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•	enhances investors' understanding of the operations of WPG Inc. and WPG L.P. by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•	eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both WPG Inc. and WPG L.P.; and

•	creates time and cost efficiencies through the preparation of one set of disclosures instead of two separate sets of disclosures.

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Item 1.	Financial Statements

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1.	Organization

Washington Prime Group Inc. ("WPG Inc.") is an Indiana corporation that operates as a fully integrated, self‑administered and self‑managed real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended (the "Code"). WPG Inc. will generally qualify as a REIT for U.S. federal income tax purposes as long as it continues to distribute at least 90% of its REIT taxable income, exclusive of net capital gains, and satisfy certain other requirements. WPG Inc. will generally be allowed a deduction against its U.S. federal income tax liability for dividends paid by it to REIT shareholders, thereby reducing or eliminating any corporate level taxation to WPG Inc. Washington Prime Group, L.P. ("WPG L.P.") is WPG Inc.'s majority‑owned limited partnership subsidiary that owns, develops and manages, through its affiliates, all of WPG Inc.'s real estate properties and other assets. WPG Inc. is the sole general partner of WPG L.P. As of March 31, 2020, our assets consisted of material interests in 101 shopping centers in the United States, consisting of open air properties and enclosed retail properties, comprised of approximately 54 million square feet of managed gross leasable area.

Unless the context otherwise requires, references to "WPG," the "Company," "we," "us" or "our" refer to WPG Inc., WPG L.P. and entities in which WPG Inc. or WPG L.P. (or any affiliate) has a material ownership or financial interest, on a consolidated basis.

We derive our revenues primarily from retail tenant leases, including fixed minimum rent leases, overage and percentage rent leases based on tenants’ sales volumes, rent payments pursuant to the terms of offering property operating services to our tenants and others, including energy, waste handling and facility services, and reimbursements from tenants for certain recoverable costs such as property operating, real estate taxes, repair and maintenance, and advertising and promotional expenses.

We seek to enhance the performance of our properties and increase our revenues by, among other things, securing leases of anchor and inline tenant spaces, re‑developing or renovating existing properties to increase the leasable square footage, and increasing the productivity of occupied locations through aesthetic upgrades, re‑merchandising and/or changes to the retail use of the space.

Severance

During the three months ended March 31, 2020, and in response to the COVID-19 pandemic (as discussed in Note 2 - "Basis of Presentation and Principles of Consolidation"), the Company recorded aggregate severance costs of $0.1 million related to workforce reductions, which costs are included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss for period then ended.

On February 5, 2019, the Company's then Executive Vice President, Head of Open Air Centers was terminated without cause from his position and received severance payments and other benefits pursuant to the terms and conditions of his employment agreement. In addition, the Company terminated, without cause, additional non-executive personnel in the Property Management department as part of an effort to reduce overhead costs. In connection with and as part of these management changes, the Company recorded aggregate severance charges of $1.9 million, including $0.1 million of non-cash stock compensation in the form of accelerated vesting of equity incentive awards, which costs are included in general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss for the three months ended March 31, 2019.

2.	Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated balance sheets as of March 31, 2020 and December 31, 2019 include the accounts of WPG Inc. and WPG L.P., as well as their majority owned and controlled subsidiaries. The accompanying consolidated statements of operations include the consolidated accounts of the Company. All intercompany transactions have been eliminated in consolidation. Due to the seasonal nature of certain operational activities, the results for the interim period ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year.

These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by GAAP for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. The Company believes that the disclosures made are adequate to prevent the information presented from being misleading. These consolidated unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the combined 2019 Annual Report on Form 10-K for WPG Inc. and WPG L.P. (the "2019 Form 10-K").

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COVID-19

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus ("COVID-19"). The pandemic has significantly impacted the economic conditions in the United States, with accelerated effects in February and March, as federal, state and local governments reacted to the public health crisis, creating significant uncertainties in the United States economy. In the interest of public health and safety, jurisdictions (national, state and local) where our shopping centers are located, required mandatory closures or capacity limitations or other restrictions for those that continue to operate which have impacted our tenants' ability to pay rent. As of March 31, 2020, all of our enclosed retail properties were closed and our open air properties have been limited to operations that have been deemed essential by the respective jurisdiction in which they operate. As a result of these developments, the Company expects a material adverse impact on its revenues, results of operations and cash flows for the year ended December 31, 2020. The situation is rapidly changing and additional impacts to the business may arise that we are not aware of currently. We cannot predict whether, when or the manner in which the conditions surrounding COVID-19 will change, including the timing of lifting any restrictions or closure requirements and when our shopping centers and tenants will reopen.

As described in Note 8, we derive almost all of our income from rental payments and other tenant charges. Our revenues and cash flow would be adversely affected if a significant number of our tenants are unable to meet their obligations to us, or if we are unable to lease vacant space in our properties on economically favorable terms. One or more of our tenants may seek the protection of the bankruptcy laws as a result of the prolonged impact of the COVID-19 pandemic which could result in the termination of its lease causing a reduction in our revenues and cash flow. Furthermore, certain of our tenants, including anchor tenants, hold the right under their lease(s) to terminate their lease(s) or reduce their rental rate if certain occupancy conditions are not met, if certain anchor tenants close, if certain sales levels or profit margins are not achieved, all of which could be triggered in the event of one or more tenant bankruptcies.

While the full outcome of the COVID-19 pandemic is unknown, it has and continues to negatively impact the revenues and business of our tenants. Many of our tenants have requested some form of rent relief, and any relief provided may reduce our future revenues and/or defer cash collections to future periods. A further worsening of the financial condition of our tenants may impact our continual assessment of future collectability of rents, which could cause us to write-off accrued rent (straight-line) that has not yet been billed. We are engaged in discussions with many of our tenants but are unable to predict the resolution or impact of these discussions.

We evaluate our real estate assets and other assets for impairment indicators whenever events or changes in circumstances indicate that recoverability of our investment in the asset is not reasonably assured. Furthermore, this evaluation is conducted no less frequently than quarterly, irrespective of changes in circumstances. The prolonged outbreak of the COVID-19 pandemic has resulted in sustained closure of our centers as well as the cessation of the operations of certain of our tenants which will likely result in a reduction in our revenues due to the impaired financial stability of our tenants and ultimately our cash flows for many of our centers as well as other sources of income generated by our properties. In addition to reduced revenues generated by our centers as a result of the COVID-19 outbreak, our ability to obtain sufficient financing for such properties may be impaired as well as our ability to lease or re-lease centers as a result of worsening market and economic conditions produced by the persistence of the COVID-19 pandemic.

As of March 31, 2020, our evaluation of impairment considered our estimate of cash flow declines caused by the COVID-19 pandemic, but our other assumptions, including estimated hold period, were generally unchanged given the highly uncertain environment. The worsening of estimated future cash flows due to a change in our plans, policies, or views of market and economic conditions as it relates to one or more of our properties adversely impacted by the COVID-19 outbreak could result in the recognition of substantial impairment charges imposed on our assets which could adversely impact our financial results.

We continuously project our cash flow sources and needs. In accordance with Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods. In evaluating the Company’s ability to continue as a going concern, management evaluated the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements were issued (May 7, 2020). Management considered the Company’s current projections of future cash flows, current financial condition, sources of liquidity and debt obligations due on or before May 7, 2021 in considering whether it has the ability to meet its obligations for at least one year from the date of issuance of this Form 10-Q.

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Our ability to meet our obligations as they come due may be impacted by our ability to remain compliant with financial covenants in our unsecured debt arrangements or to obtain waivers or amendments that impact the related covenants. As a result of the related events due to the COVID-19 pandemic, we may experience a material adverse effect on our income and expenses that could impact our ability to maintain compliance with our credit facility and bond covenants.

We are engaged in discussions with our unsecured creditors and based upon these discussions we believe, to the extent that the impact of COVID-19 results in potential non-compliance with financial covenants, it is probable that we will remain compliant with such covenants through some combination of waivers, modifications or other amendments to the related agreements. However, no assurances can be made in this regard, and if we are unable to agree on the terms of such waivers or changes, this could create substantial doubt about our ability to continue as a going concern through May 7, 2021.

General

These consolidated financial statements reflect the consolidation of properties that are wholly owned or properties in which we own less than a 100% interest but that we control. Control of a property is demonstrated by, among other factors, our ability, without the consent of any other unaffiliated partner or owner, to refinance debt or sell the property and the inability of any other unaffiliated partner or owner to replace us.

We consolidate a variable interest entity ("VIE") when we are determined to be the primary beneficiary. Determination of the primary beneficiary of a VIE is based on whether an entity has (1) the power to direct activities that most significantly impact the economic performance of the VIE and (2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our determination of the primary beneficiary of a VIE considers all relationships between us and the VIE, including management agreements and other contractual arrangements.

There have been no changes during the three months ended March 31, 2020 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. During the three months ended March 31, 2020, 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 unconsolidated entities, 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 historically committed to or intends to fund the venture.

As of March 31, 2020, our assets consisted of material interests in 101 shopping centers. The consolidated financial statements as of that date reflect the consolidation of 85 wholly owned properties and four additional properties that are less than wholly owned, but which we control or for which we are the primary beneficiary. We account for our interests in the remaining 12 properties, or the joint venture properties, using the equity method of accounting. While we manage the day-to-day operations of the joint venture properties, we 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 (see Note 5 - "Investment in Unconsolidated Entities, at Equity" for further details).

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 (loss) attributable to noncontrolling interests. WPG Inc.'s weighted average ownership interest in WPG L.P. was 84.5% and 84.4% for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 and December 31, 2019, WPG Inc.'s ownership interest in WPG L.P. was 84.6% and 84.5%, respectively. We adjust the noncontrolling limited partners' interests at the end of each period to reflect their interest in WPG L.P.

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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”). 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.

The asset or liability's fair value within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Under Topic 820, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability in an orderly transaction at the measurement date and under current market 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.

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 open air properties, 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

Adoption of New Standards

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Financial Instruments - Credit Losses," which introduced new guidance for an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. Instruments in scope include loans, held-to-maturity debt securities, and net investments in leases as well as reinsurance and trade receivables. In November 2018, the FASB issued ASU 2018-19, which clarifies that operating lease receivables are outside the scope of the new standard. We adopted this ASU on January 1, 2020, noting our seller-provided bridge financing associated with our other indebtedness (see Note 6 - "Indebtedness" for further details) and certain other miscellaneous accounts are in scope of ASU 2016-13. However, there was no impact to our consolidated financial statements at adoption.

New Standards Issued But Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Inter-Bank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR"). Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. If elected, an entity would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities electing relief would need to apply it consistently for all eligible modified contracts accounted for under a particular codification topic or industry subtopic. Additionally, entities can elect various optional expedients that would allow them to continue to apply hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. Entities electing relief related to hedging relationships can generally elect to apply the optional expedients on a hedge-by-hedge basis.

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The guidance is effective upon issuance and can be applied to modifications of existing contracts made after January 1, 2020 and can be applied to eligible hedging relationships existing as of or entered into after the same date. The relief is temporary and cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date. However, certain optional expedients can be applied to hedging relationships evaluated in periods after December 31, 2022. As of March 31, 2020, we had approximately $692.0 million (excluding debt issuance costs of $5.6 million) of our aggregate consolidated indebtedness that was indexed to LIBOR. In addition, as of March 31, 2020, we had approximately $641.0 million of consolidated indebtedness swapped to LIBOR plus a fixed spread under hedging relationships. We expect that upon modification, these contracts will generally qualify for the temporary relief upon meeting the certain criteria and we are currently assessing our plans for adoption.

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under Topic 842, Leases. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). Both lessees and lessors may make this election. The Company is evaluating its election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.  The future impact of the Lease Modification Q&A is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions.

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

The following is a summary of our beginning and ending cash, cash equivalents and restricted cash totals as presented in our statements of cash flows for the three months ended March 31, 2020 and 2019:

	Balance at March 31,								Balance at December 31,
	2020				2019				2019				2018
Cash and cash equivalents	$	39,614			$	29,244			$	41,421			$	42,542
Restricted cash	35,202				17,324				34,054				18,542
Total cash, cash equivalents and restricted cash	$	74,816			$	46,568			$	75,475			$	61,084

Restricted cash primarily relates to cash held in escrow for payment of real estate taxes and property reserves for maintenance, expansion or leasehold improvements as required by our mortgage loans. Restricted cash is included in "Deferred costs and other assets" in the accompanying balance sheets as of March 31, 2020 and December 31, 2019.

4.	Investment in Real Estate

2020 Dispositions

On March 13, 2020, Seminole Towne Center, located in Sanford, Florida, was transitioned to the lender pursuant to the terms within a deed-in-lieu of foreclosure agreement. This property was held in an unconsolidated joint venture and all involvement between us and the related property ceased in connection with this transition (see Note 5 - "Investment in Unconsolidated Entities, at Equity" for additional details).

On January 14, 2020, we completed the sale of Matteson Plaza, located in Matteson, Illinois, to an unaffiliated private real estate investor for a purchase price of $1.1 million. The net proceeds of $0.4 million was used for general corporate purposes.

On January 31, 2020, we completed the sale of Dekalb Plaza, located in King of Prussia, Pennsylvania, to an unaffiliated private real estate investor for a purchase price of $13.6 million. The net proceeds of $13.4 million was used to fund ongoing redevelopment efforts and general corporate purposes.

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We are party to two separate purchase and sale agreements to sell certain outparcels to FCPT Acquisitions, LLC ("Four Corners"). The following table summarizes the key terms of each of the closings that occurred during the three months ended March 31, 2020:

Sales Date		Parcels Sold			Purchase Price				Sales Proceeds
February 13, 2020		2			$	1,961			$	1,945

Excluding any subsequent amendments thereto, the Company has approximately $4.6 million of remaining outparcels from the first purchase and sale agreement and approximately $26.9 million from the second purchase and sale agreement to close, subject to due diligence and closing conditions. Additionally, during the three months ended March 31, 2020, the Company sold certain undeveloped land parcels and developed outparcels for an aggregate purchase price of approximately $1.5 million, receiving net proceeds of approximately $1.5 million. The net proceeds from the disposition activities were generally used to fund ongoing redevelopment efforts and for general corporate purposes. In connection with the 2020 disposition activities, the Company recorded a net gain of $26.8 million for the three months ended March 31, 2020, which are included in gain on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive loss.

2019 Dispositions

The following table summarizes the key terms of each of the closings with Four Corners that occurred during the three months ended March 31, 2019:

Sales Date		Parcels Sold			Purchase Price				Sales Proceeds
January 18, 2019		8			$	9,435			$	9,364
February 11, 2019		1			2,766				2,720
		9			$	12,201			$	12,084

The net proceeds were used to fund ongoing redevelopment efforts and for general corporate purposes. In connection with the 2019 disposition activities, the Company recorded a gain of $10.0 million for the three months ended March 31, 2019, which is included in gain on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive loss.

Impairment

During the three months ended March 31, 2020, and in connection with the preparation of the financial statements included in this report, we recorded an impairment charge of approximately $1.3 million related to vacant land at Georgesville Square, located in Columbus, Ohio and a single tenant outparcel located in Topeka, Kansas. The impairment charges in both instances were due to changes in facts and circumstances when we decided to hold the assets for a shorter period which resulted in the carrying value not being recoverable from the projected cash flows. In the case of the vacant land at Georgesville Square, the fair value was based on a recently negotiated purchase and sale agreement with a potential buyer (Level 1 input). In the case of the single tenant outparcel, the fair value was based on general market conditions (Level 3 inputs). Except as described above, the Company recorded no additional impairment charges during the three months ended March 31, 2020.

5.	Investment in Unconsolidated Entities, at Equity

The Company's investment activity in unconsolidated real estate entities during the three months ended March 31, 2020 and March 31, 2019 consisted of investments in the following material joint ventures:

•	The O'Connor Joint Venture I

This investment consists of a 51% noncontrolling interest held by the Company in a portfolio of five enclosed retail properties and 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 Town Center Plaza (which consists of Town Center Plaza and the adjacent Town Center Crossing) located in Leawood, Kansas. We retain management, leasing, legal, construction, and development responsibilities for the O'Connor Joint Venture I.

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On December 20, 2019, the O'Connor Joint Venture I closed on the extension of the mortgage loan secured by The Mall at Johnson City. The extension is effective May 6, 2020 and will extend the maturity of the mortgage loan to May 6, 2023, with two additional one-year extension options available to the joint venture. The extension requires a $5.0 million principal prepayment on May 6, 2020, in addition to funding certain reserve accounts of $10.0 million for future redevelopment and property improvements. The Company is in advanced discussions with the servicer on a forbearance agreement that will delay the prepayment requirement until the fourth quarter of 2020.

•	The O'Connor Joint Venture II

This investment consists of a 51% noncontrolling interest held by the Company in a portfolio of seven retail properties and certain related outparcels, consisting of the following: The Arboretum, located in Austin, Texas; Arbor Hills, located in Ann Arbor, Michigan; 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"); Gateway Centers, located in Austin, Texas; Malibu Lumber Yard, located in Malibu, California; Palms Crossing I and II, located in McAllen, Texas; and The Shops at Arbor Walk, located in Austin, Texas (the "O'Connor Joint Venture II"). We retain management, leasing, legal, construction, and development responsibilities for the O'Connor Joint Venture II.

•	The Seminole Joint Venture

This investment consisted of a 45% legal interest held by the Company in Seminole Towne Center, an approximate 1.1 million square foot enclosed regional retail property. The Company had no effective financial interest in this property due to preferences. On March 13, 2020, the property held through this venture was transitioned to the lender pursuant to the terms within a deed-in-lieu of foreclosure agreement and all involvement between us and the related property ceased in connection with this transition. We recorded a gain of $15.4 million related to our cash distributions and losses in the Seminole Joint Venture, which is included in gain on disposition of interests in properties, net in the accompanying consolidated statements of operations and comprehensive loss.

Individual agreements specify which services the Company is to provide to each joint venture. The Company, through its affiliates, provides management, leasing, legal, construction and development services for a fee to the joint ventures as noted above. We recorded fee income of $2.2 million and $2.7 million for the three months ended March 31, 2020 and 2019, respectively, which are included in other income in the accompanying consolidated statements of operations and comprehensive loss. Advances to the joint ventures totaled $0.8 million and $0.5 million as of March 31, 2020 and December 31, 2019, 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 our joint ventures for the three months ended March 31, 2020 and 2019:

	For the Three Months Ended March 31,
	2020				2019
Total revenues	$	63,222			$	66,022
Operating expenses	27,809				26,829
Depreciation and amortization	25,389				25,757
Operating income	10,024				13,436
Gain on extinguishment of debt	15,605				—
Interest expense, taxes, and other, net	(12,427		)		(13,065		)
Net income of the Company's unconsolidated real estate entities	$	13,202			$	371
Our share of loss from the Company's unconsolidated real estate entities	$	(1,032	)		$	(48	)

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The following table presents the combined balance sheets of our joint ventures as of March 31, 2020 and December 31, 2019:

		March 31, 2020				December 31, 2019
Assets:
Investment properties at cost, net		$	1,864,053			$	1,905,336
Construction in progress		39,354				38,280
Cash and cash equivalents		38,007				43,137
Tenant receivables and accrued revenue, net		31,922				31,238
Deferred costs and other assets (1)		292,516				301,133
Total assets		$	2,265,852			$	2,319,124
Liabilities and Members’ Equity:
Mortgage notes payable		$	1,227,467			$	1,282,307
Accounts payable, accrued expenses, intangibles, and deferred revenues(2)		284,738				297,163
Total liabilities		1,512,205				1,579,470
Members’ equity		753,647				739,654
Total liabilities and members’ equity		$	2,265,852			$	2,319,124
Our share of members’ equity, net		$	396,600			$	384,332
Our share of members’ equity, net		$	396,600			$	384,332
Advances and excess investment		20,349				17,339
Net investment in and advances to unconsolidated entities, at equity(3)		$	416,949			$	401,671

(1)	Includes value of acquired in-place leases and acquired above-market leases with a net book value of $75,489 and $79,457 as of March 31, 2020 and December 31, 2019, respectively. Additionally, includes right-of-use assets of $173,069 and $172,991 related to ground leases for which our joint ventures are the lessees as of March 31, 2020 and December 31, 2019, respectively.

(2)	Includes the net book value of below market leases of $42,442 and $45,757 as of March 31, 2020 and December 31, 2019, respectively. Additionally, includes lease liabilities of $173,069 and $172,991 related to ground leases for which our joint ventures are the lessees as of March 31, 2020 and December 31, 2019, respectively.

(3)	Includes $416,949 and $417,092 of investment in and advances to unconsolidated entities, at equity as of March 31, 2020 and December 31, 2019, respectively, and $0 and $15,421 of cash distributions and losses in unconsolidated entities, at equity as of March 31, 2020 and December 31, 2019, respectively.

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6.	Indebtedness

Mortgage Debt

Total mortgage indebtedness at March 31, 2020 and December 31, 2019 was as follows:

		March 31, 2020				December 31, 2019
Face amount of mortgage loans		$	1,113,242			$	1,117,242
Fair value adjustments, net		2,887				3,463
Debt issuance cost, net		(4,785		)		(5,097		)
Carrying value of mortgage loans		$	1,111,344			$	1,115,608

A roll forward of mortgage indebtedness from December 31, 2019 to March 31, 2020 is summarized as follows:

Balance at December 31, 2019	$	1,115,608
Debt amortization payments	(4,000		)
Amortization of fair value and other adjustments	(576		)
Amortization of debt issuance costs	312
Balance at March 31, 2020	$	1,111,344

On February 14, 2020, the Company exercised the second of two options to extend the maturity of the $51.0 million mortgage note payable secured by Town Center at Aurora, located in Aurora, Colorado for one year. The extended maturity is April 1, 2021.

Corporate Debt

On February 28, 2020, the Company redeemed the Exchange Notes (as defined below) in advance of the April 1, 2020 maturity date. The repayment was funded utilizing borrowings on the Revolver (as defined below).

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The following table identifies our total corporate debt outstanding at March 31, 2020 and December 31, 2019:

		March 31, 2020				December 31, 2019
Notes payable:
Face amount - the Exchange Notes(1)		$	—			$	250,000
Face amount - Senior Notes due 2024(2)		720,900				720,900
Debt discount, net		(7,489		)		(7,864		)
Debt issuance costs, net		(4,991		)		(5,470		)
Total carrying value of notes payable		$	708,420			$	957,566
Unsecured term loans:(7)
Face amount - Term Loan(3)(4)		$	350,000			$	350,000
Face amount - December 2015 Term Loan(5)		340,000				340,000
Debt issuance costs, net		(3,074		)		(3,358		)
Total carrying value of unsecured term loans		$	686,926			$	686,642
Revolving credit facility:(3)(6)
Face amount		$	527,000			$	207,000
Debt issuance costs, net		(2,570		)		(2,855		)
Total carrying value of revolving credit facility		$	524,430			$	204,145
Other indebtedness:(8)
Face amount		$	98,900			$	98,900
Debt issuance costs, net		(1,548		)		(1,561		)
Accretion adjustment		555				262
Total carrying value of other indebtedness		$	97,907			$	97,601

⁽¹⁾ The Exchange Notes were issued at a 0.028% discount and bore interest at 3.850% per annum.

⁽²⁾ The Senior Notes due 2024 were issued at a 1.533% discount, bore interest at 5.950% per annum through August 14, 2019, at which time the interest rate increased to 6.450% per annum. The Senior Notes due 2024 mature on August 15, 2024.

⁽³⁾ The unsecured revolving credit facility, or "Revolver" and unsecured term loan, or "Term Loan" are collectively known as the "Facility."

⁽⁴⁾ The Term Loan bears interest at one-month LIBOR plus 2.10% per annum and will mature on December 30, 2022. We have interest rate swap agreements totaling $250.0 million, which effectively fix the interest rate on a portion of the Term Loan at 4.86% through June 30, 2021. At March 31, 2020, the applicable interest rate on the unhedged portion of the Term Loan was one-month LIBOR plus 2.10% or 3.09%.

⁽⁵⁾ The December 2015 Term Loan bears interest at one-month LIBOR plus 2.35% per annum and will mature on January 10, 2023. We have interest rate swap agreements totaling $340.0 million which effectively fix the interest rate at 4.06% per annum through maturity.

⁽⁶⁾ The Revolver provides borrowings on a revolving basis up to $650.0 million, bears interest at one-month LIBOR plus 1.80%, and will initially mature on December 30, 2021, subject to two six month extensions available at our option subject to compliance with terms of the Facility and payment of a customary extension fee. At March 31, 2020, we had an aggregate available borrowing capacity of $122.8 million under the Revolver, net of $0.2 million reserved for outstanding letters of credit. At March 31, 2020, the applicable interest rate on the Revolver was one-month LIBOR plus 1.80% or 2.79%. The interest rate on the Revolver may vary in the future based upon the Company's credit rating and leveraged levels.

⁽⁷⁾ While we have interest rate swap agreements in place that fix the LIBOR portion of the rates as noted above, the spread over LIBOR could vary in the future based upon changes to the Company's credit ratings and leveraged levels.

⁽⁸⁾ Represents the financial liability associated with our failed sale and leaseback of land at Edison Mall, located in Fort Myers, Florida; Great Lakes Mall, located in Mentor, Ohio; Irving Mall, located in Irving, Texas; and Jefferson Valley Mall, located in Yorktown Heights, New York (collectively, the "Properties"). The face amount represents the sales price of the fee interest in the land at the Properties. The master ground lease has a 99-year term and includes fixed annual payments at an initial annualized rate of 7.4%, with annual rent escalators over the aforementioned term. The agreement also includes an option to repurchase the fee interest in the land at $109.3 million in year 30 of the master ground lease, which is being accreted to the financial liability during the repurchase period. Proceeds received at closing were net of $55.0 million in bridge financing provided by the Company, which is included in "Deferred costs and other assets" on the accompanying consolidated balance sheet at March 31, 2020 and December 31, 2019. Expense is being recognized utilizing an effective interest rate of 8.56% during the repurchase period.

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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 March 31, 2020, management believes the Company is in compliance with all covenants of its unsecured debt.

The total balance of mortgages was approximately $1.1 billion as of March 31, 2020. At March 31, 2020, certain of our consolidated subsidiaries were the borrowers under 20 non-recourse loans and two full-recourse loans secured by mortgages encumbering 24 properties, including one separate pool of cross-defaulted and cross-collateralized mortgages encumbering a total of four 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. If the borrower fails to comply with these covenants, the lender could accelerate the debt and enforce its right against their collateral. Our existing non-recourse mortgage loans generally prohibit our subsidiaries that are borrowers thereunder from incurring additional indebtedness, subject to certain customary and limited exceptions. In addition, certain of these instruments limit the ability of the applicable borrower's parent entity from incurring mezzanine indebtedness unless certain conditions are satisfied, including compliance with maximum loan to value ratio and minimum debt service coverage ratio tests. Further, under certain of these existing agreements, if certain cash flow levels in respect of the applicable mortgaged property (as described in the applicable agreement) are not maintained for at least two consecutive quarters, the lender could accelerate the debt and enforce its right against its collateral.

On February 21, 2020, we received a letter, dated that same date, from the lender notifying the borrower, a consolidated subsidiary of WPG L.P., that the $33.1 million mortgage loan secured by Muncie Mall, located in Muncie, Indiana, was transferred to special servicing because the borrower notified the lender that future projected cash flows will be insufficient to ensure future compliance with the mortgage loan due to the loss of certain tenants. The borrower has initiated discussions with the special servicer regarding this non-recourse loan and is considering various options. The Company continues to manage and lease the property (See Note 12 - "Subsequent Events" for additional information).

On November 5, 2019, we received a letter dated October 30, 2019, from the lender notifying the borrower, a consolidated subsidiary of WPG L.P., that the $45.1 million mortgage loan secured by Charlottesville Fashion Square, located in Charlottesville, Virginia, was transferred to special servicing because the borrower notified the lender that future projected cash flows will be insufficient to ensure future compliance with the mortgage loan due to the loss of certain tenants. The borrower has initiated discussions with the special servicer regarding this non-recourse loan and is considering various options. On March 17, 2020, 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 March 31, 2020, 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. The Company has assessed each of the defaulted properties for impairment indicators and have concluded no impairment charges were warranted as of March 31, 2020.

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 and fixed-rate corporate debt (including variable-rate unsecured debt swapped to fixed-rate and our other indebtedness, as discussed above) using cash flows discounted at current borrowing rates or Level 2 inputs. We estimate the fair values of consolidated fixed-rate unsecured notes payable using Level 1 quoted market prices, or, if no quoted market prices are available, we use quoted market prices for securities with similar terms and maturities or Level 2 inputs.

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The book value and fair value of these financial instruments and the related discount rate assumptions as of March 31, 2020 and December 31, 2019 are summarized as follows:

		March 31, 2020			December 31, 2019
Book value of fixed-rate mortgages(1)		$1,048,242			$1,052,242
Fair value of fixed-rate mortgages		$1,072,388			$1,062,205
Weighted average discount rates assumed in calculation of fair value for fixed-rate mortgages		3.86	%		4.24	%
Book value of fixed-rate corporate debt(1)		$1,410,355			$1,660,062
Fair value of fixed-rate corporate debt		$1,172,513			$1,673,105
Weighted average discount rates assumed in calculation of fair value for fixed-rate corporate debt		9.13	%		6.03	%

(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.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative 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 income or loss ("AOCI" or "AOCL") during the term of the hedged debt transaction.

Amounts reported in AOCL 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 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 $11.8 million will be reclassified as an increase to interest expense. As of March 31, 2020, the Company had 11 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk with a current notional value of $641.0 million.

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 March 31, 2020 and December 31, 2019:

Derivatives designated as hedging instruments:		Balance Sheet Location		March 31, 2020				December 31, 2019
Interest rate products	Liability derivatives	Accounts payable, accrued expenses, intangibles, and deferred revenue		$	22,009			$	6,592

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There were no asset derivative instruments at March 31, 2020 and December 31, 2019. The liability derivative instruments were reported at their fair value of $22,009 and $6,592 at March 31, 2020 and December 31, 2019, 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 will be reclassified to earnings. This reclassification will correlate with the recognition of the hedged interest payments in earnings.

The table below presents the effect of the Company's derivative financial instruments on the consolidated statements of comprehensive loss for the three months ended March 31, 2020 and 2019:

Derivatives in Cash Flow Hedging Relationships (Interest rate products)		Location of Gain or Loss Recognized in Income on Derivatives		For the Three Months Ended March 31,
				2020				2019
Amount of Loss Recognized in OCL on Derivative		Interest expense		$	(16,209	)		$	(4,565	)
Amount of Loss or (Gain) Reclassified from AOCL into Income		Interest expense		$	763			$	(545	)

The table below presents the effect of the Company's derivative financial instruments on the consolidated statements of operations for the three months ended March 31, 2020 and 2019:

Effect of Cash Flow Hedges on Consolidated Statements of Operations		For the Three Months Ended March 31,
		2020				2019
Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded		$	(38,635	)		$	(36,830	)
Amount of loss or (gain) reclassified from accumulated other comprehensive loss into interest expense		$	763			$	(545	)

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 March 31, 2020, the fair value of the derivatives in a net liability position, plus accrued interest but excluding any adjustment for nonperformance risk, related to these agreements was $22,009. As of March 31, 2020, the Company has not posted any collateral related to these agreements. The Company is not in default with any of these provisions as of March 31, 2020. If the Company had breached any of these provisions at March 31, 2020, it would have been required to settle its obligation under these agreements at their termination value of $22,009.

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.

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.

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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 March 31, 2020 and December 31, 2019, 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 tables below presents the Company’s net assets and (liabilities) measured at fair value as of March 31, 2020 and December 31, 2019 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, 2020
Derivative instruments, net	$	—			$	(22,009	)		$	—			$	(22,009	)

	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, 2019
Derivative instruments, net	$	—			$	(6,592	)		$	—			$	(6,592	)

8.	Rental Income

We receive rental income from the leasing of retail and other space under operating leases, as we retain substantially all of the risks and benefits of ownership of the investment properties. The majority of these leases contain extension options, typically at the lessee's election, and/or early termination provisions. Further, our leases do not contain any provisions that would allow the lessee to purchase the underlying assets throughout the lease term. In most cases, consideration received typically includes a fixed minimum rent component, reimbursement of a fixed portion of our property operating expenses, including utility, security, janitorial, landscaping, food court and other administrative expenses included in common area maintenance, or CAM, and reimbursement of lessor costs such as real estate taxes and insurance, computed based upon a formula in accordance with the lease terms. When not reimbursed by the fixed CAM component, CAM expense reimbursements and lessor costs are based on the tenant's proportionate share of the allocable operating expenses and CAM capital expenditures for the property. We accrue reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. We recognize differences between estimated recoveries and the final billed amounts in the subsequent year. Additionally, a large number of our tenants are also required to pay overage rents based on sales during the applicable lease year over a base amount stated in the lease agreement. We recognize overage rents only when each tenant's sales exceed the applicable sales threshold as defined in their lease. We also collect lease termination income from tenants to allow for the tenant to vacate their space prior to their scheduled lease termination date. We recognize lease termination income in the period when a termination agreement is signed, collectability is assured, and we are no longer obligated to provide space to the tenant. In the event that a tenant is in bankruptcy when the termination agreement is signed, termination fee income is deferred and recognized when, and if, it is received. We record an adjustment to rental income in the period there is a change in our assessment of whether the collectibility of operating lease payments is probable.

We have elected the practical expedient in ASU 2016-02 to not separate non-lease components from lease components as our underlying leases qualify as operating leases and the timing and pattern of transfer of the lease and non-lease components are the same. We note that the predominant component of our leases is the lease component and thus account for the combined lease and non-lease (CAM) component of the non-cancelable lease term on a straight-line basis in accordance with ASC 842.

Rental income also includes accretion related to above-market and below-market lease intangibles related to the acquisition of operating properties. We amortize any tenant inducements as a reduction of rental income utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter.

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The following table summarizes our rental income for the three months ended March 31, 2020 and 2019:

		For the Three Months Ended March 31,
		2020				2019
Operating lease payments, fixed		$	131,505			$	144,176
Operating lease payments, variable		19,104				18,062
Amortization of straight-line rent, inducements, and rent abatements		809				1,109
Net amortization/accretion of above and below-market leases		1,106				2,906
Change in estimate of collectibility of rental income		(5,291		)		(2,980		)
Total rental income		$	147,233			$	163,273

Future payments to be received under non-cancelable operating leases for each of the next five years and thereafter, excluding variable payments of tenant reimbursements, percentage or overage rents, and lease termination payments as of March 31, 2020 are as follows:

2020 (April - December)		$	354,190
2021		399,072
2022		334,192
2023		270,266
2024		209,109
Thereafter		646,995
		$	2,213,824

9.	Equity

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 market value of WPG Inc.'s common stock as determined pursuant to the terms of the WPG L.P. Partnership Agreement. At March 31, 2020, WPG Inc. had reserved 34,506,965 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 WPG Inc. Board of Directors (the "Board") adopted the Washington Prime Group, L.P. 2014 Stock Incentive Plan (the "2014 Plan"), which permitted 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 were reserved for issuance, with a maximum number of awards to be granted to a participant in any calendar year of 500,000 shares/units. On May 16, 2019, the common shareholders of WPG Inc. approved the Washington Prime Group, L.P. 2019 Stock Incentive Plan (the "2019 Plan"), which replaced the 2014 Plan with respect to the issuance of new awards. The Board and its Compensation Committee (the "Committee") previously approved and adopted the 2019 Plan, subject to WPG Inc. common shareholder approval, during the Board and Committee's regular meetings in February 2019. An aggregate of 7,290,000 shares of common stock are reserved for issuance, excluding carryover shares from the 2014 Plan. 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., long term incentive units ("LTIP units" or "LTIPs") or performance units ("Performance LTIP Units") in WPG L.P. The 2019 Plan terminates on May 16, 2029.

The following is a summary by type of the awards that the Company issued during the three months ended March 31, 2020 and March 31, 2019 under the 2014 Plan and 2019 Plan.

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Annual Long-Term Incentive Awards

During the three months ended March 31, 2020 and 2019, the Company approved the terms and conditions of the 2020 and 2019 annual awards (the "2020 Annual Long-Term Incentive Awards" and "2019 Long-Term Incentive Awards," respectively) for certain executive officers and employees of the Company. Under the terms of the awards program, each participant is provided the 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. RSUs will vest in one-third installments on each annual anniversary of the respective Grant Date (as referenced below), subject to the 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 in cash accruals or under some circumstances, common shares, with respect to the RSUs corresponding to the amount of any cash dividends paid by the Company to the Company's common shareholders for the applicable dividend payment dates. Compensation expense is recognized on a straight-line basis over the three year vesting term. Actual PSUs earned may range from 0%-150% of the PSUs allocated to the award recipient, based on the Company's 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 respective Grant Date (as referenced below). 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 of the PSUs is also subject to the participant’s continued employment with the Company through the end of the performance period. The PSUs were valued through the use of a Monte Carlo model and the related compensation expense is recognized over the three-year performance period.

The following table summarizes the issuance of the 2020 Annual Long-Term Incentive Awards and 2019 Annual Long-Term Incentive Awards, respectively:

		2020 Annual Long-Term Incentive Awards		2019 Annual Long-Term Incentive Awards
Grant Date		February 25, 2020		February 20, 2019
RSUs issued		1,373,422		572,163
Grant date fair value per unit		$2.41		$5.77
PSUs issued		1,373,422		572,163
Grant date fair value per unit		$1.74		$4.98

During the three months ended March 31, 2020, the performance period related to PSUs awarded in conjunction with the 2017 annual award ended. There was no payout as the Company's TSR rank did not exceed the minimum required threshold for payout and 262,787 PSUs were forfeited.

Stock Options

During the three months ended March 31, 2020, no stock options were granted to employees, no stock options were exercised by employees and 13,583 stock options were canceled, forfeited or expired. As of March 31, 2020, there were 587,706 stock options outstanding. During the three months ended March 31, 2019, no stock options were granted to employees, 391 stock options were exercised by employees and 6,299 stock options were canceled, forfeited or expired.

Share Award Related Compensation Expense

During the three months ended March 31, 2020 and 2019, the Company recorded compensation expense pertaining to the awards granted of $1.9 million and $1.8 million, respectively, in general and administrative and property operating expense within the consolidated statements of operations and comprehensive loss. In certain instances, employment agreements and stock compensation programs provide for accelerated vesting when executives are terminated without cause. Additionally, the Committee may, in its discretion, accelerate the vesting for retiring Board members.

Distributions

During the three months ended March 31, 2020 and 2019, the Board declared common share/unit dividends of $0.125 and $0.25 per common share/unit, respectively.

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10.	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.

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.

Lease Commitments

As of March 31, 2020, a total of four consolidated properties are subject to ground leases. The termination dates of these ground leases range from 2026 to 2076. These ground leases generally require us to make fixed annual rental payments, or a fixed annual rental plus a percentage rent component based upon the revenues or total sales of the property. Some of these leases also include escalation clauses and renewal options. For the three months ended March 31, 2020, we incurred ground lease expense of $122, of which $5 related to straight-line rent expense, which is included in ground rent in the accompanying consolidated statements of operations and comprehensive loss. For the three months ended March 31, 2019, we incurred ground lease expense of $203, of which $5 related to straight-line rent expense. Additionally, the Company has two material office leases and one material garage lease. The termination dates of these leases range from 2023 to 2026. These leases generally require us to make fixed annual rental payments, plus our share of CAM expense and real estate taxes and insurance. For the three months ended March 31, 2020, we incurred lease expense of $649, which is included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. For the three months ended March 31, 2019, we incurred lease expense of $631.

Future minimum lease payments due under these leases for each of the next five years and thereafter, excluding applicable extension options, as of March 31, 2020 are as follows:

2020 (April - December)		$	1,539
2021		2,069
2022		2,099
2023		1,427
2024		999
Thereafter		20,378
Total lease payments		28,511
Less: Discount		16,014
Present value of lease liabilities		$	12,497

The weighted average remaining lease term for our consolidated operating leases was 19.4 years and the weighted average discount rate for determining the lease liabilities was 8.7% at March 31, 2020. The discount rates utilized in calculating the lease liabilities represents our estimate of the Company's incremental borrowing rate over the terms that correspond to the leases. We had no financing leases as of March 31, 2020.

11.	Earnings (Loss) Per Common Share/Unit

WPG Inc. Earnings (Loss) Per Common Share

We determine WPG Inc.'s basic earnings (loss) per common share based on the weighted average number of shares of common stock outstanding during the period and we consider any participating securities for purposes of applying the two-class method. We determine WPG Inc.'s diluted earnings (loss) per share based on the weighted average number of shares of common stock outstanding combined with the incremental weighted average shares that would have been outstanding assuming all potentially dilutive securities were converted into common shares at the earliest date possible.

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The following table sets forth the computation of WPG Inc.'s basic and diluted earnings (loss) per common share:

		For the Three Months Ended March 31,
		2020				2019
Earnings (Loss) Per Common Share, Basic:
Net income (loss) attributable to common shareholders - basic		$	3,375			$	(5,175	)
Weighted average shares outstanding - basic		189,143,319				188,082,289
Earnings (Loss) per common share, basic		$	0.02			$	(0.03	)
Earnings (Loss) Per Common Share, Diluted:
Net income (loss) attributable to common shareholders - basic		$	3,375			$	(5,175	)
Net income (loss) attributable to limited partner unitholders		617				(956		)
Net income (loss) attributable to common shareholders - diluted		$	3,992			$	(6,131	)
Weighted average common shares outstanding - basic		189,143,319				188,082,289
Weighted average operating partnership units outstanding		34,593,887				34,731,075
Weighted average additional dilutive securities outstanding		812,751				—
Weighted average common shares outstanding - diluted		224,549,957				222,813,364
Earnings (Loss) per common share, diluted		$	0.02			$	(0.03	)

For the three months ended March 31, 2020 and 2019, additional potentially dilutive securities include contingently-issuable outstanding stock options, restricted stock units, and performance based components of annual or special arrangement awards. For the three months ended March 31, 2019, the potential dilutive effect of 673,051 contingently-issuable outstanding stock options and 1,305,005 performance based components of annual or special arrangement awards were excluded as their inclusion would be anti-dilutive. We accrue distributions when they are declared.

WPG L.P. Earnings (Loss) Per Common Unit

We determine WPG L.P.'s basic earnings (loss) per common unit based on the weighted average number of common units outstanding during the period and we consider any participating securities for purposes of applying the two-class method. We determine WPG L.P.'s diluted earnings (loss) per unit based on the weighted average number of common units outstanding combined with the incremental weighted average units that would have been outstanding assuming all potentially dilutive securities were converted into common units at the earliest date possible.

The following table sets forth the computation of WPG L.P.'s basic and diluted earnings (loss) per common unit:

		For the Three Months Ended March 31,
		2020				2019
Earnings (Loss) Per Common Unit, Basic & Diluted:
Net income (loss) attributable to common unitholders - basic and diluted		$	3,992			$	(6,131	)
Weighted average common units outstanding - basic		223,737,206				222,813,364
Weighted average additional dilutive securities outstanding		812,751				—
Weighted average units outstanding - diluted		224,549,957				222,813,364
Earnings (Loss) per common unit, basic & diluted		$	0.02			$	(0.03	)

For the three months ended March 31, 2020 and 2019, additional potentially dilutive securities include contingently-issuable units related to WPG Inc.'s outstanding stock options, restricted stock units, and WPG Inc.'s performance based components of annual or special arrangement awards. For the three months ended March 31, 2019, the potential dilutive effect of 673,051 contingently-issuable outstanding stock options and 1,305,005 performance based components of annual awards were excluded as their inclusion would be anti-dilutive. We accrue distributions when they are declared.

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12.	Subsequent Events

On April 28, 2020, the Company received notice from the New York Stock Exchange ("NYSE") that as of April 27, 2020, its Common Stock is no longer in compliance with NYSE continued listing criteria set forth in Section 802.01C of the Listed Company Manual of the NYSE, which require listed companies to maintain an average closing share price of at least $1.00 over a period of 30 consecutive trading days. The Company has until January 1, 2021, inclusive of extensions of the cure period provided by the Securities and Exchange Commission in response to the COVID-19 pandemic, to regain compliance with the continued listing criteria. During this period, the Company's Common Stock will continue to trade on the NYSE.

The Company intends to actively evaluate and monitor the price of its Common Stock between now and January 1, 2021, and will consider implementation of various options available to the Company if its Common Stock does not trade at a level that is likely to regain compliance. A delisting of our Common Stock from the NYSE could negatively impact us by, among other things, reducing liquidity and market price of our Common Stock.

On April 14, 2020, the Company received notification that a receiver had been appointed to manage and lease Muncie Mall. An affiliate of the Company continues to hold title to the property.

On April 3, 2020, the Company exercised the third of three options to extend the maturity of the $65.0 million term loan secured by Weberstown Mall, located in Stockton, California, for one year. The extended maturity date is June 8, 2021.

COVID-19 Updates

Based upon continued uncertainties due to COVID-19, the Company has taken the following measures to enhance liquidity and financial flexibility:

•On April 14, 2020 the Company drew down an additional $120.0 million from the Revolver. After this draw, the Company has approximately $3.0 million of borrowing capacity remaining under the Revolver.

•The Company and the Board have temporarily suspended the quarterly cash dividend for common shares and operating partnership units throughout the remainder of 2020 with a potential true up of the fourth quarter 2020 dividend payment in order to address the Company’s REIT taxable income distribution requirements.

•Effective April 5, 2020, the Company temporarily reduced the base salaries of its senior leadership team ranging from 5% to 25%. These reductions impacted Senior Vice Presidents, Executive Vice Presidents, the Company’s Chief Counsel, Chief Financial Officer and the Chief Executive Officer.

•On April 3, 2020 the Company furloughed or laid off approximately 20% of associates to reduce corporate overhead and operating expenses. These actions impacted both property and corporate office colleagues whose workload has been significantly reduced by the COVID-19 pandemic. Those colleagues who are temporarily furloughed will continue to receive existing Company-provided benefits throughout their absence. As circumstances change, the Company will make every effort to bring these furloughed associates back to work as soon as possible. Additionally, the Company has mandated a hiring freeze and terminated third party vendor contracts when applicable.

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

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(1)

Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all Company-owned space except for anchors, majors, freestanding office and outlots at our enclosed retail properties in the calculation of ending occupancy. Open air property GLA included in the calculation relates to all Company-owned space other than office space.

(2)	Average base minimum rent per square foot is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.

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•	funded capital expenditures and redevelopment projects of $60.0 million;

•	received net proceeds from the sale of interests in properties and outparcels of $17.2 million;

•	funded investments in unconsolidated entities of $3.2 million;

•	received distributions of capital from unconsolidated entities of $1.6 million;

•	received net proceeds from our debt financing, refinancing and repayment activities of $66.0 million; and

•	funded distributions to common and preferred shareholders and unitholders of $31.6 million.

•	excess cash generated from operating performance and working capital reserves;

•	borrowings on our debt arrangements;

•	opportunistic asset sales;

•	additional secured or unsecured debt financing; or

•	additional equity raised in the public or private markets.

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•	excluding real estate related depreciation and amortization;

•	excluding gains and losses from extraordinary items and cumulative effects of accounting changes;

•	excluding gains and losses from the sales or disposals of previously depreciated retail operating properties;

•	excluding gains and losses upon acquisition of controlling interests in properties;

•	excluding impairment charges of depreciable real estate;

•	plus the allocable portion of FFO of unconsolidated entities accounted for under the equity method of accounting based upon economic ownership interest.

•	do not represent cash flow from operations as defined by GAAP;

•	should not be considered as alternatives to net (loss) income determined in accordance with GAAP as a measure of operating performance; and

•	are not alternatives to cash flows as a measure of liquidity.

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(1)

FFO of the operating partnership decreased $20.4 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. During the three months ended March 31, 2020, comparable NOI decreased $4.0 million, which can be primarily attributed to tenant bankruptcies and co-tenancy claims, contributions from properties that were sold, and reductions of $5.0 million including our pro-rata share of joint ventures in both straight-line and above/below market lease revenue. Additionally, we received $8.7 million less in FFO from the sale of outparcels. Lastly, we incurred $1.8 million in additional interest expense primarily related to the Company's other indebtedness (see "Financing and Debt" for additional details). Offsetting these decreases to FFO was a reduction in general and administrative expenses of $1.9 million, which can be primarily attributed to severance costs incurred in 2019 that did not reoccur in 2020.

(2)	The weighted average additional dilutive securities for the three months ended March 31, 2019 are excluded for purposes of calculating diluted earnings (loss) per share/unit because their effect would have been anti-dilutive.

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•	straight-line rents and fair value rent amortization;

•	management fee allocation to promote comparability across periods; and

•	termination income, out-parcel sales and material insurance proceeds, which are deemed to be outside of normal operating results.

(1)	Represents an adjustment to remove the NOI amounts from properties not owned and operated in all periods presented, certain non-recurring expenses (such as hurricane related expenses), as well as material insurance proceeds and other non-recurring income received in the periods presented. This also includes adjustments related to the rents from the outparcels sold to Four Corners.

(2)	NOI from the Tier 2 and noncore properties held in each period presented.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

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Item 1.	Legal Proceedings

Item 1A.	Risk Factors

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Item 4.	Mine Safety Disclosures

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