|
|
|
|
At March 31, 2012 |
|
At December 31, 2011 |
|
|
|
|
Carrying
Value |
|
Fair
Value |
|
Carrying
Value |
|
Fair
Value |
|
|
Mortgage loans receivable |
|
$ |
52,368 |
|
$ |
60,467 |
(1) |
$ |
53,081 |
|
$ |
61,844 |
(1) |
|
Marketable debt securities |
|
6,486 |
|
6,516 |
(2) |
6,485 |
|
6,500 |
(2) |
|
Bonds payable |
|
2,635 |
|
2,635 |
(3) |
3,200 |
|
3,200 |
(3) |
|
Bank borrowings |
|
73,000 |
|
73,000 |
(3) |
56,000 |
|
56,000 |
(3) |
|
Senior unsecured notes |
|
100,000 |
|
104,120 |
(4) |
100,000 |
|
101,223 |
(4) |
|
Earn-out liabilities |
|
6,414 |
|
6,414 |
(5) |
6,305 |
|
6,305 |
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at March 31, 2012 and December 31, 2011 was 6.0%.
(2) Our investment in marketable debt securities is classified as Level 2. The fair value is measured using quoted market rates based on most recent transactions from an independent third party source. The pricing of our marketable debt securities as of March 31, 2012 and December 31, 2011 was 100.25% and 100.00%, respectively. See Note 4. Marketable Securities for further discussion.
(3) Our bonds payable and bank borrowings are at a variable interest rate. The estimated fair value of our bonds payable and bank borrowings approximated their carrying values at March 31, 2012 and December 31, 2011 based upon prevailing market interest rates for similar debt arrangements.
(4) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At March 31, 2012 the discount rate used to value our future cash outflow of our senior unsecured notes was 3.8% for those maturing before year 2019 and 4.4% for those maturing in year 2021. At December 31, 2011, the discount rate used to value our future cash outflow of our senior unsecured notes was 4.8% for all maturity dates.
(5) Our contingent obligation under the earn-out liabilities is classified as Level 3. We estimated the fair value of the contingent earn-out payments using a discounted cash flow analysis. The discount rate that we use consists of a risk-free U.S. Treasury rate plus a company specific credit spread which we believe is acceptable by willing market participants. At March 31, 2012 and December 31, 2011, the discount rate used to value our future cash outflow of the earn-out liability was 6.75% and 6.82%, respectively. |