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## H&R REAL ESTATE INVESTMENT TRUST H&R FINANCE TRUST 

Notes to Combined Financial Statements  (In thousands of dollars, except unit and per unit amounts) 

## Years ended December 31, 2010 and 2009 

## 5. Other assets: 

<img src='content_image/237215.jpg'>

## 6. Cash and cash equivalents: 

Cash and cash equivalents at December 31, 2010 includes cash on hand of $6,785 (2009 - $9,281) and bank term deposits of $3,945 (2009 - $99,943) at rates of interest varying between 0.93% to 1.00% (2009 - 0.11% to 0.26%). 

## 7. Mortgages payable: 

The mortgages payable are secured by income properties and letters of credit in certain cases, bearing fixed interest with a contractual weighted average rate of 6.2% (2009 - 6.2%) per annum and maturing between 2011 and 2035. Included in mortgages payable at December 31, 2010 are U.S. dollar denominated mortgages of U.S. $824,066 (2009 - U.S. $826,906). The Canadian equivalents of these amounts are $815,826 (2009 - $868,252). 

During the year ended December 31, 2010, the REIT entered into an interest rate swap on one mortgage. The fair value of this interest rate swap as at December 31, 2010 is a liability of $420. The change in fair value of $420 and the related $15 foreign exchange loss for the year ended December 31, 2010, have been recorded as a total unrealized loss of $435. 

Debt related to certain Canadian properties is held by separate legal entities, where the rent received from each property is first used to satisfy the related debt obligations with any balance then available to satisfy the cash flow requirements of the REIT. 

