Quantitative and Qualitative Disclosures about Market Risk
+Added: We are exposed to economic risks from interest rates and foreign currency exchange rates.
+Added: A portion of these risks is hedged, but the risks may affect our financial statements.
+Added: Interest Rates
We are exposed to interest rate changes primarily as a result of our credit facility and commercial paper program, term loan, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand our real estate investment portfolio and operations.
6 unchanged sentences
We do not enter into any derivative transactions for speculative or trading purposes.
−Removed: The following table presents, by year of expected maturity, the principal amounts, average interest rates and estimated fair values of our fixed rate debt as of December 31, 2020.
−Removed: There was no variable rate debt or debt that was not swapped to fixed at December 31, 2020.
+Added: The following table presents, by year of expected maturity, the principal amounts, average interest rates and estimated fair values of our fixed and variable rate debt as of December 31, 2021.
This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes (dollars in millions):
Expected Maturity Data
−Removed: Year of maturity Fixed rate debt Weighted average rate on fixed rate debt
+Added: Year of maturity Fixed rate debt Weighted average rate on fixed rate debt Variable rate debt Weighted average rate on variable rate debt
2022 $ 271.1 4.93 % $ 901.4 0.38 %
6 unchanged sentences
Fair Value (2)
−Removed: (1) Excludes net premiums recorded on mortgages payable, net original issuance premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and our term loan.
−Removed: At December 31, 2020, the unamortized balance of net premiums on mortgages payable is $1.7 million, the unamortized balance of net original issuance premiums on notes payable is $14.6 million, and the balance of deferred financing costs on mortgages payable is $973,000, on notes payable is $49.2 million, and on our term loan is $642,000.
+Added: $ 14,519.3 $ 1,551.4
+Added: (1) Excludes net premiums recorded on mortgages payable, net premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and our term loan.
+Added: At December 31, 2021, the unamortized balance of net premiums on mortgages payable is $28.7 million, the unamortized balance of net premiums on notes payable is $295.5 million, and the balance of deferred financing costs on mortgages payable is $790,000, on notes payable is $53.1 million, and on our term loan is $443,000.
(2) We base the estimated fair value of the publicly-traded fixed rate senior notes and bonds at December 31, 2021 on the indicative market prices and recent trading activity of our senior notes and bonds payable.
−Removed: We base the estimated fair value of our fixed rate mortgages at December 31, 2020 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
−Removed: We believe that the carrying value of the term loan balance reasonably approximates its estimated fair value at December 31, 2020.
−Removed: The table incorporates only those exposures that exist as of December 31, 2020.
+Added: We base the estimated fair value of our fixed rate mortgages and private senior notes payable at December 31, 2021 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
+Added: We believe that the carrying values of the line of credit borrowings, commercial paper borrowings and term loan balance reasonably approximate their estimated fair values at December 31, 2021.
+Added: The table above incorporates only those exposures that exist as of December 31, 2021.
It does not consider those exposures or positions that could arise after that date.
1 unchanged sentence
At December 31, 2021, our outstanding notes, bonds and mortgages payable had fixed interest rates.
−Removed: Interest on our revolving credit facility and term loan balance is variable.
+Added: Interest on our revolving credit facility, commercial paper borrowings and term loan balance is variable.
However, the variable interest rate feature on our term loan has been mitigated by an interest rate swap agreement.
−Removed: At December 31, 2020, our credit facility balance was zero;
−Removed: however, we intend to borrow funds on our credit facility in the future.
−Removed: Based on a hypothetical credit facility borrowing of $50 million, a 1% change in interest rate would change our interest costs by $500,000 annually.
−Removed: During 2019, we commenced foreign operations and acquired real property in the U.K.
−Removed: and have continued to acquire U.K.
−Removed: properties in 2020.
−Removed: As a result, we are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations.
−Removed: Increases or decreases in the value of Sterling relative to the U.S.
−Removed: dollar impact the amount of net income we earn from our investments in the U.K.
−Removed: We mitigate these foreign currency exposures with non-U.S.
−Removed: denominated borrowings and cross-currency swaps.
−Removed: If we increase our international presence through investments in properties outside the U.S., we may also decide to transact additional business or borrow funds in currencies other than U.S.
+Added: Based on our revolving credit facility balance of $650.0 million at December 31, 2021, a 1% change in interest rates would change our interest rate costs by $6.5 million per year.
+Added: Foreign Currency Exchange Rates
+Added: We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments.
+Added: Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates.
+Added: We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge.
+Added: We continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments, including cross-currency swaps, currency exchange swaps, foreign currency collars, and foreign currency forward contracts with financial counterparties where practicable.
+Added: Such derivative instruments are viewed as risk management tools and are not used for speculative or trading purposes.
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.