PSH-Annual-Report

Annual Report December 31, 2014Notes to Financial Statements (continued)13. FINANCIAL RISK AND MANAGEMENTOBJECTIVES AND POLICIES (continued)The following table analyzes the Company’sconcentration of equity price risk in the Company’sequity portfolio by geographical distribution (basedon counterparties’ place of primary listing or, if notlisted, place of domicile).2014 2013North America 100% 98%Europe – 2%Total 100% 100%The following table analyzes the Company’sconcentration of equity price risk in the Company’sequity portfolio by industry sectors:2014 2013Healthcare 48% –%Industrials/Chemicals 19% 19%Transportation 14% 21%Restaurant 8% 7%Consumer Products 5% 23%Real Estate Developmentand Operating3% 7%Financial Services 3% 6%Food & Beverage –% 12%REIT –% 4%Technology –% 1%Total 100% 100%Liquidity RiskThe Company’s policy and the InvestmentManager’s approach to managing liquidity are toensure, as much as possible, that it will havesufficient liquidity to meet its liabilities when due,under both normal and stressful market conditions.The Company invests primarily in liquid, largecapitalization securities which, under normalmarket conditions, are readily convertible to cash.Less liquidity is tolerated in situations where therisk/reward trade-off is sufficiently attractive tojustify the degree of illiquidity. Exposure to liquidityrisk arises because of the possibility that theCompany could be required to pay its liabilities (orredeem its shares during the Private Phase) earlierthan expected.During the Private Phase, holders of PrivateShares could redeem one-eighth of their capital,upon 65 days’ prior written notice, on the last dayof each calendar quarter starting from the first fullcalendar quarter after the issuance of such PrivateShares. If a shareholder elected not to redeemone-eighth of its Private Shares in any quarter,then such one-eighth (or the remaining portion inthe event of a redemption of less than one-eighthin such quarter) could have been redeemed twoyears after such quarter. During the Private Phase,holders of Management Shares, except William A.Ackman who committed to maintain his investmentfor ten years, had the same redemption rights asthe Private Shares except that the InvestmentManager and/or its affiliates could have redeemedall or a portion of their interests in the Company asof the last day of any quarter in order to satisfy anytax obligations related to their respective interestsin the Company.The following tables summarize the liquidity profileof the Company’s financial assets and liabilities,cash and cash equivalents (including due to/frombroker) and trade receivables and payables basedon undiscounted cash flows:As of December 31, 2014 Less than 1 Month 1 to 3 Months 3 to 6 Months 6 to 12 Months Over 1 Year TotalAssetsCash and cash equivalents $ 565,809,913 $ - $ - $ - $ - $ 565,809,913Due from brokers 515,560,923 - - - - 515,560,923Trade and other receivables 4,786,430 - - - - 4,786,430Financial assets at fair valuethrough profit or lossInvestments in securities 2,304,715,886 3,056,636,080 132,833,496 231,861,923 65,140,398 5,791,187,783Derivative financial instruments 85,762,013 108,356,069 29,219,423 45,172,696 20,604,732 289,114,933Total assets $ 3,476,635,165 $ 3,164,992,149 $ 162,052,919 $ 277,034,619 $ 85,745,130 $ 7,166,459,982LiabilitiesDue to brokers $ 68,450,144 $ - $ - $ - $ - $ 68,450,144Trade and other payables 119,212,022 - - - - 119,212,022Financial liabilities at fair valuethrough profit or lossSecurities sold, not yet purchased 266,320,348 116,261,564 8,703,213 - - 391,285,125Derivative financial instruments 9,105,121 15,266,320 1,166,973 817,303 783,907 27,139,624Total liabilities excluding net assetsattributable to managementshareholders $ 463,087,635 $ 131,527,884 $ 9,870,186 $ 817,303 $ 783,907 $ 606,086,915Net assets attributable tomanagement shareholders $ - $ 4,419,966 $ - $ - $ 222,806,294 $ 227,226,260Total liabilities $ 463,087,635 $ 135,947,850 $ 9,870,186 $ 817,303 $ 223,590,201 $ 833,313,175PERSHING SQUARE HOLDINGS, LTD. 63