Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

Effective January 1, 2016, we adopted Accounting Standards Update ("ASU") No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis," which changed the way reporting enterprises must evaluate the consolidation of limited partnerships, variable interests and similar entities. Among other things, the changes eliminate the presumption in the voting model that a general partner controls a limited partnership. However, a general partner may consolidate a limited partnership under the variable interest model, depending on the facts and circumstances. WPG Inc. reevaluated whether to consolidate WPG L.P., now considered a VIE, under the new guidance. Based on the facts and circumstances, WPG Inc. concluded that it may continue to consolidate WPG L.P. under the variable interest model as the primary beneficiary of the limited partnership. Ultimately, the new guidance did not impact any of our previous conclusions regarding consolidation.

~~Except as discussed above related to the classification of WPG L.P. as a VIE, there~~There have been no changes during the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 to any of our previous conclusions about whether an entity qualifies as a VIE or whether we are the primary beneficiary of any previously identified VIE. In connection with the Merger, the Company acquired an interest in a VIE in which we are deemed to be the primary beneficiary. Accordingly, we have consolidated the VIE, which consists solely of undeveloped land. During the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, we did not provide financial or other support to a previously identified VIE that we were not previously contractually obligated to provide.

Investments in partnerships and joint ventures represent our noncontrolling ownership interests in properties. We account for these investments using the equity method of accounting. We initially record these investments at cost and we subsequently adjust for net equity in income or loss, which we allocate in accordance with the provisions of the applicable partnership or joint venture agreement and cash contributions and distributions, if applicable. The allocation provisions in the partnership or joint venture agreements are not always consistent with the legal ownership interests held by each general or limited partner or joint venture investee primarily due to partner preferences. We separately report investments in joint ventures for which accumulated distributions have exceeded investments in and our share of net income from the joint ventures within cash distributions and losses in partnerships and joint ventures, at equity in the consolidated balance sheets. The net equity of certain joint ventures is less than zero because of financing or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization, and WPG has committed to or intends to fund the venture.

As of ~~June 30, 2016,~~March 31, 2017, our assets consisted of material interests in ~~117~~111 shopping centers. The consolidated financial statements as of that date reflect the consolidation of ~~105~~101 wholly owned properties and ~~six~~four additional properties that are less than wholly owned,

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

but which we control or for which we are the primary beneficiary. We account for our interests in the remaining six properties, or the joint venture properties, using the equity method of accounting, as we have determined that we have significant influence over their operations. We manage the day-to-day operations of the joint venture properties, but do not control the operations as we have determined that our partner or partners have substantive participating rights with respect to the assets and operations of these joint venture properties.

We allocate net operating results of WPG L.P. to third parties and to WPG Inc. based on the partners' respective weighted average ownership interests in WPG L.P. Net operating results of WPG L.P. attributable to third parties are reflected in net income attributable to noncontrolling interests. WPG Inc.'s weighted average ownership interest in WPG L.P. was 84.1% for both the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 and ~~2015.~~2016. As of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, WPG Inc.'s ownership interest in WPG L.P. was ~~84.1%~~84.2% and ~~84.2%~~84.1%, respectively. We adjust the noncontrolling limited partners' interests at the end of each period to reflect their interest in WPG L.P.

~~3. Summary of Significant Accounting Policies~~

~~Cash and Cash Equivalents~~

We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents generally consist of commercial paper, bankers' acceptances, repurchase agreements, and money market deposits or securities. Financial instruments that potentially subject us to concentrations of credit risk include our cash and cash equivalents and our tenant receivables. We place our cash and cash equivalents in institutions with high credit quality. However, at certain times, such cash and cash equivalents may be in excess of FDIC and SIPC insurance limits.

~~Investment Properties~~

We record investment properties at fair value when acquired. Investment properties include costs of acquisitions; development, predevelopment, and construction (including allocable salaries and related benefits); tenant allowances and improvements; and interest and real estate taxes incurred during construction. We capitalize improvements and replacements from repair and maintenance when the repair and maintenance extends the useful life, increases capacity, or improves the efficiency of the asset. All other repair and maintenance items are expensed as incurred. We capitalize interest on projects during periods of construction until the projects are ready for their intended purpose based on interest rates in place during the construction period. We record depreciation on buildings and improvements utilizing the straight-line method over an estimated original useful life, which is generally five to 40 years. We review depreciable lives of investment properties periodically and we make adjustments when necessary to reflect a shorter economic life. We amortize tenant allowances and tenant improvements utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. We record depreciation on equipment and fixtures utilizing the straight-line method over three to ten years.

We review investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable. These circumstances include, but are not limited to, declines in a property's cash flows, ending occupancy, estimated market values or our decision to dispose of a property before the end of its estimated useful life. Furthermore, this evaluation is conducted no less frequently than quarterly, irrespective of changes in circumstances. We measure any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization plus its residual value is less than the carrying value of the property. To the extent impairment has occurred, we charge to expense the excess of the carrying value of the property over its estimated fair value. We estimate fair value using unobservable data such as operating income, estimated capitalization rates, leasing prospects and local market information. We may decide to dispose of properties that are held for use and the consideration received from these property dispositions may differ from their carrying values. We also review our investments, including investments in unconsolidated entities, if events or circumstances change indicating that the carrying amount of our investments may not be recoverable. We will record an impairment charge if we determine that a decline in the fair value of the investments in unconsolidated entities is other-than-temporary. Changes in economic and operating conditions that occur subsequent to our review of recoverability of investment property and other investments in unconsolidated entities could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

~~Investments in Unconsolidated Entities~~

Joint ventures are common in the real estate industry. We use joint ventures to finance properties, develop new properties, and diversify our risk in a particular property or portfolio of properties. On June 1, 2015, we completed a joint venture transaction with respect to the ownership and operation of five of our properties (see Note 5 - "Investment in Unconsolidated Entities, at Equity"). We held material unconsolidated joint venture ownership interests in six properties as of June 30, 2016 and December 31, 2015.

Certain of our joint venture properties are subject to various rights of first refusal, buy-sell provisions, put and call rights, or other sale or marketing rights for partners which are customary in real estate joint venture agreements and the industry. We and our partners in these joint ventures may initiate these provisions (subject to any applicable lock up or similar restrictions), which may result in either the sale of our interest or the use of available cash or borrowings to acquire the joint venture interest from our partner.


3.	Summary of Significant Accounting Policies

Fair Value Measurements

The Company measures and discloses its fair value measurements in accordance with Accounting Standards Codification ("ASC") Topic 820 - “Fair Value Measurement” (“Topic 820”). Topic 820 guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The fair value hierarchy, as defined by Topic 820, contains three levels of inputs that may be used to measure fair value as follows:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as interest rates, foreign exchange rates, and yield curves, that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity's own assumptions, as there is little, if any, related market activity.

~~In instances where the determination of~~The asset or liability's fair value within 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 of any 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~~measurement. Under Topic 820, fair value ~~measurement~~measurements are determined based on the assumptions that market participants would use in ~~its entirety requires judgment and considers factors specific to~~pricing the asset or ~~liability.~~

~~Note 6 - "Indebtedness" includes a discussion of~~liability in an orderly transaction at the ~~fair value of debt measured using Level 2 inputs. Note 4 - "Investment in Real Estate" includes a discussion of the fair values recorded in purchase accounting, using Level 2~~measurement date and Level 3 inputs. Level 3 inputs to our purchase accounting analyses include our estimations of net operating results of the property, capitalization rates and discount rates. Similar Level 3 inputs are used in our impairment analyses noted above.

~~The Company has derivatives that must be measured~~ under the fair value standard (see Note 7 - "Derivative Financial Instruments"). The Company currently does not have any non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

~~Purchase Accounting~~

We record the purchase price of acquisitions and any excess investment in unconsolidated entities to the various components of the acquisition based upon the fair value of each component which may be derived from various observable or unobservable inputs and assumptions. Also, we may utilize third party valuation specialists. These components typically include buildings, land and intangibles related to in-place leases, and we estimate:

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

~~the fair value of land and related improvements and buildings on an as-if-vacant basis;~~

~~the market value of in-place leases based upon our best estimate of~~ current market ~~rents and amortize the resulting market rent adjustment into revenues;~~

~~the value of costs to obtain tenants, including tenant allowances and improvements and leasing commissions; and~~

~~the value of revenue and recovery of costs foregone during a reasonable lease-up period, as if the space was vacant.~~

The fair value of building is depreciated over the estimated remaining life of the acquired building or related improvements. We amortize tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. We also estimate the value of other acquired intangible assets, if any, which are amortized over the remaining life of the underlying related intangibles.

conditions.

Use of Estimates

We prepared the accompanying consolidated financial statements in accordance with GAAP. This requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period. Our actual results could differ from these estimates.

Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

Segment Disclosure

Our primary business is the ownership, development and management of retail real estate. We have aggregated our operations, including enclosed retail properties and community centers, into one reportable segment because they have similar economic characteristics and we provide similar products and services to similar types of, and in many cases, the same tenants.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued ~~ASU~~Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU No. 2014-09 revises GAAP by offering a single comprehensive revenue recognition standard instead of numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. An entity has the option to apply the provisions of ASU No. 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application. On July 9, 2015, the FASB announced it would defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also decided to permit early adoption of the standard, but not before the original effective date of December 15, 2016. This new standard will be effective for the Company on January 1, 2018 and, upon effectiveness, certain of our revenue streams will be impacted. The impacted revenue streams primarily consist of fees earned from management, development and leasing services provided to joint ventures in which we own an interest, sales of real estate and other ancillary income earned from our properties. During the three months ended March 31, 2017, these revenues were less than 2% of consolidated revenue. We ~~are currently evaluating~~expect that fee income earned from our ~~method~~joint ventures for the above-mentioned services will generally be recognized in a manner consistent with our current measurement and patterns of ~~adopting and the impact, if any,~~recognition. As a result, we do not expect the adoption of this standard ~~will~~to have ~~on our consolidated financial statements.~~

In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This standard amended existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. It was effective for annual reporting periods beginning after December 15, 2015, but early adoption was permitted. This new guidance reduced total assets and total long-term debt on our consolidated balance sheets by amounts ($16.8 million and $19.9 million as of June 30, 2016 and December 31, 2015, respectively) previously classified as deferred debt issuance costs (see Note 6 - "Indebtedness" for amounts), but this standard did not have any other effect on our consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments," which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under this ASU, acquirers must recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. This guidance is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company elected to early adopt this ASU in the third quarter of 2015, resulting in no materialsignificant impact on our consolidated ~~financial statements.~~

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes~~results of operations upon adoption in 2018. We expect to ~~Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated~~adopt the standard using the modified retrospective approach, which requires a cumulative effect adjustment as ~~in millions or billions)~~

of the date of adoption.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU No. 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. It is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. From a lessee perspective, the Company currently has seven ground leases that, under the new guidance, will result in the recognition of a lease liability and corresponding right-of-use asset. From a lessor perspective, the new guidance remains mostly similar to current rules, though contract consideration will now be allocated between lease and non-lease components. Non-lease component allocations will be recognized under ASU 2014-09, and we expect that this will result in a different pattern of recognition for certain non-lease components, including for fixed common-area ("CAM") revenues. In addition, ASU 2016-02 limits the capitalization of leasing costs to initial direct costs, which will likely result in a reduction to our capitalized leasing costs and an increase to general and administrative expenses, though the amount of such changes is highly dependent upon the leasing compensation structures in place at the time of adoption. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

~~Reclassifications~~

~~Reclassifications~~In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230)." ASU No. 2016-15 is intended to reduce diversity in practice with respect to how certain ~~amounts~~transactions are classified in the ~~2015~~statement of cash flows. It is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted. In addition, in November 2016, the Emerging Issues Task Force ("EITF") of the FASB issued EITF Issue 16-A "Restricted Cash," requiring that a statement of cash flows explain the change during the period in total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash would be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is also effective for fiscal years beginning after December 15, 2017, including interim periods. These new standards require a retrospective transition approach. The Company has $30.8 million and $29.2 million of restricted cash on its consolidated ~~financial statements have been made in order~~balance sheets as of March 31, 2017 and December 31, 2016, respectively, whose cash flow statement classification will change to ~~conform~~align with ~~2016 presentation.~~the new guidance upon adoption of the EITF. We are currently evaluating our plans regarding the adoption of these new standards.

~~4. Investment in Real Estate~~

~~The Merger~~

OnIn January ~~15, 2015, we acquired 23 properties in~~2017, the ~~Merger (see Note 1 - "Organization"). We reflected~~FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business," that provides guidance to assist entities with evaluating when a set of transferred assets and ~~liabilities~~activities (set) is a business. The new guidance requires an acquirer to determine if substantially all of the ~~properties acquired in the Merger at the estimated~~ fair value on the January 15, 2015 acquisition date. The following table summarizes the purchase accounting for the acquisition, which was finalized during the three months ended March 31, 2016 and did not result in any material changes from the estimated fair values disclosed in the 2015 Form 10-K:

Investment properties $ 3,091,410
Cash and cash equivalents (1) 547,294
Tenant accounts receivable 14,311
Investment in and advances to unconsolidated real estate entities 21,994
Deferred costs and other assets (including intangibles) 370,079
Accounts payable, accrued expenses, intangibles, and deferred revenue (289,551 )
Distributions payable (2,658 )
Redeemable noncontrolling interests, including preferred units (5,795 )
Total assets acquired and liabilities assumed 3,747,084
Fair value of mortgage notes payable assumed (1,356,389 )
Net assets acquired 2,390,695
Less: Common shares issued (535,490 )
Less: Preferred shares issued (319,960 )
Less: Common operating partnership units issued to limited partners (29,482 )
Less: Cash and cash equivalents acquired (547,294 )
Net cash paid for acquisition $ 958,469

~~(1) Includes the proceeds from the Property Sale, net~~ of the ~~repayment~~gross assets acquired is concentrated in a single identifiable asset or group of assets; if so, the ~~$155.0 million balance~~set of transferred assets and activities is not a business. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted. The new guidance will be applied on a prospective basis for transactions that occur within the ~~Glimcher credit facility.~~

The consolidated balance sheet at June 30, 2016 contains certain intangible assets associated with the Merger (excluding the amounts related to the O'Connor Properties, which were transferred to unconsolidated entities upon deconsolidation on June 1, 2015, per Note 5 - "Investment in Unconsolidated Entities, at Equity" and other dispositions). Intangiblesperiod of $86.9 million, which relate primarily to above-market leases and in-place lease values, are included in “Deferred costs and other assets” at June 30, 2016. Intangibles of $90.0 million, which are primarily related to below-market leases, are included in “Accounts payable, accrued expense, intangibles, and deferred revenue” at June 30, 2016.

Total revenues and net loss (excluding transaction costs and costs of corporate borrowing) from the properties we acquired in the Merger (including the amounts from the O'Connor Properties for periods prior to the date of the O'Connor Joint Venture transaction, as defined in Note 5 - "Investment in Unconsolidated Entities, at Equity") were $71.2 million and $9.1 million, respectively, for the three months ended June 30, 2015 and $140.0 million and $1.3 million, respectively, for the six months ended June 30, 2015, which are included in the accompanying consolidated statements of operations and comprehensive income.

adoption. Upon

~~WP Glimcher~~Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

~~2016 Dispositions~~adoption of this standard, the Company anticipates that more property acquisitions will be accounted for under asset acquisition accounting rather than business combination accounting, which will result in the capitalization of transactions costs rather than expensing of said costs under the current guidance. We early adopted this standard prospectively as of January 1, 2017, as permitted under the standard.

Deferred Costs and Other Assets

On ~~June 9, 2016 and April 28, 2016, Merritt Square Mall and Chesapeake Square were transitioned~~January 4, 2017, the remaining $15.6 million outstanding on the promissory note receivable related to the ~~lenders upon foreclosure, respectively (see Note 6 - "Indebtedness" for further discussion).~~

On January 29, 2016 ~~the Company completed the~~ sale of Forest Mall, located in Fond Du Lac, Wisconsin, and Northlake Mall, located in Atlanta, Georgia, was received by the Company in full. The proceeds were used to reduce the balance of corporate debt.

On February 28, 2017, the buyer of Knoxville Center, located in Knoxville, Tennessee, extended the maturity of the $6.2 million promissory note receivable, issued during the August 19, 2016 sale of the property, to April 28, 2017 and paid the Company $0.4 million of the outstanding principal balance. As of March 31, 2017, the buyer was current on their interest payments.

Redeemable Noncontrolling Interests for WPG Inc.

Redeemable noncontrolling interests represent the underlying equity held by unaffiliated third parties in the consolidated joint venture entity that owns Arbor Hills, located in Ann Arbor, Michigan (the "Arbor Hills Venture") and the consolidated joint venture that owns Classen Curve and The Triangle at Classen Curve, each located in Oklahoma City, Oklahoma and Nichols Hills Plaza, located in Nichols Hills, Oklahoma (the "Oklahoma City Properties Venture," collectively) as well as the outstanding WPG L.P. 7.3% Series I-1 Preferred Units (the "Series I-1 Preferred Units"). The unaffiliated third parties have, at their option, the right to have their equity purchased by the Company subject to the satisfaction of certain conditions. During the three months ended March 31, 2017, the Company purchased all of the equity owned by such unaffiliated third parties related to the Arbor Hills Venture and the Oklahoma City Properties Venture, respectively. As of March 31, 2017, the aforementioned properties were wholly owned by the Company, and the only remaining redeemable noncontrolling interests relate to Series I-1 Preferred Units.


4.	Investment in Real Estate

2017 Dispositions

On February 21, 2017, we completed the sale of Gulf View Square and River Oaks Center to private real estate investors ~~(the "Buyers")~~ for an aggregate purchase price of ~~$30.0~~$42 million, which was classified as real estate held for sale on the accompanying consolidated balance sheet as of December 31, ~~2015.~~2016. The ~~sales price consisted of $10.0 million paid to the Company at closing and the issuance of a promissory note for $20.0 million~~net proceeds from the ~~Company~~transaction were used to reduce corporate debt.

On January 10, 2017, we completed the ~~Buyers with an interest rate~~sale of ~~6% per annum. On June 29, 2016,~~Virginia Center Commons to a private real estate investor for a purchase price of $9 million, which was classified as real estate held for sale on the ~~Buyers repaid $4.4 million~~accompanying consolidated balance sheet as of ~~the promissory note balance. The remaining $15.6 million note balance is due on~~ December 31, ~~2016 after~~2016. The net proceeds from the ~~exercise of a six-month extension option by the Buyers. As of June 30, 2016, the Buyers are current on their interest payments.~~ transaction were used to reduce corporate debt.

In connection with the ~~sale,~~sales noted above, the Company recorded a ~~$2.3~~$0.1 million ~~loss,~~gain, which is included in gain (loss) ~~gain~~ on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive income for the ~~six~~three months ended ~~June 30, 2016.~~March 31, 2017.

2016 Dispositions

On January 29, 2016, the Company completed the sale of Forest Mall and Northlake Mall to private real estate investors for an aggregate purchase price of $30.0 million. The net proceeds from the ~~transactions~~transaction were used to reduce the balance outstanding under the Revolver, as defined below (see Note 6 - "Indebtedness").

In connection with the sale noted above, the Company recorded a $2.2 million loss, which is included in gain (loss) on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive income for the three months ended March 31, 2016.

Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

~~2015 Acquisition~~

~~On January 13, 2015,~~Impairment

During the three months ended March 31, 2017, the Company entered into a purchase and sale agreement to dispose of a community center asset. The agreement is subject to customary closing and diligence requirements. Given uncertainties that the disposition is probable within one year due to the aforementioned closing and diligence requirements, this property remains classified as held for use as of March 31, 2017. In connection with the preparation of our financial statements included in this Form 10-Q, we ~~acquired Canyon View Marketplace, a shopping center located~~shortened the hold period used in ~~Grand Junction, Colorado,~~assessing impairment for ~~$10.0 million including~~ the ~~assumption~~asset, which resulted in the carrying value not being recoverable from the expected cash flows. The purchase offer represents the best available evidence of fair value for this property. We compared the fair value to the carrying value, which resulted in the recording of an ~~existing mortgage with a principal balance~~impairment charge of ~~$5.5 million. The source~~approximately $8.5 million in the accompanying consolidated statements of ~~funding~~operations and comprehensive income for the ~~acquisition was cash on hand.~~

three months ended March 31, 2017.

Intangible Assets and Liabilities Associated with Acquisitions

~~Intangible~~The table below identifies the types of intangible assets and liabilities, their location on the consolidated balance sheets, their weighted average amortization period, and their book value, which is net of accumulated amortization, as of ~~June 30, 2016, which were recorded at the respective acquisition dates, are associated with the~~March 31, 2017 and December 31, 2016:



			Balance as of
Intangible Asset/Liability	Location on the Consolidated Balance Sheets	Weighted Average Remaining Amortization (in years)	March 31, 2017		December 31, 2016
Above-market leases - Company is lessor	Deferred costs and other assets	7.3	$	32,119	$	34,337
Below-market leases - Company is lessor	Accounts payable, accrued expenses, intangibles and deferred revenues	13.5	$	100,112	$	104,540
Above-market lease - Company is lessee	Accounts payable, accrued expenses, intangibles and deferred revenues	30.2	$	2,363	$	2,383
In-place leases	Deferred costs and other assets	10.0	$	65,972	$	70,907


5.	Investment in Unconsolidated Entities, at Equity

The Company's ~~acquisitions of properties at fair value, including the properties acquired~~investment activity in ~~the Merger (excluding the amounts related to the O'Connor Properties and other dispositions).~~

The gross intangibles recorded as of their respective acquisition dates are comprised of an asset for acquired above-market leases of $61,213 in which the Company is the lessor, a liability for acquired below-market leases of $157,384 in which the Company is the lessor, a liability of $2,536 for an acquired above-market lease in which the Company is the lessee, and an asset for in-place leases of $152,430.

The intangibles related to above and below-market leases in which the Company is the lessor are amortized to minimum rents on a straight-line basis over the estimated life of the lease, with amortization as a net increase to minimum rents in the amounts of $2.1 million and $6.4 million forunconsolidated real estate entities during the three months ended ~~June 30,~~March 31, 2017 and March 31, 2016 consisted of investments in the following material joint ventures:

The O'Connor Joint Venture

This investment consists of a 51% interest held by the Company in a portfolio of five enclosed retail properties and ~~2015, respectively,~~related outparcels, consisting of the following: The Mall at Johnson City located in Johnson City, Tennessee; Pearlridge Center located in Aiea, Hawaii; Polaris Fashion Place® located in Columbus, Ohio; Scottsdale Quarter® located in Scottsdale, Arizona; and ~~$4.0 million~~Town Center Plaza (which consists of Town Center Plaza and ~~$11.0 million~~the adjacent Town Center Crossing) located in Leawood, Kansas (collectively the "O'Connor Properties"). We retained management, leasing, and development responsibilities for the six months ended June 30, 2016 and 2015, respectively. The above-market leases in which the Company is the lessee are amortized to ground rent expense over the life of the non-cancelable lease terms, with amortization as a net decrease to ground rent expense in the amounts of $20 and $52 for the three months ended June 30, 2016 and 2015, respectively, and $39 and $104 for the six months ended June 30, 2016 and 2015, respectively. In-place leases are amortized to depreciation and amortization expense over the life of the leases to which they pertain, with such amortization in the amounts of $6.0 million and $14.5 million for the three months ended June 30, 2016 and 2015, respectively, and $12.5 million and $29.3 million for the six months ended June 30, 2016 and 2015, respectively. The above activity reflects the deconsolidation of the properties transferred toO'Connor Joint Venture.

On March 2, 2017, the O'Connor Joint Venture closed on ~~June~~the purchase of Pearlridge Uptown II, a 180,000 square foot wing of Pearlridge Center, for a gross purchase price of $70.0 million.

On March 30, 2017, the O'Connor Joint Venture closed on a $43.2 million non-recourse mortgage note payable with an eight year term and a fixed interest rate of 4.071% secured by Pearlridge Uptown II. The mortgage note payable requires monthly interest only payments until April 1, ~~2015~~2019, at which time monthly interest and ~~other dispositions.~~principal payments are due until maturity.

On March 29, 2017, the O'Connor Joint Venture closed on a $55.0 million non-recourse mortgage note payable with a ten year term and a fixed interest rate of 4.36% secured by sections of Scottsdale Quarter® known as Block K and Block M. The mortgage note payable requires monthly interest only payments until May 1, 2022, at which time monthly interest and principal payments are due until maturity.

~~WP Glimcher~~Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

The table below identifies the types of intangible assets and liabilities, their location on the consolidated balance sheets, their weighted average amortization period, and their book value, which is net of accumulated amortization, as of June 30, 2016 and December 31, 2015:

Balance as of
Intangible
Asset/Liability

Location on the
Consolidated Balance Sheets

Weighted Average Remaining Amortization
(in years)
June 30, 2016 December 31, 2015
Above-market leases - Company is lessor Deferred costs and other assets 7.3 $ 40,392
$ 47,285
Below-market leases - Company is lessor Accounts payable, accrued expenses, intangibles and deferred revenues 13.3 $ 117,417
$ 131,854
Above-market lease - Company is lessee Accounts payable, accrued expenses, intangibles and deferred revenues 31.0 $ 2,422
$ 2,461
In-place leases Deferred costs and other assets 9.5 $ 84,642
$ 99,836

~~Condensed Pro Forma Financial Information (Unaudited)~~

The results of operations of acquired properties are included in the consolidated statements of operations beginning on their respective acquisition dates. The following unaudited condensed pro forma financial information is presented as if the Merger and the Property Sale described in Note 1 - "Organization," which were completed on January 15, 2015, had been consummated on January 1, 2015. The unaudited condensed pro forma financial information assumes the O'Connor Joint Venture transaction completed on June 1, 2015 (see Note 5 - "Investment in Unconsolidated Entities, at Equity") also occurred as of January 1, 2015. Additionally, adjustments have been made to reflect the following transactions as if they occurred on January 1, 2015: the issuance of the Notes Payable on March 24, 2015 (see Note 6 - "Indebtedness"), the redemption of all of the outstanding Series G Preferred Shares on April 15, 2015 (see Note 8 - "Equity"), the refinancings of property mortgages on May 21, 2015 (see Note 6 - "Indebtedness"), the receipt of funds from the June 2015 Term Loan on June 4, 2015 (see Note 6 - "Indebtedness") and the receipt of funds from the December 2015 Term Loan on December 10, 2015 (see Note 6 - "Indebtedness"). Finally, no pro forma adjustments have been made for the January 13, 2015 acquisition of Canyon View Marketplace, the January 29, 2016 sale of Forest Mall and Northlake Mall, the April 28, 2016 foreclosure of Chesapeake Square or the June 9, 2016 foreclosure of Merritt Square Mall because they would not have a significant impact. The unaudited condensed pro forma financial information is for comparative purposes only and not necessarily indicative of what actual results of operations of the Company would have been had the Merger and other transactions noted above been consummated on January 1, 2015, nor does it purport to represent the results of operations for future periods.

~~WPG Inc. Condensed Pro Forma Financial Information (Unaudited)~~

~~The table below contains information related to the unaudited condensed pro forma financial information of WPG Inc. for the three and six months ended June 30, 2015 is as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2015 2015
Total revenues $ 213,627
$ 425,381
Net income attributable to the Company $ 9,243
$ 15,256
Net income attributable to common shareholders $ 5,619
$ 8,124
Earnings per common share-basic and diluted $ 0.03
$ 0.04
Weighted average shares outstanding-basic (in thousands) 185,290
185,195
Weighted average shares outstanding-diluted (in thousands) 220,252
220,098

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

~~WPG L.P. Condensed Pro Forma Financial Information (Unaudited)~~

~~The table below contains information related to the unaudited condensed pro forma financial information of WPG L.P. for the three and six months ended June 30, 2015 is as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2015 2015
Total revenues $ 213,627
$ 425,381
Net income attributable to unitholders $ 10,334
$ 16,796
Net income attributable to common unitholders $ 6,650
$ 9,554
Earnings per common unit-basic and diluted $ 0.03
$ 0.04
Weighted average units outstanding-basic (in thousands) 219,686
219,585
Weighted average units outstanding-diluted (in thousands) 220,252
220,098


5.	~~Investment in Unconsolidated Entities, at Equity~~

~~The Company's investment activity in unconsolidated real estate entities during the six months ended June 30, 2016 and June 30, 2015 consisted of investments in the following joint ventures:~~

~~The O'Connor Joint Venture~~

On June 1, 2015, we completed a joint venture transaction with O'Connor Mall Partners, L.P. ("O'Connor"), an unaffiliated third party, with respect to the ownership and operation of five of the Company’s enclosed retail properties and certain related out-parcels (the "O'Connor Joint Venture") acquired in the Merger, which were valued at approximately $1.625 billion, consisting of the following: The Mall at Johnson City located in Johnson City, Tennessee; Pearlridge Center located in Aiea, Hawaii; Polaris Fashion Place® located in Columbus, Ohio; Scottsdale Quarter® located in Scottsdale, Arizona and Town Center Plaza (which consists of Town Center Plaza and the adjacent Town Center Crossing) located in Leawood, Kansas (collectively the "O'Connor Properties"). Under the terms of the joint venture agreement, we retained a 51% interest in the O'Connor Joint Venture and sold the remaining 49% interest to O'Connor. In addition, the Company received reimbursement for 49% of costs incurred as of June 1, 2015 related to development activity at Scottsdale Quarter. The transaction generated net proceeds, after taking into consideration the assumption of debt (including the new loans on Pearlridge Center and Scottsdale Quarter) and costs associated with the transaction, of approximately $432 million (including $28.7 million for the partial reimbursement of the Scottsdale Quarter development costs), which was used to repay a portion of the Bridge Loan (see Note 6 - "Indebtedness"). Since we no longer control the operations of the O'Connor Properties, we deconsolidated the properties and recorded a gain in connection with this sale of $5.1 million, which is included in (loss) gain on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2015. We retained management and leasing responsibilities for the O'Connor Properties, though our partner's substantive participating rights over the decisions most important to the operations of the O'Connor Joint Venture preclude our control and consolidation of this venture. Further, one of the properties in this venture, Pearlridge Center, is subject to a ground lease.

~~The~~ Seminole Joint Venture

This investment consists of a 45% legal interest held by the Company in Seminole Towne Center, an approximate 1.1 million square foot enclosed regional retail property located in the Orlando, Florida area. The Company's effective financial interest in this property (after preferences) is estimated to be approximately 22% for ~~2016.~~2017. We retain management and leasing responsibilities for the Seminole Joint Venture.

Individual agreements specify which services the Company is to provide to each joint venture. The Company, through its affiliates, provide management, development, construction, marketing, leasing and legal services for a fee to each of the joint ventures described above. Related to performing these services, we recorded management fees of $1.6 million and $1.5 million for the three months ended March 31, 2017 and 2016, respectively, which are included in other income in the accompanying consolidated statements of operations and comprehensive income. Advances to the O'Connor Joint Venture totaled $2.6 million and $2.5 million as of March 31, 2017 and December 31, 2016, respectively, which are included in investment in and advances to unconsolidated entities, at equity in the accompanying consolidated balance sheets. Management deems this balance to be collectible and anticipates repayment within one year.

The following table presents the combined statements of operations for the O'Connor Joint Venture, the Seminole Joint Venture, and an indirect 12.5% ownership interest in certain real estate for all periods presented during which the Company accounted for these investments as unconsolidated entities for the three months ended March 31, 2017 and 2016:

~~WP Glimcher~~



	Three Months Ended March 31,
	2017			2016
Total revenues	$	48,434		$	46,312
Operating expenses	20,591			19,306
Depreciation and amortization	19,034			20,044
Operating income	8,809			6,962
Interest expense, taxes, and other, net	(8,460		)	(7,889		)
Net income (loss) from the Company's unconsolidated real estate entities	349			(927		)
Our share of loss from the Company's unconsolidated real estate entities	$	(444	)	$	(1,161	)


6.	Indebtedness

Mortgage Debt

Total mortgage indebtedness at March 31, 2017 and December 31, 2016 was as follows:



	March 31, 2017			December 31, 2016
Face amount of mortgage loans	$	1,603,806		$	1,610,429
Fair value adjustments, net	11,691			12,661
Debt issuance cost, net	(4,695		)	(5,010		)
Carrying value of mortgage loans	$	1,610,802		$	1,618,080

A roll forward of mortgage indebtedness from December 31, 2016 to March 31, 2017 is summarized as follows:



Balance at December 31, 2016	$	1,618,080
Debt amortization payments	(6,623		)
Amortization of fair value and other adjustments	(970		)
Amortization of debt issuance costs	315
Balance at March 31, 2017	$	1,610,802

Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

~~Other Joint Venture~~

~~The Company also holds an indirect 12.5% ownership interest in certain real estate through a joint venture with an unaffiliated third party.~~

Individual agreements specify which services the Company is to provide to each joint venture. The Company, through its affiliates, may provide management, development, construction, leasing and legal services for a fee to each of the joint ventures described above.

~~The results for the O'Connor Joint Venture are included below for the six months ended June 30, 2016 and for the period from June 1, 2015 through June 30, 2015.~~

The results for Seminole Towne Center are included below for all periods presented. The results for the indirect 12.5% ownership interest in certain real estate are included for the six months ended June 30, 2016 and for the period from January 15, 2015 through June 30, 2015.

The following table presents the combined statements of operations for the unconsolidated joint venture properties for the periods indicated above during which the Company accounted for these investments as unconsolidated entities for the three and six months ended June 30, 2016 and 2015:

For the Three Months Ended June 30, For the Six Months Ended June 30,
2016 2015 2016 2015
Total revenues $ 47,494
$ 21,168
$ 93,806
$ 29,956
Operating expenses 19,257
9,934
38,562
13,826
Depreciation and amortization 19,680
9,779
39,724
11,061
Operating income 8,557
1,455
15,520
5,069
Interest expense, net (8,277 ) (3,329 ) (16,165 ) (4,427 )
Net income (loss) from the Company's unconsolidated real estate entities 280
(1,874 ) (645 ) 642
Our share of loss from the Company's unconsolidated real estate entities $ (508 ) $ (1,703 ) $ (1,669 ) $ (1,487 )


6.	~~Indebtedness~~

~~Mortgage Debt~~

~~Total mortgage indebtedness at June 30, 2016 and December 31, 2015 was as follows:~~

June 30,
2016 December 31,
2015
Face amount of mortgage loans $ 1,663,910
$ 1,782,103
Fair value adjustments, net 14,607
17,683
Debt issuance cost, net (5,602 ) (6,347 )
Carrying value of mortgage loans $ 1,672,915
$ 1,793,439

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

~~A roll forward of mortgage indebtedness from December 31, 2015 to June 30, 2016 is summarized as follows:~~

Balance, December 31, 2015 $ 1,793,439
Debt amortization payments (7,905 )
Debt borrowings, net 4,591
Debt cancelled upon lender foreclosures, net of debt issuance costs (114,967 )
Amortization of fair value and other adjustments (3,076 )
Amortization of debt issuance costs 833
Balance, June 30, 2016 $ 1,672,915

On June 8, 2016, the Company borrowed $65.0 million under a term loan secured by ownership interests in Weberstown Mall, located in Stockton, California (the "June 2016 Secured Term Loan"). The June 2016 Secured Term Loan bears interest at one-month LIBOR plus 1.75% and will initially mature on June 8, 2018, subject to three one-year extensions available at our option subject to compliance with the terms of the underlying loan agreement and payment of customary extension fees. The interest rate on the June 2016 Secured Term Loan may vary in the future based on the Company's credit rating. The Company used the proceeds from the June 2016 Secured Term Loan to repay the $60.0 million mortgage loan secured by Weberstown Mall and for other general corporate purposes. As of June 30, 2016, the balance was $64.6 million, net of $0.4 million of debt issuance costs, and the applicable interest rate was 2.2%.

The mortgage loans secured by Chesapeake Square and Merritt Square Mall were extinguished upon the properties transitioning to the lenders on April 28, 2016 and June 9, 2016, respectively (see below for further discussion).

Unsecured Debt

The Facility

On May 15, 2014, we closed on a senior unsecured revolving credit facility, or "Revolver," and a senior unsecured term loan, or "Term Loan" (collectively referred to as the "Facility"). The Revolver provides borrowings on a revolving basis up to $900.0 million, bears interest at one-month LIBOR plus 1.25%, and will initially mature on May 30, 2018, subject to two six-month extensions available at our option subject to compliance with the terms of the Facility and payment of a customary extension fee. The Term Loan provides borrowings in an aggregate principal amount up to $500.0 million, bears interest at one-month LIBOR plus 1.45%~~, and will mature on~~. During the three months ended March 31, 2017, we extended the maturity of the Term Loan from May 30, 2017 ~~subject~~ to ~~two,~~May 30, 2018. We have one, 12-month ~~extensions~~extension available at our option subject to compliance with the terms of the Facility and payment of a customary extension fee. ~~During~~On July 6, 2016, the Company executed interest rate swap agreements totaling $200.0 million, which effectively fixed the interest rate on a portion of the Term Loan ~~using swap agreements (see Note 12 - "Subsequent Events").~~at 2.04% through August 1, 2018. The interest rate on the Facility may vary in the future based on the Company's credit rating.

At ~~June 30, 2016,~~March 31, 2017, borrowings under the Facility consisted of ~~$258.8~~$293.0 million outstanding under the Revolver (before debt issuance costs, net of ~~$2.5~~$1.5 million) and ~~$500.0~~$499.7 million, net of $0.3 million of debt issuance costs, outstanding under the Term Loan. On ~~June 30, 2016,~~March 31, 2017, we had an aggregate available borrowing capacity of ~~$640.9~~$606.7 million under the Revolver, net of $0.3 million reserved for outstanding letters of credit. At ~~June 30, 2016,~~March 31, 2017, the applicable interest rate on the Revolver was one-month LIBOR plus 1.25%, or ~~1.72%~~2.23%, and the applicable interest rate on the unhedged portion of the Term Loan was one-month LIBOR plus 1.45%, or ~~1.92%~~2.43%.

Term Loans

On December 10, 2015, the Company borrowed $340.0 million under a term loan (the "December 2015 Term Loan"), pursuant to a commitment received from bank lenders. The December 2015 Term Loan bears interest at one-month LIBOR plus 1.80% and will mature in January 2023. On December 11, 2015, the Company executed interest rate swap agreements totaling $340.0 million, which effectively fixed the interest rate on the December 2015 Term Loan at 3.51% through January 2023. The interest rate on the December 2015 Term Loan may vary in the future based on the Company's credit rating. ~~The Company used the proceeds from the December 2015 Term Loan to repay outstanding amounts on the Revolver and for other general corporate purposes.~~ As of ~~June 30, 2016,~~March 31, 2017, the balance was ~~$336.7~~$337.1 million, net of ~~$3.3~~$2.9 million of debt issuance costs.

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

On June 4, 2015, the Company borrowed $500.0 million under a term loan (the "June 2015 Term Loan"), pursuant to a commitment received from bank lenders. The June 2015 Term Loan bears interest at one-month LIBOR plus 1.45% and will mature in March 2020. On June 19, 2015, the Company executed interest rate swap agreements totaling $500.0 million, with an effective date of July 6, 2015, which effectively fixed the interest rate on the June 2015 Term Loan at 2.56% through June 2018. The interest rate on the June 2015 Term Loan may vary in the future based on the Company's credit rating. ~~The Company used the proceeds from the June 2015 Term Loan to repay the remaining outstanding balance on the Bridge Loan (defined below).~~ As of ~~June 30, 2016,~~March 31, 2017, the balance was ~~$497.2~~$497.8 million, net of ~~$2.8~~$2.2 million of debt issuance costs.

~~Bridge Loan~~

On September 16, 2014, in connection with the execution of the Merger Agreement, WPG entered into a debt commitment letter, which was amended and restated on September 23, 2014 pursuant to which parties agreed to provide up to $1.25 billion in a senior unsecured bridge loan facility (the “Bridge Loan”). The Bridge Loan had a maturity date of January 14, 2016, the date that is 364 days following the closing date of the Merger.

~~On January 15, 2015, the Company borrowed $1.19 billion under the Bridge Loan in connection with the closing of the Merger, which balance was repaid in full during 2015.~~

The Company incurred $10.4 million of Bridge Loan commitment, structuring and funding fees. Upon the full repayment of the Bridge Loan, the Company accelerated amortization of the deferred loan costs, resulting in total amortization of $6.3 million and $10.4 million included in interest expense in the accompanying consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2015, respectively.

Notes Payable

On March 24, 2015, WPG L.P. closed on a private placement of $250.0 million of 3.850% senior unsecured notes (the "Notes Payable") at a 0.028% discount due April 1, 2020. WPG L.P. received net proceeds from the offering of $248.4 million, which it used to repay a portion of outstanding borrowings under the ~~Bridge Loan.~~bridge loan dated as of September 16, 2014 (the "Bridge Loan"). The Notes Payable contain certain customary covenants and events of default which, if any such event of default occurs, would permit or require the principal, premium, if any, and accrued and unpaid interest on all of the then-outstanding Notes Payable to be declared immediately due and payable (subject in certain cases to customary grace and cure periods).

On October 21, 2015, WPG L.P. completed an offer to exchange (the "Exchange Offer") up to $250.0 million aggregate principal amount of the Notes Payable for a like principal amount of its 3.850% senior unsecured notes that have been registered under the Securities Act of 1933 (the "Exchange Notes"). On October 21, 2015, $250.0 million of Exchange Notes were issued in exchange for $250.0 million aggregate principal amount of the Notes Payable that were tendered in the Exchange Offer.

As of ~~June 30, 2016,~~March 31, 2017, the balance outstanding under the Exchange Notes was ~~$247.3~~$247.8 million, net of ~~$2.7~~$2.2 million of debt discount and issuance costs.

Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

Covenants

Our unsecured debt agreements contain financial and other covenants. If we were to fail to comply with these covenants, after the expiration of the applicable cure periods, the debt maturity could be accelerated or other remedies could be sought by the lender including adjustments to the applicable interest rate. As of ~~June 30, 2016,~~March 31, 2017, management believes the Company is in compliance with all covenants of its unsecured debt.

The total balance of mortgages was approximately ~~$1.7~~$1.6 billion as of ~~June 30, 2016.~~March 31, 2017. At ~~June 30, 2016,~~March 31, 2017, certain of our consolidated subsidiaries were the borrowers under 3130 non-recourse loans, one full-recourse loan and one partial-recourse loan secured by mortgages encumbering 3736 properties, including two separate pools of cross-defaulted and cross-collateralized mortgages encumbering a total of six properties. Under these cross-default provisions, a default under any mortgage included in the cross-defaulted pool may constitute a default under all mortgages within that pool and may lead to acceleration of the indebtedness due on each property within the pool. Certain of our secured debt instruments contain financial and other non-financial covenants which are specific to the properties which serve as collateral for that debt. Our existing non-recourse mortgage loans generally prohibit our subsidiaries that are borrowers thereunder from incurring additional indebtedness, subject to certain customary and limited exceptions. In addition, certain of these instruments limit the ability of the applicable borrower's parent entity from incurring mezzanine indebtedness unless certain conditions are satisfied, including compliance with maximum loan

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

to value ratio and minimum debt service coverage ratio tests. Further, under certain of these existing agreements, if certain cash flow levels in respect of the applicable mortgaged property (as described in the applicable agreement) are not maintained for at least two consecutive quarters, the lender could accelerate the debt and enforce its right against its collateral. If the borrower fails to comply with these covenants, the lender could accelerate the debt and enforce its right against their collateral.

On ~~January 11, 2016,~~March 30, 2017, the ~~$44.9~~Company transferred the $40.0 million mortgage loan secured by ~~River Valley~~Valle Vista Mall, located in ~~Lancaster, Ohio, matured. The~~Harlingen, Texas, to the special servicer at the request of the borrower, a consolidated subsidiary of the ~~Company, did not repay the loan in full on the maturity date.~~Company. The borrower has initiated discussions with the special servicer regarding this non-recourse loan and is considering various ~~options including restructuring, extending and other options, including transitioning the property to the lender.~~

On October 30, 2015, we received a notice of default letter, dated that same date, from the special servicer to the borrower concerning the $62.4 million mortgage loan that was scheduled to mature on February 1, 2017 and was secured by Chesapeake Square, located in Chesapeake, Virginia. The default resulted from an operating cash flow shortfall at the property in October 2015 that the borrower, a consolidated subsidiary of the Company, did not cure. On April 21, 2016, the trustee on behalf of the mortgage lender conducted a non-judicial foreclosure sale of Chesapeake Square, in which the Company’s affiliate previously held a majority ownership interest. The mortgage lender was the successful bidder at the sale and ownership transferred on April 28, 2016.

On October 8, 2015, we received a notice of default letter, dated October 5, 2015, from the special servicer to the borrower of the $52.9 million mortgage loan secured by Merritt Square Mall, located in Merritt Island, Florida. The letter was sent because the borrower, a consolidated subsidiary of the Company, did not repay the loan in full by its September 1, 2015 maturity date. On May 25, 2016, the trustee on behalf of the mortgage lender conducted a non-judicial foreclosure sale of Merritt Square Mall, in which the Company’s affiliate previously held a 100% ownership interest. The mortgage lender was the successful bidder at the sale and ownership transferred on June 9, 2016.options. The Company ~~continued~~will continue to manage and lease the ~~property through and including July 31, 2016.~~

Upon the ownership transfers of Chesapeake Square and Merritt Square Mall, the Company recognized a net gain of $34.1 million including the cancellation of outstanding mortgage debt of $115.3 million, which is included in gain on extinguishment of debt, net in the accompanying consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2016.

On June 6, 2016, we received a notice of default letter, dated June 3, 2016, from the special servicer to the borrower of the $101.5 million mortgage loan secured by Southern Hills Mall, located in Sioux City, Iowa. The letter was sent because the borrower, a consolidated subsidiary of the Company, did not repay the loan in full by its June 1, 2016 maturity date. The borrower has initiated discussions with the special servicer regarding this non-recourse loan and is considering various options including restructuring, extending and other options, including transitioning the property to the lender.

property.

On June 30, 2016, we received a notice, dated that same date, that the $87.3 million mortgage loan secured by Mesa Mall, located in Grand Junction, Colorado had been transferred to the special servicer due to the payment default that occurred when the borrower, a consolidated subsidiary of the Company, did not repay the loan in full by its June 1, 2016 maturity date. The borrower has initiated discussions with the special servicer regarding this non-recourse loan and is considering various options including restructuring, extending and other options, including transitioning the property to the ~~lender.~~lender (see Note 12 - "Subsequent Events").

On June 6, 2016, we received a notice of default letter, dated June 3, 2016, from the special servicer to the borrower of the $99.5 million mortgage loan secured by Southern Hills Mall, located in Sioux City, Iowa. The letter was sent because the borrower, a consolidated subsidiary of the Company, did not repay the loan in full by its June 1, 2016 maturity date. On October 27, 2016, we received notification that a receiver had been appointed to manage and lease the property. An affiliate of the Company still holds title to the property.

At ~~June 30, 2016,~~March 31, 2017, management believes the applicable borrowers under our other non-recourse mortgage loans were in compliance with all covenants where non-compliance could individually, or giving effect to applicable cross-default provisions in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows. ~~In addition, we~~The Company has assessed each of these properties for impairment indicators and have ~~identified Valle Vista Mall, located in Harlingen, Texas,~~concluded no impairment charges were warranted as ~~over-levered.~~of March 31, 2017.

Fair Value of Debt

The carrying values of our variable-rate loans approximate their fair values. We ~~expect~~estimate the fair values of fixed-rate mortgages and fixed-rate unsecured debt (including variable-rate unsecured debt swapped to ~~commence discussions with the special servicer on the loan encumbering this property prior to loan maturity.~~fixed-rate) using cash flows discounted at current borrowing rates.

~~WP Glimcher~~Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

~~Fair Value of Debt~~

~~The carrying values of our variable-rate loans approximate their fair values. We estimate the fair values of fixed-rate mortgages using cash flows discounted at current borrowing rates.~~ The book value ~~of our fixed-rate mortgages was $1.4 billion as of June 30, 2016~~ and ~~$1.6 billion as of December 31, 2015. The~~ fair ~~values~~value of these financial instruments and the related discount rate assumptions as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 are summarized as follows:


	June 30, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Book value of fixed-rate mortgages⁽¹⁾					$1,352,706		$1,359,329
Fair value of fixed-rate mortgages	$1,515,491		$1,675,035		$1,395,559		$1,403,103
Weighted average discount rates assumed in calculation of fair value for fixed-rate mortgages	3.05	%	3.42	%	3.80	%	3.79	%

Book value of fixed-rate unsecured debt⁽¹⁾					$1,290,000		$1,290,000
Fair value of fixed-rate unsecured debt					$1,265,188		$1,261,858
Weighted average discount rates assumed in calculation of fair value for fixed-rate unsecured debt					2.86	%	2.86	%

(1) Excludes debt issuance costs and applicable debt discounts.


7.	Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments related to the Company's borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives the Company primarily uses interest rate swaps or caps as part of its interest rate risk management strategy. Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company may also enter into forward starting swaps or treasury lock agreements to set the effective interest rate on a planned fixed-rate financing. In a forward starting swap or treasury lock agreement that the Company cash settles in anticipation of a fixed rate financing or refinancing, the Company will receive or pay an amount equal to the present value of future cash flow payments based on the difference between the contract rate and market rate on the settlement date.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in other comprehensive income ("OCI") or other comprehensive loss (“OCL”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Net realized gains or losses resulting from derivatives that were settled in conjunction with planned fixed-rate financings or refinancings continue to be included in accumulated other comprehensive ~~loss~~income ("~~AOCL"~~AOCI") during the term of the hedged debt transaction. Any ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company recognized ~~$0.6~~$0.1 million ~~and $2.9~~of hedge ineffectiveness as an increase to earnings during the three months ended March 31, 2017. The Company recognized $2.3 million of hedge ineffectiveness as a decrease to earnings during the three ~~and six~~ months ended ~~June 30,~~March 31, 2016, ~~respectively,~~ primarily resulting from a mismatch in the terms of the December 2015 Term Loan and the corresponding derivative. The December 2015 Term Loan includes a 0% LIBOR floor while the corresponding derivative does not. ~~There was no hedge ineffectiveness in earnings during the three and six months ended June 30, 2015.~~

Amounts reported in ~~AOCL~~AOCI relate to derivatives that will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. Realized gains or losses on settled derivative instruments included in ~~AOCL~~AOCI are recognized as an adjustment to income over the term of the hedged debt transaction. During the next twelve months, the Company estimates that an additional ~~$7.2~~$0.4 million will be reclassified as ~~an increase~~a decrease to interest expense.

As of ~~June 30, 2016,~~March 31, 2017, the Company had 1215 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk with a notional value of ~~$939,600.~~

$1,139,600.

~~WP Glimcher~~Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated balance sheets as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015:~~

2016:


Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:	Balance Sheet Location	June 30, 2016		December 31, 2015		Derivatives designated as hedging instruments:	Balance Sheet Location	March 31, 2017		December 31, 2016
Interest rate products	Asset derivatives	Deferred costs and other assets	$	—	$	1,658	Asset derivatives	Deferred costs and other assets	$	8,223	$	5,754
Interest rate products	Liability derivatives	Accounts payable, accrued expenses, intangibles and deferred revenues	$	20,396	$	152	Liability derivatives	Accounts payable, accrued expenses, intangibles and deferred revenues	$	—	$	2

The asset derivative instruments were reported at their fair value of ~~zero~~$8,223 and ~~$1,658~~$5,754 in deferred costs and other assets at ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, respectively, with a corresponding adjustment to OCI for the unrealized gains and losses (net of noncontrolling interest allocation). The liability derivative instruments were reported at their fair value of ~~$20,396~~$0 and ~~$152~~$2 in accounts payable, accrued expenses, intangibles, and deferred revenues at ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, respectively, with a corresponding adjustment to OCL for the unrealized gains and losses (net of noncontrolling interest allocation). Over time, the unrealized gains and losses held in ~~AOCL~~AOCI will be reclassified to earnings. This reclassification will correlate with the recognition of the hedged interest payments in earnings.

The ~~tables~~table below ~~present~~presents the effect of the Company's derivative financial instruments on the consolidated statements of operations and comprehensive income for the three ~~and six~~ months ended ~~June 30, 2016~~March 31, 2017 and ~~2015:~~

2016:

Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCL on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Three Months Ended Three Months Ended Three Months Ended
June 30, June 30, June 30,
2016 2015 2016 2015 2016 2015
Interest rate products $ (7,491 ) $ 4,644
Interest expense $ 1,910
$ (29 ) Interest expense $ (570 ) $ —

Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCL on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Six Months Ended Six Months Ended Six Months Ended
June 30, June 30, June 30,
2016 2015 2016 2015 2016 2015
Interest rate products $ (22,888 ) $ 4,243
Interest expense $ 3,841
$ (32 ) Interest expense $ (2,912 ) $ —

~~Non-Designated Hedges~~

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks, but do not meet the strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of June 30, 2016, the Company has no derivatives that are not designated as cash flow hedges.

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~



Derivatives in Cash Flow Hedging Relationships		Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)					Location of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)				Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
		Three Months Ended						Three Months Ended					Three Months Ended
	��	March 31,						March 31,					March 31,
		2017		2016				2017		2016			2017		2016
Interest rate products		$	1,263	$	(15,397	)	Interest expense	$	1,086	$	1,931	Interest expense	$	92	$	(2,342	)

Credit Risk-Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision that if the Company either defaults or is capable of being declared in default on any of its consolidated indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with its derivative counterparties that incorporate the loan covenant provisions of the Company's indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of ~~June 30, 2016,~~March 31, 2017, the fair value of derivatives in a net liability position, plus accrued interest but excluding any adjustment for nonperformance risk, related to these agreements was ~~$22,224.~~$0. As of ~~June 30, 2016,~~March 31, 2017, the Company has not posted any collateral related to these agreements. The Company is not in default with any of these provisions. If the Company had breached any of these provisions at ~~June 30, 2016,~~March 31, 2017, it would have been required to settle its obligations under the agreements at their termination value of ~~$22,224.~~

$0.

Fair Value Considerations

Currently, the Company uses interest rate swaps and caps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted 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, foreign exchange rates, and implied volatilities. Based on these inputs the Company has determined that its interest rate swap and cap valuations are classified within Level 2 of the fair value hierarchy.

Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

To comply with the provisions of Topic 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

~~The Company values its net derivative instruments on a recurring basis using significant other observable inputs (Level 2).~~

The tables below presents the Company’s net assets and liabilities measured at fair value as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 aggregated by the level in the fair value hierarchy within which those measurements fall:



	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at March 31, 2017
Derivative instruments, net	$	—	$	8,223	$	—	$	8,223

Quoted Prices in Active Markets for Identical Liabilities
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Balance at June 30, 2016
Derivative instruments, net $ —
$ (20,396 ) $ —
$ (20,396 )



	Quoted Prices in Active Markets for Identical Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2016
Derivative instruments, net	$	—	$	5,752	$	—	$	5,752

Quoted Prices in Active Markets for Identical Liabilities
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Balance at December 31, 2015
Derivative instruments, net $ —
$ 1,506
$ —
$ 1,506

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~


8.	Equity

~~The Merger~~

Related to the Merger completed on January 15, 2015, WPG Inc. issued 29,942,877 common shares, 4,700,000 shares of 8.125% Series G Cumulative Redeemable Preferred Stock (the "Series G Preferred Shares"), 4,000,000 shares of 7.5% Series H Cumulative Redeemable Preferred Stock (the "Series H Preferred Shares") and 3,800,000 shares of 6.875% Series I Cumulative Redeemable Preferred Stock (the "Series I Preferred Shares"), and WPG L.P. issued to WPG Inc. a like number of common and preferred units as consideration for the common and preferred shares issued. Additionally, WPG L.P. issued to limited partners 1,621,695 common units and 130,592 WPG L.P. 7.3% Series I‑1 Preferred Units. The preferred shares and units were issued as consideration for similarly-named preferred interests of Glimcher that were outstanding at the Merger date.

On April 15, 2015, WPG Inc. redeemed all of the 4,700,000 issued and outstanding Series G Preferred Shares, resulting in WPG L.P. redeeming a like number of preferred units under terms identical to those of the Series G Preferred Shares described below. The Series G Preferred Shares were redeemed at a redemption price of $25.00 per share, plus accumulated and unpaid distributions up to, but excluding, the redemption date, in an amount equal to $0.5868 per share, for a total payment of $25.5868 per share. This redemption amount included the first quarter dividend of $0.5078 per share that was declared on February 24, 2015 to holders of record of such Series G Preferred Shares on March 31, 2015. Because the redemption of the Series G Preferred Shares was a redemption in full, trading of the Series G Preferred Shares on the NYSE ceased after the redemption date. The aggregate amount paid to effect the redemptions of the Series G Preferred Shares was approximately $120.3 million, which was funded with cash on hand.

Exchange Rights

Subject to the terms of the limited partnership agreement of WPG L.P., limited partners in WPG L.P. have, at their option, the right to exchange all or any portion of their units for shares of WPG Inc. common stock on a one‑for‑one basis or cash, as determined by WPG Inc. Therefore, the common units held by limited partners are considered by WPG Inc. to be share equivalents and classified as noncontrolling interests within permanent equity, and classified by WPG L.P. as permanent equity. The amount of cash to be paid if the exchange right is exercised and the cash option is selected will be based on the ~~trading price~~market value of WPG Inc.'s common stock ~~at that time.~~as determined pursuant to the terms of the WPG L.P. Partnership Agreement. At ~~June 30, 2016,~~March 31, 2017, WPG Inc. had reserved ~~35,129,921~~35,127,735 shares of common stock for possible issuance upon the exchange of units held by limited partners.

The holders of the Series I-1 Preferred Units have, at their option, the right to have their units purchased by WPG L.P. subject to the satisfaction of certain conditions. Therefore, the Series I-1 Preferred Units are classified as redeemable noncontrolling interests outside of permanent equity.

Stock Based Compensation

On May 28, 2014, the Board adopted the Washington Prime Group, L.P. 2014 Stock Incentive Plan (the "Plan"), which permits the Company to grant awards to current and prospective directors, officers, employees and consultants of the Company or any affiliate. An aggregate of 10,000,000 shares of common stock has been reserved for issuance under the Plan. In addition, the maximum number of awards to be granted to a participant in any calendar year is 500,000 ~~shares.~~shares/units. Awards may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs") or other stock-based awards in WPG Inc., or long term incentive units ("LTIP units" or "LTIPs") or performance units ("Performance LTIP Units") in WPG L.P. The Plan terminates on May 28, 2024.

~~Long Term Incentive Awards~~

The following is a summary by type of the awards that the Company issued during the ~~six~~three months ended ~~June 30, 2016.~~

~~Time Vested LTIP Awards~~

~~The Company has issued time-vested LTIP units ("Inducement LTIP Units") to certain executive officers~~March 31, 2017 and ~~employees~~March 31, 2016 under the Plan, pursuant to LTIP Unit Award Agreements between the Company and each of the grant recipients. These awards will vest and the related fair value will be expensed over a four-year vesting period. During the six months ended June 30, 2016, the Company did not grant any Inducement LTIP Units.

Plan.

~~WP Glimcher~~Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

~~Performance Based Awards~~

The Company has allocated Performance LTIP units, subject to certain market conditions, under ASC 718 to certain executive officers and employees to be earned and the related fair value expensed over the applicable performance periods. During the six months ended June 30, 2016, the Company did not grant any Performance LTIP Units.

Annual Long-Term Incentive Awards

~~During 2015,~~On February 21, 2017 (the "Adoption Date"), the Company approved the ~~performance criteria~~terms and ~~maximum dollar amount~~conditions of the ~~2015~~2017 annual ~~LTIP unit awards (the "2015~~award ("2017 Annual Long-Term Incentive Awards")~~, that generally range from 30%-300% of annual base salary,~~ for certain executive officers and employees of the Company. ~~The number~~Under the terms of ~~awards~~the 2017 Annual Long-Term Incentive Awards program, each participant is ~~determined by converting~~provided the ~~cash~~opportunity to receive (i) time-based RSUs and (ii) performance-based stock units ("PSUs"). RSUs represent a contingent right to receive one WPG Inc. common share for each vested RSU. During the three months ended March 31, 2017, the Company issued 358,198 time-based RSUs, with a grant date fair value of $3.4 million, which will vest in one-third installments on each of February 21, 2018, 2019, and 2020, subject to the ~~award~~participant's continued employment with the Company through each vesting date and the participant's continued compliance with certain applicable covenants. During the service period, dividend equivalents will be paid with respect to the RSUs corresponding to the amount of any dividends paid by the Company to the Company's common shareholders for the applicable dividend payment dates. Compensation expense is recognized on a ~~number~~straight-line basis over the three year vesting term. During the three months ended March 31, 2017, the Company issued 358,198 PSUs, at target, with a grant date fair value of ~~LTIP units (the "Allocated Units")~~$2.8 million. Actual PSUs earned may range from 0%-150% of the target PSUs, based on the ~~closing price of WPG Inc.'s common shares for the final 15 days of 2015. Recipients are eligible to receive a percentage of the Allocated Units based on the~~ Company's ~~performance on its strategic goals detailed in the Company's 2015 cash bonus plan and the Company's relative~~ total shareholder return ("TSR") compared to a peer group based on companies with similar assets and revenue over a three-year performance period that commenced on the ~~MSCI REIT Index.~~Adoption Date. During the performance period, dividend equivalents corresponding to the amount of any regular cash dividends paid by the Company to the Company’s common shareholders for the applicable dividend payment dates will accrue and be deemed reinvested in additional PSUs, which will be settled in common shares at the same time and only to the extent that the underlying PSU is earned and settled in common shares. Payout ~~for 40%~~ of the ~~Allocated Units~~PSUs is ~~based on~~also subject to the ~~Company's~~participant’s continued employment with the Company through the end of the performance onperiod. The awards were valued through the ~~strategic goals~~use of a Monte Carlo model and the ~~payout on~~related compensation expense is recognized over the ~~remaining 60% is based on the Company's TSR performance. The strategic goal component was achieved in 2015; however, the TSR was below threshold~~three year performance resulting in a 40% payout for this annual LTIP award. During the six months ended June 30, 2016, the Company awarded 323,417 LTIP units related to the 2015 Annual Long-Term Incentive Awards and vest one-third on each of January 1, 2017, 2018 and 2019.period.

During ~~the six months ended June 30,~~ 2016, the Company approved the performance criteria and maximum dollar amount of the 2016 annual awards (the "2016 Annual Long-Term Incentive Awards"), that generally range from 30%~~-300%~~-100% of annual base salary, for certain executive officers and employees of the Company. The number of awards iswas determined by converting the cash value of the award to a number of ~~restricted stock units~~RSUs (the "Allocated RSUs") based on the closing price of WPG Inc.'s common shares for the final 15 trading days of 2016. Recipients ~~are~~were eligible to receive a percentage of the Allocated RSUs based on the Company's performance on its strategic goals detailed in the Company's 2016 cash bonus plan and the Company's relative TSR compared to a peer group based on companies with similar assets and revenue. Payout for 50% of the Allocated RSUs iswas based on the Company's performance on the strategic goals and the payout on the remaining 50% iswas based on the Company's TSR performance. ~~Any 2016~~Both the strategic goal component as well the TSR performance were achieved at target, resulting in a 100% payout. During the three months ended March 31, 2017, the Company awarded 324,237 of Allocated RSUs, ~~earned~~with a grant date fair value of $2.2 million, related to the 2016 Annual Long-Term Incentive Awards, which will ~~be granted~~vest in ~~2017~~one-third installments on each of February 21, 2018, 2019 and 2020.

During 2015, the Company approved the performance criteria and maximum dollar amount of the 2015 annual LTIP unit awards (the "2015 Annual Long-Term Incentive Awards"), that generally range from 30%-300% of annual base salary, for certain executive officers and employees of the Company. The number of awards was determined by converting the cash value of the award to a number of LTIP units (the "Allocated Units") based on the closing price of WPG Inc.'s common shares for the final 15 trading days of 2015. Eventual recipients were eligible to receive a percentage of the Allocated Units based on the Company's performance on its strategic goals detailed in the Company's 2015 cash bonus plan and the Company's relative TSR compared to the MSCI REIT Index. Payout for 40% of the Allocated Units was based on the Company's performance on the strategic goals and the payout on the remaining 60% was based on the Company's TSR performance. The strategic goal component was achieved in 2015; however, the TSR was below threshold performance, resulting in only a 40% payout for this annual LTIP award. During the three months ended March 31, 2016, the Company awarded 323,417 LTIP units related to the 2015 Annual Long-Term Incentive Awards, of which 108,118 vest in one-third installments on each of January 1, 2017, 2018 ~~2019~~ and ~~2020.~~2019. The ~~fair value of~~94,106 LTIP units awarded to our former Executive Chairman fully vested on the ~~awards related~~grant date and the 121,193 LTIP units awarded to certain former executive officers fully vested on the applicable severance date during 2016 pursuant to the Company's TSR performance will be expensed over the period from May 17, 2016 (when service began) through the end of the vesting period. If earned, the fair value of the portion of the awards based upon the Company's performance of the strategic goals will be recognized as expense over the period from the 2017 grant date through the end of the vesting period.

~~WPG Restricted Stock Unit Awards~~

The Company issues restricted stock units ("RSUs") to certain executive officers, employees, and independent members of the Board. The RSUs are service-based awards and the related fair value is expensed over the applicable service periods, except in instances that result in accelerated vesting due tounderlying severance arrangements. ~~During the six months ended June 30, 2016, the Company issued 154,570 RSUs under the Plan with a fair value of $1.6 million.~~

Stock Options

~~WPG Restricted Common Share Awards~~

As part of the Merger, unvested restricted common shares held by certain Glimcher executive employees, which had an original vesting period of five years, were converted into 1,039,785 WPG restricted common shares (the “WPG Restricted Shares”). The WPG Restricted Shares will be amortized over the remaining life of the applicable vesting period, except for the portion of the awards applicable to pre-Merger service, which was included as equity consideration issued in the Merger.

~~LTIP/RSU/WPG Restricted Share Award Related Compensation Expense~~

~~The Company recorded compensation expense related to all LTIP, RSU and WPG Restricted Shares of approximately $11.0 million and $2.8 million for~~During the three months ended ~~June 30, 2016~~March 31, 2017, no stock options were granted from the Plan to employees, 1,566 stock options were exercised by employees and ~~2015, respectively, and approximately $11.7 million and $5.1 million for~~34,452 stock options were canceled, forfeited or expired. As of March 31, 2017, there were 941,558 stock options outstanding.

During the ~~six~~three months ended ~~June 30,~~March 31, 2016, no stock options were granted from the Plan to employees, no stock options were exercised by employees and ~~2015, respectively. In certain instances, employment agreements and~~1,000 stock compensation programs provide for accelerated vesting when executives are terminated without cause. The expense associated with the accelerated vesting is recorded within the consolidated statements of operations and comprehensive income as "Merger, restructuring and transaction costs."options were canceled, forfeited or expired.

~~WP Glimcher~~Washington Prime Group Inc. and Washington Prime Group, L.P.

Condensed Notes to Unaudited Consolidated Financial Statements (Continued)

(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)

~~The LTIP, RSU~~Share Award Related Compensation Expense

During the three months ended March 31, 2017 and 2016, the ~~WPG Restricted Shares~~Company recorded share award related compensation expense ~~were~~pertaining to the award and option plans noted above of $1.5 million and $1.9 million (excluding the $1.2 million reversal of previously recorded stock compensation expense associated with the forfeiture of grants to former executives during the three months ended March 31, 2016), respectively, in general and administrative expense within the ~~accompanying~~ consolidated statements of operations and comprehensive ~~income as indicated below (amounts in millions):~~income. In certain instances, employment agreements and stock compensation programs provide for accelerated vesting when executives are terminated without cause.

For the Three Months Ended June 30, For the Six Months Ended June 30,
2016 2015 2016 2015
Merger, restructuring and transaction costs $ 9.5
$ —
$ 9.5
$ —
General and administrative 1.5
2.8
2.2
5.1
Total expense $ 11.0
$ 2.8
$ 11.7
$ 5.1

~~Stock Options~~

Distributions

During the six months ended June 30, 2016, 247,500 stock options were granted from the Plan to employees, 13,970 stock options were exercised by employees and 161,087 stock options were canceled, forfeited or expired. As of June 30, 2016, there were 1,217,624 stock options outstanding. The Company recorded compensation expense related to stock options of $47 and $21 for the three months ended ~~June 30,~~March 31, 2017 and 2016, ~~and 2015, respectively, and $99 and $21 for~~ the ~~six months ended June 30, 2016 and 2015, respectively.~~Board declared common share/unit dividends of $0.25 per common share/unit.

~~Distributions~~

~~On February 25, 2016, WPG Inc.'s Board of Directors declared the following cash distributions per share/unit:~~



~~Security Type~~	~~Distribution per Share/Unit~~	~~For the~~ ~~Quarter Ended~~	~~Record Date~~	~~Date Paid~~
~~Common Shares/Units~~	~~$0.2500~~	~~March 31, 2016~~	~~March 7, 2016~~	~~March 15, 2016~~
~~Series H Preferred Shares/Units~~	~~$0.4688~~	~~March 31, 2016~~	~~March 31, 2016~~	~~April 15, 2016~~
~~Series I Preferred Shares/Units~~	~~$0.4297~~	~~March 31, 2016~~	~~March 31, 2016~~	~~April 15, 2016~~
~~Series I‑1 Preferred Units~~	~~$0.4563~~	~~March 31, 2016~~	~~March 31, 2016~~	~~April 15, 2016~~

~~On May 17, 2016, WPG Inc.'s Board of Directors declared the following cash distributions per share/unit:~~



~~Security Type~~	~~Distribution per Share/Unit~~	~~For the~~ ~~Quarter Ended~~	~~Record Date~~	~~Date Paid~~
~~Common Shares/Units~~	~~$0.2500~~	~~June 30, 2016~~	~~June 3, 2016~~	~~June 15, 2016~~
~~Series H Preferred Shares/Units (1)~~	~~$0.4688~~	~~June 30, 2016~~	~~June 30, 2016~~	~~July 15, 2016~~
~~Series I Preferred Shares/Units (1)~~	~~$0.4297~~	~~June 30, 2016~~	~~June 30, 2016~~	~~July 15, 2016~~
~~Series I‑1 Preferred Units (1)~~	~~$0.4563~~	~~June 30, 2016~~	~~June 30, 2016~~	~~July 15, 2016~~


~~(1)~~9.	~~Amounts total $3.0 million~~Commitments and ~~are recorded as distributions payable in the accompanying consolidated balance sheet as of June 30, 2016.~~Contingencies

~~9. Commitments and Contingencies~~

Litigation

We are involved from time-to-time in various legal proceedings that arise in the ordinary course of our business, including, but not limited to commercial disputes, environmental matters, and litigation in connection with transactions including acquisitions and divestitures. We believe that such litigation, claims and administrative proceedings will not have a material adverse impact on our financial position or our results of operations. We record a liability when a loss is considered probable and the amount can be reasonably estimated.

~~WP Glimcher Inc. and Washington Prime Group, L.P.~~

~~Condensed Notes to Unaudited Consolidated Financial Statements (Continued)~~

~~(dollars in thousands, except share, unit and per share amounts and where indicated as in millions or billions)~~

~~Loss Contingency~~

The purchase and sale agreement related to the O’Connor Joint Venture contains certain lease-up provisions. The majority of the deals are fully executed; however, a small number of leases are not yet executed pursuant to these provisions. The Company is currently negotiating with tenants for these spaces and believes that it is likely that the space will be leased. However, if the Company is not able to execute leases with these tenants (or replacement tenants) within a specified timeframe, O’Connor could seek an adjustment payment effectively reducing the amount paid for their acquisition of joint venture interest. The Company estimates the range of the potential losses associated with these deals to be between $0 and $3 million. The Company believes that the loss is not probable at this time and has not accrued for this loss contingency in the accompanying financial statements.

Concentration of Credit Risk

Our properties rely heavily upon anchor or major tenants to attract customers; however, these retailers do not constitute a material portion of our financial results. Additionally, many anchor retailers in the enclosed retail properties own their spaces further reducing their contribution to our operating results. All operations are within the United States and no customer or tenant accounts for 5% or more of our consolidated revenues.

~~10. Related Party Transactions~~


10.	Related Party Transactions

Transactions with ~~SPG~~Simon Property Group Inc.

~~In connection with the separation,~~The Company was formed in 2014 through a spin-off of certain properties from Simon Property Group, Inc. ("SPG"). SPG managed the day-to-day operations of our legacy SPG enclosed retail properties through February 29, 2016 in accordance with property management agreements that expired as of May 31, 2016. Additionally, WPG and SPG entered into a transition services agreement pursuant to which SPG provided to WPG, on an interim, transitional basis after ~~the Separation Date~~May 28, 2014 through May 31, 2016, the date on which it was terminated, various services including administrative support for the community centers through December 31, 2015, information technology, property management, accounts payable and other financial functions, as well as engineering support, quality assurance support and other administrative services for the enclosed retail properties ~~through~~until March 1, 2016. Under the transition services agreement that terminated on May 31, 2016, SPG charged WPG, based upon SPG's allocation of certain shared costs such as insurance premiums, advertising and promotional programs, leasing and development fees. Amounts charged to expense for property management and common costs, services, and other as well as insurance premiums are included in property operating ~~costs~~expenses in the consolidated statements of operations and comprehensive income. Additionally, leasing and development fees charged by SPG are capitalized by the property. WPG terminated the transition services agreement, all applicable property management agreements with SPG, and the property development agreement effective May 31, 2016.

We did not incur any charges pertaining to the transition services agreements for the three months ended March 31, 2017. Charges for the consolidated and unconsolidated properties ~~which are consolidated~~ for ~~each of~~ the ~~periods presented~~three months ended March 31, 2016 are as follows:


									For the Three Months Ended March 31,
	For the Three Months Ended June 30,				For the Six Months Ended June 30,				2016
	2016		2015		2016		2015		Consolidated		Unconsolidated
Property management and common costs, services and other	$	2,526	$	5,620	$	6,741	$	12,549	$	5,238	$	124
Insurance premiums	$	—	$	2,269	$	—	$	4,538	$	—	$	—
Advertising and promotional programs	$	—	$	210	$	102	$	429	$	102	$	6
Capitalized leasing and development fees	$	1,315	$	2,177	$	2,483	$	3,808	$	1,168	$	8



001-36252 ~~(WP Glimcher~~(Washington Prime Group Inc.) 333-205859 (Washington Prime Group, L.P.) (Commission File No.)	180 East Broad Street Columbus, Ohio 43215 (Address of principal executive offices)
46-4323686 ~~(WP Glimcher~~(Washington Prime Group Inc.) 46-4674640 (Washington Prime Group, L.P.) (I.R.S. Employer Identification No.)	(614) 621-9000 (Registrant's telephone number, including area code)



~~WP Glimcher~~Washington Prime Group Inc. (Check One):		Large accelerated filer x Accelerated filer ¨
		Non-accelerated filer ¨ Smaller reporting company ¨
		Emerging growth company ¨ (Do not check if a smaller reporting company)

Washington Prime Group, L.P. (Check One):		Large accelerated filer ¨ Accelerated filer ¨
		Non-accelerated filer x Smaller reporting company ¨
		Emerging growth company ¨ (Do not check if a smaller reporting company)



PART I:	FINANCIAL INFORMATION	PAGE

Item 1.	Consolidated Financial Statements (unaudited)

	Financial Statements for ~~WP Glimcher~~Washington Prime Group Inc.:

	Consolidated Balance Sheets as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016	4

	Consolidated Statements of Operations and Comprehensive Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	5

	Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	6

	Consolidated Statement of Equity for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017	7

	Financial Statements for Washington Prime Group, L.P.:

	Consolidated Balance Sheets as of ~~June 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016	8

	Consolidated Statements of Operations and Comprehensive Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	9

	Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2017 and 2016 ~~and 2015~~	10

	Consolidated Statement of Equity for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017	11

	Condensed Notes to Consolidated Financial Statements	12

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3627

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5541

Item 4.	Controls and Procedures	5541

PART II:	OTHER INFORMATION

Item 1.	Legal Proceedings	5642

Item 1A.	Risk Factors	5642

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5642

Item 3.	Defaults Upon Senior Securities	5642

Item 4.	Mine Safety Disclosures	5642

Item 5.	Other Information	5642

Item 6.	Exhibits	5643

SIGNATURES		5744


	June 30, 2016			December 31, 2015			March 31, 2017			December 31, 2016
ASSETS:
Investment properties at cost	$	6,583,541		$	6,656,200		$	6,304,916		$	6,294,628
Less: accumulated depreciation	2,270,747			2,225,750			2,172,732			2,122,572
	4,312,794			4,430,450			4,132,184			4,172,056
Cash and cash equivalents	63,445			116,253			94,531			59,353
Tenant receivables and accrued revenue, net	83,207			91,603			96,560			99,967
Real estate assets held-for-sale	—			30,000			—			50,642
Investment in and advances to unconsolidated entities, at equity	468,798			488,071			442,257			458,892
Deferred costs and other assets	288,622			303,232			251,507			266,556
Total assets	$	5,216,866		$	5,459,609		$	5,017,039		$	5,107,466
LIABILITIES:
Mortgage notes payable	$	1,672,915		$	1,793,439		$	1,610,802		$	1,618,080
Notes payable	247,274			246,728			247,817			247,637
Unsecured term loans	1,333,920			1,332,812			1,334,525			1,334,522
Revolving credit facility	256,267			275,622			291,489			306,165
Accounts payable, accrued expenses, intangibles, and deferred revenues	361,252			379,112			287,969			309,178
Distributions payable	2,992			2,992			2,992			2,992
Cash distributions and losses in partnerships and joint ventures, at equity	15,389			15,399
Cash distributions and losses in unconsolidated entities, at equity							15,421			15,421
Total liabilities	3,890,009			4,046,104			3,791,015			3,833,995
Redeemable noncontrolling interests	5,765			6,132			3,265			10,660
EQUITY:
Stockholders' Equity:
Series H Cumulative Redeemable Preferred Stock, $0.0001 par value, 4,000,000 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	104,251			104,251
Series I Cumulative Redeemable Preferred Stock, $0.0001 par value, 3,800,000 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	98,325			98,325
Common stock, $0.0001 par value, 300,000,000 shares authorized, 185,337,376 and 185,304,555 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	19			19
Series H Cumulative Redeemable Preferred Stock, $0.0001 par value, 4,000,000 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively							104,251			104,251
Series I Cumulative Redeemable Preferred Stock, $0.0001 par value, 3,800,000 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively							98,325			98,325
Common stock, $0.0001 par value, 300,000,000 shares authorized, 185,428,977 and 185,427,411 issued and outstanding as of March 31, 2017 and December 31, 2016, respectively							19			19
Capital in excess of par value	1,234,277			1,225,926			1,234,860			1,232,638
Accumulated deficit	(280,623		)	(214,243		)	(384,070		)	(346,706		)
Accumulated other comprehensive (loss) income	(14,295		)	1,716
Accumulated other comprehensive income							6,888			4,916
Total stockholders' equity	1,141,954			1,215,994			1,060,273			1,093,443
Noncontrolling interests	179,138			191,379			162,486			169,368
Total equity	1,321,092			1,407,373			1,222,759			1,262,811
Total liabilities, redeemable noncontrolling interests and equity	$	5,216,866		$	5,459,609		$	5,017,039		$	5,107,466


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
REVENUE:
Minimum rent	$	141,257		$	161,695		$	284,362		$	322,601		$	137,116		$	143,105
Overage rent	1,911			2,291			5,368			5,555			2,832			3,457
Tenant reimbursements	59,410			67,437			117,366			136,682			56,790			57,956
Other income	3,160			6,105			8,673			10,408			5,656			5,513
Total revenues	205,738			237,528			415,769			475,246			202,394			210,031
EXPENSES:
Property operating	39,525			51,140			83,459			102,249			37,244			43,934
Depreciation and amortization	69,232			91,453			140,635			183,637			67,511			71,403
Real estate taxes	26,397			27,737			50,888			58,262			26,007			24,491
Advertising and promotion	2,597			2,646			4,829			5,321			2,152			2,232
Provision for credit losses	1,763			883			2,495			1,581			1,581			732
General and administrative	9,432			11,889			20,236			21,478			8,828			10,804
Merger, restructuring and transaction costs	29,914			4,903			29,914			25,713
Ground rent	1,043			2,071			2,100			4,444			1,031			1,057
Impairment loss													8,509			—
Total operating expenses	179,903			192,722			334,556			402,685			152,863			154,653
OPERATING INCOME	25,835			44,806			81,213			72,561			49,531			55,378
Interest expense, net	(34,466		)	(38,778		)	(71,814		)	(75,892		)	(32,488		)	(37,348		)
Gain on extinguishment of debt, net	34,078			—			34,078			—
Income and other taxes	(114		)	(528		)	(1,093		)	(973		)	(2,026		)	(979		)
Loss from unconsolidated entities	(508		)	(1,703		)	(1,669		)	(1,487		)
INCOME (LOSS) BEFORE (LOSS) GAIN ON DISPOSITION OF INTERESTS IN PROPERTIES, NET	24,825			3,797			40,715			(5,791		)
(Loss) gain on disposition of interests in properties, net	(88		)	5,147			(2,297		)	5,147
NET INCOME (LOSS)	24,737			8,944			38,418			(644		)
Net income (loss) attributable to noncontrolling interests	3,422			1,048			5,081			(1,248		)
Loss from unconsolidated entities, net													(444		)	(1,161		)
INCOME BEFORE GAIN (LOSS) ON DISPOSITION OF INTERESTS IN PROPERTIES, NET													14,573			15,890
Gain (loss) on disposition of interests in properties, net													51			(2,209		)
NET INCOME													14,624			13,681
Net income attributable to noncontrolling interests													1,814			1,659
NET INCOME ATTRIBUTABLE TO THE COMPANY	21,315			7,896			33,337			604			12,810			12,022
Less: Preferred share dividends	(3,508		)	(3,995		)	(7,016		)	(8,973		)	(3,508		)	(3,508		)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	17,807		$	3,901		$	26,321		$	(8,369	)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS													$	9,302		$	8,514

EARNINGS (LOSS) PER COMMON SHARE, BASIC AND DILUTED	$	0.10		$	0.02		$	0.14		$	(0.05	)
EARNINGS PER COMMON SHARE, BASIC AND DILUTED													$	0.05		$	0.05

COMPREHENSIVE INCOME:
Net income (loss)	$	24,737		$	8,944		$	38,418		$	(644	)
Unrealized (loss) income on interest rate derivative instruments	(5,581		)	4,615			(19,047		)	4,211
Net income													$	14,624		$	13,681
Unrealized income (loss) on interest rate derivative instruments													2,349			(13,466		)
Comprehensive income	19,156			13,559			19,371			3,567			16,973			215
Comprehensive income (loss) attributable to noncontrolling interests	2,532			1,783			2,045			(577		)	2,191			(487		)
Comprehensive income attributable to common shareholders	$	16,624		$	11,776		$	17,326		$	4,144		$	14,782		$	702



~~WP Glimcher~~Washington Prime Group Inc. Yes x No ¨		Washington Prime Group, L.P. Yes ¨ No x



~~WP Glimcher~~Washington Prime Group Inc. Yes x No ¨		Washington Prime Group, L.P. Yes x No ¨



	Preferred Series H		Preferred Series I		Common Stock		Capital in Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity			Non- Controlling Interests			Total Equity			Redeemable Non-Controlling Interests
Balance, December 31, 2015	$	104,251	$	98,325	$	19	$	1,225,926		$	(214,243	)	$	1,716		$	1,215,994		$	191,379		$	1,407,373		$	6,132
Exercise of stock options	—		—		—		24			—			—			24			—			24			—
Redemption of limited partner units	—		—		—		—			—			—			—			(5		)	(5		)	—
Other	—		—		—		16			—			—			16			—			16			(353		)
Equity-based compensation	—		—		—		11,770			—			—			11,770			—			11,770			—
Adjustments to noncontrolling interests	—		—		—		(3,459		)	—			—			(3,459		)	3,459			—			—
Distributions on common shares/units ($0.50 per common share/unit)	—		—		—		—			(92,701		)	—			(92,701		)	(17,634		)	(110,335		)	—
Distributions declared on preferred shares	—		—		—		—			(7,016		)	—			(7,016		)	—			(7,016		)	—
Other comprehensive loss	—		—		—		—			—			(16,011		)	(16,011		)	(3,036		)	(19,047		)	—
Net income (loss), excluding $120 of distributions to preferred unitholders	—		—		—		—			33,337			—			33,337			4,975			38,312			(14		)
Balance, June 30, 2016	$	104,251	$	98,325	$	19	$	1,234,277		$	(280,623	)	$	(14,295	)	$	1,141,954		$	179,138		$	1,321,092		$	5,765


	General Partner																							General Partner
	Preferred			Common			Total			Limited Partners			Total Partners' Equity			Non- Controlling Interests		Total Equity			Redeemable Non-Controlling Interests			Preferred			Common			Total			Limited Partners			Total Partners' Equity			Non- Controlling Interests			Total Equity			Redeemable Non-Controlling Interests
Balance, December 31, 2015	$	202,576		$	1,013,418		$	1,215,994		$	190,297		$	1,406,291		$	1,082	$	1,407,373		$	6,132
Balance, December 31, 2016																								$	202,576		$	890,867		$	1,093,443		$	168,264		$	1,261,707		$	1,104		$	1,262,811		$	10,660
Exercise of stock options	—			24			24			—			24			—		24			—			—			7			7			—			7			—			7			—
Redemption of limited partner units	—			—			—			(5		)	(5		)	—		(5		)	—
Other	—			16			16			—			16			—		16			(353		)	—			(36		)	(36		)	—			(36		)	—			(36		)	—
Equity-based compensation	—			11,770			11,770			—			11,770			—		11,770			—			—			1,132			1,132			346			1,478			—			1,478			—
Adjustments to limited partners' interests	—			(3,459		)	(3,459		)	3,459			—			—		—			—			—			554			554			(554		)	—			—			—			—
Distributions on common units ($0.50 per common unit)	—			(92,701		)	(92,701		)	(17,634		)	(110,335		)	—		(110,335		)	—
Purchase of redeemable noncontrolling interest																								—			565			565			—			565			—			565			(7,395		)
Distributions on common units ($0.25 per common unit)																								—			(46,666		)	(46,666		)	(8,782		)	(55,448		)	(23		)	(55,471		)	—
Distributions declared on preferred units	(7,016		)	—			(7,016		)	—			(7,016		)	—		(7,016		)	(120		)	(3,508		)	—			(3,508		)	—			(3,508		)	—			(3,508		)	(60		)
Other comprehensive loss	—			(16,011		)	(16,011		)	(3,036		)	(19,047		)	—		(19,047		)	—
Other comprehensive income																								—			1,972			1,972			377			2,349			—			2,349			—
Net income	7,016			26,321			33,337			4,975			38,312			—		38,312			106			3,508			9,302			12,810			1,754			14,564			—			14,564			60
Balance, June 30, 2016	$	202,576		$	939,378		$	1,141,954		$	178,056		$	1,320,010		$	1,082	$	1,321,092		$	5,765
Balance, March 31, 2017																								$	202,576		$	857,697		$	1,060,273		$	161,405		$	1,221,678		$	1,081		$	1,222,759		$	3,265



Investment properties	$	3,091,410
Cash and cash equivalents (1)	547,294
Tenant accounts receivable	14,311
Investment in and advances to unconsolidated real estate entities	21,994
Deferred costs and other assets (including intangibles)	370,079
Accounts payable, accrued expenses, intangibles, and deferred revenue	(289,551		)
Distributions payable	(2,658		)
Redeemable noncontrolling interests, including preferred units	(5,795		)
Total assets acquired and liabilities assumed	3,747,084
Fair value of mortgage notes payable assumed	(1,356,389		)
Net assets acquired	2,390,695
Less: Common shares issued	(535,490		)
Less: Preferred shares issued	(319,960		)
Less: Common operating partnership units issued to limited partners	(29,482		)
Less: Cash and cash equivalents acquired	(547,294		)
Net cash paid for acquisition	$	958,469



	Three Months Ended June 30,		Six Months Ended June 30,
	2015		2015
Total revenues	$	213,627	$	425,381
Net income attributable to the Company	$	9,243	$	15,256
Net income attributable to common shareholders	$	5,619	$	8,124
Earnings per common share-basic and diluted	$	0.03	$	0.04
Weighted average shares outstanding-basic (in thousands)	185,290		185,195
Weighted average shares outstanding-diluted (in thousands)	220,252		220,098



	June 30, 2016			December 31, 2015
Face amount of mortgage loans	$	1,663,910		$	1,782,103
Fair value adjustments, net	14,607			17,683
Debt issuance cost, net	(5,602		)	(6,347		)
Carrying value of mortgage loans	$	1,672,915		$	1,793,439


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


	June 30, 2016	June 30, 2015	% Change	March 31, 2017	March 31, 2016	% Change
Ending occupancy (1)	92.9%	92.3%	0.6%	92.7%	92.7%	—%
Average base minimum rent per square foot (2)	$21.44	$21.32	0.6%	$21.47	$21.39	0.4%


	June 30, 2016			Weighted Average Interest Rate		December 31, 2015			Weighted Average Interest Rate		March 31, 2017			Weighted Average Interest Rate		December 31, 2016			Weighted Average Interest Rate
Fixed-rate debt, face amount	$	2,502,810		4.33	%	$	2,686,003		4.48	%	$	2,642,706		4.23	%	$	2,649,329		4.23	%
Variable-rate debt, face amount	1,009,850			1.98	%	964,850			1.91	%	844,100			2.44	%	859,100			2.25	%
Total face amount of debt	3,512,660			3.65	%	3,650,853			3.80	%	3,486,806			3.79	%	3,508,429			3.75	%
Note discount	(54		)			(60		)			(45		)			(47		)
Fair value adjustments, net	14,607					17,683					11,691					12,661
Debt issuance costs, net	(16,837		)			(19,875		)			(13,819		)			(14,639		)
Total carrying value of debt	$	3,510,376				$	3,648,601				$	3,484,633				$	3,506,404


1.	Organization


	2016		2017 - 2018		2019 - 2020		Thereafter		Total		2017		2018 - 2019		2020 - 2021		Thereafter		Total
Long term debt (1)	$	295,947	$	198,407	$	1,818,102	$	1,200,204	$	3,512,660	$	339,625	$	992,352	$	1,120,033	$	1,034,796	$	3,486,806
Interest payments (2)	54,232		193,740		143,145		95,317		486,434		88,858		205,277		105,289		58,513		457,937
Distributions (3)	7,135		15,964		—		—		23,099		9,369		3,028		—		—		12,397
Ground rent (4)	1,686		6,720		6,746		117,930		133,082		2,637		7,084		7,080		119,556		136,357
Purchase/tenant obligations (5)	101,331		—		—		—		101,331		81,312		—		—		—		81,312
Total	$	460,331	$	414,831	$	1,967,993	$	1,413,451	$	4,256,606	$	521,801	$	1,207,741	$	1,232,402	$	1,212,865	$	4,174,809


(1)	Represents principal maturities only and therefore excludes net fair value adjustments of ~~$14,607,~~$11,691, debt issuance costs of ~~$(16,837)~~$(13,819) and bond discount of ~~$(54)~~$(45) as of ~~June 30, 2016.~~March 31, 2017. In addition, the principal maturities reflect any available extension options within the control of the Company.


(2)	Variable rate interest payments are estimated based on the LIBOR rate at ~~June 30, 2016.~~March 31, 2017.


(3)	Since there is no required redemption, distributions on the Series H Preferred Shares/Units, Series I Preferred Shares/Units and Series I-1 Preferred Units may be paid in perpetuity; for purposes of this table, such distributions were included through the optional redemption dates of August 10, 2017, March 27, 2018 and March 27, 2018, respectively.


(4)	Represents minimum future lease payments due through the end of the initial lease term.


(5)	Includes amounts due under executed leases and commitments to vendors for development and other matters.


~~(1)~~	~~Amounts total $3.0 million and are recorded as distributions payable in the consolidated balance sheet as of June 30, 2016.~~


New developments	$	12,292	$	2,100
Redevelopments and expansions	27,682		10,815
Tenant allowances	10,014		4,670
Operational capital expenditures	4,735		4,320
Total (1)	$	54,723	$	21,905


~~(2)~~	The weighted average additional dilutive securities for the six months ended June 30, 2015 are excluded for purposes of calculating diluted earnings (loss) per share/unit because their effect would have been anti-dilutive.


(1)	Represents an adjustment to remove the NOI amounts from properties not owned and operated in all periods presented, certain non-recurring expenses, as well as insurance proceeds received in the periods presented. ~~The assets acquired~~Furthermore, Southern Hills Mall is removed as ~~part~~the management and leasing of the ~~Merger are included in comparable NOI, as described in note 2 below.~~


~~(2)~~	~~Represents an adjustment to add the historical NOI amounts from the 23 properties acquired in the Merger for periods prior~~property was transferred to the ~~January 15, 2015 Merger date. This adjustment~~receiver during the fourth quarter of 2016, although legal title to the property is ~~included to provide comparability across~~still held by an affiliate of the ~~periods presented.~~Company.


~~(3)~~	~~NOI from five non-core properties that were held in each period presented.~~



	~~WP Glimcher Inc.~~
	~~Washington Prime Group, L.P.~~
		~~by: WP Glimcher Inc., its sole general partner~~

~~Date: August 4, 2016~~	~~By:~~	~~/s/ Mark E. Yale~~
		~~Mark E. Yale~~ ~~Executive Vice President and Chief Financial Officer~~ ~~(Principal Financial Officer)~~



~~Date: August 4, 2016~~	~~By:~~	~~/s/ Melissa A. Indest~~
		~~Melissa A. Indest~~ ~~Chief Accounting Officer and Senior Vice President, Finance~~ ~~(Principal Accounting Officer)~~



Exhibit Number	Exhibit Descriptions
~~10.65+~~ 10.50*+	~~Separation~~First Amendment to the Amended and Restated Employment Agreement ~~and General Release by and~~ between ~~WP Glimcher~~Washington Prime Group Inc. and ~~Michael~~Robert P. ~~Glimcher,~~Demchak, dated ~~as of June 20, 2016 (incorporated by reference to~~ February 21, 2017.
10.51*+	Form ~~8-K filed~~Employee Restricted Stock Unit Award Agreement.
10.52*+	Form Employee Restricted Stock Unit Award Agreement (Employee with ~~the SEC on June 24, 2016)~~Severance Agreement).
~~10.66+~~	~~Resignation and General Release by and between WP Glimcher Inc. and Niles C. Overly, dated as of June 20, 2016 (incorporated by reference to Form 8-K filed with the SEC on June 24, 2016)~~
~~10.67+~~	~~Agreement by and between WP Glimcher Inc. and Louis G. Conforti, dated as of June 20, 2016 (incorporated by reference to Form 8-K filed with the SEC on June 24, 2016)~~
10.6810.53+	~~Amendment No. 1 to Transition and Consulting~~Form Employee Restricted Stock Unit Award Agreement ~~dated June 20, 2016, between WP Glimcher Inc. and Mark S. Ordan~~(Employee with Employment Agreement).
10.69* 10.54*+	~~Senior Secured Term Loan~~Form Employee Performance Share Unit Award Agreement dated as of June 8, 2016, by and among Washington Prime Group, L.P., WTM Glimcher, LLC, The Huntington National Bank, PNC Bank, National Association, U.S. Bank National Association, and several lenders from time to time (relates to mortgage loan for Weberstown Mall)(Employee with Employment Agreement).
10.70* 10.55*+	~~Term Loan Promissory Note, dated June 8, 2016 (The Huntington National Bank) (relates to mortgage loan for Weberstown Mall)~~
10.71*	~~Term Loan Promissory Note, dated June 8, 2016 (U.S. Bank National Association) (relates to mortgage loan for Weberstown Mall)~~
10.72*	~~Term Loan Promissory Note, dated June 8, 2016 (PNC Bank, National Association) (relates to mortgage loan for Weberstown Mall)~~
10.73*	~~Environmental Indemnity~~Form Employee Performance Share Unit Award Agreement dated June 8, 2016, by Washington Prime Group, L.P. and WTM Glimcher, LLC to and for benefit of The Huntington National Bank and other lenders under Senior Secured Term Loan Agreement (relates to mortgage loan for Weberstown Mall)
10.74*	Collateral Assignment of Membership Interest Agreement, dated June 8, 2016, by Weberstown Mall, LLC to The Huntington National Bank and other lenders under Senior Secured Term Loan Agreement (relates to mortgage loan for Weberstown Mall)(Employee without Employment Agreement).
31.1*	Certification by the ~~Interim~~ 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 for ~~WP Glimcher~~Washington Prime Group Inc.
31.2*	Certification by the Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for ~~WP Glimcher~~Washington Prime Group Inc.
31.3*	Certification by the ~~Interim~~ 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 for Washington Prime Group, L.P.
31.4*	Certification by the Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Washington Prime Group, L.P.
32.1*	Certification by the ~~Interim~~ 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 for ~~WP Glimcher~~Washington Prime Group Inc.
32.2*	Certification by the ~~Interim~~ 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 for Washington Prime Group, L.P.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document



		Washington Prime Group Inc.
		Washington Prime Group, L.P.
			by: Washington Prime Group Inc., its sole general partner

Date:	April 27, 2017	By:	/s/ Mark E. Yale
			Mark E. Yale Executive Vice President and Chief Financial Officer (Principal Financial Officer)



Date:	April 27, 2017	By:	/s/ Melissa A. Indest
			Melissa A. Indest Chief Accounting Officer and Senior Vice President, Finance (Principal Accounting Officer)