13. |
Derivative Financial
Instruments |
The following table summarizes the terms of the forward interest
rate swaps held by the Company or through its joint ventures and
the asset (liability) that has been recorded as of
December 31, 2013 (in thousands):
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Fair value asset (liability) |
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December 31, |
|
Notional
amount |
|
|
Strike (1) |
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|
Credit
Spread (1) |
|
|
Trade
date |
|
|
Maturity
date |
|
|
2013 |
|
|
2012 |
|
$ |
12,421 |
(2) |
|
|
1.3 |
% |
|
|
2.6 |
% |
|
|
1/17/13 |
|
|
|
1/15/18 |
|
|
$ |
83 |
|
|
$ |
— |
|
$ |
38,255 |
(3) |
|
|
2.7 |
% |
|
|
2.5 |
% |
|
|
9/6/13 |
|
|
|
7/10/18 |
|
|
$ |
(590 |
) |
|
$ |
— |
|
$ |
26,067 |
(3) |
|
|
2.8 |
% |
|
|
2.5 |
% |
|
|
9/6/13 |
|
|
|
8/29/18 |
|
|
$ |
(435 |
) |
|
$ |
— |
|
$
|
29,952
|
(3)
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|
0.9 |
% |
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2.7 |
% |
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11/13/13
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5/31/16 |
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|
$ |
(10 |
) |
|
$ |
— |
|
$
|
30,000
|
(3)
|
|
|
1.1 |
% |
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|
4.3 |
% |
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|
10/22/13 |
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|
8/19/16
|
|
|
$ |
(8 |
) |
|
$ |
— |
|
The following table summarizes the gross and net amounts of the
Company’s forward interest rate swaps as presented in the
accompanying consolidated balance sheet as of December 31,
2013 (in thousands):
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Gross and net amounts of
asset (liability)
presented in the accompanying
consolidated balance sheet
as of December 31, 2013 |
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|
Gross amounts in
the
accompanying consolidated balance
sheet as of December 31, 2013 |
|
Notional
amount |
|
|
Gross
amount |
|
|
Offset
amount |
|
|
Net
amount |
|
|
Financial
Instruments |
|
|
Cash
Collateral |
|
|
Net
Amount |
|
$ |
12,421 |
(2) |
|
$ |
83 |
|
|
$ |
— |
|
|
$ |
83 |
|
|
$ |
83 |
|
|
$ |
— |
|
|
$ |
83 |
|
$ |
38,255 |
(3) |
|
$ |
(590 |
) |
|
$ |
— |
|
|
$ |
(590 |
) |
|
$ |
(590 |
) |
|
$ |
— |
|
|
$ |
(590 |
) |
$ |
26,067 |
(3) |
|
$ |
(435 |
) |
|
$ |
— |
|
|
$ |
(435 |
) |
|
$ |
(435 |
) |
|
$ |
— |
|
|
$ |
(435 |
) |
$ |
29,952 |
(3) |
|
$ |
(10 |
) |
|
$ |
— |
|
|
$ |
(10 |
) |
|
$ |
(10 |
) |
|
$ |
— |
|
|
$ |
(10 |
) |
$ |
30,000 |
(3) |
|
$ |
(8 |
) |
|
$ |
— |
|
|
$ |
(8 |
) |
|
$ |
(8 |
) |
|
$ |
— |
|
|
$ |
(8 |
) |
FOOTNOTES:
(1) |
The all-in rates for each swap are
equal to the sum of the Strike and Credit Spread detailed
above. |
(2) |
Amounts related to the swap held by
the Montecito Joint Venture for which the proportion of fair value
relative to the Company’s ownership percentage are included
in investments in unconsolidated entities in the accompanying
consolidated balance sheet as of December 31, 2013. |
(3) |
Amounts are included in other
liabilities in the accompanying consolidated balance sheet as of
December 31, 2013. |
The forward interest rate swaps are valued primarily based on
inputs other than quoted prices that are observable for the assets
or liabilities (such as interest rates, volatilities, and credit
risks), and are classified as Level 2 in the fair value hierarchy.
Determining fair value requires management to make certain
estimates and judgments. Changes in assumptions could have a
positive or negative impact on the estimated fair values of such
instruments could, in turn, impact the Company’s or its joint
venture’s results of operations.
The Company, or its equity method investments, did not hold any
derivative financial instruments as of December 31, 2012 or
for the years ended December 31, 2012 and 2011.
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