Our infrastructure operations require the usage of large areas of land for construction and operation. The rights to use the land can  be obtained through freehold title, leases and other rights of use. Although we believe that we have valid rights to all easements,  licences and rights of way necessary for our utilities operations, not all of our easements, licences and rights of way are registered  against the lands to which they relate and may not bind subsequent owners. The financial performance of our timberland operations depends on strong demand in the wood products and pulp and paper  industries. A decrease in the level of residential construction activity generally reduces demand for logs and wood products,  resulting in lower revenues, profits and cash flows for our customers. Depressed commodity prices for lumber, pulp or paper,  or market irregularities, may cause mill operators to temporarily or permanently shut down their mills if their product prices  fall to a level where mill operation would be uneconomical. Moreover, these operators may be required to temporarily suspend  operations at one or more of their mills to bring production in line with market demand or in response to market irregularities.  Any of these circumstances could significantly reduce the prices that we realize for our timber as well as the volume of timber  that we may be able to sell. In addition to impacting our timberland operations’ sales, cash flows and earnings, weakness in the  market prices of timber products will also have an effect on our ability to attract additional capital, the cost of that capital and  the value of our timberland assets. There is no certainty that we will be successful in implementing flexible timberland harvest  plans that can reduce harvest levels when prices are low and defer sales until prices recover.  Weather conditions, industry practices, timber growth cycles, access limitations and aboriginal claims may restrict our  harvesting, road building and other activities on the timberlands owned by our timber operations, as may other factors, including  damage by fire, insect infestation, wind, disease, prolonged drought and other natural and man-made disasters. There can be no  assurance that our forest management planning, including silviculture, will have the intended result of ensuring that our asset  base appreciates in value over time. If management’s estimates of merchantable inventory are incorrect, harvesting levels on our  timberlands may result in depletion of our timberland assets. Our agriland operations are comprised of pasture land that may be converted to higher-and-better uses, including soybean, corn  and sugarcane production. Such conversion of agrilands may not materialize as anticipated. Additionally, the attractiveness of  agrilands as an asset class for investors is contingent on the demand for soft commodities, growth in population and per capita  incomes, improving diets and the demand for biofuels, all of which involve future uncertainty. Weather conditions, growing  seasons, interactions with surrounding population, damage by fire, insect infestation, wind, disease, prolonged drought and other  natural and man-made disasters may negatively impact our agriland operations.  The principal risks for the private equity business are potential loss of invested capital as well as insufficient investment or fee  income to cover operating expenses and cost of capital. In addition, these investments are typically illiquid and may be difficult  to monetize, limiting our flexibility to react to changing economic or investment conditions. Unfavourable economic conditions could have a significant adverse impact on the ability of investee companies to repay debt  and on the value of our equity investments and the level of investment income that they generate. Even with our support of  investee companies through an economic downturn, adverse economic or business conditions facing our investee companies  may adversely impact the value of our investments or deplete our financial or management resources. These investments are  also subject to the risks inherent in the underlying businesses, some of which are facing difficult business conditions and may  continue to do so for the foreseeable future. Private Equity Residential Development We have residential land development and homebuilding operations located in Canada, the United States, Brazil and Australia.  The residential homebuilding and land development industry is cyclical and is significantly affected by changes in general  and local economic and industry conditions, such as consumer confidence, employment levels, availability of financing for  homebuyers, interest rates, levels of new and existing homes for sale, demographic trends, availability of qualified trade workers  and required materials, and housing demand. Competition from rental properties and resale homes, including homes held for  sale by investors and foreclosed homes, may reduce our ability to sell new homes, depress prices and reduce margins for the  sale of new homes. Furthermore, the market value of undeveloped land, buildable lots and housing inventories held by us  can fluctuate significantly as a result of changing economic and real estate market conditions. If there are significant adverse  changes in economic or real estate market conditions, we may have to sell homes at a loss or hold land in inventory longer  than planned. Inventory carrying costs can be significant and can result in losses in a poorly performing project or market. Our  residential property operations may be particularly affected by changes in local market conditions in California, the Washington,  D.C. area, Alberta, Ontario and Brazil, where we derive a large proportion of our residential property revenue. Government  regulations, legal challenges and delays in the entitlement process may delay the start or completion of our communities or limit  our homebuilding or other activities, which could have an adverse impact on our results of operations. Our residential operations  may be affected by the ability to raise capital on favourable terms or at all and by fluctuations in exchange rates. Virtually all of our homebuilding customers finance their home acquisitions through lenders providing mortgage financing.  Volatility experienced in mortgage markets and by many lenders, fewer loan products and tighter loan qualification requirements  have made it more difficult for borrowers to procure mortgages. Even if potential customers do not need financing, changes in  70 BROOKFIELD ASSET MANAGEMENT 