Impairment Charges and Impairment of Joint Venture Investments

9 Months Ended

Sep. 30, 2015

Asset Impairment Charges [Abstract]

Impairment Charges and Impairment of Joint Venture Investments

11. Impairment Charges and Impairment of Joint Venture Investments

The Company recorded impairment charges during the three and nine months ended September 30, 2015 and 2014, based on the difference between the carrying value of the assets or investments and the estimated fair market value as follows (in millions):  

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2015		2014		2015		2014
Assets marketed for sale or assets sold(A)	$	—	$	—	$	179.7	$	3.0
Undeveloped land previously held for development(B)		—		1.4		99.3		15.1
Total continuing operations	$	—	$	1.4	$	279.0	$	18.1
Sold assets – discontinued operations		—		0.4		—		8.9
Joint venture investments(C)		—		—		—		9.1
Total impairment charges	$	—	$	1.8	$	279.0	$	36.1

(A) In March 2015, the Company’s new senior management team initiated changes in the Company’s investment strategy.  Senior management took steps to accelerate the Company’s portfolio quality improvement initiative, which it intends to accomplish in part through the acceleration of disposition plans of lower quality assets that do not have strong long-term growth profiles.  As a result, in connection with the preparation of the March 31, 2015 Quarterly Report on Form 10-Q, the Company concluded that the assets were impaired.  The Company recorded impairment charges on 25 operating shopping centers that management identified as disposition candidates over the 12 to 24-month period following March 2015.

(B) Amounts reported in the nine months ended September 30, 2015, primarily related to five parcels of land previously held for future development.  The asset impairments were triggered primarily by the decision made by the Company’s senior management in the first quarter of 2015 to sell the land and no longer consider development.

(C) Represents “other than temporary impairment” charges on unconsolidated joint venture investments.  Amount recorded in 2014 represents a charge on a joint venture development project in Canada.  The impairment was triggered by changes in the timing of the project development assumptions that occurred in the first quarter of 2014.

Items Measured at Fair Value on a Non-Recurring Basis

For a description of the Company’s methodology on determining the fair value, refer to Note 12 of the Company’s Financial Statements filed on its Annual Report on Form 10-K for the year ended December 31, 2014, as amended.

The following table presents information about the Company’s impairment charges on both financial and nonfinancial assets that were measured on a fair value basis for the nine months ended September 30, 2015, and the year ended December 31, 2014.  The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions).  

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Total Losses
September 30, 2015
Long-lived assets held and used	$	—	$	—	$	407.1	$	407.1	$	279.0
December 31, 2014
Long-lived assets held and used		—		—		141.2		141.2		38.1
Unconsolidated joint venture investments		—		—		6.4		6.4		30.7

The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value of non-recurring items (in millions, except price per square foot which is in thousands):

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at						Range
	September 30,		December 31,		Valuation	Unobservable
Description	2015		2014		Technique	Inputs	2015	2014
Impairment of consolidated assets	$	33.8	$	74.2	Indicative Bid(A)/ Contracted Price	Indicative Bid(A)/ Contracted Price	N/A	N/A
	$	287.6	$	67.0	Income Capitalization Approach(B)/ Sales Comparison Approach	Market Capitalization Rate	8%–9%		8%
						Price per Square Foot	$10–$40	N/A
	$	51.5	N/A		Indicative Bid(A)	Indicative Bid(A)	N/A	N/A
					Discounted Cash Flow	Discount Rate	10%–14%	N/A
						Terminal Capitalization Rate	8%–10%	N/A
	$	34.2	N/A		Indicative Bid(A)/ Sales Comparison Approach	Indicative Bid(A)	N/A	N/A
Impairment of joint venture investments	N/A		$	6.4	Discounted Cash Flow	Discount Rate	N/A		15%
						Terminal Capitalization Rate	N/A		6%

(A) Fair value measurements based upon indicative bids were developed by third-party sources (including offers and comparable sales values), subject to the Company’s corroboration for reasonableness.  The Company does not have access to certain unobservable inputs used by these third parties to determine these estimated fair values.  

(B) Vacant space in certain assets was valued based on a price per square foot.