
    
    
    
    231,209,625Unexercised options
    
    
    5,031,917
    
    
    
    4,641,961Common shares outstanding  diluted(1)
    
    
    236,405,758
    
    
    
    235,851,586Common shares repurchased
    
    
    
    
    
    
    2,693,500
 (1)
    
    Includes all potential common shares at March 31, 2006 and December 31, 2005
        Brookfield Properties Corporation
    
    19




---



##### 




    
    $12 million of growth ($0.05 per diluted share) from our residential development
operations which continues to benefit from the low interest rate environment and strong
demand in the North American housing market;
    
    $6 million of growth ($0.03 per diluted share) from commercial property operating
income, primarily as a result of the O&Y acquisition during the fourth quarter of 2005;
    
    an increase in interest expense of $9 million ($0.04 per diluted share) related to
additional corporate borrowings, a full quarter of interest carry on the O&Y
Portfolio and the cessation of interest capitalized on Three World Financial Center;
    
    an increase in general and administrative expense of $4 million ($0.02 per diluted
share) due to the acquisition of the O&Y portfolio;
    
    an increase in depreciation and amortization expense of $10 million ($0.04 per diluted
share) related to the O&Y acquisition as well as the addition of Three World Financial
Center from development to commercial properties; and
    
    $18 million gain ($0.08 per diluted share), net of tax, on the sale of the World Trade
Center in Denver during the first quarter of 2006;
  Three months ended March 31(Millions, except per share amounts)
    
    2006
    
    
    2005Total revenue
    
    $
    396
    
    
    $
    335Net operating income
Commercial property operations
    
    $
    172
    
    
    $
    166Residential development operations
    
    
    25
    
    
    
    13Interest and other income
    
    
    13
    
    
    
    11210
    
    
    
    190ExpensesInterest
    
    
    88
    
    
    
    79General and administrative
    
    
    15
    
    
    
    11Non-controlling interests expense
    
    
    4
    
    
    
    3Funds from operations and gains
    
    
    103
    
    
    
    97Depreciation and amortization
    
    
    45
    
    
    
    35Future income taxes
    
    
    27
    
    
    
    20Net income from continuing operations
    
    
    31
    
    
    
    42Discontinued operations(1)
    
    
    18
    
    
    
    1Net income
    
    $
    49
    
    
    $
    43Net income per share  dilutedContinuing operations
    
    $
    0.13
    
    
    $
    0.18Discontinued operations
    
    
    0.08
    
    
    
    $
    0.21
    
    
    $
    0.18Funds from operations per share  dilutedContinuing operations
    
    $
    0.44
    
    
    $
    0.41Property disposition gains
    
    
    0.13
    
    
    
    Discontinued operations
    
    
    
    
    
    
    0.01$
    0.57
    
    
    $
    0.42
 (1)
    
    Refer to page 26 for further details on discontinued operations
   20
    
    Q1/2006 Interim Report




---



##### 



Three months ended March 31(Millions, except per share amounts)
    
    2006
    
    
    2005Net income from continuing operations
    
    $
    31
    
    
    $
    42Preferred share dividends
    
    
    (1
    )
    
    
    (1
    )Net income from continuing operations available to common shareholders
    
    $
    30
    
    
    $
    41Net income
    
    $
    49
    
    
    $
    43Preferred share dividends
    
    
    (1
    )
    
    
    (1
    )Net income available to common shareholders
    
    $
    48
    
    
    $
    42Weighted average shares outstanding  basic
    
    
    231.3
    
    
    
    232.9Unexercised options
    
    
    1.9
    
    
    
    2.0Weighted average shares outstanding  diluted
    
    
    233.2
    
    
    
    234.9
  Three months ended March 31(Millions)
    
    2006
    
    
    2005Net income
    
    $
    49
    
    
    $
    43Depreciation and amortization(1)
    
    
    45
    
    
    
    36Future income taxes(2)
    
    
    39
    
    
    
    20Funds from operations and gains
    
    $
    133
    
    
    $
    99Property disposition gain
    
    
    (30
    )
    
    
    Funds from operations
    
    $
    103
    
    
    $
    99
 (1)
    
    Includes depreciation and amortization from continuing operations of $35 million and
from discontinued operations of $1 million for the three months ended March 31, 2005(2)
    
    Includes future income taxes from discontinued operations of $12 million for the
three months ended March 31, 2006
  Three months ended March 31,(Millions, except per share amounts)
    
    2006
    
    
    2005Funds from operations
    
    $
    103
    
    
    $
    99Preferred share dividends
    
    
    (1
    )
    
    
    (1
    )$
    102
    
    
    $
    98Weighted average shares outstanding
    
    
    233.2
    
    
    
    234.9Funds from operations per share
    
    $
    0.44
    
    
    $
    0.42
   Brookfield Properties Corporation
    
    21




---



##### 



Three months ended March 31(Millions)
    
    2006
    
    
    2005Commercial property operationsRevenue from current properties
    
    $
    286
    
    
    $
    257Recurring fee income
    
    
    6
    
    
    
    7Revenue from discontinued operations
    
    
    2
    
    
    
    5Total commercial property revenue
    
    
    294
    
    
    
    269Revenue from residential development operations
    
    
    89
    
    
    
    55Revenue from commercial property and residential development operations
    
    
    383
    
    
    
    324Interest and other
    
    
    13
    
    
    
    11Total
    
    $
    396
    
    
    $
    335
    Three months ended March 31(Millions)
    
    2006
    
    
    2005Commercial property revenue
Rental revenue
    
    $
    282
    
    
    $
    252Straight-line rental income
    
    
    4
    
    
    
    5286
    
    
    
    257Property operating costs
    
    
    (120
    )
    
    
    (98
    )Commercial property net operating income prior to fee income
    
    
    166
    
    
    
    159Recurring fee income
    
    
    6
    
    
    
    7Commercial property net operating income
    
    $
    172
    
    
    $
    166
 Three months ended March 31(Millions)
    
    2006
    
    
    2005Commercial property operationsNet operating income  same property
    
    $
    160
    
    
    $
    166Net operating income  properties acquired
    
    
    12
    
    
    
    Commercial property net operating income
    
    $
    172
    
    
    $
    166
     22
    
    Q1/2006 Interim Report




---



##### 



Gross
    
    
    Avg.
    
    
    Avg. In-place
    
    
    Avg. MarketLeasable Area
    
    
    Lease Term
    
    
    Net Rent
    
    
    Net Rent(000s Sq. Ft.)
    
    
    (Years)
    
    
    ($ per Sq. Ft.)
    
    
    ($ per Sq. Ft.)New York, New YorkMidtown
    
    
    2,786
    
    
    
    18
    
    
    $
    39
    
    
    $
    60Lower Manhattan
    
    
    9,667
    
    
    
    9
    
    
    
    32
    
    
    
    25Boston, Massachusetts
    
    
    2,163
    
    
    
    6
    
    
    
    29
    
    
    
    32Washington, D.C.
    
    
    1,725
    
    
    
    14
    
    
    
    30
    
    
    
    40Toronto, Ontario
    
    
    12,283
    
    
    
    7
    
    
    
    23
    
    
    
    23Calgary, Alberta
    
    
    8,936
    
    
    
    8
    
    
    
    17
    
    
    
    25Ottawa, Ontario
    
    
    2,937
    
    
    
    5
    
    
    
    11
    
    
    
    14Denver, Colorado
    
    
    1,795
    
    
    
    4
    
    
    
    15
    
    
    
    15Minneapolis, Minnesota
    
    
    3,008
    
    
    
    8
    
    
    
    9
    
    
    
    14Other
    
    
    2,095
    
    
    
    10
    
    
    
    10
    
    
    
    15Total(1)
    
    
    47,395
    
    
    
    9
    
    
    $
    24
    
    
    $
    26
 (1)
    
    Excludes developments
   Mar. 31, 2006
    
    
    
    Mar. 31, 2005Total
    
    
    
    
    
    
    
    TotalSquare
    
    
    %
    
    
    
    Square
    
    
    %(Thousands of square feet)
    
    Feet
    
    
    Leased
    
    
    
    Feet
    
    
    LeasedNew York, New York
    
    
    12,453
    
    
    
    94.2
    
    
    
    
    12,453
    
    
    
    94.3Boston, Massachusetts
    
    
    2,163
    
    
    
    91.9
    
    
    
    
    2,163
    
    
    
    98.6Washington, D.C.
    
    
    1,725
    
    
    
    97.0
    
    
    
    
    1,557
    
    
    
    93.2Toronto, Ontario
    
    
    12,283
    
    
    
    93.7
    
    
    
    
    7,882
    
    
    
    93.0Calgary, Alberta
    
    
    8,936
    
    
    
    99.0
    
    
    
    
    6,331
    
    
    
    98.9Ottawa, Ontario
    
    
    2,937
    
    
    
    99.7
    
    
    
    
    
    
    
    
    Denver, Colorado
    
    
    1,795
    
    
    
    88.1
    
    
    
    
    3,017
    
    
    
    86.4Minneapolis, Minnesota
    
    
    3,008
    
    
    
    88.8
    
    
    
    
    3,008
    
    
    
    86.3Other
    
    
    2,095
    
    
    
    91.7
    
    
    
    
    926
    
    
    
    91.3Total(1)
    
    
    47,395
    
    
    
    94.6
    
    
    
    
    37,337
    
    
    
    93.8New York/Boston/Washington/Toronto/Calgary/Ottawa
    
    
    40,497
    
    
    
    95.4
    
    
    
    
    30,386
    
    
    
    95.2Denver/Minneapolis/Other
    
    
    6,898
    
    
    
    89.5
    
    
    
    
    6,951
    
    
    
    87.0Total(1)
    
    
    47,395
    
    
    
    94.6
    
    
    
    
    37,337
    
    
    
    93.8
 (1)
    
    Excludes developments
  Brookfield Properties Corporation
    
    23




---



##### 



At March 31, 2006, we leased 933,000 square feet of space, approximately three times the amount of
space contractually expiring. This included 383,000 square feet of new leases and 550,000 square
feet of renewals.
  December 31, 2005
    
    
    
    
    
    
    
    Activities during the three months ended March 31, 2006
    
    
    
    
    
    
    
    March 31, 2006Accelerated
    
    
    Expiring
    
    
    
    
    
    
    Leasing
    
    
    Acq.(Thousands of sq. ft.)
    
    GLA(1)
    
    
    Leased
    
    
    
    Expiries
    
    
    Expiries
    
    
    Net Rent
    
    
    Leasing
    
    
    Net Rent
    
    
    (Disp.)
    
    
    
    GLA(1)
    
    
    LeasedNew York, New YorkMidtown
    
    
    2,786
    
    
    
    2,777
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,786
    
    
    
    2,777Lower Manhattan
    
    
    9,667
    
    
    
    9,057
    
    
    
    
    (154
    )
    
    
    
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    
    9,667
    
    
    
    8,975Boston, Massachusetts
    
    
    2,163
    
    
    
    2,013
    
    
    
    
    (2
    )
    
    
    (25
    )
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    
    2,163
    
    
    
    2,011Washington, D.C.
    
    
    1,557
    
    
    
    1,542
    
    
    
    
    (33
    )
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    149
    
    
    
    
    1,725
    
    
    
    1,691Toronto, Ontario
    
    
    12,278
    
    
    
    11,591
    
    
    
    
    (77
    )
    
    
    (346
    )
    
    
    
    
    
    
    453
    
    
    
    
    
    
    
    
    
    
    
    
    12,283
    
    
    
    11,621Calgary, Alberta
    
    
    8,936
    
    
    
    8,865
    
    
    
    
    (10
    )
    
    
    (209
    )
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    
    
    
    
    
    8,936
    
    
    
    8,863Ottawa, Ontario
    
    
    2,935
    
    
    
    2,930
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    2,937
    
    
    
    2,931Denver, Colorado
    
    
    2,605
    
    
    
    2,334
    
    
    
    
    (20
    )
    
    
    (2
    )
    
    
    
    
    
    
    43
    
    
    
    (
    
    
    
    714
    )
    
    
    
    1,795
    
    
    
    1,641Minneapolis, Minnesota
    
    
    3,008
    
    
    
    2,708
    
    
    
    
    (32
    )
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    
    3,008
    
    
    
    2,730Other
    
    
    2,095
    
    
    
    1,971
    
    
    
    
    (3
    )
    
    
    (43
    )
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    2,095
    
    
    
    1,960Total
    
    
    48,030
    
    
    
    45,788
    
    
    
    
    (331
    )
    
    
    (625
    )
    
    $
    17
    
    
    
    933
    
    
    $
    22
    
    
    
    (565
    )
    
    
    
    47,395
    
    
    
    45,200
 (1)
    
    Excludes developments
      Three months ended March 31(Millions)
    
    2006
    
    
    2005Property management, leasing and project management fees
    
    $
    3
    
    
    $
    3Brookfield Residential Services Ltd. fees
    
    
    3
    
    
    
    2Brookfield LePage Johnson Controls
    
    
    
    
    
    
    2Total
    
    $
    6
    
    
    $
    7
   24
    
    Q1/2006 Interim Report




---



##### 



Three months ended March 31(Millions)
    
    2006
    
    
    2005Sales revenue
    
    $
    89
    
    
    $
    55Operating costs
    
    
    (64
    )
    
    
    (42
    )Total
    
    $
    25
    
    
    $
    13
  Lot sales
    
    
    
    Lot Sales Revenue
    
    
    
    Average Lot Sales Revenue(Units)
    
    
    
    (Millions)
    
    
    
    (Thousands)Three months ended March 31
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005Alberta
    
    
    678
    
    
    
    549
    
    
    
    $
    59
    
    
    $
    37
    
    
    
    $
    87
    
    
    $
    67Colorado
    
    
    31
    
    
    
    21
    
    
    
    
    2
    
    
    
    1
    
    
    
    
    65
    
    
    
    48Total
    
    
    709
    
    
    
    570
    
    
    
    $
    61
    
    
    $
    38
    
    
    
    $
    86
    
    
    $
    67
  Home sales
    
    
    
    Home Sales Revenue
    
    
    
    Average Home SalesRevenue(Units)
    
    
    
    (Millions)
    
    
    
    (Thousands)Three months ended March 31
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005Alberta
    
    
    113
    
    
    
    98
    
    
    
    $
    19
    
    
    $
    14
    
    
    
    $
    168
    
    
    $
    143Colorado
    
    
    35
    
    
    
    8
    
    
    
    
    9
    
    
    
    3
    
    
    
    
    257
    
    
    
    375Total
    
    
    148
    
    
    
    106
    
    
    
    $
    28
    
    
    $
    17
    
    
    
    $
    189
    
    
    $
    160
         Brookfield Properties Corporation
    
    25




---



##### 



Three months ended March 31(Millions)
    
    Type
    
    
    2006
    
    
    2005BPO Properties
    
    Redeemable preferred shares(1)
    
    $
    3
    
    
    $
    2BPO Properties
    
    Common shares
    
    
    
    
    
    
    100%-owned subsidiaries
    
    Redeemable preferred shares(1)
    
    
    
    
    
    
    Dividends  shares of subsidiaries
    
    
    
    
    
    $
    3
    
    
    $
    2BPO Properties
    
    Participating interests
    
    $
    1
    
    
    $
    1Brookfield Financial Properties
    
    Participating interests
    
    
    
    
    
    
    Non-controlling interests expense in subsidiary earnings
    
    
    
    
    
    $
    1
    
    
    $
    1Total
    
    
    
    
    
    $
    4
    
    
    $
    3
 (1)
    
    Non-participating
   
  Three months ended March 31(Millions)
    
    2006
    
    
    2005Revenue from properties sold
    
    $
    2
    
    
    $
    5Operating expenses
    
    
    (1
    )
    
    
    (2
    )1
    
    
    
    3Interest expense
    
    
    (1
    )
    
    
    (1
    )Funds from operations  discontinued operations
    
    
    
    
    
    
    2Depreciation and amortization
    
    
    
    
    
    
    (1
    )Income from discontinued operations
    
    
    
    
    
    
    1Gain on sale of discontinued operations
    
    
    30
    
    
    
    Taxes related to discontinued operations
    
    
    (12
    )
    
    
    Discontinued operations
    
    $
    18
    
    
    $
    1
  26
    
    Q1/2006 Interim Report




---



##### 



2006
    
    
    
    2005
    
    
    
    2004(Millions, except per share amounts)
    
    Q1
    
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Total revenue
    
    $
    396
    
    
    
    $
    474
    
    
    $
    378
    
    
    $
    362
    
    
    $
    335
    
    
    
    $
    390
    
    
    $
    345
    
    
    $
    381
    
    
    $
    326Net operating incomeCommercial property operations
    
    
    172
    
    
    
    
    192
    
    
    
    160
    
    
    
    162
    
    
    
    166
    
    
    
    
    167
    
    
    
    165
    
    
    
    163
    
    
    
    176Lease termination income
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    60
    
    
    
    3⁄4Total commercial property operations
    
    
    172
    
    
    
    
    192
    
    
    
    160
    
    
    
    162
    
    
    
    166
    
    
    
    
    167
    
    
    
    165
    
    
    
    223
    
    
    
    176Residential development operations
    
    
    25
    
    
    
    
    45
    
    
    
    24
    
    
    
    24
    
    
    
    13
    
    
    
    
    13
    
    
    
    11
    
    
    
    10
    
    
    
    8Interest and other
    
    
    13
    
    
    
    
    6
    
    
    
    10
    
    
    
    10
    
    
    
    11
    
    
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    14210
    
    
    
    
    243
    
    
    
    194
    
    
    
    196
    
    
    
    190
    
    
    
    
    191
    
    
    
    187
    
    
    
    244
    
    
    
    198ExpensesInterest
    
    
    88
    
    
    
    
    86
    
    
    
    84
    
    
    
    81
    
    
    
    79
    
    
    
    
    79
    
    
    
    76
    
    
    
    76
    
    
    
    73General and administrative
    
    
    15
    
    
    
    
    15
    
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    
    10
    
    
    
    10
    
    
    
    11
    
    
    
    10Non-controlling interests expense
    
    
    4
    
    
    
    
    4
    
    
    
    4
    
    
    
    5
    
    
    
    3
    
    
    
    
    4
    
    
    
    5
    
    
    
    6
    
    
    
    5103
    
    
    
    
    138
    
    
    
    95
    
    
    
    99
    
    
    
    97
    
    
    
    
    98
    
    
    
    96
    
    
    
    151
    
    
    
    110Depreciation and amortization
    
    
    45
    
    
    
    
    47
    
    
    
    41
    
    
    
    40
    
    
    
    35
    
    
    
    
    38
    
    
    
    35
    
    
    
    34
    
    
    
    33Unrealized foreign exchange on preferred
share restatement
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    41
    
    
    
    28
    
    
    
    (2
    )
    
    
    (4
    )Future income taxes
    
    
    27
    
    
    
    
    42
    
    
    
    22
    
    
    
    19
    
    
    
    20
    
    
    
    
    17
    
    
    
    22
    
    
    
    47
    
    
    
    30Net income from continuing operations
    
    $
    31
    
    
    
    $
    49
    
    
    $
    32
    
    
    $
    40
    
    
    $
    42
    
    
    
    $
    2
    
    
    $
    11
    
    
    $
    72
    
    
    $
    51Discontinued operations
    
    
    18
    
    
    
    
    (2
    )
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    1
    
    
    
    1Net income
    
    $
    49
    
    
    
    $
    47
    
    
    $
    33
    
    
    $
    41
    
    
    $
    43
    
    
    
    $
    2
    
    
    $
    11
    
    
    $
    73
    
    
    $
    52Net income per share  basicPrior to the following:
    
    $
    0.13
    
    
    
    $
    0.21
    
    
    $
    0.14
    
    
    $
    0.17
    
    
    $
    0.18
    
    
    
    $
    3⁄4
    
    
    $
    0.05
    
    
    $
    0.15
    
    
    $
    0.22Discontinued operations
    
    
    0.08
    
    
    
    
    (0.01
    )
    
    
    3⁄4
    
    
    
    0.01
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    0.01
    
    
    
    3⁄4Lease termination income
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    0.15
    
    
    
    3⁄4$
    0.21
    
    
    
    $
    0.20
    
    
    $
    0.14
    
    
    $
    0.18
    
    
    $
    0.18
    
    
    
    $
    3⁄4
    
    
    $
    0.05
    
    
    $
    0.31
    
    
    $
    0.22Net income per share  dilutedPrior to the following:
    
    $
    0.13
    
    
    
    $
    0.21
    
    
    $
    0.14
    
    
    $
    0.16
    
    
    $
    0.18
    
    
    
    $
    3⁄4
    
    
    $
    0.05
    
    
    $
    0.15
    
    
    $
    0.22Discontinued operations
    
    
    0.08
    
    
    
    
    (0.01
    )
    
    
    3⁄4
    
    
    
    0.01
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    0.01
    
    
    
    3⁄4Lease termination income
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    0.15
    
    
    
    3⁄4$
    0.21
    
    
    
    $
    0.20
    
    
    $
    0.14
    
    
    $
    0.17
    
    
    $
    0.18
    
    
    
    $
    3⁄4
    
    
    $
    0.05
    
    
    $
    0.31
    
    
    $
    0.22Funds from operations per share  dilutedPrior to the following:
    
    $
    0.44
    
    
    
    $
    0.59
    
    
    $
    0.40
    
    
    $
    0.42
    
    
    $
    0.41
    
    
    
    $
    0.42
    
    
    $
    0.40
    
    
    $
    0.39
    
    
    $
    0.46Property disposition gains
    
    
    0.13
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4Discontinued operations
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    
    3⁄4
    
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.01Lease termination income
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    0.25
    
    
    
    3⁄4$
    0.57
    
    
    
    $
    0.59
    
    
    $
    0.41
    
    
    $
    0.43
    
    
    $
    0.42
    
    
    
    $
    0.42
    
    
    $
    0.41
    
    
    $
    0.65
    
    
    $
    0.47
 Notes:
 (1)
    
    The 2004 results have been restated to reflect the impact of the reclassification of
certain preferred share dividends to interest expense and foreign exchange on the
reclassification of certain preferred shares to liabilities(2)
    
    Per share amounts include the effect of the three-for-two common stock split on
March 31, 2005
  Brookfield Properties Corporation
    
    27




---



##### 



28
    
    Q1/2006 Interim Report




---



##### 



Year of
    
    
    000s
    
    
    % ofTenant
    
    Location
    
    Expiry(1)
    
    
    Sq.Ft.(2)
    
    
    Sq. Ft.(2)
    
    
    Credit Rating(3)RatedMerrill Lynch
    
    New York/Toronto
    
    
    2013
    
    
    
    4,363
    
    
    
    10.8
    %
    
    A+CIBC/CIBC World Markets
    
    New York/Toronto/Calgary
    
    
    2028
    
    
    
    2,056
    
    
    
    5.1
    %
    
    A+Government of Canada
    
    Toronto/Ottawa/Edmonton
    
    
    2010
    
    
    
    2,004
    
    
    
    4.9
    %
    
    AAABank of Montreal/Nesbitt Burns
    
    Toronto/Calgary
    
    
    2020
    
    
    
    1,092
    
    
    
    2.7
    %
    
    AA-JPMorgan Chase
    
    New York/Denver
    
    
    2018
    
    
    
    1,029
    
    
    
    2.5
    %
    
    A+RBC Financial Group
    
    Five major markets
    
    
    2018
    
    
    
    985
    
    
    
    2.4
    %
    
    AA-Petro-Canada
    
    Calgary
    
    
    2013
    
    
    
    891
    
    
    
    2.2
    %
    
    BBBTarget Corporation
    
    Minneapolis
    
    
    2014
    
    
    
    865
    
    
    
    2.1
    %
    
    A+Imperial Oil
    
    Calgary
    
    
    2011
    
    
    
    633
    
    
    
    1.6
    %
    
    AAATalisman Energy
    
    Calgary
    
    
    2015
    
    
    
    527
    
    
    
    1.3
    %
    
    BBB+CP Rail
    
    Calgary
    
    
    2014
    
    
    
    455
    
    
    
    1.1
    %
    
    BBBConoco Phillips
    
    Calgary
    
    
    2010
    
    
    
    445
    
    
    
    1.1
    %
    
    A-American Express
    
    New York
    
    
    2022
    
    
    
    409
    
    
    
    1.0
    %
    
    A+Fidelity Properties Inc.
    
    New York/Boston
    
    
    2009
    
    
    
    381
    
    
    
    0.9
    %
    
    BBB-Enbridge Inc.
    
    Calgary/Edmonton
    
    
    2016
    
    
    
    378
    
    
    
    0.9
    %
    
    A-Pepco Holdings Inc.
    
    Washington, D.C.
    
    
    2028
    
    
    
    364
    
    
    
    0.9
    %
    
    BBB+Teachers Insurance Annuity Association
    
    Denver
    
    
    2008
    
    
    
    323
    
    
    
    0.8
    %
    
    AAACanadian Natural Resources
    
    Calgary
    
    
    2011
    
    
    
    277
    
    
    
    0.7
    %
    
    BBB+Goldman Sachs
    
    New York
    
    
    2015
    
    
    
    274
    
    
    
    0.7
    %
    
    A+EnCana Corporation
    
    Calgary
    
    
    2013
    
    
    
    259
    
    
    
    0.6
    %
    
    A-Lehman Brothers
    
    New York
    
    
    2010
    
    
    
    253
    
    
    
    0.6
    %
    
    AA-Anadarko Canada Corporation
    
    Calgary
    
    
    2011
    
    
    
    235
    
    
    
    0.6
    %
    
    BBB+Bank of Nova Scotia
    
    New York
    
    
    2014
    
    
    
    230
    
    
    
    0.6
    %
    
    AA-Bank of America
    
    Boston
    
    
    2008
    
    
    
    213
    
    
    
    0.5
    %
    
    AAMarsh Mercer
    
    Toronto
    
    
    2015
    
    
    
    207
    
    
    
    0.5
    %
    
    BBBAmdocs Canada Inc.
    
    Toronto
    
    
    2011
    
    
    
    201
    
    
    
    0.5
    %
    
    BBB-Government and related services
    
    Various
    
    Various
    
    
    1,157
    
    
    
    2.9
    %
    
    BBB- or higherOther investment grade
    
    Various
    
    Various
    
    
    3,235
    
    
    
    8.0
    %
    
    BBB- or higher23,741
    
    
    
    58.5
    %UnratedCadwalader, Wickersham & Taft LLP
    
    New York
    
    
    2024
    
    
    
    465
    
    
    
    1.1
    %
    
    Cleary, Gottlieb, Steen & Hamilton
    
    New York
    
    
    2012
    
    
    
    446
    
    
    
    1.1
    %
    
    Goodwin Procter LLP
    
    Boston
    
    
    2016
    
    
    
    397
    
    
    
    1.0
    %
    
    Wellington Management Co.
    
    Boston
    
    
    2011
    
    
    
    358
    
    
    
    0.9
    %
    
    Osler Hoskin & Harcourt LLP
    
    Toronto
    
    
    2015
    
    
    
    285
    
    
    
    0.7
    %
    
    National Association of Securities Dealers
    
    New York
    
    
    2020
    
    
    
    277
    
    
    
    0.7
    %
    
    CI Investments Inc.
    
    Toronto
    
    
    2011
    
    
    
    212
    
    
    
    0.5
    %
    
    Total
    
    
    
    
    
    
    
    
    26,181
    
    
    
    64.5
    %
 
 (1)Weighted average based on square feet(2)Prior to considering partnership interests in partially-owned properties(3)From Standard & Poors, Moodys or Dominion Bond Rating Service   Brookfield Properties Corporation
    
    29




---



##### 



March 31, 2006
    
    Currently
    
    
    Remainder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2013 &(000s Sq. Ft.)
    
    Available
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Beyond
    
    
    Parking
    
    
    TotalNew York
    
    
    701
    
    
    
    164
    
    
    
    42
    
    
    
    252
    
    
    
    102
    
    
    
    517
    
    
    
    216
    
    
    
    591
    
    
    
    9,587
    
    
    
    281
    
    
    
    12,453Boston
    
    
    152
    
    
    
    62
    
    
    
    61
    
    
    
    447
    
    
    
    40
    
    
    
    172
    
    
    
    382
    
    
    
    26
    
    
    
    545
    
    
    
    276
    
    
    
    2,163Washington, D.C.
    
    
    34
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    20
    
    
    
    44
    
    
    
    9
    
    
    
    18
    
    
    
    47
    
    
    
    982
    
    
    
    571
    
    
    
    1,725Toronto
    
    
    662
    
    
    
    328
    
    
    
    532
    
    
    
    599
    
    
    
    860
    
    
    
    1,014
    
    
    
    645
    
    
    
    765
    
    
    
    5,054
    
    
    
    1,824
    
    
    
    12,283Calgary
    
    
    73
    
    
    
    158
    
    
    
    244
    
    
    
    406
    
    
    
    293
    
    
    
    1,110
    
    
    
    1,624
    
    
    
    626
    
    
    
    3,089
    
    
    
    1,313
    
    
    
    8,936Ottawa
    
    
    6
    
    
    
    87
    
    
    
    65
    
    
    
    1,004
    
    
    
    135
    
    
    
    2
    
    
    
    29
    
    
    
    4
    
    
    
    575
    
    
    
    1,030
    
    
    
    2,9371,628
    
    
    
    799
    
    
    
    944
    
    
    
    2,728
    
    
    
    1,474
    
    
    
    2,824
    
    
    
    2,914
    
    
    
    2,059
    
    
    
    19,832
    
    
    
    5,295
    
    
    
    40,497% of total
    
    
    4.0
    %
    
    
    2.0
    %
    
    
    2.3
    %
    
    
    6.7
    %
    
    
    3.6
    %
    
    
    7.0
    %
    
    
    7.2
    %
    
    
    5.1
    %
    
    
    48.8
    %
    
    
    3⁄4
    
    
    
    86.7
    %Denver
    
    
    154
    
    
    
    34
    
    
    
    60
    
    
    
    396
    
    
    
    19
    
    
    
    113
    
    
    
    82
    
    
    
    58
    
    
    
    376
    
    
    
    503
    
    
    
    1,795Minneapolis
    
    
    278
    
    
    
    47
    
    
    
    33
    
    
    
    84
    
    
    
    216
    
    
    
    50
    
    
    
    32
    
    
    
    117
    
    
    
    1,630
    
    
    
    521
    
    
    
    3,008Other
    
    
    135
    
    
    
    91
    
    
    
    146
    
    
    
    68
    
    
    
    151
    
    
    
    214
    
    
    
    122
    
    
    
    91
    
    
    
    603
    
    
    
    474
    
    
    
    2,095567
    
    
    
    172
    
    
    
    239
    
    
    
    548
    
    
    
    386
    
    
    
    377
    
    
    
    236
    
    
    
    266
    
    
    
    2,609
    
    
    
    1,498
    
    
    
    6,898% of total
    
    
    1.4
    %
    
    
    0.4
    %
    
    
    0.6
    %
    
    
    1.4
    %
    
    
    1.0
    %
    
    
    0.9
    %
    
    
    0.6
    %
    
    
    0.6
    %
    
    
    6.4
    %
    
    
    3⁄4
    
    
    
    13.3
    %2,195
    
    
    
    971
    
    
    
    1,183
    
    
    
    3,276
    
    
    
    1,860
    
    
    
    3,201
    
    
    
    3,150
    
    
    
    2,325
    
    
    
    22,441
    
    
    
    6,793
    
    
    
    47,3955.4
    %
    
    
    2.4
    %
    
    
    2.9
    %
    
    
    8.1
    %
    
    
    4.6
    %
    
    
    7.9
    %
    
    
    7.8
    %
    
    
    5.7
    %
    
    
    55.2
    %
    
    
    3⁄4
    
    
    
    100.0
    %
         30
    
    Q1/2006 Interim Report




---



##### 



Brookfield Properties Corporation
    
    31




---



##### 



32
    
    Q1/2006 Interim Report




---



##### 



(i) Effect of Contingently Convertible Instruments on the Computation of Diluted Earnings Per
Share, Emerging Issues Committee Abstract 155
  (ii) Implicit Variable Interests, Emerging Issues Committee Abstract 157
       Brookfield Properties Corporation
    
    33




---



##### 



Three months ended
    
    
    
    Year endedCurrency
    
    
    Mar. 31, 2006
    
    
    
    Dec. 31, 2005Common shares(1)
    
    US$
    
    $
    0.1800
    
    
    
    $
    0.6500Class A preferred shares
    
    
    C$
    
    
    
    0.0469
    
    
    
    
    0.1875Class AA Series E preferred shares
    
    
    C$
    
    
    
    0.2223
    
    
    
    
    0.7591Class AAA Series E preferred shares
    
    
    C$
    
    
    
    0.2265
    
    
    
    
    0.7695Class AAA Series F preferred shares
    
    
    C$
    
    
    
    0.3750
    
    
    
    
    1.5000Class AAA Series G preferred shares
    
    US$
    
    
    0.3281
    
    
    
    
    1.3125Class AAA Series H preferred shares
    
    
    C$
    
    
    
    0.3594
    
    
    
    
    1.4375Class AAA Series I preferred shares
    
    
    C$
    
    
    
    0.3250
    
    
    
    
    1.3000Class AAA Series J preferred shares
    
    
    C$
    
    
    
    0.3125
    
    
    
    
    1.2500Class AAA Series K preferred shares
    
    
    C$
    
    
    
    0.3250
    
    
    
    
    1.3000
 (1)Per share amounts include the effect of the three-for-two common stock-split on
March 31, 2005
   
 34
    
    Q1/2006 Interim Report




---



##### 



Unaudited(US Millions)
    
    Note
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005AssetsCommercial properties
    
    
    3
    
    
    $
    7,454
    
    
    $
    7,430Development properties
    
    
    4
    
    
    
    680
    
    
    
    615Receivables and other
    
    
    5
    
    
    
    963
    
    
    
    955Restricted cash and deposits
    
    
    6
    
    
    
    346
    
    
    
    316Marketable securities
    
    
    
    
    
    
    
    
    
    
    58Cash and cash equivalents
    
    
    19
    
    
    
    129
    
    
    
    64Assets held for sale
    
    
    7
    
    
    
    37
    
    
    
    75$
    9,609
    
    
    $
    9,513LiabilitiesCommercial property debt
    
    
    8
    
    
    $
    5,261
    
    
    $
    5,216Accounts payable and other liabilities
    
    
    9
    
    
    
    658
    
    
    
    626Future income tax liability
    
    
    10
    
    
    
    228
    
    
    
    188Liabilities related to assets held for sale
    
    
    7
    
    
    
    32
    
    
    
    51Capital securities
    
    
    11
    
    
    
    1,093
    
    
    
    1,101Non-controlling interests
    
    
    12
    
    
    
    60
    
    
    
    59Preferred equity  subsidiaries
    
    
    13
    
    
    
    326
    
    
    
    329Shareholders equity
Preferred equity  corporate
    
    
    14
    
    
    
    45
    
    
    
    45Common equity
    
    
    15
    
    
    
    1,906
    
    
    
    1,898$
    9,609
    
    
    $
    9,513
 See accompanying notes to the consolidated financial statements
 Brookfield Properties Corporation
    
    35




---



##### 



Unaudited
    
    
    
    
    
    Three months ended Mar. 31(US Millions, except per share amounts)
    
    Note
    
    
    2006
    
    
    2005Total revenue
    
    
    17
    
    
    $
    396
    
    
    $
    335Net operating income
Commercial property operations
    
    
    17
    
    
    $
    172
    
    
    $
    166Residential development operations
    
    
    17
    
    
    
    25
    
    
    
    13Interest and other
    
    
    
    
    
    
    13
    
    
    
    11210
    
    
    
    190ExpensesInterest
    
    
    
    
    
    
    88
    
    
    
    79General and administrative
    
    
    
    
    
    
    15
    
    
    
    11Non-controlling interests expense
    
    
    
    
    
    
    4
    
    
    
    3103
    
    
    
    97Depreciation and amortization
    
    
    
    
    
    
    45
    
    
    
    35Future income taxes
    
    
    10
    
    
    
    27
    
    
    
    20Net income from continuing operations
    
    
    
    
    
    
    31
    
    
    
    42Discontinued operations
    
    
    7
    
    
    
    18
    
    
    
    1Net income
    
    
    
    
    
    $
    49
    
    
    $
    43Net income per common share  basic and dilutedContinuing operations
    
    
    
    
    
    $
    0.13
    
    
    $
    0.18Discontinued operations
    
    
    
    
    
    
    0.08
    
    
    
    Net income per share
    
    
    
    
    
    $
    0.21
    
    
    $
    0.18
 See accompanying notes to the consolidated financial statements
  Unaudited
    
    
    
    
    
    Three months ended Mar. 31(US Millions)
    
    Note
    
    
    2006
    
    
    2005Retained earnings  beginning of period
    
    
    
    
    
    $
    747
    
    
    $
    787Net income
    
    
    
    
    
    
    49
    
    
    
    43Shareholder distributions
Preferred shares dividends  corporate
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Common share dividends
    
    
    
    
    
    
    (42
    )
    
    
    (25
    )Amount paid in excess of the book value of common
shares purchased for cancellation
    
    
    
    
    
    
    
    
    
    
    (21
    )Retained earnings  end of period
    
    
    15
    
    
    $
    753
    
    
    $
    783
 See accompanying notes to the consolidated financial statements
 36
    
    Q1/2006 Interim Report




---



##### 



Unaudited
    
    
    
    
    
    Three months ended Mar. 31(US Millions)
    
    Note
    
    
    2006
    
    
    2005Operating activities
Net income
    
    
    
    
    
    $
    49
    
    
    $
    43Depreciation and amortization
    
    
    
    
    
    
    45
    
    
    
    36Future income taxes
    
    
    
    
    
    
    39
    
    
    
    20Property disposition gains
    
    
    
    
    
    
    (30
    )
    
    
    Other
    
    
    
    
    
    
    (86
    )
    
    
    (75
    )17
    
    
    
    24Financing activities
Commercial property debt arranged
    
    
    
    
    
    
    120
    
    
    
    98Commercial property debt repayments
    
    
    
    
    
    
    (29
    )
    
    
    (24
    )Land development debt, net
    
    
    
    
    
    
    21
    
    
    
    1Common shares issued
    
    
    
    
    
    
    2
    
    
    
    1Common shares repurchased
    
    
    
    
    
    
    
    
    
    
    (31
    )Cashflow retained from non-controlling interests
    
    
    
    
    
    
    1
    
    
    
    2Preferred share dividends
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Common share dividends
    
    
    
    
    
    
    (42
    )
    
    
    (25
    )72
    
    
    
    21Investing activitiesMarketable securities
    
    
    
    
    
    
    58
    
    
    
    (26
    )Real estate mortgages
    
    
    
    
    
    
    5
    
    
    
    Acquisitions of real estate
    
    
    
    
    
    
    (90
    )
    
    
    Dispositions of real estate, net
    
    
    19
    
    
    
    65
    
    
    
    Development and redevelopment investments
    
    
    
    
    
    
    (7
    )
    
    
    (19
    )Restricted cash and deposits
    
    
    
    
    
    
    (30
    )
    
    
    Commercial property tenant installation costs
    
    
    
    
    
    
    (22
    )
    
    
    (34
    )Capital expenditures
    
    
    
    
    
    
    (3
    )
    
    
    (2
    )(24
    )
    
    
    (81
    )Increase (decrease) in cash resources
    
    
    
    
    
    
    65
    
    
    
    (36
    )Opening cash and cash equivalents
    
    
    
    
    
    
    64
    
    
    
    112Closing cash and cash equivalents
    
    
    
    
    
    $
    129
    
    
    $
    76
 See accompanying notes to the consolidated financial statements
 Brookfield Properties Corporation
    
    37




---



##### 



(i) Effect of Contingently Convertible Instruments on the Computation of Diluted Earnings Per
Share, Emerging Issues Committee Abstract 155
  (ii) Implicit Variable Interests, Emerging Issues Committee Abstract 157
    (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Commercial properties
    
    $
    8,198
    
    
    $
    8,137Less: Accumulated depreciation
    
    
    (744
    )
    
    
    (707
    )Total
    
    $
    7,454
    
    
    $
    7,430
   (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Commercial developments
    
    $
    242
    
    
    $
    224Residential development land
    
    
    438
    
    
    
    391Total
    
    $
    680
    
    
    $
    615
 38
    
    Q1/2006 Interim Report




---



##### 



(Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Receivables and real estate mortgages
    
    $
    566
    
    
    $
    551Prepaid expenses and other assets
    
    
    287
    
    
    
    279Intangible assets(1)
    
    
    110
    
    
    
    125Total
    
    $
    963
    
    
    $
    955
 (1)
    
    Net of accumulated amortization of $16 million and $11 million at March 31, 2006 and
December 31, 2005, respectively
          (Millions)
    
    Mar. 31, 2006
    
    
    Mar. 31, 2005Revenue
    
    $
    2
    
    
    $
    5Operating expenses
    
    
    (1
    )
    
    
    (2
    )1
    
    
    
    3Interest expense
    
    
    (1
    )
    
    
    (1
    )
    
    
    
    2Depreciation and amortization
    
    
    
    
    
    
    (1
    )Income from discontinued operations prior to gain and taxes
    
    
    
    
    
    
    1Gain on sale of discontinued operations
    
    
    30
    
    
    
    Taxes related to discontinued operations
    
    
    
    
    
    
    (12
    )Income from discontinued operations
    
    $
    18
    
    
    $
    1
 Brookfield Properties Corporation
    
    39




---



##### 



Weighted Average
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mar. 31
    
    
    Dec. 31Interest Rate at
    
    
    Remainder
    
    
    Principal Repayments
    
    
    
    
    
    
    2011 &
    
    
    2006
    
    
    2005(Millions)
    
    Mar. 31, 2006
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Beyond
    
    
    Total
    
    
    TotalCommercial property debt
    
    
    6.5
    %
    
    $
    233
    
    
    $
    632
    
    
    $
    426
    
    
    $
    881
    
    
    $
    189
    
    
    $
    2,900
    
    
    $
    5,261
    
    
    $
    5,216
      (Millions)
    
    Mar. 31, 2006
    
    
    Mar. 31, 2005Accounts payable
    
    $
    361
    
    
    $
    342Land development debt
    
    
    178
    
    
    
    158Intangible liabilities(1)
    
    
    119
    
    
    
    126Total
    
    $
    658
    
    
    $
    626
 (1)
    
    Net of accumulated amortization of $7 million and $3 million at March 31, 2006 and
December 31, 2005, respectively
   Weighted Average
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mar. 31
    
    
    Dec. 31Interest Rate at
    
    
    Remainder
    
    

Principal Repayments
    
    
    
    
    
    
    2006
    
    
    2005(Millions)
    
    Mar. 31, 2006
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Total
    
    
    TotalLand development debt
    
    
    5.7
    %
    
    $
    133
    
    
    $
    29
    
    
    $
    6
    
    
    $
    7
    
    
    $
    3
    
    
    $
    178
    
    
    $
    158
   (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Future income tax liabilities related to difference in tax and book basis, net
    
    $
    575
    
    
    $
    541Future income tax assets related to non-capital losses and capital losses
    
    
    (347
    )
    
    
    (353
    )Total
    
    $
    228
    
    
    $
    188
  40
    
    Q1/2006 Interim Report




---



##### 



(Millions)
    
    Mar. 31, 2006
    
    
    Mar. 31, 2005Income tax expense at the Canadian federal and provincial income
tax rate of 35% (2005  35%)
    
    $
    21
    
    
    $
    22Increase (decrease) in income tax expense due to the following:Non-deductible preferred share dividends
    
    
    5
    
    
    
    5Higher income tax rates in other jurisdictions
    
    
    (1
    )
    
    
    1Minority shareholders interests in income tax expense
    
    
    
    
    
    
    (1
    )Tax assets previously not recognized
    
    
    
    
    
    
    (8
    )Other
    
    
    2
    
    
    
    1Total
    
    $
    27
    
    
    $
    20
  (Millions)
    
    Mar. 31, 2006
    
    
    Mar. 31, 2005Income tax expense at the Canadian federal and provincial income
tax rate of 35% (2005  35%)
    
    $
    10
    
    
    $
    Increase (decrease) in income tax expense due to the following:Higher income tax rates in other jurisdictions
    
    
    2
    
    
    
    Total
    
    $
    12
    
    
    $
    
   Shares
    
    
    Shares
    
    
    Cumulative(Millions, except share information)
    
    Authorized
    
    
    Outstanding
    
    
    Dividend Rate
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Class AAA Series E
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    70% of bank prime
    
    $
    171
    
    
    $
    172Class AAA Series F
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    
    6.00
    %
    
    
    171
    
    
    
    172Class AAA Series G
    
    
    6,000,000
    
    
    
    4,400,000
    
    
    
    5.25
    %
    
    
    110
    
    
    
    110Class AAA Series H
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    
    5.75
    %
    
    
    171
    
    
    
    173Class AAA Series I
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    
    5.20
    %
    
    
    171
    
    
    
    172Class AAA Series J
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    
    5.00
    %
    
    
    171
    
    
    
    172Class AAA Series K
    
    
    6,000,000
    
    
    
    6,000,000
    
    
    
    5.20
    %
    
    
    128
    
    
    
    130Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,093
    
    
    $
    1,101
  Redemption Date(1)
    
    Redemption Price(2)
    
    Companys Option(3)
    
    Holders Option(4)Series E
    
    Retractable at par
    
    
    
    
    
    Series F
    
    September 30, 2009
    
    C $25.75
    
    September 30, 2009
    
    March 31, 2013Series G
    
    June 30, 2011
    
    US $26.00
    
    June 30, 2011
    
    September 30, 2015Series H
    
    December 31, 2011
    
    C $26.00
    
    December 31, 2011
    
    December 31, 2015Series I
    
    December 31, 2008
    
    C $25.75
    
    December 31, 2008
    
    December 31, 2010Series J
    
    June 30, 2010
    
    C $26.00
    
    June 30, 2010
    
    December 31, 2014Series K
    
    December 31, 2012
    
    C $26.00
    
    December 31, 2012
    
    December 31, 2016
 
 (1)
    
    Subject to applicable law and rights of the corporation, the company may, on or
after the dates specified above, redeem Class AAA preferred shares for cash as follows: the
Series F at a price of C$25.75, if redeemed during the 12 months commencing September 30,
2009 and decreasing by C$0.25 each 12-month period thereafter to a price per share of C$25.00
if redeemed on or after September 30, 2012; the Series G at a price of US$26.00, if redeemed
during the 12 months commencing June 30, 2011 and decreasing by US$0.33 each 12-month period
thereafter to a price per share of US$25.00 if redeemed on or after June 30, 2014; the Series
H at a price of C$26.00, if redeemed during the 12 months commencing December 31, 2011 and
decreasing by C$0.33 each 12-month period thereafter to a price per share of C$25.00 if
redeemed on or after December 31, Brookfield Properties Corporation
    
    
    41




---



##### 



2014; the Series I at a price of C$25.75, if redeemed
during the 12 months commencing December 31, 2008 and decreasing by C$0.25 each 12-month
period thereafter to a price per share of C$25.00 if redeemed on or after December 31, 2010;
the Series J at a price of C$26.00 if redeemed during the 12 months commencing June 30, 2010 and decreasing
by C$0.25 each 12-month period thereafter to a price per share of C$25.00 if redeemed on or
after June 30, 2014; the Series K at a price of C$26.00 if redeemed during the 12-months
commencing December 31, 2012 and decreasing by C$0.33 each 12-month period thereafter to a price
per share of $C25.00 if redeemed on or after December 31, 2015.(2)
    
    Subject to applicable law and rights of the corporation, the company may purchase
Class AAA preferred shares for cancellation at the lowest price or prices at which, in the
opinion of the Board of Directors of the company, such shares are obtainable.(3)
    
    Subject to the approval of the Toronto Stock Exchange the company may, on or after
the dates specified above, convert the Class AAA, Series F, G, H, I, J and K into common
shares of the company. The Class AAA, Series F, G, H, I, J and K preferred shares may be
converted into that number of common shares determined by dividing the then-applicable
redemption price by the greater of C$2.00 (Series G  US$2.00) or 95% of the weighted average
trading price of common shares at such time.(4)
    
    Subject to the companys right to redeem or find substitute purchasers, the holder
may, on or after the dates specified above, convert Class AAA, Series F, G, H, I, J and K
preferred shares into that number of common shares determined by dividing the then-applicable
redemption price by the greater of C$2.00 (Series G  US$2.00) or 95% of the weighted average
trading price of common shares at such time.    (Millions)
    
    Others Equity Ownership
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Common shares of BPO Properties(1)
    
    
    11.0
    %
    
    $
    48
    
    
    $
    47Limited partnership units of Brookfield Financial Properties
    
    
    0.6
    %
    
    
    12
    
    
    
    12Total
    
    
    
    
    
    $
    60
    
    
    $
    59
 
 (1)
    
    Canadian dollar denominated   PreferredShares
    
    
    Shares
    
    
    Cumulative
    
    
    Mar. 31,(Millions, except share information)
    
    Outstanding
    
    
    Series
    
    
    Dividend Rate
    
    
    2006
    
    
    Dec. 31, 2005BPO Properties
    
    
    1,805,489
    
    
    Series G
    
    70% of bank prime
    
    $
    39
    
    
    $
    393,816,527
    
    
    Series J
    
    70% of bank prime
    
    
    81
    
    
    
    82300
    
    
    Series K
    
    30-day BA + 0.4%
    
    
    128
    
    
    
    1292,847,711
    
    
    Series M
    
    70% of bank prime
    
    
    61
    
    
    
    62800,000
    
    
    Series N
    
    30-day BA + 0.4%
    
    
    17
    
    
    
    17Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    326
    
    
    $
    329
    42
    
    
    Q1/2006 Interim Report




---



##### 



Cumulative(Millions, except share information)
    
    Shares Outstanding
    
    
    Dividend Rate
    
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Class A redeemable voting
    
    
    6,312,000
    
    
    
    7.50
    %
    
    $
    11
    
    
    $
    11Class AA Series E
    
    
    2,000,000
    
    
    70% of bank prime
        
    
    34
    
    
    
    34Total
    
    
    
    
    
    
    
    
    
    $
    45
    
    
    $
    45
      (Millions)
    
    Mar. 31, 2006
    
    
    Dec. 31, 2005Common shares
    
    $
    1,068
    
    
    $
    1,066Retained earnings
    
    
    753
    
    
    
    747Cumulative translation adjustment
    
    
    85
    
    
    
    85Total
    
    $
    1,906
    
    
    $
    1,898
  Three months ended Mar. 31(Millions)
    
    2006
    
    
    2005Net income from continuing operations
    
    $
    31
    
    
    $
    42Preferred share dividends
    
    
    (1
    )
    
    
    (1
    )Net income from continuing operations available to common shareholders
    
    $
    30
    
    
    $
    41Net income
    
    $
    49
    
    
    $
    43Preferred share dividends
    
    
    (1
    )
    
    
    (1
    )Net income available to common shareholders
    
    $
    48
    
    
    $
    42Weighted average shares outstanding  basic
    
    
    231.3
    
    
    
    232.9Unexercised dilutive options
    
    
    1.9
    
    
    
    2.0Weighted average shares outstanding  diluted
    
    
    233.2
    
    
    
    234.9
  Brookfield Properties Corporation
    
    
    43




---



##### 



Three months ended Mar. 31(Millions)
    
    2006
    
    
    2005Revenue from commercial property operations(1)
    
    $
    294
    
    
    $
    269Revenue from residential development operations
    
    
    89
    
    
    
    55Revenue from commercial property and residential development operations
    
    
    383
    
    
    
    324Interest and other
    
    
    13
    
    
    
    11Total
    
    $
    396
    
    
    $
    335
 
 (1)
    
    Includes revenue from discontinued operations of $2 million and $5 million for the
three months ended March 31, 2006 and 2005, respectively   Three months ended Mar. 31(Millions)
    
    2006
    
    
    2005Revenue from current properties (including fee income)
    
    $
    292
    
    
    $
    264Property operating costs
    
    
    (120
    )
    
    
    (98
    )Net operating income
    
    $
    172
    
    
    $
    166
    Three months ended Mar. 31(Millions)
    
    2006
    
    
    2005Revenue
    
    $
    89
    
    
    $
    55Expenses
    
    
    (64
    )
    
    
    (42
    )Total
    
    $
    25
    
    
    $
    13
 44
    
    
    Q1/2006 Interim Report




---



##### 



Three months ended Mar. 31(Millions)
    
    2006
    
    
    2005Dispositions of real estate
    
    $
    116
    
    
    $
    Mortgages assumed by purchasers
    
    
    (51
    )
    
    
    Net dispositions
    
    $
    65
    
    
    $
    Cash taxes paid
    
    $
    3
    
    
    $
    3Cash interest paid (excluding dividends paid on capital securities)
    
    $
    59
    
    
    $
    72
 Brookfield Properties Corporation
    
    
    45




---



##### 



46
    
    
    Q1/2006 Interim Report




---



##### 



Commercial
    
    
    
    ResidentialUnited States
    
    
    
    Canada
    
    
    
    Development
    
    
    
    Total(Millions)
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005Revenues
    
    $
    188
    
    
    $
    189
    
    
    
    $
    104
    
    
    $
    75
    
    
    
    $
    89
    
    
    $
    55
    
    
    
    $
    381
    
    
    $
    319Expenses
    
    
    75
    
    
    
    69
    
    
    
    
    45
    
    
    
    29
    
    
    
    
    64
    
    
    
    42
    
    
    
    
    184
    
    
    
    140113
    
    
    
    120
    
    
    
    
    59
    
    
    
    46
    
    
    
    
    25
    
    
    
    13
    
    
    
    
    197
    
    
    
    179Other revenues
    
    
    5
    
    
    
    2
    
    
    
    
    6
    
    
    
    7
    
    
    
    
    2
    
    
    
    2
    
    
    
    
    13
    
    
    
    11Net operating income from continuing
operations
    
    
    118
    
    
    
    122
    
    
    
    
    65
    
    
    
    53
    
    
    
    
    27
    
    
    
    15
    
    
    
    
    210
    
    
    
    190Interest expense
    
    
    61
    
    
    
    56
    
    
    
    
    27
    
    
    
    23
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    88
    
    
    
    79General and administrative
    
    
    9
    
    
    
    6
    
    
    
    
    6
    
    
    
    5
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    15
    
    
    
    11Non-controlling interests expense
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    4
    
    
    
    3
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    4
    
    
    
    3Income before undernoted
    
    
    48
    
    
    
    60
    
    
    
    
    28
    
    
    
    22
    
    
    
    
    27
    
    
    
    15
    
    
    
    
    103
    
    
    
    97Depreciation and amortization
    
    
    25
    
    
    
    24
    
    
    
    
    20
    
    
    
    11
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    45
    
    
    
    35Income before unallocated costs
    
    
    23
    
    
    
    36
    
    
    
    
    8
    
    
    
    11
    
    
    
    
    27
    
    
    
    15
    
    
    
    
    58
    
    
    
    62Future income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    20Net income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    42Discontinued operations
    
    
    18
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    1Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    49
    
    
    $
    43Acquisitions of real estate, net
    
    $
    (75
    )
    
    $
    3⁄4
    
    
    
    $
    (15
    )
    
    $
    3⁄4
    
    
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    
    $
    (90
    )
    
    $
    3⁄4Dispositions of real estate, net
    
    
    65
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    65
    
    
    
    3⁄4Commercial property tenant improvements
    
    
    (20
    )
    
    
    (30
    )
    
    
    
    (2
    )
    
    
    (4
    )
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    (22
    )
    
    
    (34
    )Development and redevelopment
    
    
    (2
    )
    
    
    (17
    )
    
    
    
    (5
    )
    
    
    (2
    )
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    (7
    )
    
    
    (19
    )Capital expenditures
    
    
    (3
    )
    
    
    (2
    )
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    (3
    )
    
    
    (2
    )
  Commercial
    
    
    
    ResidentialUnited States
    
    
    
    Canada
    
    
    

Development
    
    
    
    TotalMar. 31
    
    
    Dec. 31
    
    
    
    Mar. 31
    
    
    Dec. 31
    
    
    
    Mar. 31
    
    
    Dec. 31
    
    
    
    Mar. 31
    
    
    Dec. 31(Millions)
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005
    
    
    
    2006
    
    
    2005AssetsProperties
    
    $
    5,239
    
    
    $
    5,289
    
    
    
    $
    2,125
    
    
    $
    2,141
    
    
    
    $
    3⁄4
    
    
    $
    3⁄4
    
    
    
    $
    7,454
    
    
    $
    7,430Development Properties
    
    
    31
    
    
    
    29
    
    
    
    
    211
    
    
    
    195
    
    
    
    
    438
    
    
    
    391
    
    
    
    
    680
    
    
    
    615Receivables and other
    
    
    466
    
    
    
    407
    
    
    
    
    311
    
    
    
    375
    
    
    
    
    186
    
    
    
    173
    
    
    
    
    963
    
    
    
    955Restricted cash and deposits
    
    
    345
    
    
    
    314
    
    
    
    
    1
    
    
    
    2
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    346
    
    
    
    316Marketable securities
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    58
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    58Cash and cash equivalents
    
    
    39
    
    
    
    33
    
    
    
    
    86
    
    
    
    25
    
    
    
    
    4
    
    
    
    6
    
    
    
    
    129
    
    
    
    64Assets held for sale
    
    
    3⁄4
    
    
    
    75
    
    
    
    
    37
    
    
    
    3⁄4
    
    
    
    
    3⁄4
    
    
    
    3⁄4
    
    
    
    
    37
    
    
    
    75Total
    
    $
    6,210
    
    
    $
    6,147
    
    
    
    $
    2,771
    
    
    $
    2,796
    
    
    
    $
    628
    
    
    $
    570
    
    
    
    $
    9,609
    
    
    $
    9,513
   47




---



##### 



Symbol
    
    Stock ExchangeOutstanding at Mar. 31, 2006
    
    
    BPO
    
    New York / TorontoCommon SharesClass A Preferred SharesSeries A
    
    
    2,050,000
    
    
    Not listed
    
    
    Series B
    
    
    4,262,000
    
    
    Not listed
    
    
    Class AA Preferred SharesSeries E
    
    
    2,000,000
    
    
    Not listed
    
    
    Class AAA Preferred SharesSeries E
    
    
    8,000,000
    
    
    Not listed
    
    
    Series F
    
    
    8,000,000
    
    
    BPO.PR.F
    
    TorontoSeries G
    
    
    4,400,000
    
    
    BPO.PR.U
    
    TorontoSeries H
    
    
    8,000,000
    
    
    BPO.PR.H
    
    TorontoSeries I
    
    
    8,000,000
    
    
    BPO.PR.I
    
    TorontoSeries J
    
    
    8,000,000
    
    
    BPO.PR.J
    
    TorontoSeries K
    
    
    6,000,000
    
    
    BPO.PR.K
    
    Toronto
 (1)
 Record Date
    
    Payment DateFirst day of March, June,
    
    Last business day of March, June,Common Shares(2)
    
    September and December
    
    September and DecemberClass A Preferred Shares
    
    First day of March and
    
    15th day of March andSeries A, B
    
    September
    
    SeptemberClass AA Preferred Shares
    
    15th day of March, June,
    
    Last business day of March, June,Series E
    
    September and December
    
    September and DecemberClass AAA Preferred Shares
    
    15th day of March, June,
    
    Last business day of March, June,Series E, F, G, H, I, J and K
    
    September and December
    
    September and December
 
 (1)
    
    All dividends are subject to declaration by the companys Board of Directors(2)
    
    Common shareholders resident in the United States will receive payment in U.S.
dollars and shareholders resident in Canada will receive their dividends in Canadian dollars
at the exchange rate on the date of record, unless they elect otherwise (3)
 (US Dollars)
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006March 31
    
    $
    0.07
    
    
    $
    0.07
    (4)
    
    $
    0.10
    
    
    $
    0.11
    
    
    $
    0.18June 30
    
    
    0.07
    
    
    
    0.07
    
    
    
    0.10
    
    
    
    0.18
    
    
    
    0.19September 30
    
    
    0.07
    
    
    
    0.10
    
    
    
    0.11
    
    
    
    0.18December 31
    
    
    0.07
    
    
    
    0.10
    
    
    
    0.11
    
    
    
    0.18
 (3)
    
    Adjusted to reflect the three-for-two stock split effective March 31, 2005(4)
    
    Excludes the distribution of Brookfield Homes Corporation 48




---



##### 



BROOKFIELD PROPERTIES CORPORATIONThree World Financial Center
    
    BCE Place, Bay Wellington Tower200 Vesey Street, 11th Floor
    
    181 Bay Street, Suite 330New York, New York 10281-1021
    
    Toronto, Ontario M5J 2T3Tel: (212) 417-7000
    
    Tel: (416) 369-2300Fax: (212) 417-7214
    
    Fax: (416) 369-2301www.brookfieldproperties.com
    CIBC MELLON TRUST COMPANYBy mail:
    
    P.O. Box 7010Adelaide Street Postal StationToronto, Ontario, M5C 2W9By courier:
    
    199 Bay StreetCommerce Court WestSecurities LevelToronto, Ontario, M5L 1G9Attention: Courier WindowTel:
    
    (800) 387-0825; (416) 643-5500Fax:
    
    (416) 643-5501Web site:
    
    www.cibcmellon.comE-mail:
    
    inquiries@cibcmellon.com
     BrookfieldProperties
    

(BROOKFIELD LOGO)
  49