12 unchanged sentences
We also carefully monitor the performance of the loans, including those held through our joint venture investments, as well as external factors that may affect their value.
−Removed: For more information, see Item 2, “ Management's Discussion and Analysis — Risk Management .”
Interest Rate and Credit Curve Spread Risk
15 unchanged sentences
Moreover, with respect to certain of the instruments used as hedges, we are exposed to the risk that the counterparties with which we trade may cease making markets and quoting prices in such instruments, which may render us unable to enter into an offsetting transaction with respect to an open position.
−Removed: If we anticipate that the income
−Removed: from any such hedging transaction will not be qualifying income for REIT income purposes, we may conduct all or part of our hedging activities through a to-be-formed corporate subsidiary that is fully subject to federal corporate income taxation.
+Added: If we anticipate that the income from any such hedging transaction will not be qualifying income for REIT income purposes, we may conduct all or part of our hedging activities through a to-be-formed corporate subsidiary that is fully subject to federal corporate income taxation.
Our profitability may be adversely affected during any period as a result of changing interest rates.
1 unchanged sentence
We limit our exposure to interest rate increases for our debt primarily through the use of interest rate caps.
−Removed: At September 30, 2020, we did not have any outstanding interest rate swap positions.
−Removed: The interest rate sensitivity table below illustrates the hypothetical impact of changes in the index rates in 1% increments on our interest expense in a one year period, assuming no changes in our debt principal as it stood at September 30, 2020, and taking into account the effects of interest rate caps and contractual floors on indices.
−Removed: The maximum decrease in the interest rates is assumed to be the actual applicable indices at September 30, 2020, all of which were under 1% at September 30, 2020.
+Added: The interest rate sensitivity table below illustrates the hypothetical impact of changes in the index rates in 1% increments on our interest expense in a one year period, assuming no changes in our debt principal as it stood at March 31, 2021, and taking into account the effects of interest rate caps and contractual floors on indices.
+Added: The maximum decrease in the interest rates is assumed to be the actual applicable indices at March 31, 2021, all of which were under 1% at March 31, 2021.
($ in thousands) +2.00% +1.00% Maximum Decrease in Applicable Index
3 unchanged sentences
Foreign Currency Risk
−Removed: We have foreign currency rate exposures related to our foreign currency-denominated investments held predominantly by our foreign subsidiaries and to a lesser extent, by U.S.
+Added: We have foreign currency rate exposures related to our foreign currency-denominated investments, in EUR and in GBP, held predominantly by our foreign subsidiaries and to a lesser extent, by U.S.
subsidiaries.
Changes in foreign currency rates can adversely affect the fair values and earnings of our non-U.S.
−Removed: We generally mitigate this foreign currency risk by utilizing currency instruments to hedge our net investments in our foreign subsidiaries.
−Removed: We had previously employed forwards and costless collars (buying a protective put while writing an out-of the-money covered call with a strike price at which the premium received is equal to the premium of the protective put purchased) which involved no initial capital outlay as hedging instruments on our foreign subsidiary investments.
−Removed: During the quarter ended September 30, 2020, we settled all our outstanding foreign currency hedges and replaced them with put options purchased through upfront premiums.
−Removed: At September 30, 2020, we had approximately €485.3 million and £262.7 million or a total of $0.9 billion, in net investments in our European subsidiaries.
−Removed: A 1% change in these foreign currency rates would result in a $8.7 million increase or decrease in translation gain or loss included in other comprehensive income in connection with investments in our European subsidiaries, and a $0.3 million gain or loss in earnings in connection with a GBP denominated loan receivable held by a U.S subsidiary.
−Removed: A summary of the foreign exchange contracts in place at September 30, 2020, including notional amounts and key terms, is included in Note 11 to the consolidated financial statements.
+Added: We generally mitigate this foreign currency risk by utilizing currency instruments to hedge our net investments in our foreign subsidiaries, using primarily foreign currency put options, forward contracts and costless collars.
The maturity dates of these instruments approximate the projected dates of related cash flows for specific investments.
−Removed: Termination or maturity of currency hedging instruments may result in an obligation for payment to or from the counterparty to the hedging agreement.
−Removed: We are exposed to credit loss in the event of non-performance by counterparties for these contracts.
−Removed: To manage this risk, we select major international banks and financial institutions as counterparties and perform a quarterly review of the financial health and stability of our trading counterparties.
−Removed: Based on our review at September 30, 2020, we do not expect any counterparty to default on its obligations.
−Removed: Many of our assets and liabilities are interest rate sensitive in nature.
−Removed: As a result, interest rates and other factors influence our performance more so than inflation, although inflation rates can often have a meaningful influence over the direction of interest rates.
−Removed: Furthermore, our financial statements are prepared in accordance with GAAP and our distributions as determined by our board of directors will be primarily based on our taxable income, and, in each case, our activities and balance sheet are measured with reference to historical cost and/or fair value without considering inflation.
+Added: We expect our foreign currency exposure to be reduced significantly in the near future as we are currently pursuing a monetization of the remaining investments in our OED portfolio in the Other segment, which holds a substantial portion of our foreign currency denominated investments.
+Added: Commodity Price Risk
+Added: Certain operating costs in our data center portfolio are subject to price fluctuations caused by volatility of underlying commodity prices, primarily electricity used in our data center operations.
+Added: We closely monitor the cost of electricity at all of our locations and may enter into power utility contracts to purchase electricity at fixed prices in certain locations in the U.S., with such contracts generally representing less than our forecasted usage.
+Added: Our building of new data centers and expansion of existing data centers will also subject us to commodity price risk with respect to building materials such as steel and copper.
+Added: Additionally, the lead time to procure data center equipment is substantial and procurement delays could increase construction cost and delay revenue generation.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.