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D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 2015 Accelerated filer ¨Non-accelerated filer xSmaller reporting company¨ and is seeking shareholder approval of the name change at its 2015 Annual Meeting of Stockholders.D.C.20549
THE SECURITIES EXCHANGE ACT OF 193420147315 Wisconsin Avenue, Suite 500 EastBethesda, Maryland 20814(240) 630-0000Registrantregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ox No ý¨Registrantregistrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to submit and post such files). Yes ýx No o¨Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitionsdefinition of "large“large accelerated filer," "accelerated filer,"” “accelerated filer” and "smaller“smaller reporting company"company” in Rule 12b-2 of the Exchange Act (check one):Large accelerated filer oAccelerated filer oNon-accelerated filer ý(Do not check if asmaller reporting company)Smaller reporting company oRegistrantthe registrant is a shell company (as defined byin Rule 12b-2 of the Exchange Act). Yes o¨ No ýxJuneMay 6, 2014,2015, registrant had 155,162,657185,289,688 shares of common stock outstanding.was formerly named SPG SpinCo Subsidiary Inc. As of February 25, 2014, the registrant changedintends to change its name to Washington Prime GroupWP Glimcher Inc.
Washington Prime Group Inc.
Form 10-Q
Consolidated and Combined Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, Consolidated and Combined Statements of Cash Flows for the three months ended March 31, Condensed Notes to Consolidated and Combined Financial Item 2. Management's Discussion and Analysis of Financial Condition and Results of Item 3. Quantitative and Qualitative Disclosures About Market Item 1A. Item 2. Unregistered Sales of Equity Securities and Use of Item Item Item PagePART I: FINANCIAL INFORMATION PAGE Part I—Financial Information Item 1. Item 1. Consolidated and Combined Financial Statements (Unaudited) CombinedConsolidated Balance Sheets as of March 31, 20142015 and December 31, 2013 3 20142015 and 2013 4 20142015 and 2013 Consolidated Statement of Equity for the three months ended March 31, 2015. Statements 6Operations 17Risk Item 4. Controls and Procedures. Item 4.Controls and Procedures 29PART II:OTHER INFORMATION Part II—Other InformationItem 1.Legal Proceedings Item 1. Legal Proceedings. Risk Factors. Risk Factors 30Proceeds Item 3. Defaults Upon Senior Securities. 3.Mine Safety Disclosures. Defaults Upon Senior Securities Item 5. Other Information. 4.Exhibits. Mine Safety Disclosures 30SIGNATURES5.Other Information30Item 6.Exhibits31Signature
Financial Statements
ASSETS: Investment properties at cost Less—accumulated depreciation Cash and cash equivalents Tenant receivables and accrued revenue, net Investment in unconsolidated entities, at equity Deferred costs and other assets Total assets LIABILITIES: Mortgages Accounts payable, accrued expenses, intangibles, and deferred revenues Cash distributions and losses in partnerships and joint ventures, at equity Other liabilities Total liabilities EQUITY: SPG Equity Noncontrolling interests Total equity Total liabilities and equity REVENUE: Minimum rent Overage rent Tenant reimbursements Other income Total revenue EXPENSES: Property operating Depreciation and amortization Real estate taxes Repairs and maintenance Advertising and promotion Provision for credit losses Other Total operating expenses OPERATING INCOME Interest expense Income and other taxes Income from unconsolidated entities Gain on sale of interests in properties NET INCOME Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SPG CASH FLOWS FROM OPERATING ACTIVITIES: Net Income Adjustments to reconcile net income to net cash provided by operating activities— Depreciation and amortization Gain on sale of interests in properties Provision for credit losses Straight-line rent Equity in income of unconsolidated entities Distributions of income from unconsolidated entities Changes in assets and liabilities— Tenant receivables and accrued revenue, net Deferred costs and other assets Acounts payable, accrued expenses, intangibles, deferred revenues and other liabilities Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures, net Investments in unconsolidated entities Distributions of capital from unconsolidated entities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Change in SPG investment, net Distributions to noncontrolling interest holders in properties Proceeds from issuance of debt, net of transaction costs Repayments of debt Net cash used in financing activities INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning of period CASH AND CASH EQUIVALENTS, end of period REIT. one‑for‑one basis or, at WPG’s option, into cash. Additionally, the financial statements reflect the common shares and units outstanding at the separation date as outstanding for all periods prior to the separation. services to our tenants and others, including energy, waste handling and facility services, and reimbursements from tenants for certain recoverable expenditures such as property operating, real estate taxes, repair and maintenance, and advertising and promotional expenditures. amortization, and WPG has committed to or intends to fund the venture. property. cash and cash equivalents with institutions with high credit quality. However, at certain times, such cash and cash equivalents may be in excess of FDIC and SIPC insurance limits. particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. same tenants. total long-term debt on its consolidated balance sheets by amounts classified as deferred debt issuance costs, but do not expect this update to have any other effect on our consolidated financial statements. Muncie Mall Oak Court Mall Lincolnwood Town Center Cottonwood Mall Westminster Mall Charlottesville Fashion Square Total(1) to compliance with the terms of the Facility and payment of a customary extension fee. The Term Loan provides borrowings in an aggregate principal amount up to $500 million, bears interest at one-month Indebtedness as of March 31, 2014 Facility proceeds Town Center at Aurora mortgage proceeds Sunland Park Mall mortgage repayment Mortgage amortization Indebtedness as of June 13, 2014 At March 31, Fair value of fixed-rate mortgages Weighted average discount rates assumed in calculation of fair value for fixed-rate mortgages Balance at January 1, 2014 Net Income Distributions to SPG, net(1) Balance at March 31, 2014 Common costs, services and other Insurance premiums Advertising and promotional programs Property management costs, services and other Insurance premiums Advertising and promotional programs $593 which will be amortized into expense over the term of the Bonds Payable and OCL of $1.0 million related to the two remaining ten-year swaps to adjust the carrying amount of the interest rate swaps to their fair values at March 31, 2015. There was no derivative activity during 2014. 2015, the Series G Preferred Shares are classified in the accompanying consolidated and combined balance sheets as a liability at the redemption price, which approximates the fair value at which these preferred interests were recorded upon issuance at the Merger date. The Series G Preferred Shares were redeemed at a redemption price of $25.00 per share, plus accumulated and unpaid distributions up to, but excluding, the redemption date, in an amount equal to $0.5868 per share, for a total payment of $25.5868 per share. This redemption amount includes the first quarter dividend of $0.5078 per share that was declared on February 24, 2015 to holders of record of such Series G Preferred Shares on March 31, 2015. Because the redemption of the Series G Preferred Shares was a redemption in full, trading of the Series G Preferred Shares on the NYSE ceased after the redemption date. The aggregate amount paid to effect the redemptions of the Series G Preferred Shares was approximately $120.3 million, which was funded with cash on hand. REIT. one‑for‑one basis, or, at WPG’s option, into cash. Businesses for periods prior to the separation. related to certain SPG corporate functions, including senior management, property management, legal, leasing, development, marketing, human resources, finance, public reporting, tax and information technology. These expenses have been charged based on direct usage or benefit where identifiable, with the remainder charged on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. We consider the expense allocation methodology and results to be reasonable for all periods presented. However, the charges may not be indicative of the actual expenses that would have been incurred had WPG operated as an independent, publicly-traded company for the periods presented prior to the separation. plan of merger with Glimcher and certain affiliated parties of each dated September 16, 2014 (the “Merger Agreement”), in a stock and cash transaction valued at approximately $4.2 billion, including the assumption of debt (the “Merger”). In the Merger, Glimcher common shareholders received, for each Glimcher common share, $14.02 consisting of $10.40 in cash and 0.1989 of a share of the Company’s common stock valued at $3.62 per Glimcher common share, based on the closing price of the Company’s common stock on the Merger closing date. Approximately 29.9 million shares of WPG common stock were issued to Glimcher shareholders in the Merger as noted below. Additionally included in consideration were operating partnership units and preferred stock as noted below. In connection with the closing of the Merger, an indirect subsidiary of WPG was merged into Glimcher’s operating partnership. In the Merger, we acquired 23 shopping centers comprised of approximately 15.8 million square feet of gross leasable area and assumed additional mortgages on 16 properties with a fair value of approximately $1.4 billion. The combined company, to be renamed WP Glimcher Inc. (pending shareholder approval), is comprised of approximately 68 million square feet of gross leasable area (compared to approximately 53 million square feet for the Company as of December 31, 2014) and has a combined portfolio of 121 properties as of March 31, 2015. portfolio. Shopping Centers: Ending Occupancy Average Base Minimum Rent per Square Foot Current Leasing Activities seven open-air shopping centers, consisting of four centers located in Florida, and one each in Indiana, Connecticut and Virginia. The properties were previously accounted for under the equity method, but are now consolidated as four properties are wholly owned and three properties are approximately 88.2 percent owned post acquisition. periods under comparison. 2014 2015. These preferred dividends are included in distributions payable in the consolidated balance sheets as of March 31, 2015. See “Equity Activity - Dividends” below. The Series G Preferred Shares were redeemed in full on April 15, 2015. As a result of the Merger, our indebtedness has increased significantly, including $1.19 billion in new borrowings under the Bridge Loan, which balance was subsequently partially repaid with $248.4 million net proceeds from the Bonds Payable, as further discussed below. 2015. The additional indebtedness includes additional mortgages of approximately $1.4 billion, as well as unsecured borrowings of $1.19 billion under the Bridge Loan, a portion of which balance was subsequently repaid with net proceeds from the Bonds Payable. As of March 31, 2015, the Bridge Loan has a remaining outstanding balance of $941.6 million, and it matures on January 14, 2016. 2015. The Bridge Loan matures on January 14, 2016, and we anticipate using the estimated $430 million in proceeds that may be raised from the JV to repay a portion of the outstanding Bridge Loan balance. The Company anticipates repaying the remaining balance on the Bridge Loan through a term loan with an expected initial balance of $500 million. We have a commitment from bank lenders for the new term loan, subject to a number of customary conditions, including execution and delivery of definitive documentation. The term loan will mature March 2020, will bear interest of LIBOR plus 1.15% and is expected to close in the second quarter of 2015. However, as a result of the announcement of the Merger and related financings, the Company was informed by S&P and Moody's that it has been placed on negative outlook and Fitch has downgraded the Company to a BBB- rating. There can be no assurance that the Company will achieve a particular rating or maintain a particular rating in the future. 2014 was as follows (in thousands): fair value of $6.4 million. Muncie Mall Oak Court Mall Lincolnwood Town Center Cottonwood Mall Westminster Mall Charlottesville Fashion Square Total(1) hand. Indebtedness as of March 31, 2014 Facility proceeds Town Center at Aurora mortgage proceeds Sunland Park Mall mortgage repayment Mortgage amortization Indebtedness as of June 13, 2014 At March 31, Fixed Rate Variable Rate Long Term Debt(1) Interest Payments Off-Balance Sheet Arrangements cash on hand. 2016. The redevelopment is expected to be fully completed in mid-2017. New developments(1) Redevelopments and expansions Tenant allowances Operational capital expenditures Total Net Income Adjustments to Arrive at FFO: Depreciation and amortization from consolidated properties Our share of depreciation and amortization from unconsolidated entities Gain on sale of interests in properties Net income attributable to noncontrolling interest holders in properties Noncontrolling interests portion of depreciation and amortization FFO Reconciliation of NOI of consolidated properties: Net Income Income and other taxes Interest expense Gain on sale of interests in properties Income from unconsolidated entities Operating Income Depreciation and amortization NOI of consolidated properties Reconciliation of NOI of unconsolidated entities: Net Income Interest expense Loss (gain) from operations of discontinued joint venture interests Operating Income Depreciation and amortization NOI of unconsolidated entities Total consolidated and unconsolidated NOI from continuing operations Adjustments to NOI: NOI of discontinued unconsolidated properties Total NOI of our portfolio Change in NOI from prior period Less: Joint venture partners' share of NOI Our Share of NOI Increase in our share of NOI from prior period Total NOI of our portfolio NOI from non comparable properties(1) Total NOI of comparable properties(2) Decrease in NOI of comparable properties 2015, $2.1 billion of our aggregate indebtedness (42.9% of total indebtedness) was subject to variable interest rates. Evaluation of Disclosure Controls and Procedures.We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.CombinedConsolidated Balance SheetsDollarsdollars in thousands)
thousands, except share and par value amounts) March 31, 2014 December 31, 2013 March 31, 2015 December 31, 2014 $ 4,797,446 $ 4,789,705 $ 8,378,533 $ 5,292,665 2,006,624 1,974,949 Less: accumulated depreciation 2,172,119 2,113,929 2,790,822 2,814,756 6,206,414 3,178,736 29,300 25,857 255,616 108,768 55,745 61,121 72,256 69,616 5,130 3,554 15,949 — 101,172 97,370 479,629 170,883 $ 2,982,169 $ 3,002,658 $ 7,029,864 $ 3,528,003 $ 1,276,189 $ 918,614 Mortgage notes payable $ 2,757,416 $ 1,435,114 Bonds payable 249,930 — Unsecured term loan 500,000 500,000 Revolving credit facility 413,750 413,750 Bridge loan 941,570 — Series G Cumulative Redeemable Preferred Stock (called for redemption) 117,500 — 126,028 151,011 345,049 194,014 Distributions payable 5,750 — 41,441 41,313 15,344 15,298 3,919 7,195 14,653 11,786 1,447,577 1,118,133 5,360,962 2,569,962 Redeemable noncontrolling interests 6,145 — 1,534,592 1,883,680 Stockholders' Equity Series H Cumulative Redeemable Preferred Stock, $0.0001 par value, 4,000,000 shares issued and outstanding as of March 31, 2015 104,251 — Series I Cumulative Redeemable Preferred Stock, $0.0001 par value, 3,800,000 shares issued and outstanding as of March 31, 2015 98,325 — Common stock, $0.0001 par value, 300,000,000 shares authorized,
185,204,391 and 155,162,597 issued and outstanding as of March 31, 2015 and December 31, 2014, respectively 19 16 Capital in excess of par value 1,215,096 720,921 Retained earnings 13,383 68,114 Accumulated other comprehensive loss (340 ) — Total stockholders' equity 1,430,734 789,051 — 845 232,023 168,990 1,534,592 1,884,525 1,662,757 958,041 $ 2,982,169 $ 3,002,658 Total liabilities, redeemable noncontrolling interests and equity $ 7,029,864 $ 3,528,003
and Comprehensive (Loss) IncomeDollarsdollars in thousands)thousands, except per share amounts) For the Three Months
Ended March 31, For the Three Months Ended March 31, 2014 2013 2015 2014 $ 106,637 $ 104,980 $ 162,704 $ 106,637 2,110 2,433 3,263 2,110 47,168 45,371 69,227 47,168 2,054 1,451 2,528 2,054 157,969 154,235 Total revenues 237,722 157,969 26,140 24,365 41,079 26,140 45,968 45,299 92,184 45,968 19,947 19,962 30,565 19,947 7,150 5,386 9,488 7,150 1,952 2,137 2,687 1,952 786 690 698 786 1,119 1,191 General and administrative 9,700 — Merger and transaction costs 20,810 — Ground rent and other costs 2,748 1,119 103,062 99,030 209,959 103,062 54,907 55,205 27,763 54,907 (13,917 ) (13,719 ) (37,122 ) (13,917 ) (75 ) (78 ) (445 ) (75 ) 345 293 216 345 242 14,152 Gain on sale of interest in property — 242 NET (LOSS) INCOME (9,588 ) 41,502 Net (loss) income attributable to noncontrolling interests (2,296 ) 7,110 NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS (7,292 ) 34,392 Less: Preferred share dividends (4,978 ) — NET (LOSS) INCOME TO COMMON SHAREHOLDERS $ (12,270 ) $ 34,392 41,502 55,853 — 67 (LOSS) EARNINGS PER COMMON SHARE, BASIC AND DILUTED $ (0.07 ) $ 0.22 $ 41,502 $ 55,786 COMPREHENSIVE (LOSS) INCOME: Net (loss) income $ (9,588 ) $ 41,502 Unrealized loss on interest rate derivative instruments (404 ) — Comprehensive (loss) income (9,992 ) 41,502 Comprehensive (loss) income attributable to noncontrolling interests (2,360 ) 7,110 Comprehensive (loss) income attributable to common shareholders $ (7,632 ) $ 34,392 Dollarsdollars in thousands) For the Three Months
Ended March 31, 2014 2013 $ 41,502 $ 55,853 46,385 46,011 (242 ) (14,152 ) 786 690 (176 ) (31 ) (345 ) (293 ) 414 351 4,767 6,326 (4,088 ) (1,010 ) (21,691 ) (28,880 ) 67,312 64,865 (24,742 ) (24,238 ) (356 ) (1,256 ) 866 2,073 (24,232 ) (23,421 ) (393,221 ) (46,550 ) — (172 ) 494,769 — (141,185 ) (2,486 ) (39,637 ) (49,208 ) 3,443 (7,764 ) 25,857 30,986 $ 29,300 $ 23,222 For the Three Months Ended March 31, 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (9,588 ) $ 41,502 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization, including fair value rent, fair value debt, deferred financing costs and stock compensation 90,574 46,385 Gain on sale of interest in property — (242 ) Provision for credit losses 698 786 Equity in income of unconsolidated entities (216 ) (345 ) Distributions of income from unconsolidated entities 99 414 Changes in assets and liabilities: Tenant receivables and accrued revenue, net 10,924 4,591 Deferred costs and other assets (5,628 ) (4,088 ) Accounts payable, accrued expenses, deferred revenues and other liabilities (35,089 ) (21,691 ) Net cash provided by operating activities 51,774 67,312 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired (956,602 ) — Cash expenditures, net (34,882 ) (24,742 ) Restricted cash reserves for future capital expenditures, net 1,492 — Investments in unconsolidated entities — (356 ) Distributions of capital from unconsolidated entities 46 866 Net cash used in investing activities (989,946 ) (24,232 ) CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to Simon Property Group, Inc., net — (393,221 ) Distributions to noncontrolling interest holders in properties (8 ) — Net proceeds from issuance of common shares, including common stock plans 796 — Distributions on common shares/units (52,807 ) — Proceeds from issuance of debt, net of transaction costs 1,423,280 494,769 Repayments of debt (286,241 ) (141,185 ) Net cash provided by (used in) financing activities 1,085,020 (39,637 ) INCREASE IN CASH AND CASH EQUIVALENTS 146,848 3,443 CASH AND CASH EQUIVALENTS, beginning of period 108,768 25,857 CASH AND CASH EQUIVALENTS, end of period $ 255,616 $ 29,300 Preferred Series G Preferred Series H Preferred Series I Common
StockCapital in
Excess of
Par ValueRetained
EarningsAccumulated Other Comprehensive Loss Total
Stockholders'
EquityNon-
Controlling
InterestsTotal
EquityRedeemable Non-Controlling Interests Balance, December 31, 2014 $ — $ — $ — $ 16 $ 720,921 $ 68,114 $ — $ 789,051 $ 168,990 $ 958,041 $ — Issuance of shares and units in connection with the merger 117,384 104,251 98,325 3 535,035 — — 854,998 29,482 884,480 6,148 Exercise of stock options — — — — 1,249 — — 1,249 — 1,249 — Noncontrolling interest in property — — — — — — — — (8 ) (8 ) — Equity-based compensation — — — — 2,316 — — 2,316 — 2,316 — Adjustments to noncontrolling interests — — — — (44,425 ) — — (44,425 ) 44,425 — — Distributions on common shares/units ($0.25 per common share/unit) — — — — — (42,090 ) — (42,090 ) (8,459 ) (50,549 ) — Distributions declared on preferred shares — — — — — (5,349 ) — (5,349 ) — (5,349 ) — Reclassification of preferred shares called for redemption (117,384 ) — — — — — — (117,384 ) — (117,384 ) — Other comprehensive loss — — — — — — (340 ) (340 ) (64 ) (404 ) — Net loss, excluding $50 of distributions to preferred unit holders — — — — — (7,292 ) — (7,292 ) (2,343 ) (9,635 ) (3 ) Balance, March 31, 2015 $ — $ 104,251 $ 98,325 $ 19 $ 1,215,096 $ 13,383 $ (340 ) $ 1,430,734 $ 232,023 $ 1,662,757 $ 6,145 Dollarsdollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)1. Organization1. Organization ("WPG"(“WPG” or the "Company"“Company”) is a recently formedan Indiana corporation that operates as a self‑administered and self‑managed real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. REITs will generally not be liable for federal corporate income taxes as long as they continue to distribute not less than 100% of their taxable income and satisfy certain other requirements. Washington Prime Group, L.P. (“WPG L.P.”) is our majority‑owned partnership subsidiary that owns, through its affiliates, all of our real estate properties and other assets. WPG owns, develops and manages retail real estate properties. As of March 31, 2015, our assets consisted of interests in 121 shopping centers in the United States, consisting of strip centers and malls.("SPG"(“SPG”) and its subsidiaries. AsOn May 28, 2014, WPG separated from SPG through the distribution of March 31, 2014,100% of the outstanding shares of WPG to the SPG shareholders in a tax‑free distribution. Prior to the separation, WPG was a wholly owned subsidiary of SPG. As described in Note 2 - "Basis of Presentation and Principles of Consolidation and Combination," WPG’s results prior to the separation are presented herein on a carve-out basis. Prior to or concurrent with the separation, from SPG which was completed on May 28, 2014, SPG engaged in certain formation transactions that were designed to consolidate the ownership of its interests in 98 properties ("(“SPG Businesses"Businesses”) and distribute such interests to WPG and its operating partnership, Washington Prime Group, L.P. ("WPG L.P."). Pursuant to the separation agreement, on May 28, 2014, SPG distributed 100% of the common shares of WPG on a pro rata basis to SPG'sSPG’s shareholders as of the May 16, 2014 record date."we"“we”, "us"“us” and "our"“our” refer to Washington Prime Group Inc.WPG, WPG L.P. and entities in which WPG (or an affiliate) has a material ownership or financial interest, on a consolidated basis, after giving effect to the transfer of assets and liabilities from SPG as well as to the SPG Businesses prior to the date of the completion of the separation. Before the completion of the separation, SPG Businesses were operated as subsidiaries of SPG, which operates as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended. WPG is expected to operate as a REIT subsequent to the separation and distribution. REITs will generally not be liable for federal corporate income taxes as long as they continue to distribute not less than 100% of their taxable income.iswas approximately equal to the percentage of outstanding units of partnership interest that SPG owned of Simon Property Group, L.P. owned by Simon Property Group, Inc.(“SPG L.P.”), with the remaining units of WPG L.P. being owned by the limited partners who were also limited partners of Simon Property Group,SPG L.P. as of the May 16, 2014 record date. The units in WPG L.P. are redeemableconvertible by their holders for cash or, at WPG's option, for WPG common shares on a one-for-one basis. The accompanying unaudited combined financial statements reflect Simon Property Group, L.P.'s interests in the SPG Businesses.spin-offseparation date are presented as if the transferred business was our business for all historical periods described and at the carrying value of such assets and liabilities reflected in SPG'sSPG’s books and records. has entered into agreements with SPG under which SPG will provideprovides various services to us, including accounting, asset management, development, human resources, information technology, leasing, legal, marketing, public reporting and tax. The charges for the services will beare based on an hourly or per transaction fee arrangement and pass-throughpass‑through of out-of-pocket costs. Ourout‑of‑pocket costs (see Note 9 - "Related Party Transactions").consistconsisted of interests in 98 shopping centers, including 44 malls and 54 strip centers. One of these strip centers was under development and opened during the third quarter of 2013. In addition to the above properties, the combined historical financial statements include interestsan interest in three strip centersone shopping center held within a joint venture portfolio of properties which were sold during the first quarter of 2013 as well as one additional strip center which was sold by that same joint venture on February 28, 2014.tenants'tenants’ sales volumes, offering property operatingWashington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)1. Organization (Continued)re-developingre‑developing or renovating existing properties to increase the leasable square footage, and increasing the productivity of occupied locations through aesthetic upgrades, re-merchandisingre‑merchandising and/or changes to the retail use of the space.unauditedconsolidated and combined financial statements include the combined accounts of SPG Businesses and are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated balance sheet as of March 31, 2015 includes the accounts of the Company and WPG L.P., as well as their wholly owned subsidiaries. The accompanying consolidated and combined statements of operations include the consolidated accounts of the Company and the combined accounts of SPG Businesses. All significant intercompany balances and transactions have been eliminated.eliminated in consolidation and combination. Due to the seasonal nature of certain operational activities, the results for the interim period ended March 31, 20142015 are not necessarily indicative of the results to be expected for the full year.necessary for fair presentation (includingconsisting of normal recurring accruals) have been included.accruals, necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. The Company believes that the disclosures made are adequate to prevent the information presented from being misleading. These consolidated and combined unaudited financial statements should be read in conjunction with the historical audited consolidated and combined financial statements of SPG Businesses and related notes included in the Information Statement dated May 16,Company's 2014 filed as Exhibit 99.1 to our current reportAnnual Report on Form 8-K filed10-K.May 20, 2014 (the "Information Statement"). Our combineda carve-out basis. The accompanying financial statements for the periods prior to the separation are derivedprepared on a carve-out basis from the books and recordsconsolidated financial statements of SPG using the historical results of operations and bases of the assets and liabilities of the transferred businesses and including allocations from SPG. The financial statements were carved-out frompresented on a combined basis prior to the separation as the ownership interests in the SPG atBusinesses were under common control and ownership of SPG.carrying value reflectivepart of WPG for all periods presented. The historical financial statements and supplemental schedule of the SPG Businesses have been renamed as WPG. Equity and income have been adjusted retroactively to reflect WPG's ownership interest and the noncontrolling interest holders' interest in the SPG Businesses as of the separation date as if such interests were held for all periods presented in the financial statements. WPG's earnings per common share have been presented for all historical costperiods as if the number of common shares and units issued in such SPG records. Ourconnection with the separation were outstanding during each of the periods presented.8.9 - "Related Party Transactions". Costs of the services that were charged to us were based on either actual costs incurred or a proportion of costs estimated to be applicable to us. The historical combined financial information presented may therefore not be indicative of the results of operations, financial position or cash flows that would have been obtained if we had been an independent, stand-alone public company during the periods presented prior to the separation or of our future performance as an independent, stand-alone company. For joint venture or mortgaged properties, SPG has a standard management agreement for management, leasing and development activities provided to the properties. Management fees arewere based upon a percentage of revenues. For any wholly owned property that does not have a management agreement, SPG allocatesallocated the proportion of the underlying costs of management, leasing and development, in a manner that is materially consistent with the percentage of revenue-based management fees and/or upon the actual volume of leasing and development activity occurring at the property.Washington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)2. Basis of Presentation Combination (Continued) These combined financial statements reflect the consolidation of properties that are wholly owned or properties in which we own less than a 100% interest but that we control. Control of a property is demonstrated by, among other factors, our ability to refinance debt and sell the property without the consent of any other partner or owner, and the inability of any other partner or owner to replace us.20142015 in previous conclusions about whether an entity qualifies as a VIE or whether we are the primary beneficiary of any previously identified VIE. In connection with the Merger, the Company acquired an interest in a VIE in which we are deemed to be the primary beneficiary. Accordingly, we have consolidated the VIE, which consists solely of undeveloped land. During 2014,2015, we did not provide financial or other support to a previously identified VIE that we were not previously contractually obligated to provide.amortization.2014, the2015, our assets consisted of interests in 121 shopping centers. The consolidated and combined financial statements as of that date reflect the consolidation of 86 wholly-owned113 wholly owned properties and twoseven additional properties that are less than wholly-owned,wholly owned, but which we control or for which we are the primary beneficiary. We account for our interests in the one remaining 10 properties,property, or the joint venture properties,property, using the equity method of accounting, as we have determined that we have significant influence over theirits operations. We manage the day-to-day operations of the joint venture properties,property, but have determined that our partner or partners havehas substantive participating rights with respect to the assets and operations of thesethis joint venture properties.trade accounts receivable.tenant receivables. We place ourWashington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)3. Summary of Significant Accounting Policies (Continued)cost.fair value when acquired. Investment properties include costs of acquisitions; development, predevelopment, and construction (including allocable salaries and related benefits); tenant allowances and improvements; and interest and real estate taxes incurred during construction. We capitalize improvements and replacements from repair and maintenance when the repair and maintenance extends the useful life, increases capacity, or improves the efficiency of the asset. All other repair and maintenance items are expensed as incurred. We capitalize interest on projects during periods of construction until the projects are ready for their intended purpose based on interest rates in place during the construction period. We record depreciation on buildings and improvements utilizing the straight-line method over an estimated original useful life, which is generally 10five to 3540 years. We review depreciable lives of investment properties periodically and we make adjustments when necessary to reflect a shorter economic life. We amortize tenant allowances and tenant improvements utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. We record depreciation on equipment and fixtures utilizing the straight-line method over seventhree to ten years.incomeexpense the excess of carrying value of the property over its estimated fair value. We estimate fair value using unobservable data such as operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. We may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. We also review our investments, including investments in unconsolidated entities, if events or circumstances change indicating that the carrying amount of our investments may not be recoverable. We will record an impairment charge if we determine that a decline in the fair value of the investments in unconsolidated entities is other-than-temporary. Changes in economic and operating conditions that occur subsequent to our review of recoverability of investment property and other investments in unconsolidated entities could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.10 propertiesone property as of March 31, 20142015 and 11 properties as of December 31, 2013.2014. Additionally, in connection with the Merger, we acquired joint venture interests in two entities, one in the development stage and the other with retail operations.Washington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)3. Summary of Significant Accounting Policies (Continued) Level 1inputs are quoted prices for identical itemsmeasurements in active, liquidaccordance with Accounting Standards Codification Topic 820 - “Fair Value Measurements and visible markets such as stock exchanges. Level 2Disclosure” (“Topic 820”). Topic 820 guidance emphasizes that fair value inputs are observable information for similar items in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3is a market-based measurement, not an entity-specific measurement. Therefore, a fair value inputs reflect our best estimate of inputs andmeasurement should be determined based on the assumptions that market participants would use in pricing anthe asset or liability. As a basis for considering market participant assumptions in fair value measurements, Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy, as defined by Topic 820, contains three levels of inputs that may be used to measure fair value as follows:the measurement date. Thecommonly quoted intervals.market andfair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the valuation estimate. We have no investments for which fair value is measured onmeasurement in its entirety. The Company's assessment of the significance of a recurring basis using Level 3 inputs.34 - "Real Estate Acquisitions and Dispositions" includes a discussion of the fair values recorded in purchase accounting, and impairment, using Level 2 and Level 3 inputs. Level 3 inputs to our purchase accounting and impairmentanalyses include our estimations of net operating results of the property, capitalization rates and discount rates.••••Washington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)3. Summary of Significant Accounting Policies (Continued)Per Share Data Presentationearnings per share information is not applicable as allretail real estate. We have aggregated our common shares, sinceoperations, including malls and strip centers, into one reportable segment because they have similar economic characteristics and we provide similar products and services to similar types of, and in many cases, the date of our formation through the date of the combined financial statements, are owned directly or indirectly by SPG.AprilMay 2014, the Financial Accounting Standards Board (FASB)("FASB") issued Accounting Standards Update (ASU) No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU No. 2014-08 changes the definition of a discontinued operation to include only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity's operations and financial results. ASU No. 2014-08 is effective prospectively for fiscal years beginning after December 15, 2014, but can be early-adopted. We early adopted ASU No. 2014-08 and will apply the revised definition to all disposals on a prospective basis. ASU 2014-08 also requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. In May 2014, the FASB issued ASU("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU No. 2014-09 revises GAAP by offering a single comprehensive revenue recognition standard instead of numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. ASU No. 2014-09 is effective for annual reporting periods beginning after December 31, 2016 and early adoption is not permitted. An entity has the option to apply the provisions of ASU No. 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application. On April 1, 2015, the FASB proposed deferring the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. We are currently evaluating our method of adopting and the impact, if any, the adoption of this standard will have on our consolidated financial statements.ASU No. 2014-09this standard will have on our consolidated financial statementsstatements.related disclosures.Investment properties $ 3,054,194 Cash and cash equivalents (1) 553,835 Tenant accounts receivable 14,263 Investment in and advances to unconsolidated real estate entities 15,803 Deferred costs and other assets (including intangibles) 316,436 Accounts payable, accrued expenses, intangibles, and deferred revenue (196,847 ) Distributions payable (2,658 ) Redeemable noncontrolling interests (6,148 ) Total assets acquired and liabilities assumed 3,748,878 Fair value of mortgage notes payable assumed (1,358,184 ) Net assets acquired 2,390,694 Less: Common shares issued (535,490 ) Less: Preferred shares issued (319,960 ) Less: Operating partnership units issued (29,482 ) Less: Cash and cash equivalents acquired (553,835 ) Net cash paid for acquisition $ 951,927 (1) Includes the proceeds from the Property Sale, net of the repayment of the $155.0 million balance on the Glimcher credit facility. Shopping Center Name Acquisition Date Location Percent Acquired Whitehall Mall December 1, 2014 Whitehall, PA 50% $ 14.9 $ 10.5 Clay Terrace June 20, 2014 Carmel, IN 50% $ 22.9 $ 46.6 Seven Open-Air Shopping Centers June 18, 2014 Various Various $ 162.0 $ 42.3 stripshopping center and recorded a gain of approximately $0.2 million, which is included in gain on sale of interest in propertiesproperty in the consolidated and combined statements of operations. This propertyoperations and comprehensive (loss) income.partpresented as if the Merger and the Property Sale described in Note 1 - "Organization", which were completed on January 15, 2015, had been consummated on January 1, 2014. The unaudited condensed pro forma financial information assumes the 2014 acquisitions listed above also occurred as of January 1, 2014. Additionally, an adjustment has been made to reflect the redemption of all of the outstanding Series G Preferred Shares, which was completed on April 15, 2015 (see Note 8 - "Equity"), as of January 1, 2014. Finally, the January 13, 2015 acquisition of Canyon View Marketplace has been excluded from this analysis since it would not have a portfoliosignificant impact. The unaudited condensed pro forma financial information is for comparative purposes only and not necessarily indicative of interests in properties,what actual results of operations of the remainderCompany would have been had the Merger and other transactions noted above been consummated on January 1, 2014, nor does it purport to represent the results of which is included within those properties distributed by SPG to WPG on May 28, 2014. On January 10, 2014, SPG acquired one of its partner's remaining interests in three properties that were contributed to WPG. operations for future periods.consideration paidunaudited condensed pro forma financial information for the partner's remaining interests in these three properties was approximately $4.6 million. Two of these properties were previously consolidatedmonths ended March 31, 2015 and are now wholly owned. The remaining property2014 is accounted for under the equity method.as follows: Three Months Ended March 31, 2015 2014 Total revenues $ 249,820 $ 251,171 Net income from continuing operations $ 6,339 $ 15,537 Net income from continuing operations attributable to common stockholders $ 2,377 $ 9,932 Earnings per common share-basic and diluted $ 0.01 $ 0.06 Weighted average shares outstanding-basic 179,575 155,163 Weighted average shares outstanding-diluted 213,975 186,738 Dollarsdollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)4. Real5. Indebtedness Face amount of mortgage loans $ 2,708,977 $ 1,431,516 Fair value adjustments, net 48,439 3,598 Carrying value of mortgage loans $ 2,757,416 $ 1,435,114 Balance, December 31, 2014 $ 1,435,114 Debt assumptions at fair value 1,364,503 Repayment of debt (32,700 ) Debt amortization payments (5,066 ) Amortization of fair value adjustments (4,435 ) Balance, March 31, 2015 $ 2,757,416 Dispositions (Continued) On February 21, 2013, SPG increased its economic interest in three unconsolidated strip centers and subsequently disposed of its interests in those properties. The aggregate gain recognized on this transaction was approximately $14.2 million and is included in gain on sale of interests in properties in the combined statements of operations. These properties were part of a portfolio of interests in properties, the remainder of which is included within those properties distributed by SPG to WPG on May 28, 2014.5. Indebtedness TotalDispositions"), we assumed an additional mortgage indebtedness was $1.3 billion and $918.6 million at March 31, 2014 and December 31, 2013, respectively. On February 11, 2014, Brunswick Square refinanced its $76.5 million, 5.65% fixed rate mortgage maturing August 11, 2014 with a $77.0 million, 4.796% fixed rate mortgage that matures Marchfair value of $6.4 million.2024. On February 20, 2014, West Ridge Mall refinanced its $64.6 million, 5.89% fixed rate mortgage maturing July 1, 2014- "Organization"), we assumed additional mortgages with a $54.0 million, 4.84% fixed rate mortgage that maturesfair value of approximately $1.4 billion on 14 properties.6, 2024. The new debt encumbers both West Ridge Mall and West Ridge Plaza. In addition, in27, 2015, the first quarter of 2014, we entered into the following mortgages on previously unencumbered properties (in millions): Amount Interest
Rate Type Maturity $ 37.0 4.19 % Fixed 4/1/2021 40.0 4.76 % Fixed 4/1/2021 53.0 4.26 % Fixed 4/1/2021 105.0 4.82 % Fixed 4/6/2024 85.0 4.65 % Fixed 4/1/2024 50.0 4.54 % Fixed 4/1/2024 $ 370.0 (1)Proceeds were retained by SPG as part of the formation transactions (see Note 6). On April 4, 2014, Town Center at Aurora entered into a $55.0 million, 4.19% fixed rate mortgage that initially matures April 1, 2019, with two 1-year extension options subject to certain requirements, the proceeds of which were retained by SPG as part of the formation transactions. On June 5, 2014, weCompany repaid the $18.8 million mortgage on Sunland Park Mall inWest Town Corners and the amount of $30.7$13.9 million (including prepayment penalty of $2.9 million, which will be expensed in the second quarter of 2014). mortgage on Gaitway Plaza with cash on hand.loan was due to mature on January 1, 2026. The repayment was funded through a borrowing on our credit facility (see below). In AprilFacilityLiborLIBOR plus 1.05%, and will initially mature on May 30, 2018, subject to two, 6-month extensions available at our option subjectWashington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)5. Indebtedness (Continued)LiborLIBOR plus 1.15%, and will initially mature on May 30, 2016, subject to three, 12-month extensions available at our option subject to compliance with the terms of the Facility and payment of a customary extension fee. In connection with the formation of WPG, and as contemplated in the Information Statement, we incurred $670.8 million of additional indebtedness under the Facility concurrent with the May 28, 2014 distribution or shortly thereafter. The proceeds of thewere usedconsisted of $413.8 million outstanding under the Revolver and $500.0 million outstanding under the Term Loan. On March 31, 2015, we had an aggregate available borrowing capacity of $483.1 million under the Facility, net of $3.1 million reserved for outstanding letters of credit. At March 31, 2015, the applicable interest rate on the Revolver was one-month LIBOR plus 1.05%, or 1.23%, and the applicable interest rate on the Term Loan was one-month LIBOR plus 1.15%, or 1.33%.follows: (i) $585.0 million was retained by SPG as partin millions or billions)formation transactions, (ii) $30.7Merger Agreement, WPG entered into a debt commitment letter, which was amended and restated on September 23, 2014 pursuant to which parties agreed to provide up to $1.25 billion in a senior unsecured bridge loan facility (the “Bridge Loan”).used for$941.6 million and the applicable interest rate was three-month LIBOR plus 1.15%, or 1.43%.Sunland Park Mall mortgage, (iii) $40.7 million was retained to cover transaction costs, (iv) $11.4 million was repaid to SPG forBridge Loan, the Company accelerated amortization on the pro-rata portion of the deferred loan financing costs in the amount of $1.8 million, resulting in total amortization of $4.1 million included in interest expense in the accompanying consolidated and (v)combined statements of operations and comprehensive (loss) income for the remaining $3.0three months ended March 31, 2015.was retained on hand for other corporate and working capital purposes. Taking into consideration the subsequent event activity described above, the following table isof 3.850% senior unsecured notes (the "Bonds Payable") at a rollforward of debt2014 balance sheet date2015, management believes the Company is in compliance with all covenants of its unsecured debt.the June 13, 2014 filing date of this report (in millions):Unaudited Consolidated and Combined Financial Statements (Continued) $ 1,276.2 670.8 55.0 (27.7 ) (3.1 ) $ 1,971.2 2014,2015, certain of our consolidated subsidiaries were the borrowers under 2642 non-recourse mortgage loans secured by mortgages encumbering 3146 properties, including threefive separate pools of cross-defaulted and cross-collateralized mortgages encumbering a total of eight12 properties. The total balance of mortgages was approximately $2.8 billion as of March 31, 2015. Under these cross-default provisions, a default under any mortgage included in the cross-defaulted pool may constitute a default under all mortgages within that pool and may lead to acceleration of the indebtedness due on each property within the pool. Certain of our secured debt instruments contain financial and other non-financial covenants which are specific to the properties which serve as collateral for that debt. Our existing non-recourse mortgage loans generally prohibit our subsidiaries that are borrowers thereunder from incurring additional indebtedness, subject to certain customary and limited exceptions. In addition, certain of these instruments limit the ability of the applicable borrower's parent entity from incurring mezzanine indebtedness unless certain conditions are satisfied, including compliance with maximum loan to value ratio and minimum debt service coverage ratio tests. Further, under certain of these existing agreements, if certain cash flow levels in respect of the applicable mortgaged property (as described in the applicable agreement) are not maintained for at least two consecutive quarters, the lender could accelerate the debt and enforce its right against its collateral. If the borrower fails to comply with these covenants, the lender could accelerate the debt and enforce its right against their collateral. At March 31, 2014,2015, management believes the applicable borrowers under these non-recourse mortgage loans were in compliance with all covenants where non-compliance could individually, or giving effect to applicable cross-default provisions in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.Washington Prime Group Inc.Condensed Notes to Unaudited Combined Financial Statements (Continued)(Dollars in thousands, except where indicated as in millions or billions)5. Indebtedness (Continued)$1.3$2.4 billion and $918.6 million$1.4 billion as of March 31, 20142015 and December 31, 2013,2014, respectively. The fair values of these financial instruments and the related discount rate assumptions as of March 31, 20142015 and December 31, 20132014 are summarized as follows: March 31,
2014 December 31,
2013 $ 1,335,791 $ 981,631 $2,501,423 $1,503,944 3.76 % 3.06 % 3.23 % 3.36 % 6. Equity6. Derivative Financial Instruments following table providesCompany is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a reconciliationwide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the beginningCompany's known or expected cash payments related to the Company's borrowings.ending carrying amounts of combined total equity. SPG
Equity Noncontrolling
Interests Total
Equity $ 1,883,680 $ 845 $ 1,884,525 41,502 — 41,502 (390,590 ) (845 ) (391,435 ) $ 1,534,592 $ — $ 1,534,592 (1)Amounts include $370.0 million of proceeds on new indebtedness retained by SPGto manage its exposure to interest rate movements. To accomplish these objectives the Company primarily uses interest rate swaps or caps as part of its interest rate risk management strategy. Interest rate swaps involve the formation transactions (see Note 5).7. Commitmentsreceipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company may also enter into forward starting swaps or treasury lock agreements to set the effective interest rate on a planned fixed-rate financing. In a forward starting swap or treasury lock agreement that the Company cash settles in anticipation of a fixed rate financing or refinancing, the Company will receive or pay an amount equal to the present value of future cash flow payments based on the difference between the contract rate and ContingenciesLitigation We are involved from time-to-time in various legal proceedings that arise inmarket rate on the ordinary course of our business, including, but not limited to commercial disputes, environmental matters, and litigation in connection with transactions including acquisitions and divestitures. We believe that such litigation, claims and administrative proceedings will not have a material adverse impact on our financial position or our results of operations. We record a liability when a loss is considered probable and the amount can be reasonably estimated.Concentration of Credit Risk Our properties rely heavily upon anchor or major tenants to attract customers; however, these retailers do not constitute a material portion of our financial results. Additionally, many anchor retailers in the mall properties own their spaces further reducing their contribution to our operatingDollarsdollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)7. Commitments and Contingencies (Continued)results. All operations are within the United States and no customer or tenant accounts for 5% or moreour combined revenues.8. Related Party Transactions As described in Note 1, the accompanying combined financial statements present the operations of SPG Businesses as carved-out from the financial statements of SPG. Transactions between the properties have been eliminatedchanges in the combined presentation. A fee for certain centralized SPG costs for activities suchfair value of derivatives designated and that qualify as common costs for managementcash flow hedges is recorded in other comprehensive income ("OCI") or other comprehensive loss (“OCL”) and other services, national advertising and promotion programs, consulting, accounting, legal, marketing and management information systems has been charged to the propertiesis subsequently reclassified into earnings in the combined financial statements. In addition, certain commercial general liability and property damage insurance is providedperiod that the hedged forecasted transaction affects earnings. Net realized gains or losses resulting from derivatives that were settled in conjunction with planned fixed-rate financings or refinancings continue to the properties by an indirect subsidiary of SPG. Amounts charged to expense for common costs, services, and other as well as insurance premiums arebe included in property operating costs inaccumulated other comprehensive loss ("AOCL") during the combined statements of operations. Charges for eachterm of the periods presented for properties which are consolidatedhedged debt transaction. Any ineffective portion of the change in fair value of the SPG Businesses portfolio are as included below: For the
Three Months
Ended March 31, 2014 2013 $ 5,428 $ 5,278 2,219 2,274 233 218 Leasing and development fees charged by SPG are capitalized by the property. Forderivatives is recognized directly in earnings. The Company had no hedge ineffectiveness in earnings during the three months ended March 31, 2014,2015 and 2013, these charges were $455 and $292, respectively. Leasing and development fees charged2014.unconsolidated properties were $51 and $27 forderivatives that will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. Realized gains or losses on settled derivative instruments included in AOCL are recognized as an adjustment to income over the term of the hedged debt transaction. During the next twelve months, the Company estimates that an additional $62 will be reclassified as a decrease to interest expense.20142015, the Company entered into two five-year forward starting swaps and 2013, respectively. Amounts charged to unconsolidated properties withintwo ten-year forward starting swaps. The two five-year swaps were terminated upon the SPG Businesses portfolio areprivate placement of the Bonds Payable during the quarter. As of March 31, 2015, the Company had two outstanding interest rate derivatives that were designated as included below:cash flow hedges of interest rate risk with a notional value of $150,000. For the
Three Months
Ended March 31, 2014 2013 $ 1,025 $ 1,151 55 58 13 15 Liability Derivatives As of March 31, 2015 Derivatives designated as hedging instruments: Interest rate products Accounts payable, accrued expenses, intangibles and deferred revenues $ 998 At March 31, 2014 and December 31, 2013, $1,039 and $4,959, respectively,payable to SPG and its affiliates and are includedreported at their fair value of $998 in accounts payable, accrued expenses, intangibles, and deferred revenues at March 31, 2015 with a corresponding adjustment to OCL for the unrealized gains and losses (net of noncontrolling interest allocation). There were no outstanding derivatives as of December 31, 2014. Over time, the unrealized gains and losses held in AOCL will be reclassified to earnings. This reclassification will correlate with the accompanying combined balance sheets.recognition of the hedged interest payments in earnings.TableContentsDerivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCL on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) March 31, March 31, March 31, 2015 2015 2015 Interest rate products $ (407 ) Interest expense $ (3 ) Interest expense $ — Dollarsdollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions) Derivative instruments, net $ — $ 998 $ — $ 998 7. Equity 9. Subsequent Events See1 - "Organization" and Note 52 - "Basis of Presentation and Principles of Consolidation and Combination" for debt activity subsequentmore information). Upon becoming a separate company on May 28, 2014, WPG's ownership is now classified under the typical stockholders' equity classifications of common stock, capital in excess of par value and retained earnings. Related to the separation, 155,162,597 shares of WPG common stock and 31,575,487 units of WPG L.P.'s limited partnership interest were issued to shareholders of SPG and unit holders of SPG L.P., respectively.2014.LTIP Units (as defined)stock options, stock appreciation rights, restricted stock, restricted stock units or other stock-based awards in WPG, or long term incentive plan ("LTIP") units or performance units in WPG, L.P. The Plan terminates on May 28, 2024.Security Type Dividend per Share/Unit Record Date Payable Date Common Shares/Units (1) $0.1100 March 31, 2015 March 6, 2015 March 16, 2015 Series G Preferred Shares (2) $0.5078 March 31, 2015 March 31, 2015 April 15, 2015 Series H Preferred Shares (2) $0.4688 March 31, 2015 March 31, 2015 April 15, 2015 Series I Preferred Shares (2) $0.4297 March 31, 2015 March 31, 2015 April 15, 2015 Series I‑1 Preferred Units (2) $0.4563 March 31, 2015 March 31, 2015 April 15, 2015 (1) Represents a prorated dividend for the period from January 15, 2015 through March 31, 2015, which is in addition to the $0.14 stub dividend paid on January 22, 2015. (2) Amounts total $5.8 million and are recorded as distributions payable in the accompanying consolidated balance sheets as of March 31, 2015. TableContentsour business, including, but not limited to commercial disputes, environmental matters, and litigation in connection with transactions including acquisitions and divestitures. We believe that such litigation, claims and administrative proceedings will not have a material adverse impact on our financial position or our results of operations. We record a liability when a loss is considered probable and the amount can be reasonably estimated.2015 $ 5,219 2016 7,303 2017 7,279 2018 7,306 2019 7,759 Thereafter 368,333 Total $ 403,199 For the Three Months Ended March 31, 2015 2014 Property management and common costs, services and other $ 6,929 $ 5,428 Insurance premiums $ 2,269 $ 2,219 Advertising and promotional programs $ 219 $ 233 Capitalized leasing and development fees $ 1,631 $ 455 For the Three Months Ended March 31, 2015 2014 Property management costs, services and other $ 222 $ 1,025 Insurance premiums $ 3 $ 55 Advertising and promotional programs $ 10 $ 13 Capitalized leasing and development fees $ 2 $ 51 For the Three Months Ended March 31, 2015 2014 (Loss) Earnings Per Share, Basic: Net (loss) income to common stockholders - basic $ (12,270 ) $ 34,392 Weighted average shares outstanding - basic 179,575,102 155,162,597 (Loss) earnings per common share, basic $ (0.07 ) $ 0.22 (Loss) Earnings Per Share, Diluted: Net (loss) income to common stockholders - basic $ (12,270 ) $ 34,392 Net (loss) income attributable to common unit holders (2,293 ) 7,110 Net (loss) income to common stockholders - diluted $ (14,563 ) $ 41,502 Weighted average shares outstanding - basic 179,575,102 155,162,597 Weighted average operating partnership units outstanding 34,400,375 31,575,487 Weighted average shares outstanding - diluted 213,975,477 186,738,084 (Loss) earnings per common share, diluted $ (0.07 ) $ 0.22 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSManagement’s Discussion and Analysis of Financial Condition and Results of OperationsOverview—("WPG"(“WPG” or the "Company"“Company”) is a recently formedan Indiana corporation that operates as a self‑administered and self‑managed real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. REITs will generally not be liable for federal corporate income taxes as long as they continue to distribute not less than 100% of their taxable income and satisfy certain other requirements. Washington Prime Group, L.P. (“WPG L.P.”) is our majority‑owned partnership subsidiary that owns, through its affiliates, all of our real estate properties and other assets. WPG owns, develops and manages retail real estate properties. As of March 31, 2015, our assets consisted of interests in 121 shopping centers in the United States, consisting of strip centers and malls.("SPG"(“SPG”) and its subsidiaries. AsOn May 28, 2014, WPG separated from SPG through the distribution of March 31, 2014,100% of the outstanding shares of WPG to the SPG shareholders in a tax‑free distribution. Prior to the separation, WPG was a wholly owned subsidiary of SPG. Prior to or concurrent with the separation, from SPG which was completed on May 28, 2014, SPG engaged in certain formation transactions that were designed to consolidate the ownership of its interests in 98 properties ("(“SPG Businesses"Businesses”) and distribute such interests to WPG and its operating partnership, Washington Prime Group, L.P. ("WPG L.P."). Pursuant to the separation agreement, SPG distributed 100% of the common shares of WPG on a pro rata basis to SPG'sSPG’s shareholders as of the May 16, 2014 record date."we"“we”, "us"“us” and "our"“our” refer to Washington Prime Group Inc.WPG, WPG L.P. and entities in which WPG (or an affiliate) has a material ownership or financial interest, on a consolidated basis, after giving effect to the transfer of assets and liabilities from SPG as well as to the SPG Businesses prior to the date of the completion of the separation. Before the completion of the separation, SPG Businesses were operated as subsidiaries of SPG, which operates as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended. WPG is expected to operate as a REIT subsequent to the separation and distribution. REITs will generally not be liable for federal corporate income taxes as long as they continue to distribute not less than 100% of their taxable income.owned by Simon Property Group, Inc.(“SPG L.P.”), with the remaining units of WPG L.P. being owned by the limited partners who were also limited partners of Simon Property Group,SPG L.P. as of the May 16, 2014 record date. The units in WPG L.P. are redeemableconvertible by their holders for cash or, at WPG's option, for WPG common shares on a one-for-one basis. The accompanying unaudited combined financial statements reflect Simon Property Group, L.P.'s interests in the SPG Businesses.spin-offseparation date are presented as if the transferred business was our business for all historical periods described and at the carrying value of such assets and liabilities reflected in SPG'sSPG’s books and records. Additionally, the financial statements reflect the common shares and units outstanding at the separation date as outstanding for all periods prior to the separation.intra-companyintercompany transactions and accounts have been eliminated. The total net effect of the settlement of these intercompany transactions is reflected in the consolidated and combined statements of cash flow as a financing activity and in the consolidated and combined balance sheets as SPG equity in SPG Businesses.presented.presented prior to the separation. Our combined historical financial statements include chargespresented.expects to incurnow incurs additional costs associated with being an independent, publicly traded company, primarily from newly established or expanded corporate functions and from higher charges than in the past from SPG for various services that will continue to be provided on a transition basis.functions. We believe that cash flow from operations will be sufficient to fund these additional corporate expenses. has entered into agreements with SPG under which SPG will provideprovides various services to us, including accounting, asset management, development, human resources, information technology, leasing, legal, marketing, public reporting and tax. The charges for the services will beare based on an hourly or per transaction fee arrangement and pass-through of out-of-pocket costs. Ourconsistconsisted of interests in 98 shopping centers, including 44 malls and 54 strip centers. One of these strip centers was under development and opened during the third quarter of 2013. In addition to the above properties, the combined historical financial statements include interestsan interest in three strip centersone shopping center held within a joint venture portfolio of properties which were sold during the first quarter of 2013 as well as one additional strip center which was sold by that same joint venture on February 28, 2014.OverviewOutlookstrip center and mall assetsshopping centers that match our investment criteria. property NOI (NOI for properties owned and operating in both periods under comparison) to be key measures of operating performance that are not specifically defined by accounting principles generally accepted in the United States, or GAAP. We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Reconciliations of these measures to the most comparable GAAP measure are included elsewhere in this report. and average base minimum rent per square foot.foot and comparable NOI. These reporting metrics exclude the impact of seven non-core properties.2014 improved2015 were generally stable compared to the first three months of 2013.2014. Ending occupancy for the shopping centers was 92.2%91.9% as of March 31, 2014,2015, as compared to 91.0%92.3% as of March 31, 2013, an increase of 120 basis points.2014. Average base minimum rent per square foot remained stableimproved across the portfolio as the shopping centers saw an increase of 0.3%1.5%. Our share of portfolio Comparable NOI grew by 0.7%increased 0.9% for the first three months in 2014 as compared to the first three months in 2013. Comparable property NOI decreased 1.2% for the portfolio, including the approximate 165 basis point impact of the harsh winter weather conditions in the first quarter of 2014.properties distributed to us:properties: March 31,
2014 March 31,
2013 %/Basis
Points
Change(1) 92.2 % 91.0 % +120 bps $ 18.92 $ 18.86 0.3% % Change (3) Ending occupancy (1) 91.9% 92.3% (0.4)% Average base minimum rent per square foot (2) $21.11 $20.79 1.5% (1) Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation of ending occupancy. Strip center GLA included in the calculation relates to all company owned space. (2) Average base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy. (3) Percentages may not recalculate due to rounding. Percentage changes are representative of the change from the comparable prior period. (1)Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period. Ending Occupancy Levels and Average Base Minimum Rent per Square Foot. Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation of ending occupancy. Strip center GLA included in the calculation relates to all company owned space. Average base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.2014,2015 we signed 4555 new leases and 148128 renewal leases with a fixed minimum rent (excluding mall anchors and majors, new development, redevelopment, expansion, downsizing, and relocation) across the portfolio, comprising approximately 0.6 million611,000 square feet of which 0.5 million square feet related to consolidated properties. During the three months ended March 31, 2013, we signed 60 new leases and 99 renewal leases, comprising approximately 0.4 million square feet of which substantially all related to consolidated properties.feet. The average annual initial base minimum rent for new leases was $18.82 psf for the 2014 period and $20.14 psf in 2013 with an average tenant allowance on new leases of $22.47$22.41 psf and $25.79 psf, respectively. Forfor renewed leases was $26.11 psf.2014, releasing spreads across2015. The primary driver of the portfolio were positive as we were able to lease available square feet at higher rents than the expiring rental ratesnet loss is depreciation and amortization on the same space (based on total tenant payments—base minimum rent plus common area maintenance), resulting innewly acquired assets recorded at fair value. Thus, the operating results of the properties are contributing positive FFO for the Company.releasing spread of $0.54 psf, representing a 2.0% increase over expiring payments.Results of Operations The following opening affected our combined results in the comparative periods:
Grand Junction, Colorado.•During the third quarter of 2013, we opened University Town Plaza, a 580,00043,000 square foot stripshopping center located in Pensacola, Florida.TableContents•strip center. The gain recognized on this transaction was approximately $0.2 million and is included in gain on sale of interest in properties in the combined statements of operations.•On February 21, 2013, SPG increased its economic interest in three unconsolidated strip centers and subsequently disposed of its interests in those properties. These properties were part ofshopping center held within a portfolio of interests in properties, the remainder of which is included within those properties distributed by SPG to WPG. The aggregate gain recognized on this transaction was approximately $14.2 million and is included in gain on sale of interests in properties in the combined statements of operations."property transactions."Property Transactions." In the following discussions of our results of operations, "comparable" refers to properties openwe owned and operatingoperated throughout both years inof the year-to-year comparisons.20142015 vs. Three Months Ended March 31, 2013$1.7$56.1 million, during 2014, of which the property transactionsMerger properties accounted for $0.5$47.8 million ofand the increase.Property Transactions accounted for $9.0 million. Comparable rents decreased $0.7 million, or 0.7%, primarily attributable to a slight decrease in base minimum rents. Overage rents increased $1.2 million, or 1.1%, primarily attributable to an increase in base minimum rents.the Merger properties. Tenant reimbursements increased $1.8$22.1 million due to a $0.3$19.1 million increase attributable to the property transactionsMerger properties and a $1.5$3.0 million increase attributable to the Property Transactions. Other income increased $0.5 million due to $0.9 million attributable to the Merger, partially offset by a net $0.4 million decrease in miscellaneous income.utility reimbursementsincreased depreciation and annual fixed contractual increases related to common area maintenance. Other incomeamortization on new asset additions.$0.6 million primarily as a result of increased land sales in 2014 versus 2013. Total operating expenses increased $4.0$23.2 million, of which $0.8$7.5 million was attributable to net borrowings on the Bridge Loan and Bonds Payable to finance the Merger transaction and $7.6 million was attributable to the additional property mortgages assumed in the Merger. Of the remaining $8.1 million increase, $4.4 million was attributable to mortgages placed on seven previously unencumbered properties during 2014, $4.3 million was attributable to borrowings on the revolving credit facility and term loan and $1.4 million was attributable to the property transactions. The remainderThese increases are partially offset by a $1.8 million decrease attributable to the repayment and refinancing of the increase wascertain mortgages in 2014 and a $0.2 million decrease primarily attributable to increased snow removal and utility costslower interest on the amortizing loan balances of the comparable properties.harsh winter. On February 28, 2014, SPG sold our interestcapital transactions related to the Merger.one unconsolidated strip center and on February 21, 2013, SPGconnection with the Merger. Preferred dividends totaling $5.0 million increased its economic interest in three unconsolidated strip centers and subsequently disposed its interests in those properties. Each of these properties was part of a portfolio of interests in properties,net loss to common shareholders during the remainder of which is included within those properties distributed by SPG to WPG. The aggregate gain recognized on these transactions was $0.2 million and $14.2 million for the periods endingquarter ended March 31, 2014 and 2013, respectively. are expected to include payment of operating expenses, working capital, debt repayment, including principal and interest, reinvestment in properties, development and redevelopment of properties, tenant allowance and dividends. Following the separation from SPG, ourOur primary sources of cash are expected to be operating cash flow and borrowings under our debt arrangements including our senior unsecured revolving credit facility, or Revolver, and a senior unsecured term loan, or Term Loan (collectively referred to as the "Facility"), as further discussed below.primarily on long-term fixed rate mortgage debt as well as floating rate debt. We minimize the use ofAt March 31, 2015, floating rate debt and may enter into floating rate to fixed rate interest rate swaps. At March 31, 2014,comprised 42.9% of our total debt was comprised solely of fixed rateconsolidated debt. However,We will continue to monitor our borrowings under the Facility are at variable rates.borrowing mix to limit market risk. We derive most of our liquidity from leases that generate positive net cash flow from operations, anddistributions of capital from unconsolidated entities that totaled $68.2which was $51.8 million during the three months ended March 31, 2014.$3.4$146.8 million during 20142015 to $29.3$255.6 million as of March 31, 2014 as further discussed2015. The increase was primarily due to operating cash flow from the properties and balances acquired in the Merger. See "Cash Flows" below for more information. On April 15, 2015, the Company redeemed the Series G Preferred Shares for the aggregate amount of approximately $120.3 million, which was funded with cash on hand.expected status as a REIT may require WPGrequires us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. WPGWe may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand, availability under the Facility and will generate sufficient cash flow from operations and from debt refinancings to address our debt maturities, dividends and capital needs through 2014.haveinitially assigned us an investment grade credit rating of BBB or Baa2.and distributions of capital from unconsolidated entities totaled $68.2$51.8 million during the first three months of 2014.2015. During this period we also:•$24.7$34.9 million (includes development costs of $0.6$0.8 million, renovation and expansion costs of $16.8$24.7 million, and tenant costs and other operational capital expenditures of $7.3$9.4 million),•$353.6$1.1 billion,•investments in unconsolidated entities for development capitaldistributions to common shareholders and unitholders of $0.4$52.8 million. expected status as a REIT on a long-term basis. In addition, we expect to be able to generate or obtain capital for nonrecurring capital expenditures, such as acquisitions, major building renovations and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from:••••2014,2015, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our retail tenants. A significant deterioration in projected cash flows from operations could cause us to increase our reliance on available funds from our debt arrangements, curtail planned capital expenditures, or seek other additional sources of financing as discussed above.was $1.3 billion and $918.6 million at March 31, 20142015 and December 31, 2013, respectively. Face amount of mortgage loans $ 2,708,977 $ 1,431,516 Fair value adjustments, net 48,439 3,598 Carrying value of mortgage loans $ 2,757,416 $ 1,435,114 Balance, December 31, 2014 $ 1,435,114 Debt assumptions at fair value 1,364,503 Repayment of debt (32,700 ) Debt amortization payments (5,066 ) Amortization of loan premiums (4,435 ) Balance, March 31, 2015 $ 2,757,416 February 11, 2014, Brunswick Square refinanced its $76.5 million, 5.65% fixed rateJanuary 13, 2015, resulting from our acquisition of Canyon View Marketplace (see "Acquisitions and Dispositions" below), we assumed an additional mortgage maturing August 11, 2014 with a $77.0 million, 4.796% fixed rate mortgage that matures March 1, 2024.February 20, 2014, West Ridge Mall refinanced its $64.6 million, 5.89% fixed rate mortgage maturing July 1, 2014January 15, 2015, resulting from the Merger, we assumed additional mortgages with a $54.0 million, 4.84% fixed rate mortgage that maturesfair value of approximately $1.4 billion on 14 properties.6, 2024. The new debt encumbers both West Ridge Mall and West Ridge Plaza. In addition, in27, 2015, the first quarter of 2014, we entered into the following mortgages on previously unencumbered properties (in millions): Amount Interest
Rate Type Maturity $ 37.0 4.19 % Fixed 4/1/2021 40.0 4.76 % Fixed 4/1/2021 53.0 4.26 % Fixed 4/1/2021 105.0 4.82 % Fixed 4/6/2024 85.0 4.65 % Fixed 4/1/2024 50.0 4.54 % Fixed 4/1/2024 $ 370.0 (1)Proceeds were retained by SPG as part of the formation transactions. On April 4, 2014, Town Center at Aurora entered into a $55.0 million, 4.19% fixed rate mortgage that initially matures April 1, 2019, with two 1-year extension options subject to certain requirements, the proceeds of which were retained by SPG as part of the formation transactions. On June 5, 2014, weCompany repaid the $18.8 million mortgage on Sunland Park Mall inWest Town Corners and the amount of $30.7$13.9 million (including prepayment penalty of $2.9 million, which will be expensed in the second quarter of 2014). The loan was due to maturemortgage on January 1, 2026. The repayment was funded through a borrowingGaitway Plaza with cash on our credit facility (see below). In AprilLiborLIBOR plus 1.05%, and will initially mature on May 30, 2018, subject to two, 6-month extensions available at our option subject to compliance with the terms of the Facility and payment of a customary extension fee. The Term Loan provides borrowings in an aggregate principal amount up to $500 million, bears interest at one-month LiborLIBOR plus 1.15%, and will initially mature on May 30, 2016, subject to three, 12-month extensions available at our option subject to compliance with the terms of the Facility and payment of a customary extension fee. In connection with the formation of WPG, and as contemplated in the Information Statement dated May 16, 2014 filed as Exhibit 99.1 to our current report on Form 8-K filed on May 20, 2014 (the "Information Statement"), we incurred $670.8 million of additional indebtedness under the Facility concurrent with the May 28, 2014 distribution or shortly thereafter. The proceeds of thewere used as follows: (i) $585.0consisted of $413.8 million outstanding under the Revolver and $500.0 million outstanding under the Term Loan. On March 31, 2015, we had an aggregate available borrowing capacity of $483.1 million under the Facility, net of $3.1 million reserved for outstanding letters of credit. At March 31, 2015, the applicable interest rate on the Revolver was retained by SPG as partone-month LIBOR plus 1.05%, or 1.23%, and the applicable interest rate on the Term Loan was one-month LIBOR plus 1.15%, or 1.33%.formation transactions, (ii) $30.7Merger Agreement, WPG entered into a debt commitment letter, which was amended and restated on September 23, 2014 pursuant to which the initial commitment parties agreed to provide up to $1.25 billion in a senior unsecured bridge loan facility (the “Bridge Loan”). On October 6, 2014, certain financial institutions became parties to the debt commitment letter by way of a joinder agreement and were assigned a portion of the initial commitment parties’ commitments thereunder.used for$941.6 million and the applicable interest rate was three-month LIBOR plus 1.15%, or 1.43%.Sunland Park Mall mortgage, (iii) $40.7 million was retained to cover transaction costs, (iv) $11.4 million was repaid toTableBridge Loan, the Company accelerated amortization on the pro-rata portion of ContentsSPG forthe deferred loan financing costs in the amount of $1.8 million, resulting in total amortization of $4.1 million included in interest expense in the consolidated and (v)combined statements of operations and comprehensive (loss) income for the remaining $3.0three months ended March 31, 2015.was retained on hand for other corporate and working capital purposes.Debt after Subsequent Event Activity Taking into consideration the subsequent event activity described above, the following table isof 3.850% senior unsecured notes (the "Bonds Payable") at a rollforward of debt2014 balance sheet date to2015, management believes the June 13, 2014 filing dateCompany is in compliance with all covenants of this report (in millions): $ 1,276.2 670.8 55.0 (27.7 ) (3.1 ) $ 1,971.2 Covenants on Mortgage Loans2014,2015, certain of our consolidated subsidiaries were the borrowers under 2642 non-recourse mortgage loans secured by mortgages encumbering 3146 properties, including threefive separate pools of cross-defaulted and cross- collateralizedcross-collateralized mortgages encumbering a total of eight12 properties. The total balance of mortgages was approximately $2.8 billion as of March 31, 2015. Under these cross-default provisions, a default under any mortgage included in the cross-defaulted pool may constitute a default under all mortgages within that pool and may lead to acceleration of the indebtedness due on each property within the pool. Certain of our secured debt instruments contain financial and other non-financial covenants which are specific to the properties which serve as collateral for that debt. Our existing non-recourse mortgage loans generally prohibit our subsidiaries that are borrowers thereunder from incurring additional indebtedness, subject to certain customary and limited exceptions. In addition, certain of these instruments limit the ability of the applicable borrower's parent entity from incurring mezzanine indebtedness unless certain conditions are satisfied, including compliance with maximum loan to value ratio and minimum debt service coverage ratio tests. Further, under certain of these existing agreements, if certain cash flow levels in respect of the applicable mortgaged property (as described in the applicable agreement) are not maintained for at least two consecutive quarters, the lender could accelerate the debt and enforce its right against its collateral. If the borrower fails to comply with these covenants, the lender could accelerate the debt and enforce its right against their collateral. At March 31, 2014,2015, management believes the applicable borrowers under these non-recourse mortgage loans were in compliance with all covenants where non-compliance could individually, or giving effect to applicable cross-default provisions in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows. Prior to Subsequent Event Activity20142015 and December 31, 2013,2014, consisted of the following (dollars in thousands): March 31,
2014 Effective Weighted
Average Interest
Rate December 31,
2013 Effective Weighted
Average Interest
Rate $ 1,276,189 5.40 % $ 918,614 5.87 % — — — — $ 1,276,189 5.40 % $ 918,614 5.87 % Fixed-rate debt, face amount $ 2,727,877 4.89 % $ 1,431,516 5.23 % Variable-rate debt, face amount 2,086,420 1.53 % 913,750 1.27 % Total face amount of debt 4,814,297 3.43 % 2,345,266 3.69 % Bond discount (70 ) — Fair value adjustments, net 48,439 3,598 Total carrying value of debt $ 4,862,666 $ 2,348,864 In regards to long-term debt arrangements, thethesethe Company's future obligations on our indebtedness as of March 31, 2014,2015, for the remainder of 2014,2015, and subsequent years thereafter assuming the obligations remain outstanding through initial maturities (in thousands): 2014 2015 - 2016 2017 - 2018 After 2018 Total $ 90,847 $ 350,635 $ 71,601 $ 762,136 $ 1,275,219 $ 50,641 $ 113,728 $ 80,653 $ 134,568 $ 379,590 2015 2016 - 2017 2018 - 2019 Thereafter Total Long term debt (1) $ 694,816 $ 1,984,899 $ 602,558 $ 1,532,024 $ 4,814,297 Interest payments (2) 119,844 199,829 155,583 192,003 667,259 Dividends (3) 13,460 27,164 3,028 — 43,652 Preferred share redemptions (4) 117,500 — — — 117,500 Ground rent (5) 5,219 14,582 15,065 368,333 403,199 Purchase/tenant obligations (6) 106,468 — — — 106,468 Total $ 1,057,307 $ 2,226,474 $ 776,234 $ 2,092,360 $ 6,152,375 (1) Represents principal maturities only and therefore excludes net fair value adjustments of $48,439 and bond discount of $70. (2) Variable rate interest payments are estimated based on the LIBOR rate at March 31, 2015. (3) Includes dividends on the Series G Preferred Shares through the April 15, 2015 redemption date. Since there is no required redemption, dividends on the Series H Preferred Shares and Series I Preferred Shares may be paid in perpetuity; for purposes of this table, such dividends were included through the optional redemption dates of August 10, 2017 and March 27, 2018, respectively. (4) Consists of the Series G Preferred Shares which were redeemed in their entirety on April 15, 2015. (5) Represents minimum future lease payments due through the end of the initial lease term. (6) Includes amounts due under executed leases and commitments to vendors for development and other matters. (1)Represents principal maturities only and therefore, excludes net premiums of $970.2014,2015, there were no guarantees of joint venture related mortgage indebtedness. WPG may elect to fund cash needs of a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans, although such fundings are not required contractually or otherwise.LTIP Units (as defined)stock options, stock appreciation rights, restricted stock, restricted stock units or other stock-based awards in WPG, or long term incentive plan ("LTIP") units or performance units in WPG, L.P. The Plan terminates on May 28, 2024.Security Type Dividend per Share/Unit Record Date Payable Date Common Shares/Units (1) $0.1100 March 31, 2015 March 6, 2015 March 16, 2015 Series G Preferred Shares (2) $0.5078 March 31, 2015 March 31, 2015 April 15, 2015 Series H Preferred Shares (2) $0.4688 March 31, 2015 March 31, 2015 April 15, 2015 Series I Preferred Shares (2) $0.4297 March 31, 2015 March 31, 2015 April 15, 2015 Series I‑1 Preferred Units (2) $0.4563 March 31, 2015 March 31, 2015 April 15, 2015 (1) Represents a prorated dividend for the period from January 15, 2015 through March 31, 2015, which is in addition to the $0.14 stub dividend paid on January 22, 2015. (2) Amounts total $5.8 million and are recorded as distributions payable in the consolidated balance sheets as of March 31, 2015. are currently negotiating terms to acquirepursue the joint venture interests held by partners in eight unconsolidatedacquisition of properties for approximately $185 million. To the extent that meet our strategic criteria.reach agreement on the terms of sale, we expect to close on the acquisitions of the joint venture interestsacquired 23 properties in the second quarter of 2014. We can give no assurance that the acquisitions will be completedMerger (see details in this timeframe, if at all. Acquisitions."Merger with Glimcher Realty Trust" above).10, 2014, SPG13, 2015, we acquired oneCanyon View Marketplace, a 43,000 square foot shopping center located in Grand Junction, Colorado, for $10.0 million including the assumption of its partner's remaining interests in three properties that were contributed to WPG.an existing mortgage with a principal balance of $5.5 million. The consideration paidsource of funding for the partner's remaining interestsin these three propertiesacquisition was approximately $4.6 million. Two of these properties were previously consolidated and are now wholly owned. The remaining property is accounted for under the equity method. will pursue the disposition of properties that no longer meet our strategic criteria. On February 28, 2014, SPG disposed of its interest in one unconsolidated strip center and, on February 21, 2013, SPG increased its economic interest in three unconsolidated strip centers and subsequently disposed of its interests in those properties. Each of these properties was part of a portfolio of interests in properties, the remainder of which is included within those properties distributed by SPG to WPG on May 28, 2014.20142015 related to these activities to be approximately $75.0$150 to $200 million. Our estimated stabilized return on invested capital typically ranges between 8% and 12%.stripshopping center in the Houston metropolitan area, to bewhich has been named Fairfield Town Center. The projected cost of this development is expected to be approximately $75.0$80 million. The carrying value of this project is $10.3$11.7 million at March 31, 20142015 which primarily relates to the cost of the underlying land and site improvements for infrastructure. The development is expected to be fully completed in the later partfirst half of 2015. As of March 31, 2014, a pipeline of approximately $300 million of future development and redevelopment projects has been identified, including the Fairfield Town Center Development. These projects generally consist of expansions and redevelopment of existing centers and leasing of anchor and big-box tenants.thirdsecond quarter of 2013,2014, we opened University Town Plaza,commenced redevelopment activities at Jefferson Valley Mall, a former enclosed mall which we have redeveloped into a 580,000556,000 square foot open-air stripshopping center located in Pensacola, Florida.the New York City area. The total cost of this project wasis expected to be approximately $31.7$34 million.held for the development of Fairfield Town Center as discussed above, and other additional parcels at our current centers which we may utilize for expansion of the existing center or sales of outlots.(in thousands) for the periodthree months ended March 31, 2014: 2014 $ 550 16,797 6,475 920 $ 24,742
2015 (in thousands):(1)Primarily relates to land held for development of Fairfield Town Center.New developments (1) $ 744 Redevelopments and expansions 24,746 Tenant allowances 7,763 Operational capital expenditures 1,629 Total $ 34,882 (1) Primarily relates to land held for development of Fairfield Town Center. the heading "RiskPart I, "Item 1A. Risk Factors" in the Information Statement. We may update that discussion in subsequent Quarterly ReportsCompany's Annual Report on Form 10-Q, but otherwise we10-K for the year ended December 31, 2014, as updated by Part II, "Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q. We undertake no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise. property NOI. We believe that these non-GAAP measures are helpful to investors because they are widely recognized measures of the performance of REITs and provide a relevant basis for our comparison among REITs. We also use these measures internally to measure the operating performance of our portfolio.•••••interest, andinterest.•all determined on a consistent basis in accordance with GAAP. We have adopted NAREIT's clarification of the definition of FFO that requires us to include the effects of nonrecurring items not classified as extraordinary, cumulative effect of accounting changes, or a gain or loss resulting from the sale or disposal of, or any impairment charges related to, previously depreciated operating properties.••••thousands)thousands, except share/unit amounts): For the Three Months
Ended March 31, 2014 2013 $ 41,502 $ 55,853 45,968 45,299 1,166 3,162 (242 ) (14,152 ) — (67 ) — (39 ) $ 88,394 $ 90,056 For the Three Months Ended March 31, 2015 2014 Net (loss) income $ (9,588 ) $ 41,502 Less: Preferred dividends and distributions on preferred operating partnership units (5,028 ) — Adjustments to Arrive at FFO: Real estate depreciation and amortization, including joint venture impact 91,682 47,134 Gain on sale of interest in property — (242 ) Net income attributable to noncontrolling interest holders in properties 3 — Noncontrolling interests portion of depreciation and amortization (33 ) — FFO of the Operating Partnership (1) 77,036 88,394 FFO allocable to limited partners 12,323 14,947 FFO allocable to shareholders $ 64,713 $ 73,447 Diluted net (loss) income per share $ (0.07 ) $ 0.22 Adjustments to arrive at FFO per share: Depreciation and amortization from consolidated properties and our share of real estate depreciation and amortization from unconsolidated properties 0.43 0.25 Gain on sale of interest in property — — Diluted FFO per share $ 0.36 $ 0.47 Weighted average shares outstanding - basic 179,575,102 155,162,597 Weighted average limited partnership units outstanding 34,400,375 31,575,487 Weighted average additional dilutive securities outstanding 1,068,420 — Weighted average shares outstanding - diluted 215,043,897 186,738,084 (1) FFO of the operating partnership decreased by $11.4 million for the three months ended March 31, 2015 compared to the three months ended March 31, 2014. Contributing to this decrease were the following items included in FFO for the three months ended March 31, 2015: costs associated with the Merger of $20.8 million, general and administrative costs primarily related to being a publicly traded company after the separation from SPG of $9.7 million, and interest expense from additional indebtedness incurred related to the separation from SPG of approximately $5.9 million. property NOI (in thousands): For the Three Months
Ended March 31, 2014 2013 $ 41,502 $ 55,853 75 78 13,917 13,719 (242 ) (14,152 ) (345 ) (293 ) 54,907 55,205 45,968 45,299 $ 100,875 $ 100,504 $ 2,985 $ 4,057 3,551 3,470 23 (649 ) 6,559 6,878 3,878 3,754 $ 10,437 $ 10,632 $ 111,312 $ 111,136 39 1,177 $ 111,351 $ 112,313 (0.9 )% (8,194 ) (9,843 ) $ 103,157 $ 102,470 0.7 % $ 111,351 $ 112,313 1,685 1,328 $ 109,666 $ 110,985 (1.2 )% (1)NOI excluded from comparable property NOI relates to properties not owned and operated in both periods under comparison and excluded income noted in footnote 2 below. For the Three Months Ended March 31, 2015 2014 Reconciliation of NOI of consolidated properties: Net (loss) income $ (9,588 ) $ 41,502 Income and other taxes 445 75 Interest expense 37,122 13,917 Gain on sale of interest in property — (242 ) Income from unconsolidated entities (216 ) (345 ) Straight-line rents (1,728 ) (149 ) Fair value rent amortization (4,638 ) (244 ) Management fee allocation 5,217 3,501 Termination income and outparcel sales (507 ) (1,018 ) Other adjustments for comparability 468 216 General and administrative 9,700 — Merger and transaction costs 20,810 — Depreciation and amortization 92,184 45,968 NOI of consolidated properties $ 149,269 $ 103,181 NOI of unconsolidated properties 2,300 10,437 Adjustments for comparability 152 211 Less: Partners' share of comparable NOI (2,380 ) (2,499 ) NOI from sold properties 67 39 Total NOI of our portfolio $ 149,408 $ 111,369 Less: NOI from non-comparable properties (1) (2,524 ) (589 ) Add: NOI from Glimcher properties prior to the Merger (1) 7,843 43,499 Less: NOI from non-core properties (2) (6,353 ) (7,228 ) Comparable NOI $ 148,374 $ 147,051 Comparable NOI percentage change 0.9 % (2)Comparable properties are malls and strip centers that were owned in both of the periods under comparison. Five properties were considered non comparable for the periods under comparison. Excludes lease termination income, interest income, land sale gains and the impact of significant redevelopment activities.(1) NOI excluded from comparable NOI relates to properties not owned and operating in all periods reported. The assets acquired as part of the Merger are included in comparable NOI. (2) NOI from seven non-core mall properties is excluded from comparable NOI. Sensitivity Analysis.disclosed a quantitative and qualitative analysis regardingare exposed to market risk in the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Information Statement. There have been no materialfrom changes in interest rates, primarily LIBOR. We seek to limit the assumptions usedimpact of interest rate changes on earnings and cash flows and to lower the overall borrowing costs by closely monitoring our variable rate debt and converting such debt to fixed rates when we deem such conversion advantageous. From time to time, we may enter into interest rate swap agreements or results obtained regarding market risk since Decemberother interest rate hedging contracts. While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under GAAP guidance. As of March 31, 2013.Controls and Procedures Item 4. Controls and Procedures20142015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Part II—Other Information Item 1. Item 1. Legal Proceedings Item 1A. Risk Factors Factors ThroughFactors” in the period covered by this report, there wereCompany’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”). There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of the 2014 Form 10-K, with the exception of the items listed below.Risk Factors disclosedMerger. Our increased levels of indebtedness following our recent transactions could also reduce access to capital and increase borrowing costs generally, thereby reducing funds available for working capital, capital expenditures, tenant improvements, acquisitions and other general corporate purposes and may create competitive disadvantages for us relative to other companies with lower debt levels. The effect of these factors could be magnified if we complete the joint venture transactions. If we do not achieve the expected benefits and cost savings from the Merger, or if the financial performance of the Company does not meet current expectations, then our ability to service our indebtedness may be adversely impacted.Information Statement.second quarter of 2015, subject to the satisfaction or waiver of the closing conditions, and to generate net proceeds of approximately $430 million to us after taking into account the transfer of mortgage debt to the JV and estimated closing costs. We expect to use the net proceeds to repay the portion of our Bridge Loan that we are not refinancing with net term indebtedness. The Bridge Loan had a principal amount of $941.6 million as of March 31, 2015 and matures on January 14, 2016. Delays in consummating the joint venture transactions or the failure to consummate the joint venture transactions on the terms contemplated, or at all, could negatively affect our future business and financial results, and, in that event, the market price of our shares and debt securities may decline, particularly to the extent that the current market price reflects a market assumption that the joint venture transactions will be consummated. If the joint venture transactions are consummated on terms that are different than those contemplated herein or is not consummated for any reason, our ongoing businesses could be adversely affected and we will be subject to several risks, including (i) the payment of certain costs, including costs relating to the joint venture transactions, such as legal, accounting and financial advisory fees, and (ii) the diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the joint venture transactions. If the joint venture transactions are not consummated, we will not achieve the expected benefits thereof, including the reduction of leverage through repayment of a portion of the amount outstanding under the Bridge Loan using the proceeds to be received by us in connection with the joint venture transactions, and will be subject to the risks described above, including the possibility of adverse actions by the rating agencies. If the expected proceeds are not available to pay a portion of the Bridge Loan, then we would be required to find alternative means of financing such payment. The terms of such financing, if available, may be less attractive to us than the terms of the joint venture transactions. Any of the above factors could materially affect our business, financial results and price of our shares and debt securities. Item 4. Item 4. Mine Safety Disclosures On June 3, 2014, the Audit Committee of Washington Prime Group Inc.'s Board of Directors approved certain audit, audit-related, tax compliance and tax consulting services to be provided by Ernst & Young LLP, our independent registered public accounting firm. This disclosure is made pursuant to Section 10A(i)(2) of the Securities Exchange Act of 1934, as added by Section 202 of the Sarbanes-Oxley Act of 2002.ExhibitNumberExhibit DescriptionsWashington Prime Group Inc. 3.1 By: /s/ Mark E. Yale By: /s/ Melissa A. Indest 2.1 Purchase, Sale and Escrow Agreement, dated February 25, 2015, by and among WPG-OC Limited Partner, LLC, WPG-OC General Partner, LLC, O'Connor Mall Partners, L.P. and Fidelity National Title Insurance Company (incorporated by reference to Form 8-K filed February 26, 2015) 3.1 Amended and Restated Articles of Incorporation of Washington Prime Group Inc., as amended (incorporated by reference to Form S-4 filed October 28, 2014) 3.2 Articles of Amendment No. 2of Washington Prime Group Inc. setting forth the Terms of Series G Cumulative Redeemable Preferred Stock (incorporated by reference to Form 108-A filed March 24, 2014)January 14, 2015)
3.33.2Articles of Amendment of Washington Prime Group Inc. setting forth the Terms of Series H Cumulative Redeemable Preferred Stock (incorporated by reference to Form 8-A filed January 14, 2015)3.4
Articles of Amendment of Washington Prime Group Inc. setting forth the Terms of Series I Cumulative Redeemable Preferred Stock (incorporated by reference to Form 8-A filed January 14, 2015)3.5
Amended and Restated Bylaws of Washington Prime Group Inc. (incorporated by reference to Form 8-K filed January 22, 2015)3.6* Amended and Restated Bylaws of Washington Prime Group Inc. Redlined to Show Bylaw Amendments Effective January 15, 2015 4.1 Indenture, dated as of March 24, 2015, between Washington Prime Group, L.P. and U.S. Bank National Association, as Trustee (incorporated by reference to Form 8-K filed March 26, 2015) 4.2 First Supplemental Indenture, dated as of March 24, 2015, between Washington Prime Group, L.P. and U.S. Bank National Association, as Trustee (incorporated by reference to Form 8-K filed March 26, 2015) 4.3 Registration Rights Agreement, dated as of March 24, 2015, by and among Washington Prime Group, L.P. and Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBS Securities Inc., as representatives of the initial purchasers named therein (incorporated by reference to Form 8-K filed March 26, 2015) 10.1 First Amendment to Purchase and Sale Agreement, dated as of January 15, 2015, by and between Washington Prime Group, L.P. and Simon Property Group, L.P. (incorporated by reference to Form 10-K filed February 26, 2015) 10.2 Amendment No. 1 to Amended and Restated Limited Partnership Agreement of Washington Prime Group, L.P. dated as of January 14, 2015, setting forth the Terms of Series G Preferred Units (incorporated by reference to Form 10-K filed February 26, 2015) 10.3 Amendment No. 2 to Amended and Restated Limited Partnership Agreement of Washington Prime Group, L.P. dated as of January 14, 2015, setting forth the Terms of Series H Preferred Units (incorporated by reference to Form 10-K filed February 26, 2015) 10.4 Amendment No. 3 to Amended and Restated Limited Partnership Agreement of Washington Prime Group, L.P. dated as of January 14, 2015, setting forth the Terms of Series I Preferred Units (incorporated by reference to Form 10-K filed February 26, 2015) 10.5 Amendment No. 4 to Amended and Restated Limited Partnership Agreement of Washington Prime Group, L.P. dated as of January 14, 2015, setting forth the Terms of Series I-1Preferred Units (incorporated by reference to Form 10-K filed February 26, 2015) 10.6+ Transition and Consulting Agreement by and between Washington Prime Group Inc. and Myles H. Minton, dated as of January 5, 2015 (incorporated by reference to Form 8-K filed January 9, 2015) 10.7 364-Day Bridge Term Loan Agreement, dated as of January 15, 2015, by and among Washington Prime Group, L.P., the institutions from time to time party thereto as lenders, and Citibank, N.A., as administrative agent (incorporated by reference to Form 8-K filed January 22, 2015) 10.8+ First Amendment to Employment Agreement, by and between Washington Prime Group Inc. and Mark Ordan, dated as of September 16, 2014 (incorporated by reference to Form 8-K filed January 22, 2015) 10.9+ Second Amendment to Severance Benefits Agreement, by and between Washington Prime Group Inc. and Michael P. Glimcher, dated as of September 16, 2014 (incorporated by reference to Form 8-K filed January 22, 2015) 10.10+ Third Amendment to Severance Benefits Agreement, by and between Washington Prime Group Inc. and Mark E. Yale, dated as of October 13, 2014 (incorporated by reference to Form 8-K filed January 22, 2015) 10.11+ Second Amendment to Severance Benefits Agreement, by and between Washington Prime Group Inc. and Lisa A. Indest, dated as of January 12, 2015 (incorporated by reference to Form 8-K filed January 22, 2015) 10.12+ Employment Agreement, by and between Washington Prime Group Inc. and Mark E. Yale, dated as of October 13, 2014 (incorporated by reference to Form 8-K filed January 22, 2015) 10.13+ Conditional Offer of Employment with Washington Prime Group Inc. by and between Washington Prime Group Inc. and Lisa A. Indest, dated as of January 9, 2015 (incorporated by reference to Form 8-K filed January 22, 2015) 10.14+ First Amendment to Employment Agreement, by and between Washington Prime Group Inc. and C. Marc Richards, dated as of November 10, 2014 (incorporated by reference to Form 8-K filed January 22, 2015) 10.15+ Glimcher Realty Trust Amended and Restated 2004 Incentive Plan (incorporated by reference to Form S-8 filed January 15, 2015) 10.16+ Glimcher Realty Trust 2012 Incentive Compensation Plan (incorporated by reference to Form S-8 filed January 15, 2015) 10.17+ Form of Amendment to Severance Benefits Agreement dated April 1, 2011 by and among Glimcher Realty Trust, Glimcher Properties Limited Partnership and certain named executives of Glimcher Realty Trust (incorporated by reference to Glimcher Realty Trust's Form 10-Q filed April 29, 2011) 10.18+ Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trust, Glimcher Properties Limited Partnership and Michael P. Glimcher (incorporated by reference to Glimcher Realty Trust's Form 10-K filed March 24, 2014)31, 1998)
10.19+31.1Severance Benefits Agreement, dated June 28, 2004, by and among Glimcher Realty Trust, Glimcher Properties Limited Partnership and Lisa A. Indest (incorporated by reference to Glimcher Realty Trust's Form 10-Q filed August 13, 2004)10.20+
Severance Benefits Agreement, dated August 30, 2004, by and among Glimcher Realty Trust, Glimcher Properties Limited Partnership and Mark E. Yale (incorporated by reference to Glimcher Realty Trust's Form 8-K filed August 31, 2004)10.21+
First Amendment to the Severance Benefits Agreement dated September 8, 2006, by and among Glimcher Realty Trust, Glimcher Properties Limited Partnership and Mark E. Yale (incorporated by reference to Glimcher Realty Trust's Form 8-K filed September 8, 2006)10.22 Purchase Agreement, dated as of March 17, 2015, by and between Washington Prime Group, L.P. and Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBS Securities Inc., as representatives of the initial purchasers named therein, relating to 2.850% Senior Notes due 2020 (incorporated by reference to Form 8-K filed March 23, 2015) 10.23+ Second Amendment to Employment Agreement between Washington Prime Group Inc. and Mark Ordan dated March 27, 2015 (incorporated by reference to Form 8-K filed on March 31, 2015) 10.24*+ Description of 2015 Annual Incentive Cash Bonus Plan 10.25*+ Description of Terms of 2015 Annual LTIP Unit Awards 10.26*+ Form of Series 2015A LTIP Unit Award Agreements with Executive Officers Other Than EVP, Legal & Compliance 10.27*+ Series 2015A LTIP Unit Award Agreement by and between Washington Prime Group Inc. and Farinaz S. Tehrani, dated as of February 24, 2015 10.28*+ Certificate of Designation of Series 2015A LTIP Units of Washington Prime Group, L.P. 10.29*+ Employment Agreement by and between Washington Prime Group Inc. and Farinaz S. Tehrani, dated as of February 24, 2015 10.30*+ Terms and Conditions of the Grant of Special Performance LTIP Units to Mr. Glimcher, Mr. Yale, Ms. Tehrani and Ms. Indest 31.1* Certification by the Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*31.2
Certification by the Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32*32
Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002101.INS101.INS*
XBRL Instance Document
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XBRL Taxonomy Extension Schema Document
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XBRL Taxonomy Extension Calculation Linkbase Document
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XBRL Taxonomy Extension Label Linkbase Document
101.PRE*101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
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XBRL Taxonomy Extension Definition Linkbase DocumentSIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.WASHINGTON PRIME GROUP INC.By:/s/ C. MARC RICHARDSName:C. Marc RichardsTitle:Vice President and Chief Financial OfficerDate: June 13, 2014