PSH-Annual-Report

Annual Report December 31, 2014Notes to Financial Statements (continued)8. DERIVATIVE CONTRACTS (continued)The table below summarizes gains or losses fromthe Company’s derivative trading activities forDecember 31, 2014 and December 31, 2013included in net gain/(loss) on financial assets andliabilities.Derivatives for Year Ended 2014 Year Ended 2013Trading Activities Net Gain/(Loss) Net Gain/(Loss)Currency Call/Put Options $ (6,959,589) $ (9,230,816)Equity Options 58,580,114 (6,875,378)Interest Rate Options (41,677) (53,519)Interest Rate Swaptions - (304,967)Interest CDS Swaptions - (588,451)Warrants (2,192,329) 25,969,554Foreign CurrencyForward Contracts 40,008,042 18,569,718Total Return Swaps (19,231,419) 9,807,069Credit Default Swaps (119,036) (1,645,264)Investment Grade IndexTranche Swaps - 149,875Total Net Gain $ 70,044,106 $ 35,797,821Offsetting of Derivative Assets and LiabilitiesThe amendments to IFRS 7 require an entity todisclose information about offsetting rights andrelated arrangements. The disclosures provideusers with information to evaluate the effect ofnetting arrangements on an entity’s financialposition. The new disclosures are required for allrecognized financial instruments that are offset inaccordance with IAS 32 Financial InstrumentsPresentation. The disclosures also apply torecognized financial instruments that are subject toan enforceable master netting arrangement orsimilar agreement, irrespective of whether they areoffset in accordance with IAS 32.The table below displays the amounts by which thefair values of derivative assets and liabilities couldbe reduced in the statement of financial position asa result of counterparty netting. Collateral pledgedrepresents the amounts by which derivative assetsand liabilities could have been further reduced forfinancial presentation purposes if the Company didnot include collateral amounts in due from brokersin the statement of financial position.As ofDecember 31, 2014(1)Gross AmountsGross AmountsOffset in theStatement ofFinancial PositionNet AmountsPresented in theStatement ofFinancial PositionOffsetting PermittedUnder ISDA NettingAgreements(2)Cash CollateralPledged/(Received)Net AmountDerivative Assets $ 100,787,318 $ - $ 100,787,318 $ (13,889,759) $ (69,318,281) $17,579,278Total $ 100,787,318 $ - $ 100,787,318 $ (13,889,759) $ (69,318,281) $17,579,278Derivative Liabilities $ (14,711,281) $ - $ (14,711,281) $ 13,889,759 $ 754,567 $ (66,955)Total $ (14,711,281) $ - $ (14,711,281) $ 13,889,759 $ 754,567 $ (66,955)As ofDecember 31, 2013(1)Gross AmountsGross AmountsOffset in theStatement ofFinancial PositionNet AmountsPresented in theStatement ofFinancial PositionOffset PermittedUnder ISDA NettingAgreements(3)Cash CollateralPledged/(Received)Net AmountDerivative Assets $ 181,381,914 $ - $ 181,381,914 $ (89,428,003) $ (85,805,579) $ 6,148,332Total $ 181,381,914 $ - $ 181,381,914 $ (89,428,003) $ (85,805,579) $ 6,148,332Derivative Liabilities $ (91,744,432) $ - $ (91,744,432) $ 89,428,003 $ 2,215,743 $ (100,686)Total $ (91,744,432) $ - $ (91,744,432) $ 89,428,003 $ 2,215,743 $ (100,686)(1) The gross amounts include derivative assets and liabilitieswhich the Company has entered into with an ISDAcounterparty and are collateralized.(2) Excess collateral posted of approximately $90 million isnot reflected in the table above.(3) The Company has also received excess collateral fromcounterparties of approximately $13 million which is notreflected in the table above. Excess collateral posted ofapproximately $18 million is not reflected in the tableabove.PERSHING SQUARE HOLDINGS, LTD. 57