company’s derivative financial instruments involve either counterparties that are banks or other financial institutions in North  America, the United Kingdom and Australia, or arrangements that have embedded credit risk mitigation features. The company  does not expect to incur credit losses in respect of any of these counterparties. The maximum exposure in respect of loans  receivable and credit investments is equal to the carrying value. Liquidity risk is the risk that the company cannot meet a demand for cash or fund an obligation as it comes due. Liquidity risk  also includes the risk of not being able to liquidate assets in a timely manner at a reasonable price.  To ensure the company is able to react to contingencies and investment opportunities quickly, the company maintains sources  of liquidity at the corporate and subsidiary level. The primary source of liquidity consists of cash and other financial assets, net  of deposits and other associated liabilities, and undrawn committed credit facilities.  The company is subject to the risks associated with debt financing, including the ability to refinance indebtedness at maturity.  The company believes these risks are mitigated through the use of long-term debt secured by high-quality assets, maintaining  debt levels that are in management’s opinion relatively conservative, and by diversifying maturities over an extended period of  time. The company also seeks to include in its agreements terms that protect the company from liquidity issues of counterparties  that might otherwise impact the company’s liquidity. The capital of the company consists of the components of equity in the company’s consolidated balance sheet (i.e., common and  preferred equity) as well as the company’s capital securities, which include corporate preferred shares that are convertible into  common shares at the option of either the holder or the company. As at December 31, 2013, the recorded values of these items  in the company’s consolidated financial statements totalled $21.0 billion (2012 – $21.4 billion). The company’s objectives when managing this capital are to maintain an appropriate balance between holding a sufficient  amount of capital to support its operations, which includes maintaining investment-grade ratings at the corporate level, and  providing shareholders with a prudent amount of leverage to enhance returns. Corporate leverage, which consists of corporate  debt as well as subsidiary obligations that are guaranteed by the company or are otherwise considered corporate in nature,  totalled $4.0 billion based on carrying values at December 31, 2013 (2012 – $4.7 billion). The company monitors its capital base  and leverage primarily in the context of its deconsolidated debt-to-total capitalization ratios. The ratio as at December 31, 2013  was 15% (2012 – 17%). The consolidated capitalization of the company includes the capital and financial obligations of consolidated entities, including  long-term property-specific financings, subsidiary borrowings, capital securities as well as common and preferred equity held by  other investors in these entities. The capital in these entities is managed at the entity level with oversight by management of the  company. The capital is managed with the objective of maintaining investment-grade levels in most circumstances and is, except  in limited and carefully managed circumstances, without any recourse to the company. Management of the company also takes  into consideration capital requirements of consolidated and non-consolidated entities that it has interests in when considering the  appropriate level of capital and liquidity on a deconsolidated basis. The company is subject to limited covenants in respect of its corporate debt and is in full compliance with all such covenants as  at December 31, 2013 and 2012. The company and its consolidated entities are also in compliance with all covenants and other  capital requirements related to regulatory or contractual obligations of material consequence to the company. The company offers pension and other post-employment benefit plans to employees of certain of its subsidiaries. The company’s  obligations under its defined benefit pension plans are determined periodically through the preparation of actuarial valuations.  The benefit plans’ in year valuation change was $26 million (2012 – $23 million). The discount rate used was 5% (2012 – 5%)  with an increase in the rate of compensation of 3% (2012 – 3%) and an investment rate of 5% (2012 – 5%). 2013 ANNUAL REPORT 143 (MILLIONS) Dec. 31, 2013 Dec. 31, 2012 Plan assets  $ 662 $ 1,141 Less accrued benefit obligation: Defined benefit pension plan  (796) (1,324) Other post-employment benefits  (36) (51) Net liability  (170) (234) Less: net actuarial losses  3 39 Accrued benefit liability  $ (167) $ (195) 28.  CAPITAL MANAGEMENT c)  Liquidity Risk 29.  POST-EMPLOYMENT BENEFITS