filings.toolsItem 7A. Quantitative and Qualitative Disclosures About Market Risk
7K characters. Original on sec.gov · Markdown
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company’s primary market risk exposure is interest rate risk. The following table presents the Company’s aggregate fixed rate and variable rate domestic and foreign debt obligations outstanding as of December 31, 2012, with corresponding weighted-average interest rates sorted by maturity date. The table does not include extension options where available. Amounts include fair value purchase price allocation adjustments for assumed debt. The information is presented in U.S. dollar equivalents, which is the Company’s reporting currency. The instruments’ actual cash flows are denominated in U.S. dollars, Canadian dollars (CAD), Mexican pesos (MXN) and Chilean Pesos (CLP) as indicated by geographic description ($USD equivalent in millions).
| 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| U.S. Dollar Denominated | ||||||||||||||||||||||||||||||||
| Secured Debt | ||||||||||||||||||||||||||||||||
| Fixed Rate | $ | 85.1 | $ | 192.0 | $ | 128.9 | $ | 256.6 | $ | 184.4 | $ | 88.4 | $ | 935.4 | $ | 995.7 | ||||||||||||||||
| Average Interest Rate | 5.99 | % | 6.47 | % | 5.43 | % | 6.69 | % | 6.15 | % | 6.80 | % | 6.31 | % | ||||||||||||||||||
| Variable Rate | $ | - | $ | - | $ | 6.0 | $ | - | $ | - | $ | 21.5 | $ | 27.5 | $ | 26.9 | ||||||||||||||||
| Average Interest Rate | - | - | 0.17 | % | - | - | 3.06 | % | 2.43 | % | ||||||||||||||||||||||
| Unsecured Debt | ||||||||||||||||||||||||||||||||
| Fixed Rate | $ | 275.0 | $ | 294.8 | $ | 350.0 | $ | 300.0 | $ | 290.9 | $ | 600.0 | $ | 2,110.7 | $ | 2,346.0 | ||||||||||||||||
| Average Interest Rate | 5.40 | % | 5.20 | % | 5.29 | % | 5.78 | % | 5.70 | % | 5.59 | % | 5.50 | % | ||||||||||||||||||
| Variable Rate | $ | 2.2 | $ | 400.0 | $ | 250.0 | $ | - | $ | - | $ | - | $ | 652.2 | $ | 629.8 | ||||||||||||||||
| Average Interest Rate | 5.50 | % | 1.26 | % | 1.25 | % | - | - | - | 1.27 | % | |||||||||||||||||||||
| CAD Denominated | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Unsecured Debt | ||||||||||||||||||||||||||||||||
| Fixed Rate | $ | 201.3 | $ | - | $ | - | $ | - | $ | - | $ | 151.0 | $ | 352.3 | $ | 363.1 | ||||||||||||||||
| Average Interest Rate | 5.18 | % | - | - | - | - | 5.99 | % | 5.53 | % | ||||||||||||||||||||||
| MXN Denominated | ||||||||||||||||||||||||||||||||
| Unsecured Debt | ||||||||||||||||||||||||||||||||
| Fixed Rate | $ | 76.9 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 76.9 | $ | 69.6 | ||||||||||||||||
| Average Interest Rate | 8.58 | % | - | - | - | - | - | 8.58 | % | |||||||||||||||||||||||
| CLP Denominated | ||||||||||||||||||||||||||||||||
| Secured Debt | ||||||||||||||||||||||||||||||||
| Variable Rate | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 40.3 | $ | 40.3 | $ | 45.9 | ||||||||||||||||
| Average Interest Rate | - | - | - | - | - | 5.72 | % | 5.72 | % |
Based on the Company’s variable-rate debt balances, interest expense would have increased by $7.2 million in 2012 if short-term interest rates were 1.0% higher.
The Company also faces foreign currency exchange risk. The following table presents the Company’s foreign investments as of December 31, 2012. Investment amounts are shown in their respective local currencies and the U.S. dollar equivalents:
| Foreign Investment (in millions) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Country | Local Currency | US Dollars | ||||||
| Mexican real estate investments (MXN) | 8,881.2 | $ | 685.0 | |||||
| Canadian real estate joint venture and marketable securities investments (CAD) | 397.8 | $ | 400.5 | |||||
| Chilean real estate investments (CLP) | 37,761.2 | $ | 78.9 | |||||
| Brazilian real estate investments (Brazilian Real) | 43.5 | $ | 21.3 | |||||
| Peruvian real estate investments (Peruvian Nuevo Sol) | 14.7 | $ | 5.9 |
The foreign currency exchange risk has been partially mitigated, but not eliminated, through the use of local currency denominated debt. The Company has not, and does not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of December 31, 2012, the Company has no other material exposure to market risk.
Item 8. Financial Statements and Supplementary Data
The response to this Item 8 is included in our audited Notes to Consolidated Financial Statements, which are contained in Part IV Item 15 of this Form 10-K.
Previous: Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations · Next: Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure