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8-K
WASHINGTON PRIME GROUP INC. filed this Form 8-K on 07/26/2018
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SAFE HARBOR: Some of the information contained in this presentation includes forward looking statements. Such statements are subject to a number of risks and uncertainties which could cause actual results in the future to differ materially and adversely from those described in the forward-looking statements. Investors should consult the Company's filings with the Securities and Exchange Commission for a description of the various risks and uncertainties which could cause such a difference before deciding whether to invest.










        



Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page
Financial Statement Data
 
 
 
Consolidated statements of operations (unaudited)
1
 
Consolidated balance sheets (unaudited)
2
 
Supplemental balance sheet detail
3
 
Components of minimum rents, other income and corporate overhead
4
 
Reconciliation of funds from operations - including pro-rata share of unconsolidated properties
5
 
Reconciliation of net operating income growth for comparable properties - including pro-rata share of unconsolidated properties
6
 
 
 
Debt Information
 
 
 
Summary of debt
7
 
EBITDAre and key balance sheet metrics
8
 
Key guidance assumptions
 
9
 
 
 
 
Operational Data
 
 
 
Operating metrics
10
 
Leasing results and base rent psf
11
 
Releasing spreads
 
12
 
Top 10 tenants
13
 
Lease expirations
 
14
 
 
 
 
Development Activity
 
 
 
Capital expenditures
15
 
Redevelopment projects
16
 
 
 
Property Information
 
 
 
Property information
17-19
 
 
 
Other
 
 
 
Non-GAAP pro-rata financial information
20
 
Proportionate share of unconsolidated properties - statements of operations (unaudited)
21
 
Proportionate share of unconsolidated properties - balance sheet (unaudited)
22
 
Glossary of terms
 
23



        



CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
(Unaudited, dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended
June 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
Minimum rent (see components on page 4)
$
121,787

 
$
129,433

 
$
245,126

 
$
266,549

 
Overage rent
1,415

 
1,299

 
3,429

 
4,131

 
Tenant reimbursements
47,594

 
52,121

 
96,238

 
108,911

 
Other income (see components on page 4)
7,932

 
6,318

 
14,275

 
11,974

 
Total revenues
178,728

 
189,171

 
359,068

 
391,565

 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
Property operating
(35,945
)
 
(35,164
)
 
(72,311
)
 
(72,408
)
 
Real estate taxes
(21,094
)
 
(23,253
)
 
(43,135
)
 
(49,260
)
 
Advertising and promotion
(2,240
)
 
(2,275
)
 
(4,011
)
 
(4,427
)
 
Total recoverable expenses
(59,279
)
 
(60,692
)
 
(119,457
)
 
(126,095
)
 
Depreciation and amortization
(63,796
)
 
(66,620
)
 
(125,090
)
 
(134,131
)
 
Provision for credit losses
(611
)
 
(1,903
)
 
(3,957
)
 
(3,484
)
 
General and administrative
(11,191
)
 
(9,091
)
 
(20,845
)
 
(17,919
)
 
Ground rent
(198
)
 
(996
)
 
(395
)
 
(2,027
)
 
Impairment loss

 

 

 
(8,509
)
 
Total operating expenses
(135,075
)
 
(139,302
)
 
(269,744
)
 
(292,165
)
 
 
 
 
 
 
 
 
 
 
Operating Income
43,653

 
49,869

 
89,324

 
99,400

 
 
 
 
 
 
 
 
 
 
Interest expense, net
(34,701
)
 
(31,281
)
 
(69,045
)
 
(63,769
)
 
Gain on extinguishment of debt, net

 
21,221

 

 
21,221

 
Income and other taxes
(601
)
 
(522
)
 
(1,086
)
 
(2,548
)
 
(Loss) income from unconsolidated entities, net
(895
)
 
(172
)
 
267

 
(616
)
 
Gain on disposition of interests in properties, net
8,063

 
125,385

 
16,244

 
125,436

 
 
 
 
 
 
 
 
 
 
Net income
15,519

 
164,500

 
35,704

 
179,124

 
Net income attributable to noncontrolling interests
1,925

 
25,525

 
4,586

 
27,339

 
Net income attributable to the Company
13,594

 
138,975

 
31,118

 
151,785

 
Less: Preferred share dividends
(3,508
)
 
(3,508
)
 
(7,016
)
 
(7,016
)
 
Net income attributable to common shareholders
$
10,086

 
$
135,467

 
$
24,102

 
$
144,769

 
 
 
 
 
 
 
 
 
 
Earnings per common share, basic
$
0.05

 
$
0.73

 
$
0.13

 
$
0.78

 
Earnings per common share, diluted
$
0.05

 
$
0.72

 
$
0.13

 
$
0.77


SUPPLEMENTAL INFORMATION | 1



CONSOLIDATED BALANCE SHEETS
 
 
 
Washington Prime Group Inc.
 
 
 
(Unaudited, dollars in thousands)
 
 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
 
2018
 
2017
 
Assets:
 
 
 
 
Investment properties at cost
$
5,868,879

 
$
5,761,714

 
Construction in progress
44,594

 
46,046

 
 
5,913,473

 
5,807,760

 
Less: accumulated depreciation
2,226,646

 
2,139,620

 
 
3,686,827

 
3,668,140

 
 
 
 
 
 
Cash and cash equivalents
53,987

 
52,019

 
Tenant receivables and accrued revenue, net (see components on page 3)
79,363

 
90,314

 
Investment in and advances to unconsolidated entities, at equity
443,963

 
451,839

 
Deferred costs and other assets (see components on page 3)
207,928

 
189,095

 
Total assets
$
4,472,068

 
$
4,451,407

 
 
 
 
 
 
Liabilities:
 
 
 
 
Mortgage notes payable
$
1,060,687

 
$
1,157,082

 
Notes payable
981,026

 
979,372

 
Unsecured term loans
684,939

 
606,695

 
Revolving credit facility
275,440

 
154,460

 
Accounts payable, accrued expenses, intangibles, and deferred revenues (see components on page 3)
251,422

 
264,998

 
Distributions payable
2,992

 
2,992

 
Cash distributions and losses in unconsolidated entities, at equity
15,421

 
15,421

 
Total liabilities
3,271,927

 
3,181,020

 
 
 
 
 
 
Redeemable noncontrolling interests
3,265

 
3,265

 
 
 
 
 
 
Equity:
 
 
 
 
Stockholders' equity
 
 
 
 
Series H Cumulative Redeemable Preferred Stock
104,251

 
104,251

 
Series I Cumulative Redeemable Preferred Stock
98,325

 
98,325

 
Common stock
19

 
19

 
Capital in excess of par value
1,244,211

 
1,240,483

 
Accumulated deficit
(418,472
)
 
(350,594
)
 
Accumulated other comprehensive income
12,403

 
6,920

 
Total stockholders' equity
1,040,737

 
1,099,404

 
Noncontrolling interests
156,139

 
167,718

 
Total equity
1,196,876

 
1,267,122

 
Total liabilities, redeemable noncontrolling interests and equity
$
4,472,068

 
$
4,451,407


SUPPLEMENTAL INFORMATION | 2                                    



SUPPLEMENTAL BALANCE SHEET DETAIL
Washington Prime Group Inc.
 
(unaudited, dollars in thousands)
 
 
 
 
 
 
June 30,
 
December 31,
 
2018
 
2017
 
 
 
 
Tenant receivables and accrued revenue, net:
 
 
 
Straight-line receivable
$
38,589

 
$
36,566

Tenant receivable
16,240

 
12,875

Allowance for doubtful accounts, net
(10,270
)
 
(7,867
)
Unbilled receivables and other
34,804

 
48,740

Total
$
79,363

 
$
90,314

 
 
 
 
Deferred costs and other assets:
 
 
 
Deferred leasing and corporate improvements, net
$
77,287

 
$
79,079

In place lease intangibles, net
47,254

 
46,627

Acquired above market lease intangibles, net
22,585

 
24,254

Mortgage and other escrow deposits
29,127

 
18,182

Prepaids, notes receivable and other assets, net
31,675

 
20,953

Total
$
207,928

 
$
189,095

 
 
 
 
Accounts payable, accrued expenses, intangibles and deferred revenues:
 
 
 
Accounts payable and accrued expenses
$
151,055

 
$
158,450

Below market lease intangibles, net
75,256

 
77,871

Deferred revenues and deposits
25,111

 
28,677

Total
$
251,422

 
$
264,998

 
 
 
 
 
 
 
 
















SUPPLEMENTAL INFORMATION | 3



COMPONENTS OF MINIMUM RENTS, OTHER INCOME AND CORPORATE OVERHEAD
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
(unaudited, dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
 
Components of Minimum Rents:
 
 
 
 
 
 
 
 
  Base rent
$
115,800

 
$
121,937

 
$
231,352

 
$
252,022

 
  Mark-to-market adjustment
1,076

 
2,853

 
4,125

 
5,062

 
  Straight-line rents
1,164

 
377

 
2,023

 
831

 
  Temporary tenant rents
3,747

 
4,266

 
7,626

 
8,634

 
       Total Minimum Rents
$
121,787

 
$
129,433

 
$
245,126

 
$
266,549

 
 
 
 
 
 
 
 
 
 
Components of Other Income:
 
 
 
 
 
 
 
 
  Sponsorship and other ancillary property income
$
2,054

 
$
2,309

 
$
3,703

 
$
4,076

 
  Fee income
2,140

 
1,941

 
4,482

 
3,523

 
  Lease termination income
258

 
1,944

 
2,024

 
2,780

 
  Other
3,480

 
124

 
4,066

 
1,595

 
       Total Other Income
$
7,932

 
$
6,318

 
$
14,275

 
$
11,974

 
 
 
 
 
 
 
 
 
 
Components of Corporate Overhead:
 
 
 
 
 
 
 
 
General & administrative
$
11,191

 
$
9,091

 
$
20,845

 
$
17,919

 
Third party management fees & internal corporate overhead allocated to operating expense
5,382

 
5,008

 
10,602

 
10,481

 
       Total Corporate Overhead
$
16,573

 
$
14,099

 
$
31,447

 
$
28,400

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


SUPPLEMENTAL INFORMATION | 4



RECONCILIATION OF FUNDS FROM OPERATIONS
 
 
 
 
Including Pro-Rata Share of Unconsolidated Properties
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
(unaudited, dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Funds from Operations ("FFO"):
 
 
 
 
 
 
 
Net income
$
15,519

 
$
164,500

 
$
35,704

 
$
179,124

Less: Preferred dividends and distributions on preferred operating partnership units
(3,568
)
 
(3,568
)
 
(7,136
)
 
(7,136
)
Real estate depreciation and amortization, including joint venture impact
73,355

 
75,079

 
143,554

 
149,600

Gain on disposition of interests in properties, net including impairment loss on depreciable real estate
(1,460
)
 
(125,385
)
 
(1,755
)
 
(116,927
)
FFO
$
83,846

 
$
110,626

 
$
170,367

 
$
204,661

 
 
 
 
 
 
 
 
Adjusted Funds from Operations:
 
 
 
 
 
 
 
FFO
$
83,846

 
$
110,626

 
$
170,367

 
$
204,661

Gain on extinguishment of debt, net

 
(21,221
)
 

 
(21,221
)
Adjusted FFO
$
83,846

 
$
89,405

 
$
170,367

 
$
183,440

 
 
 
 
 
 
 
 
Weighted average common shares outstanding - diluted
223,886

 
222,264

 
223,653

 
222,034

 
 
 
 
 
 
 
 
FFO per diluted share
$
0.37

 
$
0.50

 
$
0.76

 
$
0.92

Total adjustments
$

 
$
(0.10
)
 
$

 
$
(0.10
)
Adjusted FFO per diluted share
$
0.37

 
$
0.40

 
$
0.76

 
$
0.83

 
 
 
 
 
 
 
 
Non-cash items included in FFO:
 
 
 
 
 
 
 
Non-cash stock compensation expense
$
2,519

 
$
1,817

 
$
4,261

 
$
3,295

Straight-line adjustment as an increase to minimum rents (1)
$
1,297

 
$
868

 
$
2,612

 
$
1,796

Straight-line and fair market value adjustment recorded as an increase to ground lease expense (1)
$
555

 
$
529

 
$
1,122

 
$
882

Fair value of debt amortized as a decrease to interest expense (1)
$
1,006

 
$
1,302

 
$
2,012

 
$
2,609

Loan fee amortization and bond discount (1)
$
1,821

 
$
1,395

 
$
4,842

 
$
2,612

Mark-to-market/inducement adjustment as a net increase to base rents (1)
$
1,300

 
$
3,915

 
$
5,859

 
$
6,963

Non-real estate depreciation (1)
$
2,415

 
$
2,394

 
$
4,972

 
$
4,642

Hedge ineffectiveness as a decrease to interest expense (2)
$

 
$
(36
)
 
$

 
$
(128
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes the pro-rata share of the joint venture properties.
 
 
 
 
 
 
 
(2) On January 1, 2018, the Company adopted accounting policy ASU 2017-12 that eliminates the requirement to separately measure and record hedge ineffectiveness.

SUPPLEMENTAL INFORMATION | 5



RECONCILIATION OF NET OPERATING INCOME GROWTH FOR COMPARABLE PROPERTIES
 
 
 
 
 
 
 
 
Including Pro-Rata Share of Unconsolidated Properties
 
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
(unaudited, dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
 
 
2018
 
2017
 
Variance $
 

 
2018
 
2017
 
Variance $
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Comp NOI to Operating Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
$
43,653

 
$
49,869

 
$
(6,216
)
 
 
 
$
89,324

 
$
99,400

 
$
(10,076
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
63,796

 
66,620

 
(2,824
)
 
 
 
125,090

 
134,131

 
(9,041
)
 
 
General and administrative
11,191

 
9,091

 
2,100

 
 
 
20,845

 
17,919

 
2,926

 
 
Impairment loss

 

 

 
 
 

 
8,509

 
(8,509
)
 
 
Fee income
(2,140
)
 
(1,941
)
 
(199
)
 
 
 
(4,482
)
 
(3,523
)
 
(959
)
 
 
Management fee allocation

 
37

 
(37
)
 
 
 
(16
)
 
513

 
(529
)
 
 
Pro-rata share of unconsolidated joint ventures in comp NOI
18,546

 
14,337

 
4,209

 
 
 
35,429

 
22,270

 
13,159

 
 
Property allocated corporate expense
3,685

 
3,328

 
357

 
 
 
7,181

 
6,664

 
517

 
 
Non-comparable properties and other (1)
(3,413
)
 
99

 
(3,512
)
 
 
 
(2,860
)
 
(1,014
)
 
(1,846
)
 
 
NOI from sold properties
4

 
(2,063
)
 
2,067

 
 
 
(12
)
 
(5,732
)
 
5,720

 
 
Termination income
(258
)
 
(1,944
)
 
1,686

 
 
 
(2,024
)
 
(3,053
)
 
1,029

 
 
Straight-line rents
(1,164
)
 
(377
)
 
(787
)
 
 
 
(2,023
)
 
(831
)
 
(1,192
)
 
 
Ground lease adjustments for straight-line and fair market value
12

 
25

 
(13
)
 
 
 
25

 
30

 
(5
)
 
 
Fair market value and inducement adjustments to base rents
(1,072
)
 
(2,845
)
 
1,773

 
 
 
(4,114
)
 
(5,046
)
 
932

 
 
Less: noncore properties (2)
(3,552
)
 
(4,036
)
 
484

 
 
 
(7,092
)
 
(8,333
)
 
1,241

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comparable NOI - core portfolio
$
129,288

 
$
130,200

 
$
(912
)
 
 
 
$
255,271

 
$
261,904

 
$
(6,633
)
 
 
Comparable NOI percentage change - core portfolio
 
 
 
 
-0.7
 %
 
 
 
 
 
 
 
-2.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 three noncore properties held in each period presented.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
Variance $
 
Variance %
 
2018
 
2017
 
Variance $
 
Variance %
Comparable Property Net Operating Income (Comp NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum rent
$
133,111

 
$
133,014

 
$
97

 
0.1
 %
 
$
266,461

 
$
266,337

 
$
124

 
0.0
 %
Overage rent
1,869

 
1,630

 
239

 
14.7
 %
 
4,105

 
4,420

 
(315
)
 
-7.1
 %
Tenant reimbursements
52,978

 
55,852

 
(2,874
)
 
-5.1
 %
 
107,274

 
112,630

 
(5,356
)
 
-4.8
 %
Other
3,563

 
2,580

 
983

 
38.1
 %
 
5,427

 
4,620

 
807

 
17.5
 %
Total revenue
191,521

 
193,076

 
(1,555
)
 
-0.8
 %
 
383,267

 
388,007

 
(4,740
)
 
-1.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recoverable expenses - operating
(36,624
)
 
(35,331
)
 
(1,293
)
 
-3.7
 %
 
(73,161
)
 
(70,106
)
 
(3,055
)
 
-4.4
 %
Recoverable expenses - real estate taxes
(23,534
)
 
(24,662
)
 
1,128

 
4.6
 %
 
(48,273
)
 
(50,249
)
 
1,976

 
3.9
 %
Provision for credit losses
(845
)
 
(1,870
)
 
1,025

 
54.8
 %
 
(4,151
)
 
(3,523
)
 
(628
)
 
-17.8
 %
Ground rent
(1,230
)
 
(1,013
)
 
(217
)
 
-21.4
 %
 
(2,411
)
 
(2,225
)
 
(186
)
 
-8.4
 %
Total operating expenses
(62,233
)
 
(62,876
)
 
643

 
1.0
 %
 
(127,996
)
 
(126,103
)
 
(1,893
)
 
-1.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comp NOI - Excluding noncore properties
$
129,288

 
$
130,200

 
$
(912
)
 
-0.7
 %
 
$
255,271

 
$
261,904

 
$
(6,633
)
 
-2.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comp NOI - Core enclosed retail properties
$
96,189

 
$
97,926

 
$
(1,737
)
 
-1.8
 %
 
$
190,623

 
$
197,102

 
$
(6,479
)
 
-3.3
 %
Comp NOI - Open air properties
$
33,099

 
$
32,274

 
$
825

 
2.6
 %
 
$
64,648

 
$
64,802

 
$
(154
)
 
-0.2
 %

SUPPLEMENTAL INFORMATION | 6



SUMMARY OF DEBT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
as of
6/30/2018
 
Total Debt, Including WPG Share of Unconsolidated Entities as of 6/30/2018
 
Total Debt
as of
12/31/2017
 
Total Debt, Including WPG Share of Unconsolidated Entities as of 12/31/2017
 
 
Schedule of
Maturities by Year (1)
 
Mortgage
Debt
Maturities
 
Weighted Avg.
Interest Rate
 
Unsecured Maturities
 
Weighted Avg. Interest Rate
 
Total Debt Maturities
 
Weighted Avg. Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated debt:
 
 
 
 
 
 
 
 
Total debt, including WPG share of unconsolidated entities:
 
 
 
 
 
 
 
 
 
Mortgage debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Fixed
 
$
991,888

 
$
991,888

 
$
1,000,936

 
$
1,000,936

 
 
2018
 
$
8,477

 
7.0%
 



 
$
8,477

 
7.0%
 
   Variable
 
65,000

 
65,000

 
151,500

 
151,500

 
 
2019
 
143,190

 
6.4%
 



 
143,190

 
6.4%
 
Debt issuance costs
 
(3,225
)
 
(3,225
)
 
(3,692
)
 
(3,692
)
 
 
2020
 
107,911

 
5.9%
 
$
250,000


3.9%
 
357,911

 
4.5%
 
Fair value debt adjustments
 
7,024

 
7,024

 
8,338

 
8,338

 
 
2021
 
371,082

 
5.1%
 



 
371,082

 
5.1%
 
   Total mortgage debt
 
1,060,687

 
1,060,687

 
1,157,082

 
1,157,082

 
 
2022
 
133,582

 
4.4%
 
630,000


3.7%
 
763,582

 
3.8%
 
 
 
 
 
 
 
 
 
 
 
 
2023
 
27,956

 
4.9%
 
340,000


3.5%
 
367,956

 
3.6%
 
Unsecured debt
 
 
 
 
 
 
 
 
2024
 
346,177

 
4.7%
 
750,000


6.0%
 
1,096,177

 
5.6%
 
   Credit facility
 
280,000

 
280,000

 
155,000

 
155,000

 
 
2025
 
343,587

 
3.7%
 

 
 
 
343,587

 
3.7%
 
   Term loans
 
690,000

 
690,000

 
610,000

 
610,000

 
 
2026
 
12,691

 
4.3%
 

 
 
 
12,691

 
4.3%
 
   Bonds payable
 
1,000,000

 
1,000,000

 
1,000,000

 
1,000,000

 
 
2027
 
195,062

 
4.3%
 

 
 
 
195,062

 
4.3%
 
Debt issuance costs & discounts
 
(28,595
)
 
(28,595
)
 
(24,473
)
 
(24,473
)
 
 
2028
 

 
0.0%
 

 
 
 

 
0.0%
 
   Total unsecured debt
 
1,941,405

 
1,941,405

 
1,740,527

 
1,740,527

 
 
Thereafter
 
2,029

 
4.7%
 

 
 
 
2,029

 
4.7%
 
 
 
 
 
 
 
 
 
 
 
 
Fair value,debt issuance cost, and debt discount adjustments
 
7,183

 
 
 
(28,595
)
 
 
 
(21,412
)
 
 
 
Total consolidated debt
 
$
3,002,092

 
$
3,002,092

 
$
2,897,609

 
$
2,897,609

 
 
Total debt
 
$
1,698,927

 
4.8%
 
$
1,941,405

 
4.6%
 
$
3,640,332

 
4.7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unconsolidated debt:
 
 
 
 
 
 
 
 
(1) Includes extension options
 
 
 
Mortgage loans payable
 
$
1,290,981

 
$
634,856

 
$
1,294,639

 
$
636,379

 
 

 
 
 
Debt issuance costs
 
(5,392
)
 
(2,688
)
 
(5,771
)
 
(2,871
)
 
 
Total consolidated debt:
 
Fair value debt adjustments
 
11,905

 
6,072

 
13,275

 
6,770

 
 
Schedule of
Maturities by Year (1)
 
Mortgage
Debt
Maturities
 
Weighted Avg.
Interest Rate
 
Unsecured Maturities
 
Weighted Avg. Interest Rate
 
Total Debt Maturities
 
Weighted Avg. Interest Rate
 
Total unconsolidated debt
 
$
1,297,494

 
$
638,240

 
$
1,302,143

 
$
640,278

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt:
 
$
4,299,586

 
$
3,640,332

 
$
4,199,752

 
$
3,537,887

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 % of
Total Debt
as of
6/30/18
 
Our Share of Total Debt
as of 6/30/18
 
Weighted Avg.
Interest
Rate
 
Weighted
Avg. Years
to Maturity
 
 
2018
 
$
8,477

 
7.0%
 
 
 
 
 
$
8,477

 
7.0%
 
 
 
 
 
 
 
 
2019
 
143,190

 
6.4%
 

 

 
143,190

 
6.4%
 
 
 
 
 
 
 
 
2020
 
82,668

 
5.7%
 
$
250,000

 
3.9%
 
332,668

 
4.3%
 
Consolidated debt:
 
 
 
 
 
 
 
 
2021
 
321,534

 
5.0%
 

 
 
 
321,534

 
5.0%
 
   Fixed
 
85%
 
$
2,566,713

 
5.0
%
 
4.4

 
 
2022
 
133,582

 
4.4%
 
630,000

 
3.7%
 
763,582

 
3.8%
 
   Variable
 
15%
 
435,379

 
3.5
%
 
4.0

 
 
2023
 
21,260

 
5.0%
 
340,000

 
3.5%
 
361,260

 
3.6%
 
   Total Consolidated
 
100%
 
$
3,002,092

 
4.8
%
 
4.4

 
 
2024
 
346,177

 
4.7%
 
750,000

 
6.0%
 
1,096,177

 
5.6%
 
 
 
 
 
 
 
 
 
 
 
 
2025
 

 

 

 
 
 

 

 
Unconsolidated debt:
 
 
 
 
 
 
 
 
2026
 

 

 

 
 
 

 

 
   Fixed
 
99%
 
$
631,544

 
4.1
%
 
6.9

 
 
2027
 

 

 

 
 
 

 

 
   Variable
 
1%
 
6,696

 
4.6
%
 
4.5

 
 
2028
 

 

 

 
 
 

 

 
   Total Unconsolidated
 
100%
 
$
638,240

 
4.2
%
 
6.9

 
 
Thereafter
 

 

 

 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
Fair value,debt issuance cost, and debt discount adjustments
 
3,799

 
 
 
(28,595
)
 
 
 
(24,796
)
 
 
 
Total debt:
 
 
 
 
 
 
 
 
 
 
Total debt
 
$
1,060,687

 
5.1%
 
$
1,941,405

 
4.6%
 
$
3,002,092

 
4.8%
 
   Fixed
 
88%
 
$
3,198,257

 
4.8
%
 
4.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Variable
 
12%
 
442,075

 
3.6
%
 
4.1

 
 
(1) Includes extension options
 
 
 
   Total debt
 
100%
 
$
3,640,332

 
4.7
%
 
4.8

 
 

 
 

SUPPLEMENTAL INFORMATION | 7



EBITDAre AND KEY BALANCE SHEET METRICS
 
 
 
Washington Prime Group Inc.
 
 
 
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
 
2018
 
2017
 
2018
 
2017
 
Calculation of EBITDAre:
 
 
 
 
 
 
 
 
 
Net income
 
$
15,519

 
$
164,500

 
$
35,704

 
$
179,124

 
Interest expense, net
 
34,701

 
31,281

 
69,045

 
63,769

 
Income and other taxes
 
601

 
522

 
1,086

 
2,548

 
Depreciation and amortization
 
63,796

 
66,620

 
125,090

 
134,131

 
Gain on disposition of interests in properties, net
 
(1,460
)
 
(125,385
)
 
(1,755
)
 
(125,436
)
 
Impairment loss
 

 

 

 
8,509

 
Pro-rata share of unconsolidated entities, net
 
18,064

 
16,369

 
35,695

 
29,479

 
EBITDAre (2)
 
131,221

 
153,907

 
264,865

 
292,124

 
Gain on debt extinguishment, net
 

 
(21,221
)
 

 
(21,221
)
 
Adjusted EBITDAre
 
$
131,221

 
$
132,686

 
$
264,865

 
$
270,903

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bond Covenant Requirement (1)
 
As of
June 30, 2018
 
 
 
 
 
Key Balance Sheet Metrics:
 
 
Ratio
 
 
 
 
 
Total indebtedness to Total assets
 
≤ 60%
 
50.2%
 
 
 
 
 
Secured indebtedness to Total assets
 
≤ 40%
 
17.5%
 
 
 
 
 
Consolidated EBITDA / Annual service charge
 
≥ 1.5x
 
2.89x
 
 
 
 
 
Total unencumbered assets / Total unsecured indebtedness
 
> 150%
 
214%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The covenants detailed are from the August 2017 Bond Offering, which represents the Company's most restrictive unsecured debt covenants.
 
(2) EBITDAre is calculated consistent with the NAREIT definition.
 
 
 
 






SUPPLEMENTAL INFORMATION | 8



KEY GUIDANCE ASSUMPTIONS
 
 
Washington Prime Group Inc.
 
 
2018 Guidance
 
 
 
 
 
 
 
 
 
Fiscal Year 2018
 
 
 
Guidance
 
Earnings Expectations:
 
 
 
FFO per share, as adjusted - diluted (1)
 
 $1.48 to $1.56
 
FFO per share, as adjusted - diluted - third quarter
 
 $0.34 to $0.37
 
 
 
 
 
Underlying Assumptions to 2018 Guidance (1):
 
 
 
Comparable NOI growth for core properties- fiscal year 2018 (2) (3)
 
 approximately (1.0)%
 
General and administrative expenses (including property allocated overhead) (4)
 
 $58-$62 million
 
Non-cash adjustments for purchase accounting and straight line rents (3)
 
 $9-$11 million
 
Assumed property sales
 
None
 
Assumed joint venture transactions
 
None
 
Assumed acquisition
 
1 (Q218)
 
Assumed lender transitions (guidance excludes any related gain from debt extinguishment)
 
1 to 3 properties (Q418)
 
Gain from sale of outparcels (primarily relates to Four Corners first tranche)
 
$14.5 million in first half 2018
 
Redevelopment spend (3)
 
 $100 to $125 million
 
Recurring capital expenditures and deferred leasing costs (3)
 
 $70 to $80 million
 
Distributions per common share and units
 
 $0.25 per diluted share quarterly
 
 
 
 
 
 
 
 
 
(1) Guidance excludes any future gains on Four Corners outparcel sales