Derivative Financial Instruments We record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends  on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge  accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. We use a variety  of derivative financial instruments in the normal course of business to selectively manage or hedge the risks associated with our  indebtedness and interest payments. Our objectives in using interest rate derivatives are to add stability to interest expense and to  manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps and caps. We  require that hedging derivative instruments be highly effective in reducing the risk exposure that they are designated to hedge. As  a result, there was no significant ineffectiveness from any of our derivative activities during the period. We formally designate any  instrument that meets these hedging criteria as a hedge at the inception of the derivative contract. We have no credit-risk-related  hedging or derivative activities. As of December 31, 2011, we had the following outstanding interest rate derivatives related to interest rate risk: The carrying value of our interest rate swap agreements, at fair value, is a net liability balance of $10.0 million and $19.5  million at December 31, 2011 and 2010, respectively, and is included in other liabilities and accrued dividends. The interest rate  cap agreements were of nominal value at December 31, 2011 and 2010 and we generally do not apply hedge accounting to these  arrangements. We are also exposed to fluctuations in foreign exchange rates on financial instruments which are denominated in foreign  currencies, primarily in Japan and Europe. We use currency forward contracts to manage our exposure to changes in foreign  exchange rates on certain Yen and Euro-denominated receivables and net investments. Currency forward contracts involve fixing  the Yen-USD or Euro-USD exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency  forward contracts are typically cash settled in US dollars for their fair value at or close to their settlement date. Approximately  ¥2.6 billion remains as of December 31, 2011 for all forward contracts. We entered into Yen-USD forward contracts during 2009  for approximately ¥3 billion that we received through April 2011 and we entered into Yen-USD forward contracts during 2010 for  ¥1.7 billion that we expect to receive through October 2012. In 2011, we entered into additional Yen-USD forward contracts for  approximately ¥3.8 billion that we expect to receive through October 1, 2013. The December 31, 2011 net liability balance related  to these forwards was $2.2 million and is included in other liabilities and accrued distributions. We have reported the changes  in fair value for these forward contracts in earnings. The underlying currency adjustments on the foreign currency denominated  receivables are also reflected in income and generally offset the amounts in earnings for these forward contracts. In 2011,  we entered into a Euro-USD forward contract with a €141.3 million notional value maturing on January 31, 2012 which was  designated as a net investment hedge. The December 31, 2011 asset balance related to this forward was $14.9 million and is  included in deferred costs and other assets. We apply hedge accounting and the change in fair value for this Euro forward contract  is reflected in other comprehensive income. Changes in the value of this hedge are offset by changes in the underlying hedged  Euro-denominated joint venture investment. In connection with our sale of Gallerie Commerciali Italia, S.p.A., or GCI, as further  discussed in Note 14, this hedge was terminated. The total gross accumulated other comprehensive loss related to our derivative activities, including our share of the other  comprehensive loss from joint venture properties and terminated hedging relationships, approximated $115.8 million and  $40.1 million as of December 31, 2011 and 2010, respectively. 2011 Annual Report 43 Interest Rate Derivative  Number of Instruments  Notional Amount Interest Rate Swaps  3  $485.8 million Interest Rate Caps  3  $381.3 million