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## PART 4 – CAPITALIZATION AND LIQUIDITY 

## FINANCING STRATEGY 

The following are key elements of our capital strategy: 

• Match our long-life assets with long-duration mortgage financings with a diversified maturity schedule; 

• Provide recourse only to the specific assets being financed, with limited cross collateralization or parental guarantees; 

• Limit borrowings to investment-grade levels based on anticipated performance throughout a business cycle; and 

• Structure our affairs to facilitate access to a broad range of capital and liquidity at multiple levels of the organization. 

Most of our borrowings are in the form of long-term, property-specific financings such as mortgages or project financings secured only by the specific assets. We attempt to diversify our maturity schedule so that financing requirements in any given year are manageable. Limiting recourse to specific assets or business units is intended to limit the impact of weak performance by one asset or business unit on our ability to finance the balance of the operations. 

Most of our financings have investment-grade characteristics which is intended to ensure that debt levels on any particular asset or business can typically be maintained throughout a business cycle, and to enable us to limit covenants and other performance requirements, thereby reducing the risk of early payment requirements or restrictions on the distribution of cash from the assets being financed. Furthermore, our ability to finance at the corporate, operating unit, and asset level on a private or public basis is intended to lessen our dependence on any particular segment of the capital markets or the performance of any particular unit. 

To enable us to react to attractive investment opportunities and deal with contingencies when they arise, we typically maintain sufficient liquidity at the corporate level and within our key operating platforms. Our primary sources of liquidity, which we refer to as “core liquidity,” consist of our cash and financial assets, net of deposits and other associated liabilities, and undrawn committed credit facilities. 

We historically generate substantial liquidity within our operations on an ongoing basis through our operating cash flow, as well as from the turnover of assets with shorter investment horizons and periodic monetization of our longer-dated assets through sales, refinancings or co-investor participations. Accordingly, we believe we have the necessary liquidity to manage our financial commitments and to capitalize on opportunities to invest capital at attractive returns. 

## CAPITALIZATION 

## Overview 

We review key components of our consolidated capitalization in the following sections. In several instances we have disaggregated the balances into the amounts attributable to our operating segments in order to facilitate discussion and analysis. 

The following table presents our capitalization on a corporate (i.e., deconsolidated), a proportionally consolidated and consolidated basis. 

<img src='content_image/228811.jpg'>

1. Represents interest rate swap contracts settled in August 2013 that was previously included in corporate subsidiary borrowings due to a corporate guarantee 

