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SEC Filings

10-K
WASHINGTON PRIME GROUP INC. filed this Form 10-K on 02/24/2017
Entire Document
 
Washington Prime Group Inc. and Washington Prime Group, L.P.
Notes to Consolidated and Combined Financial Statements (Continued)
(dollars in thousands, except share, unit, per share and per unit amounts and
where indicated as in millions or billions)


The table below identifies the types of intangible assets and liabilities, their location on the consolidated balance sheets, their weighted average amortization period, and their book value, which is net of accumulated amortization, as of December 31, 2016 and 2015:
 
 
 
 
 
 
Balance as of
Intangible
Asset/Liability
 
Location on the
Consolidated Balance Sheets
 
Weighted Average Remaining Amortization (in years)
 
December 31, 2016
 
December 31, 2015
Above-market leases - Company is lessor
 
Deferred costs and other assets
 
7.3
 
$
34,337

 
$
47,285

Below-market leases - Company is lessor
 
Accounts payable, accrued expenses, intangibles and deferred revenues
 
13.5
 
$
104,540

 
$
131,854

Above-market lease - Company is lessee
 
Accounts payable, accrued expenses, intangibles and deferred revenues
 
30.5
 
$
2,383

 
$
2,461

In-place leases
 
Deferred costs and other assets
 
9.8
 
$
70,907

 
$
99,836

The net amortization of intangibles as an increase (decrease) to net income as of December 31, 2016 is as follows:
 
 
Above/Below-Market Leases-Lessor
 
Above/Below-Market Leases-Lessee
 
In-place Leases
 
Total Net Intangible Amortization
2017
 
$
5,618

 
$
78

 
$
(17,264
)
 
$
(11,568
)
2018
 
4,868

 
78

 
(11,364
)
 
(6,418
)
2019
 
5,294

 
78

 
(9,558
)
 
(4,186
)
2020
 
5,605

 
78

 
(7,376
)
 
(1,693
)
2021
 
5,656

 
78

 
(3,898
)
 
1,836

Thereafter
 
43,162

 
1,993

 
(21,447
)
 
23,708

 
 
$
70,203

 
$
2,383

 
$
(70,907
)
 
$
1,679


Impairment
During the year ended December 31, 2016, the Company made continued progress to dispose of its remaining noncore properties. On November 10, 2016, the Company sold Richmond Town Square for $7.3 million. Additionally, as of December 31, 2016, we had executed purchase and sale agreements to sell Virginia Center Commons, located in Glen Allen, Virginia for $9.0 million and to sell Gulf View Square, located in Port Richey, Florida and River Oaks Center, located in Chicago, Illinois for $15 million and $27 million, respectively. The Company closed on these transactions during the first quarter of 2017 (see Note 13 - "Subsequent Events" for further discussion). As such, the Company has classified these enclosed retail properties as held-for-sale as of December 31, 2016. We compared the fair value of each noncore property to its relative carrying value, which resulted in the recording of an impairment charge of approximately $21.9 million within the consolidated and combined statements of operations and comprehensive income (loss) for the year ended December 31, 2016. The impairment charge was attributed to the recent continued declines in the fair value of the properties and executed agreements entered into in 2016 to sell these properties at prices below the carrying value.
During the year ended December 31, 2015, we took an impairment charge of approximately $138 million primarily related to the noncore properties noted above, in addition to Forest Mall and Northlake Mall, which were both sold on January 29, 2016, and Knoxville Center, which was sold on August 19, 2016. The impairment charge was due to the change in facts and circumstances when we decided to hold the assets for a shorter period which resulted in the carrying value not being recoverable from the projected cash flows.
During the third quarter of 2015, a major anchor tenant of Chesapeake Square informed us of their intention to close their store at the property. The impending closure was deemed a triggering event and, therefore, we evaluated this property in conjunction with our quarterly impairment review and preparation of our financial statements for the quarter ended September 30, 2015. We compared the fair value to the related carrying value, which resulted in the recording of an impairment charge of approximately

F-30

©2013- WASHINGTON PRIME GROUP