UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2015~~March 31, 2016



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____ to_____

Commission File Number: 001-36160 (Brixmor Property Group)

Commission File Number: 333-201464-01 (Brixmor Operating Partnership LP)

Brixmor Property Group Inc.

Brixmor Operating Partnership LP

(Exact Name of Registrant as Specified in Its Charter)



Maryland (Brixmor Property Group Inc.)		45-2433192
Delaware (Brixmor Operating Partnership LP)		80-0831163
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

450 Lexington Avenue, New York, New York 10017

(Address of Principal Executive Offices) (Zip Code)

212-869-3000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Brixmor Property Group Inc. Yes þ No ¨ Brixmor Operating Partnership LP Yes þ No ¨

Indicate by check mark whether the registrant 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 registrant was required to submit and post such files).

Brixmor Property Group Inc. Yes þ No ¨ Brixmor Operating Partnership LP Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting

company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Brixmor Property Group Inc.				Brixmor Operating Partnership LP
Large accelerated filer	þ	Non-accelerated filer	¨	Large accelerated filer	¨	Non-accelerated filer	þ
Smaller reporting company	¨	Accelerated filer	¨	Smaller reporting company	¨	Accelerated filer	¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Brixmor Property Group Inc. Yes ¨ No þ Brixmor Operating Partnership LP Yes ¨ No þ

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of ~~October~~April 1, ~~2015,~~2016, Brixmor Property Group Inc. had ~~298,488,602~~299,257,744 shares of common stock outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended ~~September 30, 2015~~March 31, 2016 of Brixmor Property Group Inc. and Brixmor Operating Partnership LP. Unless stated otherwise or the context otherwise requires, references to the “Parent Company” or “BPG” mean Brixmor Property Group Inc. and its consolidated subsidiaries; and references to the “Operating Partnership” mean Brixmor Operating Partnership LP and its consolidated subsidiaries. The terms the “Company,” “Brixmor,” “we,” “our” and “us” mean the Parent Company and the Operating Partnership, collectively.

The Parent Company is a real estate investment trust (“REIT”) which owns 100% of the common stock of BPG Subsidiary Inc. (“BPG Sub”), which, in turn, is the sole owner of Brixmor OP GP LLC, or the General Partner, the sole general partner of the Operating Partnership. As of ~~September 30, 2015,~~March 31, 2016, the Parent Company beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, approximately ~~98.1%~~98.2% of the outstanding partnership common units of interest (the “OP Units”) in the Operating Partnership. Certain investments funds affiliated with The Blackstone Group L.P. and certain current and former members of the Company’s management collectively owned the remaining ~~1.9%~~1.8% interest in the Operating Partnership.

The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:

Enhances investors’ understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

Eliminates duplicative disclosure and provides a more streamlined and readable presentation; and

Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates the Parent Company and the Operating Partnership as one business. The management of the Parent Company consists of the same individuals as the management of the Operating Partnership. These individuals are officers of both the Parent Company and the Operating Partnership.

We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company does not incur any material indebtedness. The Operating Partnership holds substantially all of our assets. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all remaining capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations, its direct or indirect incurrence of indebtedness, and the issuance of OP Units.

Stockholders’ equity, partners’ capital, and non-controlling interests are the primary areas of difference between the unaudited condensed consolidated financial statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital includes OP Units owned by the Parent Company through BPG Sub and the General Partner as well as OP Units owned by certain investments funds affiliated with The Blackstone Group L.P. and certain current and former members of the our management. OP Units owned by third parties are accounted for in partners’ capital in the Operating Partnership’s financial statements and outside of stockholders’ equity in non-controlling interests in the Parent Company’s financial statements.

In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, separate certification of periodic report under Section 302 of the Sarbanes-Oxley Act of 2002 and separate certification pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.

The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have material assets other than its indirect investment in the Operating Partnership. Therefore, while stockholders’ equity and partners’ capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are materially the same on their respective financial statements.

TABLE OF CONTENTS


Item No.		Page		Page
Part I - FINANCIAL INFORMATION
1.	Financial Statements	5	Financial Statements	5
	Brixmor Property Group Inc. (unaudited)		Brixmor Property Group Inc. (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	5	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	5
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	6	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015	6
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014	7	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	7
	Condensed Consolidated Statements of Changes in Equity for the Nine Months Ended September 30, 2015 and 2014	8	Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2016 and 2015	8
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	9	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	9
	Brixmor Operating Partnership LP (unaudited)		Brixmor Operating Partnership LP (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	10	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	10
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	11	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015	11
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014	12	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	12
	Condensed Consolidated Statements of Changes in Capital for the Nine Months Ended September 30, 2015 and 2014	13	Condensed Consolidated Statements of Changes in Capital for the Three Months Ended March 31, 2016 and 2015	13
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	14	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	14
	Brixmor Property Group Inc. and Brixmor Operating Partnership LP (unaudited)		Brixmor Property Group Inc. and Brixmor Operating Partnership LP (unaudited)
	Notes to Condensed Consolidated Financial Statements	15	Notes to Condensed Consolidated Financial Statements	15
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
3.	Quantitative and Qualitative Disclosures about Market Risk	41	Quantitative and Qualitative Disclosures about Market Risk	34
4.	Controls and Procedures	41	Controls and Procedures	34
Part II - OTHER INFORMATION
1.	Legal Proceedings	42	Legal Proceedings	36
1A.	Risk Factors	42	Risk Factors	36
2.	Unregistered Sales of Equity Securities and Use of Proceeds	42	Unregistered Sales of Equity Securities and Use of Proceeds	36
3.	Defaults Upon Senior Securities	42	Defaults Upon Senior Securities	36
4.	Mine Safety Disclosures	42	Mine Safety Disclosures	36
5.	Other Information	42	Other Information	36
6.	Exhibits	43	Exhibits	37

~~- 3 -~~

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “targets” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, ~~2014,~~2015, as such factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at ~~www.sec.gov~~.www.sec.gov. These factors include (1) changes in national, regional or local economic climates; (2) local conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our Portfolio; (3) the attractiveness of properties in our Portfolio to our tenants; (4) the financial stability of tenants, including the ability of tenants to pay rents and expense reimbursements; (5) in the case of percentage rents, our tenants’ sales volumes; (6) competition from other available properties; (7) changes in market rental rates; ~~and~~ (8) changes in the regional demographics of our ~~properties.~~properties; (9) litigation and governmental investigations following the completion of the recent Audit Committee review described under “Part 1. Business-Recent Developments” in our annual report on Form 10-K for the fiscal year ended December 31, 2015; and (10) the impact of the Audit Committee review and related management changes on our access to the capital markets and our cost of capital. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.

~~- 4 -~~

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

													BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES	CONDENSED CONSOLIDATED BALANCE SHEETS	(Unaudited, in thousands, except share information)
	September 30, 2015			December 31, 2014			March 31, 2016			December 31, 2015
Assets
Real estate
Land	$	2,015,176		$	2,000,415		$	2,012,905		$	2,011,947
Buildings and improvements	8,895,181			8,801,834			8,934,306			8,920,903
	10,910,357			10,802,249			10,947,211			10,932,850
Accumulated depreciation and amortization	(1,798,676		)	(1,549,234		)	(1,957,169		)	(1,880,685		)
Real estate, net	9,111,681			9,253,015			8,990,042			9,052,165

Investments in and advances to unconsolidated joint ventures	5,047			5,072			5,023			5,019
Cash and cash equivalents	37,983			60,595			105,822			69,528
Restricted cash	52,763			53,164			44,211			41,462
Marketable securities	24,589			20,315			23,166			23,001
Receivables, net of allowance for doubtful accounts of $14,500 and $14,070	171,914			182,424
Receivables, net of allowance for doubtful accounts of $16,884 and $16,587							169,898			180,486
Deferred charges and prepaid expenses, net	106,512			94,269			109,813			109,149
Other assets	17,134			13,059			17,283			17,197
Total assets	$	9,527,623		$	9,681,913		$	9,465,258		$	9,498,007


Liabilities
Debt obligations, net	$	5,969,336		$	6,022,508		$	6,007,397		$	5,974,266
Accounts payable, accrued expenses and other liabilities	626,600			679,102			552,785			603,439
Total liabilities	6,595,936			6,701,610			6,560,182			6,577,705

Commitments and contingencies (Note 12)
Commitments and contingencies (Note 11)

Equity
Common stock, $0.01 par value; authorized 3,000,000,000 shares; 298,488,602 and 296,552,142 shares outstanding	2,985			2,966
Common stock, $0.01 par value; authorized 3,000,000,000 shares; 299,247,744 and 299,138,450 shares outstanding							2,992			2,991
Additional paid in capital	3,260,930			3,223,941			3,266,119			3,270,246
Accumulated other comprehensive loss	(6,227		)	(4,435		)	(2,448		)	(2,509		)
Distributions in excess of net income/loss	(382,797		)	(318,762		)
Distributions in excess of net income							(413,445		)	(400,945		)
Total stockholders’ equity	2,874,891			2,903,710			2,853,218			2,869,783
Non-controlling interests	56,796			76,593			51,858			50,519
Total equity	2,931,687			2,980,303			2,905,076			2,920,302
Total liabilities and equity	$	9,527,623		$	9,681,913		$	9,465,258		$	9,498,007
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 5 -~~

																			BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	(Unaudited, in thousands, except per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Revenues
Rental income	$	245,829		$	240,820		$	733,429		$	717,975		$	251,146		$	243,570
Expense reimbursements	65,304			63,479			200,570			197,730			69,712			69,754
Other revenues	1,892			2,170			6,430			6,290			2,246			1,969
Total revenues	313,025			306,469			940,429			921,995			323,104			315,293

Operating expenses
Operating costs	27,952			28,792			93,779			95,556			35,051			35,160
Real estate taxes	45,472			44,346			133,635			132,592			44,391			44,189
Depreciation and amortization	102,439			111,104			315,424			333,924			100,479			108,544
Provision for doubtful accounts	1,953			2,771			6,973			8,617			2,740			2,495
Impairment of real estate assets	—			—			807			—			—			807
General and administrative	22,030			19,624			73,030			59,221			20,724			30,715
Total operating expenses	199,846			206,637			623,648			629,910			203,385			221,910

Other income (expense)
Dividends and interest	57			169			241			436			73			94
Interest expense	(61,567		)	(65,545		)	(186,289		)	(199,464		)	(57,443		)	(62,564		)
Gain on sale of real estate assets	—			—			9,224			378
Gain (loss) on extinguishment of debt, net	137			460			922			(2,573		)
Gain on extinguishment of debt, net													—			292
Other	2,880			(1,205		)	(115		)	(5,335		)	(907		)	(184		)
Total other expense	(58,493		)	(66,121		)	(176,017		)	(206,558		)	(58,277		)	(62,362		)

Income before equity in income of unconsolidated joint ventures	54,686			33,711			140,764			85,527			61,442			31,021
Equity in income of unconsolidated joint ventures	133			112			358			248			107			115
Gain on disposition of investments in unconsolidated joint ventures	—			—			—			1,820
Income from continuing operations	54,819			33,823			141,122			87,595

Discontinued operations
Income from discontinued operations	—			41			—			4,881
Gain on disposition of operating properties	—			—			—			14,426
Income from discontinued operations	—			41			—			19,307

Net income	54,819			33,864			141,122			106,902			61,549			31,136

Net income attributable to non-controlling interests	(1,046		)	(6,834		)	(2,814		)	(40,998		)	(1,072		)	(713		)

Net income attributable to common stockholders	$	53,773		$	27,030		$	138,308		$	65,904		$	60,477		$	30,423
Per common share:
Income from continuing operations:
Basic	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Diluted	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Net income attributable to common stockholders:
Basic	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Diluted	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Weighted average shares:
Basic	298,464			244,078			297,714			233,781			299,180			296,189
Diluted	298,936			244,835			304,706			234,920			299,379			297,715
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 6 -~~

																			BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	(Unaudited, in thousands)
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Net income	$	54,819		$	33,864		$	141,122		$	106,902		$	61,549		$	31,136
Other comprehensive income (loss)
Unrealized gain (loss) on interest rate hedges	(2,477		)	1,998			(9,150		)	(4,532		)
Amortization of interest rate swaps to interest expense	2,365			2,519			7,319			7,473
Unrealized gain (loss) on marketable securities	21			(18		)	39			5
Unrealized loss on interest rate hedges													(43		)	(2,437		)
Unrealized gain on marketable securities													104			34
Total other comprehensive income (loss)	(91		)	4,499			(1,792		)	2,946			61			(2,403		)
Comprehensive income	54,728			38,363			139,330			109,848			61,610			28,733
Comprehensive income attributable to non-controlling interests	(1,046		)	(6,834		)	(2,814		)	(40,998		)	(1,072		)	(713		)
Comprehensive income attributable to the Company	$	53,682		$	31,529		$	136,516		$	68,850		$	60,538		$	28,020
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 7 -~~


BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES	BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES																		BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY																		CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited, in thousands)	(Unaudited, in thousands)																		(Unaudited, in thousands)
	Common Stock																		Common Stock
	Number	Amount		Additional Paid in Capital			Accumulated Other Comprehensive Loss			Distributions in Excess of Net Income/Loss			Non-controlling Interests			Total			Number	Amount		Additional Paid in Capital			Accumulated Other Comprehensive Loss			Distributions in Excess of Net Income/Loss			Non-controlling Interests			Total
Beginning balance, January 1, 2014	229,689	$	2,297	$	2,543,690		$	(6,812	)	$	(196,707	)	$	942,052		$	3,284,520
Common stock dividends ($0.60 per common share)	—	—		—			—			(144,240		)	—			(144,240		)
Distributions to non-controlling interests	—	—		—			—			—			(38,589		)	(38,589		)
Redemption of Series A	—	—		6,222			—			—			(201,400		)	(195,178		)
Equity based compensation expense	—	—		5,404			—			—			1,615			7,019
Acquisition of non-controlling interests	—	—		437			—			—			(1,437		)	(1,000		)
Other comprehensive income	—	—		—			2,946			—			—			2,946
Conversion of Operating Partnership units and BPG Sub shares into common stock	15,406	154		155,086			—			—			(155,240		)	—
Net income	—	—		—			—			65,904			40,032			105,936
Ending balance, September 30, 2014	245,095	$	2,451	$	2,710,839		$	(3,866	)	$	(275,043	)	$	587,033		$	3,021,414

Beginning balance, January 1, 2015	296,552	$	2,966	$	3,223,941		$	(4,435	)	$	(318,762	)	$	76,593		$	2,980,303		296,552	$	2,966	$	3,223,941		$	(4,435	)	$	(318,762	)	$	76,593		$	2,980,303
Common stock dividends ($0.675 per common share)	—	—		—			—			(202,343		)	—			(202,343		)
Common stock dividends ($0.225 per common share)																			—	—		—			—			(67,533		)	—			(67,533		)
Distributions to non-controlling interests	—	—		—			—			—			(4,554		)	(4,554		)	—	—		—			—			—			(1,328		)	(1,328		)
Equity based compensation expense	—	—		18,939			—			—			420			19,359			—	—		12,654			—			—			297			12,951
Issuance of common stock and OP Units	33	—		(743		)	—			—			765			22			29	—		(743		)	—			—			765			22
Other comprehensive loss	—	—		—			(1,792		)	—			—			(1,792		)	—	—		—			(2,403		)	—			—			(2,403		)
Conversion of Operating Partnership units into common stock	1,903	19		19,223			—			—			(19,242		)	—			1,903	19		19,601			—			—			(19,620		)	—
Shared-based awards retained for taxes	—	—		(430		)	—			—			—			(430		)	—	—		(430		)	—			—			—			(430		)
Net income	—	—		—			—			138,308			2,814			141,122			—	—		—			—			30,423			713			31,136
Ending balance, September 30, 2015	298,488	$	2,985	$	3,260,930		$	(6,227	)	$	(382,797	)	$	56,796		$	2,931,687
Ending balance, March 31, 2015																			298,484	$	2,985	$	3,255,023		$	(6,838	)	$	(355,872	)	$	57,420		$	2,952,718

Beginning balance, January 1, 2016																			299,138	$	2,991	$	3,270,246		$	(2,509	)	$	(400,945	)	$	50,519		$	2,920,302
Common stock dividends ($0.245 per common share)																			—	—		—			—			(72,977		)	—			(72,977		)
Distributions to non-controlling interests																			—	—		—			—			—			(1,322		)	(1,322		)
Equity based compensation benefit																			—	—		(1,555		)	—			—			(27		)	(1,582		)
Issuance of common stock and OP Units																			77	1		(1,407		)	—			—			1,616			210
Other comprehensive income																			—	—		—			61			—			—			61
Shared-based awards retained for taxes																			—	—		(1,165		)	—			—			—			(1,165		)
Net income																			—	—		—			—			60,477			1,072			61,549
Ending balance, March 31, 2016																			299,215	$	2,992	$	3,266,119		$	(2,448	)	$	(413,445	)	$	51,858		$	2,905,076
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 8 -~~

													BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	(Unaudited, in thousands)
	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2016			2015
Operating activities:
Net income	$	141,122		$	106,902		$	61,549		$	31,136
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	315,424			334,515			100,479			108,544
Debt premium and discount amortization	(13,972		)	(15,524		)	(4,066		)	(5,048		)
Deferred financing cost amortization	6,236			6,708			1,937			2,048
Above- and below-market lease intangible amortization	(34,367		)	(35,090		)	(11,018		)	(13,530		)
Provisions for impairment	807			—			—			807
Gain on disposition of operating properties and disposition of investments in unconsolidated joint ventures	(9,224		)	(16,624		)
Equity based compensation	19,359			7,019			(1,582		)	12,951
Other	106			(214		)	231			49
Gain on extinguishment of debt, net	(4,502		)	(4,245		)	—			(297		)
Changes in operating assets and liabilities:
Restricted cash	(1,782		)	11,007			(2,113		)	(6,845		)
Receivables	10,502			6,513			10,589			3,675
Deferred charges and prepaid expenses	(23,932		)	(29,787		)	(5,310		)	(2,608		)
Other assets	(295		)	357			84			(268		)
Accounts payable, accrued expenses and other liabilities	6,442			753			(36,778		)	(17,677		)
Net cash provided by operating activities	411,924			372,290			114,002			112,937

Investing activities:
Improvements to and investments in real estate assets	(147,393		)	(146,499		)	(36,340		)	(40,411		)
Acquisitions of real estate assets	(52,278		)	—
Proceeds from sales of real estate assets	41,795			2,778			—			9,918
Distributions from unconsolidated joint venture	—			187
Change in restricted cash attributable to investing activities	2,182			7,321			(636		)	(1,678		)
Purchase of marketable securities	(19,320		)	(20,250		)	(6,893		)	(4,200		)
Proceeds from sale of marketable securities	15,014			21,414			6,810			4,499
Net cash used in investing activities	(160,000		)	(135,049		)	(37,059		)	(31,872		)

Financing activities:
Repayment of debt obligations and financing liabilities	(733,815		)	(827,460		)	(4,740		)	(158,568		)
Repayment of borrowings under unsecured revolving credit facility	(1,118,475		)	(675,047		)	—			(682,475		)
Proceeds from borrowings under unsecured revolving credit facility	619,000			826,343			40,000			163,000
Proceeds from unsecured term loan and notes	1,188,146			600,000			—			695,156
Deferred financing costs	(3,153		)	(2,995		)	—			(1,899		)
Distributions to common stockholders	(201,398		)	(124,128		)	(73,447		)	(66,750		)
Distributions to non-controlling interests	(24,841		)	(55,111		)	(1,297		)	(21,611		)
Repurchase of common shares in conjunction with equity award plans							(1,165		)	(329		)
Net cash used in financing activities	(274,536		)	(258,398		)	(40,649		)	(73,476		)

Change in cash and cash equivalents	(22,612		)	(21,157		)	36,294			7,589
Cash and cash equivalents at beginning of period	60,595			113,915			69,528			60,595
Cash and cash equivalents at end of period	$	37,983		$	92,758		$	105,822		$	68,184

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $2,131 and $2,776	$	191,125		$	216,720
Supplemental non-cash investing and/or financing activities:
Net carrying value of properties distributed to non-controlling owners	$	—		$	178,969
Cash paid for interest, net of amount capitalized of $587 and $656							$	68,088		$	61,355
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 9 -~~

													BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES	CONDENSED CONSOLIDATED BALANCE SHEETS	(Unaudited, in thousands, except unit information)
	September 30, 2015			December 31, 2014			March 31, 2016			December 31, 2015
Assets
Real estate
Land	$	2,015,176		$	2,000,415		$	2,012,905		$	2,011,947
Buildings and improvements	8,895,181			8,801,834			8,934,306			8,920,903
	10,910,357			10,802,249			10,947,211			10,932,850
Accumulated depreciation and amortization	(1,798,676		)	(1,549,234		)	(1,957,169		)	(1,880,685		)
Real estate, net	9,111,681			9,253,015			8,990,042			9,052,165

Investments in and advances to unconsolidated joint ventures	5,047			5,072			5,023			5,019
Cash and cash equivalents	37,947			60,450			105,786			69,506
Restricted cash	52,763			53,164			44,211			41,462
Marketable securities	24,378			20,113			22,951			22,791
Receivables, net of allowance for doubtful accounts of $14,500 and $14,070	171,914			182,424
Receivables, net of allowance for doubtful accounts of $16,884 and $16,587							169,898			180,486
Deferred charges and prepaid expenses, net	106,512			94,269			109,813			109,149
Other assets	17,134			13,059			17,283			17,197
Total assets	$	9,527,376		$	9,681,566		$	9,465,007		$	9,497,775


Liabilities
Debt obligations, net	$	5,969,336		$	6,022,508		$	6,007,397		$	5,974,266
Accounts payable, accrued expenses and other liabilities	626,600			679,102			552,785			603,439
Total liabilities	6,595,936			6,701,610			6,560,182			6,577,705

Commitments and contingencies (Note 12)
Commitments and contingencies (Note 11)

Capital
Partnership common units: 304,286,518 and 304,246,750 units outstanding	2,937,656			2,984,381
Partnership common units: 304,601,693 and 304,366,215 units outstanding							2,907,264			2,922,565
Accumulated other comprehensive loss	(6,216		)	(4,425		)	(2,439		)	(2,495		)
Total capital	2,931,440			2,979,956			2,904,825			2,920,070
Total liabilities and capital	$	9,527,376		$	9,681,566		$	9,465,007		$	9,497,775
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 10 -~~

																			BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	(Unaudited, in thousands, except per unit data)
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Revenues
Rental income	$	245,829		$	240,820		$	733,429		$	717,975		$	251,146		$	243,570
Expense reimbursements	65,304			63,479			200,570			197,730			69,712			69,754
Other revenues	1,892			2,170			6,430			6,290			2,246			1,969
Total revenues	313,025			306,469			940,429			921,995			323,104			315,293

Operating expenses
Operating costs	27,952			28,792			93,779			95,556			35,051			35,160
Real estate taxes	45,472			44,346			133,635			132,592			44,391			44,189
Depreciation and amortization	102,439			111,104			315,424			333,924			100,479			108,544
Provision for doubtful accounts	1,953			2,771			6,973			8,617			2,740			2,495
Impairment of real estate assets	—			—			807			—			—			807
General and administrative	22,030			19,624			73,030			59,221			20,724			30,715
Total operating expenses	199,846			206,637			623,648			629,910			203,385			221,910

Other income (expense)
Dividends and interest	57			169			241			436			73			94
Interest expense	(61,567		)	(65,545		)	(186,289		)	(199,464		)	(57,443		)	(62,564		)
Gain on sale of real estate assets	—			—			9,224			378
Gain (loss) on extinguishment of debt, net	137			460			922			(2,573		)
Gain on extinguishment of debt, net													—			292
Other	2,880			(1,205		)	(115		)	(5,335		)	(907		)	(184		)
Total other expense	(58,493		)	(66,121		)	(176,017		)	(206,558		)	(58,277		)	(62,362		)

Income before equity in income of unconsolidated joint ventures	54,686			33,711			140,764			85,527			61,442			31,021
Equity in income of unconsolidated joint ventures	133			112			358			248			107			115
Gain on disposition of investments in unconsolidated joint ventures	—			—			—			1,820
Income from continuing operations	54,819			33,823			141,122			87,595

Discontinued operations
Income from discontinued operations	—			41			—			4,881
Gain on disposition of operating properties	—			—			—			14,426
Income from discontinued operations	—			41			—			19,307

Net income	54,819			33,864			141,122			106,902

Net income attributable to non-controlling interests	—			(322		)	—			(966		)

Net income attributable to Brixmor Operating Partnership LP	$	54,819		$	33,542		$	141,122		$	105,936
Net income attributable to:
Series A interest	$	—		$	—		$	—		$	21,014
Partnership common units	54,819			33,542			141,122			84,922
Net income attributable to Brixmor Operating Partnership LP	$	54,819		$	33,542		$	141,122		$	105,936		$	61,549		$	31,136
Per common unit:
Income from continuing operations:
Basic	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Diluted	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Net income attributable to partnership common units:
Basic	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Diluted	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10
Weighted average number of partnership common units:
Basic	304,270			302,890			303,899			302,407			304,483			303,131
Diluted	304,742			303,647			304,706			303,546			304,682			304,657
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 11 -~~

																			BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	(Unaudited, in thousands)
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Net income	$	54,819		$	33,864		$	141,122		$	106,902		$	61,549		$	31,136
Other comprehensive income (loss)
Unrealized gain (loss) on interest rate hedges	(2,477		)	1,998			(9,150		)	(4,532		)
Amortization of interest rate swaps to interest expense	2,365			2,519			7,319			7,473
Unrealized gain (loss) on marketable securities	21			(16		)	40			2
Unrealized loss on interest rate hedges													(43		)	(2,437		)
Unrealized gain on marketable securities													99			31
Total other comprehensive income (loss)	(91		)	4,501			(1,791		)	2,943			56			(2,406		)
Comprehensive income	54,728			38,365			139,331			109,845
Comprehensive income attributable to non-controlling interests	—			(322		)	—			(966		)
Comprehensive income attributable to Brixmor Operating Partnership LP	$	54,728		$	38,043		$	139,331		$	108,879
Comprehensive income attributable to:
Series A interest	$	—		$	—		$	—		$	21,014
Partnership common units	54,728			38,043			139,331			87,865
Comprehensive income attributable to Brixmor Operating Partnership LP	$	54,728		$	38,043		$	139,331		$	108,879		$	61,605		$	28,730
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 12 -~~

																									BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL
(Unaudited, in thousands)	(Unaudited, in thousands)															(Unaudited, in thousands)

	Partnership Common Units			Series A Interest			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total
Beginning balance, January 1, 2014	$	3,108,398		$	180,386		$	(6,797	)	$	1,437		$	3,283,424
Distributions to partners	(182,079		)	—			—			—			(182,079		)
Redemption of Series A interest	6,222			(201,400		)	—			—			(195,178		)
Equity based compensation expense	7,019			—			—			—			7,019
Acquisition of non-controlling interests	437			—			—			(1,437		)	(1,000		)
Other comprehensive income	—			—			2,943			—			2,943
Net income	84,922			21,014			—			—			105,936
Ending balance, September 30, 2014	$	3,024,919		$	—		$	(3,854	)	$	—		$	3,021,065
																Partnership Common Units			Accumulated Other Comprehensive Loss			Total
Beginning balance, January 1, 2015	$	2,984,381		$	—		$	(4,425	)	$	—		$	2,979,956		$	2,984,381		$	(4,425	)	$	2,979,956
Distributions to partners	(206,798		)	—			—			—			(206,798		)	(68,763		)	—			(68,763		)
Equity based compensation expense	19,359			—			—			—			19,359			12,951			—			12,951
Other comprehensive loss	—			—			(1,791		)	—			(1,791		)	—			(2,406		)	(2,406		)
Issuance of OP Units	22						—						22			22			—			22
Share-based awards retained for taxes	(430		)	—			—			—			(430		)	(430		)	—			(430		)
Net income	141,122			—			—			—			141,122			31,136			—			31,136
Ending balance, September 30, 2015	$	2,937,656		$	—		$	(6,216	)	$	—		$	2,931,440
Ending balance, March 31, 2015																$	2,959,297		$	(6,831	)	$	2,952,466

Beginning balance, January 1, 2016																$	2,922,565		$	(2,495	)	$	2,920,070
Distributions to partners																(74,313		)	—			(74,313		)
Equity based compensation benefit																(1,582		)	—			(1,582		)
Other comprehensive income																—			56			56
Issuance of OP Units																210			—			210
Share-based awards retained for taxes																(1,165		)	—			(1,165		)
Net income																61,549			—			61,549
Ending balance, March 31, 2016																$	2,907,264		$	(2,439	)	$	2,904,825
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 13 -~~

													BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	(Unaudited, in thousands)
	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2016			2015
Operating activities:
Net income	$	141,122		$	106,902		$	61,549		$	31,136
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	315,424			334,515			100,479			108,544
Debt premium and discount amortization	(13,972		)	(15,524		)	(4,066		)	(5,048		)
Deferred financing cost amortization	6,236			6,708			1,937			2,048
Above- and below-market lease intangible amortization	(34,367		)	(35,090		)	(11,018		)	(13,530		)
Provisions for impairment	807			—			—			807
Gain on disposition of operating properties and disposition of investments in unconsolidated joint ventures	(9,224		)	(16,624		)
Equity based compensation	19,359			7,019			(1,582		)	12,951
Other	106			(214		)	231			49
Gain on extinguishment of debt, net	(4,502		)	(4,245		)	—			(297		)
Changes in operating assets and liabilities:
Restricted cash	(1,782		)	11,007			(2,113		)	(6,845		)
Receivables	10,502			6,513			10,589			3,675
Deferred charges and prepaid expenses	(23,932		)	(29,787		)	(5,310		)	(2,608		)
Other assets	(295		)	357			84			(268		)
Accounts payable, accrued expenses and other liabilities	6,444			760			(36,780		)	(17,670		)
Net cash provided by operating activities	411,926			372,297			114,000			112,944

Investing activities:
Improvements to and investments in real estate assets	(147,393		)	(146,499		)	(36,340		)	(40,411		)
Acquisitions of real estate assets	(52,278		)	—
Proceeds from sales of real estate assets	41,795			2,778			—			9,918
Distributions from unconsolidated joint venture	—			187
Change in restricted cash attributable to investing activities	2,182			7,321			(636		)	(1,675		)
Purchase of marketable securities	(19,316		)	(20,243		)	(6,884		)	(4,200		)
Proceeds from sale of marketable securities	15,014			21,414			6,810			4,499
Net cash used in investing activities	(159,996		)	(135,042		)	(37,050		)	(31,869		)

Financing activities:
Repayment of debt obligations and financing liabilities	(733,815		)	(827,460		)	(4,740		)	(158,568		)
Repayment of borrowings under unsecured revolving credit facility	(1,118,475		)	(675,047		)	—			(682,475		)
Proceeds from borrowings under unsecured revolving credit facility	619,000			826,343			40,000			163,000
Proceeds from unsecured term loan and notes	1,188,146			600,000			—			695,156
Deferred financing costs	(3,153		)	(2,995		)	—			(1,899		)
Partner distributions	(206,266		)	(177,531		)	(75,930		)	(68,722		)
Distributions to non-controlling interests	(19,870		)	(966		)	—			(19,870		)
Net cash used in financing activities	(274,433		)	(257,656		)	(40,670		)	(73,378		)

Change in cash and cash equivalents	(22,503		)	(20,401		)	36,280			7,697
Cash and cash equivalents at beginning of period	60,450			113,006			69,506			60,450
Cash and cash equivalents at end of period	$	37,947		$	92,605		$	105,786		$	68,147

Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized of $2,131 and $2,776	$	191,125		$	216,720
Supplemental non-cash investing and/or financing activities:
Net carrying value of properties distributed to non-controlling owners	$	—		$	178,969
Cash paid for interest, net of amount capitalized of $587 and $656							$	68,088		$	61,355
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~- 14 -~~

BRIXMOR PROPERTY GROUP INC. AND BRIXMOR OPERATING PARTNERSHIP LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, in thousands, unless otherwise stated)

1. Nature of Business and Financial Statement Presentation

Description of Business

Brixmor Property Group Inc. and subsidiaries (collectively, the “Parent Company”) is an internally-managed REIT. Brixmor Operating Partnership LP and subsidiaries (collectively, the “Operating Partnership”) is the entity through which the Parent Company conducts substantially all of its operations and owns substantially all of its assets. The Parent Company owns 100% of the common stock of BPG Subsidiary Inc. (“BPG Sub”), which, in turn, is the sole member of Brixmor OP GP LLC (the “General Partner”), the sole general partner of the Operating Partnership. The Parent Company engages in the ownership, management, leasing, acquisition and development of retail shopping centers through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. The Parent Company, the Operating Partnership and their controlled subsidiaries on a consolidated basis (collectively the “Company” or “Brixmor”) owns and operates the largest wholly-owned portfolio of grocery-anchored community and neighborhood shopping centers in the United States.

As of September 30, 2015, the Parent Company beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, 98.1% of the outstanding partnership common units of interest in the Operating Partnership (“OP Units”). Certain investments funds affiliated with The Blackstone Group L.P. (together with such affiliated funds, “Blackstone”) and certain members of the Parent Company’s current and former management collectively owned the remaining 1.9% of the outstanding OP Units. Holders of OP Units (other than the Parent Company, BPG Sub and the General Partner) may redeem their OP Units for cash based upon the market value of an equivalent number of shares of the Parent Company’s common stock or, at the Parent Company’s election, exchange their OP Units for shares of the Parent Company’s common stock on a one-for-one basis subject to customary conversion rate adjustments for splits, unit distributions and reclassifications. The number of OP Units in the Operating Partnership beneficially owned by the Parent Company is equivalent to the number of outstanding shares of the Parent Company’s common stock, and the entitlement of all OP Units to quarterly distributions and payments in liquidation is substantially the same as those of the Parent Company’s common stockholders.

The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single reportable segment for disclosure purposes in accordance with U.S. generally accepted accounting principles (“GAAP”).

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the unaudited Condensed Consolidated Financial Statements for the periods presented have been included. The operating results for the periods presented are not necessarily indicative of the results that may be expected for a full fiscal year. These financial statements should be read in conjunction with the financial statements for the year ended December 31, ~~2014~~2015 and accompanying notes included in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February ~~19, 2015.~~

Certain prior period balances in the accompanying unaudited Condensed Consolidated Statements of Operations have been reclassified to conform to the current period presentation for the results of discontinued operations and certain prior period balances in the accompanying unaudited Condensed Consolidated Balance Sheets have been reclassified to conform to the current period presentation for the adoption of Accounting Standards Update (“ASU”) 2015-03,“Interest - Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs.”29, 2016.

Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Parent Company, the Operating Partnership, each of their wholly owned subsidiaries and all other entities in which they have a controlling financial interest. The portions of consolidated entities not owned by the ~~Parent~~ Company ~~and the Operating~~

~~- 15 -~~

~~Partnership~~ are presented as non-controlling interests as of and during the periods presented. All intercompany transactions have been eliminated.

Subsequent Events

In preparing the unaudited Condensed Consolidated Financial Statements, the Company has evaluated events and transactions occurring after ~~September 30, 2015~~March 31, 2016 for recognition or disclosure purposes. Based on this evaluation, there were no subsequent events from ~~September 30, 2015~~March 31, 2016 through the date the financial statements were ~~issued.~~issued, except as follows. On April 12, 2016, the Company’s Board of Directors appointed James M. Taylor to serve as the Company’s new Chief Executive Officer and President, effective May 20, 2016. Mr. Taylor will succeed Daniel B. Hurwitz, who has served as the Company’s interim Chief Executive Officer and President since February 2016. Mr. Hurwitz will continue to serve as a member of the Company's Board of Directors. On April 25, 2016, the Company's Board of Directors appointed Angela Aman to serve as the Company's new Chief Financial Officer, effective May 20, 2016. Ms. Aman will succeed Barry Lefkowitz, who has served as the Company's interim Chief Financial Officer since February 2016.

Income Taxes

The Parent Company has elected to qualify as a REIT in accordance with the Internal Revenue Code ~~(the~~of 1986, as amended(the “Code”). To qualify as a REIT, the Parent Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its adjusted REIT taxable income to its stockholders. It is management’s intention to adhere to these requirements and maintain the Parent Company’s REIT status.

As a REIT, the Parent Company generally will not be subject to federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to federal taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. The Operating Partnership is organized as a limited partnership and is generally not subject to federal or state income taxes.

~~The~~BPG Sub also has elected to qualify as a REIT under the Code and is subject to the same tax requirements and tax treatment as the Parent Company. BPG Sub has a taxable REIT subsidiary, and the Parent Company ~~does not have any taxable REIT subsidiaries, but~~and BPG Sub may in the future elect to treat newly formed subsidiaries as taxable REIT subsidiaries which would be subject to income tax. Taxable REIT subsidiaries may participate in non-real estate-related activities and/or perform non-customary services for tenants and are subject to United States federal and state income tax at regular corporate tax rates.

The Operating Partnership is organized as a limited partnership and is generally not subject to federal income tax. Accordingly, no provision for federal income taxes has been reflected in the accompanying unaudited Condensed Consolidated Financial Statements. The Operating Partnership, however, may be subject to certain state and local income taxes or franchise taxes. During the three and nine months ended September 30, 2015, the Company recognized $3.9 million of income related to certain federal and state tax contingencies. These amounts are included in Other on the Company's unaudited Condensed Consolidated Statements of Operations.

~~The~~ Company has analyzed the tax position taken on income tax returns for the open ~~2012~~2013 through ~~2014~~2015 tax years and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s unaudited Condensed Consolidated Financial Statements as of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014.~~2015.

New Accounting Pronouncements

In ~~April~~February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the unaudited Condensed Consolidated Financial Statements of the Company.

In February 2015, the ~~Financial Accounting Standards Board ("FASB")~~FASB issued ASU ~~2015-03, “Interest - Imputation of Interest (Topic 835): Simplifying~~2015-02 “Amendments to the ~~Presentation of Debt Issuance Costs.~~Consolidation Analysis to ASC Topic 810 Consolidation.” ASU ~~2015-03 requires that debt issuance costs related~~2015-02 updates to include all reporting entities within the scope of Subtopic 810-10 Consolidation - Overall, including limited partnerships and similar legal entities, unless a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected byscope exception applies. Overall the amendments in this ~~update.~~update are to simplify the codification and reduce the number of consolidation models and place more emphasis on risk of loss when determining controlling financial interests. ASU ~~2015-03~~2015-02 is effective for public businesses for interim and annual ~~reporting~~ periods beginning after December 15, 2015. ~~Early adoption~~This ASU is ~~permitted.~~effective for the Company beginning in the first quarter of the year ended December 31, 2016. The Company ~~elected to early adopt ASU 2015-03 beginning with~~has evaluated the ~~period ending June 30, 2015 (see Note 6). The~~impact of the adoption of ASU ~~2015-03~~2015-02 on its unaudited Condensed Consolidated Financial Statements and have determined under ASU 2015-02 the Operating Partnership is considered a variable interest entity (“VIE”). The Parent Company is the primary beneficiary of the VIE and the Parent Company’s partnership interest is considered a majority voting interest. As such, this standard did not have a material impact on the ~~Company’s financial position or results~~unaudited Condensed Consolidated Financial Statements of ~~operations.~~the Company.

In May 2014, the FASB issued ASU ~~No.~~ 2014-09, “Revenue from Contracts with Customers.” ASU No. 2014-09 contains a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance in ASU No. 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public entities, ASU No. 2014-09, as amended by ASU No. 2015-14, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is ~~not permitted.~~permitted for reporting periods beginning after December 15, 2016. The Company is currently in the process of evaluating the impact the adoption of ASU No. 2014-09 will have on the unaudited Condensed Consolidated Financial Statements of the Company.

~~- 16 -~~

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they either are not relevant to the Company, or they are not expected to have a material effect on the unaudited Condensed Consolidated Financial Statements of the Company.

2. ~~Acquisition of Real Estate~~

~~During the nine months ended September 30, 2015, the Company acquired the following properties, in separate transactions (dollars in thousands):~~

Purchase Price
Property Name Location Month Acquired Cash Debt Assumed Total GLA
Retail Building at Bardin Place Center Arlington, TX Jun-15 $ 9,258
$ —
$ 9,258
96,127
Larchmont Centre Mt. Laurel, NJ Jun-15 11,000
7,000
18,000
103,787
Webster Square Shopping Center Marshfield, MA Jun-15 31,950
—
31,950
182,756
$ 52,208
$ 7,000
$ 59,208
382,670

The purchase price for these acquisitions has been allocated to real estate and related intangible assets acquired and liabilities assumed, as applicable, in accordance with our accounting policies for business combinations. The aggregate purchase price of the properties acquired during the nine months ended September 30, 2015, has been allocated as follows:

Assets
Land $ 13,004
Buildings 35,606
Building Improvements 4,671
Tenant Improvements 2,335
Above Market Rents 95
In-Place Leases 4,101
Real estate, net 59,812
Deferred charges and prepaid expenses, net 1,792
Total assets $ 61,604

Liabilities
Mortgage payable $ 7,000
Mortgage Fair Value Adjustment 440
Debt obligations, net 7,440
Accounts payable, accrued expenses and other liabilities (Below Market Leases) 1,956
Total liabilities 9,396
Net Assets Acquired $ 52,208

In addition the Company acquired the following land parcels adjacent to existing Company owned shopping centers in connection with its repositioning activities at those centers: (i) during the three months ended September 30, 2015, two land parcels for an aggregate purchase price of $6.5 million; (ii) during the nine months ended September 30, 2015, four land parcels for an aggregate purchase price of $8.6 million; and (iii) during the nine months ended September 30, 2014, three land parcels for an aggregate purchase price of $12.3 million.

~~The real estate operations acquired were not considered material to the Company, individually or in the aggregate, and therefore pro forma financial information is not necessary.~~

During the nine months ended September 30, 2015 the Company incurred acquisition related expenses of $1.6 million. These amounts are included in Other on the unaudited Condensed Consolidated Statements of Operations.

~~- 17 -~~

3. Disposals, Discontinued Operations and Assets Held for Sale

During the ~~nine~~three months ended ~~September 30,~~March 31, 2016, the Company did not dispose of any shopping centers. The Company had no properties held for sale as of March 31, 2016 or December 31, 2015.

During the three months ended March 31, 2015, the Company disposed of ~~four~~one shopping ~~centers and two outparcels~~center for ~~net~~ proceeds of ~~$41.8~~$9.9 million resulting in ~~an aggregate gain of $9.2~~a $0.8 million ~~and an aggregate impairment of $0.8 million.~~impairment. The impairment charge was based upon the sales price in the signed contract with the third party buyer, adjusted to reflect associated disposition costs. These inputs are classified as Level 3 of the fair value hierarchy.

The ~~Company had no properties held for sale as~~results of ~~September 30, 2015.~~operations from the disposed shopping center are included in income from continuing operations.

As a result of adopting ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” there were no discontinued operations for the three and nine months ended September 30, 2015 as none of the current year disposals represented a strategic shift in the Company’s business that would qualify as discontinued operations. The following table provides a summary of revenues and expenses from properties included in discontinued operations during the three and nine months ended September 30, 2014:

Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014
Discontinued operations:
Revenues $ 123
$ 637
Operating expenses (82 ) (1,571 )
Other income (expense), net —
5,815
Income from discontinued operating properties 41
4,881
Gain on disposition of operating properties —
14,426
Income from discontinued operations $ 41
$ 19,307

Discontinued operations includes the results of 34 shopping centers disposed of during the year ended December 31, 2014, including 33 shopping centers distributed to Blackstone in connection with the Company's initial public offering ("IPO").

4.3. Real Estate

The Company’s components of Real estate, net consisted of the following:


	September 30, 2015			December 31, 2014			March 31, 2016			December 31, 2015
Land	$	2,015,176		$	2,000,415		$	2,012,905		$	2,011,947
Buildings and improvements:
Building	7,355,922			7,332,073			7,359,342			7,359,342
Building and tenant improvements	652,530			552,351			708,327			683,983
Other rental property ⁽¹⁾	886,729			917,410
Lease intangibles ⁽¹⁾							866,637			877,578
	10,910,357			10,802,249			10,947,211			10,932,850
Accumulated depreciation and amortization ⁽¹⁾	(1,798,676		)	(1,549,234		)	(1,957,169		)	(1,880,685		)
Total	$	9,111,681		$	9,253,015		$	8,990,042		$	9,052,165

⁽¹⁾

At ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014, Other rental property~~2015, Lease intangibles consisted of ~~intangible assets including:~~the following: (i) ~~$805.7~~$786.9 million and ~~$833.3~~$796.8 million, respectively, of in-place lease value, (ii) ~~$81.1~~$79.7 million and ~~$84.1~~$80.8 million, respectively, of above-market leases, and (iii) ~~$592.7~~$615.9 million and ~~$550.4~~$606.5 million, respectively, of accumulated amortization. These intangible assets are amortized over the term of each related lease.

In addition, at ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, the Company had intangible liabilities relating to below-market leases of ~~$515.2~~$500.7 million and ~~$528.7~~$505.8 million, respectively, and accumulated amortization of ~~$230.9~~$245.3 million and ~~$202.7~~$237.2 million, respectively. These intangible liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the Company’s unaudited Condensed Consolidated Balance Sheets, are accreted over the term of each related lease, including any renewal periods, ~~with fixed rentals~~ that ~~are~~is considered to be below market.

~~Amortization expense associated with the~~Net above ~~mentioned~~and below market lease intangible ~~assets and liabilities recognized~~accretion income for the three months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~ was ~~$10.8~~$11.0 million and ~~$18.1~~$13.5 million, respectively. Amortization expense associated with ~~the above mentioned intangible assets~~tenant relationships and ~~liabilities recognized~~leases in place for the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~ was ~~$33.5~~$18.1 million and ~~$58.4~~$25.1 million, respectively. The estimated net accretion income and amortization expense associated

~~- 18 -~~

with the Company’s ~~intangible assets~~above and ~~liabilities~~below market leases, tenant relationships and leases in place for the next five years isare as follows:


Year Ended December 31,	Estimated net amortization expense
2015 (remaining three months)	$	9,400
2016	22,995
Year ending December 31,			Above- and below-market lease accretion, net			Tenant relationships and leases in place amortization
2016 (remaining nine months)			$	(25,207	)	$	41,111
2017	11,161		(29,557		)	41,560
2018	5,029		(26,609		)	32,252
2019	2,908		(22,303		)	25,428
2020			(17,749		)	19,160

On a continuous basis, management assesses whether there are any indicators, including property operating performance and general market conditions, that the value of the Company’s assets (including any related amortizable intangible assets or liabilities) may be impaired. To the extent impairment has occurred, the carrying value of the asset would be adjusted to an amount to reflect the estimated fair value of the asset.

During the three months ended March 31, 2016, the Company acquired two land parcels and one outparcel in or adjacent to existing shopping centers in connection with its repositioning activities at those centers for an aggregate purchase price of $1.2 million. These amounts are included in Improvements to and investments in real estate assets on the Company's unaudited Condensed Consolidated Statement of Cash Flows.

5.4. Financial Instruments - Derivatives and Hedging

The Company’s use of derivative instruments is limited to the utilization of interest rate agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. In certain situations, the Company may enter into derivative financial instruments such as interest rate swap and interest rate cap agreements to manage interest rate risk exposure arising from variable rate debt transactions that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements.

Cash Flow Hedges of Interest Rate Risk

The Company uses interest rate swaps to manage its exposure to changes in benchmark interest rates. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without changing the underlying notional amount. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ the Company did not enter into any new interest rate swap agreements.

A detail of the Company’s interest rate derivatives designated as cash flow hedges outstanding as of ~~September 30, 2015~~March 31, 2016 is as follows:



	Number of Instruments	Notional Amount
Interest Rate Swaps	5	$	1,500,000

The Company has elected to present its interest rate derivatives on its unaudited Condensed Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. A detail of the Company’s fair value of interest rate derivatives on a gross and net basis as of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, respectively, is as follows:


	Fair Value of Derivative Instruments						Fair Value of Derivative Instruments
Interest rate swaps classified as:	September 30, 2015			December 31, 2014			March 31, 2016			December 31, 2015
Gross derivative assets	$	—		$	—		$	—		$	—
Gross derivative liabilities	(6,255		)	(4,423		)	(2,480		)	(2,437		)
Net derivative liability	$	(6,255	)	$	(4,423	)	$	(2,480	)	$	(2,437	)

The gross derivative liabilities are included in accounts payable, accrued expenses and other liabilities on the unaudited Condensed Consolidated Balance Sheets. All of the Company’s outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The fair value of the Company's interest rate derivatives is determined using market standard valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. These inputs are classified as Level 2 of the fair value hierarchy. The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in other comprehensive income (“OCI”)

~~- 19 -~~

and is reclassified into earnings as interest expense in the period that the hedged forecasted transaction affects earnings.

The effective portion of the Company's interest rate swaps that was recorded in the accompanying unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2016 and 2015 is as follows:



Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps and Caps)	Three Months Ended March 31,
	2016			2015
Unrealized loss on interest rate hedges	$	(1,529	)	$	(4,901	)
Amortization of interest rate swaps to interest expense	$	1,486		$	2,464

The Company estimates that approximately ~~$6.3~~$2.5 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense ~~over~~through the ~~next twelve months.~~expiration of the Company's interest rate swaps on October 1, 2016. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges during the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2014.~~2015.

Non-Designated (Mark-to Market) Hedges of Interest Rate Risk

The Company does not use derivatives for trading or speculative purposes. As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, the Company did not have any material non-designated hedges.

Credit-risk-related Contingent Features

The Company has agreements with its derivative counterparties that contain a provision whereby if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Company were to breach any of the contractual provisions of the derivative contracts, it would be required to settle its obligations under the agreements at their termination value including accrued interest, or approximately ~~$7.0~~$2.9 million.

6.5. Debt Obligations

As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, the Company had the following indebtedness outstanding:


	Carrying Value as of								Carrying Value as of
	September 30, 2015			December 31, 2014			Stated Interest Rates	Scheduled Maturity Date	March 31, 2016			December 31, 2015			Stated Interest Rates	Scheduled Maturity Date
Mortgage and secured loans⁽¹⁾
Fixed rate mortgage and secured loans⁽²⁾	$	2,615,067		$	3,116,882		4.40% - 8.00%	2016 – 2024	$	2,222,023		$	2,226,763		4.40% - 8.00%	2016 – 2024
Net unamortized premium	45,745			66,340					36,284			40,508
Net unamortized debt issuance cost⁽⁵⁾	(2,435		)	(4,381		)
Net unamortized debt issuance cost									(1,380		)	(1,752		)
Total mortgage and secured loans, net	$	2,658,377		$	3,178,841				$	2,256,927		$	2,265,519

Notes payables
Unsecured notes⁽³⁾	$	1,218,453		$	243,453		3.85% - 7.97%	2022 - 2029	$	1,218,453		$	1,218,453		3.85% - 7.97%	2022 - 2029
Net unamortized discount	(4,834		)	(3,153		)			(4,517		)	(4,676		)
Net unamortized debt issuance cost⁽⁵⁾	(10,302		)	—
Net unamortized debt issuance cost									(9,609		)	(9,923		)
Total notes payable, net	$	1,203,317		$	240,300				$	1,204,327		$	1,203,854

Unsecured Credit Facility and Term Loan
Unsecured Credit Facility⁽⁴⁾	$	1,520,000		$	2,019,475		1.65%	2017 – 2018	$	1,956,000		$	1,916,000		1.90%	2017 – 2018
Unsecured Term Loan	600,000			600,000			1.65%	2019	600,000			600,000			1.90%	2019
Net unamortized debt issuance cost⁽⁵⁾	(12,358		)	(16,108		)
Net unamortized debt issuance cost									(9,857		)	(11,107		)
Total Unsecured Credit Facility and Term Loan	$	2,107,642		$	2,603,367				$	2,546,143		$	2,504,893

Total debt obligations, net	$	5,969,336		$	6,022,508				$	6,007,397		$	5,974,266


⁽¹⁾	The Company’s mortgages and secured loans are collateralized by certain properties and the equity interests of certain subsidiaries. These properties had a carrying value as of ~~September 30, 2015~~March 31, 2016 of approximately ~~$3.9~~$3.3 billion.


⁽²⁾	The weighted average interest rate on the Company’s fixed rate mortgage and secured loans was ~~5.93%~~5.86% as of ~~September 30, 2015.~~March 31, 2016.


⁽³⁾	The weighted average interest rate on the Company’s unsecured notes was 3.91% as of ~~September 30, 2015.~~March 31, 2016.

⁽⁴⁾

The Unsecured Credit Facility (as defined below) consists of a $1.25 billion revolving credit facility and a $1.5 billion term loan facility. The Company has in place five forward starting interest rate swap agreements that convert the floating interest rate on the $1.5 billion term loan facility to a fixed, combined interest rate of 0.844% plus an interest spread of 140 basis points. ~~In February 2015, the Unsecured Credit Facility was amended to terminate the guarantees and release and discharge the Parent Guarantors from their respective obligations under the guarantees.~~

⁽⁵⁾

In April 2015, the FASB issued ASU 2015-03, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Beginning with the period ending June 30, 2015, the Company elected to early adopt ASU 2015-03 and appropriately and retrospectively applied the guidance to its debt obligations for all periods presented. These amounts were previously included in Deferred charges and prepaid expenses, net on the Company’s Condensed Consolidated Balance Sheets.

~~- 20 -~~

~~2015 Debt Transactions~~

In January 2015, the Operating Partnership issued $700.0 million aggregate principal amount of 3.850% Senior Notes due 2025 (the “2025 Notes”), the proceeds of which were used to repay outstanding borrowings under its $1.25 billion unsecured revolving credit facility that had been used to repay indebtedness and financial liabilities over the course of 2014. The 2025 Notes bear interest at a rate of 3.850% per annum, payable semi-annually on February 1 and August 1 of each year. The 2025 Notes will mature on February 1, 2025. The 2025 Notes are the Operating Partnership’s unsecured and unsubordinated obligations and rank equally in right of payment with all of the Operating Partnership’s existing and future senior unsecured and unsubordinated indebtedness. The Operating Partnership may redeem the 2025 Notes at any time in whole or from time to time in part at the applicable make-whole redemption price specified in the Indenture with respect to the 2025 Notes. If the 2025 Notes are redeemed on or after November 1, 2024 (three months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2025 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

In August 2015, the Operating Partnership issued $500.0 million aggregate principal amount of 3.875% Senior Notes due 2022 (the “2022 Notes”), the proceeds of which were utilized to repay outstanding indebtedness, including borrowings under the Company's $1.25 billion unsecured revolving credit facility and $125 million aggregate principal amount of senior unsecured notes held at an indirect subsidiary of the Company, Brixmor LLC. The 2022 Notes bear interest at a rate of 3.875% per annum, payable semi-annually on February 15 and August 15 of each year, commencing February 15, 2016. The 2022 Notes will mature on August 15, 2022. The 2022 Notes are the Operating Partnership’s unsecured and unsubordinated obligations and rank equally in right of payment with all of the Operating Partnership’s existing and future senior unsecured and unsubordinated indebtedness. The Operating Partnership may redeem the 2022 Notes at any time in whole or from time to time in part at the applicable make-whole redemption price specified in the Indenture with respect to the 2022 Notes. If the 2022 Notes are redeemed on or after June 15, 2022 (two months prior to the maturity date), the redemption price will be equal to 100% of the principal amount of the 2022 Notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

In addition, during the nine months ended September 30, 2015, the Company repaid $487.7 million of mortgages and secured loans and $225.0 million of unsecured notes, resulting in a $0.9 million net gain on extinguishment of debt. These repayments were funded primarily from borrowings under the Company’s Unsecured Credit Facility.

Pursuant to the terms of an unsecured $600.0 million term loan (the “Term Loan”), a $2.75 billion senior unsecured credit facility (the “Unsecured Credit Facility”), and the 2022 Notes and the 2025 Notes, the Company among other things is subject to maintenance of various financial covenants. The Company is currently in compliance with these covenants.

Debt Maturities

As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, the Company had accrued interest of ~~$23.3~~$22.5 million and ~~$20.4~~$31.1 million outstanding, respectively. As of ~~September 30, 2015,~~March 31, 2016, scheduled maturities of the Company’s outstanding debt obligations were as follows:


Year ending December 31,
2015 (remaining three months)	$	8,142
2016	1,257,862
2016 (remaining nine months)				$	872,960
2017	369,659			805,659
2018	1,519,476			1,519,476
2019	620,126			620,126
2020				766,577
Thereafter	2,178,255			1,411,678
Total debt maturities	5,953,520			5,996,476
Net unamortized premiums on mortgages	45,745			36,284
Net unamortized discount on notes	(4,834		)	(4,517		)
Net unamortized debt issuance costs	(25,095		)	(20,846		)
Total debt obligations	$	5,969,336		$	6,007,397

~~- 21 -~~

7.6. Fair Value Disclosures

All financial instruments of the Company are reflected in the accompanying unaudited Condensed Consolidated Balance Sheets at amounts which, in management’s judgment, reasonably approximate their fair values, except those instruments listed below:

September 30, 2015 December 31, 2014

Carrying
Amounts

Fair
Value

Carrying
Amounts

Fair
Value

Mortgage and secured loans payable $ 2,658,377
$ 2,793,090
$ 3,178,841
$ 3,337,250
Notes payable 1,203,317
1,209,590
240,300
252,441
Unsecured credit facility and term loan 2,107,642
2,120,000
2,603,367
2,619,475
Total debt obligations $ 5,969,336
$ 6,122,680
$ 6,022,508
$ 6,209,166



	March 31, 2016				December 31, 2015
	Carrying Amounts		Fair Value		Carrying Amounts		Fair Value
	Carrying Amounts		Fair Value		Carrying Amounts		Fair Value
Mortgage and secured loans payable	$	2,256,927	$	2,363,560	$	2,265,519	$	2,367,070
Notes payable	1,204,327		1,160,258		1,203,854		1,198,504
Unsecured credit facility and term loan	2,546,143		2,556,000		2,504,893		2,516,000
Total debt obligations	$	6,007,397	$	6,079,818	$	5,974,266	$	6,081,574

As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is included in GAAP 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 that are classified within Level 3 of the hierarchy).

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The valuation methodology used to estimate the fair value of the Company’s debt obligations is based on discounted cash flows, with assumptions that include credit spreads, loan amounts and debt maturities. The Company determined that the valuations of its debt obligations are classified within Level 3 of the fair value hierarchy. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

The Company’s marketable securities and interest rate derivatives are measured at fair value on a recurring basis. ~~At September 30, 2015 and December 31, 2014, the~~The fair ~~values~~value of ~~the~~ marketable securities are based primarily on ~~published values, securities dealers’ estimated~~publicly traded market values ~~or comparable market sales~~in active markets and ~~fall within Level 2 of~~are classified accordingly on the fair value hierarchy. See Note 54 for fair value information onregarding the Company's interest rate derivatives.

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:



	Fair Value Measurements as of March 31, 2016
	Balance			Quoted Prices in Active markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities⁽¹⁾	$	23,166		$	1,236	$	21,930		$	—

Liabilities:
Interest rate derivatives	$	(2,480	)	$	—	$	(2,480	)	$	—

	Fair Value Measurements as of December 31, 2015
	Balance			Quoted Prices in Active markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities⁽¹⁾	$	23,001		$	1,167	$	21,834		$	—

Liabilities:
Interest rate derivatives	$	(2,437	)	$	—	$	(2,437	)	$	—


⁽¹⁾	As of March 31, 2016 and December 31, 2015 marketable securities included less than $0.1 million of net unrealized losses.

The Company’s impairment charges are measured at fair value on a non-recurring basis. See Note 3 for fair value information on the impairment charges.

8.7. Equity and Capital

~~During the nine months ended September 30,~~ATM

In 2015, the Parent Company entered into an at-the-market equity offering program ~~("ATM"~~(“ATM”) through which the Parent Company may sell from time to time up to an aggregate of $400.0 million of its common stock through sales agents over a three-year period. There were no shares issued under the ATM for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and the year ended December 31, 2015. As of ~~September 30, 2015,~~March 31, 2016 $400.0 million of common stock remained available for issuance under the ATM.

Common Stock

During the three months ended ~~September 30,~~March 31, 2016 and 2015, the Company repurchased 47,444 shares and ~~2014,~~12,754 shares respectively, in connection with common shares surrendered to the Company to satisfy statutory minimum tax withholding obligations on the vesting of restricted stock units (“RSUs”) under the Company’s equity-based compensation plans.

Dividends and Distributions

During the three months ended March 31, 2016 and 2015, the Company declared common stock dividends and OP unit distributions of $0.245 per share/unit and $0.225 per ~~share and $0.20 per share, respectively. During the nine months ended September 30, 2015 and 2014, the Company declared common stock dividends and OP~~ share/unit, ~~distributions of $0.675 per share and $0.60 per share,~~ respectively. As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014,~~2015, the Company had declared but unpaid common stock dividends and OP unit distributions of ~~$69.7~~$75.3 million and ~~$68.8~~$76.0 million, respectively. These amounts are included in accounts payable, accrued expenses and other liabilities on the Company's unaudited Condensed Consolidated Balance Sheets.

Non-controlling interests

The non-controlling interests presented in these unaudited Condensed Consolidated Financial Statements relate to portions of consolidated subsidiaries held by the non-controlling interest holders.

As of March 31, 2016, the Parent Company beneficially owned, through its direct and indirect interest in BPG Sub and the General Partner, 98.2% of the outstanding partnership common units of interest in the Operating Partnership (“OP Units”). Certain investments funds affiliated with The Blackstone Group L.P. (together with such affiliated funds, “Blackstone”) and certain members of the Parent Company’s current and former management collectively owned ~~1.91% and 2.54%~~the

remaining 1.8% of the ~~Operating Partnership’s~~ outstanding ~~vested partnership~~

~~- 22 -~~

~~common units as~~OP Units. Holders of ~~September 30, 2015 and December 31, 2014, respectively. During the nine months ended September 30, 2015, 1.9 million~~ OP Units ~~were converted to~~(other than the Parent Company, BPG Sub and the General Partner) may redeem their OP Units for cash based upon the market value of an ~~equal~~equivalent number of shares of the Parent Company’s common ~~shares.~~stock or, at the Parent Company’s election, exchange their OP Units for shares of the Parent Company’s common stock on a one-for-one basis subject to customary conversion rate adjustments for splits, unit distributions and reclassifications. The number of OP Units in the Operating Partnership beneficially owned by the Parent Company is equivalent to the number of outstanding shares of the Parent Company’s common stock, and the entitlement of all OP Units to quarterly distributions and payments in liquidation is substantially the same as those of the Parent Company’s common stockholders.

9.8. Stock Based Compensation

In 2011 and 2013 prior to the IPO, certain employees of the Company were granted long-term incentive awards which provided them with equity interests as an incentive to remain in the Company’s service and align executives’ interests with those ofthe Company’s equity holders. The awards were granted to such employees by the Partnerships, in the form of Class B Units in each of the Partnerships. The awards were granted with service and performance ~~and market~~ conditions. A portion of the Class B Units were subject to performance conditions which vested on the date that certain funds affiliated with certain of the Company’s pre-IPO owners received cash proceeds resulting in a 15% internal rate of return on their investment in the Company. In connection with the IPO, certain of these awards vested and the vested awards were exchanged for a combination of vested common shares of the Company and vested shares of BPG Sub. The remaining unvested Class B Units as of the IPO effective date were exchanged for a combination of unvested restricted common shares of the Company and unvested restricted common shares of BPG Sub, (collectively, the “RSAs”). The RSAs ~~are~~were subject to the same vesting terms as those applicable to the exchanged Class B Units. During the nine months ended September 30, 2015, the achievement of the performance condition became probable and the Company recognized $9.9 million of equity based compensation expense as a component of General and administrative expense in the Consolidated Statements of Operations.

~~In connection with~~During the ~~IPO,~~year ended December 31, 2013, the Board of Directors approved the 2013 Omnibus Incentive Plan (the “Plan”). The Plan provides for a maximum of 15.0 million shares of the Company’s common stock to be issued for qualified and non-qualified options, stock appreciation rights, restricted stock and restricted stock units, OP Units in the Operating Partnership, performance awards and other stock-based awards.

During the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 and year ended December 31, ~~2014,~~2015, the Company granted ~~restricted stock units (“RSUs”)~~RSUs in the Company to certain employees, or at the election of certain employees, long-term incentive plan units (“LTIP Units”) in the Operating Partnership. The RSUs and LTIP Units are divided into multiple tranches, with each tranche subject to separate performance-based vesting conditions, market-based vesting conditions and service-based vesting conditions. Each award contains a threshold, target, and maximum number of units in respect to each tranche. The number of units actually earned for each tranche is determined based on performance during a specified performance period, and the earned units are then further subject to time-based vesting conditions. The aggregate number of RSUs and LTIP Units granted, assuming that the target level of performance is achieved, was ~~0.6~~0.4 million and ~~0.6~~0.7 million for the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 and year ended December 31, ~~2014,~~2015, respectively, with service periods ranging from one to five years.

~~The~~During the three months ended March 31, 2016, the Company reversed $2.6 million of previously recognized equity compensation expense as a result of forfeitures in connection with the resignation of several Company executives. During the three months ended March 31, 2015, as a result of certain of the Company’s pre-IPO owners receiving a 15% internal rate of return on their investment becoming probable, the Company recognized ~~$3.8 million and $1.9~~$9.9 million of equity based compensation expense as a component of General and administrative expense in the Company's unaudited Condensed Consolidated Statements of Operations. The Company recognized ($1.6) million and $12.9 million of equity based compensation (benefit)/expense for the three months ended ~~September 30,~~March 31, 2016 and 2015, ~~and 2014, respectively. The Company recognized $19.3 million and $7.0 million of equity based compensation expense for the nine months ended September 30, 2015 and 2014,~~ respectively. As of ~~September 30, 2015,~~March 31, 2016, the Company had ~~$14.6~~$14.7 million of total unrecognized compensation cost related to unvested stock compensation expected to be recognized over a weighted average period of approximately 2.3 years.

~~10.~~

9. Earnings per Share

Basic earnings per share (“EPS”) is calculated by dividing net income attributable to the Company’s common stockholders, including participating securities, by the weighted average number of shares outstanding for the period. Certain restricted shares issued pursuant to the Company’s share-based compensation program are considered participating securities, as such shares have rights to receive non-forfeitable dividends. Unvested restricted shares are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the common stockholders. Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock.

~~- 23 -~~

The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2014:~~2015:


	Three Month Ended September 30,						Nine Month Ended September 30,						Three Months Ended March 31,
	2015			2014			2015			2014			2016			2015
Computation of Basic Earnings Per Share:
Income from continuing operations	$	54,819		$	33,823		$	141,122		$	87,595
Net income													$	61,549		$	31,136
Income attributable to non-controlling interests	(1,046		)	(6,826		)	(2,814		)	(21,778		)	(1,072		)	(713		)
Non-forfeitable dividends on unvested restricted shares	(6		)	(268		)	(17		)	(805		)	(15		)	(4		)
Income from continuing operations attributable to common stockholders	53,767			26,729			138,291			65,012
Income from discontinued operations, net of non-controlling interests	—			33			—			87
Net income attributable to the Company’s common stockholders for basic earnings per share	$	53,767		$	26,762		$	138,291		$	65,099		$	60,462		$	30,419

Weighted average number shares outstanding - basic	298,464			244,078			297,714			233,781			299,180			296,189

Basic Earnings Per Share Attributable to the Company’s Common Stockholders:
Income from continuing operations	$	0.18		$	0.11		$	0.46		$	0.28
Income from discontinued operations	—			—			—			—
Net income	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10

Computation of Diluted Earnings Per Share:
Income from continuing operations attributable to common stockholders	$	53,767		$	26,729		$	138,291		$	65,012
Allocation to convertible non-controlling interests	—			—			2,814			—
Income from continuing operations attributable to common stockholders for diluted earnings per share	53,767			26,729			141,105			65,012
Income from discontinued operations, net of nonconvertible non-controlling interests	—			33			—			87
Net income attributable to the Company’s common stockholders for diluted earnings per share	$	53,767		$	26,762		$	141,105		$	65,099		$	60,462		$	30,419

Weighted average shares outstanding - basic	298,464			244,078			297,714			233,781			299,180			296,189
Effect of dilutive securities:
Conversion of OP Units	—			—			6,185			—
Equity awards	472			757			807			1,139			199			1,526
Weighted average shares outstanding - diluted	298,936			244,835			304,706			234,920
Weighted average shares outstanding - diluted ⁽¹⁾													299,379			297,715

Diluted Earnings Per Share Attributable to the Company’s Common Stockholders:
Income from continuing operations	$	0.18		$	0.11		$	0.46		$	0.28
Income from discontinued operations	—			—			—			—
Net income	$	0.18		$	0.11		$	0.46		$	0.28		$	0.20		$	0.10


⁽¹⁾	For the three months ended March 31, 2016 and 2015, the weighted average number of vested OP Units outstanding was 5.3 million and 6.9 million, respectively and was not dilutive.

~~- 24 -~~

~~11.~~10. Earnings per Unit

Basic earnings per unit is calculated by dividing net income attributable to the Operating Partnership’s common units, including participating securities, by the weighted average number of partnership common units outstanding for the period. Certain restricted units issued pursuant to the Company’s share-based compensation program are considered participating securities. Unvested restricted units are not allocated net losses, as such amounts are allocated entirely to the partnership common units.

The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three ~~and nine~~ months ended ~~September 30, 2015~~March 31, 2016 and ~~2014:~~2015:

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Computation of Basic Earnings Per Unit:
Income from continuing operations $ 54,819
$ 33,823
$ 141,122
$ 87,595
Income attributable to non-controlling interests —
(322 ) —
(2,786 )
Non-forfeitable dividends on unvested restricted shares (6 ) (268 ) (17 ) (805 )
Income from continuing operations attributable to partnership common units 54,813
33,233
141,105
84,004
Income from discontinued operations, net of Series A interest —
41
—
113
Net income attributable to the Operating Partnership’s common units for basic earnings per unit $ 54,813
$ 33,274
$ 141,105
$ 84,117

Weighted average number of common units outstanding - basic 304,270
302,890
303,899
302,407

Basic Earnings Per Unit Attributable to the Operating Partnership’s Common Units:
Income from continuing operations $ 0.18
$ 0.11
$ 0.46
$ 0.28
Income from discontinued operations —
—
—
—
Net Income $ 0.18
$ 0.11
$ 0.46
$ 0.28

Computation of Diluted Earnings Per Unit:
Income from continuing operations attributable to partnership common units $ 54,813
$ 33,233
$ 141,105
$ 84,004
Income from discontinued operations, net of Series A interest —
41
—
113
Net income attributable to the Operating Partnership’s common units for diluted earnings per unit $ 54,813
$ 33,274
$ 141,105
$ 84,117

Weighted average common units outstanding - basic 304,270
302,890
303,899
302,407
Effect of dilutive securities:
Equity awards 472
757
807
1,139
Weighted average common units outstanding - diluted 304,742
303,647
304,706
303,546

Diluted Earnings Per Unit Attributable to the Operating Partnership’s Common Units:
Income from continuing operations $ 0.18
$ 0.11
$ 0.46
$ 0.28
Income from discontinued operations —
—
—
—
Net Income $ 0.18
$ 0.11
$ 0.46
$ 0.28



	Three Months Ended March 31,
	2016			2015
Computation of Basic Earnings Per Unit:
Net income	$	61,549		$	31,136
Non-forfeitable dividends on unvested restricted shares	(15		)	(4		)
Net income attributable to the Operating Partnership’s common units for basic earnings per unit	$	61,534		$	31,132

Weighted average number of common units outstanding - basic	304,483			303,131

Basic Earnings Per Unit Attributable to the Operating Partnership’s Common Units:
Net Income	$	0.20		$	0.10

Computation of Diluted Earnings Per Unit:
Net income attributable to the Operating Partnership’s common units for diluted earnings per unit	$	61,534		$	31,132

Weighted average common units outstanding - basic	304,483			303,131
Effect of dilutive securities:
Equity awards	199			1,526
Weighted average common units outstanding - diluted	304,682			304,657

Diluted Earnings Per Unit Attributable to the Operating Partnership’s Common Units:
Net Income	$	0.20		$	0.10

11. Commitments and Contingencies

Legal Matters

Except as described below, the Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, taking into account existing reserves, will have a material impact on the Company’s results of operations, cash flows, or financial position.

On February 8, 2016, the Company issued a press release and filed a Form 8-K reporting the completion of a review by the Audit Committee of the Company's Board of Directors that began after the Company received information in late December 2015 through its established compliance processes. The Audit Committee review led the Board of Directors to conclude that specific Company accounting and financial reporting personnel, in certain instances, were smoothing income items, both up and down, between reporting periods in an effort to achieve consistent quarterly same property net operating income growth.

~~- 25 -~~

~~12. Commitments~~As a result of the Audit Committee review and ~~Contingencies~~the conclusions reached by the Board of Directors, the Company’s Chief Executive Officer, its President and Chief Financial Officer, its Treasurer and Chief Accounting Officer, and an accounting employee all resigned. Following these resignations the Company appointed a new Interim Chief Executive Officer and President, Interim Chief Financial Officer and Interim Chief Accounting Officer.

Prior to the Company’s February 8, 2016 announcement, the Company voluntarily reported to the SEC the matters described above. The SEC has commenced an investigation with respect to these matters, and the Company is cooperating fully.

On March 31, 2016, the Company and the former officers referenced above were named as defendants in a putative securities class action complaint filed in the United States District Court for the Southern District of New York (the “Court”). The complaint, captioned Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefit Funds v. Brixmor Property Group Inc., et al. (Case No. 16-CV-02400 (AT), asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on the facts described in the Company’s February 8, 2016 press release and Form 8-K. Additional securities class action complaints alleging the same or similar facts may be filed in the near future, and the Company expects that all such cases will be consolidated with the existing action pursuant to the Private Securities Litigation Reform Act of 1995. The Company believes it has valid defenses in this action and intends to vigorously defend itself.

Leasing commitments

The Company periodically enters into ground leases for neighborhood and community shopping centers which it operates and enters into office leases for administrative space. During the three months ended ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ the Company recognized rent expense associated with these leases of ~~$2.4~~$1.9 million and ~~$2.3 million, respectively. During the nine months ended September 30, 2015 and 2014, the Company recognized rent expense associated with these leases of $7.4 million and $7.1~~$2.5 million, respectively. Minimum annual rental commitments associated with these leases during the next five years and thereafter are as follows:


Year ending December 31,
2015 (remaining three months)	$	1,470
2016	6,899
2016 (remaining nine months)			$	5,353
2017	6,788		6,625
2018	6,403		6,208
2019	6,258		6,056
2020			5,242
Thereafter	92,738		81,710
Total minimum annual rental commitments	$	120,556	$	111,194

Environmental matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property. The Company does not believe that any resulting liability from such matters will have a material adverse effect on the financial position, results of operations or liquidity of the Company.

~~Other legal matters~~

The Company is subject to various other legal proceedings and claims that arise in the ordinary course of business. Management believes that the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or liquidity of the Company.

~~13.~~12. Related-Party Transactions

In the ordinary course of conducting its business, the Company enters into ~~customary~~ agreements with its affiliates and an unconsolidated joint ~~ventures~~venture in relation to the leasing and management of its and/or its related parties’ real estate assets.

As of March 31, 2016 and December 31, ~~2014, receivables from related parties were $4.2 million, which are included in Receivables, net in the unaudited Condensed Consolidated Balance Sheets. As of September 30,~~ 2015, there were no material receivables from related parties. As of ~~September 30, 2015~~March 31, 2016 and December 31, ~~2014~~2015 there were no material payables to related parties.

~~- 26 -~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto. Historical results and percentage relationships set forth in the unaudited Condensed Consolidated Statements of Operations and contained in the unaudited Condensed Consolidated Financial Statements and accompanying notes, including trends which might appear, should not be taken as indicative of future operations.

Executive Summary

Our Company

We operate the largest wholly-owned portfolio of grocery-anchored community and neighborhood shopping centers in the United States. Our high quality national portfolio is diversified by geography, tenancy and retail format, and our shopping centers are primarily anchored by market-leading grocers. The Parent Company has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the United States federal income tax laws, commencing with our taxable year ended December 31, 2011, and has maintained such requirements for our taxable year ended December 31, ~~2014,~~2015, and expects to satisfy such requirements for subsequent taxable years.

Our primary objective is to maximize total returns to ~~the Parent Company’s~~BPG’s stockholders through a combination of growth and value-creation at the asset level supported by stable cash flows. We seek to achieve this through ownership of a large, high quality, diversified portfolio of primarily grocery-anchored community and neighborhood shopping centers and by creating meaningful NOI growth from this portfolio. We expect that the major drivers of this growth will be a combination of positive rent spreads from below-market in-place rents and ~~significant near-term~~above average lease rollover, occupancy increases, ~~across both our anchor and small shop space,~~ annual contractual rent increases across the portfolio and the ~~realization~~execution of embedded anchor space repositioning / redevelopment opportunities / outparcel development opportunities.

We expect the following set of core competencies to position us to execute on our growth strategies:

Anchor Space Repositioning / Redevelopment / Outparcel Development Expertise - We have been a top redeveloper over the past decade, according to Chain Store Age magazine, having completed anchor space repositioning / redevelopment / outparcel development projects totaling over $1 billion since January 1, 2003.

Expansive Retailer Relationships - We believe that given the scale of our asset base and our nationwide footprint, we have a competitive advantage in supporting the growth plans of the nation’s largest retailers. We believe that we are the largest landlord by gross leasable area (“GLA”) to Kroger and TJX Companies, as well as a key landlord to all major grocers and most major retail category leaders. We believe that our strong relationships with leading retailers affords us insight into their strategies and priority access to their expansion plans, enabling us to efficiently provide these retailers with space in multiple locations.

Fully-Integrated Operating Platform - We operate with a fully-integrated, comprehensive platform both leveraging our national presence and demonstrating our commitment to a regional and local presence. We provide our tenants with personalized service through our network of three regional offices in Atlanta, Chicago and Philadelphia, as well as via 12 leasing and property management satellite offices throughout the country. We believe that this strategy enables us to obtain critical market intelligence and to benefit from the regional and local expertise of our workforce.

Experienced Management - Senior members of our management team are experienced real estate operators with deep industry expertise and retailer ~~relationships and have an average of 24 years of experience in the real estate industry and an average tenure of 15 years with the Company.~~relationships.

Recent Developments

For a discussion of recent events related to a review conducted by our Audit Committee, related management changes, and the risks related thereto, see Item 1 “Business-Recent Developments,” Item 1A “Risk Factors-Risks Related to Recent Events, ” and Item 9A “Controls and Procedures” in our annual report on Form 10-K for the fiscal year ended December 31, 2015.

Other Factors That May Influence our Future Results

We derive our revenues primarily from rents (including percentage rents based on tenants’ sales levels) and expense reimbursements due to us from tenants under existing leases at each of our properties. Expense reimbursements consist of payments made by tenants to us under contractual lease obligations for their proportional share of the property’s operating expenses, insurance and real estate taxes and certain capital expenditures related to maintenance of the properties.

~~- 27 -~~

The amount of rental income and expense reimbursements we receive is primarily dependent on our ability to maintain or increase rental rates and on our ability to lease available space, including renewing expiring leases. Factors that could affect our rental income include: (1) changes in national, regional or local economic climates; (2) local conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our Portfolio; (3) the attractiveness of properties in our Portfolio to our tenants; (4) the financial stability of tenants, including the ability of tenants to pay rents and expense reimbursements; (5) in the case of percentage rents, our tenants’ sales volumes; (6) competition from other available properties; (7) changes in market rental rates; and (8) changes in the regional demographics of our properties.

Our operating costs include property-related costs, including repairs and maintenance, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security, ground rent expense related to ground lease payments for which we are the lessee and various other property related costs. Increases in our operating expenses, to the extent they are not offset by revenue increases, impact our overall performance. For a further discussion of these and other factors that could impact our future results, performance or transactions, see Item 1A. “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, ~~2014.~~2015.

Portfolio and Financial Highlights

As of ~~September 30, 2015,~~March 31, 2016, we owned interests in ~~519~~518 shopping centers (the “Portfolio”), including ~~518~~517 wholly owned shopping centers and one shopping center held through an unconsolidated joint venture.

Billed occupancy for the Portfolio was ~~90.9%~~90.4% and ~~90.8%~~90.3% as of ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ respectively. Leased occupancy for the Portfolio was ~~92.6%~~92.4% and ~~92.7%~~92.4% as of ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ respectively.

During the three months ended ~~September 30, 2015,~~March 31, 2016, we executed ~~474~~497 leases in our Portfolio totaling ~~3.3~~3.6 million square feet of GLA, including ~~126~~169 new leases totaling ~~0.6~~0.9 million square feet of GLA and ~~348~~328 renewals totaling 2.7 million square feet of GLA. The average annualized cash base rent (“ABR”) under the new leases increased ~~49.0%~~34.9% from the prior tenant’s ABR and increased ~~15.2%~~10.9% for both new and renewal leases on comparable space from the ABR under the prior leases. The average ABR per leased square foot of these new leases in our Portfolio is ~~$16.35~~$14.88 and the average ABR per leased square foot of these new and renewal leases in our Portfolio is ~~$12.88.~~$13.35. The average cost per square foot for tenant improvements and leasing commissions for new leases was ~~$24.71~~$21.46 and ~~$4.14,~~$2.58, respectively. The average cost per square foot for tenant improvements and leasing commissions for renewal leases was ~~$1.67~~$0.16 and ~~$0.02,~~$0.05, respectively.

During the nine months ended September 30, 2015, we executed 1,464 leases in our Portfolio totaling 9.5 million square feet of GLA, including 501 new leases totaling 2.3 million square feet of GLA and 963 renewals totaling 7.2 million square feet of GLA. The ABR under the new leases increased 46.2% from the prior tenant’s ABR and increased 15.0% for both new and renewal leases on comparable space from the ABR under the prior leases. The average ABR per leased square foot of these new leases in our Portfolio is $15.86 and the average ABR per leased square foot of these new and renewal leases in our Portfolio is $12.97. The cost per square foot for tenant improvements and leasing commissions for new leases was $19.78 and $3.32, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.96 and $0.02, respectively.

~~Acquisition Activity~~

During the nine months ended September 30, 2015, we acquired two shopping centers and a retail building in one of our existing shopping centers for $59.2 million including the assumption of $7.0 million of mortgage debt.

~~Disposition Activity~~

~~During the nine months ended September 30, 2015, we disposed of four shopping centers and two outparcels for net proceeds of $41.8 million.~~

~~- 28 -~~

Results of Operations

The results of operations discussion is combined for the Parent Company and the Operating Partnership because there are no material differences in the results of operations between the two reporting entities.

Comparison of the Three Months Ended ~~September 30, 2015~~March 31, 2016 to the Three Months Ended ~~September 30, 2014~~March 31, 2015

Revenues (in thousands)


	Three Months Ended September 30,							Three Months Ended March 31,
	2015		2014		$ Change			2016		2015		$ Change
Revenues
Rental income	$	245,829	$	240,820	$	5,009		$	251,146	$	243,570	$	7,576
Expense reimbursements	65,304		63,479		1,825			69,712		69,754		(42		)
Other revenues	1,892		2,170		(278		)	2,246		1,969		277
Total revenues	$	313,025	$	306,469	$	6,556		$	323,104	$	315,293	$	7,811

Rental income

The increase in rental income for the three months ended ~~September 30, 2015~~March 31, 2016 of ~~$5.0~~$7.6 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to (i) $5.6 million from a ~~$4.4~~bankruptcy settlement of a former tenant, (ii) a $5.1 million increase in ABR, partially offset by (iii) a $2.5 million decrease in revenue from above and below market lease accretion. The ABR increase was driven primarily by contractual rent increases from properties owned as of the end of both reporting periods and for the entirety of both periods as well as an increase in leasing spreads of ~~15.0%~~10.9% in 2016 and 14.9% in 2015 for both new and renewal leases.

Expense reimbursements

~~The expense recovery percentage~~Expense reimbursements remained approximately the same for ~~our properties increased to 88.9% for 2015,~~the three months ended March 31, 2016 as compared to ~~86.8% for~~ the ~~same~~corresponding period in ~~2014, primarily due to an increase in reimbursable expenses and an increased recoveries from year-end billings.~~2015.

Other revenues

The ~~decrease~~increase in other revenues for the three months ended ~~September 30, 2015~~March 31, 2016 of $0.3 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to ~~a decrease~~an increase in ~~the number of managed properties.~~percentage rent revenue.

Operating Expenses (in thousands)


	Three Months Ended September 30,							Three Months Ended March 31,
	2015		2014		$ Change			2016		2015		$ Change
Operating expenses
Operating costs	$	27,952	$	28,792	$	(840	)	$	35,051	$	35,160	$	(109	)
Real estate taxes	45,472		44,346		1,126			44,391		44,189		202
Depreciation and amortization	102,439		111,104		(8,665		)	100,479		108,544		(8,065		)
Provision for doubtful accounts	1,953		2,771		(818		)	2,740		2,495		245
Impairment of real estate assets								—		807		(807		)
General and administrative	22,030		19,624		2,406			20,724		30,715		(9,991		)
Total operating expenses	$	199,846	$	206,637	$	(6,791	)	$	203,385	$	221,910	$	(18,525	)

Operating costs

~~The decrease in operating~~Operating costs remained approximately the same for the three months ended ~~September 30, 2015 of $0.8 million,~~March 31, 2016 as compared to the corresponding period in ~~2014, was primarily due to a decrease in insurance expenses.~~2015.

Real estate taxes

~~The increase in real~~Real estate taxes remained approximately the same for the three months ended ~~September 30, 2015 of $1.1 million,~~March 31, 2016 as compared to the corresponding period in ~~2014, was primarily due to increased tax assessments on several of our properties, primarily in Texas.~~2015.

~~- 29 -~~

Depreciation and amortization

The decrease in depreciation and amortization for the three months ended ~~September 30, 2015~~March 31, 2016 of ~~$8.7~~$8.1 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to ~~a decrease in intangible asset amortization due to tenant lease expirations and lease terminations.~~the run off of purchase accounting intangibles.

Provision for doubtful accounts

The ~~decrease~~increase in provisions for doubtful accounts for the three months ended ~~September 30, 2015~~March 31, 2016 of ~~$0.8~~$0.2 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to ~~a decrease~~an increase in ~~tenant receivables.~~total revenues.

Impairment of real estate assets

During the three months ended March 31, 2015, we disposed of one shopping center resulting in an impairment of $0.8 million.

General and administrative

The ~~increase~~decrease in general and administrative costs for the three months ended ~~September 30, 2015~~March 31, 2016 of ~~$2.4~~$10.0 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to ~~an increase~~a $14.8 million decrease in equity based compensation expense offset by $3.7 million of legal and consulting expenses related to the Audit Committee review. The decrease in equity based compensation expense was the result of 2015 including $9.9 million of expense associated with ~~an increase~~the vesting of certain pre-IPO equity awards and 2016 including a benefit of $2.6 million associated with the forfeiture of equity awards in connection with the ~~estimated number~~resignation of ~~performance-based long-term incentive awards that will vest.~~several Company executives.

During the three months ended ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ we capitalized personnel costs of $1.6 million and ~~$1.5~~$1.6 million, respectively, to building and improvements for anchor space repositioning and redevelopment projects and ~~$3.7~~we capitalized leasing costs of $4.1 million and ~~$4.0~~$3.8 million, respectively, to deferred charges and prepaid expenses, ~~net for deferred leasing costs.~~net.

Other Income and Expenses (in thousands)


	Three Months Ended September 30,									Three Months Ended March 31,
	2015			2014			$ Change			2016			2015			$ Change
Other income (expense)
Dividends and interest	$	57		$	169		$	(112	)	$	73		$	94		$	(21	)
Interest expense	(61,567		)	(65,545		)	3,978			(57,443		)	(62,564		)	5,121
Gain (loss) on extinguishment of debt, net	137			460			(323		)	—			292			(292		)
Other	2,880			(1,205		)	4,085			(907		)	(184		)	(723		)
Total other income (expense)	$	(58,493	)	$	(66,121	)	$	7,628		$	(58,277	)	$	(62,362	)	$	4,085

Dividends and interest

~~The decrease in dividends~~Dividends and interest remained approximately the same for the three months ended ~~September 30, 2015 of $0.1 million,~~March 31, 2016 as compared to the corresponding period in ~~2014, was primarily due to the 2015 repayment of a $4.1 million interest-bearing receivable.~~2015.

Interest expense

The decrease in interest expense for the three months ended ~~September 30, 2015~~March 31, 2016 of ~~$4.0~~$5.1 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to the ~~2014 repayment~~2015 debt repayments of ~~$1.0~~$1.1 billion ~~of debt~~ with a weighted-average interest rate of ~~5.59%~~5.77%, ~~and the 2015 repayment of $712.7 million of debt with a weighted-average interest rate of 5.85%, which decreased interest expense by $13.1 million,~~ partially offset by an increase of $9.0 million of interest expense on our Unsecured Credit Facility, the 2022 Notes and the 2025 Notes. The secured mortgage loan and unsecured note repayments were financed primarily from proceeds of borrowings under our Unsecured Credit Facility, the Term Loan, the issuance of ~~the 2022 Notes and the 2025 Notes which had~~$1.2 billion of senior unsecured notes with a weighted average interest rate of ~~2.72% as of September 30, 2015.~~3.86%.

Gain (loss) on extinguishment of debt, net

During the three months ended ~~September 30,~~March 31, 2015, we repaid $106.4 million of mortgages and secured loans and $125.0 million of unsecured notes, resulting in a $0.1 million net gain on extinguishment of debt. During the three months ended September 30, 2014, we repaid $5.1$151.5 million of mortgages and secured loans, resulting in a ~~$0.5~~$0.3 million net gain on extinguishment of debt.

~~- 30 -~~

Other

The increase in other ~~income,~~expense, net for the three months ended ~~September 30, 2015~~March 31, 2016 of ~~$4.1~~$0.7 million, as compared to the corresponding period in ~~2014,~~2015, was primarily due to ~~$3.9~~$0.8 million of income in 2015 related to the resolution of certain ~~federal and state tax contingencies.~~contingencies for disposed properties.

Equity in Income of Unconsolidated Joint Ventures (in thousands)

Three Months Ended September 30,
2015 2014 $ Change
Equity in income of unconsolidated joint ventures $ 133
$ 112
$ 21



	Three Months Ended March 31,
	2016		2015		$ Change
Equity in income of unconsolidated joint ventures	$	107	$	115	$	(8	)

Equity in income of unconsolidated joint ventures

Equity in income of unconsolidated joint ventures remained approximately the same for the three months ended ~~September 30, 2015~~March 31, 2016 as compared to the corresponding period in ~~2014.~~2015.

~~Discontinued Operations (in thousands)~~

Three Months Ended September 30,
2015 2014 $ Change
Discontinued operations
Income from discontinued operations $ —
$ 41
$ (41 )
Income from discontinued operations $ —
$ 41
$ (41 )

~~Discontinued Operations~~

As a result of adopting ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” there were no disposals classified as discontinued operations for the three months ended September 30, 2015.

Results from discontinued operations for the three months ended September 30, 2014 include the results of 34 shopping centers disposed of during the year ended December 31, 2014, including 33 shopping centers distributed to Blackstone in connection with the Company's IPO.

~~Comparison of the Nine Months Ended September 30, 2015 to the Nine Months Ended September 30, 2014~~

~~Revenues (in thousands)~~

Nine Months Ended September 30,
2015 2014 $ Change
Revenues
Rental income $ 733,429
$ 717,975
$ 15,454
Expense reimbursements 200,570
197,730
2,840
Other revenues 6,430
6,290
140
Total revenues $ 940,429
$ 921,995
$ 18,434

~~Rental income~~

The increase in rental income for the nine months ended September 30, 2015 of $15.5 million, as compared to the corresponding period in 2014, was primarily due to a $12.6 million increase in ABR driven primarily by contractual rent increases as well as an increase in leasing spreads of 15.0% for both new and renewal leases.

~~Expense reimbursements~~

~~The expense recovery percentage for our properties increased to 88.2% for 2015, as compared to 86.7% for the same period in 2014, primarily due to increased recoveries from year-end billings.~~

~~- 31 -~~

~~Other revenues~~

~~Other revenues remained approximately the same for the nine months ended September 30, 2015 as compared to the corresponding period in 2014.~~

~~Operating Expenses (in thousands)~~

Nine Months Ended September 30,
2015 2014 $ Change
Operating expenses
Operating costs $ 93,779
$ 95,556
$ (1,777 )
Real estate taxes 133,635
132,592
1,043
Depreciation and amortization 315,424
333,924
(18,500 )
Provision for doubtful accounts 6,973
8,617
(1,644 )
Impairment of real estate assets 807
—
807
General and administrative 73,030
59,221
13,809
Total operating expenses $ 623,648
$ 629,910
$ (6,262 )

~~Operating costs~~

~~The decrease in operating costs for the nine months ended September 30, 2015 of $1.8 million, as compared to the corresponding period in 2014, was primarily due to a decrease in insurance expenses.~~

~~Real estate taxes~~

The increase in real estate taxes for the nine months ended September 30, 2015 of $1.0 million, as compared to the corresponding period in 2014, was primarily due to increased tax assessments on several of our properties, primarily in Texas.

~~Depreciation and amortization~~

The decrease in depreciation and amortization for the nine months ended September 30, 2015 of $18.5 million, as compared to the corresponding period in 2014, was primarily due to a decrease in intangible asset amortization due to tenant lease expirations and lease terminations.

~~Provision for doubtful accounts~~

The decrease in provisions for doubtful accounts for the nine months ended September 30, 2015 of $1.6 million, as compared to the corresponding period in 2014, was primarily due to a decrease in tenant receivables.

~~Impairment of real estate assets~~

~~During the nine months ended September 30, 2015, we incurred an impairment of $0.8 million resulting from the sale of one of our shopping centers.~~

~~General and administrative~~

The increase in general and administrative costs for the nine months ended September 30, 2015 of $13.8 million, as compared to the corresponding period in 2014, was primarily due to a $12.4 million increase in equity based compensation expense. The equity based compensation expense increase is primarily the result of a performance condition associated with the vesting of certain shares becoming probable.

During the nine months ended September 30, 2015 and 2014, we capitalized personnel costs of $4.6 million and $4.4 million, respectively, to building and improvements for anchor space repositioning and redevelopment projects and $11.2 million and $11.5 million, respectively, to deferred charges and prepaid expenses, net for deferred leasing costs.

~~- 32 -~~

~~Other Income and Expenses (in thousands)~~

Nine Months Ended September 30,
2015 2014 $ Change
Other income (expense)
Dividends and interest $ 241
$ 436
$ (195 )
Interest expense (186,289 ) (199,464 ) 13,175
Gain on sale of real estate assets 9,224
378
8,846
Gain (loss) on extinguishment of debt, net 922
(2,573 ) 3,495
Other (115 ) (5,335 ) 5,220
Total other income (expense) $ (176,017 ) $ (206,558 ) $ 30,541

~~Dividends and interest~~

The decrease in dividends and interest for the nine months ended September 30, 2015 of $0.2 million, as compared to the corresponding period in 2014, was primarily due to the 2015 repayment of a $4.1 million interest-bearing receivable.

~~Interest expense~~

The decrease in interest expense for the nine months ended September 30, 2015 of $13.2 million, as compared to the corresponding period in 2014, was primarily due to the 2014 repayment of $1.0 billion of debt with a weighted-average interest rate of 5.59%, and the 2015 repayment of $712.7 million of debt with a weighted-average interest rate of 5.85%, which decreased interest expense by $33.7 million, partially offset by an increase of $21.0 million of interest expense on our Unsecured Credit Facility, the 2022 Notes and the 2025 Notes. The secured mortgage loan and unsecured note repayments were financed primarily from proceeds of borrowings under our Unsecured Credit Facility, Term Loan and the issuance of the 2022 Notes and the 2025 Notes which had a weighted average interest rate of 2.72% as of September 30, 2015.

~~Gain on sale of real estate assets~~

During the nine months ended September 30, 2015, we disposed of three shopping centers and two outparcels for net proceeds of $31.9 million resulting in an aggregate gain of $9.2 million. During the nine months ended September 30, 2014, we disposed of one building for net proceeds of $2.8 million resulting in a gain of $0.4 million.

~~Gain (loss) on extinguishment of debt, net~~

During the nine months ended September 30, 2015, we repaid $487.7 million of mortgages and secured loans and $225.0 million of unsecured notes, resulting in a $0.9 million net gain on extinguishment of debt. During the nine months ended September 30, 2014, we repaid $684.4 million of mortgages and secured loans and $60.0 million of unsecured notes resulting in a $2.6 million net loss on extinguishment of debt.

~~Other~~

The decrease in other expense, net for the nine months ended September 30, 2015 of $5.2 million, as compared to the corresponding period in 2014, was primarily due to $3.9 million of income in 2015 related to certain federal and state tax contingencies and a $1.4 million expense in 2014 related to a litigation settlement.

~~Equity in Income of Unconsolidated Joint Ventures (in thousands)~~

Nine Months Ended September 30,
2015 2014 $ Change
Equity in income of unconsolidated joint ventures $ 358
$ 248
$ 110
Gain on disposition of investments in unconsolidated joint ventures —
1,820
(1,820 )

~~- 33 -~~

~~Equity in income of unconsolidated joint ventures~~

~~Equity in income of unconsolidated joint ventures remained approximately the same for the nine months ended September 30, 2015 as compared to the corresponding period in 2014.~~

~~Gain on disposition of investments in unconsolidated joint ventures~~

During the nine months ended September 30, 2014, in connection with our IPO, we distributed our interests in three unconsolidated joint ventures to Blackstone resulting in a gain on disposition of $1.8 million.

~~Discontinued Operations (in thousands)~~

Nine Months Ended September 30,
2015 2014 $ Change
Discontinued operations
Income from discontinued operations $ —
$ 4,881
$ (4,881 )
Gain on disposition of operating properties —
14,426
(14,426 )
Income from discontinued operations $ —
$ 19,307
$ (19,307 )

~~Discontinued Operations~~

Results from discontinued operations for the nine months ended September 30, 2014 include the results of 34 shopping centers disposed of during the year ended December 31, 2014, including 33 shopping centers distributed to Blackstone in connection with the Company's IPO.

Liquidity and Capital Resources

We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months for all anticipated uses, including all scheduled principal and interest payments on our outstanding indebtedness, current and anticipated tenant improvements, stockholder distributions to maintain the Parent Company’s qualification as a REIT and other capital obligations associated with conducting our business.

Our primary expected sources and uses and capital are as follows:

Sources

cash and cash equivalent balances;

operating cash flow;

available borrowings under our existing revolving credit facility;

issuance of long-term debt;

asset sales; and

issuance of equity securities.

Uses

Short term:

leasing costs and tenant improvements allowances;

active anchor space repositioning/redevelopments;

recurring maintenance capital expenditures;

debt repayment requirements;

corporate and administrative costs; and

dividend/distribution payments.

~~- 34 -~~

Long term:

major active redevelopments, renovation or expansion programs at individual properties;

acquisitions; and

debt maturities.

Our cash flow activities are summarized as follows (dollars in thousands):

Brixmor Property Group Inc.


	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2016			2015
Cash flows provided by operating activities	$	411,924		$	372,290		$	114,002		$	112,937
Cash flows used in investing activities	$	(160,000	)	$	(135,049	)	$	(37,059	)	$	(31,872	)
Cash flows used in financing activities	$	(274,536	)	$	(258,398	)	$	(40,649	)	$	(73,476	)

Brixmor Operating Partnership LP


	Nine Months Ended September 30,						Three Months Ended March 31,
	2015			2014			2016			2015
Cash flows provided by operating activities	$	411,926		$	372,297		$	114,000		$	112,944
Cash flows used in investing activities	$	(159,996	)	$	(135,042	)	$	(37,050	)	$	(31,869	)
Cash flows used in financing activities	$	(274,433	)	$	(257,656	)	$	(40,670	)	$	(73,378	)

Operating Activities

Cash and cash equivalents for the Parent Company were ~~$38.0~~$105.8 million and ~~$92.8~~$68.2 million as of ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ respectively. Cash and cash equivalents for the Operating Partnership were ~~$37.9~~$105.8 million and ~~$92.6~~$68.1 million as of ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~ respectively.

Our net cash flow provided by operating activities primarily consist of cash inflows from tenant rental payments and tenant expense reimbursements and cash outflows for property operating expenses, real estate taxes, general and administrative expenses and interest payments.

For the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, the Company’s net cash flow provided by operating activities increased ~~$39.6~~$1.1 million as compared to the corresponding period in ~~2014.~~2015. The increase is primarily due to (i) an increase in ~~Same Property NOI,~~net operating income, and (ii) a decrease in interest expense due to a decrease in the weighted average interest rate on outstanding indebtedness, ~~and~~partially offset by (iii) an increase in general and administrative expense due to expenses associated with the Audit Committee review and (iv) a decrease in working capital due to ~~an increase~~a decrease in accounts payable accrued expenses and other liabilities due to timing of payments, partially offset by ~~a reduction~~an increase in cash flows from restricted ~~cash.~~cash and receivables.

Investing Activities

Net cash flow used in investing activities is impacted by the nature, timing and extent of improvements made to our shopping centers, allowances provided to our tenants, and our acquisition and disposition programs. Capital used to fund these activities, and the source thereof, can vary significantly from period to period based on, for example, negotiations with tenants and their willingness to pay higher base rents over the terms of their respective leases as well as the availability of operating cash flows. Net cash flow used in investing activities is also impacted by the level of recurring property capital expenditures in a given period.

For the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, the Company’s net cash flow used in investing activities increased ~~$25.0~~$5.2 million as compared to the corresponding period in ~~2014.~~2015. The increase was primarily due to (i) ~~an increase of $52.3 million in acquisitions of real estate assets, (ii)~~ a decrease of $5.1 million in restricted cash attributable to investing activities and (iii) a decrease of $6.4 million in proceeds from the sale of marketable securities, partially offset by (iv) an increase of $39.0$9.9 million in proceeds from sales of real estate ~~assets.~~assets, partially offset by (ii) a decrease of $4.1 million in improvements to and investments in real estate assets and (iii) a decrease of $1.0 million in restricted cash attributable to investing activities.

~~- 35 -~~

Improvements to and investments in real estate assets

During the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and 2015, ~~and 2014,~~ the Company expended ~~$147.4~~$36.3 million and ~~$146.5~~$40.4 million, respectively, on improvements to and investments in real estate assets.

Recurring capital expenditures are costs to maintain properties and their common areas including new roofs and paving of parking lots. Recurring capital expenditures per square foot for the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and 2015, were $0.01 and ~~2014, were $0.18 and $0.23,~~$0.03, respectively.

In addition to recurring capital expenditures, we evaluate our Portfolio on an ongoing basis to identify value-creating anchor space repositioning / redevelopment opportunities / outparcel development opportunities. ~~We have intensified our focus on enhancing the quality of our assets and improving the customer experience through a unified organizational effort known as "Raising the Bar."~~ These efforts are tenant-driven and focus on renovating, re-tenanting and repositioning ~~assets and generally present higher risk-adjusted returns than new developments.~~assets. Such initiatives are focused on upgrading our centers with strong, best-in-class anchors and transforming such properties’ overall merchandise mix and tenant quality. Potential new projects include value-creation opportunities that have been previously identified within the Portfolio, as well as new opportunities created by the lack of meaningful community and neighborhood shopping center development in the United States. We may occasionally seek to acquire non-owned anchor spaces and ~~land parcels~~outparcels at or adjacent to our shopping centers in order to facilitate redevelopment projects. In addition, as we own a vast majority of our anchor spaces greater than 35,000 sq. ft., we have important operational control over the positioning of our shopping centers in the event an anchor ceases to operate and flexibility in working with new and existing anchor tenants as they seek to expand or reposition their stores. ~~Currently,~~

As of March 31, 2016, our anchor space repositioning / redevelopments / outparcel developments in our Portfolio ~~relate to 48 projects for which we anticipate incurring approximately $110.6 million~~are as follows (dollars in ~~improvements, of which $60.9 million had not yet been incurred as of September 30, 2015.~~thousands):



	As of March 31, 2016
	Total Projects	Anticipated Cost		Cost Incurred
Anchor space repositioning	27	$	111,863	$	40,419
Redevelopment	1	7,166		471
Outparcel development	10	18,661		7,954
New development	1	19,229		3,845
Total	39	$	156,919	$	52,689

Acquisitions of and proceeds from sales of real estate assets

Although we expect that the major drivers of our growth will come from our existing Portfolio, we will continue to evaluate the market for available properties and may acquire ~~properties~~shopping centers when we believe strategic opportunities exist. During the three months ended March 31, 2016, we did not acquire any shopping centers.

We may also dispose of properties when we feel growth has been maximized. During the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, we ~~acquired two properties and a retail building in one~~did not dispose of ~~our existing~~any shopping ~~centers and we disposed of four properties and two outparcels.~~centers.

Financing Activities

Our net cash flow used in financing activities is impacted by the nature, timing and extent of issuances of debt and equity, principal and other payments associated with our outstanding indebtedness and prevailing market conditions associated with each source of capital.

For the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, the Parent Company’s net cash used in financing activities ~~increased $16.1~~decreased $32.5 million as compared to the corresponding period in ~~2014.~~2015. The ~~increase~~decrease was primarily due to a ~~$47.0~~$13.6 million net ~~increase~~decrease in distributions to stockholders and non-controlling interests ~~partially offset by a $31.0~~and an $18.1 million decrease in debt repayments, net of borrowings.

For the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, the Operating Partnership’s net cash used in financing activities ~~increased $16.8~~decreased $32.4 million as compared to the corresponding period in 2014. The ~~increase~~decrease was primarily due to a ~~$47.6~~$12.3 million ~~increase~~decrease in distributions to partners and non-controlling interests ~~partially offset by a $31.0~~and an $18.1 million decrease in debt repayments, net of borrowings.

~~Our~~We believe our current capital structure provides us with financial flexibility and capacity to fund our current capital needs as well as future growth opportunities. We have an Unsecured Credit Facility consisting of a $1.5 billion term loan and a $1.25 billion revolving credit facility, with a lending group comprised of ~~top-tier~~ financial institutions under which we had ~~$1.23 billion~~$794.0 million of undrawn capacity as of ~~September 30, 2015.~~March 31, 2016. We believe we have ~~strong~~ access to multiple forms of capital, including unsecured corporate level debt, secured mortgage debt, preferred equity and additional credit facilities. We ~~continue to maintain the~~currently have investment grade credit ratings from all three major credit rating ~~agencies received during 2014.~~agencies. We intend to continue to enhance our financial and operating flexibility through ongoing commitment to ladder and extend the duration of our debt, and further expand our unencumbered asset pool.

~~- 36 -~~

During the nine months ended September 30, 2015, the Operating Partnership issued $700.0 million aggregate principal amount of the 2025 Notes and $500.0 million aggregate principal amount of the 2022 Notes, the proceeds of which were utilized to repay outstanding indebtedness, including borrowings under the Company's $1.25 billion unsecured revolving credit facility and $125 million aggregate principal amount of senior unsecured notes held at an indirect subsidiary of the Company, Brixmor LLC. In addition, during the nine months ended September 30, 2015, we repaid $487.7 million of mortgages and secured loans and $225.0 million of unsecured notes. These repayments were funded primarily from borrowings under the Company’s Unsecured Credit Facility. During the remainder of 2015, we do not have any mortgage loans and notes scheduled to mature and we have $8.1 million of scheduled mortgage amortization payments. We currently intend to repay the scheduled amortization payments with operating cash.

In connection with our intention to continue to qualify as a REIT for federal income tax purposes, we expect to continue paying regular dividends to our stockholders. Our Board of Directors will continue to evaluate the dividend policy on a quarterly basis as the Board of Directors monitors sources of capital and evaluates the impact of the economy and capital markets availability on operating fundamentals. Since cash used to pay dividends reduces amounts available for capital investment, we generally intend to maintain a conservative dividend payout ratio, reserving such amounts as the Board of Directors considers necessary for the expansion and renovation of shopping centers in our portfolio, debt reduction, the acquisition of interests in new properties and other investments as suitable opportunities arise and such other factors as the Board of Directors considers appropriate. Cash dividends paid to common stockholders and OP Unit holders for the ~~nine~~three months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~ were ~~$205.8~~$74.7 million and ~~$178.2~~$68.5 million, respectively. Our Board of Directors declared a quarterly cash dividend of $0.225 per common share and OP Unit for the third quarter of 2015. The dividend was paid on October 15, 2015 to shareholders of record on October 5, 2015. Our Board of Directors declared a quarterly cash dividend of $0.245 per common share and OP Unit for the ~~fourth~~first quarter of ~~2015.~~2016. The dividend ~~is payable~~was paid on ~~January~~April 15, 2016 to shareholders of record on ~~January~~April 5, 2016. Our Board of Directors declared a quarterly cash dividend of $0.245 per common share and

OP Unit for the second quarter of 2016. The dividend is payable on July 15, 2016 to shareholders of record on July 6, 2016.

Contractual Obligations

Our contractual debt obligations relate to our notes payable, mortgages and secured loans with maturities ranging from one year to 15 years, and non-cancelable operating leases pertaining to our shopping centers and corporate offices.

The following table summarizes our debt maturities (excluding options and fair market debt adjustments) and obligations under non-cancelable operating leases as of ~~September 30, 2015.~~March 31, 2016.


Contractual Obligations	Payment due by period														Payment due by period
(in thousands)	2015 (Remaining Three Months)		2016		2017		2018		2019		Thereafter		Total		2016 (Remaining Nine Months)		2017		2018		2019		2020		Thereafter		Total
Debt⁽¹⁾	$	8,142	$	1,257,862	$	369,659	$	1,519,476	$	620,126	$	2,178,255	$	5,953,520	$	872,960	$	805,659	$	1,519,476	$	620,126	$	766,577	$	1,411,678	$	5,996,476
Interest payments ⁽²⁾	54,160		226,205		170,726		139,880		110,451		265,803		967,225		163,198		175,126		140,509		110,768		94,206		171,596		855,403
Operating leases	1,470		6,899		6,788		6,403		6,258		92,738		120,556		5,353		6,625		6,208		6,056		5,242		81,710		111,194
Total	$	63,772	$	1,490,966	$	547,173	$	1,665,759	$	736,835	$	2,536,796	$	7,041,301	$	1,041,511	$	987,410	$	1,666,193	$	736,950	$	866,025	$	1,664,984	$	6,963,073


⁽¹⁾	Debt includes scheduled principal amortization and scheduled maturities for mortgages and secured loans, credit facilities and notes payable.

⁽²⁾

We incur variable rate interest on ~~$20.0 million~~$1.9 billion and $600.0 million of debt related to the Unsecured Credit Facility and Term Loan, respectively. The margin associated with Unsecured Credit Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans. The margin on the Unsecured Credit Facility was 1.40% and the all-in rate was 1.90% as of ~~September 30, 2015.~~March 31, 2016. The Company has in place five forward starting interest rate swap agreements that convert the floating interest rate on $1.5 billion of the Unsecured Credit Facility to a fixed, combined interest rate of 0.844% plus an interest spread of 140 basis points. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans. The margin on the Term Loan was 1.40% and the all-in rate was 1.90% as of ~~September 30, 2015.~~

~~Same Property Net Operating Income~~

Same Property NOI is calculated (using properties owned as of the end of both reporting periods and for the entirety of both periods excluding properties classified as discontinued operations), as rental income (minimum rent, percentage rents, tenant recoveries and other property income) less rental operating expenses (property operating expenses, real estate taxes and bad debt expense) of the properties owned by us. Same Property NOI excludes

~~- 37 -~~

corporate level income (including transaction and other fees), lease termination income, straight-line rent and amortization of above- and below-market leases of the same property pool from the prior year reporting period to the current year reporting period.

Same Property NOI is a supplemental, non-GAAP financial measure utilized to evaluate the operating performance of real estate companies and is frequently used by securities analysts, investors and other interested parties in understanding business and operating results regarding the underlying economics of our business operations. It includes only the net operating income of properties owned for the full period presented, which eliminates disparities in net income due to the acquisition or disposition of properties during the period presented, and therefore provides a more consistent metric for comparing the performance of properties. Management uses Same Property NOI to review operating results for comparative purposes with respect to previous periods or forecasts, and also to evaluate future prospects. Same Property NOI is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, net income (determined in accordance with GAAP) or other GAAP financial measures. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of Same Property NOI may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs.

~~Comparison of the Three Months Ended September 30, 2015 to the Three Months Ended September 30, 2014~~

Three Months Ended September 30,
2015 2014 Change

Number of properties 516
516
—
Percent billed 90.9 % 90.8 % 0.1 %
Percent leased 92.6 % 92.7 % (0.1 %)

Revenues
Rental income $ 229,401
$ 222,984
$ 6,417
Expense reimbursements 64,931
63,268
1,663
Percentage rents 1,533
1,570
(37 )
295,865
287,822
8,043
Operating expenses
Operating costs (29,179 ) (29,001 ) (178 )
Real estate taxes (45,205 ) (44,160 ) (1,045 )
Provision for doubtful accounts (1,927 ) (2,775 ) 848
(76,311 ) (75,936 ) (375 )
Same property NOI $ 219,554
$ 211,886
$ 7,668

Same Property NOI increased $7.7 million or 3.6% for the three months ended September 30, 2015, as compared to the same period in 2014, primarily due to an increase in ABR from same store properties and an increase in expense recovery percentage from 86.5% in 2014 to 87.3% in 2015.

~~- 38 -~~

~~Comparison of the Nine Months Ended September 30, 2015 to the Nine Months Ended September 30, 2014~~

Nine Months Ended September 30,
2015 2014 Change

Number of properties 516
516
—
Percent billed 90.9 % 90.8 % 0.1 %
Percent leased 92.6 % 92.7 % (0.1 %)

Revenues
Rental income $ 682,262
$ 664,374
$ 17,888
Expense reimbursements 200,030
197,074
2,956
Percentage rents 5,075
4,611
464
887,367
866,059
21,308
Operating expenses
Operating costs (94,952 ) (95,435 ) 483
Real estate taxes (133,195 ) (131,881 ) (1,314 )
Provision for doubtful accounts (6,845 ) (8,628 ) 1,783
(234,992 ) (235,944 ) 952
Same property NOI $ 652,375
$ 630,115
$ 22,260

Same Property NOI increased $22.3 million or 3.5% for the nine months ended September 30, 2015, as compared to the same period in 2014, primarily due to an increase in ABR from same store properties and an increase in expense recovery percentage from 86.7% in 2014 to 87.7% in 2015.

~~The following table provides a reconciliation of Net income attributable to Brixmor Property Group Inc. to Same Property NOI for the periods presented (dollars in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Net income attributable to Brixmor Property Group Inc. $ 53,773
$ 27,030
$ 138,308
$ 65,904
Adjustments:
Revenue adjustments⁽¹⁾
(17,050 ) (18,277 ) (52,044 ) (54,206 )
Depreciation and amortization 102,439
111,104
315,424
333,924
Impairment of real estate assets —
—
807
—
General and administrative 22,030
19,624
73,030
59,221
Total other expense 58,493
66,121
176,017
206,558
Equity in income of unconsolidated joint ventures (133 ) (112 ) (358 ) (248 )
Gain on disposition of investments in unconsolidated joint ventures —
—
—
(1,820 )
Pro rata share of same property NOI of unconsolidated joint ventures 201
185
567
547
Income from discontinued operations —
(41 ) —
(19,307 )
Net income attributable to non-controlling interests 1,046
6,834
2,814
40,998
Non-same property NOI (1,245 ) (582 ) (2,190 ) (1,456 )
Same property NOI $ 219,554
$ 211,886
$ 652,375
$ 630,115


⁽¹⁾	~~Includes adjustments for lease settlement income, straight-line rents, above- and below-market rent amortization, net and fee income from managed properties and unconsolidated joint ventures.~~March 31, 2016.

Funds From Operations

NAREIT FFO is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income

~~- 39 -~~

(loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect funds from operations on the same basis.

FFO attributable to stockholders and non-controlling interests convertible into common stock is FFO as further adjusted to exclude net income (loss) attributable to non-controlling interests not convertible into common stock. We believe FFO attributable to stockholders and non-controlling interests convertible into common stock is a meaningful supplemental measure that is more reflective of our operating performance by excluding FFO attributable to non-controlling interests not convertible into common stock.

We present NAREIT FFO ~~and FFO attributable to stockholders and non-controlling interests convertible into common stock~~ as we consider ~~them~~it an important supplemental ~~measures~~measure of our operating performance and we believe ~~they are~~it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. NAREIT FFO ~~and FFO attributable to stockholders and non-controlling interests convertible into common stock~~ should not be considered as ~~alternatives~~an alternative to net income (determined in accordance with GAAP) as ~~indicators~~an indicator of financial performance and ~~are~~is not ~~alternatives~~an alternative to cash flow from operating activities (determined in accordance with GAAP) as ~~measures~~a measure of liquidity. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations and, accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of NAREIT FFO ~~and FFO attributable to stockholders and non-controlling~~

~~interests convertible into common stock~~ may differ in certain respects from the methodology utilized by other REITs

and, therefore, may not be comparable to a similarly titled ~~measures~~measure presented by such other REITs. Investors are cautioned that items excluded from NAREIT FFO ~~and FFO attributable to stockholders and non-controlling interests convertible into common stock~~ are significant components in understanding and addressing financial performance.

Our reconciliation of Brixmor Property Group ~~Inc’s~~Inc.’s net income to NAREIT FFO ~~and FFO attributable to stockholders and non-controlling interest convertible into common stock~~ for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2016 and 2015 ~~and 2014~~ is as follows (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Net income $ 54,819
$ 33,864
$ 141,122
$ 106,902
Gain on disposition of operating properties —
—
(9,224 ) (14,804 )
Gain on disposition of unconsolidated joint ventures —
—
—
(1,820 )
Depreciation and amortization-real estate related-continuing operations 101,360
110,582
311,637
332,126
Depreciation and amortization-real estate related-discontinued operations —
46
—
591
Depreciation and amortization-real estate related-unconsolidated joint ventures 16
23
59
146
Impairment of operating properties —
—
807
—
FFO 156,195
144,515
444,401
423,141
Adjustments attributable to non-controlling interests not convertible into common stock —
(322 ) —
(6,200 )
FFO attributable to stockholders and non-controlling interests convertible into common stock $ 156,195
$ 144,193
$ 444,401
$ 416,941

FFO per share/OP Unit - diluted $ 0.51
$ 0.47
$ 1.46
$ 1.37
Weighted average shares/OP Units outstanding - basic and diluted⁽¹⁾
304,752
304,318
304,716
304,272



	Three Months Ended March 31,
	2016		2015
Net income	$	61,549	$	31,136
Depreciation and amortization-real estate related-continuing operations	99,685		107,190
Depreciation and amortization-real estate related-unconsolidated joint ventures	25		22
Impairment of operating properties	—		807
NAREIT FFO	161,259		139,155
NAREIT FFO per share/OP Unit - diluted	$	0.53	$	0.46
Weighted average shares/OP Units outstanding - basic and diluted⁽¹⁾	304,682		304,670


⁽¹⁾	Basic and diluted shares/OP Units outstanding reflects an assumed conversion of ~~certain BPG Sub shares and~~vested OP Units to common stock of the Company and the vesting of certain ~~restricted stock~~equity awards.

Inflation

The majority of leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions contain clauses enabling us to receive percentage rents, which generally increase as prices rise but may be adversely impacted by tenant sales decreases, and/or escalation clauses which are typically related to increases in the consumer price index or similar inflation indices. In addition, we believe that many of our existing lease rates are below current market levels for comparable space and that upon renewal or re-rental such rates may be increased to be

~~- 40 -~~

consistent with, or closer to, current market rates. This belief is based upon an analysis of relevant market conditions, including a comparison of comparable market rental rates, and upon the fact that many of our leases have been in place for a number of years and may not contain escalation clauses sufficient to match the increase in market rental rates over such time. Most of our leases require the tenant to pay its share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, we periodically evaluate our exposure to interest rate fluctuations, and may enter into interest rate protection agreements which mitigate, but do not eliminate, the effect of changes in interest rates on our floating rate loans.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of ~~September 30, 2015.~~March 31, 2016.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes from the quantitative and qualitative disclosures about market risk disclosed in Item 7A of Part II of our Form 10-K for the year ended December 31, ~~2014.~~2015.

Item 4. Controls and Procedures

Controls and Procedures (Brixmor Property Group Inc.)

Evaluation of Disclosure Controls and Procedures

The Parent Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. The Parent Company’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based ~~upon that~~on this evaluation and considering the material weakness in internal control over financial reporting disclosed in the Parent Company’s Form 10-K for the year ended December 31, 2015, as referenced below in “Changes in Internal Control over Financial Reporting”, BPG’s principal executive officer, Daniel B. Hurwitz, and principal financial officer, Barry Lefkowitz, concluded that ~~as of the end of the period covered by this report, the design and operation of the Parent Company’s~~BPG’s disclosure controls and procedures were not effective ~~to accomplish their objectives at the reasonable assurance level.~~as of March 31, 2016.

Changes in Internal Control over Financial Reporting

There have been no changes in the Parent Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~September 30, 2015~~March 31, 2016 that have materially affected, or that are reasonably likely to materially affect, the Parent Company’s internal control over financial ~~reporting.~~reporting, except as follows.

As disclosed in the Company’s Form 10-K for the year ended December 31, 2015, the Audit Committee of the Board of Directors conducted a review that led the Board of Directors to conclude that specific BPG personnel, in certain instances, were directly involved and/or supervised persons directly involved in smoothing income items, both up and down, between reporting periods in an effort to achieve consistent quarterly same property net operating income growth, an industry non-GAAP financial measure. Also as disclosed in the Company’s Form 10-K for the year ended December 31, 2015, based on the results of the Audit Committee review, the Board of Directors concluded that there was a deficiency in the control environment specifically because the actions identified in the Audit Committee review failed to demonstrate commitment to integrity and ethical values and senior management did not set an appropriate tone at the top. Although the actual amount of financial statement misstatement resulting from these actions was not significant, because of the override of controls that occurred at senior levels of management, the management concluded that the potential for material misstatement of the financial statements was more than remote. Accordingly, management determined that this control deficiency constituted a material weakness.

BPG has implemented or is evaluating various remedial actions to address the material weakness described above. These actions include the following:

certain personnel are no longer employed by BPG;

the Audit Committee, Board and executives will increase communication and training to employees regarding the ethical values of BPG, requirement to comply with laws, the Code of Conduct and BPG's policies; and

BPG is evaluating its organizational structure, and will assess roles and responsibilities to enhance controls and compliance.

BPG is committed to maintaining a strong internal control environment. Management believes the foregoing efforts will effectively remediate the material weakness. We will give further updates to our remediation plan in future SEC filings.

Controls and Procedures (Brixmor Operating Partnership LP)

Evaluation of Disclosure Controls and Procedures

The Operating Partnership maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. The Operating Partnership’s management, with the participation of its principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this report. Based ~~upon that~~on this evaluation and considering the material weakness in internal control over financial reporting disclosed in the Operating Partnership’s Form 10-K for the year ended December 31, 2015, as referenced below in “Changes in Internal Control over Financial Reporting”, the Operating Partnership’s principal executive officer, Daniel B. Hurwitz, and principal financial officer, Barry Lefkowitz, concluded that ~~as of the end of the period covered by this report, the design and operation of~~ the Operating Partnership’s disclosure controls and procedures were not effective ~~to accomplish their objectives at the reasonable assurance level.~~as of March 31, 2016.

Changes in Internal Control over Financial Reporting

~~- 41 -~~

There have been no changes in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~September 30, 2015~~March 31, 2016 that have materially affected, or that are reasonably likely to materially affect, the Operating Partnership’s internal control over financial ~~reporting.~~reporting, except as follows.

As disclosed in the Company’s Form 10-K for the year ended December 31, 2015, the Audit Committee of the Board of Directors conducted a review that led the Board of Directors to conclude that specific Operating Partnership personnel, in certain instances, were directly involved and/or supervised persons directly involved in smoothing income items, both up and down, between reporting periods in an effort to achieve consistent quarterly same property net operating income growth, an industry non-GAAP financial measure. Also as disclosed in the Company’s Form 10-K for the year ended December 31, 2015, based on the results of the Audit Committee review, the Board of Directors concluded that there was a deficiency in the control environment specifically because the actions identified in the Audit Committee review failed to demonstrate commitment to integrity and ethical values and senior management did not set an appropriate tone at the top. Although the actual amount of financial statement misstatement resulting from these actions was not significant, because of the override of controls that occurred at senior levels of management, the management concluded that the potential for material misstatement of the financial statements was more than remote. Accordingly, management determined that this control deficiency constituted a material weakness.

The Operating Partnership has implemented or is evaluating various remedial actions to address the material weakness described above. These actions include the following:

certain personnel are no longer employed by the Operating Partnership;

the Operating Partnership is evaluating its organizational structure, and will assess roles and responsibilities to enhance controls and compliance.

The Operating Partnership is committed to maintaining a strong internal control environment. Management believes the foregoing efforts will effectively remediate the material weakness. We will give further updates to our remediation plan in future SEC filings.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

~~We are not presently involved~~The information contained under the heading “Legal Matters” in ~~any material litigation arising outside the ordinary course of~~Note 11 - Commitments and Contingencies to our ~~business. However, we are involved~~unaudited condensed consolidated financial statements in ~~routine litigation arising in the ordinary course of business, none of which we believe, individually or in the aggregate, taking~~this report is incorporated by reference into ~~account existing reserves, will have a material impact on our results of operations or financial condition.~~this Item 1.

Item 1A. Risk Factors

There have been no material changes to the risk factors relating to the Company disclosed in our Form 10-K for the year ended December 31, ~~2014.~~2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRSHRA”), which added Section 13(r) of the Exchange Act, we hereby incorporate by reference herein Exhibit 99.1 of this report, which includes disclosures publicly filed and/or provided to Blackstone by Travelport Limited, which may be considered our affiliate.

~~- 42 -~~

Item 6. Exhibits

The exhibits listed on the accompanying Exhibit Index are filed as part of this report and such Exhibit Index is incorporated herein by reference.

Incorporated by Reference
Exhibit
Number
Exhibit Description Form File No.
Date of
Filing

Exhibit
Number

Filed
Herewith
4.1 Second Supplemental Indenture, dated August 10, 2015, between Brixmor Operating Partnership LP, as issuer, and The Bank of New York Mellion, as trustee 8-K 001-36160 8/10/15 4.2
10.1 Form of Restricted Stock Unit Agreement of Brixmor Property Group Inc. 10-Q 001-36160 4/27/15 10.1
10.2 Form of LTIP Unit Agreement of Brixmor Operating Partnership LP 10-Q 001-36160 4/27/15 10.2
31.1 Brixmor Property Group Inc. Certification of 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 — — — — x
31.2 Brixmor Property Group Inc. Certification of 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 — — — — x
31.3 Brixmor Operating Partnership LP Certification of 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 — — — — x
31.4 Brixmor Operating Partnership LP Certification of 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 — — — — x
32.1 Brixmor Property Group Inc. Certification of 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 2002 — — — — x
32.2 Brixmor Operating Partnership LP Certification of 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 2002 — — — — x
99.1 Section 13(r) Disclosure — — — — x
101.INS XBRL Instance Document — — — — x
101.SCH XBRL Taxonomy Extension Schema Document — — — — x
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document — — — — x
101.DEF XBRL Taxonomy Extension Definition Linkbase Document — — — — x



		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Date of Filing	Exhibit Number	Filed Herewith
10.1	Separation Agreement and Release, dated February 7, 2016 by and between Brixmor Property Group Inc. and Michael A. Carroll	8-K	001-36160	2/8/2016	10.1
10.2	Separation Agreement and Release, dated February 5, 2016 by and between Brixmor Property Group Inc. and Michael V. Pappagallo	8-K	001-36160	2/8/2016	10.2
10.3	Separation Agreement and release, dated February 7, 2016 by and between Brixmor Property Group Inc. and Steven A. Splain	8-K	001-36160	2/16/2016	10.3
10.4	Employment Agreement, dated February 12, 2016 by and between Brixmor Property Group Inc. and Daniel B. Hurwitz	8-K	001-36160	2/16/2016	10.2
10.5	Employment Agreement, dated February 12, 2016, by and between Brixmor Property Group Inc. and Barry Lefkowitz	8-K	001-36160	2/16/2016	10.1
10.6	Form of Restricted Stock Unit Agreement	—	—	—	—	x
31.1	Brixmor Property Group Inc. Certification of 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	—	—	—	—	x
31.2	Brixmor Property Group Inc. Certification of 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	—	—	—	—	x
31.3	Brixmor Operating Partnership LP Certification of 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	—	—	—	—	x
31.4	Brixmor Operating Partnership LP Certification of 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	—	—	—	—	x
32.1	Brixmor Property Group Inc. Certification of 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 2002	—	—	—	—	x

~~- 43 -~~



		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Date of Filing	Exhibit Number	Filed Herewith
32.2	Brixmor Operating Partnership LP Certification of 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 2002	—	—	—	—	x
99.1	Section 13(r) Disclosure	—	—	—	—	x
101.INS	XBRL Instance Document	—	—	—	—	x
101.SCH	XBRL Taxonomy Extension Schema Document	—	—	—	—	x
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	—	—	—	—	x
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	—	—	—	—	x
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	—	—	—	—	x
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	—	—	—	—	x

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

~~- 44 -~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrants~~Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.



	BRIXMOR PROPERTY GROUP INC.

Date: ~~October~~April 26, ~~2015~~2016	By:	/s/~~Michael A. Carroll~~Daniel B. Hurwitz
		~~Michael A. Carroll~~Daniel B. Hurwitz
		Interim Chief Executive Officer and ~~Director~~President
		(Principal Executive Officer)

Date: ~~October~~April 26, ~~2015~~2016	By:	/s/~~Michael V. Pappagallo~~Barry Lefkowitz
		~~Michael V. Pappagallo~~Barry Lefkowitz
		~~President and~~Interim Chief Financial Officer
		(Principal Financial Officer)

Date: ~~October~~April 26, ~~2015~~2016	By:	/s/~~Steven A. Splain~~Michael Cathers
		~~Steven A. Splain~~Michael Cathers
		~~Executive Vice President~~Interim Chief Accounting Officer
		(Principal Accounting Officer)



	BRIXMOR OPERATING PARTNERSHIP LP

Date: ~~October~~April 26, ~~2015~~2016	By:	/s/~~Michael A. Carroll~~Daniel B. Hurwitz
		~~Michael A. Carroll~~Daniel B. Hurwitz
		Interim Chief Executive Officer and ~~Director~~President
		(Principal Executive Officer)

Date: ~~October~~April 26, ~~2015~~2016	By:	/s/~~Michael V. Pappagallo~~Barry Lefkowitz
		~~Michael V. Pappagallo~~Barry Lefkowitz
		~~President and~~Interim Chief Financial Officer
		(Principal Financial Officer)

Date: ~~October~~April 26, ~~2015~~2016	By:	/s/~~Steven A. Splain~~Michael Cathers
		~~Steven A. Splain~~Michael Cathers
		~~Executive Vice President~~Interim Chief Accounting Officer
		(Principal Accounting Officer)

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			Purchase Price
Property Name	Location	Month Acquired	Cash		Debt Assumed		Total		GLA
Retail Building at Bardin Place Center	Arlington, TX	Jun-15	$	9,258	$	—	$	9,258	96,127
Larchmont Centre	Mt. Laurel, NJ	Jun-15	11,000		7,000		18,000		103,787
Webster Square Shopping Center	Marshfield, MA	Jun-15	31,950		—		31,950		182,756
			$	52,208	$	7,000	$	59,208	382,670



Assets
		Land	$	13,004
		Buildings	35,606
		Building Improvements	4,671
		Tenant Improvements	2,335
		Above Market Rents	95
		In-Place Leases	4,101
	Real estate, net		59,812
	Deferred charges and prepaid expenses, net		1,792
Total assets			$	61,604

Liabilities
		Mortgage payable	$	7,000
		Mortgage Fair Value Adjustment	440
	Debt obligations, net		7,440
	Accounts payable, accrued expenses and other liabilities (Below Market Leases)		1,956
Total liabilities			9,396
Net Assets Acquired			$	52,208



	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
Discontinued operations:
Revenues	$	123		$	637
Operating expenses	(82		)	(1,571		)
Other income (expense), net	—			5,815
Income from discontinued operating properties	41			4,881
Gain on disposition of operating properties	—			14,426
Income from discontinued operations	$	41		$	19,307