Impairments

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property, a fair value analysis is performed and, to the extent the estimated fair value is less than the current book value, a provision for impairment is recorded to reduce the book value to estimated fair value. Key assumptions that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures and property sales capitalization rates. If a property is classified as held for sale, it is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell, and depreciation of the property ceases.

During 2020, we identified the impact of the COVID-19 pandemic as an impairment triggering event for properties occupied by certain tenants experiencing difficulties meeting their lease obligations to us. After considering the impacts of the COVID-19 pandemic on the key assumptions noted above, we determined that the carrying values of 17 properties classified as held for investment for the three months ended September 30, 2020, and 25 properties classified as held for investment for the nine months ended September 30, 2020 were not recoverable. As a result, we recorded provisions for impairment of $81.6 million for the three months ended September 30, 2020, and $89.8 million for the nine months ended September 30, 2020, on the applicable properties impacted by the COVID-19 pandemic. Of the provisions for impairment recorded during the third quarter of 2020 for properties impacted by the COVID-19 pandemic, a total of 12 assets occupied by certain of our tenants in the theater industry were impaired for $79.0 million. Impairments recorded on other properties during the three and nine months ended September 30, 2020 totaled $23.5 million and $33.6 million respectively.

The following table summarizes our provisions for impairment during the periods indicated below (dollars in millions):


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Total provisions for impairment	$	105.1	$	13.5	$	123.4	$	31.2
Number of properties:
Classified as held for sale	8		1		9		1
Classified as held for investment	18		2		28		4
Sold	17		24		31		36