Management’s discussion and analysis of financial condition and results of operations addresses the financial condition of the Corporation and its subsidiaries as of December 31, 2001 compared with December 31, 2000 and the Corporation’s results of operations for each of the three years in the period ended December 31, 2001. The supplementary financial information and the consolidated financial statements and related notes, all of which are integral parts of the following analysis of our results and our financial position, are incorporated by reference from the Corporation’s 2001 Annual Report to Shareholders, pages 21, 22 and 48 through 71.
the availability of primary and reinsurance coverage, including 	the implications relating to the absence of terrorism 	legislation;
the occurrence of significant weather-related or other natural 	or human-made disasters;
In the latter part of 2001, we had homeowners rate increases approved in many of the states where rates are deficient. We are seeking a second round of rate increases and are increasing insurance to value. We saw a dramatic proliferation of water damage claims in 2001, particularly in Texas, where state mandated policy language has contributed to broader water damage coverage. We are closely monitoring the water damage issue in Texas and in other states where it is becoming a growing concern. If necessary, we will reduce our presence in states where we cannot attain rate adequacy due to regulatory constraints or adverse loss trends.
are presenting new asbestos claims as non-products premises or operations claims or attempting to reclassify old products claims. The extent to which insureds will be successful in obtaining coverage on this basis is uncertain.
The unrealized market appreciation before tax of those fixed maturities carried at amortized cost was $64 million, $69 million and $59 million at December 31, 2001, 2000 and 1999, respectively. Such unrealized appreciation was not reflected in the consolidated financial statements.
Foreign currency risk is the sensitivity to foreign exchange rate fluctuations of the market value and investment income related to foreign currency denominated financial instruments. The functional currency of our foreign operations is generally the currency of the local operating environment since their business is transacted primarily in such local currency. We reduce the risks relating to currency fluctuations by maintaining investments in those foreign currencies in which our property and casualty subsidiaries have loss reserves and other liabilities. Such investments have characteristics similar to our liabilities in those currencies. At December 31, 2001, the property and casualty subsidiaries held non-U.S. investments of $1.6 billion supporting their international operations. These investments have quality and maturity characteristics similar to our domestic portfolio. The principal currencies creating foreign exchange rate risk for the property and casualty subsidiaries are the euro, the Canadian dollar and the British pound sterling. The following table provides information about those fixed maturity investments that are denominated in these currencies. The table presents cash flows of principal amounts in U.S. dollar equivalents by expected maturity dates at December 31, 2001 and 2000. Actual cash flows could differ from the expected amounts.
We also have interest rate risk on our debt obligations. The table on page 33 provides information about our long term debt obligations and related interest rate swap at December 31, 2001. For debt obligations, the table presents expected cash flows of principal amounts and related weighted average