FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

NOTE 22: CAPITAL MANAGEMENT AND LIQUIDITYThe capital of the Business consists of property debt, capital securities, other secured debt and equity.The parent company’s objectives when managing this capital are to maintain an appropriate balance betweenholding a sufficient amount of capital to support its operations and to reduce its weighted average cost of capitaland improve the returns on equity through value enhancement initiatives and the consistent monitoring of thebalance between debt and equity financing of the subsidiaries. As at December 31, 2011, the recorded values ofcapital in the financial statements totaled $38 billion (2010 - $28 billion). Its principal liquidity needs for the nextyear are to:• fund recurring expenses;• meet debt service requirements;• make dividend payments;• fund those capital expenditures deemed mandatory, including tenant improvements;• fund current development costs not covered under construction loans; and• fund investing activities which could include:O discretionary capital expenditures; andO property acquisitions.Most of the company’s borrowings are in the form of long term asset-specific financings with recourse only tothe specific assets. Limiting recourse to specific assets ensures that poor performance within one area does notcompromise the company’s ability to finance the balance of its operations.The company’s operating subsidiaries are subject to limited covenants in respect of their corporate debt and arein full compliance with all such covenants at December 31, 2011. The company’s operating subsidiaries are alsoin compliance with all covenants and other capital requirements related to regulatory or contractual obligations ofmaterial consequence to the company.The parent company’s strategy is to satisfy its liquidity needs in respect of the Business using the company’scash on hand, cashflows generated from operating activities and provided by financing activities, as well asproceeds from asset sales. The operating subsidiaries of the Business also generate liquidity by accessing capitalmarkets on an opportunistic basis.The company’s principal liquidity needs for periods beyond the next year are for scheduled debt maturities,distributions, recurring and non-recurring capital expenditures, development costs and potential propertyacquisitions. The Business plans to meet these needs with one or more of: cashflows from operations;construction loans; creation of new funds; proceeds from sales of assets; proceeds from sale of non-controllinginterests in subsidiaries; and credit facilities and refinancing opportunities.The following table presents the contractual maturities of the company’s financial liabilities at December 31,2011:(US$ Millions)Payments Due By PeriodTotal Less than 1 Year 2 – 3 years 4 – 5 YearsAfter 5YearsProperty and other secured debt $ 15,598 $ 1,433 $ 6,812 $ 2,063 $ 5,290Capital securities 994 150 392 452 -Other financial liabilities 1,170 1,170 - - -Interest expense (1)Property and other secured debt 4,746 984 1,820 1,015 927Capital securities 152 49 72 31 -(1) Represents aggregate interest expense expected to be paid over the term of the obligations. Variable interest rate payments have beencalculated based on current rates.F-32