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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF March 31, 2015 Accelerated filer ¨Non-accelerated filer xSmaller reporting company¨ Item 3. Quantitative and Qualitative Disclosures About Market Item 1A. Item 2. Unregistered Sales of Equity Securities and Use of Item Item Item 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: Mortgage notes payable Unsecured term loan Revolving credit facility Accounts payable, accrued expenses, intangibles, and deferred revenues Cash distributions and losses in partnerships and joint ventures, at equity Other liabilities Total liabilities EQUITY: Stockholders' Equity Common stock, $0.0001 par value, 300,000,000 shares authorized, 155,162,597 issued and outstanding in 2014 Capital in excess of par value SPG Equity Retained earnings Total stockholders' equity Noncontrolling interests Total equity Total liabilities and equity
THE SECURITIES EXCHANGE ACT OF 1934September 30, 2014
*7315 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 ýx No o¨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 ýxOctober 29, 2014,May 6, 2015, registrant had 155,162,597185,289,688 shares of common stock outstanding.Washington Prime Group Inc.Form 10-QPagePART I: FINANCIAL INFORMATION PAGE Part I—Financial Information Item 1. Item 1. Consolidated and Combined Financial Statements (Unaudited)
Consolidated and Combined Balance Sheets as of September 30, 2014March 31, 2015 and December 31, 2013
Consolidated and Combined Statements of Operations and Comprehensive (Loss) Income for the three and nine months ended September 30, 2014March 31, 2015 and 20132014.
Consolidated and Combined Statements of Cash Flows for the ninethree months ended September 30, 2014March 31, 2015 and 20132014.
Consolidated Statement of Equity for the three months ended March 31, 2015. Condensed Notes to Consolidated and Combined Financial StatementsStatements.Item 2. Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsOperations. 25Risk Item 4. Controls and Procedures. Item 4.Controls and Procedures 43PART II:OTHER INFORMATION Part II—Other InformationItem 1.Legal Proceedings Item 1. Legal Proceedings. Risk Factors. Risk Factors 44Proceeds Item 3. Defaults Upon Senior Securities. 3.Mine Safety Disclosures. Defaults Upon Senior Securities Item 5. Other Information. 4.Exhibits. Mine Safety Disclosures 44SIGNATURES5.Other Information44Item 6.Exhibits45Signature47
Financial Statementsand Combined Balance SheetsDollarsdollars in thousands, except share and par value amounts) September 30,
2014 December 31,
2013 March 31, 2015 December 31, 2014 $ 5,210,439 $ 4,789,705 $ 8,378,533 $ 5,292,665 2,069,421 1,974,949 Less: accumulated depreciation 2,172,119 2,113,929 3,141,018 2,814,756 6,206,414 3,178,736 120,808 25,857 255,616 108,768 61,053 61,121 72,256 69,616 5,242 3,554 15,949 — 170,809 97,370 479,629 170,883 $ 3,498,930 $ 3,002,658 $ 7,029,864 $ 3,528,003 $ 1,501,566 $ 918,614 $ 2,757,416 $ 1,435,114 Bonds payable 249,930 — 500,000 — 500,000 500,000 340,750 — 413,750 413,750 Bridge loan 941,570 — Series G Cumulative Redeemable Preferred Stock (called for redemption) 117,500 — 152,004 151,011 345,049 194,014 Distributions payable 5,750 — 15,245 41,313 15,344 15,298 23,561 7,195 14,653 11,786 2,533,126 1,118,133 5,360,962 2,569,962 Redeemable noncontrolling interests 6,145 — 16 — 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 16 722,140 — 1,215,096 720,921 — 1,565,169 73,276 — 13,383 68,114 Accumulated other comprehensive loss (340 ) — 795,432 1,565,169 1,430,734 789,051 170,372 319,356 232,023 168,990 965,804 1,884,525 1,662,757 958,041 $ 3,498,930 $ 3,002,658 Total liabilities, redeemable noncontrolling interests and equity $ 7,029,864 $ 3,528,003
and Comprehensive (Loss) Income
| | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2014 | 2013 | 2014 | 2013 | |||||||||
REVENUE: | |||||||||||||
Minimum rent | $ | 113,887 | $ | 104,905 | $ | 328,898 | $ | 313,390 | |||||
Overage rent | 1,747 | 1,396 | 4,991 | 5,000 | |||||||||
Tenant reimbursements | 50,814 | 47,523 | 145,161 | 138,698 | |||||||||
Other income | 1,236 | 1,555 | 4,778 | 4,096 | |||||||||
| | | | | | | | | | | | | | |
Total revenue | 167,684 | 155,379 | 483,828 | 461,184 | |||||||||
| | | | | | | | | | | | | | |
EXPENSES: | |||||||||||||
Property operating | 29,268 | 27,713 | 81,627 | 77,533 | |||||||||
Depreciation and amortization | 49,307 | 46,771 | 142,563 | 137,171 | |||||||||
Real estate taxes | 20,430 | 20,144 | 59,129 | 58,501 | |||||||||
Repairs and maintenance | 5,169 | 5,001 | 17,253 | 15,890 | |||||||||
Advertising and promotion | 1,954 | 2,270 | 5,838 | 6,215 | |||||||||
Provision for (recovery of) credit losses | 447 | 376 | 1,852 | 260 | |||||||||
General and administrative | 4,395 | 0 | 6,260 | 0 | |||||||||
Transaction and related costs | 0 | 0 | 39,931 | 0 | |||||||||
Merger costs | 2,500 | 0 | 2,500 | 0 | |||||||||
Ground rent and other costs | 1,108 | 1,017 | 3,508 | 3,371 | |||||||||
| | | | | | | | | | | | | | |
Total operating expenses | 114,578 | 103,292 | 360,461 | 298,941 | |||||||||
| | | | | | | | | | | | | | |
OPERATING INCOME | 53,106 | 52,087 | 123,367 | 162,243 | |||||||||
Interest expense | (23,219 | ) | (13,791 | ) | (59,813 | ) | (41,247 | ) | |||||
Income and other taxes | (134 | ) | (68 | ) | (275 | ) | (170 | ) | |||||
Income from unconsolidated entities | 99 | 353 | 846 | 852 | |||||||||
Gain upon acquisition of controlling interests and on sale of interests in properties | 8,969 | 0 | 100,479 | 14,152 | |||||||||
| | | | | | | | | | | | | | |
NET INCOME | 38,821 | 38,581 | 164,604 | 135,830 | |||||||||
Net income attributable to noncontrolling interests | 6,620 | 6,347 | 28,210 | 23,116 | |||||||||
| | | | | | | | | | | | | | |
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 32,201 | $ | 32,234 | $ | 136,394 | $ | 112,714 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
EARNINGS PER COMMON SHARE, BASIC AND DILUTED | |||||||||||||
Net income attributable to common stockholders | $ | 0.21 | $ | 0.21 | $ | 0.88 | $ | 0.73 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| For the Three Months Ended March 31, | |||||||
| 2015 | 2014 | ||||||
| REVENUE: | |||||||
| Minimum rent | $ | 162,704 | $ | 106,637 | |||
| Overage rent | 3,263 | 2,110 | |||||
| Tenant reimbursements | 69,227 | 47,168 | |||||
| Other income | 2,528 | 2,054 | |||||
| Total revenues | 237,722 | 157,969 | |||||
| EXPENSES: | |||||||
| Property operating | 41,079 | 26,140 | |||||
| Depreciation and amortization | 92,184 | 45,968 | |||||
| Real estate taxes | 30,565 | 19,947 | |||||
| Repairs and maintenance | 9,488 | 7,150 | |||||
| Advertising and promotion | 2,687 | 1,952 | |||||
| Provision for credit losses | 698 | 786 | |||||
| General and administrative | 9,700 | — | |||||
| Merger and transaction costs | 20,810 | — | |||||
| Ground rent and other costs | 2,748 | 1,119 | |||||
| Total operating expenses | 209,959 | 103,062 | |||||
| OPERATING INCOME | 27,763 | 54,907 | |||||
| Interest expense | (37,122 | ) | (13,917 | ) | |||
| Income and other taxes | (445 | ) | (75 | ) | |||
| Income from unconsolidated entities | 216 | 345 | |||||
| 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 | ||
| (LOSS) EARNINGS PER COMMON SHARE, BASIC AND DILUTED | $ | (0.07 | ) | $ | 0.22 | ||
| 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 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: Net Income Adjustments to reconcile net income to net cash provided by operating activities— Depreciation and amortization Gain upon acquisition of controlling interests and on sale of interests in properties Loss on debt extinguishment Provision for (recovery of) 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 Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired Capital expenditures, net Net proceeds from sale of assets Investments in unconsolidated entities Distributions of capital from unconsolidated entities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to SPG, net Distributions to noncontrolling interest holders in properties Distributions on common shares/units Proceeds from issuance of debt, net of transaction costs Repayments of debt including prepayment penalties Net cash provided by (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. tenants for certain recoverable expenditures such as property operating, real estate taxes, repair and maintenance, and advertising and promotional expenditures. with Glimcher Realty Trust Merger‑related litigation. their revenue-based management fees and/or upon the actual volume of leasing and development activity occurring at the property. have determined that our partner property. 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. 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. particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. derived from various observable or unobservable inputs and assumptions. Also, we may utilize third party valuation specialists. These components typically include buildings, land and intangibles related to in-place leases and we estimate: Investment properties Other assets Debt Other liabilities Net assets acquired Noncontrolling interest Prior net cash distributions and losses Gain on pre-existing interest Fair value of total consideration transferred Less: Units issued Less: Cash acquired Net cash paid for acquisitions Face amount of mortgage loans Premiums, net Carrying value of mortgage loans approximately $1.4 billion on 14 properties. Muncie Mall Oak Court Mall Lincolnwood Town Center Cottonwood Mall Westminster Mall Charlottesville Fashion Square Town Center at Aurora Total(1) Unsecured Debt % discount due April 1, 2020. WPG L.P. received net proceeds from the offering of $248.4 million, which it used to repay a portion of outstanding borrowings under the Bridge Loan. The Bonds Payable contain certain customary covenants and events of default which, if any such event of default occurs, would permit or require the principal, premium, if any, and accrued and unpaid interest on all of the then-outstanding Bonds Payable to be declared immediately due and payable (subject in certain cases to customary grace and cure periods). Fair value of fixed-rate mortgages Weighted average discount rates assumed in calculation of fair value for fixed-rate mortgages respective ownership interest in SPG L.P. on the date of separation (see Balance, December 31, 2013 Issuance of shares in connection with separation Issuance of limited partner units Noncontrolling interest in property (see Note 4) Equity-based compensation Adjustments to noncontrolling interests Distributions to SPG, net(1) Distributions on common shares/units ($0.25 per common share/unit) Purchase of noncontrolling interest Net income Balance, September 30, 2014 options outstanding. understanding (the “MOU”) with plaintiffs in the Consolidated Action providing for the settlement of the Consolidated Action. Under the terms of the MOU, and to avoid the burden and expense of further litigation, the Company and Glimcher agreed to make certain supplemental disclosures related to the then-proposed Merger, all of which were set forth in a Current Report on Form 8‑K filed by Glimcher with the Securities and Exchange Commission (the “SEC”) on December 23, 2014. On January 12, 2015, at the Special Meeting of Glimcher shareholders, the shareholders voted to approve the transaction, and on January 15, 2015 the transaction closed. the Company has commitments under ground leases at both Malibu Lumber Yard ("Malibu") located in Malibu, California, and Pearlridge Center ("Pearlridge"), located in Aiea, Hawaii. The ground lease at Malibu will expire in 2047 and has three five-year extension options which are exercisable at the option of the Company. The ground lease at Malibu provides for scheduled rent increases every five years. The ground lease at Malibu may require additional payments which are calculated based on percentage rent. The ground lease payments in the below schedule do not reflect payments based on percentage rent. The ground lease at Pearlridge will expire in 2058 and has two ten-year extension options which are exercisable at the option of the Company. The ground lease at Pearlridge provides for scheduled rent increases every five years through the end of 2043, at which time minimum ground rent is adjusted to the higher of fair market value or the ground rent charged in the previous year. Property management and common costs, services and other Insurance premiums Advertising and promotional programs Capitalized leasing and development fees Property management costs, services and other Insurance premiums Advertising and promotional programs Capitalized leasing and development fees Net income attributable to common stockholders—basic and diluted Weighted average shares outstanding—basic and diluted Earnings per common share, basic and diluted Net income attributable to common stockholders Management’s Discussion and Analysis of Financial Condition and Results of Operations REIT. interim periods presented. The Company believes that the disclosures made are adequate to prevent the information presented from being misleading. Company’s common stock foot and comparable NOI. These reporting metrics exclude the impact of seven non-core properties. Ending Occupancy Average Base Minimum Rent per Square Foot Current Leasing Activities for renewed leases was $26.11 psf. consolidated as four properties are wholly owned and three properties are approximately 88.2 percent owned post acquisition. March 31, 2014 income. new asset additions. 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. March 31, 2015. On 1, 2015. We expect the transaction to close in the second quarter of 2015, subject to the satisfaction or waiver of the closing conditions. Prior to closing on the JV, we expect to refinance Pearlridge Center’s existing $171 million mortgage that matures in 2015 with a new $225 million loan. The new nonrecourse, interest-only loan on Pearlridge Center is expected to have a 10-year term and a fixed interest rate of approximately 3.50%. We expect to also refinance existing debt totaling $193 million on Scottsdale Quarter that matures in 2015 with a new $165 million loan. The new nonrecourse, interest-only loan on Scottsdale Quarter is expected to also have a 10-year term and a fixed interest rate of approximately 3.50%. The JV and refinancing transactions are expected to generate net proceeds of approximately $430 million to us at closing after taking into account the mortgage debt transferred to the JV and estimated closing costs. We expect to use the proceeds to repay a portion of the Bridge Loan. 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. borrowings, public and private offerings of debt or equity, including rights offerings, sale of certain assets and joint ventures. The major credit rating agencies initially assigned us an investment grade credit rating of BBB or Baa2. However, as a result of the Face amount of mortgage loans Premiums, net Carrying value of mortgage loans approximately $1.4 billion on 14 properties. Muncie Mall Oak Court Mall Lincolnwood Town Center Cottonwood Mall Westminster Mall Charlottesville Fashion Square Town Center at Aurora Total(1) with cash on hand. 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%. 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 Fixed Rate Variable Rate Total Long Term Debt(1) Interest Payments(2) Total Off-Balance Sheet Arrangements Merger. options outstanding. January 14, 2015. The dividend represents the first quarter 2015 regular quarterly dividend prorated for the dividend period prior to the Merger. dividends: to any applicable lock up or similar restrictions). If we determine it is in our shareholders' best interests for us to purchase the joint venture interest and we believe we have adequate liquidity to execute the purchase without hindering our cash flows, then we may initiate these provisions or elect to buy. If we decide to sell any of our joint venture interests, we expect to use the net proceeds to reduce outstanding indebtedness or to reinvest in development, redevelopment, or expansion opportunities. cash on hand. New developments(1) Redevelopments and expansions Tenant allowances Operational capital expenditures Total Forward-Looking Statements properties, general risks related to retail real estate, including the ability to renew leases or lease new properties on favorable terms, dependency on anchor stores or major tenants and on the level of revenues realized by tenants, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, including our ability to complete certain planned joint venture transactions, intensely competitive market environment in the retail industry, costs of common area maintenance, insurance costs and coverage, dependency on key management personnel, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. We discussed these and other risks and uncertainties under Net Income Adjustments to Arrive at FFO: Depreciation and amortization from consolidated properties Our share of depreciation and amortization from unconsolidated entities Gain upon acquisition of controlling interests and on sale of interests in properties Net income attributable to noncontrolling interest holders in properties Noncontrolling interests portion of depreciation and amortization FFO of the Operating Partnership(1) FFO allocable to limited partners FFO allocable to shareholders Diluted net income per share Adjustments to arrive at FFO per share: Depreciation and amortization from consolidated properties and our share of depreciation and amortization from unconsolidated properties Gain upon acquisition of controlling interests and on sale of interests in properties Diluted FFO per share Basic and diluted weighted average shares outstanding Weighted average limited partnership units outstanding Diluted weighted average shares and units outstanding Reconciliation of NOI of consolidated properties: Net Income Income and other taxes Interest expense Gain on upon acquisition of controlling interests and on sale of interests in properties Income from unconsolidated entities General and administrative Transaction and related costs Merger costs Operating Income Depreciation and amortization NOI of consolidated properties Reconciliation of NOI of unconsolidated entities: Net Income Interest expense NOI of properties sold Operating Income Depreciation and amortization NOI of unconsolidated entities Total consolidated and unconsolidated NOI from continuing operations Adjustments to NOI: NOI of properties sold 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) Change in NOI of comparable properties March 31, 2015. Factors” in the Company’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.Dollarsdollars in thousands) For the Nine Months Ended
September 30, 2014 2013 $ 164,604 $ 135,830 143,768 138,518 (100,479 ) (14,152 ) 2,894 0 1,852 260 (464 ) 69 (846 ) (852 ) 880 1,114 335 1,187 (13,423 ) (237 ) (176 ) (16,591 ) 198,945 245,146 (154,370 ) 0 (63,868 ) (67,230 ) 24,976 0 (2,493 ) (1,956 ) 1,180 3,274 (194,575 ) (65,912 ) (1,060,187 ) (173,552 ) (845 ) (261 ) (47,055 ) 0 1,379,575 — (180,907 ) (7,763 ) 90,581 (181,576 ) 94,951 (2,342 ) 25,857 30,986 $ 120,808 $ 28,644 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 an 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. On May 28, 2014, WPG separated from SPG through the distribution of 100% of the outstanding shares of WPG to the SPG shareholders in a tax‑free distribution. Prior to the separation, from SPG which was completed on May 28, 2014, 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, 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."). WPG L.P. is our majority owned partnership subsidiary that owns all of our real estate properties and other assets. 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 operates 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 and satisfy certain other requirements.iswas approximately equal to the percentage of outstanding units of partnership interest that SPG owned of Simon Property Group, L.P. ("(“SPG L.P."”) owned by SPG,, with the remaining units of WPG L.P. being owned by the limited partners who were also limited partners of SPG L.P. as of the May 16, 2014 record date. The units in WPG L.P. are convertible by their holders for WPG common shares on a one-for-oneone‑for‑one basis or, at WPG'sWPG’s option, into cash.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.pass-throughpass‑through of out-of-pocketout‑of‑pocket costs (see Note 8)9 - "Related Party Transactions").interestsan interest in threeone shopping centerscenter held within a joint venture portfolio of properties which were sold during the first quarter of 2013 as well as one additional shopping center which was sold by that same joint venture on February 28, 2014.tenants'tenants’ sales volumes, offering property operating services to our tenants and others, including energy, waste handling and facility services, and reimbursements fromWashington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere 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.Proposed the Company entered into a definitive agreement with Glimcher Realty Trust ("Glimcher"(the “Merger Agreement”) under which it will acquire Glimcher, in a stock and cash transaction valued at $14.20 perapproximately $4.2 billion, including the assumption of debt (the “Merger”). Prior to the Merger, Glimcher was a Maryland REIT engaged in the ownership, management, acquisition and development of retail properties, including mixed‑use, open‑air and enclosed regional malls as well as outlet centers. As of December 31, 2014, Glimcher owned material interests in and managed 25 properties with total gross leasable area of approximately 17.2 million square feet, including the two properties sold to SPG concurrent with the Merger as noted below. Prior to the Merger, Glimcher’s common shares were listed on the NYSE under the symbol “GRT.”(the "Merger"). Under the terms$14.02 consisting of the Merger, which has been unanimously approved by the Board of Directors of the Company and the Board of Trustees of Glimcher, Glimcher shareholders will receive, for each Glimcher share, $10.40 in cash and 0.1989 of a share of the Company'sCompany’s common stock at closing. The total transaction value, including the assumption of debt, is approximately $4.3 billion assuming the stock portion of the consideration is valued at $3.80$3.62 per Glimcher common share, based on the ten day volume weighted averageclosing price of the Company'sCompany’s common stock prior to the date ofon the Merger agreement. We estimate that approximately 28.8closing date. Approximately 29.9 million shares of WPG common stock will bewere issued to Glimcher shareholders in the Merger.Merger as noted below. Additionally included in consideration arewere 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 newcombined company, to be namedrenamed WP Glimcher will beInc. (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 September 30,December 31, 2014) and will havehas a combined portfolio of 119 properties. As described in our Registration Statement on Form S-4 filed on October 28, 2014 pertaining to the Merger (the "Form S-4"), in121 properties as of March 31, 2015.will bewas converted into preferred stock of WPG and each outstanding unit of Glimcher'sGlimcher’s operating partnership will bewas converted into 0.7431 of a unit of WPG LP. Further, each outstanding stock option in respect of Glimcher common stock will bewas converted into a WPG option, and certain other Glimcher equity awards will bewere assumed by WPG and converted into equity awards in respect of WPG common shares.executionclosing of the Merger, agreement, the Company entered intoGlimcher completed a definitive agreementtransaction with SPG under which affiliates of SPG will acquireacquired Jersey Gardens in Elizabeth, New Jersey, and University Park Village in Fort Worth, Texas, properties currentlypreviously owned by affiliates of Glimcher, for an aggregate cash purchase price of $1.09 billion, including SPG’s assumption of which $424.0approximately $405.0 million will be used to repayof associated mortgage indebtedness. Completion of the sale of these properties to SPG will occur concurrent with the closing of the acquisition of Glimcher by WPG. On September 16, 2014, in connection with the execution of the Merger agreement, WPG entered into a debt commitment letter, which was amended and restated on September 23, 2014 and October 6, 2014, pursuant to which the commitment parties agreed to provide an up to $1.25 billion senior unsecured bridge loan facility. The facility will mature on the date that is 364 days following the closing date of the Merger. The interest rate payable on amounts outstanding under the facility will be equal to three-month LIBOR plus an applicable margin based on WPG's credit rating, which increases on the 180th andWashington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)1. Organization (Continued)270th days following the consummation of the Merger. In addition, an increasing duration fee will be payable on the 180th and 270th days following the consummation of the Merger on the outstanding principal amount, if any, under the facility. The facility will not amortize and any amounts outstanding will be repaid in full on the maturity date. The facility is expected to contain events of default, representations and warranties and covenants that are substantially identical to those contained in WPG's existing credit agreement (subject to certain exceptions set forth in the debt commitment letter). Completion of the Merger is subject to, among other things, approval by the holders of the Glimcher common shares. Assuming approval is obtained, the Merger transaction is expected to close in the first quarter of 2015. The cash portion of the Merger consideration is expected to bewas funded by the sale of the two properties to SPG, joint ventures with institutional partners, other assets sales, capital markets transactions, and/orProperty Sale and draws under the $1.25 billion fully committed bridge facility. The Company can give no assurance that the Merger and related transactions will be completed in the above timeframe, if at all.Bridge Loan (see Note 5 - "Indebtedness"). During the third quarter of 2014,three months ended March 31, 2015, the Company incurred $2.5$20.8 million of fairness opinion fees related tocosts in connection with the closing of the Merger, which are included in merger costs for the three and nine months ended September 30, 2014transaction costs in the accompanying consolidated and combined statements of operations.operations and comprehensive (loss) income. Additionally, during the year ended December 31, 2014, the Company incurred $3.9$8.8 million of bridge loan commitmentcosts related to the Merger.structuring fees, which are included in deferred costs and other assets asContingencies" for a discussion of September 30, 2014 in the accompanying consolidated and combined balance sheets. Other transaction costs are expected to be incurred in the fourth quarter of 2014 and in 2015 in connection with the closing of the Merger. A putative class action lawsuit challenging the proposed Merger transactions has been filed in Maryland state court. The action was filed on October 2, 2014 and is captionedZucker v. Glimcher Realty Trust et al., 24-C-14-005675 (Circ. Ct. Baltimore City). TheZucker complaint alleges that the trustees of Glimcher breached their fiduciary duties to Glimcher shareholders by agreeing to sell Glimcher for inadequate consideration and agreeing to improper deal protection terms in the merger agreement. In addition, the lawsuit alleges that Glimcher, WPG and certain of their affiliates aided and abetted these purported breaches of fiduciary duty. TheZucker complaint further alleges that the trustees of Glimcher were incentivized to enter into the merger agreement due to their ownership of large amounts of restricted stock and/or stock options and that Mr. Glimcher would be employed by the surviving entity and that he, in addition to another trustee of Glimcher, would join the board of the surviving entity. The lawsuit seeks, among other things, an injunction barring the merger. On October 23, 2014, a second putative class action lawsuit challenging the merger was filed in Maryland state court. The action is captionedMotsch v. Glimcher Realty Trust et al., 24-C-14-006011 (Circ. Ct. Baltimore City). TheMotsch complaint alleges breach of fiduciary duty claims against the Glimcher trustees and aiding and abetting claims against Glimcher, WPG and certain of their affiliates substantially similar to those asserted in theZucker complaint. TheMotsch complaint also asserts a derivative claim for breach of fiduciary duty against the Glimcher trustees. The defendants intend to vigorously defend the lawsuits.September 30, 2014March 31, 2015 includes the accounts of the Company and WPG L.P., as well asWashington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)2. Basis of Presentation and Principles of Consolidation and Combination (Continued)wholly-ownedwholly owned subsidiaries. The accompanying consolidated and combined statements of operations include the consolidated accounts of the Company and the combined accounts of SPG Businesses. Accordingly, the results presented for the periods ended September 30, 2014 reflect the aggregate operations and changes in cash flows and equity of the SPG Businesses on a carve-out basis for the period from January 1, 2014 through May 27, 2014 and of the Company on a consolidated basis subsequent to May 27, 2014. The accompanying financial statements for the periods prior to the separation are prepared on a carve-out basis from the consolidated 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. All intercompany transactions have been eliminated in consolidation and combination. Due to the seasonal nature of certain operational activities, the results for the interim period ended September 30, 2014March 31, 2015 are not necessarily indicative of the results to be expected for the full year.Company's revised historical audited consolidated and combined financial statements and related notes included as Annex Fin the Company's 2014 Annual Report on Form 10-K.Form S-4. separation are prepared on a carve-out basis from the consolidated 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 presented on a combined basis prior to the separation as the ownership interests in the SPG Businesses were under common control and ownership of SPG.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 were based upon a percentage of revenues. For any wholly owned property that does not have a management agreement, SPG allocated the proportion of the underlying costs of management, leasing and development, in a manner that is materially consistent with the percentage ofWashington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)2. Basis of Presentation and Principles of Consolidation and Combination (Continued) In connection with the separation, we incurred $39.9 million of expenses, including investment banking, legal, accounting, tax and other professional fees, which are included in transaction and related costs for the nine months ended September 30, 2014 in the accompanying consolidated and combined statements of operations.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.September 30, 2014,March 31, 2015, our assets consisted of interests in 96121 shopping centers. The consolidated and combined financial statements as of that date reflect the consolidation of 89 wholly-owned113 wholly owned properties and fiveseven 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 two 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, butWashington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)2. Basis of Presentation and Principles of Consolidation and Combination (Continued)or partners havehas substantive participating rights with respect to the assets and operations of thesethis joint venture properties.82.9%84.0% and 83.1% for the ninethree months ended September 30,March 31, 2015 and 2014, and 2013, respectively. As of September 30, 2014March 31, 2015 and December 31, 2013,2014, our ownership interest in WPG L.P. was 82.5%84.2% and 83.1%82.4%, respectively. We adjust the noncontrolling limited partners' interests at the end of each period to reflect their interest in WPG L.P.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 ofWashington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)3. Summary of Significant Accounting Policies (Continued)two propertiesone property as of September 30, 2014March 31, 2015 and 11 properties as of December 31, 2013. 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.Notes 3Note 4 - "Real Estate Acquisitions and 4 includeDispositions" includes a discussion of the fair values recorded in purchase accounting, using Level 2 and Level 3 inputs. Level 3 inputs to our purchase accounting analyses include our estimations of net operating results of the property, capitalization rates and discount rates.Washington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)3. Summary of Significant Accounting Policies (Continued)••••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. 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. We early adopted ASU No. 2014-08 and will apply the revised definition to all disposals on a prospective basis.Washington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)3. Summary of Significant Accounting Policies (Continued) 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 ASU No. 2014-09this standard will have on our consolidated financial statements and related disclosures.4. Real Estate Acquisitions and Dispositions On July 17, 2014, we sold Highland Lakes Center, a wholly owned shopping center in Orlando, FL, for net proceeds of $20.5 million, resulting in a gain of approximately $9.0 million, which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the accompanying consolidated and combined statements of operations. On June 23, 2014, we sold New Castle Plaza, a wholly owned shopping center in New Castle, Indiana, for net proceeds of $4.4 million, resulting in a gain of approximately $2.4 million, which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the accompanying consolidated and combined statements of operations. On June 20, 2014, we acquired our partner's 50 percent interest in Clay Terrace, a 577,000 square foot lifestyle center located in Carmel, Indiana for approximately $22.9 million, paid by issuing 1,173,678 units of WPG L.P. The center is anchored by Dick's Sporting Goods, DSW and Whole Foods and includes several national and local retailers as well as a variety of dining options. Also included in the transaction is land available for development. The property was previously accounted for under the equity method, but is now consolidated as it is wholly owned post-acquisition. The consolidation of this previously unconsolidated property resulted in a remeasurement of our previously held interest to fair value and a corresponding non-cash gain of approximately $46.6 million which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the accompanying consolidated and combined statements of operations. On June 18, 2014, we acquired our partner's interest in a portfolio of seven open-air shopping centers, consisting of four centers located in Florida, and one each in Indiana, Connecticut and Virginia, for approximately $162.0 million. The portfolio of properties totals over 2.1 million square feet. Also included in this transaction is land valued at approximately $4.0 million. Previously, we held between 32 percent to 42 percent legal ownership interests in the properties, but received substantially less economic benefit due to the partner's preferred capital allocation. 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. The consolidation of these previously unconsolidated properties resulted in a remeasurement of our previously held interest to fair value and a corresponding non-cash gain of approximately $42.3 million which is included in gain upon acquisition of controlling interest and on sale of interests in properties in the accompanying consolidated and combined statements of operations. The source of funding for the acquisition was a borrowing under the Revolver (see Note 5).Dollarsdollars in thousands, except share, unit and per share amounts and
where indicated as in millions or billions) (Continued)above acquisition properties acquired in the Merger at the estimated fair value on the respectiveJanuary 15, 2015 acquisition dates.date. The following table summarizes the purchase price allocation for the acquisition, which has been further refined as of September 30, 2014; however, it remainsis preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition: $ 413,548 67,870 (206,473 ) (26,584 ) 248,361 (1,032 ) 26,235 (88,843 ) 184,721 (22,464 ) (7,887 ) $ 154,370 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 upon acquisition of controlling interest and on sale of interestsinterest in propertiesproperty in the consolidated and combined statements of operations. This property is partoperations and comprehensive (loss) income.a portfoliooperations of interests inacquired properties the remainder of which isare 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. The consideration paid for the partner's remaining interests in these three properties 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. On February 21, 2013, SPG increased its economic interest in three unconsolidated shopping 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 upon acquisition of controlling interests and on sale of interests in properties in the consolidated and combined statements of operations. These propertiesoperations beginning on their respective acquisition dates. The following unaudited condensed pro forma financial information is presented as if the Merger and the Property Sale described in Note 1 - "Organization", which were partcompleted 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. 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)5. Indebtedness5. Indebtedness was $1.5 billion and $918.6 million at September 30, 2014March 31, 2015 and December 31, 2013, respectively,2014 was as follows: September 30,
2014 December 31,
2013 $ 1,497,868 $ 917,532 3,698 1,082 $ 1,501,566 $ 918,614 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 June 20, 2014,January 13, 2015, resulting from our acquisition of the controlling interest in Clay TerraceCanyon View Marketplace (see Note 4)4 - "Real Estate Acquisitions and Dispositions"), we assumed an additional mortgage with a fair value of $117.5$6.4 million.June 19, 2014, we closed on an extension of the 5.84% fixed rate mortgage on Chesapeake Square with unpaid principal balance of $64.7 million and original maturity date of August 1, 2014. The new maturity date is February 1, 2017, with a one-year extension option subject to certain requirements. On June 18, 2014,January 15, 2015, resulting from our acquisition of the controlling interest in a portfolio of seven open-air shopping centersMerger (see Note 4)1 - "Organization"), we assumed additional mortgages on four properties with a fair value of $88.9 million.June 5, 2014, weMarch 27, 2015, the Company 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 is recorded in interest expense for the nine months ended September 30, 2014 in the accompanying consolidated and combined statements of operations. 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). On February 20, 2014, West Ridge Mall refinanced its $64.6 million, 5.89% fixed rate mortgage maturing July 1, 2014 with a $54.0 million, 4.84% fixed rate mortgage that matures March 6, 2024. The new debt encumbers both West Ridge Mall and West Ridge Plaza. 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 March 1, 2024.Washington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)5. Indebtedness (Continued) In addition, prior to May 28, 2014, mortgages were obtained on previously unencumbered properties as follows (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 55.0 4.19 % Fixed 4/1/2019 $ 425.0 (1)Proceeds were retained by SPG as part of the separation (see Note 6). 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, 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) $585.0 million was retained by SPG as part of the formation transactions, (ii) $30.7 million was used for the repayment of the Sunland Park Mall mortgage, (iii) $39.9 million was retained to cover transaction and related costs, (iv) $11.4 million was repaid to SPG for deferred loan financing costs and (v) the remaining $3.8 million was retained on hand for other corporate and working capital purposes. On June 17, 2014, we incurred an additional $170.0 million of indebtedness under the Facility, the proceeds of which were primarily used for the acquisition of our partner's interest in a portfolio of seven open-air shopping centers (see Note 4). At September 30, 2014, our unsecured debt consisted of $340.8$413.8 million outstanding under the Revolver and $500.0 million outstanding under the Term Loan. On September 30, 2014,March 31, 2015, we had an aggregate available borrowing capacity of $559.2$483.1 million under the Facility.Dollarsdollars in thousands, except share, unit and per share amounts and
where indicated as in millions or billions)5. Indebtedness (Continued)0.028September 30, 2014, we wereMarch 31, 2015, management believes the Company is in compliance with all covenants of ourits unsecured debt.September 30, 2014,March 31, 2015, certain of our consolidated subsidiaries were the borrowers under 3142 non-recourse mortgage loans secured by mortgages encumbering 3646 properties, including fourfive separate pools of cross-defaulted and cross-collateralized mortgages encumbering a total of 1012 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 September 30, 2014,March 31, 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. unsecured loans approximate their fair values. We estimate the fair values of fixed-rate mortgages using cash flows discounted at current borrowing rates. The book value of our fixed-rate mortgages was $1.5$2.4 billion and $918.6 million$1.4 billion as of September 30, 2014March 31, 2015 and December 31, 2013,2014, respectively. The fair values of these financial instruments and the related discount rate assumptions as of September 30, 2014March 31, 2015 and December 31, 20132014 are summarized as follows: September 30,
2014 December 31,
2013 $ 1,568,426 $ 981,631 $2,501,423 $1,503,944 3.29 % 3.06 % 3.23 % 3.36 % 6. Equity6. Derivative Financial Instruments Liability Derivatives As of March 31, 2015 Derivatives designated as hedging instruments: Interest rate products Accounts payable, accrued expenses, intangibles and deferred revenues $ 998 Derivatives 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 $ — Derivative instruments, net $ — $ 998 $ — $ 998 7. Equity Washington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)6. Equity (Continued)NotesNote 1 - "Organization" and Note 2 - "Basis of Presentation and Principles of Consolidation and Combination" for more 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.Changes in Equityfollowing table provides a reconciliationMergerbeginning4,700,000 issued and ending carrying amountsoutstanding Series G Preferred Shares. Since notification of redemption had been given to the shareholders prior to March 31, 2015, the Series G Preferred Shares are classified in the accompanying consolidated and combined equity: Common
Stock Capital in
Excess of
Par Value SPG
Equity Retained
Earnings Total
Stockholders'
Equity Noncontrolling
Interests Total
Equity $ — $ — $ 1,565,169 $ — $ 1,565,169 $ 319,356 $ 1,884,525 16 711,265 (711,281 ) — — — — — — — — — 22,464 22,464 — — — — — 1,032 1,032 — — — — — 1,266 1,266 — 10,875 — — 10,875 (10,875 ) — — — (878,209 ) — (878,209 ) (181,978 ) (1,060,187 ) — — — (38,797 ) (38,797 ) (8,258 ) (47,055 ) — — — — — (845 ) (845 ) — — 24,321 112,073 136,394 28,210 164,604 $ 16 $ 722,140 $ — $ 73,276 $ 795,432 $ 170,372 $ 965,804
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.(1)Amountbalance 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 approximately $1.0 billionthe first quarter dividend of proceeds$0.5078 per share that was declared on new indebtedness retained by SPG L.P. as partFebruary 24, 2015 to holders of record of such Series G Preferred Shares on March 31, 2015. Because the redemption of the separation (see Note 5).Washington Prime Group Inc.Condensed Notes to Unaudited Consolidated and Combined Financial Statements (Continued)(Dollars in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)6. Equity (Continued)Other Compensation Arrangements On June 24, 2014, Mark Ordan, our Chief Executive Officer, was awarded 153,610units underAwardsPlan, pursuant to the employment agreement between the Company and Mr. Ordan, dated as of February 15, 2014 (the "Employment Agreement"). The LTIP units were granted as "Inducement LTIP Units" under the terms of the Employment Agreement. Subject to certain exceptions, 25% of the Inducement LTIP Units will become vested on each of the first four anniversaries of the effective date of the Employment Agreement based on continued employment. The grant date fair value of the award of $3.0 million is being recognized as expense over the applicable vesting period. Mr. Ordan is also entitled to receive special performance LTIP units ("Special PP Units") under the terms of the employment agreement that vest based upon the Company's achievement of certain shareholder return and outperformance of the Company's stock relative to certain indices. These Special PP Units were valued by an external specialist at a discount to the stock price on the date of the separation in order to allow for the possibility that the stock performance conditions will not be met. If the performance criteria have been met, a maximum amount, based on the closing price for the 20 consecutive trading days commencing on the separation date, of $2.0 million ("First Special PP"), $1.5 million ("Second Special PP") and $1.5 million ("Third Special PP") may become earned on Decemberthree months ended March 31, 2015, 2016 and 2017, respectively. The earned First and Second Special Units will vest on May 28, 2017 and the earned Third Special PP Units will be vested immediately upon being earned, subject to continued employment. The grant date fair value of the award of $2.3 million is being recognized as expense over the applicable vesting periods of the Special PP Units. Additionally, the employment agreement provides that Mr. Ordan will receive an annual grant of LTIP units with respect to each fiscal year during the term of the employment agreement, to be made no later than promptly following the completion of our audited financial statements for such fiscal year and on terms no less favorable than the annual LTIP unit awards made to our other senior executives (the "Annual LTIP Units"). The number of Annual LTIP Units granted in respect of a fiscal year will be determined based on our achievement of total shareholder return ("TSR") goals with respect to such fiscal year by dividing a cash amount, not greater than $0.75 million, by the average closing price of our common stock for the final 15 trading days of such fiscal year, with Annual LTIP Units awarded in respect of fiscal year 2014 pro-rated based on the number of days from March 15, 2014 to December 31, 2014. Annual LTIP Units vest at a rate of one-third on each of the first three anniversaries of the first day of the fiscal year following the fiscal year in respect of which such Annual LTIP Units were granted, subject to Mr. Ordan's continued employment on each such vesting date. On August 25, 2014, the Company awarded 130,000203,215 time-vested LTIP Units ("Officer Inducement LTIP Units") to thecertain executive officers and employees of the Company under the Plan, pursuant to LTIP Unit Award Agreements between the Company and each of the officers. The Officer Inducement LTIP Unitsgrant recipients. These awards will vest 25% on each ofand the first four anniversaries ofrelated fair value will be expensed over a four-year vesting period.date, subject to each respective officer's continued employment on each such vesting date. On August 25, 2014, the Company awardedof LTIP units subject to certain performance conditions described below ("Officer Performance LTIP Units") to each of thecertain executive officers and employees of the Company in the maximum total amount of 195,000 units. The Officer Performance304,818 units, to be earned and related fair value expensed over the applicable performance periods.Units relate toUnit AwardsfollowingTableCompany approved the performance criteria and maximum dollar amount of ContentsWashington Prime Group Inc.Condensed Notes to Unaudited Consolidatedthe 2015 annual LTIP unit awards, ranging from 30%-300% of annual base salary, for certain executive officers and Combined Financial Statements (Continued)(Dollarsemployees of the Company. Any 2015 annual LTIP unit awards earned will be granted in thousands, except share, unit and per share amounts andwhere indicated as in millions or billions)6. Equity (Continued)performance periods: from May 28, 2014 to (i) December 31, 2015, (ii) December 31, 2016 and (iii) December 31,vest one-third on each of January 1, 2017, in each case, subject to2018 and 2019.officer's continued employment throughMerger, unvested restricted shares held by certain Glimcher executive employees, which had an original vesting period of five years, were converted into 1,039,785 WPG restricted shares (the “WPG Restricted Shares”). The WPG Restricted Shares will be amortized over the remaining life of the applicable vesting date. The vesting date is May 28, 2017period, except for the performance periods ending in 2015 and 2016 and is the applicable grant date for the performance period ending in 2017. The Performance LTIP Units are granted promptly (and in any event within 15 days)portion of the end of eachawards applicable performance period. In each case,to pre-Merger service, which was included as equity consideration issued in the maximum number of Officer Performance LTIP Units granted for each of the performance periods is one-third of the maximum total amount described above. Merger.number of Officer Performance LTIP Units granted in respect of each performance period will be determined as a percentage of the maximum, based on the Company's achievement of absolute and relative (versus the MSCI REIT Index) total shareholder return ("TSR") goals, with 40% of the Officer Performance LTIP Units available for grant with respect to each performance period granted based on achievement of absolute TSR goals, and 60% of the Officer Performance LTIP Units available for grant with respect to each performance period granted based on achievement of relative TSR goals. WeCompany recorded compensation expense related to all LTIP unitsand WPG Restricted Units of approximately $1.2 million and $1.3$2.3 million for the three and nine months ended September 30, 2014, respectively,March 31, 2015, which expense is included in general and administrative expense in the accompanying consolidated and combined statements of operations.Board of Directors Compensation On August 4, 2014, the Board of Directors approved annual compensation for the period of May 28, 2014 through May 28, 2015 for the independent membersoperations and comprehensive (loss) income.BoardMerger, outstanding stock options held by certain former Glimcher employees were converted into 1,125,014 WPG stock options. During the three months ended March 31, 2015, employees exercised 98,900 stock options and 146,621 stock options were canceled, forfeited or expired. As of Directors of the Company. Each independent director's annual compensation shall total $0.2 million based on a combination of cash and restrictedMarch 31, 2015, there were 879,493 stock units granted under the Plan.September 15, 2014,January 22, 2015, the Company paid a quarterly cash dividend of $0.25$0.14 per common share/unit.unit for the period from November 26, 2014 through January 14, 2015. On August 4,December 24, 2014, the Company'sCompany’s Board of Directors had declared the dividend, which was contingent on the closing of the Merger, to shareholders and unitholders of record on August 27, 2014, with an ex-dividend dateJanuary 14, 2015. The dividend represents the first quarter 2015 regular quarterly dividend prorated for the dividend period prior to the Merger.August 25, 2014.7.Directors declared the following cash dividends: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. See "Proposed Merger" sectionNote 1Glimcher, and alleges these defendants breached fiduciary duties. Specifically, plaintiffs in the Consolidated Action allege that the trustees of Glimcher agreed to sell Glimcher for inadequate consideration and agreed to improper deal protection provisions that precluded other bidders from making successful offers. Plaintiffs further allege that the sales process was flawed and conflicted in several respects, including the allegation that the trustees failed to canvas the market for potential buyers, failed to secure a discussion“go‑shop” provision in the merger agreement allowing Glimcher to seek alternative bids after signing the merger agreement, and were improperly influenced by WPG’s early suggestion that the surviving entity would remain headquartered in Ohio and would retain a significant portion of Merger-related litigation.Glimcher management, including the retention of Michael Glimcher as CEO of the surviving entity and positions for Michael Glimcher and another trustee of Glimcher on the board of the surviving entity. Plaintiffs in the Consolidated Action additionally allege that the Preliminary Registration Statement filed with the SEC on October 28, 2014, failed to disclose material information concerning, among other things, (i) the process leading up to the consummation of the Merger Agreement; (ii) the financial analyses performed by Glimcher’s financial advisors; and (iii) certain financial projections prepared by Glimcher and WPG management allegedly relied on by Glimcher's financial advisors. The Consolidated Action also names as defendants Glimcher, WPG and certain of their affiliates, and alleges that these defendants aided and abetted the purported breaches of fiduciary duty. Plaintiffs seek, among other things, an order enjoining or rescinding the transaction, damages, and an award of attorney’s fees and costs.TableContentsDollarsdollars in thousands, except share, unit and per share amounts and
where indicated as in millions or billions)7. CommitmentsContingencies (Continued)adequacy of the settlement. If the settlement is approved by the court, it will resolve and release all claims by shareholders of Glimcher challenging any aspect of the Merger, the Merger agreement, and any disclosure made in connection therewith, including in the Definitive Proxy Statement/Prospectus on Schedule 14A filed with the SEC by Glimcher on December 2, 2014. Additionally, in connection with the settlement, the parties contemplate that plaintiffs’ counsel will file a petition in the Circuit Court for Baltimore City for an award of attorneys’ fees in an amount not to exceed $425 and reasonable, documented expenses in an amount not to exceed $20, to be paid by the Company. Accordingly, the Company has accrued $445 related to this matter, which expense is included in merger and transaction costs for the three months ended March 31, 2015 in the accompanying consolidated and combined statements of operations and comprehensive (loss) income. There can be no assurance that the Circuit Court for Baltimore City will approve the settlement. In the event that the settlement is not approved and the conditions are not satisfied, defendants will continue to vigorously defend against the allegations in the Consolidated Action.2015 $ 5,219 2016 7,303 2017 7,279 2018 7,306 2019 7,759 Thereafter 368,333 Total $ 403,199 8.NotesNote 1 - "Organization" and Note 2 - "Basis of Presentation and Principles of Consolidation and Combination", the accompanying consolidated and combined financial statements include the operations of SPG Businesses as carved-out from the financial statements of SPG for the periods prior to the separation and the operations of the properties under the Company's ownership subsequent to the separation. Transactions between the properties have been eliminated in the consolidated and combined presentation.operations.operations and comprehensive loss. Additionally, leasing and development fees charged by SPG are capitalized by the property. for each of the periods presented for properties which are consolidated and combined for each of the periods presented are as included below:follows: For the Three
Months Ended
September 30, For the Nine
Months Ended
September 30, For the Three Months Ended March 31, 2014 2013 2014 2013 2015 2014 $ 5,515 $ 3,786 $ 15,325 $ 12,764 $ 6,929 $ 5,428 2,351 2,274 6,790 6,821 $ 2,269 $ 2,219 196 217 639 631 $ 219 $ 233
1,176
264
7,341
1,328 $ 1,631 $ 455 Dollarsdollars in thousands, except share, unit and per share amounts and
where indicated as in millions or billions)8. Related Party Transactions (Continued)for unconsolidated properties are as included below:follows: For the Three
Months Ended
September 30, For the Nine
Months Ended
September 30, For the Three Months Ended March 31, 2014 2013 2014 2013 2015 2014 $ 241 $ 969 $ 2,010 $ 2,905 $ 222 $ 1,025 14 59 123 175 $ 3 $ 55 10 15 36 46 $ 10 $ 13
8
26
162
223 $ 2 $ 51 September 30, 2014March 31, 2015 and December 31, 2013, $3,4732014, $5,297 and $4,959,$4,715, respectively, were payable to SPG and its affiliates and are included in accounts payable, accrued expenses, intangibles, and deferred revenues in the accompanying consolidated and combined balance sheets.9. For the Three Months
Ended September 30, For the Nine Months
Ended September 30, 2014 2013 2014 2013 $ 32,201 $ 32,234 $ 136,394 $ 112,714 155,162,597 155,162,597 155,162,597 155,162,597 $ 0.21 $ 0.21 $ 0.88 $ 0.73 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 and nine months ended September 30, 2014 and 2013,March 31, 2015, additionally potentially dilutive securities include units that are exchangeable for commonunvested restricted shares, outstanding stock and LTIP units granted under the Plan that are convertible intooptions, restricted stock units and exchangeable for common stock. No securities had a material dilutive effect forperformance based LTIP unit awards. For the three and nine months ended September 30, 2014 and 2013.March 31, 2015, diluted shares exclude the impact of any such additional securities because their effect would be anti-dilutive. There were no such securities outstanding during the three months ended March 31, 2014. We accrue dividends when they are declared.Dollarsdollars in thousands, except share, unit and per share amounts and
where indicated as in millions or billions)10.October 10, 2014,April 15, 2015, the Company restructuredredeemed all of the $94.04,700,000 issued and outstanding Series G Preferred Shares (see Note 7 - "Equity").mortgage on Rushmore Mall, splittingterm loan, subject to a number of customary conditions, including execution and delivery of definitive documentation. The term loan, under which the principalCompany plans to borrow $500 million, will mature in March 2020, will bear interest of LIBOR plus 1.15% and is expected to close in the second quarter of 2015. The Company anticipates using the proceeds to repay the balance into an "A Note" of $58.0 million and a "B Note" of $36.0 million. The maturity date of both notes was extended from June 1, 2016 to February 1, 2019 and the interest rate of both notes remains at 5.79%. Interest accrues on both notes, with payment due currently on the ABridge Loan remaining after the application of the proceeds from the anticipated joint venture described in Note 8 - "Commitments and at maturity on the B Note. Under a sale or refinance, amounts of principal and interest due on the B Note may be forgiven. At closing, the Company contributed $11.6 million to be applied towards closing costs and lender-held reserves. On October 29, 2014, the Company repaid the $15.3 million mortgage on Lake View Plaza and $2.2 million mortgage on DeKalb Plaza through a $18.0 million borrowing under the Revolver. On November 4, 2014, the Company's Board of Directors declared a quarterly cash dividend of $0.25 per common share/unit, payable on December 15, 2014, to shareholders and unitholders of record on November 26, 2014, with an ex-dividend date of November 25, 2014.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOverview—("WPG"(“WPG” or the "Company"“Company”) is an 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. On May 28, 2014, WPG separated from SPG through the distribution of 100% of the outstanding shares of WPG to the SPG shareholders in a tax‑free distribution. Prior to the separation, from SPG which was completed on May 28, 2014, WPG was a wholly owned subsidiary of SPG. Prior to or concurrent with the separation, 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 operates 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 and satisfy certain other requirements.("(“SPG L.P."”) owned by SPG,, with the remaining units of WPG L.P. being owned by the limited partners who were also limited partners of SPG L.P. as of the May 16, 2014 record date. The units in WPG L.P. are convertible by their holders for WPG common shares on a one-for-oneone‑for‑one basis, or, at WPG'sWPG’s option, into cash.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.September 30, 2014March 31, 2015 includes the accounts of the Company and WPG L.P., as well as their wholly-ownedwholly owned subsidiaries. The consolidated and combined statements of operations include the consolidated accounts of the Company and the combined accounts of SPG Businesses. Accordingly, the results presented for the periods ended September 30,March 31, 2014 reflect the aggregate operations and changes in cash flows and equity on a carve-out basis of the SPG Businesses for the period from January 1, 2014 through May 27, 2014 and on a consolidated basis of the Company subsequent to May 27, 2014.Businesses. The financial statements for the periods prior to the separation are prepared on a carve-out basis from the consolidated 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. All intercompany transactions have been eliminated in consolidation and combination. In the opinion of management, the consolidated and combined financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and its results of operations and cash flows for theintra-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 for periods prior to the separation. In connection with the separation, we incurred $39.9 million of expenses, including investment banking, legal, accounting, tax and other professional fees, which are included in transaction and related costs for the nine months ended September 30, 2014 in the consolidated and combined statements of operations.interestsan interest in threeone shopping centerscenter held within a joint venture portfolio of properties which were sold during the first quarter of 2013 as well as one additional shopping center which was sold by that same joint venture on February 28, 2014. AsSeptember 30, 2014, our assets consistedmerger with Glimcher and certain affiliated parties of interests in 96 shopping centers.Proposed Merger Oneach dated September 16, 2014 the Company entered into a definitive agreement with Glimcher Realty Trust ("Glimcher"(the “Merger Agreement”) under which it will acquire Glimcher, in a stock and cash transaction valued at $14.20 perapproximately $4.2 billion, including the assumption of debt (the “Merger”). In the Merger, Glimcher common shareholders received, for each Glimcher common share, (the "Merger"). Under the terms$14.02 consisting of the Merger, which has been unanimously approved by the Board of Directors of the Company and the Board of Trustees of Glimcher, Glimcher shareholders will receive, for each Glimcher share, $10.40 in cash and 0.1989 of a share of the Company'sat closing. The total transaction value, including the assumption of debt, is approximately $4.3 billion assuming the stock portion of the consideration is valued at $3.80$3.62 per Glimcher common share, based on the ten day volume weighted averageclosing price of the Company'sCompany’s common stock prior to the date ofon the Merger agreement. We estimate that approximately 28.8closing date. Approximately 29.9 million shares of WPG common stock will bewere issued to Glimcher shareholders in the Merger.Merger as noted below. Additionally included in consideration arewere 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 newcombined company, to be namedrenamed WP Glimcher will beInc. (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 September 30,December 31, 2014) and will havehas a combined portfolio of 119 properties. As described in our Registration Statement on Form S-4 filed on October 28, 2014 pertaining to the Merger (the "Form S-4"), in121 properties as of March 31, 2015.will bewas converted into preferred stock of WPG and each outstanding unit of Glimcher'sGlimcher’s operating partnership will bewas converted into 0.7431 of a unit of WPG LP. Further, each outstanding stock option in respect of Glimcher common stock will bewas converted into a WPG option, and certain other Glimcher equity awards will bewere assumed by WPG and converted into equity awards in respect of WPG common shares.executionclosing of the Merger, agreement, the Company entered intoGlimcher completed a definitive agreementtransaction with SPG under which affiliates of SPG will acquireacquired Jersey Gardens in Elizabeth, New Jersey, and University Park Village in Fort Worth, Texas, properties currentlypreviously owned by affiliates of Glimcher, for an aggregate cash purchase price of $1.09 billion, including SPG’s assumption of which $424.0approximately $405.0 million will be used to repayof associated mortgage indebtedness. Completion of the sale of these properties to SPG will occur concurrent with the closing of the acquisition of Glimcher by WPG. On September 16, 2014, in connection with the execution of the Merger agreement, WPG entered into a debt commitment letter, which was amended and restated on September 23, 2014 and October 6, 2014, pursuant to which the commitment parties agreed to provide an up to $1.25 billion senior unsecured bridge loan facility. The facility will mature on the date that is 364 days following the closing date of the Merger. The interest rate payable on amounts outstanding under the facility will be equal to three-month LIBOR plus an applicable margin based on WPG's credit rating, which increases on the 180th and 270th days following the consummation of the Merger. In addition, an increasing duration fee will be payable on the 180th and 270th days following the consummation of the Merger on the outstanding principal amount, if any, under the facility. The facility will not amortize and any amounts outstanding will be repaid in full on the maturity date. The facility is expected to contain events of default, representations and warranties and covenants that are substantially identical to those contained in WPG's existing credit agreement (subject to certain exceptions set forth in the debt commitment letter)indebtedness (the “Property Sale”). Completion of the Merger is subject to, among other things, approval by the holders of the Glimcher common shares. Assuming approval is obtained, the Merger transaction is expected to close in the first quarter of 2015. is expected to bewas funded by the sale of the two properties to SPG, joint ventures with institutional partners, other assets sales, capital markets transactions, and/orProperty Sale and draws under the $1.25 billion fully committed bridge facility. The Company can give no assurance that the MergerBridge Loan (see "Financing and related transactions will be completed in the above timeframe, if at all.Debt" below). During the third quarter of 2014,three months ended March 31, 2015, the Company incurred $2.5$20.8 million of fairness opinion fees related tocosts in connection with the closing of the Merger, which are included in merger costs for the three and nine months ended September 30, 2014transaction costs in the consolidated and combined statements of operations. Additionally, the Company incurred $3.9 millionoperations and comprehensive (loss) income.bridge loan commitment and structuring fees, which are included in deferred costs and other assets as of September 30, 2014 in the consolidated and combined balance sheets. Other transaction costs are expected to be incurred in the fourth quarter of 2014 and in 2015 in connection with the closing of the Merger. A putative class action lawsuit challenging the proposed Merger transactions has been filed in Maryland state court. The action was filed on October 2, 2014 and is captionedZucker v. Glimcher Realty Trust et al., 24-C-14-005675 (Circ. Ct. Baltimore City). TheZucker complaint alleges that the trustees ofGlimcher breached their fiduciary duties to Glimcher shareholders by agreeing to sell Glimcher for inadequate consideration and agreeing to improper deal protection terms in the merger agreement. In addition, the lawsuit alleges that Glimcher, WPG and certain of their affiliates aided and abetted these purported breaches of fiduciary duty. TheZucker complaint further alleges that the trustees of Glimcher were incentivized to enter into the merger agreement due to their ownership of large amounts of restricted stock and/or stock options and that Mr. Glimcher would be employed by the surviving entity and that he, in addition to another trustee of Glimcher, would join the board of the surviving entity. The lawsuit seeks, among other things, an injunction barring the merger. On October 23, 2014, a second putative class action lawsuit challenging the merger was filed in Maryland state court. The action is captionedMotsch v. Glimcher Realty Trust et al., 24-C-14-006011 (Circ. Ct. Baltimore City). TheMotsch complaint alleges breach of fiduciary duty claims against the Glimcher trustees and aiding and abetting claims against Glimcher, WPG and certain of their affiliates substantially similar to those asserted in theZucker complaint. TheMotsch complaint also asserts a derivative claim for breach of fiduciary duty against the Glimcher trustees. The defendants intend to vigorously defend the lawsuits.Overview and Outlook 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.ninethree months of 2014 improved2015 were generally stable compared to the first ninethree months of 2013.2014. Ending occupancy for the shopping centers was 92.7%91.9% as of September 30, 2014,March 31, 2015, as compared to 92.2%92.3% as of September 30, 2013, an increase of 50 basis points.March 31, 2014. Average base minimum rent per square foot remained stableimproved across the portfolio as the shopping centers saw an increase of 1.4%1.5%. Our share of portfolio Comparable NOI grew by 4.6%increased 0.9% for the first nine months in 2014 as compared to the first nine months in 2013. Comparable property NOI increased 1.6% for the portfolio, net of the approximate 165 basis point impact of increased costs associated with the harsh winter weather conditions in the first quarter of 2014. September 30,
2014 September 30,
2013 %/Basis
Points
Change(1) 92.7 % 92.2 % +50 bps $ 19.07 $ 18.80 1.4 % % 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.ninethree months ended September 30, 2014,March 31, 2015 we signed 15855 new leases and 441128 renewal leases with a fixed minimum rent (excluding mall anchors and majors, new development, redevelopment, expansion, downsizing, and relocation) across the portfolio, comprising approximately 1.6 million611,000 square feet of which 1.5 million square feet related to consolidated properties. During the nine months ended September 30, 2013, we signed 213 new leases and 322 renewal leases, comprising approximately 1.6 million square feet of which 1.4 million related to consolidated properties.feet. The average annual initial base minimum rent for new leases was $21.20 psf in the 2014 period and $18.65 psf in the 2013 period with an average tenant allowance on new leases of $27.06$22.41 psf and $22.43 psf, respectively. The following opening and closing related to redevelopments affected our results in the comparative periods:•During the second quarter of 2014, we commenced redevelopment activities at Jefferson Valley Mall, a 556,000 square foot shopping center located in the New York City area.•During the third quarter of 2013, we opened University Town Plaza, a 580,000 square foot shopping center located in Pensacola, Florida, after completion of the redevelopment.•FL.Florida.•••••On February 21, 2013, SPG increased its economic interest in three unconsolidated shopping centers and subsequently disposed of its interests in those properties. 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."property transactions."Property Transactions." In the following discussions of our results of operations, "comparable" refers to properties we owned and operated throughout both of the periods under comparison.September 30, 2014March 31, 2015 vs. Three Months Ended September 30, 2013$9.0$56.1 million, of which the property transactionsMerger properties accounted for $8.1$47.8 million and the Property Transactions accounted for $9.0 million. Comparable rents increased $0.9decreased $0.7 million, or 0.9%0.7%, primarily attributable to an increasea slight decrease in base minimum rents. Overage rents increased $1.2 million, primarily attributable to the Merger properties. Tenant reimbursements increased $3.3$22.1 million due to a $2.7$19.1 million increase attributable to the property transactionsMerger properties and a $0.6$3.0 million increase in comparable properties primarilyattributable to the Property Transactions. Other income increased $0.5 million due to utility reimbursements and annual fixed contractual increases related$0.9 million attributable to common area maintenance. Other income decreased $0.3the Merger, partially offset by a net $0.4 million primarily as a result of decreaseddecrease in miscellaneous income in 2014 versus 2013.$11.3$106.9 million, of which $4.4$9.7 million was attributable to general and administrative expenses associated with WPG operating as a separate, publicly-traded company and $2.5$20.8 million was attributable to transaction costs associated with the Merger. Of the remaining $76.4 million increase, $6.3$65.3 million was attributable to the property transactions net of a $1.9Merger properties and $10.3 million decrease primarilywas attributable to decreasedthe Property Transactions, with a net $0.8 million increase attributable to the comparable properties primarily due to increased depreciation and amortization on assets becoming fully depreciated as well as slightly decreasing operating costs at the comparable properties.$9.4$23.2 million, of which $5.4$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, $3.8$4.3 million was attributable to borrowings on the revolving credit facility and term loan and $1.3$1.4 million was attributable to the property transactions. These increases are partially offset by a $0.6$1.8 million decrease attributable to the repayment and refinancing of the Sunland Park Mall mortgagecertain mortgages in 2014 and a $0.5$0.2 million decrease primarily attributable to lower interest on the amortizing loan balances of the comparable properties. The aggregate gain recognized on the property transactions during the 2014 period was $9.0 million from the sale of Highland Lakes Center.Nine Months Ended September 30, 2014 vs. Nine Months Ended September 30, 2013 Minimum rents increased $15.5 million, of which the property transactions accounted for $10.1 million. Comparable rents increased $5.4 million, or 1.7%, primarilyan increasenoncontrolling interests primarily relates to the allocation of (loss) income to third parties based on their respective weighted average ownership interest in base minimum rents. Tenant reimbursements increased $6.5 million,WPG L.P., which percentage decreased slightly due to a $3.8 million increase attributable to the propertycapital transactions and a $2.7 million increase in comparable properties primarily due to utility reimbursements and annual fixed contractual increases related to common area maintenance. Other income increased $0.7 million primarily as a result of increased land sales and lease settlements in 2014 versus 2013, partially offset by decreased miscellaneous income during 2014. Total operating expenses increased $61.5 million, of which $39.9 million was attributable to transaction costs related to the separation of WPG from SPG, $6.3 million was attributableMerger.generalthe 8.125% Series G Cumulative Redeemable Preferred Stock (the "Series G Preferred Shares"), the 7.5% Series H Cumulative Redeemable Preferred Stock (the "Series H Preferred Shares") and administrative expenses associated with WPG operating as a separate, publicly-traded company and $2.5 million was attributable to costs associatedthe 6.875% Series I Cumulative Redeemable Preferred Stock (the "Series I Preferred Shares") issued in connection with the Merger. Of the remaining increase, $9.4Preferred dividends totaling $5.0 million was attributableincreased net loss to the property transactions and $3.4 million was primarily attributable to increased snow removal and utility costs due to the harsh winter. Interest expense increased $18.6 million, of which $10.8 million was attributable to mortgages placed on seven previously unencumbered properties during 2014, $2.2 million was attributable to the prepayment penalty net of interest savings on the Sunland Park Mall mortgage, $5.1 million was attributable to borrowings on the revolving credit facility and term loan and $1.7 million was attributable to the property transactions. These increases are partially offset by a $1.2 million decrease primarily attributable to lower interest on the amortizing loan balances of the comparable properties. The aggregate gain recognized on the property transactionscommon shareholders during the 2014 period was $100.5 million, including $88.9 million fromquarter ended March 31, 2015. These preferred dividends are included in distributions payable in the acquisitionconsolidated balance sheets as of controlling interestsMarch 31, 2015. See “Equity Activity - Dividends” below. The Series G Preferred Shares were redeemed in Clay Terrace and a portfolio of seven open-air shopping centers, $9.0 million from the sale of Highland Lakes Center, $2.4 million from the sale of New Castle Plaza and $0.2 million from the sale of our interest in one unconsolidated shopping center. The aggregate gain recognizedfull on the property transactions during the 2013 period was $14.2 million from the increase in and subsequent sale of our interests in three unconsolidated shopping centers.September 30, 2014,March 31, 2015, floating rate debt comprised 35.9%42.9% of our total consolidated debt. We will continue to monitor our borrowing mix to limit market risk. We derive most of our liquidity from leases that generate positive net cash flow from operations, and distributions of capital from unconsolidated entities, the total of which was $200.1$51.8 million during the ninethree months ended September 30, 2014.$95.0$146.8 million during 20142015 to $120.8$255.6 million as of September 30, 2014.March 31, 2015. The increase was primarily due to operating cash flow from the properties and balances acquired in business combinations and proceeds from sale of assets.the Merger. See "Cash Flows" below for more information.September 30, 2014,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.$559.2$483.1 million under the Facility, net of outstanding borrowings of $840.8 million.$413.8 million and $3.1 million reserved for outstanding letters of credit. The weighted average interest rate on the Facility was 1.3% for the periodthree months ended March 31, 2015.initial borrowing concurrentDecember 31, 2014. This could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and increasing our interest expense. Our increased indebtedness following the Merger is described in greater detail under “Financing and Debt” below. 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.May 28, 2014 separationfinancing for the Merger. The amount of cash flows required to pay interest on our increased indebtedness levels following completion of the Merger are greater than the amount of cash flows required to service our indebtedness prior to the Merger.30, 2014.2014.announcedannouncement of the Merger and related financings, the Company has beenwas informed by S&P and Moody's that it has been placed on negative watchoutlook 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.and distributions of capital from unconsolidated entities totaled $200.1$51.8 million during the first ninethree months of 2014.2015. During this period we also:•$154.4$956.6 million,•$63.9$34.9 million (includes development costs of $1.0$0.8 million, renovation and expansion costs of $29.0$24.7 million, and tenant costs and other operational capital expenditures of $33.9$9.4 million),•salerestricted cash reserves held for future capital expenditures of assets of $25.0$1.5 million,•$1.2 billion,•funded distributions to SPG of $1.1 billion, primarily related to the separation,•funded distributions to noncontrolling interest holders in properties•$47.1 million, and$52.8 million.•funded investments in unconsolidated entities primarily for development capital of $2.5 million.••••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 $1.5 billion and $918.6 million at September 30, 2014March 31, 2015 and December 31, 2013, respectively,2014 was as follows (in thousands): September 30,
2014 December 31,
2013 $ 1,497,868 $ 917,532 3,698 1,082 $ 1,501,566 $ 918,614 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 June 20, 2014,January 13, 2015, resulting from our acquisition of the controlling interest in Clay TerraceCanyon View Marketplace (see "Acquisitions and Dispositions" below), we consolidatedassumed an additional mortgage with a fair value of $117.5$6.4 million.June 19, 2014, we closed on an extension of the 5.84% fixed rate mortgage on Chesapeake Square with unpaid principal balance of $64.7 million and original maturity date of August 1, 2014. The new maturity date is February 1, 2017, with a one-year extension option subject to certain requirements. On June 18, 2014,January 15, 2015, resulting from our acquisition of the controlling interest in a portfolio of seven open-air shopping centers (see "Acquisitions and Dispositions" below),Merger, we consolidatedassumed additional mortgages on four properties with a fair value of $88.9 million.June 5, 2014, we repaid the mortgage on Sunland Park Mall in the amount of $30.7 million (including prepayment penalty of $2.9 million, which is recorded in interest expense for the nine months ended September 30, 2014 in the consolidated and combined statements of operations. The loan was due to mature on January 1, 2026. The repayment was funded through a borrowing on our credit facility (see below). On February 20, 2014, West Ridge Mall refinanced its $64.6 million, 5.89% fixed rate mortgage maturing July 1, 2014 with a $54.0 million, 4.84% fixed rate mortgage that matures March 6, 2024. The new debt encumbers both West Ridge Mall and West Ridge Plaza. 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 March 1, 2024. In addition, prior to May 28, 2014, mortgages were obtained on previously unencumbered properties as follows (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 55.0 4.19 % Fixed 4/1/2019 $ 425.0 (1)Proceeds were retained by SPG as part of the separation.Mortgage Debt Activity Subsequent to September 30, 2014 On October 10, 2014, the Company restructured the $94.0 million mortgage on Rushmore Mall, splitting the principal balance into an "A Note" of $58.0 million and a "B Note" of $36.0 million. The maturity date of both notes was extended from June 1, 2016 to February 1, 2019 and the interest rate of both notes remains at 5.79%. Interest accrues on both notes, with payment due currently on the A Note and at maturity on the B Note. Under a sale or refinance, amounts of principal and interest due on the B Note may be forgiven. At closing, the Company contributed $11.6 million to be applied towards closing costs and lender-held reserves. On October 29, 2014,27, 2015, the Company repaid the $15.3$18.8 million mortgage on Lake View PlazaWest Town Corners and $2.2the $13.9 million mortgage on DeKalbGaitway Plaza through a $18.0 million borrowing under the Revolver. ��In April 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) $585.0 million was retained by SPG as part of the formation transactions, (ii) $30.7 million was used for the repayment of the Sunland Park Mall mortgage, (iii) $39.9 million was retained to cover transaction and other costs, (iv) $11.4 million was repaid to SPG for deferred loan financing costs and (v) the remaining $3.8 million was retained on hand for other corporate and working capital purposes. On June 17, 2014, we incurred an additional $170.0 million of indebtedness under the Facility, the proceeds of which were primarily used for the acquisition of our partner's interest in a portfolio of seven open-air shopping centers (see "Acquisitions and Dispositions" below). At September 30, 2014, our unsecured debt consisted of $340.8$413.8 million outstanding under the Revolver and $500.0 million outstanding under the Term Loan. On September 30, 2014,March 31, 2015, we had an aggregate available borrowing capacity of $559.2$483.1 million under the Facility.September 30, 2014, we wereMarch 31, 2015, management believes the Company is in compliance with all covenants of ourits unsecured debt.September 30, 2014,March 31, 2015, certain of our consolidated subsidiaries were the borrowers under 3142 non-recourse mortgage loans secured by mortgages encumbering 3646 properties, including fourfive separate pools of cross-defaulted and cross- collateralizedcross-collateralized mortgages encumbering a total of 1012 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. OurSeptember 30, 2014,March 31, 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.September 30, 2014March 31, 2015 and December 31, 2013,2014, consisted of the following (dollars in thousands): September 30,
2014 Effective
Weighted
Average
Interest
Rate December 31,
2013 Effective
Weighted
Average
Interest
Rate $ 1,501,566 5.22 % $ 918,614 5.87 % 840,750 1.27 % — 0.00 % $ 2,342,316 3.80 % $ 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 September 30, 2014,March 31, 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 $ 19,779 $ 1,055,105 $ 473,374 $ 790,360 $ 2,338,618 22,851 145,599 87,599 134,267 390,316 $ 42,630 $ 1,200,704 $ 560,973 $ 924,627 $ 2,728,934 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 $3,698.(2)Variable rate interest payments are estimated based on the LIBOR rate at September 30, 2014.September 30, 2014,March 31, 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."Overview—Basis"Overview-Basis of Presentation" for more 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.Other Compensation Arrangements On June 24, 2014, Mark Ordan, our Chief Executive Officer, was awarded 153,610Units underAwardsPlan, pursuant to the employment agreement between the Company and Mr. Ordan, dated as of February 15, 2014 (the "Employment Agreement"). The LTIP units were granted as "Inducement LTIP Units" under the terms of the Employment Agreement. Subject to certain exceptions, 25% of such LTIP units will become vested on each of the first four anniversaries of the effective date of the Employment Agreement based on continued employment. Mr. Ordan is also entitled to receive special performance LTIP units ("Special PP Units") under the terms of the employment agreement that vest based upon the Company's achievement of certain shareholder return and outperformance of the Company's stock relative to certain indices. These Special PP Units were valued by an external specialist at a discount to the stock price on the date of the separation in order to allow for the possibility that the stock performance conditions will not be met. If the performance criteria have been met, a maximum amount, based on the closing price for the 20 consecutive trading days commencing on the separation date, of $2.0 million ("First Special PP"), $1.5 million ("Second Special PP") and $1.5 million ("Third Special PP") may become earned on Decemberthree months ended March 31, 2015, 2016 and 2017, respectively. The earned First and Second Special Units will vest on May 28, 2017 and the earned Third Special PP Units will be vested immediately upon being earned, subject to continued employment. The grant date fair value of the award of $2.3 million is being recognized as expense over the applicable vesting periods of the Special PP Units. Additionally, the employment agreement provides that Mr. Ordan will receive an annual grant of LTIP units with respect to each fiscal year during the term of the employment agreement, to be made no later than promptly following the completion of our audited financial statements for such fiscal year and on terms no less favorable than the annual LTIP unit awards made to our other senior executives (the "Annual LTIP Units"). The number of Annual LTIP Units granted in respect of a fiscal year will be determined based on our achievement of total shareholder return ("TSR") goals with respect to such fiscal year by dividing a cash amount, not greater than $0.75 million, by the average closing price of our common stock for the final 15 trading days of such fiscal year, with Annual LTIP Units awarded in respect of fiscal year 2014 pro-rated based on the number of days from March 15, 2014 to December 31, 2014. Annual LTIPUnits vest at a rate of one-third on each of the first three anniversaries of the first day of the fiscal year following the fiscal year in respect of which such Annual LTIP Units were granted, subject to Mr. Ordan's continued employment on each such vesting date. On August 25, 2014, the Company awarded 130,000203,215 time-vested LTIP Units ("Officer Inducement LTIP Units") to thecertain executive officers and employees of the Company under the Plan, pursuant to LTIP Unit Award Agreements between the Company and each of the officers. The Officer Inducement LTIP Unitsgrant recipients. These awards will vest 25% on each ofand the first four anniversaries ofrelated fair value will be expensed over a four-year vesting period.date, subject to each respective officer's continued employment on each such vesting date. On August 25, 2014, the Company awardedof LTIP units subject to certain performance conditions described below ("Officer Performance LTIP Units") to each of thecertain executive officers and employees of the Company in the maximum total amount of 195,000 units. The Officer Performance304,818 units, to be earned and related fair value expensed over the applicable performance periods.Units relate toUnit AwardsfollowingCompany approved the performance periods:criteria and maximum dollar amount of the 2015 annual LTIP unit awards, ranging from May 28, 2014 to (i) December 31,30%-300% of annual base salary, for certain executive officers and employees of the Company. Any 2015 (ii) December 31,annual LTIP unit awards earned will be granted in 2016 and (iii) December 31,vest one-third on each of January 1, 2017, in each case, subject to2018 and 2019.officer's continued employment throughMerger, unvested restricted shares held by certain Glimcher executive employees, which had an original vesting period of five years, were converted into 1,039,785 WPG restricted shares (the “WPG Restricted Shares”). The WPG Restricted Shares will be amortized over the remaining life of the applicable vesting date. The vesting date is May 28, 2017period, except for the performance periods ending in 2015 and 2016 and is the applicable grant date for the performance period ending in 2017. The Performance LTIP Units are granted promptly (and in any event within 15 days)portion of the end of eachawards applicable performance period. In each case,to pre-Merger service, which was included as equity consideration issued in the maximum number of Officer Performance LTIP Units granted for each of the performance periods is one-third of the maximum total amount described above. The number of Officer Performance LTIP Units granted in respect of each performance period will be determined as a percentage of the maximum, based on the Company's achievement of absolute and relative (versus the MSCI REIT Index) total shareholder return ("TSR") goals, with 40% of the Officer Performance LTIP Units available for grant with respect to each performance period granted based on achievement of absolute TSR goals, and 60% of the Officer Performance LTIP Units available for grant with respect to each performance period granted based on achievement of relative TSR goals.unitsand WPG Restricted Units of approximately $1.2 million and $1.3$2.3 million for the three and nine months ended September 30, 2014, respectively,March 31, 2015, which expense is included in general and administrative expense in the consolidated and combined statements of operations.Board of Directors Compensation On August 4, 2014, the Board of Directors approved annual compensation for the period of May 28, 2014 through May 28, 2015 for the independent membersoperations and comprehensive (loss) income.BoardMerger, outstanding stock options held by certain former Glimcher employees were converted into 1,125,014 WPG stock options. During the three months ended March 31, 2015, employees exercised 98,900 stock options and 146,621 stock options were canceled, forfeited or expired. As of Directors of the Company. Each independent director's annual compensation shall total $0.2 million based on a combination of cash and restrictedMarch 31, 2015, there were 879,493 stock units granted under the Plan.September 15, 2014,January 22, 2015, the Company paid a quarterly cash dividend of $0.25$0.14 per common share/unit.unit for the period from November 26, 2014 through January 14, 2015. On August 4,December 24, 2014, the Company'sCompany’s Board of Directors had declared the dividend, which was contingent on the closing of the Merger, to shareholders and unitholders of record on August 27, 2014, with an ex-dividend date of August 25, 2014.November 4, 2014,February 24, 2015, the Company'sCompany’s Board of Directors declared a quarterlythe following cash dividend of $0.25 per common share/unit, payable on December 15, 2014, to shareholders and unitholders of record on November 26, 2014, with an ex-dividend date of November 25, 2014.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. June 20, 2014,January 15, 2015, we acquired our partner's 50 percent interest23 properties in Clay Terrace,the Merger (see details in "Merger with Glimcher Realty Trust" above).577,00043,000 square foot lifestyleshopping center located in Carmel, IndianaGrand Junction, Colorado, for approximately $22.9$10.0 million paid by issuing 1,173,678 unitsincluding the assumption of WPG L.P. The center is anchored by Dick's Sporting Goods, DSW and Whole Foods and includes several national and local retailers as well asan existing mortgage with a varietyprincipal balance of dining options. Also included in the transaction is land available for development. The property was previously accounted for under the equity method, but is now consolidated as it is wholly owned post-acquisition. The consolidation of this previously unconsolidated property resulted in a remeasurement of our previously held interest to fair value and a corresponding non-cash gain of approximately $44.6 million which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the consolidated and combined statements of operations. On June 18, 2014, we acquired our partner's interest in a portfolio of seven open-air shopping centers, consisting of four centers located in Florida, and one each in Indiana, Connecticut and Virginia, for approximately $162.0$5.5 million. The portfolio of properties totals over 2.1 million square feet. Also included in this transaction is land valued at approximately $4.0 million. Previously, we held between 32 percent to 42 percent legal ownership interests in the properties, but received substantially less economic benefit due to the partner's preferred capital allocation. 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. The consolidation of these previously unconsolidated properties resulted in a remeasurement of our previously held interest to fair value and a corresponding non-cash gain of approximately $42.3 million which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the consolidated and combined statements of operations. The source of funding for the acquisition was a borrowing under the Revolver (see "Financing and Debt" above). On January 10, 2014, SPG acquired one of its partner's remaining interests in three properties that were contributed to WPG. The consideration paid for the partner's remaining interests in these three properties 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. On July 17, 2014, we sold Highland Lakes Center, a wholly owned shopping center in Orlando, FL, for net proceeds of $20.5 million, resulting in a gain of approximately $9.0 million, which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the consolidated and combined statements of operations. On June 23, 2014, we sold New Castle Plaza, a wholly owned shopping center in New Castle, Indiana, for net proceeds of $4.4 million, resulting in a gain of approximately $2.4 million, which is included in gain upon acquisition of controlling interests and on sale of interests in properties in the consolidated and combined statements of operations. On February 28, 2014, SPG disposed of its interest in one unconsolidated shopping center and, on February 21, 2013, SPG increased its economic interest in three unconsolidated shopping 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%.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 $10.8$11.7 million at September 30, 2014March 31, 2015 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 first half of 2016. As of September 30, 2014, approximately $300 million of development and redevelopment projects have 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.$44.0$34 million. The redevelopment is expected to be fully completed in mid-2016. Duringmid-2017.2013, we opened University2015. We have retained a 25% interest in the apartment development and our joint venture partner will build and manage the apartment complex. Construction on the south parcel commenced in August 2014 and will include a 140,000 square foot building that will be comprised of retail and office that will be completed in 2015. American Girl will be the retail anchor for the building and comprises more than 45% of the planned retail in the building and will open in 2015. Office leasing on the south parcel building is underway and demand for the space has been very strong. The middle parcel will be the final component of Phase III and will be comprised of retail and likely a boutique hotel. Phase III will add density at Scottsdale with a mix of office, residential and lodging, but the cornerstone of the development will remain retail. The total investment in Phase III of Scottsdale will be approximately $110 million to $130 million.enclosed mallElder Beerman for Her department store into restaurants at The Mall at Fairfield Commons which was redeveloped into a 580,000 square foot open-air shopping center locatedis expected to be completed during 2015. The restaurant lineup will feature Chuy’s, BJ’s Restaurant & Brewhouse and Bravo Cucina Italiana. The investment in Pensacola, Florida.this redevelopment will be approximately $20 million.total cost ofinvestment in this project was approximately $33.0redevelopment is $25 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 ninethree months ended September 30, 2014:March 31, 2015 (in thousands): $ 1,007 28,958 22,420 11,483 $ 63,868 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. (1)Primarily relates to land held for development of Fairfield Town Center.the heading "RiskPart I, "Item 1A. Risk Factors" in the Information Statement, and we discussed certain risks and uncertainties underCompany's Annual Report on Form 10-K for the heading "Riskyear ended December 31, 2014, as updated by Part II, "Item 1A. Risk Factors" in thethis Quarterly Report on Form S-4, incorporated by reference into Item 1A of Part II of this report.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.•••• For the Three Months Ended
September 30, For the Nine Months Ended
September 30, 2014 2013 2014 2013 $ 38,821 $ 38,581 $ 164,604 $ 135,830 49,301 46,771 142,555 137,171 337 1,172 2,473 3,597 (8,969 ) 0 (100,479 ) (14,152 ) 0 (46 ) 0 (178 ) 0 (41 ) 0 (118 ) $ 79,490 $ 86,437 $ 209,153 $ 262,150 13,925 14,616 35,844 44,327 $ 65,565 $ 71,821 $ 173,309 $ 217,823 $ 0.21 $ 0.21 $ 0.88 $ 0.73 0.26 0.25 0.78 0.75 (0.05 ) — (0.54 ) (0.08 ) $ 0.42 $ 0.46 $ 1.12 $ 1.40 155,162,597 155,162,597 155,162,597 155,162,597 32,955,058 31,575,487 32,091,064 31,575,487 188,117,655 186,738,084 187,253,661 186,738,084 (1) 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. includes transaction costs related to WPG's separationwere operating results from SPG of $39.9 million, or $0.21 per diluted share, in the nine months ended September 30, 2014 and costsproperties associated with the proposed merger with Glimcher of $2.5 million, or $0.01 per diluted share, in the three and nine months ended September 30, 2014. Additionally, FFO includes general and administrative costs related to being a publicly traded company after the separation of $4.4 million, or $0.02 per diluted share, and $6.3 million, or $0.03 per diluted share, in the three and nine months ended September 30, 2014, respectively. Finally, FFO includes interest expense related to additional indebtedness incurred related to the separation of approximately $9.2 million, or $0.05 per diluted share, and approximately $15.9 million, or $0.08 per diluted share, in the three and nine months ended September 31, 2014, respectively.Merger less associated debt costs.property NOI (in thousands): For the Three Months
Ended September 30, For the Nine Months
Ended September 30, 2014 2013 2014 2013 $ 38,821 $ 38,581 $ 164,604 $ 135,830 134 68 275 170 23,219 13,791 59,813 41,247
(8,969
)
—
(100,479
)
(14,152
) (99 ) (353 ) (846 ) (852 ) 4,395 — 6,260 — — — 39,931 — 2,500 — 2,500 60,001 52,087 172,058 162,243 49,307 46,771 142,563 137,171 $ 109,308 $ 98,858 $ 314,621 $ 299,414 $ 701 $ 3,457 $ 6,625 $ 10,432 1,084 3,634 7,908 10,709 20 22 28 (523 ) 1,805 7,113 14,561 20,618 1,200 3,691 8,450 11,101 $ 3,005 $ 10,804 $ 23,011 $ 31,719 $ 112,313 $ 109,662 $ 337,632 $ 331,133 (21 ) 71 33 1,225 $ 112,292 $ 109,733 $ 337,665 $ 332,358 2.3 % 1.6 % (2,517 ) (8,746 ) (18,165 ) (27,050 ) $ 109,775 $ 100,987 $ 319,500 $ 305,308 8.7 % 4.6 %
$
112,292
$
109,733
$
337,665
$
332,358 2,912 3,349 10,833 10,612 $ 109,380 $ 106,384 $ 326,832 $ 321,746 2.8 % 1.6 % (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 shopping centers that were owned in both of the periods under comparison. Eight 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.rates.rates, primarily LIBOR. We seek to limit the impact 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 other 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 September 30, 2014, $840.8 millionMarch 31, 2015, $2.1 billion of our aggregate indebtedness (35.9%(42.9% of total indebtedness) was subject to variable interest rates.marketLIBOR rates of interest on our variable rate debt fluctuate by 50 basis points,fluctuated, our future earnings and cash flows would be impacted, depending upon the current LIBOR rates and the existence of any derivative contracts current in effect. Based upon variable debt as of March 31, 2015, a 50 basis point increase orin LIBOR rates would result in a decrease depending on rate movement, by $4.2in earnings and cash flow of $10.0 million annually. A 50 basis point decrease in LIBOR rates (or to 0% for LIBOR rates that are below 0.50%) would result in an increase in earnings and cash flow of $4.5 million. This assumes that the amount outstanding under our variable rate debt remains at $840.8 million,$2.1 billion, the balance as of September 30, 2014.Item 4. Controls and ProceduresControls and Procedures September 30, 2014March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Part II—Other InformationItem 1. Legal Proceedings See "Overview—BasisPresentation"Glimcher, and alleges these defendants breached fiduciary duties. Specifically, plaintiffs in Part I, Itemthe Consolidated Action allege that the trustees of Glimcher agreed to sell Glimcher for inadequate consideration and agreed to improper deal protection provisions that precluded other bidders from making successful offers. Plaintiffs further allege that the sales process was flawed and conflicted in several respects, including the allegation that the trustees failed to canvas the market for potential buyers, failed to secure a “go‑shop” provision in the merger agreement allowing Glimcher to seek alternative bids after signing the merger agreement, and were improperly influenced by WPG’s early suggestion that the surviving entity would remain headquartered in Ohio and would retain a significant portion of Glimcher management, including the retention of Michael Glimcher as CEO of the surviving entity and positions for Michael Glimcher and another trustee of Glimcher on the board of the surviving entity. Plaintiffs in the Consolidated Action additionally allege that the Preliminary Registration Statement filed with the SEC on October 28, 2014, failed to disclose material information concerning, among other things, (i) the process leading up to the consummation of the Merger Agreement; (ii) the financial analyses performed by Glimcher’s financial advisors; and (iii) certain financial projections prepared by Glimcher and WPG management allegedly relied on by Glimcher's financial advisors. The Consolidated Action also names as defendants Glimcher, WPG and certain of their affiliates, and alleges that these defendants aided and abetted the purported breaches of fiduciary duty. Plaintiffs seek, among other things, an order enjoining or rescinding the transaction, damages, and an award of attorney’s fees and costs.a discussionBaltimore City for an award of Merger-related litigation.attorneys’ fees not to exceed $425,000 and reasonable, documented expenses in an amount not to exceed $20,000, to be paid by the Company. Accordingly, the Company has accrued $445,000 related to this matter, which expense is included in merger and transaction costs for the three months ended March 31, 2015 in the consolidated and combined statements of operations and comprehensive (loss) income. There can be no assurance that the Circuit Court for Baltimore City will approve the settlement. In the event that the settlement is not approved and the conditions are not satisfied, defendants will continue to vigorously defend against the allegations in the Consolidated Action.Item 1A. Risk Factors Factorsfactors set forthfactor in the 2014 Form 10-K entitled “Following the Merger, we have significant indebtedness, which could adversely affect our business, including decreasing our business flexibility and increasing our interest expense” is modified and restated in its entirety as follows:caption "Risk Factors"Bridge Loan in January 2015 in comparison to our registration statementindebtedness on Form S-4 fileda recent historical basis, which could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and increasing our interest expense. In addition, we have and will continue to incur various costs and expenses associated with our recent transactions. The amount of cash required to pay interest on our increased indebtedness levels following completion of the Merger and our borrowings under the Bridge Loan is greater than the amount of cash flows required to service our indebtedness prior to the Merger. 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.CommissionMerger bears interest at variable interest rates. If interest rates increase, such variable rate debt would create higher debt service requirements, which could adversely affect our cash flows.October 28, 2014 (File No. 333-199626)February 25, 2015, we announced that we, through certain of our affiliates, O’Connor Mall Partners, L.P., a Delaware limited partnership (“OC”), and Fidelity National Title Insurance Company, as escrow agent, entered into a purchase, sale and escrow agreement (the “Agreement”), providing for our sale to OC of a 49% partnership interest in a newly formed limited partnership (the “JV”), with the remaining 51% partnership interest held by us. We expect the transaction to close in the 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 incorporatednot 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 referenceus in connection with the joint venture transactions, and filed as Exhibit 99.1will be subject to this Form 10-Q.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. Mine Safety DisclosuresItem 4. Mine Safety Disclosures ExhibitNumberExhibit Descriptions 2.1Separation and Distribution Agreement by and among Simon Property Group, Inc., Simon Property Group, L.P., Washington Prime Group Inc.By: /s/ Mark E. Yale Washington Prime Group,Chief Financial OfficerBy: /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. , dated as of May 27, 2014 and Fidelity National Title Insurance Company (incorporated by reference to Form 8-K filed May 29, 2014)February 26, 2015)
3.12.2Agreement and Plan of Merger, dated September 16, 2014, between Glimcher Realty Trust, Glimcher LP, Washington Prime Group Inc. and Washington Prime Group LP (including the exhibits attached thereto) (incorporated by reference to Form 8-K filed September 19, 2014)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 Amendment No. 2Form 8-K filed January 22, 2015)3.6* Amended and Restated Bylaws of Washington Prime Group Inc. Redlined to Form 10 filedShow Bylaw Amendments Effective January 15, 20154.1 Indenture, dated as of March 24, 2014)10.1Form of Director Restricted Stock Unit Award Agreement2015, between Washington Prime Group, L.P. and U.S. Bank National Association, as Trustee (incorporated by reference to Form 8-K filed August 8, 2014)March 26, 2015)
4.210.2FormFirst Supplemental Indenture, dated as of Series 2014B LTIP Unit Award Agreements with OfficersMarch 24, 2015, between Washington Prime Group, L.P. and U.S. Bank National Association, as Trustee (incorporated by reference to Form 8-K filed August 28, 2014)March 26, 2015)
4.310.3Registration 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 31, 1998) 10.19+ Severance 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 2014B2015A LTIP Units of Washington Prime Group, L.P. (incorporated by reference to Form 8-K filed August 28, 2014)
10.29*+10.4Employment Agreement by and between Washington Prime Group Inc. and Farinaz S. Tehrani, dated as of February 24, 201510.30*+
Terms and Conditions of the Grant of Special Performance LTIP Units to Officers (incorporated by reference to Form 8-K filed August 28, 2014)Mr. Glimcher, Mr. Yale, Ms. Tehrani and Ms. Indest
31.1*10.5Employment Agreement with Butch Knerr dated as of September 8, 2014 (incorporated by reference to Form 8-K filed September 8, 2014)10.6Employment Agreement between Michael P. Glimcher and Washington Prime Group Inc., dated September 16, 2014 (incorporated by reference to Form 8-K filed September 19, 2014)10.7Amendment to Severance Benefits Agreement between Michael P. Glimcher and Washington Prime Group Inc., dated September 16, 2014 (incorporated by reference to Form 8-K filed September 19, 2014)10.8Amendment No. 1 to Revolving Credit and Term Loan Agreement, dated as of October 16, 2014, among Washington Prime Group, L.P., the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Form 8-K filed October 17, 2014)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 200299.1Risk Factors from Form S-4 filed by the registrant on October 28, 2014 (File No. 333-199626)
101.INS*101.INS
XBRL Instance Document
101.SCH*101.SCH
XBRL Taxonomy Extension Schema DocumentExhibitNumberExhibit Descriptions101.CAL* 101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE*101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*101.DEF
XBRL Taxonomy Extension Definition Linkbase Document 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.
+ Represents management contract or compensatory plan or arrangement.WASHINGTON PRIME GROUP INC.By:/s/ C. MARC RICHARDSName:C. Marc RichardsTitle:Vice President and Chief Financial OfficerDate: November 4, 2014