DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Sep. 30, 2012

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 18—DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges of Interest Rate Risk

        The Trust's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Trust primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Trust making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

        The effective portion of changes in the fair value of derivatives, designated and that qualify as cash flow hedges, is recorded in accumulated other comprehensive income on our consolidated balance sheet and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. In March 2012, the Trust entered into an interest rate swap agreement used to hedge the variable cash flows associated with existing variable-rate debt.

        Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Trust's variable-rate debt.

        As of September 30, 2012, the Trust had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk (dollars in thousands):

Interest Rate Derivative	Notional		Rate			Maturity
Interest Rate Swap	$	1,954		5.25	%		April 1, 2022

        The table below presents the fair value of the Trust's derivative financial instrument as well as its classification on the consolidated balance sheets as of the dates indicated (amounts in thousands):

Derivatives as of:
September 30, 2012			September 30, 2011
Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Other Assets	$	10		$	—
Accounts payable and accrued liabilities	$	104	Accounts payable and accrued liabilities	$	—

        The following table presents the effect of the Trust's derivative financial instrument on the consolidated statements of comprehensive income (loss) for the year ended September 30, 2012 (dollars in thousands):

	Year ended September 30, 2012
Amount of loss recognized on derivative in Other Comprehensive Income	$	123
Amount of loss reclassified from Accumulated Other Comprehensive Income into Interest Expense	$	19

        No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Trust's cash flow hedges during the years ended September 30, 2012, 2011 or 2010. During the twelve months ending September 30, 2013, the Trust estimates an additional $36,000 will be reclassified from other comprehensive income as an increase to interest expense.

        Credit-risk-related Contingent Features

        The agreement between the Trust and its derivatives counterparty provides that if the Trust defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Trust could be declared in default on its derivative obligation.

        As of September 30, 2012, the fair value of the derivative in a net liability position, which includes accrued interest, but excludes any adjustment for nonperformance risk related to this agreement, was $110,000. As of September 30, 2012, the Trust has not posted any collateral related to this agreement. If the Trust had been in breach of this agreement at September 30, 2012, it could have been required to settle it obligations thereunder at its termination value of $110,000.