Impairment Charges and Impairment of Joint Venture Investments

12 Months Ended

Dec. 31, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Impairment Charges and Impairment of Joint Venture Investments

12. Impairment Charges and Impairment of Joint Venture Investments

The Company recorded impairment charges based on the difference between the carrying value of the assets or investments and the estimated fair market value as follows (in millions):  

	For the Year Ended December 31,
	2014		2013		2012
Land held for development(A)	$	13.2	$	—	$	10.1
Undeveloped land(B)		5.4		3.0		20.1
Assets marketed for sale(B)		10.6		16.0		16.6
Total continuing operations	$	29.2	$	19.0	$	46.8
Sold assets or assets held for sale – discontinued operations		8.9		53.6		79.7
Joint venture investments(C)		30.7		1.0		26.7
Total impairment charges	$	68.8	$	73.6	$	153.2

(A) Amounts reported in the years ended December 31, 2014 and 2012, primarily related to land held for development in Canada that was owned through a consolidated joint venture.  The asset impairments were triggered primarily by the Company’s decision to sell the land.  

(B) The impairment charges were triggered primarily due to the Company’s marketing of these assets for sale and management’s assessment of the likelihood and timing of one or more potential transactions.

(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 primarily was triggered as a result of a major retailer’s change in its strategy to exit the Canadian market, as well as changes in the timing of the project and development assumptions.  In 2012, the charges primarily related to the investment in the Coventry II DDR Montgomery Farm LLC joint venture in which the Company sold its interest in 2012.  

Items Measured at Fair Value on a Non-Recurring Basis

The Company is required to assess the fair value of certain impaired consolidated and unconsolidated joint venture investments.  The valuation of impaired real estate assets and investments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset as well as the income capitalization approach considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence.  In general, the Company considers multiple valuation techniques when measuring fair value of an investment.  However, in certain circumstances, a single valuation technique may be appropriate.  

For operational real estate assets, the significant assumptions included the capitalization rate used in the income capitalization valuation as well as the projected property net operating income.  For projects under development, the significant assumptions included the discount rate, the timing and the estimated costs for the construction completion and project stabilization, projected net operating income and the exit capitalization rate.  For investments in unconsolidated joint ventures, the Company also considered the valuation of any underlying joint venture debt.  These valuation adjustments were calculated based on market conditions and assumptions made by management at the time the valuation adjustments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change.  

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 years ended December 31, 2014, 2013 and 2012.  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
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
December 31, 2013
Long-lived assets held and used/held for sale		—		—		164.2		164.2		72.6
Unconsolidated joint venture investments		—		—		35.3		35.3		1.0
December 31, 2012
Long-lived assets held and used		—		—		180.7		180.7		126.5
Unconsolidated joint venture investments		—		—		4.7		4.7		26.7
Deconsolidated joint venture investment		—		—		56.1		56.1		9.3

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):

	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at December 31,						Range
Description	2014		2013		Valuation Technique	Unobservable Inputs	2014		2013
Impairment of consolidated assets	$	74.2	$	88.7	Indicative Bid (A)/ Contracted Price	Indicative Bid (A)/ Contracted Price	N/A		N/A
		67.0		75.5	Income Capitalization Approach(B)	Market Capitalization Rate		8%	8%–10%
						Price per Square Foot	N/A		$12–$117
Impairment of joint venture investments		6.4		35.3	Discounted Cash Flow	Discount Rate		15%	8%–15%
						Terminal Capitalization Rate		6%	N/A

(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.