8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 13, 2015

Brixmor Property Group Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-36160	45-2433192
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

420 Lexington Avenue

New York, New York 10170

(Address of Principal Executive Offices) (Zip Code)

(212) 869-3000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01    Other Events

Brixmor Operating Partnership LP (the “Operating Partnership"), is disclosing certain financial and related information. Brixmor Property Group Inc. is the sole owner of Brixmor OP GP LLC, the sole general partner of the Operating Partnership. The consolidated financial statements and related Management's Discussion and Analysis of Financial Condition and Results of Operations are filed as exhibits to this report and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d)     Exhibits

Exhibit No.	Description
99.1	Combined Consolidated Financial Statements of Brixmor Operating Partnership LP as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011
99.2	Management's Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2013 and 2012, and years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011
99.3	Condensed Consolidated Financial Statements of Brixmor Operating Partnership LP as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013
99.4	Management's Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BRIXMOR PROPERTY GROUP INC.
By:	/s/Steven F. Siegel
Name:	Steven F. Siegel
Title:	Executive Vice President and
	General Counsel

Date: January 13, 2015

EXHIBIT INDEX

Exhibit No.	Description
99.1	Combined Consolidated Financial Statements of Brixmor Operating Partnership LP as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011
99.2	Management's Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2013 and 2012, and years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011
99.3	Condensed Consolidated Financial Statements of Brixmor Operating Partnership LP as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013
99.4	Management's Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2014 and December 31, 2013, and for the nine months ended September 30, 2014 and 2013

EX-99.1

Exhibit 99.1

COMBINED CONSOLIDATED FINANCIAL STATEMENTS

Brixmor Operating Partnership LP and Subsidiaries

For the years Ended December 31, 2013 and 2012 (successor), the period from June 28, 2011 through December 31, 2011 (successor) and the period from January 1, 2011 through June 27, 2011 (predecessor) With Report of Independent Auditors

BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

INDEX TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS

	Page
COMBINED CONSOLIDATED STATEMENTS
Report of Ernst & Young LLP, Registered Public Accounting Firm	2
Consolidated Balance Sheets as of December 31, 2013 and 2012	3
Combined Consolidated Statements of Operations for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011	4
Combined Consolidated Statements of Comprehensive Loss for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011	5
Combined Consolidated Statement of Changes in Partners' Capital for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011	6
Combined Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011	7
Notes to Combined Consolidated Financial Statements	8

- -1 -

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Brixmor Operating Partnership LP and Subsidiaries

We have audited the accompanying consolidated balance sheets of Brixmor Operating Partnership LP and Subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related combined consolidated statements of operations, comprehensive loss, changes in capital, and cash flows for each of the years ended December 31, 2013 and 2012 (Successor) and for the periods from June 28, 2011 through December 31, 2011 (Successor) and January 1, 2011 through June 27, 2011 (Predecessor). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Brixmor Operating Partnership LP and Subsidiaries at December 31, 2013 and 2012, and the combined consolidated results of its operations and its cash flows for each of the years ended December 31, 2013 and 2012 (Successor) and the periods from June 28, 2011 through December 31, 2011 (Successor) and January 1, 2011 through June 27, 2011 (Predecessor), in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young

New York, New York

September 15, 2014

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit information)

	Successor
	December 31, 2013			December 31, 2012
Assets
Real estate
Land	$	2,055,802		$	1,915,667
Buildings and improvements	8,781,926			7,978,759
	10,837,728			9,894,426
Accumulated depreciation and amortization	(1,190,170		)	(796,296		)
Real estate, net	9,647,558			9,098,130
Investments in and advances to unconsolidated joint ventures	9,205			16,038
Cash and cash equivalents	113,006			97,481
Restricted cash	75,457			90,160
Marketable securities	21,907			24,681
Receivables, net	178,505			156,944
Deferred charges and prepaid expenses, net	105,522			95,118
Other assets	19,650			19,358
Total assets	$	10,170,810		$	9,597,910
Liabilities
Debt obligations, net	$	5,981,289		$	6,499,356
Financing liabilities, net	175,111			174,440
Accounts payable, accrued expenses and other liabilities	709,519			632,110
Total liabilities	6,865,919			7,305,906
Redeemable non-controlling interests	21,467			21,467
Commitments and contingencies	—			—
Capital
Partnership common units; 304,230,758 and 240,905,467 units outstanding	3,108,398			2,269,203
Series A interest	180,386			—
Accumulated other comprehensive loss	(6,797		)	(36		)
Total partners' capital	3,281,987			2,269,167
Non-controlling interests	1,437			1,370
Total capital	3,283,424			2,270,537
Total liabilities and capital	$	10,170,810		$	9,597,910

The accompanying notes are an integral part of these combined consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
	Successor (Consolidated)									Predecessor (Combined Consolidated)
	Year Ended December 31,						Period from June 28, 2011 through December 31,			Period from January 1, 2011 through June 27,
	2013			2012			2011			2011
Revenues
Rental income	$	887,819		$	851,654		$	429,365		$	412,929
Expense reimbursements	242,939			225,848			112,416			114,879
Other revenues	16,135			11,233			5,331			7,588
Total revenues	1,146,893			1,088,735			547,112			535,396
Operating expenses
Operating costs	116,566			118,929			59,461			64,409
Real estate taxes	168,555			155,210			77,487			76,763
Depreciation and amortization	438,730			488,714			283,763			168,690
Provision for doubtful accounts	10,920			11,544			8,465			10,348
Impairment of real estate assets	1,531			—			—			—
Acquisition related costs	—			—			—			5,647
General and administrative	121,079			88,931			49,874			57,363
Total operating expenses	857,381			863,328			479,050			383,220
Other income (expense)
Dividends and interest	825			1,125			641			815
Interest expense	(343,311		)	(376,414		)	(199,221		)	(189,380		)
Gain on sales of real estate assets and acquisition of joint venture interest	2,223			501			—			—
Gain (loss) on extinguishment of debt, net	(20,063		)	—			917			—
Other	(11,004		)	(513		)	1,224			(3,732		)
Total other income (expense)	(371,330		)	(375,301		)	(196,439		)	(192,297		)
Loss before equity in income of unconsolidated joint ventures	(81,818		)	(149,894		)	(128,377		)	(40,121		)
Equity in income (loss) of unconsolidated joint ventures	1,167			687			(160		)	(381		)
Impairment of investments in unconsolidated joint ventures	—			(314		)	—			—
Loss from continuing operations	(80,651		)	(149,521		)	(128,537		)	(40,502		)
Discontinued operations:
Income (loss) from discontinued operations	3,504			(2,438		)	(5,762		)	2,019
Gain on disposition of operating properties	3,392			5,369			—			—
Impairment on real estate held for sale	(45,122		)	(13,599		)	—			(8,608		)
Loss from discontinued operations	(38,226		)	(10,668		)	(5,762		)	(6,589		)
Net loss	(118,877		)	(160,189		)	(134,299		)	(47,091		)
Non-controlling interests
Net income attributable to non-controlling interests	(1,355		)	(1,306		)	(653		)	(752		)
Net loss attributable to Brixmor Operating Partnership LP	$	(120,232	)	$	(161,495	)	$	(134,952	)	$	(47,843	)
Net income (loss) attributable to:
Series A interest	$	3,451		$	—		$	—		$	—
Partnership common units	(123,683		)	(161,495		)	(134,952		)	(47,843		)
Net loss attributable to Brixmor Operating Partnership LP	$	(120,232	)	$	(161,495	)	$	(134,952	)	$	(47,843	)
The accompanying notes are an integral part of these combined consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

	Successor (Consolidated)									Predecessor (Combined Consolidated)
	Year Ended December 31,						Period from June 28, 2011 through December 31,			Period from January 1, 2011 through June 27,
	2013			2012			2011			2011
Net loss	$	(118,877	)	$	(160,189	)	$	(134,299	)	$	(47,091	)
Other comprehensive income (loss)
Unrealized loss on interest rate hedges	(6,795		)	—			—			—
Unrealized gain (loss) on marketable securities	34			(80		)	44			20
Comprehensive loss	(125,638		)	(160,269		)	(134,255		)	(47,071		)
Comprehensive income attributable to non-controlling interests	(1,355		)	(1,306		)	(653		)	(752		)
Comprehensive loss attributable to Brixmor Operating Partnership LP	$	(126,993	)	$	(161,575	)	$	(134,908	)	$	(47,823	)
Comprehensive income (loss) attributable to:
Series A interest	$	3,451		$	—		$	—		$	—
Partnership common units	(130,444		)	(161,575		)	(134,908		)	(47,823		)
Comprehensive loss attributable to Brixmor Operating Partnership LP	$	(126,993	)	$	(161,575	)	$	(134,908	)	$	(47,823	)

The accompanying notes are an integral part of these combined consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

COMBINED CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL

(in thousands)

Predecessor (Combined Consolidated) For the Period January 1, 2011 through June 27, 2011
	CNP Net Investment			Series A Interest			Accumulated Other Comprehensive Income (loss)			Non-Controlling Interests			Total
Beginning balance, January 1, 2011	$	1,956,471		$	—		$	(5	)	$	1,352		$	1,957,818
Contributions	4,377			—			—			—			4,377
Distributions	(36,725		)	—			—			—			(36,725		)
Other reclassification adjustment	2			—			—			—			2
Unrealized gain on marketable securities	—			—			20			—			20
Non-controlling interest	—			—			—			(28		)	(28		)
Net income (loss)	(47,843		)	—			—			116			(47,727		)
Ending balance, June 27, 2011	$	1,876,282		$	—		$	15		$	1,440		$	1,877,737
Successor (Consolidated) For the Period June 28, 2011 through December 31, 2011
	Partnership Common Units			Series A Interest			Accumulated Other Comprehensive Income			Non-Controlling Interest			Total
Beginning balance, June 28, 2011	$	—		$	—		$	—		$	—		$	—
Contributions from partners	2,209,125			—			—			—			2,209,125
Equity based compensation expense	1,070			—			—			—			1,070
Non-cash contribution of basis step-up	328,826			—			—			—			328,826
Unrealized gain on marketable securities	—			—			44			—			44
Issuance of non-controlling interests in subsidiary	—			—			—			1,463			1,463
Net income (loss)	(134,952		)	—			—			6			(134,946		)
Ending balance, December 31, 2011	$	2,404,069		$	—		$	44		$	1,469		$	2,405,582
Successor (Consolidated) For the Year Ended December 31, 2012
	Partnership Common Units			Series A Interest			Accumulated Other Comprehensive Income (loss)			Non-Controlling Interest			Total
Beginning balance, January 1, 2012	$	2,404,069		$	—		$	44		$	1,469		$	2,405,582
Contributions from partners	20,209			—			—			—			20,209
Distributions to non-controlling interests	—			—			—			(114		)	(114		)
Equity based compensation expense	6,420			—			—			—			6,420
Unrealized loss on marketable securities	—			—			(80		)	—			(80		)
Net income (loss)	(161,495		)	—			—			15			(161,480		)
Ending balance, December 31, 2012	$	2,269,203		$	—		$	(36	)	$	1,370		$	2,270,537
Successor (Consolidated) For the Year Ended December 31, 2013
	Partnership Common Units			Series A Interest			Accumulated Other Comprehensive loss			Non-Controlling Interest			Total
Beginning balance, January 1, 2013	$	2,269,203		$	—		$	(36	)	$	1,370		$	2,270,537
Contributions from partners	893,860			—			—			—			893,860
Distributions to partners	(59,359		)	(10,000		)	—			—			(69,359		)
Issuance of Series A interest	(186,935		)	186,935			—			—			—
Equity based compensation expense	36,395			—			—			—			36,395
Issuance of OP units for acquired properties	317,556			—			—			—			317,556
Change in value of credit swap liability	—			—			(6,795		)	—			(6,795		)
Unrealized gain on marketable securities	—			—			34			—			34
Declared but unpaid dividends and distributions	(38,639		)	—			—			—			(38,639		)
Net income (loss)	(123,683		)	3,451			—			67			(120,165		)
Ending balance, December 31, 2013	$	3,108,398		$	180,386		$	(6,797	)	$	1,437		$	3,283,424

The accompanying notes are an integral part of these combined consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Successor (Consolidated)									Predecessor (Combined Consolidated)
	Year Ended December 31,						Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
	2013			2012
Operating activities:
Net loss	$	(118,877	)	$	(160,189	)	$	(134,299	)	$	(47,091	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	450,279			510,435			298,698			179,371
Debt premium and discount amortization	(20,973		)	(25,314		)	(12,974		)	(2,832		)
Deferred financing cost amortization	10,831			10,272			4,812			5,166
Above and below market lease intangible amortization	(51,379		)	(50,881		)	(28,058		)	(33,989		)
Provisions of impairment	46,653			13,913			—			8,751
Gain on sale of real estate assets and acquisition of joint venture interest	(5,615		)	(5,870		)	—			(143		)
Amortization of Class B units	36,395			6,420			1,070			999
Other	(1,165		)	(687		)	210			—
(Gain) loss on debt extinguishment, net	16,498			—			(917		)	—
Changes in operating assets and liabilities:
Restricted cash	5,562			(8,144		)	10,823			(18,103		)
Receivables	(17,055		)	(11,793		)	(7,706		)	15,635
Deferred charges and prepaid expenses	(22,826		)	(24,422		)	(5,992		)	(18,368		)
Other assets	2,901			(2,692		)	—			4,769
Accounts payable, accrued expenses and other liabilities	759			18,461			(27,671		)	22,928
Net cash provided by operating activities	331,988			269,509			97,996			117,093
Investing activities:
Acquisition of the Business	—			—			(1,335,799		)	—
Building improvements	(150,461		)	(177,213		)	(56,855		)	(59,073		)
Acquisitions of real estate assets	(6,377		)	(6,000		)	—			—
Proceeds from sales of real estate assets	58,994			50,609			719			53,453
Distributions from unconsolidated joint ventures	593			1,640			1,434			3,233
Contributions to unconsolidated joint ventures	(25		)	(1,496		)	—			(2		)
Change in restricted cash attributable to investing activities	8,108			16,266			7,370			(16,922		)
Purchase of marketable securities	(12,731		)	(21,913		)	(12,953		)	(10,984		)
Proceeds from sale of marketable securities	15,538			19,608			9,053			11,453
Net cash used in investing activities	(86,361		)	(118,499		)	(1,387,031		)	(18,842		)
Financing activities:
Repayment of debt obligations and financing liabilities	(2,702,931		)	(530,342		)	(2,415,462		)	(383,383		)
Proceeds from debt obligations	57,000			360,000			1,542,000			163,000
Repayment of borrowings under unsecured revolving credit facility	(914,108		)	—			—			—
Proceeds from borrowings under unsecured credit facility	2,534,286			—			—			—
Deferred financing costs	(27,529		)	(7,256		)	(39,243		)	(921		)
Change in restricted cash attributable to financing activities	—			—			100,123			(100,123		)
Partners contribution	893,860			20,209			2,209,125			—
Contributions attributable to CNP net investment	—			—			—			4,377
Distributions attributable to CNP net investment	—			—			—			(36,725		)
Partners distributions	(69,359		)	—			—			—
Distributions to non-controlling interests and other	(1,321		)	(1,758		)	(1,890		)	(798		)
Net cash provided by (used in) financing activities	(230,102		)	(159,147		)	1,394,653			(354,573		)
Change in cash and cash equivalents	15,525			(8,137		)	105,618			(256,322		)
Cash and cash equivalents at beginning of period	97,481			105,618			—			304,522
Cash and cash equivalents at end of period	$	113,006		$	97,481		$	105,618		$	48,200
Supplemental cash flow information, including non-cash investing and/or financing activities:
Cash paid for interest, net of amount capitalized	$	342,950		$	388,320		$	217,445		$	185,597
State and local taxes paid	2,013			2,754			—			—
Capitalized interest	4,968			1,661			292			254
Fair value of Operating Partnership units issued for acquisition of real estate assets	317,556			—			—			—

The accompanying notes are an integral part of these combined consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, unless otherwise stated)

1. Nature of Business and Financial Statement Presentation

Description of Business

Brixmor Operating Partnership LP and its consolidated subsidiaries (the “Operating Partnership”) were formed on June 28, 2011 for the purpose of owning, operating and managing grocery-anchored community and neighborhood shopping centers throughout the United States.

On February 28, 2011, Brixmor Property Group Inc. (“BPG”) agreed to purchase certain United States assets and management platform of Centro Properties Group (“CNP”) and its managed funds (collectively, the “Business”), which is referred to herein as the “Transaction.” On June 28, 2011, the Transaction was consummated, resulting in the BPG acquiring 585 properties for approximately $9.0 billion, net of cash acquired of $0.1 billion. The consideration for the Transaction included approximately $1.2 billion in cash and $7.8 billion of assumed indebtedness.

Initial Public Offering and IPO Property Transfers

On November 4, 2013, BPG, which owned 75.5% of the Operating Partnership as of December 31, 2013, completed an initial public offering (“IPO”) in which it sold approximately 47.4 million shares of its common stock, at an IPO price of $20.00 per share. BPG received net proceeds from the sale of shares in the IPO of approximately $893.9 million after deducting $54.9 million in underwriting discounts, expenses and transaction costs. Of the total proceeds received, $824.7 million was used to pay down amounts outstanding under the Operating Partnership's unsecured credit facility (see Note 6 for additional information).

In connection with BPG's IPO, the Operating Partnership acquired interests in 43 properties (the “Acquired Properties”) from certain investment funds affiliated with The Blackstone Group L.P. (together with such affiliated funds, “Blackstone”) in exchange for 15,877,791 common units of partnership interest (the “OP Units”) in the Operating Partnership having a value equivalent to the value of the Acquired Properties. In connection with the acquisition of the Acquired Properties, Operating Partnership repaid $66.6 million of indebtedness to Blackstone attributable to the Acquired Properties with a portion of the net proceeds of the IPO.

Also in connection with BPG's IPO, the Operating Partnership created a separate series of interest ("Series A") in the Operating Partnership that allocates to certain funds affiliated with The Blackstone Group L.P. and Centerbridge Partners, L.P. (owners of the Operating Partnership prior to the IPO) (the “pre-IPO owners”) all of the economic consequences of ownership of the Operating Partnership’s interest in 47 properties that the Operating Partnership historically held in its portfolio (the “Non-Core Properties”).  During 2013, 11 of the Non-Core Properties were disposed of. As of December 31, 2013, the Operating Partnership owned a 100% interest in 33 of the Non-Core Properties and a 20% interest in three of the Non-Core Properties.  On January 15, 2014, the Operating Partnership caused all but one of the Non-Core Properties to be transferred to the pre-IPO owners. The one remaining Non-Core Property was transferred to the lender in satisfaction of the property's mortgage balance and, following such transfer, on March 28, 2014, the Series A was terminated. The operating results of the 44 wholly-owned Non-Core Properties are included in Discontinued operations in the Combined Consolidated Statements of Operations. The operating results of the remaining three Non-Core Properties, in which the Operating Partnership owned a 20% interest, are included in Equity in income of unconsolidated joint ventures within continuing operations in the Combined Consolidated Statements of Operations.

Basis of Presentation

The financial information included herein reflects the consolidated financial position of the Operating Partnership as of December 31, 2013 and 2012 and the consolidated results of its operations and cash flows for the years ended December 31, 2013 and 2012, the period from June 28, 2011 through December 31, 2011 as well as the combined consolidated results of its operations and cash flows for the period from January 1, 2011 through June 27, 2011.

For periods preceding the date of the Transaction, the financial information included herein reflects the combined consolidated financial position, results of operations and cash flows of the Business, which has been determined to be the predecessor to the Operating Partnership.

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The Business comprised certain U.S. holding companies that indirectly owned interests in the shopping centers and historically conducted the activities of that business prior to the Transaction. Because these holding companies were under the common control of CNP prior to the Transaction, the financial information for the pre-Transaction periods has been presented on a combined consolidated basis in accordance with U.S. generally accepted accounting principles ("GAAP"). All amounts presented have been reflected at the Business’ historical basis.

As a result, the financial information for 2011 includes financial information associated with the post-Transaction basis for the period June 28, 2011 through December 31, 2011 and financial information associated with the pre-Transaction basis for the period January 1, 2011 through June 27, 2011. These separate periods are presented to reflect the new accounting basis established as of June 28, 2011 in connection with the Transaction, which was accounted for as a business combination.

The bases of the assets and liabilities associated with the post-Transaction basis are, therefore, not comparable to the pre-Transaction basis, nor would the statement of operations items for the period June 28, 2011 through December 31, 2011 have been the same had the Transaction not occurred.

The Operating Partnership does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Operating Partnership believes it has a single reportable segment for disclosure purposes in accordance with GAAP.

Principles of Consolidation and Use of Estimates

The accompanying Combined Consolidated Financial Statements include the accounts of Brixmor Operating Partnership LP, its wholly owned subsidiaries and all other entities in which it has a controlling financial interest. The portions of consolidated entities not owned by the Operating Partnership are presented as non-controlling interests as of and during the periods presented. All intercompany transactions have been eliminated.

When the Operating Partnership obtains an economic interest in an entity, management evaluates the entity to determine: (i) whether the entity is a variable interest entity (“VIE”), (ii) in the event the entity is a VIE, whether the Operating Partnership is the primary beneficiary of the entity, and (iii) in the event the entity is not a VIE, whether the Operating Partnership otherwise has a controlling financial interest.

The Operating Partnership consolidates: (i) entities that are VIEs for which the Operating Partnership is deemed to be the primary beneficiary and (ii) entities that are not VIEs which the Operating Partnership controls. If the Operating Partnership has an interest in a VIE but it is not determined to be the primary beneficiary, the Operating Partnership accounts for its interest under the equity method of accounting. Similarly, for those entities which are not VIEs and over which the Operating Partnership has the ability to exercise significant influence, the Operating Partnership accounts for its interests under the equity method of accounting. The Operating Partnership continually reconsiders its determination of whether an entity is a VIE and whether the Operating Partnership qualifies as its primary beneficiary.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to impairments of real estate, recovery of receivables and depreciable lives. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from these estimates.

Non-controlling Interests

The Operating Partnership accounts for non-controlling interests in accordance with the Consolidation guidance and the Distinguishing Liabilities from Equity guidance issued by the Financial Accounting Standards Board (“FASB”). Non-controlling interests represent the portion of capital that the Operating Partnership does not own in those entities that it consolidates. The Operating Partnership identifies its non-controlling interests separately within the Capital section of the Operating Partnership’s Consolidated Balance Sheets. The amounts of consolidated net earnings attributable to the Operating Partnership and to the non-controlling interests are presented separately on the Operating Partnership’s Combined Consolidated Statements of Operations.

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Non-controlling interests also includes amounts related to partnership units issued by consolidated subsidiaries of the Operating Partnership. Holders of these Class A Preferred Units have a redemption right that provides the holder with the option to redeem their units for $33.15 per unit in cash plus all accrued and unpaid distributions. The unit holders generally have the right to redeem their units for cash at any time provided certain notification requirements have been met.

The Operating Partnership evaluates the terms of the partnership units issued in accordance with the FASB’s Distinguishing Liabilities from Equity guidance. Units which embody an unconditional obligation requiring the Operating Partnership to redeem the units for cash at a specified or determinable date (or dates) or upon an event that is certain to occur are determined to be mandatorily redeemable under this guidance and are included as Redeemable non-controlling interests in partnership and classified within the mezzanine section between Total liabilities and Capital in the Operating Partnership's Consolidated Balance Sheets. Convertible units for which the Operating Partnership has the option to settle redemption amounts in cash or BPG common stock are included in the caption Non-controlling interests within the Capital section of the Operating Partnership's Consolidated Balance Sheets.

Cash and Cash Equivalents

For purposes of presentation on both the Consolidated Balance Sheets and the Combined Consolidated Statements of Cash Flows, the Operating Partnership considers instruments with an original maturity of three months or less to be cash and cash equivalents.

Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Operating Partnership believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government.

Restricted Cash

Restricted cash represents cash deposited in escrow accounts, which generally can only be used for the payment of real estate taxes, debt service, insurance, and future capital expenditures as required by certain loan and lease agreements as well as legally restricted tenant security deposits. All restricted cash is invested in money market accounts.

Real Estate

Real estate assets are recorded in the Consolidated Balance Sheets at historical cost, less accumulated depreciation and amortization. Upon acquisition of real estate operating properties, management estimates the fair value of acquired tangible assets (consisting of land, buildings, and tenant improvements), identifiable intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships), and assumed debt based on an evaluation of available information. Based on these estimates, the estimated fair value is allocated to the acquired assets and assumed liabilities.

The fair values of tangible assets are determined as if the acquired property is vacant. Fair value is determined using an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year from the acquisition date, information regarding the fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation on a retrospective basis. The Operating Partnership expenses transaction costs associated with business combinations in the period incurred.

In allocating the fair value to identifiable intangible assets and liabilities of an acquired operating property, the value of above-market and below-market leases is estimated based on the present value (using an interest rate reflecting the risks associated with leases acquired) of the difference between: (i) the contractual amounts to be paid pursuant to the leases negotiated and in-place at the time of acquisition and (ii) management’s estimate of fair market lease rates for the property or an equivalent property, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market or below-market intangible is amortized as a reduction of, or increase to, rental income over the remaining non-cancelable term of each lease, which includes renewal periods with fixed rental terms that are considered to be below-market.

In determining the value of in-place leases and tenant relationships, management evaluates the specific characteristics of each lease and the Operating Partnership's overall relationship with each tenant. Factors considered include, but are not limited to: the nature of the existing relationship with a tenant, the credit risk associated with a tenant, expectations surrounding lease renewals, estimated carrying costs of a property during a hypothetical expected lease-up period,

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current market conditions and costs to execute similar leases. Management also considers information obtained about a property in connection with its pre-acquisition due diligence. Estimated carrying costs include: real estate taxes, insurance, other property operating costs and estimates of lost rentals at market rates during the hypothetical lease-up periods. Costs to execute similar leases include: commissions and legal costs to the extent that such costs are not already incurred with a new lease that has been negotiated in connection with the purchase of a property. The value assigned to in-place leases is amortized to expense over the remaining term of each lease. The value assigned to tenant relationships is amortized over the initial terms of the leases.

Certain real estate assets are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

Building and building and land improvements	20 - 40 years
Furniture, fixtures, and equipment	5 - 10 years
Tenant improvements	The shorter of the term of the related lease or useful life

Costs to fund major replacements and betterments, which extend the life of the asset, are capitalized and depreciated over their respective useful lives, while costs for ordinary repairs and maintenance activities are expensed as incurred.

When a real estate asset is identified by management as held-for-sale, the Operating Partnership discontinues depreciating the asset and estimates its sales price, net of estimated selling costs. If, in management's opinion, the estimated net sales price of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value. Additionally, the real estate asset and related operations are classified as discontinued operations and separately presented within the Combined Consolidated Statements of Operations and within Other assets on the Consolidated Balance Sheets. Properties classified as real estate held-for-sale generally represent properties that are under contract for sale and are expected to close within 12 months.

On a periodic basis, management assesses whether there are indicators that the value of the Operating Partnership's real estate assets (including any related intangible assets or liabilities) may be impaired.

If an indicator is identified, a real estate asset is considered impaired only if management's estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset's carrying value. Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its fair value.

In situations in which a lease or leases associated with a significant tenant have been, or are expected to be, terminated early, the Operating Partnership evaluates the remaining useful lives of depreciable or amortizable assets in the asset group related to the lease that will be terminated (i.e., tenant improvements, above and below market lease intangibles, in-place lease value and leasing commissions). Based upon consideration of the facts and circumstances surrounding the termination, the Operating Partnership may write-off or accelerate the depreciation and amortization associated with the asset group. Such write-offs are included within Depreciation and amortization in the Combined Consolidated Statements of Operations.

Real Estate Under Redevelopment

Real estate assets that are under redevelopment are carried at cost and are not depreciated. Amounts essential to the development of the property, such as development costs, construction costs, interest costs, real estate taxes, salaries and related costs of personnel directly involved and other costs incurred during the period of redevelopment are capitalized. The Operating Partnership ceases cost capitalization when the property is available for occupancy or upon substantial completion of building and tenant improvements, but no later than one year from the completion of major construction activity.

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Investments in and Advances to Unconsolidated Joint Ventures

The Operating Partnership accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Operating Partnership exercises significant influence over, but does not control these entities. These investments are initially recorded at cost and are subsequently adjusted for cash contributions and distributions. Earnings for each investment are recognized in accordance with the terms of the applicable agreement and where applicable, are based upon an allocation of the unconsolidated real estate joint ventures' net assets at book value as if it was hypothetically liquidated at the end of each reporting period. Intercompany fees and gains on transactions with an unconsolidated joint venture are eliminated to the extent of the Operating Partnership's ownership interest.

To recognize the character of distributions from an unconsolidated joint venture, the Operating Partnership reviews the nature of cash distributions received for purposes of determining whether such distributions should be classified as either a return on investment, which would be included in operating activities, or a return of investment, which would be included in Investing activities on the Combined Consolidated Statements of Cash Flows.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions, that the value of the Operating Partnership's investments in unconsolidated joint ventures may be impaired. An investment's value is impaired only if management's estimate of the fair value of the Operating Partnership's investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.

Management's estimates of fair value are based upon a discounted cash flow model for each specific investment that includes all estimated cash inflows and outflows over a specified holding period and, where applicable, any estimated debt premiums. Capitalization rates, discount rates and credit spreads used in these models are based upon rates that the Operating Partnership believes to be within a reasonable range of current market rates.

Deferred Leasing and Financing Costs

Costs incurred in obtaining tenant leases (including internal leasing costs) and long-term financing are amortized using the straight-line method over the term of the related lease or debt agreement, which approximates the effective interest method. Costs incurred related to obtaining tenant leases which are capitalized include salaries, lease incentives and the related costs of personnel directly involved in successful leasing efforts. Costs incurred in obtaining long-term financing which are capitalized include bank fees, legal and title costs and transfer taxes. The amortization of deferred leasing and financing costs is included in Depreciation and amortization and Interest expense, respectively, in the Combined Consolidated Statements of Operations.

Marketable Securities

The Operating Partnership classifies its marketable securities, which include both debt and equity securities, as available-for-sale. These securities are carried at fair value with unrealized gains and losses reported in partners' capital as a component of accumulated other comprehensive loss. Gains or losses on securities sold are based on the weighted average method.

On a periodic basis, management assesses whether there are indicators that the value of the Operating Partnership's marketable securities may be impaired. A marketable security is impaired if the fair value of the security is less than its carrying value and the difference is determined to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying value of the security over its estimated fair value.

At December 31, 2013 and 2012, the fair value of the Operating Partnership's marketable securities portfolio approximated its amortized cost basis. As a result, gross unrealized gains and gross unrealized losses were immaterial to the Operating Partnership's Combined Consolidated Financial Statements.

Derivative Financial Instruments

Derivatives, including certain derivatives embedded in other contracts, are measured at fair value and are recognized in the Consolidated Balance Sheets as assets or liabilities, depending on the Operating Partnership's rights or obligations under the applicable derivative contract. The accounting for changes in the fair value of a derivative varies based on the intended use of the derivative, whether the Operating Partnership has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the necessary criteria.

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Revenue Recognition and Receivables

Rental revenue is recognized on a straight-line basis over the terms of the related leases.  The cumulative difference between rental revenue recognized in the Combined Consolidated Statements of Operations and contractual payment terms is recorded as deferred rent and presented on the accompanying Consolidated Balance Sheets within Receivables, net.

The Operating Partnership commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date.

Certain leases also provide for percentage rents based upon the level of sales achieved by a lessee.  These percentage rents are recognized upon the achievement of certain pre-determined sales levels. Leases also typically provide for reimbursement of common area maintenance, property taxes and other operating expenses by the lessee which are recognized in the period the applicable expenditures are incurred.

The determination of who is the owner, for accounting purposes, of tenant improvements (where provided) determines the nature of the leased asset and when revenue recognition under a lease begins. If the Operating Partnership is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Operating Partnership concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded under a lease are accounted for as lease incentives which are amortized as a reduction of revenue recognized over the term of the lease. In these circumstances, the Operating Partnership commences revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. In making this assessment, the Operating Partnership considers a number of factors, each of which individually is not determinative.

Gains from the sale of depreciated operating properties are generally recognized under the full accrual method, provided that various criteria relating to the terms of the sale and subsequent involvement by the Operating Partnership with the applicable property are met.

The Operating Partnership periodically evaluates the collectability of its receivables related to base rents, straight-line rent, expense reimbursements and those attributable to other revenue generating activities. The Operating Partnership analyzes its receivables and historical bad debt levels, tenant credit-worthiness and current economic trends when evaluating the adequacy of its allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.

Stock Based Compensation

In 2011 and 2013, prior to BPG’s IPO, certain employees of the Operating Partnership were granted long-term incentive awards which provide them with equity interests as an incentive to remain in the Operating Partnership’s service and align executives’ interests with those of BPG’s equity holders. The awards were granted by two of BPG’s current equity holders, BRE Retail Holdco L.P. and Blackstone Retail Transaction II Holdco L.P. (the “Partnerships”), in the form of Class B Units in each of the Partnerships. The awards were granted with service conditions and performance and market conditions.

In connection with the IPO, BPG's Board of Directors approved the 2013 Omnibus Incentive Plan (the “Plan”). The Plan provides for a maximum of 15,000,000 shares of the BPG's common stock to be issued for qualified and non-qualified options, stock appreciation rights, restricted stock and restricted stock units, OP Units in the Operating Partnership, performance awards and other stock-based awards.

The Operating Partnership accounts for equity awards in accordance with the Financial Accounting Standards Board (“FASB”) Stock Compensation guidance which requires that all share based payments to employees and non-employee directors be recognized in the statement of operations over the service period based on their fair value. Fair value is determined based on the type of award using either the grant date market price of the Operating Partnership’s stock, the Black-Scholes-Merton option-pricing model or a Monte Carlo simulation model. Share-based compensation expense

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is included in general and administrative in the Operating Partnership’s Combined Consolidated Statements of Operations.

Income Taxes

The Operating Partnership is organized as a limited partnership and is generally not subject to federal income tax. Accordingly, no provision for federal income taxes has been reflected in the accompanying Combined Consolidated Financial Statements. The Operating Partnership, however, may be subject to certain state and local income taxes or franchise taxes. State and local income taxes or franchise taxes were approximately $2.9 million, $2.1 million, $3.4 million and $6.5 million for the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, respectively.

The Operating Partnership has analyzed the tax position taken on income tax returns for the open 2009 through 2013 tax years and has concluded that no provision for income taxes related to uncertain tax positions is required in its Combined Consolidated Financial Statements as of December 31, 2013 and 2012.

BPG, the Operating Partnership’s ultimate parent, has made an election to qualify, and believes it is operating so as to qualify, as a Real Estate Investment Trust (“REIT”) for United States federal income tax purposes. Generally, a REIT is entitled to a deduction for dividends that it pays and therefore will not be subject to United States federal corporate income tax on its net taxable income that is currently distributed to its stockholders. To qualify as a REIT, certain income, asset, distribution, and organization tests must be satisfied. Although the Operating Partnership is not classified as a REIT, it operates under REIT regulations so as to enable its ultimate parent to continue to qualify for REIT status.

New Accounting Pronouncements

In February 2013, FASB issued Accounting Standards Update (“ASU”) 2013-2, Comprehensive Income (Topic 220): Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-2 requires entities to disclose certain information relating to amounts reclassified out of accumulated other comprehensive income. The adoption of this guidance did not have a material impact on the Operating Partnership’s financial statement presentation.

In April 2014, the Financial Accounting Standards Board issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU No. 2014-08 amends the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The amendments require expanded disclosures for discontinued operations that would provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations reporting. ASU No. 2014-08 is to be applied prospectively to all disposals (or classifications as held for sale) of components of an entity and all businesses or nonprofit activities that, on acquisition, are classified as held for sale that occur within fiscal years, and interim periods within those years, beginning after December 15, 2014. The adoption of ASU 2014-08 is expected to eliminate discontinued operations reporting for disposals that are routine in nature and do not change the Operating Partnership’s strategy.

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

It has been determined that any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they either are not relevant to the Operating Partnership, or they are not expected to have a material effect on the Combined Consolidated Financial Statements of the Operating Partnership.

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2.    Acquisition of Real Estate

The Operating Partnership acquired interests in the Acquired Properties from certain investment funds affiliated with Blackstone in exchange for 15,877,791 OP Units in the Operating Partnership having a value of $317.5 million based on the IPO price of $20.00 per share. In connection with the acquisition of the Acquired Properties, the Operating Partnership repaid approximately $66.6 million of indebtedness to Blackstone attributable to the Acquired Properties with a portion of the net proceeds of the IPO.

The acquisition of the Acquired Properties was accounted for as a business combination. As a result, the associated consideration has been allocated to the assets acquired and liabilities assumed based on management's estimate of their fair values using information available on the acquisition date. The allocation of the consideration for this acquisition is preliminary and remains subject to adjustment. The following table summarizes the fair value of the net assets acquired on October 29, 2013:

Assets
Real estate, net	$	888,134
Cash and cash equivalents	8,729
Restricted cash	7,878
Receivables, net	4,840
Deferred charges and prepaid expenses, net	1,496
Other assets	989
Total assets	$	912,066
Liabilities
Debt obligations, net	$	430,465
Accounts payable, accrued expenses and other liabilities	164,045
Total liabilities	594,510
Net Assets Acquired	$	317,556

During the year ended December 31, 2013, in addition to the Acquired Properties, the Operating Partnership acquired one building, located adjacent to one of the Operating Partnership's existing shopping centers, for approximately $5.1 million and acquired the remaining 70% partnership interest in Arapahoe Crossings, L.P. that was previously owned by an unaffiliated third party for a net purchase price of $18.7 million. In connection with the acquisition, a gain of $1.1 million on the step-up of the Operating Partnership's original 30% interest was recognized. The acquisition of the partnership interest included the assumption of debt obligations of approximately $41.8 million, which were paid off with the proceeds from the unsecured credit facility entered into in July 2013 (see Note 6 for further discussion of the unsecured credit facility).

During the year ended December 31, 2012, the Operating Partnership acquired three retail buildings, located adjacent to three of the Operating Partnership’s existing shopping centers, for approximately $5.5 million and acquired the remaining 50% ownership interest in a 41.6 acre land parcel in Riverhead, NY for a purchase price of $0.5 million.

The accompanying unaudited pro forma information for the years ended December 31, 2013, 2012, and 2011, is presented as if the Transaction had occurred on January 1, 2011 and the acquisition of the Acquired Properties had occurred on January 1, 2012. This pro forma information is based on the historical financial statements and should be read in conjunction with the Combined Consolidated Financial Statements and notes thereto. This unaudited pro forma information does not purport to represent what the actual results of operations would have been had the above occurred, nor do they purport to predict the results of operations for future periods.

	Year Ending December 31,
	2013			2012			2011
Revenue	$	1,208,741		$	1,162,498		$	1,090,032
Net Loss	$	(123,725	)	$	(163,786	)	$	(260,601	)

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3.    Discontinued Operations and Assets Held for Sale

The Operating Partnership reports as discontinued operations real estate assets that are held for sale as of the end of the current period and real estate assets that were sold during the period. In addition, the 33 wholly-owned Non-Core Properties transferred to the pre-IPO owners and one wholly-owned Non-Core Property transferred to the lender in satisfaction of the property's mortgage balance during the three months ended March 31, 2014 are included in the results from discontinued operations. The operating results and gain on disposition of the real estate properties are included in a separate component of income on the Combined Consolidated Statements of Operations under Discontinued operations. This has resulted in certain reclassifications for the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011.

	Successor									Predecessor
	Year Ended December 31, 2013			Year Ended December 31, 2012			Period from June 28, 2011 to December 31, 2011			Period from January 1, 2011 to June 27, 2011
Discontinued operations:
Revenues	$	35,243		$	50,609		$	26,551		$	26,593
Operating expenses	(27,429		)	(42,132		)	(26,095		)	(22,068		)
Other expense, net	(4,310		)	(10,915		)	(6,218		)	(2,506		)
Income (loss) from discontinued operating properties	3,504			(2,438		)	(5,762		)	2,019
Gain on disposition of operating properties	3,392			5,369			—			—
Impairment on real estate held for sale	(45,122		)	(13,599		)	—			(8,608		)
Loss from discontinued operations	$	(38,226	)	$	(10,668	)	$	(5,762	)	$	(6,589	)

As of December 31, 2013, the Operating Partnership had one shopping center classified as held for sale and is presented in Other assets within the Consolidated Balance Sheets. The shopping center had a carrying value of approximately $5.5 million as of December 31, 2013.

As of December 31, 2012, the Operating Partnership had one shopping center classified as held for sale which is presented in Other assets within the Consolidated Balance Sheets. The shopping center had a carrying value of approximately $1.6 million as of December 31, 2012.

During the three months ended March 31, 2014, the Operating Partnership disposed of 33 wholly-owned Non-Core Properties (See Note 1).

During the year ended December 31, 2013, the Operating Partnership disposed of 18 shopping centers for aggregate proceeds of $54.6 million.

During the year ended December 31, 2012, the Operating Partnership disposed of 19 shopping centers, one land parcel and two buildings for aggregate proceeds of $50.6 million.

In connection with the real estate included in the results from discontinued operations during the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period January 1, 2011 to June 27, 2011, the Operating Partnership recognized provisions for impairment of $45.1 million, $13.6 million, $0 and $8.6 million respectively. For purposes of measuring this provision, fair value was determined based on either of the following: (i) contracts with buyers or purchase offers from potential buyers and then adjusted to reflect associated disposition costs; or (ii) internal analysis. The Operating Partnership believes the inputs utilized were reasonable in the context of applicable market conditions; however, due to the significance of the unobservable inputs to the overall fair value measures, including forecasted revenues and expenses based upon market conditions and expectations for growth, the Operating Partnership determined that such fair value measurements were classified within Level 3 of the fair value hierarchy.

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4.    Real Estate

The Operating Partnership's components of Real estate, net consisted of the following:

	December 31, 2013			December 31, 2012
Land	$	2,055,802		$	1,915,667
Buildings and improvements:
Building	7,436,072			6,817,378
Building and tenant improvements	373,907			254,844
Other rental property (1)	971,947			906,537
	10,837,728			9,894,426
Accumulated depreciation and amortization	(1,190,170		)	(796,296		)
Total	$	9,647,558		$	9,098,130

⁽¹⁾  At December 31, 2013 and 2012, Other rental property consisted of intangible assets including: (i) $881.9 million and $826.9 million, respectively, of in-place lease value; (ii) $90.0 million and $79.6 million, respectively, of above-market leases; and (iii) $462.5 million and $341.8 million, respectively, of accumulated amortization. These intangible assets are amortized over the term of each related lease.

In addition, at December 31, 2013 and 2012, the Operating Partnership had intangible liabilities relating to below-market leases of approximately $541.8 million and $473.9 million, respectively, and accumulated amortization of approximately $153.6 million and $97.7 million, respectively. These intangible liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the Operating Partnership's Consolidated Balance Sheets, are amortized over the term of each related lease including any renewal periods with fixed rentals that are considered to be below market.

Amortization expense associated with the above mentioned intangible assets and liabilities was approximately $93.3 million, $142.4 million, $113.2 million and $19.0 million for the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, respectively. The estimated net amortization expense associated with the Operating Partnership's intangible assets and liabilities for the next five years are as follows:

Year ending December 31,	Estimated net amortization expense
2014	$	74,553
2015	47,885
2016	23,183
2017	10,543
2018	4,194

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

During the year ended December 31, 2013, the Operating Partnership recognized $1.5 million of provision for impairment, excluding provisions for impairment included in Discontinued operations. The Operating Partnership did not recognize any provisions for impairment for the year ended December 31, 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, excluding provisions for impairment included in Discontinued operations.

For purposes of measuring this provision, fair value was determined based upon contracts with buyers and then adjusted to reflect associated disposition costs. The carrying value of impaired real estate was $69.3 million as of December 31, 2013.

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5.    Financial Instruments - Derivatives and Hedging

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

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Operating Partnership making fixed-rate payments over the life of the agreements without changing the underlying notional amount. During the year ended December 31, 2013, the Operating Partnership entered into five forward starting interest rate swap agreements with a notional amount of $1,500.0 million to hedge the variable cash flows associated with third party debt. The Operating Partnership did not have any derivatives designated as cash flow hedges as of December 31, 2012

A detail of the Operating Partnership’s interest rate derivatives designated as cash flow hedges outstanding as of December 31, 2013 is as follows:

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

The Operating Partnership has elected to present its interest rate derivatives on its Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. A detail of the Operating Partnership’s fair value of interest rate derivatives on a gross and net basis as of December 31, 2013 and 2012, respectively, is as follows:

	Fair Value of Derivative Instruments
Interest rate swaps classified as:	December 31, 2013			December 31, 2012
Gross derivative assets	$	—		$	—
Gross derivative liabilities	(6,795		)	—
Net derivative liability	$	(6,795	)	$	—

All of the Operating Partnership’s outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in other comprehensive income (“OCI”) and is reclassified into earnings as interest expense in the period that the hedged forecasted transaction affects earnings. The effective portion of the Operating Partnership’s interest rate swaps that was recorded in the accompanying Combined Consolidated Statements of Operations for the year ended December 31, 2013 is as follows:

Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps and Caps)	Year Ended December 31, 2013
Amount of loss recognized in OCI on derivative	$	(6,795	)
Amount of gain (loss) reclassified from accumulated OCI into interest expense	$	—

The Operating Partnership estimates that approximately $9.0 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the next twelve months. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Operating Partnership’s cash flow hedges during the year ended December 31, 2013. The Operating Partnership did not have any designated hedges for the year ended December 31, 2012, the period from June 28, 2011 through December 31, 2011 and the period from January 1, 2011 through June 27, 2011.

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

The Operating Partnership does not use derivatives for trading or speculative purposes. Derivatives not designated as hedges are used to manage the Operating Partnership’s exposure to interest rate movements but do not meet the strict hedge accounting requirements. The Operating Partnership’s only non-designated interest rate derivatives held as of December 31, 2013 and 2012 were interest rate caps. Interest rate caps involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. As of December 31, 2013 and 2012, the fair value of these interest rate caps was nominal, and, during the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 through June 27, 2011, no payments were received from the respective counterparties.

A detail of the Operating Partnership’s non-designated interest rate derivatives outstanding as of December 31, 2013 is as follows:

	Number of Instruments	Notional Amount
Interest Rate Caps	10	$	1,118,000

Credit-risk-related Contingent Features

The Operating Partnership has agreements with its derivative counterparties that contain a provision whereby if the Operating Partnership defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Operating Partnership could also be declared in default on its derivative obligations. If the Operating Partnership were to breach any of the contractual provisions of the derivative contracts, it would be required to settle its obligations under the agreements at their termination value including accrued interest, or approximately $6.8 million.

6.    Debt Obligations

As of December 31, 2013 and 2012, the Operating Partnership had the following indebtedness outstanding:

	Successor
	Carrying Value as of
	December 31, 2013			December 31, 2012			Stated Interest Rates	Scheduled Maturity Date
Mortgage and secured loans(1)
Fixed rate mortgage and secured loans(2)	$	3,444,578		$	5,330,442		4.85% - 8.18%	2014 – 2021
Variable rate mortgage and secured loans(3)	483,604			668,605			Variable(3)	2015 – 2017
Total mortgage and secured loans	3,928,182			5,999,047
Net unamortized premium	93,077			116,222
Total mortgage and secured loans, net	$	4,021,259		$	6,115,269
Notes payables
Unsecured notes(4)(5)	$	353,617		$	404,612		3.75% - 7.97%	2014 - 2029
Net unamortized discount	(13,766		)	(20,525		)
Total notes payable, net	$	339,851		$	384,087
Unsecured Credit Facility(6)	$	1,620,179		$	—		1.79%	2017 – 2018
Total debt obligations	$	5,981,289		$	6,499,356

(1) The Operating Partnership's mortgages and secured loans are collateralized by certain properties and the equity interests of certain subsidiaries. These properties had a carrying value as of December 31, 2013 of approximately $5.4 billion.

(2) The weighted average interest rate on the Operating Partnership’s fixed rate mortgage and secured loans was 5.91% as of December 31, 2013.

(3) The weighted average interest rate on the Operating Partnership’s variable rate mortgage and secured loans was 3.80% as of December 31, 2013. The Operating Partnership incurs interest on $483.6 million of mortgages using the 30-day LIBOR rate (which was 0.17% as of December 31, 2013 subject to certain rate floor requirements ranging from 0 basis points to 75 basis points), plus interest spreads ranging from 300 basis points to 375 basis points.

(4) The weighted average interest rate on the Operating Partnership’s unsecured notes was 6.03% as of December 31, 2013.

(5) The Operating Partnership has a one-time put repurchase right to certain unsecured notes that requires the Operating Partnership to offer to repurchase the notes if tendered by holders (but does not require the holders to tender) for an amount equal to the principal amount plus accrued and unpaid interest on January 15, 2014. Although the stated maturity dates for these notes range from August 2026 to February 2028, the scheduled maturity dates listed above

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represent the first dates that note holders can require the Operating Partnership to redeem all or any portion of the notes pursuant to the required put repurchase right. In January 2014 $57.7 million was tendered to, and repurchased by the Operating Partnership.

(6) The Operating Partnership has in place five forward starting interest rate swap agreements that convert the floating interest rate on the $1.5 billion term loan facility to a fixed, combined interest rate of 0.844% plus an interest spread of 160 basis points.

Debt Transactions

On February 27, 2013, certain indirect wholly owned subsidiaries of the Operating Partnership (the “Borrowers”) obtained a $57.0 million mortgage loan (the "Mortgage Loan"). The Mortgage Loan is secured by three shopping centers and is guaranteed by BPG Subsidiary Inc. ("BPG Sub") as to certain customary recourse carveout liabilities.

The Mortgage Loan bears interest at a rate equal to LIBOR (subject to a floor of 25 basis points) plus a spread of 350 basis points, payable monthly, and is scheduled to mature on March 1, 2016, with two extension options that allow the Borrowers to extend the maturity through March 1, 2017 and then to March 1, 2018, subject in each case to the satisfaction of certain financial conditions.

In connection with the closing of the Mortgage Loan, approximately $42.0 million of mortgage loans of subsidiaries of the Operating Partnership were repaid.

On July 16, 2013, the Operating Partnership entered into an unsecured credit facility (the “Unsecured Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Wells Fargo Bank, National Association, as syndication agents and Barclays Capital plc, Citibank, N.A., Deutsche Bank Securities Inc. and Royal Bank of Canada, as documentation agents.

The Unsecured Credit Facility consists of (i) a $1.25 billion revolving credit facility (the “Revolving Facility"), maturing on July 31, 2017, with a one-year extension option; and (ii) a $1.5 billion term loan facility (the “Term Loan Facility”), which will mature on July 31, 2018. Through October 28, 2013, the obligations under the Unsecured Credit Facility were guaranteed by both BPG Sub and Brixmor OP GP LLC, the general partner of the Operating Partnership, (together, the "Parent Guarantors"), as well as by both Brixmor Residual Holding LLC and Brixmor GA America LLC (together, the "Material Subsidiary Guarantors"). Effective October 28, 2013, pursuant to the terms of the Unsecured Credit Facility, the guarantees by the Material Subsidiary Guarantors were terminated. The Revolving Facility includes borrowing capacity available for letters of credit and for short-term borrowings and an option for the Operating Partnership to increase the size of the facility, raise incremental credit facilities, and extend the maturity date subject to certain limitations.

Unsecured Credit Facility borrowings bear interest, at the Operating Partnership’s option, at a rate equal to a margin over either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus half of 1%, and (3) the LIBOR rate that would be payable on such day for a LIBOR rate loan with a one-month interest period plus 1% or (b) a LIBOR rate determined by reference to the BBA LIBOR rate for the interest period relevant to a particular borrowing.

The margin associated with Term Loan Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00% for LIBOR rate loans. The margin associated with Revolving Facility borrowings is also based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans.

The Operating Partnership, in addition to recurring interest payments, is required to pay a commitment fee to the lenders related to the Revolving Facility in respect of the unutilized commitments thereunder and customary letter of credit fees. The commitment fee is based on the daily-unused amount and is either 0.25% or 0.175% per annum. Voluntary prepayments are permitted at any time without premium or penalty, subject to certain minimum amounts and the payment of customary “breakage” costs in respect of LIBOR rate loans. The Unsecured Credit Facility requires no amortization payments.

Pursuant to the terms of the Unsecured Credit Facility, the Operating Partnership among other things, is subject to maintenance of various financial covenants. The Operating Partnership is currently in compliance with these covenants.

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Debt Maturities

As of December 31, 2013 and 2012, the Operating Partnership had accrued interest of $32.2 million and $30.7 million outstanding, respectively. As of December 31, 2013, scheduled maturities of the Operating Partnership's outstanding debt obligations were as follows:

Year ending December 31,
2014	$	327,553
2015	980,029
2016	1,335,445
2017	647,268
2018	1,521,557
Thereafter	1,090,126
Total debt maturities	5,901,978
Net unamortized premiums on mortgages	93,077
Net unamortized discount on notes	(13,766		)
Total debt obligations	$	5,981,289

7.     Financing Liabilities

At December 31, 2013 and 2012, the Operating Partnership had financing liabilities of $175.1 million and $174.4 million, respectively, net of unamortized premium of $2.4 million and $2.6 million, respectively.

On December 6, 2010, the Operating Partnership formed a real estate venture with Inland American CP Investment, LLC (“Inland”). The Operating Partnership contributed 25 shopping centers with a fair value of approximately $471.0 million and Inland contributed cash of $121.5 million, resulting in Inland receiving a 70% ownership interest with a cumulative preferential share of cash flow generated by the shopping centers at an 11% stated return. The Operating Partnership received a 30% ownership interest, subordinated to Inland’s preferred interest. Due to the venture agreement providing Inland with the right to put its interest to the Operating Partnership for an amount of cash equal to the amount it contributed plus accrued interest beginning December 6, 2015, the Operating Partnership consolidates the real estate venture under the financing method which requires the amount Inland contributed to be reflected as a liability. The venture agreement also provided the Operating Partnership with the right to call Inland’s interest, beginning December 6, 2014, for an amount of cash determined on the same basis as described above.

On November 11, 2008, a Class A Preferred Unit Holder (see Note 9 for further details) elected to redeem substantially all of its units. These units were redeemed in exchange for the fee interest in a property, and the Operating Partnership entered into a 20 year master lease agreement at the date of transfer with the Class A Preferred Unit Holder. The carrying value of this agreement at December 31, 2013 and 2012 was $17.8 million and $18.0 million, respectively, including unamortized premium of $2.6 million and $2.8 million, respectively.

In addition to the two liabilities disclosed above, as of December 31, 2013 and 2012, financing liabilities include capital leases of $26.3 million and $27.1 million, respectively, net of unamortized discount of $0.2 million and $0.2 million respectively.

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8.     Fair Value Disclosures

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

	December 31, 2013				December 31, 2012
	Carrying Amounts		Fair Value		Carrying Amounts		Fair Value
Mortgage and secured loans payable	$	4,021,259	$	4,179,640	$	6,115,269	$	6,161,656
Notes payable	339,851		371,393		384,087		395,280
Credit facility	1,620,179		1,620,179		—		—
Total debt obligations	$	5,981,289	$	6,171,212	$	6,499,356	$	6,556,936
Financing liabilities	$	175,111	$	175,111	$	174,440	$	174,440

The valuation methodology used to estimate the fair value of the Operating Partnership's fixed and variable-rate indebtedness and financing liabilities is based on discounted cash flows, with assumptions that include credit spreads, loan amounts and debt maturities. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is included in U.S. GAAP that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs that are classified within Level 3 of the hierarchy).

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

At December 31, 2013 and 2012, the fair values of the Operating Partnership’s marketable securities, valued based on quoted market prices, were classified within Level 1 of the fair value hierarchy. Conversely, at December 31, 2013 and 2012, the fair values of the Operating Partnership’s mortgage and secured loans, notes payable, financing liabilities and interest rate caps, valued based on discounted cash flow or other similar methodologies were classified within Level 3 of the fair value hierarchy.

9. Redeemable Non-controlling Interests

The redeemable non-controlling interests presented in these Combined Consolidated Financial Statements relate to portions of a consolidated subsidiary held by non-controlling interest holders in a partnership ("ERP") that was formed to own certain real estate properties which were contributed to it in exchange for cash, the assumption of mortgage indebtedness and limited partnership units (or Class A Preferred Units).

The Operating Partnership is entitled to receive 100% of all net income and gains before depreciation after the limited partners receive their preferred return. As of December 31, 2013 and 2012, there were 648 thousand and 648 thousand Class A Preferred Units outstanding, respectively.

Holders of these Class A Preferred Units have a redemption right that provides the holder with the option to redeem their units for $33.15 per unit in cash plus all accrued and unpaid distributions. Due to this right, the portion of the partnership attributable to such outside interests has been classified as redeemable non-controlling interests within the Operating Partnership's Consolidated Balance Sheets which, at December 31, 2013 and 2012 were $21.5 million and $21.5 million, respectively.

During the year ended December 31, 2013, no limited partners with Class A Preferred Units made a redemption election. During the year ended December 31, 2012, one Class A Preferred Unit Holder elected to redeem substantially all of its Class A Preferred Units for approximately $0.1 million in cash. Such redemption elections may be made at any time, and the Operating Partnership is required to make any such redemption on the second to last business day of the quarter in which such election is made, provided that the Operating Partnership receives the redemption election at least ten business days prior to such date.

The changes in redeemable non-controlling interests are as follows:

	Successor
	Year Ended December 31, 2013			Year Ended December 31, 2012
Balance at beginning of period	$	21,467		$	21,559
Unit redemptions	—			(92		)
Distributions to redeemable non-controlling interests	(1,288		)	(1,291		)
Preferred return	1,288			1,291
Balance at end of period	$	21,467		$	21,467

10. Revenue Recognition

Future minimum annual base rents as of December 31, 2013 to be received over the next five years pursuant to the terms of non-cancelable operating leases are included in the table below.

Amounts included assume that all leases which expire are not renewed and that tenant renewal options are not exercised; therefore, neither renewal rents nor rents from replacement tenants are included. Future minimum annual base rents also do not include payments which may be received under certain leases on the basis of a percentage of reported tenants' sales volume, common area maintenance charges and real estate tax reimbursements.

Year ending December 31,
2014	$	823,803
2015	721,352
2016	600,528
2017	479,408
2018	371,683
Thereafter	1,400,662

The Operating Partnership recognized approximately $6.4 million, $6.1 million, $2.8 million and $3.0 million of rental income based on a percentage of its tenants' sales for the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, respectively.

As of December 31, 2013 and 2012, the estimated allowance associated with Operating Partnership's outstanding rent receivables, included in Receivables, net in the Operating Partnership's Consolidated Balance Sheets was $30.2 million and $28.2 million, respectively. In addition, as of December 31, 2013 and 2012, receivables associated with the effects of recognizing rental income on a straight-line basis were $48.6 million and $31.7 million, respectively net of the estimated allowance of $0.9 million and $0.5 million, respectively.

11. Stock Based Compensation

Class B Units

Certain employees of the Operating Partnership were granted Class B Units in the Partnerships in 2011 and 2013 prior to BPG's IPO. The Class B Units were granted with service conditions and performance and market conditions. The fair value of the Class B Units with service conditions are recognized ratably over the applicable service period. The Class B Units granted, subject to performance and market conditions, will be recognized as the applicable conditions are met. The Class B Units granted are profits interests having economic characteristics similar to stock appreciation rights and representing the right to share in any increase in value that exceeds a specified threshold. Therefore, the Class B Units only have value to the extent there is an appreciation in the value of the Business from and after the applicable date of grant and the appreciation rights exceeds a specified threshold. The Class B Units granted, subject to performance and market conditions, vest on the date, if any, that the Operating Partnership's Sponsor receives cash proceeds resulting in a 15% internal rate of return, subject to continued employment on such date.

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In connection with BPG's IPO, the Class B Units subject to performance and market vesting conditions were modified such that 75% of those awards vested as of the IPO effective date. The Class B Units which solely have vesting service conditions and the remaining 25% of the awards with performance and market vesting conditions were also further modified to require the payment of non-forfeitable dividends during the period in which they are unvested.

The vested Class B Units as of the IPO effective date were exchanged for a combination of vested shares of BPG's common stock, vested shares of BPG Subsidiary stock and a cash payment of $6.0 million. The $6.0 million cash payment was paid to the Class B Unit holders by Blackstone to reduce the number of fully vested common shares of BPG and BPG Subsidiary that would have otherwise been issued in the conversion of the Class B Units to shares of BPG common stock. The $6.0 million was recorded as incentive-based compensation expense during the year ended December 31, 2013.

The unvested Class B Units as of the IPO effective date were exchanged for a combination of unvested restricted shares of BPG's common stock and unvested restricted shares of BPG Subsidiary stock. The unvested restricted shares are subject to the same vesting terms as those applicable to the exchanged Class B Units.

The Class B Units granted to employees by the Partnerships were recorded as a contribution by the Partnerships, with amortization, net of forfeitures, being recorded as a component of General and administrative expenses in the Combined Consolidated Statements of Operations. As a result of the modification of the awards the Operating Partnership recognized $24.9 million of incentive-based compensation related to the units subject to performance and market vesting conditions during the year ended December 31, 2013. The Operating Partnership did not recognize expense related to the units subject to performance conditions as of December 31, 2012 and 2011 as the applicable conditions were not yet met.

The Operating Partnership calculates the fair value of share based compensation awards using the Black-Scholes-Merton option pricing model which requires the use of subjective assumptions, including share price volatility, the expected life of the award, risk free interest rate and expected dividend yield. In developing its assumptions the Operating Partnership takes into account the following:

As a result of BPG's status as a private company for the last several years the Operating Partnership does not have sufficient history to estimate the volatility of its common share price. The Operating Partnership calculates the expected volatility based on reported data for selected reasonably similar publicly traded companies for which historical information is available. The Operating Partnership plans to continue to use the guideline peer group volatility information until the historical volatility of BPG's common shares is relevant to measure expected volatility for future award grants;

The Operating Partnership determines the risk free interest rate by reference to implied yields available from United States Treasury securities with a remaining term equal to the expected life assumed at the date of the grant;

The Operating Partnership's assumed dividend yield is based on its historical dividends paid, excluding dividends that resulted from activities to be one time in nature;

The Operating Partnership estimates the average expected life of the awards based on the projected liquidity event.

The assumptions used in the Black-Scholes-Merton option pricing model are set forth below:

	2011		2013
Dividend yield	0	%	0	%
Risk free interest rate	0.9	%	0.2	%
Expected volatility	80.0	%	35.0	%
Expected life	5 years		1.6 years

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The following table presents the grant dates and numbers of Class B units granted to employees from

June 28, 2011 through December 31, 2013:

		Estimated Fair Value Per Class B Units at Grant Date				Total Estimated Value of Class B Units at Grant Date (in millions)
Date of Grant	Number of Class B Units Granted (in millions)	Service Condition		Performance and Market Condition		Service Condition		Performance and Market Condition
November 1, 2011	96.8	$	0.450	$	0.440	$	21.8	$	21.3
March 29, 2013	9.1	$	0.445	$	0.444	$	2.0	$	2.0
April 30, 2013	1.8	$	0.445	$	0.444	$	0.4	$	0.4
May 20, 2013	20.6	$	0.289	$	0.289	$	3.0	$	3.0

In addition, certain of the Operating Partnership’s employees were granted equity incentive awards in the Acquired Properties. These awards were granted with service conditions and performance and market conditions. As the awards were granted to the employees under the Operating Partnership’s management agreement with the owners of the Acquired Properties, the amounts earned by the employees for the amortization of the awards at their fair value as measured at each reporting period were considered to be a component of the Operating Partnership’s management fees, and then recorded a corresponding amount for compensation expense. In connection with the IPO, all of such awards vested. In exchange for the vested incentive awards, the holders received vested OP Units. During the year ended December 31, 2013, the Operating Partnership recorded $6.2 million of management fee income and compensation expense based upon the face value of the OP Units issued at the date of grant.

The IPO price of $20.00 per share was based on a number of factors, including the Operating Partnership's results of operations, the Operating Partnership's future prospects, the economic conditions in and future prospects for the industry in which the Operating Partnership competes, current market valuations of publicly traded companies considered comparable to the Operating Partnership and the other factors described under the section entitled "Underwriting" in BPG's prospectus, dated October 29, 2013 and filed with the SEC on October 31, 2013 pursuant to Rule 424(b)(4) under the Securities Act.

The methodology applied to determine the value of the awards at grant date and IPO would be substantially the same. The following table sets forth the value of the 2013 Class B Units at grant date and at the time of the IPO based on the IPO price of $20.00 per share.

Date of Grant	Value of Class B Units at Grant Date (in millions)		Assumed Value at IPO (in millions)
March 29, 2013	$	4.0	$	6.4
April 30, 2013	$	0.8	$	1.3
May 20, 2013	$	6.0	$	7.7

The increase in value between grant date and value at the IPO is due to improved operating results driven by an increase in underlying property performance and the impact of the July 2013 debt refinancing (specifically the new Unsecured Credit Facility, closed July 16, 2013).

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Information with respect to Class B Units and restricted shares for the years ended December 31, 2013 and 2012 and for the period from June 28, 2011 to December 31, 2011 are as follows:

	Class B Units		Restricted Shares	Aggregate Intrinsic Value
Outstanding, June 28, 2011	—		—	$	—
Vested	—		—	—
Granted	96,842		—	43,095
Forfeited	—		—	—
Outstanding, December 31, 2011	96,842		—	43,095
Vested	—		—	—
Granted	—		—	—
Forfeited	—		—	—
Outstanding, December 31, 2012	96,842		—	43,095
Vested	(41,990	)	—	(17,327		)
Granted	31,474		10	10,990
Forfeited	(16,342	)	—	(7,272		)
Exchanged	(69,984	)	2,072
Outstanding, December 31, 2013	—		2,082	$	29,486

During the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, the Operating Partnership recognized approximately $42.5 million, $6.4 million, $1.1 million and $0 respectively, of incentive-based compensation expense relating to these units as a component of General and administrative expense in the Combined Consolidated Statements of Operations.

As of December 31, 2013, there was $16.4 million of unrecognized compensation cost related to non vested stock granted under the Plan. This unrecognized compensation cost is expected to be recognized over the term of five years through 2018. The Operating Partnership issues new awards from its authorized units available at the date of grant.

12. Earnings Per Unit

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

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The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the years ended December 31, 2013, 2012 and the period from June 28, 2011 through December 31, 2011:

	Successor
	Year Ended December 31,						Period from June 28, 2011 through December 31,
	2013			2012			2011
Computation of Basic Earnings Per Unit:
Loss from continuing operations	$	(80,651	)	$	(149,521	)	$	(128,537	)
Income attributable to non-controlling interests	(1,355		)	(1,306		)	(653		)
Distributions on unvested restricted units	(200		)	—			—
Loss from continuing operations attributable to partnership common units	(82,206		)	(150,827		)	(129,190		)
Loss from discontinued operations, net of Series A interest	(41,677		)	(10,668		)	(5,762		)
Net loss attributable to the Operating Partnerships common units for basic earnings per unit	$	(123,883	)	$	(161,495	)	$	(134,952	)
Weighted average number of vested common units outstanding - basic	250,109			238,834			238,834
Basic Earnings Per Unit Attributable to the Operating Partnership's Common Units:
Loss from continuing operations	$	(0.33	)	$	(0.63	)	$	(0.54	)
Loss from discontinued operations	(0.17		)	(0.04		)	(0.02		)
Net loss (1)	$	(0.49	)	$	(0.68	)	$	(0.57	)
Computation of Diluted Earnings Per Unit:
Loss from continuing operations attributable to partnership common units	$	(82,006	)	$	(150,827	)	$	(129,190	)
Loss from discontinued operations, net of Series A interest	(41,677		)	(10,668		)	(5,762		)
Net loss attributable to the Operating Partnership's common units for diluted earnings per unit	$	(123,683	)	$	(161,495	)	$	(134,952	)
Weighted average common units outstanding - basic	250,109			238,834			238,834
Effect of dilutive securities:
Equity awards	—			—			—
Weighted average common units outstanding - diluted	250,109			238,834			238,834
Diluted Earnings Per Unit Attributable to the Operating Partnership's Common Units:
Loss from continuing operations	$	(0.33	)	$	(0.63	)	$	(0.54	)
Loss from discontinued operations	(0.17		)	(0.04		)	(0.02		)
Net loss (1)	$	(0.49	)	$	(0.68	)	$	(0.57	)

(1) Basic and Diluted earnings per unit for net income (loss) may not equal the sum of basic and diluted earnings per unit from income (loss) from continuing and discontinued operations due to rounding.

13.    Commitments and Contingencies

Leasing commitments

The Operating Partnership periodically enters into leases in connection with ground leases for neighborhood and community shopping centers which it operates and office leases for administrative space. During the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, the Operating Partnership recognized rent expense associated with these leases of $9.6 million, $9.4 million, $4.8 million and $4.5 million, respectively. Minimum annual rental commitments associated with these

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leases during the next five years and thereafter are as follows: 2014, $8.6 million; 2015, $8.6 million; 2016, $8.1 million; 2017, $8.0 million; 2018, $7.3 million and thereafter, $93.6 million.

Insurance captive

In April 2007, the Operating Partnership formed a wholly owned captive insurance company, ERT-CIC, LLC (“ERT CIC”) which underwrote the first layer of general liability insurance programs for the Operating Partnership’s wholly owned, majority owned and joint venture properties. The Operating Partnership formed ERT-CIC as part of its overall risk management program and to stabilize insurance costs, manage exposure and recoup expenses through the functions of the captive program. The Operating Partnership capitalized ERT CIC in accordance with the applicable regulatory requirements. ERT CIC established annual premiums based on projections derived from the past loss experience of the Operating Partnership’s properties. ERT CIC engaged an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to ERT CIC may be adjusted based on this estimate and may be reimbursed by tenants pursuant to specific lease terms.

During 2012, the Operating Partnership replaced ERT-CIC with a newly formed, wholly owned captive insurance company, Brixmor Incap, LLC (“Incap”). Incap underwrites the first layer of general liability insurance programs for the Operating Partnership’s wholly owned, majority owned and joint venture properties. The Operating Partnership formed Incap as part of its overall risk management program and to stabilize insurance costs, manage exposure and recoup expenses through the functions of the captive program. The Operating Partnership has capitalized Incap in accordance with the applicable regulatory requirements. Incap established annual premiums based on projections derived from the past loss experience of the Operating Partnership’s properties. Incap has engaged an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs.

Premiums paid to Incap may be adjusted based on this estimate and may be reimbursed by tenants pursuant to specific lease terms.

Environmental matters

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

Other legal matters

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

14.    Related-Party Transactions

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

As of December 31, 2013 and 2012, receivables from related parties were $6.1 million and $6.8 million, respectively, which are included in Receivables, net in the Consolidated Balance Sheets. As of December 31, 2013 and 2012, there were no material payables to related parties.

15.    Retirement Plan

The Operating Partnership has a Retirement and 401(k) Savings Plan (the "Savings Plan") covering officers and employees of the Operating Partnership. Participants in the Savings Plan may elect to contribute a portion of their earnings to the Savings Plan and the Operating Partnership makes a matching contribution to the Savings Plan to a maximum of 3% of the employee’s eligible compensation. For the years ended December 31, 2013 and 2012, the period from June 28, 2011 to December 31, 2011 and the period from January 1, 2011 to June 27, 2011, the Operating Partnership’s expense for the Savings Plan was approximately $1.3 million, $1.3 million, $0.7 million and $0.7 million, respectively.

16.    Subsequent Events

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In preparing the Combined Consolidated Financial Statements, the Operating Partnership has evaluated events and transactions occurring after December 31, 2013 for recognition or disclosure purposes. Based on this evaluation, from December 31, 2013 through to the date the financial statements were issued, the following events have been identified:

• On January 15, 2014, the Operating Partnership completed a cash tender offer (the “Tender Offer”) pursuant to which the Operating Partnership purchased 55.1% of the securities (the “Notes”) listed in the table below for an aggregate principal amount of $57.7 million. The offer was made pursuant to requirements set forth in the indenture governing the Notes (the "Indenture"), which provided that holders of the Notes had the right to require the Operating Partnership to repurchase such Notes from holders for cash on January 15, 2014 (the "Payment Date").

Title of Security	Principal Amount Outstanding		Principal Amount Validly Tendered
7.97% Senior Unsecured Notes due August 14, 2026	$	10,000	$	7,138
7.65% Senior Unsecured Notes due November 2, 2026	25,000		15,362
7.68% Senior Unsecured Notes due November 2, 2026	10,000		10,000
7.68% Senior Unsecured Notes due November 2, 2026	9,602		4,467
6.90% Senior Unsecured Notes due February 15, 2028	25,000		14,356
6.90% Senior Unsecured Notes due February 15, 2028	25,000		6,327
	$	104,602	$	57,650

The outstanding principal balance of the Notes was $104.6 million prior to the completion of the Tender Offer. The remaining outstanding balance of these notes will be repaid during 2026 and 2028. Holders who validly tendered their Notes on or prior to midnight, New York City time, on Tuesday, January 14, 2014 (the “Expiration Date”) were eligible to receive $1,000.00 per $1,000.00 principal amount of Notes (the “Tender Consideration”). Holders of the Notes who validly tendered their Notes before the Expiration Date also received accrued and unpaid interest on their Notes purchased pursuant to the Tender Offer from the last interest payment date to, but not including the payment date for the Notes purchased in the Tender Offer. The Notes purchased pursuant to the Tender Offer were cancelled and retired. Proceeds from the Unsecured Credit Facility were used to pay the bondholders under the Tender Offer.

In addition, pursuant to the Indenture, the covenant contained in the Indenture restricting the Operating Partnership or any subsidiary of the Operating Partnership from selling or transferring any real property (or any equity interest in an entity whose principal asset is real property) or the right to receive income or profits from such real property to any affiliate of the Operating Partnership that is not a subsidiary thereof or to any entity that owns an equity interest in the Operating Partnership expired and lapsed on January 15, 2014. See Note 1 - Initial Public Offering and IPO Property Transfers” for discussion of the transfer of Non-Core Properties to the pre-IPO owners of BPG on January 15, 2014.

• On March 11, 2014, the Board of Directors approved grants of 625,750 restricted stock units (“RSUs”) in BPG to certain employees of the Operating Partnership, or at the election of certain employees, long-term incentive plan units (“LTIP Units”) in the Operating Partnership.  The RSUs and LTIP Units were granted with certain performance, market and service conditions.  The fair value of the RSUs and LTIP Units granted with market conditions will be recognized over the term of the award and the RSUs and LTIP Units granted with performance conditions will be recognized as the applicable performance and service conditions are met.  Under the terms of the RSUs and LTIP Units, the holder can earn up to a maximum of 150% of the award based on the actual results of the performance and market conditions.

• On March 18, 2014, the Operating Partnership entered into a $600.0 million unsecured term loan facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, which will mature on March 18,

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2019. The Credit Facility provides the option to increase the size of the term loan facility by up to $250.0 million in additional term loans, subject to certain limitations, for a total commitment of up to $850.0 million.

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EX-99.2

Exhibit 99.2

BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our Consolidated Financial Statements and related notes included in Exhibit 99.1 of this Form 8-K. Historical results and percentage relationships set forth in the Consolidated Statements and accompanying notes, including trends which might appear, should not be taken as indicative of future operations.

In this discussion, the terms “we,” “us,” “our” and the “Operating Partnership” refer to Brixmor Operating Partnership LP and its subsidiaries.

Information related to our financial condition and results of operations as of and for periods ending prior to June 27, 2011 represents that of our Predecessor and information related to our financial condition and results of operations as of and for the periods ending after June 27, 2011 represents that of our Successor due to the Acquisition (as defined below) which occurred on June 28, 2011and was accounted for as a business combination. Therefore, the bases of the assets and liabilities associated with our Predecessor are not comparable to those of our Successor and the results of operations associated with our Successor would not have been the same had the Acquisition not occurred.

This discussion and analysis contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Brixmor Property Group Inc.'s annual report on Form 10-K for the fiscal year ended December 31, 2013.

Executive Summary

Our Operating Partnership

We are a Delaware limited partnership that owns and operates the largest wholly owned portfolio of grocery-anchored community and neighborhood shopping centers in the United States. Our high quality national portfolio is diversified by geography, tenancy and retail format, and our shopping centers are primarily anchored by market-leading grocers.

The sole general partner of the Operating Partnership is Brixmor OP GP LLC, an entity that is wholly owned by BPG Subsidiary Inc. (“BPG Sub”). All of the outstanding common stock of BPG Subsidiary Inc. is owned by Brixmor Property Group Inc. (“BPG”), which is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “BRX.” The limited partners of the Operating Partnership are BPG Sub, and other limited partners consisting of certain investment funds affiliated with The Blackstone Group L.P. (together with such affiliates, “Blackstone” or our “Sponsor”) and current or former members of our management. BPG has made an election to qualify, and believes it is operating so as to qualify, as a Real Estate Investment Trust (“REIT”) for United States federal income tax purposes. Generally, a REIT is entitled to a deduction for dividends that it pays and therefore will not be subject to United States federal corporate income tax on its net taxable income that is currently distributed to its stockholders. To qualify as a REIT, certain income, asset, distribution, and organization tests must be satisfied. Although we are not classified as a REIT, we operate under REIT regulations so as to enable BPG to continue to qualify for REIT status.

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

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

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

• Expansive Retailer Relationships - We believe that given the scale of our asset base and our nationwide footprint, we have a competitive advantage in supporting the growth plans of the nation’s largest retailers. We believe that we are

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the largest landlord by gross leasable area (“GLA”) to Kroger and TJX Companies, as well as a key landlord to all major grocers and most major retail category leaders. We believe that our strong relationships with leading retailers affords us insight into their strategies and priority access to their expansion plans, enabling us to efficiently provide these retailers with space in multiple locations.

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

• Experienced Management - Senior members of our management team are experienced real estate operators with deep industry expertise and retailer relationships and have an average of 26 years of experience in the real estate industry and an average tenure of 14 years with the Operating Partnership.

Acquisition and Comparability of Financial Results

On February 28, 2011, BPG, which owned 75.5% of the Operating Partnership as of December 31, 2013, agreed to purchase certain United States assets and the management platform of Centro Properties Group (“Centro”) and its managed funds, which we refer to as the “Acquisition.” On June 28, 2011, the Acquisition was consummated for approximately $9.0 billion, net of cash acquired of $0.1 billion. The consideration for the Acquisition included approximately $1.2 billion in cash and $7.8 billion of assumed indebtedness (the “Consideration”).

The Consideration was funded through an investment fund affiliated with BPG’s Sponsor making an initial capital contribution of approximately $1.7 billion and a contribution from an affiliated noncontrolling interest holder of $560.1 million. Following the closing of the Acquisition, we used $0.9 billion of the cash contributed to repay a portion of the outstanding indebtedness assumed. In addition, we obtained approximately $1.5 billion of debt financing, which is secured by 115 of our community and neighborhood shopping centers, and we repaid and/or refinanced approximately $2.4 billion of assumed indebtedness with the proceeds from this debt financing and cash contributed in connection with the Acquisition.

Prior to the Acquisition, we had nominal assets and operations and, as a result, the assets and management platform acquired constitute our Predecessor. The Predecessor comprises certain United States holding companies that indirectly own the acquired assets and historically conducted the activities of that business prior to the Acquisition. Due to these holding companies being under the common control of Centro, the financial information associated with our Predecessor has been presented on a combined consolidated basis under generally accepted accounting principles in the United States of America (“GAAP”) at its historical basis, which is not comparable to our basis in the acquired assets and management platform subsequent to the Acquisition. Moreover, due to the effects of the Acquisition, our results of operations subsequent to the Acquisition are not the same as they would have been had the Acquisition not occurred.

Initial Public Offering and IPO Property Transfers

On November 4, 2013, BPG completed an initial public offering (“IPO”) in which it sold approximately 47.4 million shares of its common stock, at an IPO price of $20.00 per share. BPG received net proceeds from the sale of shares in BPG's IPO of approximately $893.9 million after deducting $54.9 million in underwriting discounts, expenses and transaction costs. Of the total proceeds received, $824.7 million was used to pay down amounts outstanding under the Operating Partnership's Unsecured Credit Facility (see Note 6 for additional information).

In connection with BPG's IPO, the Operating Partnership acquired interests in 43 properties (the “Acquired Properties”) from Blackstone in exchange for 15.9 million common units of partnership interest (the “OP Units”) in the Operating Partnership having a value equivalent to the value of the Acquired Properties. In connection with the acquisition of the Acquired Properties, the Operating Partnership repaid $66.6 million of indebtedness to Blackstone attributable to certain of the Acquired Properties with a portion of the net proceeds of BPG's IPO. During the nine months ended September 30, 2014, the Operating Partnership repaid the remaining $7.6 million of indebtedness to Blackstone attributable to certain of the Acquired Properties.

Also in connection with BPG's IPO the Operating Partnership created a separate series of interest in the Operating Partnership (“Series A”) that allocated to certain funds affiliated with The Blackstone Group L.P. and Centerbridge Partners, L.P. (owners of the Operating Partnership prior to BPG's IPO) (the “pre-IPO owners”) all of the economic consequences of ownership of the Operating Partnership’s interest in 47 properties that the Operating Partnership historically held in its portfolio (the “Non-Core Properties”).  During 2013, the Operating Partnership disposed of 11 of the Non-Core Properties. During the nine months ended

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September 30, 2014, the Operating Partnership caused its ownership interests in all but one of the remaining 36 Non-Core Properties to be transferred to the pre-IPO owners. The 35 Non-Core Properties distributed to the pre-IPO owners had a carrying value of $179.0 million and a fair value of $195.2 million resulting in a gain of $16.2 million. The one remaining Non-Core Property was transferred to the lender in satisfaction of the property's mortgage balance and, following such transfer, on March 28, 2014, the Series A was terminated. The operating results of the 44 wholly-owned Non-Core Properties, including the gain on disposition, are included in Discontinued operations on the Combined Consolidated Statements of Operations. The operating results of the remaining three Non-Core Properties, in which the Operating Partnership owned a 20% interest, are included in Equity in income of unconsolidated joint ventures within continuing operations, through their distribution date, on the Combined Consolidated Statements of Operations.

Factors That May Influence our Future Results

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

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

Our operating expenses include property-related costs, including repairs and maintenance, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security, ground rent expense related to ground lease payments for which we are the lessee and various other property related costs. Increases in our operating expenses, to the extent they are not offset by revenue increases, impact our overall performance. For a further discussion of these and other factors that could impact our future results, performance or transactions, see Item 1A. “Risk Factors” in Brixmor Property Group Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Portfolio and Financial Highlights

• As of December 31, 2013, we owned interests in 558 shopping centers, including 554 wholly owned shopping centers (the "Consolidated Portfolio") and four shopping centers held through unconsolidated joint ventures. The Consolidated Portfolio includes the 522 shopping centers in our "IPO Portfolio" and the 36 Non-Core Properties in which the Company had an ownership interest in as of December 31, 2013.

• Billed occupancy for the IPO Portfolio was 90.7% and 90.0% as of December 31, 2013 and 2012, respectively. Leased occupancy for the IPO Portfolio was 92.4% and 91.3% as of December 31, 2013 and 2012, respectively.

• During 2013, we executed 2,244 leases in our IPO Portfolio totaling 12.8 million square feet of GLA, including 787 new leases totaling 3.4 million square feet of GLA and 1,457 renewals totaling 9.4 million sq. ft. of GLA. The average ABR under the new leases increased 29.5% from the prior tenant’s ABR and increased 9.8% for both new and renewal leases on comparable space from the prior tenant’s ABR. The average ABR per leased square foot of these new leases in our IPO Portfolio is $13.69 and the average ABR per leased square foot of these new and renewal leases in our IPO Portfolio is $12.38. The cost per square foot for tenant improvements and leasing commissions for new leases was $12.58 and $2.98, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.70 and $0.04, respectively.

• During 2012, we executed 2,273 leases in our Consolidated Portfolio totaling 12.8 million sq. ft. of GLA, including 715 new leases totaling 3.5 million sq. ft. of GLA and 1,558 renewals totaling 9.2 million sq. ft. The average ABR under the new leases increased 20.1% from the prior tenants' ABR and increased 6.2% for both new and renewal leases on comparable space from the prior tenants' ABR. The average ABR per leased sq. ft. of these new leases was $11.86 and the average ABR per leased sq. ft. of these new and renewal leases was $11.95. The cost per sq. ft. for tenant improvements and leasing commissions for new leases was $11.46 and $1.77, respectively. The cost per sq. ft. for tenant improvements and leasing commissions for renewal leases was $0.80 and $0.02, respectively.

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Acquisition Activity

• During the year ended December 31, 2013, in addition to the Acquired Properties, we acquired one retail building which was adjacent to one of our existing shopping centers for a purchase price of $5.1 million and the remaining 70% interest in a shopping center held through an unconsolidated joint venture for a net purchase price $18.7 million.

• During the year ended December 31, 2012, we acquired three retail buildings which were adjacent buildings at certain of our existing shopping centers, for approximately $5.5 million. In addition, we acquired the remaining 50% ownership interest in a 41.6 acre land parcel for a purchase price of $0.5 million.

Disposition Activity

• During the year ended December 31, 2013, we disposed of 18 shopping centers and three land parcels for aggregate proceeds of $59.0 million.

• During the year ended December 31, 2012, we disposed of 19 shopping centers, two retail buildings and one land parcel for aggregate proceeds of $50.6 million.

Results of Operations

Comparison of the Year Ended December 31, 2013 to the Year Ended December 31, 2012

Revenues (in thousands)

	Year ended December 31,
	2013		2012		$ Change
Revenues
Rental income	$	887,819	$	851,654	$	36,165
Expense reimbursements	242,939		225,848		17,091
Other revenues	16,135		11,233		4,902
Total revenues	$	1,146,893	$	1,088,735	$	58,158

Rental income

The increase in rental income for 2013 of $36.2 million, as compared to the corresponding period in 2012, was primarily due to a $25.0 million increase in ABR driven by (i) an increase in billed occupancy from 90.0% as of December 31, 2012 to 90.7% as of December 31, 2013, (ii) an increase in leasing spreads of 9.8% for both new and renewal leases, (iii) $9.7 million of ABR from the Acquired Properties, (iv) and a $2.5 million increase in the amortization of above and below market lease intangibles and lease settlement income. These increases were partially offset by a $1.6 million decrease in straight line rent.

Expense reimbursements

The increase in expense reimbursements for 2013 of $17.1 million, as compared to the corresponding period in 2012, was primarily due to an increase in reimbursable expenses and an increase in the recovery percentage which increased to 85.2% for 2013, as compared to 82.4% for the same period in 2012. The increased percentage of recoveries from tenants is primarily attributable to higher occupancy of our portfolio coupled with an increase in real estate taxes which have a higher recovery rate than operating expenses.

Other revenues

The increase in other revenues for 2013 of $4.9 million as compared to the corresponding period in 2012, was primarily due to $6.1 million of non-cash management fee income recorded in connection the vesting of equity incentive awards in the Acquired Properties. Certain of our employees have been granted equity incentive awards in the Acquired Properties. These awards were granted with service conditions and performance and market conditions. As the awards were granted to the employees under our management agreement with the owners of the Acquired Properties, we considered the amounts earned by the employees for the amortization of the awards at their fair value as measured at each reporting period to be a component of our management fees, and then recorded a corresponding amount for compensation expense. In connection with the IPO, based on the terms of these awards, all of such awards granted to our employees vested. In exchange for the vested incentive awards, the holders received vested OP Units. At the time of the IPO, we recorded $6.1 million of additional management fee income and additional compensation expense based upon the fair value of the OP Units issued at the date of grant.

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Operating Expenses (in thousands)

	Year ended December 31,
	2013		2012		$ Change
Operating expenses:
Operating costs	$	116,566	$	118,929	$	(2,363	)
Real estate taxes	168,555		155,210		13,345
Depreciation and amortization	438,730		488,714		(49,984		)
Provision for doubtful accounts	10,920		11,544		(624		)
Impairment of real estate assets	1,531		—		1,531
General and administrative	121,079		88,931		32,148
Total operating expenses	$	857,381	$	863,328	$	(5,947	)

Operating costs

The decrease in operating costs for 2013 of $2.4 million, as compared to the corresponding period in 2012, was due to decreased snow removal costs, decreased tenant related legal costs and decreased insurance costs partially offset by an increase in repairs and maintenance expenses.

Real estate taxes

The increase in real estate taxes for 2013 of $13.3 million, as compared to the corresponding period in 2012, was primarily due to increased assessments at certain properties, primarily in California, Illinois, Texas and New York, partially offset by decreases in assessments due to successful appeals of assessed values.

Depreciation and amortization

The decrease in depreciation and amortization for 2013 of $50.0 million, as compared to the corresponding period in 2012, was primarily due to tenant lease expirations and lease terminations associated with tenant improvements and in-place lease value intangible assets, partially offset by $7.4 million of depreciation and amortization recorded in connection with the Acquired Properties.

Provision for doubtful accounts

The decrease in the provision for doubtful accounts of $0.6 million for 2013, as compared to 2012, was primarily due to improving market conditions and operating environment of our tenants. The provision for doubtful accounts as a percentage of total revenues decreased from 1.06% for 2012 to 0.95% for 2013.

Impairment of real estate assets

During 2013, we recognized a $1.5 million impairment on the disposal of one land parcel. No impairments were recognized on real estate properties during 2012.

General and administrative

The increase in general and administrative costs for 2013 of $32.1 million, as compared to the corresponding period in 2012, primarily due to (i) $36.1 million increased stock-based compensation expense recorded in connection with the IPO partially offset by a $1.8 million decrease in personnel related expenses due to reductions in staff and $1.3 million decrease in professional fees.

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Other Income and Expenses (in thousands)

	Year ended December 31,
	2013			2012			$ Change
Other income (expense)
Dividends and interest	$	825		$	1,125		$	(300	)
Interest expense	(343,311		)	(376,414		)	33,103
Gain on sales of real estate assets and acquisition of joint venture interest	2,223			501			1,722
Gain (loss) on extinguishment of debt, net	(20,063		)	—			(20,063		)
Other	(11,004		)	(513		)	(10,491		)
Total other income (expense)	$	(371,330	)	$	(375,301	)	$	3,971

Dividends and interest

Dividends and interest remained approximately the same for 2013 as compared to the corresponding period in 2012.

Interest expense

Interest expense decreased by $33.1 million for 2013, as compared to the corresponding period in 2012, primarily due to the 2013 repayment of $2.6 billion of secured mortgage and term loans with a weighted-average interest rate of 5.69% which decreased interest expense by approximately $50.0 million, partially offset by $16.2 million of interest expense on our Unsecured Credit Facility which we entered into in July 2013. The 2013 secured mortgage and term loan repayments were financed primarily from proceeds of our Unsecured Credit Facility which had a weighted average of 2.4% as of December 31, 2013. During 2013, our Debt obligations, net decreased by $518.0 million primarily due to a portion of our IPO proceeds being used to repay outstanding borrowings under the revolving portion of the Unsecured Credit Facility partially offset by debt assumed from the Acquired Properties.

Gain on sales of real estate assets

During 2013, we disposed of two land parcels for aggregate proceeds of $1.4 million resulting in an aggregate gain of $1.1 million. In addition, we purchased the remaining 70% interest in a shopping center held through an unconsolidated joint venture resulting in a gain of $1.1 million on the step-up of the original 30% interest. During 2012, we sold one land parcel and two buildings for aggregate net proceeds of $1.4 million.

Gain (loss) on extinguishment of debt, net

During 2013, we recognized $20.1 million of losses on extinguishment of debt, net resulting from the write-offs of unamortized debt issuance costs and premium/discounts associated with repayments of certain of our debt obligations.

Other

Other increased by $10.5 million for 2013, as compared to the corresponding period in 2012, primarily due to $6.0 million of expenses related to BPG's IPO.

Equity in Income of Unconsolidated Joint Ventures (in thousands)

	Year ended December 31,
	2013		2012			$ Change
Equity in income of unconsolidated joint ventures	$	1,167	$	687		$	480
Impairment of investment in unconsolidated joint ventures	$	—	$	(314	)	$	314

Equity in income of unconsolidated joint ventures increased by $0.5 million for 2013, as compared to corresponding period in 2012, primarily due to increased operating performance of certain of our unconsolidated joint ventures. During 2012, we recognized provisions for impairment associated with certain of our unconsolidated joint venture investments due to the operating performance of these unconsolidated joint ventures.

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Discontinued Operations (in thousands)

	Year ended December 31,
	2013			2012			$ Change
Discontinued operations:
Income (loss) from discontinued operations	$	3,504		$	(2,438	)	$	5,942
Gain on disposition of operating properties	3,392			5,369			(1,977		)
Impairment of real estate held for sale	(45,122		)	(13,599		)	(31,523		)
Loss from discontinued operations	$	(38,226	)	$	(10,668	)	$	(27,558	)

Income (loss) from discontinued operations

Results from discontinued operations include the results from: (i) 33 Non-Core shopping centers disposed of during the three months ended March 31, 2014, (ii) 18 shopping centers disposed of in 2013; and (iii) 19 shopping centers and one retail building sold during 2012.

Gain on disposition of operating properties

During 2013, the gain on disposition of operating properties was attributable to the sale of four shopping centers for aggregate proceeds of $12.4 million. In connection with the sale of shopping centers in 2012, we recognized a gain of $5.4 million.

Impairment of real estate held for sale

During 2013, as a result of our strategy to dispose of certain shopping centers, we recognized provisions for impairment of $45.1 million relating to 14 shopping centers disposed of during 2013 and 14 properties disposed of during the three months ended March 31, 2014.

During 2012, we recognized provisions for impairment of $13.6 million in connection with the disposal of 19 shopping centers. For purposes of measuring the provision, fair value was determined based upon the contracts with buyers and then adjusted to reflect associated disposition costs.

Comparison of the Year Ended December 31, 2012 to the periods from January 1, 2011 through June 27, 2011 and the period from June 28, 2011 to December 31, 2011

Revenues (in thousands)

	Successor				Predecessor
	Year Ended December 31, 2012		Period from June 28, 2011 through December 31, 2011		Period from January 1, 2011 through June 27, 2011
Revenue
Rental income	$	851,654	$	429,365	$	412,929
Expense reimbursements	225,848		112,416		114,879
Other revenue	11,233		5,331		7,588
Total revenues	$	1,088,735	$	547,112	$	535,396

Rental income

The increase in rental income for 2012 of approximately $9.4 million from 2011 was primarily due to the combined impact of a $16.2 million increase in ABR driven by a 70 basis point increase in occupancy as well as an increase in leasing spreads of 6.4% for both new and renewal leases and an increase in straight line rent amortization of $3.5 million due to the effects of the Acquisition being included in our results of operations for a full year, partially offset by a $10.1 million net decrease in the amortization of above and below market lease intangibles due to the expiration and termination of leases during 2011 and 2012.

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Expense reimbursements

The decrease in expense reimbursements of $1.4 million was primarily due to a decrease in operating costs partially offset by an increase in the expense recovery percentage to 82.4% in 2012 from 81.7% in 2011 primarily due to higher occupancy rates in our portfolio.

Other revenue

The decrease in other revenue of approximately $1.7 million for 2012, as compared to 2011, was primarily due to a decrease in fee revenues.

Operating expenses (in thousands)

	Successor				Predecessor
	Year Ended December 31, 2012		Period from June 28, 2011 through December 31, 2011		Period from January 1, 2011 through June 27, 2011
Operating expenses
Operating costs	$	118,929	$	59,461	$	64,409
Real estate taxes	155,210		77,487		76,763
Depreciation and amortization	488,714		283,763		168,690
Provision for doubtful accounts	11,544		8,465		10,348
Acquisition related costs	—		—		5,647
General and administrative	88,931		49,874		57,363
Total operating expenses	$	863,328	$	479,050	$	383,220

Operating costs

The decrease in operating costs in 2012 of $4.9 million, as compared to 2011, was due to decreased snow removal costs of $3.0 million and decreased utilities of $1.1 million due to a milder winter, decreased repairs and maintenance costs of $2.9 million and decreased tenant related legal costs of $1.0 million. These decreases were partially offset with increased insurance costs of $2.6 million.

Real estate taxes

Real estate taxes for 2012 increased by $1.0 million from 2011 due to higher assessments at certain properties.

Depreciation and amortization

The increase in depreciation and amortization of $36.3 million for 2012, as compared to 2011, was primarily due to $18.2 million from the Acquisition resulting from the change in basis recorded in connection therewith and $17.9 million due to capital expenditures since the Acquisition.

Provision for doubtful accounts

The decrease of $7.3 million in the provision for doubtful accounts for 2012, as compared to 2011, was primarily due to lower billed receivables which, before the allowance for bad debt, decreased from $74.2 million as of December 31, 2011 to $58.7 million as of December 31, 2012. Moreover, the provision for doubtful accounts as a percentage of total revenues decreased from 1.93% for the period January 1, 2011 to June 27, 2011 to 1.55% for the period June 28, 2011 to December 31, 2011 to 1.06% for 2012.

Acquisition-related costs

Acquisition costs incurred during 2011 primarily related to the Acquisition and included legal, accounting, consulting, advisory fees and transfer taxes and other acquisition costs.

General and administrative

General and administrative costs decreased by $18.3 million for 2012, as compared to 2011, due to (i) decreased personnel costs of approximately $7.1 million due to reductions made in staffing coupled with a one-time retention bonus payment made to certain employees in 2011, (ii) tax consulting fees of approximately $4.9 million due to increased costs incurred during 2011

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as a result of the Acquisition coupled with reduced tax complexity post-Acquisition, (iii) state franchise taxes of $5.9 million in 2012 due to change in structure as a result of the Acquisition and (iv) state transfer taxes of $6.2 million. Transfer taxes unrelated to the Acquisition were incurred during the Predecessor period from January 1, 2011 through June 27, 2011. These decreases were partially offset by an increase of $5.4 million related to stock based compensation expense due to long-term incentive awards granted to certain of our employees in November 2011 and increased severance costs of approximately $0.7 million due to staff reductions.

Other income (expense) (in thousands)

	Successor						Predecessor
	Year Ended December 31, 2012			Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
Other income (expense)
Dividends and interest	$	1,125		$	641		$	815
Interest expense	(376,414		)	(199,221		)	(189,380		)
Gain on sale of real estate	501			—			—
Gain (loss) on extinguishment of debt, net	—			917			—
Other	(513		)	1,224			(3,732		)
Total other income (expense)	$	(375,301	)	$	(196,439	)	$	(192,297	)

Dividends and interest

Dividends and interest income decreased slightly due to lower cash balances during 2012, as compared to the 2011 periods.

Interest expense

Interest expense decreased $12.2 million for 2012, as compared to 2011, primarily due to: (i) a $3.4 million decrease due to repayments of unsecured bonds of approximately $29.6 million in November 2011 and $95.8 million during 2012; (ii) a $30.0 million decrease due to the repayment of approximately $2.4 billion of debt in connection with the Acquisition; (iii) a $10.4 million decrease due to the mark-to-market debt adjustment as a result of the Acquisition; (iv) a $2.1 million decrease in loan defeasance costs that were incurred in 2011 in connection with the Acquisition; (v) increased capitalized interest of approximately $1.1 million due to increased redevelopment spend; (vi) decreased loan consent fees of $0.9 million that were incurred in connection with the Acquisition in 2011 that were not incurred in 2012; and (vii) decreased advisor costs of approximately $3.2 million that were incurred during the Predecessor period. These decreases were partially offset by interest costs of approximately $43.4 million related to the financing incurred as part of the Acquisition of $1.5 billion.

Gain on sale of real estate

During 2012, we sold one land parcel and two buildings for net proceeds of $1.4 million.

During the period from June 28, 2011 through December 31, 2011, we sold approximately 1.1 acres of land for net proceeds of $0.7 million. There was no gain or loss recognized on the sale.

Gain (loss) on extinguishment of debt, net

During the period from June 28, 2011 through December 31, 2011, we recognized a $0.9 million gain on extinguishment of debt resulting from the write-off of unamortized debt issuance costs and premium/discounts associated with repayments of certain of our debt obligations.

Other

The change in Other includes a $3.3 million impairment of intangible assets for the Predecessor period from January 1, 2011 through June 27, 2011. The intangible assets consisted of property management contracts that were fully impaired as of the date of the Acquisition.

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Equity income (loss) in unconsolidated joint ventures (in thousands)

	Successor						Predecessor
	Year Ended December 31, 2012			Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
Equity in income (loss) of unconsolidated joint ventures	$	687		$	(160	)	$	(381	)
Impairment of investment in unconsolidated joint ventures	$	(314	)	$	—		$	—

Equity in income (loss) of unconsolidated joint ventures increased by $1.2 million in 2012, as compared to 2011, due to improved operating performance of the properties owned by certain of the unconsolidated joint ventures coupled with a gain on a land parcel sale in one of the unconsolidated joint ventures.

During 2012, we recognized provisions for impairment associated with certain of our unconsolidated joint ventures investments due to the operating performance of these unconsolidated joint ventures.

Discontinued operations (in thousands)

	Successor						Predecessor
	Year Ended December 31, 2012			Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
Discontinued operations:
Income (loss) from discontinued operations	$	(2,438	)	$	(5,762	)	$	2,019
Gain on disposition of operating properties	5,369			—			—
Impairment of real estate held for sale	(13,599		)	—			(8,608		)
Loss from discontinued operations	$	(10,668	)	$	(5,762	)	$	(6,589	)

Income (loss) from discontinued operations

Results from discontinued operations include the results from: (i) 33 Non-Core shopping centers disposed of during the three months end March 31, 2014; (ii) 18 shopping centers disposed of in 2013; (iii) 19 shopping centers and one retail building sold during 2012; and (iv) two shopping centers sold during the period from January 1, 2011 through June 27, 2011.

Gain on disposition of operating properties

In connection with the sale of shopping centers in 2012, we recognized a gain of $5.4 million.

Impairment of real estate held for sale

In connection with the disposition of 19 shopping centers in 2012 we recognized $13.6 million of provisions for impairment. For purposes of measuring the provision, fair value was determined based upon the contracts with buyers or for purchase and then adjusted to reflect associated disposition costs.

Same Property Net Operating Income

Same Property NOI is calculated (using properties owned as of the end of both reporting periods and for the entirety of both periods excluding properties classified as discontinued operations), as rental income (minimum rent, percentage rents, tenant recoveries and other property income) less rental operating expenses (property operating expenses, real estate taxes and bad debt expense) of the properties owned by us. Same Property NOI excludes corporate level income (including transaction and other fees), lease termination income, straight-line rent and amortization of above-/below-market leases of the same property pool from the prior year reporting period to the current year reporting period.

Same Property NOI is a supplemental, non-GAAP financial measure utilized to evaluate the operating performance of real estate companies and is frequently used by securities analysts, investors and other interested parties in understanding business and operating results regarding the underlying economics of our business operations. It includes only the net operating income

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

Comparison of the Year Ended December 31, 2013 to the Year Ended December 31, 2012

		Twelve Months Ended
		12/31/13			12/31/12			Change
Number of properties (a)		479			479			—
Percent billed		90.8%			90.0%			0.8%
Percent leased		92.6%			91.3%			1.3%
Revenues
	Rental income	$	814,232		$	790,046		$	24,186
	Expense reimbursements	241,328			227,919			13,409
	Other revenues	6,342			6,115			227
		1,061,902			1,024,080			37,822
Operating expenses
	Property operating costs	(116,923		)	(118,582		)	1,659
	Real estate taxes	(167,393		)	(156,584		)	(10,809		)
	Provisions for doubtful accounts	(10,902		)	(11,534		)	632
		(295,218		)	(286,700		)	(8,518		)
Same property NOI		$	766,684		$	737,380		$	29,304

(a) Arapahoe Crossings, L.P., in which we owned a 30% interest prior to our July 31, 2013 acquisition of the remaining 70%, is reflected in Same Property NOI as if we owned 100% for all of 2013 and 2012.

Same Property NOI increased $29.3 million or 4.0% for the year ended December 31, 2013, as compared to the same period in 2012, primarily due to (i) a $24.2 million increase in rental income driven by an increase in billed occupancy to 90.8% from 90.0% and an increase in ABR per square foot to $11.82 from $11.60, and (ii) an increase in the expense recovery percentage to 84.9% from 82.8% driven by higher occupancy and an increase in real estate taxes which have a higher recovery rate than operating expenses.

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The following table provides a reconciliation of net loss attributable to the Brixmor Operating Partnership LP to Same Property NOI for the periods presented above (dollars in thousands):

	Year Ended December 31,
	2013			2012
Net income (loss) attributable to Brixmor Operating Partnership LP	$	(120,232	)	$	(161,495	)
Adjustments:
Revenue adjustments (1)	(76,100		)	(66,711		)
Depreciation and amortization	438,730			488,714
Impairment of real estate assets	1,531			—
General and administrative	121,079			88,931
Total other expense	371,330			375,301
Equity in income of unconsolidated joint ventures	(1,167		)	(687		)
Impairment of investment in unconsolidated joint venture	—			314
Pro rata share of Same Property NOI of unconsolidated joint ventures	719			617
Loss from discontinued operations	38,226			10,668
Net loss attributable to non-controlling interests	1,355			1,306
Non-same property NOI	(8,787		)	422
Same property NOI	$	766,684		$	737,380

(1) Includes adjustments for lease settlement income, straight-line rents, above- and below-market rent amortization, net and fee

income from managed properties and unconsolidated joint ventures.

Comparison of the Year Ended December 31, 2012 to the Year Ended December 31, 2011

		Twelve Months Ended
		12/31/2012			12/31/2011			Change
Number of properties (a)		479			479			—
Percent billed		90.0		%	87.2		%	2.8%
Percent leased		91.3		%	90.6		%	0.7%
Revenues
	Rental income	$	786,519		$	767,801		$	18,718
	Expense reimbursements	226,614			220,876			5,738
	Other revenues	6,092			18,104			(12,012		)
		1,019,225			1,006,781			12,444
Operating expenses
	Property operating costs	(117,987		)	(125,044		)	7,057
	Real estate taxes	(155,322		)	(154,982		)	(340		)
	Provisions for doubtful accounts	(11,545		)	(18,993		)	7,448
		(284,854		)	(299,019		)	14,165
Same property NOI		$	734,371		$	707,762		$	26,609

(a) Arapahoe Crossings, L.P., in which we owned a 30% interest prior to our July 31, 2013 acquisition of the remaining 70%, is reflected in Same Property NOI based on our 30% ownership interest 2012 and 2011.

Same Property NOI increased $26.6 million or 3.8% for the year ended December 31, 2012, as compared to the same period in 2011, primarily due to (i) a $18.7 million increase in rental income driven by an increase in billed occupancy to 90.0% from 87.2% and an increase in overall leasing spreads of 6.3%, (ii) an increase in the expense recovery percentage to 82.5% from 82.1% driven by higher occupancy, and (iii) a $14.2 million decrease in operating expenses driven by a decrease in landlord expenses and a decrease in provision for doubtful accounts. The decrease in the provision for doubtful accounts was primarily attributable to lower receivable balances. Moreover, the provision for doubtful accounts as a percentage of total revenues decreased from 1.89% for 2011 to 1.13% for 2012.

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The following table provides a reconciliation of net loss attributable to the Brixmor Operating Partnership LP to Same Property NOI for the periods presented above (dollars in thousands):

	Year Ended December 31,
	2012			2011
Net income (loss) attributable to Brixmor Operating Partnership LP	$	(161,495	)	$	(182,795	)
Adjustments:
Revenue adjustments (1)	(71,009		)	(79,928		)
Depreciation and amortization	488,714			452,453
Acquisition related costs	—			5,647
General and administrative	88,931			107,237
Total other expense	375,301			388,736
Equity in income of unconsolidated joint ventures	(687		)	541
Impairment of investment in unconsolidated joint venture	314			—
Pro rata share of Same Property NOI of unconsolidated joint ventures	1,906			1,905
Loss from discontinued operations	10,668			12,351
Net loss attributable to non-controlling interests	1,306			1,405
Non-same property NOI	422			210
Same property NOI	$	734,371		$	707,762

(1) Includes adjustments for lease settlement income, straight-line rents, above- and below-market rent amortization, net and fee

income from managed properties and unconsolidated joint ventures.

Liquidity and Capital Resources

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

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

Sources

• cash and cash equivalents;

• operating cash flow;

• available borrowings under our existing revolving credit facility;

• issuance of long-term debt; and

• asset sales.

Uses

Short term:

• leasing costs and tenant improvements allowances;

• active anchor space repositioning/redevelopments;

• recurring maintenance capital expenditures;

• debt repayment requirements;

• corporate and administrative costs; and

• distribution payments.

Long term:

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

• acquisitions; and

• debt maturities.

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

	Successor									Predecessor
	Year Ended December 31,						Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
	2013			2012
Cash flows provided by operating activities	$	331,988		$	269,509		$	97,996		$	117,093
Cash flows used in investing activities	$	(86,361	)	$	(118,499	)	$	(1,387,031	)	$	(18,842	)
Cash flows provided by (used in) financing activities	$	(230,102	)	$	(159,147	)	$	1,394,653		$	(354,573	)

Operating Activities

Cash and cash equivalents were $113.0 million and $97.5 million as of December 31, 2013 and December 31, 2012, respectively.

Our net cash flow provided by operating activities primarily consist of net income from property operations, adjusted for non-cash items including depreciation and amortization, gains and impairments, and equity based compensation expense.

For the year ended December 31, 2013, net cash flow provided by operating activities increased $62.5 million as compared to the corresponding period in 2012. The increase is primarily due to a $29.3 million increase in Same Property NOI, NOI generated from the Acquired Properties, a decrease in interest expense due to repayments of secured mortgage and term loans and unsecured notes and a decrease in general and administrative expense.  These increases were partially offset by costs incurred in BPG's IPO.

For the year ended December 31, 2012, net cash flow provided by operating activities was $269.5 million, as compared to $98.0 million for the period from June 28, 2011 through December 31, 2011 and $117.1 million for the period from January 1, 2011 through June 27, 2011. The increase of $54.4 million is primarily due to (i) an increase in same property NOI of $27.0 million, (ii) a decrease in general and administrative costs of $22.7 million excluding the compensation expense related to the Class B units, and (iii) a decrease in acquisition related costs of $5.6 million.

Investing Activities

Net cash flow used in investing activities is impacted by the nature, timing and extent of improvements made to our shopping centers, allowances provided to our tenants, and our acquisition and disposition programs. Capital used to fund these activities, and the source thereof, can vary significantly from period to period based on, for example, negotiations with tenants and their willingness to pay higher base rents over the terms of their respective leases as well as the availability of operating cash flows. Net cash flow used in investing activities is also impacted by the level of recurring property capital expenditures in a given period. Recurring capital expenditures are costs to maintain properties and their common areas including new roofs, paving of parking lots and other general upkeep items. Recurring capital expenditures per square foot for the years ended December 31, 2013, 2012 and 2011, were $0.26, $0.28 and $0.28, respectively.

For the year ended December 31, 2013, net cash flow used in investing activities decreased $32.1 million as compared to the corresponding period in 2012. The decrease was primarily due to a decrease of $26.8 million expended in 2013 on building improvements and expansion, and an increase of $8.4 million in 2013 in proceeds received from sales of real estate assets.

For the year ended December 31, 2012, net cash flow used in investing activities decreased $1,287.4 million as compared to the corresponding period in 2011. The decrease was primarily due to the effects of the Acquisition, which resulted in the use of $1.3 billion of our capital. Proceeds from asset sales generally remained stable in 2012 as compared to 2011. During 2012, we disposed of 19 shopping centers, two buildings and one land parcel for aggregate proceeds of $50.6 million. During the period from June 28, 2011 through December 31, 2011, we sold approximately 1.1 acres of land for aggregate proceeds of $0.7 million. During the period from January 1, 2011 through June 27, 2011, we sold two shopping centers for proceeds of $53.5 million.

Currently, our anchor space repositioning/redevelopments in our Total Portfolio relate to 19 shopping centers for which we anticipate incurring approximately $88.7 million in improvements, of which $56.1 million had not yet been incurred as of December 31, 2013.

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Financing Activities

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

For the year ended December 31, 2013, net cash used in financing activities increased $71.0 million as compared to the corresponding period in 2012. The increase was due to (i) an increase of $855.4 million of repayments of debt obligations, net of borrowings, (ii) an increase of $68.9 million in distributions to partners and distributions to non-controlling interests and (iii) an increase of $20.3 million in deferred financing costs associated with the Unsecured Credit Facility, partially offset by $873.7 million in contributions from partners.

For the year ended December 31, 2012, net cash used in financing activities was $159.1 million as compared to net cash provided by financing activities of $1.4 billion for the period from June 28, 2011 through December 31, 2011 and the net cash used in financing activities of $354.6 million for the period from January 1, 2011 through June 27, 2011. The decrease was due to $2,193.3 million of partner contributions in 2011 related to the Acquisition, partially offset by $923.5 million in net repayment of debt obligations primarily due to the repayment of debt in connection with the Acquisition.

Debt transactions

On July 16, 2013, the Operating Partnership entered into an unsecured credit facility (the “Unsecured Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Wells Fargo Bank, National Association, as syndication agents and Barclays Capital plc, Citibank, N.A., Deutsche Bank Securities Inc. and Royal Bank of Canada, as documentation agents.

The Unsecured Credit Facility consists of (i) $1.25 billion revolving credit facility (the “Revolving Facility), maturing on July 31, 2017, with a one-year extension option; and (ii) a $1.5 billion term loan facility (the “Term Loan Facility”), which will mature on July 31, 2018. Through October 28, 2013, the obligations under the Unsecured Credit Facility were guaranteed by both BPG Subsidiary Inc. ("BPG Sub") and Brixmor OP GP LLC, the general partner of the Operating Partnership (together, the "Parent Guarantors"), as well as by both Brixmor Residual Holding LLC and Brixmor GA America LLC (together, the "Material Subsidiary Guarantors"). Effective October 28, 2013, pursuant to the terms of the Unsecured Credit Facility, the guarantees by the Material Subsidiary Guarantors were terminated. The Revolving Facility includes borrowing capacity available for letters of credit and for short-term borrowings and an option for us to increase the size of the facility, raise incremental credit facilities, and extend the maturity date subject to certain limitations.

Unsecured Credit Facility borrowings bear interest, at our Operating Partnership’s option, at a rate equal to a margin over either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus half of 1%, and (3) the LIBOR rate that would be payable on such day for a LIBOR rate loan with a one-month interest period plus 1% or (b) a LIBOR rate determined by reference to the BBA LIBOR rate for the interest period relevant to a particular borrowing.

The margin associated with Term Loan Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.4% to 2.0% for LIBOR rate loans. The margin associated with Revolving Facility borrowings is also based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans.

Our Operating Partnership, in addition to recurring interest payments, is required to pay a commitment fee to the lenders related to the Revolving Facility in respect of the unutilized commitments thereunder and customary letter of credit fees. The commitment fee is based on the daily-unused amount and is either 0.25% or 0.175% per annum. Voluntary prepayments are permitted at any time without premium or penalty, subject to certain minimum amounts and the payment of customary “breakage” costs in respect of LIBOR rate loans. The Unsecured Credit Facility requires no amortization payments.

During 2013, in addition to the Unsecured Credit Facility, we refinanced $42.0 million of mortgage loans with the proceeds of a $57.0 million mortgage loan. The $57.0 million mortgage loan, which closed on February 27, 2013 and was repaid during the three months ended June 30, 2014, was secured by three shopping centers, bore interest at a rate equal to LIBOR (subject to a floor of 25 basis points) plus a spread of 350 basis points, and required interest payments monthly. We also repaid $2.6 billion of mortgages and secured loans and repaid $51.0 million of unsecured notes. These repayments were funded primarily from borrowings under the Operating Partnership’s Unsecured Credit Facility. A portion of the proceeds from BPG’s IPO were used to repay a portion of the outstanding balance under the Revolving Facility.

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During 2012, certain of our indirect wholly-owned subsidiaries obtained mortgage loans totaling $360.0 million which were secured by 30 of our shopping centers and a guaranty by BPG Subsidiary of certain customary recourse carveout liabilities. The loans bore interest at a rate equal to LIBOR (subject to a floor of 50 basis points) plus a spreads ranging from 375 to 395 basis points and required monthly payments. $270.0 million was repaid in 2013 and the remaining $90.0 million was repaid during the three months ended March 31, 2014. In addition during 2012, $403.6 million of mortgage debt and $95.8 million of unsecured notes was repaid with proceeds from the loans described above and cash.

During 2011, in connection with the Acquisition, we repaid and/or refinanced a $1,652.0 million bridge loan and $714.4 million of mortgage and secured loans, using proceeds from $1,480.0 million of mortgage and secured loans and $886.0 million of the initial capital contribution made by an affiliate of BPG’s Sponsor. The repayment and refinancing of this indebtedness commenced our strategy of deleveraging our balance sheet. In addition financing was obtained under two mezzanine loan facilities in the amount of $225.0 million, which were secured by, among other things, the limited liability company interests of certain of our indirect wholly-owned subsidiaries that owned seven community and neighborhood shopping centers. The $225.0 million was repaid in 2013. In addition during 2011, we also repaid approximately $171.4 million of unsecured notes with cash.

Contractual Obligations

Our contractual debt obligations relate to our notes payable, mortgages and secured loans and financing liabilities with maturities ranging from one year to 18 years, and non-cancelable operating leases pertaining to our shopping centers.

The following table summarizes our debt maturities (excluding options and fair market debt adjustments) and obligations under non-cancelable operating leases as of December 31, 2013.

Contractual Obligations	Payment due by period
(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt (1)	$	5,901,978	$	327,553	$	2,315,474	$	2,168,825	$	1,090,126
Interest payments (2)	1,128,401		287,850		451,225		227,880		161,446
Financing liabilities	172,690		891		132,917		2,199		36,683
Operating leases	134,201		8,616		16,712		15,274		93,599
Total	$	7,337,270	$	624,910	$	2,916,328	$	2,414,178	$	1,381,854

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

(2) We incur variable rate interest on $271.5 million and $600.0 million of debt related to the Unsecured Credit Facility and Term Loan, respectively. The margin associated with Unsecured Credit Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans.

As of December 31, 2013, we had $353.6 million of notes payable outstanding, excluding the impact of unamortized premiums, with a weighted average interest rate of 6.03%. The agreements related to these notes payable contain certain covenants, including the maintenance of certain financial coverage ratios. As of December 31, 2013, we were in compliance with the covenants.

The holders of the notes issued under our 1995 indenture have a put right that requires us to repurchase notes tendered by holders (but does not require such holders to tender their notes) for an amount equal to the principal amount plus accrued and unpaid interest on January 15, 2014. As of December 31, 2013, there was $104.6 million aggregate principal amount of notes outstanding under the 1995 indenture. In January 2014, $57.7 million of the outstanding notes were tendered by holders and repurchased by us.

Funds From Operations

FFO is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect funds from operations on the same basis.

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

We present FFO and FFO attributable to partners as we consider them important supplemental measures of our operating performance and we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. FFO and FFO attributable to partners should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of liquidity. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of FFO and FFO attributable to partners may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from FFO and FFO attributable to partners are significant components in understanding and addressing financial performance.

The following table provides a reconciliation of net income (loss) to FFO and FFO attributable to partners is as follows (in thousands):

	Successor									Predecessor
	Year Ended December 31,						Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
	2013			2012
Net income (loss)	$	(118,877	)	$	(160,189	)	$	(134,299	)	$	(47,091	)
Gain on disposition of operating properties	(3,392		)	(5,369		)	—			—
Gain on disposition of unconsolidated joint ventures	—			(24		)	30			—
Depreciation and amortization-real estate related-continuing operations	436,730			485,962			281,817			166,529
Depreciation and amortization-real estate related-discontinued operations	11,504			21,720			14,936			10,683
Depreciation and amortization-real estate related-unconsolidated joint ventures	180			817			476			908
Impairment of operating properties	43,582			13,599			—			8,608
Impairment of unconsolidated joint ventures	—			314			—			—
FFO	369,727			356,830			162,960			139,637
Adjustments attributable to Series A interest and non-controlling interests not convertible into partnership common units	(7,155		)	(1,306		)	(653		)	(752		)
FFO attributable to partners	$	362,572		$	355,524		$	162,307		$	138,885

EBITDA and Adjusted EBITDA

Earnings before interest, tax depreciation and amortization (“EBITDA”) is calculated as the sum of net income (loss) in accordance with GAAP before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted for (i) acquisition related costs, (ii) gain (loss) on disposition of operating properties, (iii) impairment of real estate assets and real estate equity investments, (iv) gain (loss) on disposition of unconsolidated joint ventures, (v) gain (loss) on extinguishment of debt, and (vi) after adjustments attributable to Series A interest and non-controlling interests not convertible into partnership common units.

EBITDA and Adjusted EBITDA are supplemental, non-GAAP measures utilized in various financial ratios and are helpful to securities analysts, investors and other interested parties in the evaluation of REITs, as a measure of Brixmor’s operational performance because EBITDA and Adjusted EBITDA exclude various items that do not relate to or are not indicative of its operating performance. In addition, it includes the results of operations of real estate properties that have been sold or classified as real estate held for sale at the end of the reporting period. Accordingly, the use of EBITDA and Adjusted EBITDA in various ratios provides a meaningful performance measure as it relates to its ability to meet various coverage tests for the stated period.  EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (determined in accordance with GAAP)

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as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as a measure of liquidity.

Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations and, accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of EBITDA and Adjusted EBITDA may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs. Investors are cautioned that items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and addressing financial performance.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income (loss) (dollars in thousands):

	Successor									Predecessor
	Year Ended December 31,						Period from June 28, 2011 through December 31, 2011			Period from January 1, 2011 through June 27, 2011
	2013			2012
Net income (loss)	$	(118,877	)	$	(160,189	)	$	(134,299	)	$	(47,091	)
Interest expense-continuing operations	343,311			376,414			199,221			189,380
Interest expense-discontinued operations	6,564			10,929			6,216			2,991
Interest expense-unconsolidated joint ventures	651			1,589			852			—
Federal and state taxes	2,843			2,171			3,414			10,590
Depreciation and amortization-continuing operations	438,730			488,714			283,763			168,690
Depreciation and amortization-discontinued operations	11,504			21,720			14,936			10,683
Depreciation and amortization-unconsolidated joint ventures	180			817			476			908
EBITDA	$	684,906		$	742,165		$	374,579		$	336,151
Acquisition-related costs	—			—			—			5,647
Gain on disposition of operating properties	(3,392		)	(5,369		)	—			—
Gain from development/land sales and acquisition of joint venture interests	(2,223		)	(501		)	—			—
Gain on disposition of unconsolidated joint ventures	—			(24		)	30			—
Loss (gain) on extinguishment of debt, net	17,769			—			(917		)	—
Impairment of operating properties and land sales	1,531			—			—			—
Impairment of real estate held for sale	45,122			13,599			—			8,608
Impairments of real estate joint ventures	—			314			—			—
Adjustments to Series A interest and non-controlling interest not convertible into partnership common units	(4,059		)	(1,306		)	(653		)	(752		)
Total adjustments	54,748			6,713			(1,540		)	13,503
Adjusted EBITDA	$	739,654		$	748,878		$	373,039		$	349,654

Our Critical Accounting Policies

Our discussion and analysis of the historical financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could ultimately differ from those estimates. For a discussion of recently-issued and adopted accounting standards, see Note 1 to financial statements included in Exhibit 99.1 of this Form 8-K.

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Revenue Recognition and Receivables

Rental revenue is recognized on a straight-line basis over the terms of the related leases.  The cumulative difference between rental revenue recognized in the Combined Consolidated Statements of Operations and contractual payment terms is recorded as deferred rent and presented on the accompanying Consolidated Balance Sheets within Receivables, net.

The Operating Partnership commences recognizing revenue based on an evaluation of a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date.

Certain leases also provide for percentage rents based upon the level of sales achieved by a lessee.  These percentage rents are recognized upon the achievement of certain pre-determined sales levels. Leases also typically provide for reimbursement of common area maintenance, property taxes and other operating expenses by the lessee which are recognized in the period the applicable expenditures are incurred.

The determination of who is the owner, for accounting purposes, of tenant improvements (where provided) determines the nature of the leased asset and when revenue recognition under a lease begins. If the Operating Partnership is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Operating Partnership concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded under a lease are accounted for as lease incentives which are amortized as a reduction of revenue recognized over the term of the lease. In these circumstances, the Operating Partnership commences revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. In making this assessment, the Operating Partnership considers a number of factors, each of which individually is not determinative.

Gains from the sale of depreciated operating properties are generally recognized under the full accrual method, provided that various criteria relating to the terms of the sale and subsequent involvement by the Operating Partnership with the applicable property are met.

The Operating Partnership periodically evaluates the collectability of its receivables related to base rents, straight-line rent, expense reimbursements and those attributable to other revenue generating activities. The Operating Partnership analyzes its receivables and historical bad debt levels, tenant credit-worthiness and current economic trends when evaluating the adequacy of its allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.

Real Estate

Real estate assets are recorded in the Consolidated Balance Sheets at historical cost, less accumulated depreciation and amortization. Upon acquisition of real estate operating properties, management estimates the fair value of acquired tangible assets (consisting of land, buildings, and tenant improvements), identifiable intangible assets and liabilities (consisting of above and below-market leases, in-place leases and tenant relationships), and assumed debt based on an evaluation of available information. Based on these estimates, the estimated fair value is allocated to the acquired assets and assumed liabilities.

The fair values of tangible assets are determined as if the acquired property is vacant. Fair value is determined using an exit price approach, which contemplates the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If, up to one year from the acquisition date, information regarding the fair value of the assets acquired and liabilities assumed is received and estimates are refined, appropriate adjustments are made to the purchase price allocation on a retrospective basis. The Operating Partnership expenses transaction costs associated with business combinations in the period incurred.

In allocating the fair value to identifiable intangible assets and liabilities of an acquired operating property, the value of above-market and below-market leases is estimated based on the present value (using an interest rate reflecting the risks associated with leases acquired) of the difference between: (i) the contractual amounts to be paid pursuant to the leases negotiated and in-place at the time of acquisition and (ii) management’s estimate of fair market lease rates for the property or an equivalent property, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market or below-market intangible is amortized as a reduction of, or increase to, rental income over the remaining non-cancelable term of each lease, which includes renewal periods with fixed rental terms that are considered to be below-market.

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In determining the value of in-place leases and tenant relationships, management evaluates the specific characteristics of each lease and the Operating Partnership's overall relationship with each tenant. Factors considered include, but are not limited to: the nature of the existing relationship with a tenant, the credit risk associated with a tenant, expectations surrounding lease renewals, estimated carrying costs of a property during a hypothetical expected lease-up period, current market conditions and costs to execute similar leases. Management also considers information obtained about a property in connection with its pre-acquisition due diligence. Estimated carrying costs include: real estate taxes, insurance, other property operating costs and estimates of lost rentals at market rates during the hypothetical lease-up periods. Costs to execute similar leases include: commissions and legal costs to the extent that such costs are not already incurred with a new lease that has been negotiated in connection with the purchase of a property. The value assigned to in-place leases is amortized to expense over the remaining term of each lease. The value assigned to tenant relationships is amortized over the initial terms of the leases.

Certain real estate assets are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

Building and building and land improvements	20 - 40 years
Furniture, fixtures, and equipment	5 - 10 years
Tenant improvements	The shorter of the term of the related lease or useful life

Costs to fund major replacements and betterments, which extend the life of the asset, are capitalized and depreciated over their respective useful lives, while costs for ordinary repairs and maintenance activities are expensed as incurred.

When a real estate asset is identified by management as held-for-sale, the Operating Partnership discontinues depreciating the asset and estimates its sales price, net of estimated selling costs. If, in management's opinion, the estimated net sales price of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value. Additionally, the real estate asset and related operations are classified as discontinued operations and separately presented within the Combined Consolidated Statements of Operations and within Other assets on the Consolidated Balance Sheets. Properties classified as real estate held-for-sale generally represent properties that are under contract for sale and are expected to close within 12 months.

On a periodic basis, management assesses whether there are indicators that the value of the Operating Partnership's real estate assets (including any related intangible assets or liabilities) may be impaired.

If an indicator is identified, a real estate asset is considered impaired only if management's estimate of current and projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated and probability weighted holding period, are less than a real estate asset's carrying value. Various factors are considered in the estimation process, including expected future operating income, trends and prospects and the effects of demand, competition, and other economic factors. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its fair value.

In situations in which a lease or leases associated with a significant tenant have been, or are expected to be, terminated early, the Operating Partnership evaluates the remaining useful lives of depreciable or amortizable assets in the asset group related to the lease that will be terminated (i.e., tenant improvements, above and below market lease intangibles, in-place lease value and leasing commissions). Based upon consideration of the facts and circumstances surrounding the termination, the Operating Partnership may write-off or accelerate the depreciation and amortization associated with the asset group. Such write-offs are included within Depreciation and amortization in the Combined Consolidated Statements of Operations.

Stock Based Compensation

In 2011 and 2013, prior to BPG’s IPO, certain employees of the Operating Partnership were granted long-term incentive awards which provide them with equity interests as an incentive to remain in the Operating Partnership’s service and align executives’ interests with those of BPG’s equity holders. The awards were granted by two of BPG’s current equity holders, BRE Retail Holdco L.P. and Blackstone Retail Transaction II Holdco L.P. (the “Partnerships”), in the form of Class B Units in each of the Partnerships. The awards were granted with service conditions and performance and market conditions.

In connection with the IPO, BPG's Board of Directors approved the 2013 Omnibus Incentive Plan (the “Plan”). The Plan provides for a maximum of 15,000,000 shares of the BPG's common stock to be issued for qualified and non-qualified options, stock appreciation rights, restricted stock and restricted stock units, OP Units in the Operating Partnership, performance awards and other stock-based awards.

- 20 -

The Operating Partnership accounts for equity awards in accordance with the Financial Accounting Standards Board (“FASB”) Stock Compensation guidance which requires that all share based payments to employees and non-employee directors be recognized in the statement of operations over the service period based on their fair value. Fair value is determined based on the type of award using either the grant date market price of the Operating Partnership’s stock, the Black-Scholes-Merton option-pricing model or a Monte Carlo simulation model. Share-based compensation expense is included in general and administrative in the Operating Partnership’s Combined Consolidated Statements of Operations.

Inflation

The majority of leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions contain clauses enabling us to receive percentage rents, which generally increase as prices rise but may be adversely impacted by tenant sales decreases, and/or escalation clauses which are typically related to increases in the consumer price index or similar inflation indices. In addition, we believe that many of our existing lease rates are below current market levels for comparable space and that upon renewal or re-rental such rates may be increased to be consistent with, or closer to, current market rates. This belief is based upon an analysis of relevant market conditions, including a comparison of comparable market rental rates, and upon the fact that many of our leases have been in place for a number of years and may not contain escalation clauses sufficient to match the increase in market rental rates over such time. Most of our leases require the tenant to pay its share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, we periodically evaluate our exposure to interest rate fluctuations, and may enter into interest rate protection agreements which mitigate, but do not eliminate, the effect of changes in interest rates on our floating rate loans.

In the normal course of business we also face risks that are either non-financial or non-qualitative. Such risks principally include credit risks and legal risks. For a discussion of other factors which may adversely affect our liquidity and capital resources, please see the section titled “Risk Factors” in Brixmor Property Group Inc.'s annual report on Form 10-K for the fiscal year ended December 31, 2013.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of December 31, 2013.

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EX-99.3

Exhibit 99.3

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Brixmor Operating Partnership LP and Subsidiaries

For The Nine Months Ended September 30, 2014 and 2013

BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
CONDENSED CONSOLIDATED STATEMENTS
Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	2
Condensed Consolidated Statements of Operations for the nine months ended September 30, 2014 and 2013	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2014 and 2013	4
Condensed Consolidated Statement of Changes in Capital for the nine months ended September 30, 2014 and 2013	5
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013	6
Notes to Combined Consolidated Financial Statements	7

- 1 -

BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except unit information)
	September 30, 2014			December 31, 2013
Assets
Real estate
Land	$	1,998,837		$	2,055,802
Buildings and improvements	8,751,020			8,781,926
	10,749,857			10,837,728
Accumulated depreciation and amortization	(1,452,732		)	(1,190,170		)
Real estate, net	9,297,125			9,647,558
Investments in and advances to unconsolidated joint ventures	5,216			9,205
Cash and cash equivalents	92,607			113,006
Restricted cash	56,240			75,457
Marketable securities	21,020			21,907
Receivables, net	170,615			178,505
Deferred charges and prepaid expenses, net	118,933			105,522
Other assets	13,298			19,650
Total assets	$	9,775,054		$	10,170,810
Liabilities
Debt obligations, net	$	5,933,358		$	5,981,289
Financing liabilities, net	121,470			175,111
Accounts payable, accrued expenses and other liabilities	677,699			709,519
Total liabilities	6,732,527			6,865,919
Redeemable non-controlling interests	21,467			21,467
Commitments and contingencies	—			—
Capital
Partnership common units; 304,230,758 units outstanding	3,024,914			3,108,398
Series A interest	—			180,386
Accumulated other comprehensive loss	(3,854		)	(6,797		)
Total partners' capital	3,021,060			3,281,987
Non-controlling interests	—			1,437
Total capital	3,021,060			3,283,424
Total liabilities and capital	$	9,775,054		$	10,170,810
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2014			2013
Revenues
Rental income	$	718,240		$	654,079
Expense reimbursements	197,835			179,534
Other revenues	6,290			8,006
Total revenues	922,365			841,619
Operating expenses
Operating costs	95,595			85,542
Real estate taxes	132,650			124,711
Depreciation and amortization	334,084			328,878
Provision for doubtful accounts	8,636			7,956
Impairment of real estate assets	—			1,531
General and administrative	59,221			65,386
Total operating expenses	630,186			614,004
Other income (expense)
Dividends and interest	431			621
Interest expense	(199,464		)	(270,845		)
Gain on sale of real estate assets and acquisition of joint venture interest	378			2,223
Gain (loss) on extinguishment of debt, net	(2,573		)	(17,783		)
Other	(5,335		)	(8,098		)
Total other income (expense)	(206,563		)	(293,882		)
Income (loss) before equity in income of unconsolidated joint ventures	85,616			(66,267		)
Equity in income of unconsolidated joint ventures	248			1,001
Gain on disposition of investments in unconsolidated joint ventures	1,820			—
Income (loss) from continuing operations	87,684			(65,266		)
Discontinued operations
Income (loss) from discontinued operations	4,787			(892		)
Gain on disposition of operating properties	14,426			2,631
Impairment of real estate held for sale	—			(43,323		)
Income (loss) from discontinued operations	19,213			(41,584		)
Net income (loss)	106,897			(106,850		)
Non-controlling interests
Net income attributable to non-controlling interests	(966		)	(1,018		)
Net income (loss) attributable to Brixmor Operating Partnership LP	$	105,931		$	(107,868	)
Net loss attributable to:
Series A interest	$	21,014		$	—
Partnership common units	84,917			(107,868		)
Net income (loss) attributable to Brixmor Operating Partnership LP	$	105,931		$	(107,868	)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2014			2013
Net income (loss)	$	106,897		$	(106,850	)
Other comprehensive income (loss)
Unrealized gain (loss) on interest rate hedges	2,941			(7,720		)
Unrealized gain (loss) on marketable securities	2			38
Comprehensive income (loss)	109,840			(114,532		)
Comprehensive income attributable to non-controlling interests	(966		)	(1,018		)
Comprehensive income (loss) attributable to Brixmor Operating Partnership LP	$	108,874		$	(115,550	)
Comprehensive income (loss) attributable to:
Series A interest	21,014			—
Partnership common units	87,860			(115,550		)
Comprehensive income (loss) attributable to Brixmor Operating Partnership LP	$	108,874		$	(115,550	)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

- 4 -

BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL
(Unaudited, in thousands)
	Partnership Common Units			Series A Interest			Accumulated Other Comprehensive Income (Loss)			Non-controlling Interests			Total
Beginning balance, January 1, 2014	$	3,108,398		$	180,386		$	(6,797	)	$	1,437		$	3,283,424
Distribution to partners	(182,079		)	—			—			—			(182,079		)
Redemption of Series A	6,222			(201,400		)	—			—			(195,178		)
Equity based compensation expense	7,019			—			—			—			7,019
Acquisition of non-controlling interests	437			—			—			(1,437		)	(1,000		)
Change in value of credit swap liability	—			—			2,941			—			2,941
Unrealized gain on marketable securities	—			—			2			—			2
Net income	84,917			21,014			—			—			105,931
Ending balance, September 30, 2014	$	3,024,914		$	—		$	(3,854	)	$	—		$	3,021,060
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Nine Months Ended September 30,
	2014			2013
Operating activities:
Net income (loss)	$	106,897		$	(106,850	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	334,515			338,379
Debt premium and discount amortization	(15,524		)	(16,619		)
Deferred financing cost amortization	6,708			8,703
Above- and below-market lease intangible amortization	(35,090		)	(39,051		)
Provisions of impairment	—			44,854
Gain on disposition of operating properties, disposition of investments in unconsolidated joint ventures and acquisition of joint venture interest	(16,624		)	(4,854		)
Equity based compensation	7,019			3,661
Other	(214		)	(1,002		)
(Gain) loss on extinguishment of debt, net	(4,245		)	17,788
Changes in operating assets and liabilities:
Restricted cash	11,007			5,244
Receivables	6,513			(21,495		)
Deferred charges and prepaid expenses	(29,787		)	(25,288		)
Other assets	357			(1,820		)
Accounts payable, accrued expenses and other liabilities	760			12,978
Net cash provided by operating activities	372,292			214,628
Investing activities:
Improvements to and investments in real estate assets	(146,499		)	(104,627		)
Acquisitions of real estate assets	—			(23,792		)
Proceeds from sales of real estate assets	2,778			44,866
Distributions from unconsolidated joint ventures	187			455
Contributions to unconsolidated joint ventures	—			(3		)
Change in restricted cash attributable to investing activities	7,328			4,231
Purchase of marketable securities	(20,250		)	(10,662		)
Proceeds from sale of marketable securities	21,414			12,609
Net cash used in investing activities	(135,042		)	(76,923		)
Financing activities:
Repayment of debt obligations and financing liabilities	(827,460		)	(2,479,830		)
Proceeds from debt obligations	—			57,000
Repayment of borrowings under unsecured revolving credit facility	(675,047		)	—
Proceeds from borrowings under unsecured credit facility	826,343			2,379,108
Proceeds from unsecured term loan	600,000			—
Deferred financing costs	(2,995		)	(21,223		)
Partner distributions	(177,524		)	(33,362		)
Distributions to non-controlling interests and other	(966		)	(1,004		)
Net cash used in financing activities	(257,649		)	(99,311		)
Change in cash and cash equivalents	(20,399		)	38,394
Cash and cash equivalents at beginning of period	113,006			97,481
Cash and cash equivalents at end of period	$	92,607		$	135,875
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, in thousands, unless otherwise stated)

1. Nature of Business and Financial Statement Presentation

Description of Business

Brixmor Operating Partnership LP and its consolidated subsidiaries (the “Operating Partnership”) were formed for the purpose of owning, operating and managing grocery-anchored community and neighborhood shopping centers throughout the United States.

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

Initial Public Offering and IPO Property Transfers

On November 4, 2013, Brixmor Property Group Inc. (“BPG”), which owned 80.58% of the Operating Partnership as of September 30, 2014, completed an initial public offering (“IPO”) in which it sold approximately 47.4 million shares of its common stock, at an IPO price of $20.00 per share. BPG received net proceeds from the sale of shares in BPG's IPO of approximately $893.9 million after deducting $54.9 million in underwriting discounts, expenses and transaction costs. Of the total proceeds received, $824.7 million was used to pay down amounts outstanding under the Operating Partnership's Unsecured Credit Facility (see Note 5 for additional information).

In connection with BPG's IPO, the Operating Partnership acquired interests in 43 properties (the “Acquired Properties”) from certain investment funds affiliated with The Blackstone Group L.P. (together with such affiliated funds, “Blackstone”) in exchange for 15.9 million common units of partnership interest (the “OP Units”) in the Operating Partnership having a value equivalent to the value of the Acquired Properties. In connection with the acquisition of the Acquired Properties, the Operating Partnership repaid $66.6 million of indebtedness to Blackstone attributable to certain of the Acquired Properties with a portion of the net proceeds of BPG's IPO. During the nine months ended September 30, 2014, the Operating Partnership repaid the remaining $7.6 million of indebtedness to Blackstone attributable to certain of the Acquired Properties.

Also in connection with BPG's IPO the Operating Partnership created a separate series of interest in the Operating Partnership (“Series A”) that allocated to certain funds affiliated with The Blackstone Group L.P. and Centerbridge Partners, L.P. (owners of the Operating Partnership prior to BPG's IPO) (the “pre-IPO owners”) all of the economic consequences of ownership of the Operating Partnership’s interest in 47 properties that the Operating Partnership historically held in its portfolio (the “Non-Core Properties”).  During 2013, the Operating Partnership disposed of 11 of the Non-Core Properties. During the nine months ended September 30, 2014, the Operating Partnership caused its ownership interests in all but one of the remaining 36 Non-Core Properties to be transferred to the pre-IPO owners. The 35 Non-Core Properties distributed to the pre-IPO owners had a carrying value of $179.0 million and a fair value of $195.2 million resulting in a gain of $16.2 million. The one remaining Non-Core Property was transferred to the lender in satisfaction of the property's mortgage balance and, following such transfer, on March 28, 2014, the Series A was terminated. The operating results of the 44 wholly-owned Non-Core Properties, including the gain on disposition, are included in Discontinued operations on the unaudited Condensed Consolidated Statements of Operations. The operating results of the remaining three Non-Core Properties, in which the Operating Partnership owned a 20% interest, are included in Equity in income of unconsolidated joint ventures within continuing operations, through their distribution date, on the unaudited Condensed Consolidated Statements of Operations.

Basis of Presentation

The financial information included herein reflects the Operating Partnership's consolidated financial position as of September 30, 2014 and December 31, 2013, and the consolidated results of its operations and cash flows from the nine months ended September 30, 2014, and 2013.

Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Brixmor Property Group Inc., its wholly owned subsidiaries and all other entities in which it has a controlling financial interest. The

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portions of consolidated entities not owned by the Operating Partnership are presented as non-controlling interests as of and during the periods presented. All intercompany transactions have been eliminated.

Subsequent Events

In preparing the unaudited Condensed Consolidated Financial Statements, the Operating Partnership has evaluated events and transactions occurring after September 30, 2014 for recognition or disclosure purposes. Based on this evaluation, there were no subsequent events from September 30, 2014 through the date the financial statements were issued other than those disclosed in Notes 6 and 7.

Income Taxes

The Operating Partnership is organized as a limited partnership and is generally not subject to federal income tax. Accordingly, no provision for federal income taxes has been reflected in the accompanying Condensed Consolidated Financial Statements. The Operating Partnership, however, may be subject to certain state and local income taxes or franchise taxes.

BPG, the Operating Partnership’s ultimate parent has made an election to qualify, and believes it is operating so as to qualify, as a Real Estate Investment Trust (“REIT”) for United States federal income tax purposes. Generally, a REIT is entitled to a deduction for dividends that it pays and therefore will not be subject to United States federal corporate income tax on its net taxable income that is currently distributed to its stockholders. To qualify as a REIT, certain income, asset, distribution, and organization tests must be satisfied. Although the Operating Partnership is not classified as a REIT, it operates under REIT regulations so as to enable its ultimate parent to continue to qualify for REIT status.

New Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU No. 2014-08 amends the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The amendments require expanded disclosures for discontinued operations that would provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations reporting. ASU No. 2014-08 is to be applied prospectively to all disposals (or classifications as held for sale) of components of an entity and all businesses or nonprofit activities that, on acquisition, are classified as held for sale that occur within fiscal years, and interim periods within those years, beginning after December 15, 2014. The adoption of ASU 2014-08 is expected to eliminate discontinued operations reporting for disposals that are routine in nature and do not change the Operating Partnership’s strategy.

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

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

2.    Acquisition of Real Estate

During the nine months ended September 30, 2014, the Operating Partnership did not make any acquisitions of real estate.

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During the nine months ended September 30, 2013, the Operating Partnership acquired one building, located adjacent to one of the Operating Partnership's existing shopping centers, for approximately $5.1 million and acquired the remaining 70% partnership interest in Arapahoe Crossings, L.P. that was previously owned by an unaffiliated third party for a net purchase price of $18.7 million. In connection with the acquisition, a gain of $1.1 million on the step-up of the Operating Partnership's original 30% interest was recognized. The acquisition of the partnership interest included the assumption of debt obligations of approximately $41.8 million, which were paid off with the proceeds from the Operating Partnership's Unsecured Credit Facility (see Note 5 for additional information).

3.    Discontinued Operations and Assets Held for Sale

The Operating Partnership reports as discontinued operations real estate assets that are held for sale as of the end of the current period and real estate assets that were disposed of during the period. The operating results of the real estate properties are included in a separate component of income on the unaudited Condensed Consolidated Statements of Operations under Discontinued operations. This has resulted in certain reclassifications for the nine months ended September 30, 2013.

	Nine Months Ended September 30,
	2014			2013
Discontinued operations:
Revenues	$	267		$	28,004
Operating expenses	(1,293		)	(21,992		)
Other income (expense), net	5,813			(6,904		)
Income (loss) from discontinued operating properties	4,787			(892		)
Gain on disposition of operating properties	14,426			2,631
Impairment on real estate held for sale	—			(43,323		)
Income (loss) from discontinued operations	$	19,213		$	(41,584	)

Discontinued operations includes the results of 51 shopping centers, including 44 Non-Core Properties, disposed of during the year ended December 31, 2013 and the nine months ended September 30, 2014.

As of September 30, 2014, the Operating Partnership did not have any properties classified as held for sale. As of December 31, 2013, the Operating Partnership had one property classified as held for sale and it is presented in Other assets within the unaudited Condensed Consolidated Balance Sheets. The property had a carrying value of approximately $5.5 million as of December 31, 2013.

During the nine months ended September 30, 2014, one of the Non-Core Properties was transferred to the lender in satisfaction of the property's mortgage balance resulting in a $6.1 million gain on extinguishment of debt.

During the nine months ended September 30, 2013, the Operating Partnership disposed of ten shopping centers for aggregate proceeds of $40.5 million.

During the nine months ended September 30, 2014, the Operating Partnership did not recognize any provisions for impairment. During the nine months ended September 30, 2013, the Operating Partnership recognized provisions for impairment of $43.3 million.

For purposes of measuring this provision, fair value was determined based on either of the following: (i) contracts with buyers or purchase offers from potential buyers, adjusted to reflect associated disposition costs; or (ii) internal analysis. The Operating Partnership believes the inputs utilized were reasonable in the context of applicable market conditions; however, due to the significance of the unobservable inputs to the overall fair value measures, including forecasted revenues and expenses based upon market conditions and expectations for growth, the Operating Partnership determined that such fair value measurements were classified within Level 3 of the fair value hierarchy.

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4.    Real Estate

The Operating Partnership's components of Real estate, net consisted of the following:

	September 30, 2014			December 31, 2013
Land	$	1,998,837		$	2,055,802
Buildings and improvements:
Building	7,327,482			7,436,072
Building and tenant improvements	500,712			373,907
Other rental property (1)	922,826			971,947
	10,749,857			10,837,728
Accumulated depreciation and amortization	(1,452,732		)	(1,190,170		)
Total	$	9,297,125		$	9,647,558

⁽¹⁾  At September 30, 2014 and December 31, 2013, Other rental property consisted of intangible assets including: (i) $838.0 million and $881.9 million, respectively, of in-place lease value, (ii) $84.8 million and $90.0 million, respectively, of above-market leases, and (iii) $526.3 million and $462.5 million, respectively, of accumulated amortization. These intangible assets are amortized over the term of each related lease.

In addition, at September 30, 2014 and December 31, 2013, the Operating Partnership had intangible liabilities relating to below-market leases of $529.6 million and $541.8 million, respectively, and accumulated amortization of $190.0 million and $153.6 million, respectively. These intangible liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the Operating Partnership's unaudited Condensed Consolidated Balance Sheets, are amortized over the term of each related lease, including any renewal periods, with fixed rentals that are considered to be below market.

Amortization expense associated with the above mentioned intangible assets and liabilities recognized for the nine months ended September 30, 2014 and 2013 was $58.4 million and $67.6 million, respectively. The estimated net amortization expense associated with the Operating Partnership's intangible assets and liabilities for the next five years is as follows:

Year ending December 31,	Estimated net amortization expense
2014 (remaining three months)	$	15,859
2015	45,828
2016	22,034
2017	9,804
2018	3,655

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

During the nine months ended September 30, 2014, the Operating Partnership did not recognize any provisions for impairment, excluding any provisions for impairment included in Discontinued operations. During the nine months ended September 30, 2013, the Operating Partnership recognized provisions for impairment of $1.5 million, excluding provisions for impairment included in Discontinued operations.

For purposes of measuring this provision, fair value was determined based upon contracts with buyers, adjusted to reflect associated disposition costs.

5.    Financial Instruments - Derivatives and Hedging

The Operating Partnership's use of derivative instruments is limited to the utilization of interest rate agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. In certain situations, the Operating Partnership has entered into derivative financial instruments such as interest rate swap and interest rate cap agreements to manage interest rate risk exposure arising from variable rate debt transactions that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The

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Operating Partnership’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements.

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Operating Partnership making fixed-rate payments over the life of the agreements without changing the underlying notional amount. During the nine months ended September 30, 2014, the Operating Partnership did not enter into any new interest rate swap agreements. During the year ended December 31, 2013, the Operating Partnership entered into five forward starting interest rate swap agreements with a notional amount of $1,500.0 million to hedge the variable cash flows associated with third party debt.

A detail of the Operating Partnership’s interest rate derivatives designated as cash flow hedges outstanding as of September 30, 2014 is as follows:

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

The Operating Partnership has elected to present its interest rate derivatives on its unaudited Condensed Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. A detail of the Operating Partnership’s fair value of interest rate derivatives on a gross and net basis as of September 30, 2014 and December 31, 2013, respectively, is as follows:

	Fair Value of Derivative Instruments
Interest rate swaps classified as:	September 30, 2014			December 31, 2013
Gross derivative assets	$	—		$	—
Gross derivative liabilities	(3,854		)	(6,795		)
Net derivative liability	$	(3,854	)	$	(6,795	)

All of the Operating Partnership’s outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in other comprehensive income (“OCI”) and is reclassified into earnings as interest expense in the period that the hedged forecasted transaction affects earnings. The effective portion of the Operating Partnership’s interest rate swaps that was recorded in the accompanying unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2014 is as follows:

Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps and Caps)	Nine Months Ended September 30, 2014
Amount of gain (loss) recognized in OCI on derivative	$	(4,531	)
Amount of loss reclassified from accumulated OCI into interest expense	$	(7,472	)

The Operating Partnership estimates that approximately $8.4 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the next twelve months. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Operating Partnership’s cash flow hedges during the nine months ended September 30, 2014 and the year ended December 31, 2013.

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

The Operating Partnership does not use derivatives for trading or speculative purposes. Derivatives not designated as hedges are used to manage the Operating Partnership’s exposure to interest rate movements but do not meet the strict hedge accounting requirements. The Operating Partnership’s only non-designated interest rate derivatives held as of September 30, 2014 and December 31, 2013 were interest rate caps. Interest rate caps involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. As of September 30, 2014 and December 31, 2013, the fair value of these interest rate caps was nominal,

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and, during the nine months ended September 30, 2014, and 2013, no payments were received from the respective counterparties.

A detail of the Operating Partnership’s non-designated interest rate derivatives outstanding as of September 30, 2014 is as follows:

	Number of Instruments	Notional Amount
Interest Rate Caps	4	$	521,105

Credit-risk-related Contingent Features

The Operating Partnership has agreements with its derivative counterparties that contain a provision whereby if the Operating Partnership defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Operating Partnership could also be declared in default on its derivative obligations. If the Operating Partnership were to breach any of the contractual provisions of the derivative contracts, it would be required to settle its obligations under the agreements at their termination value including accrued interest, or approximately $4.7 million.

6.    Debt Obligations

As of September 30, 2014 and December 31, 2013, the Operating Partnership had the following indebtedness outstanding:

	Carrying Value as of
	September 30, 2014			December 31, 2013			Stated Interest Rates	Scheduled Maturity Date
Mortgage and secured loans(1)
Fixed rate mortgage and secured loans(2)	$	3,203,987		$	3,444,578		4.90% - 8.00%	2015 – 2021
Variable rate mortgage and secured loans	—			483,604			N/A	N/A
Total mortgage and secured loans	3,203,987			3,928,182
Net unamortized premium	73,333			93,077
Total mortgage and secured loans, net	$	3,277,320		$	4,021,259
Notes payables
Unsecured notes(3)(4)	$	293,657		$	353,617		5.25% - 7.97%	2015 - 2029
Net unamortized discount	(9,094		)	(13,766		)
Total notes payable, net	$	284,563		$	339,851
Unsecured Credit Facility(5)	$	1,771,475		$	1,620,179		1.69%	2017 – 2018
Unsecured Term Loan	600,000			—			1.59%	2019
Total debt obligations, net	$	5,933,358		$	5,981,289

(1) The Operating Partnership's mortgages and secured loans are collateralized by certain properties and the equity interests of certain subsidiaries. These properties had a carrying value as of September 30, 2014 of approximately $4.1 billion.

(2) The weighted average interest rate on the Operating Partnership’s fixed rate mortgage and secured loans was 5.95% as of September 30, 2014.

(3) The weighted average interest rate on the Operating Partnership’s unsecured notes was 5.75% as of September 30, 2014.

(4) The Operating Partnership had a one-time put repurchase right to certain unsecured notes that required the Operating Partnership to offer to repurchase the notes if tendered by holders (but did not require the holders to tender) for an amount equal to the principal amount plus accrued and unpaid interest on January 15, 2014. In January 2014, $57.7 million of these notes was tendered to, and repurchased by the Operating Partnership. The Operating Partnership also repaid an additional $2.2 million of the notes in separate transactions during the nine months ended September 30, 2014.

(5) The Unsecured Credit Facility consists of a $1.25 billion revolving credit facility and a $1.5 billion term loan facility. The Operating Partnership has in place five forward starting interest rate swap agreements that convert the floating interest rate on the $1.5 billion term loan facility to a fixed, combined interest rate of 0.844% plus an interest spread of 150 basis points.

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2014 Debt Transactions

On March 18, 2014, the Operating Partnership entered into an unsecured $600.0 million term loan (the “Term Loan”) which matures on March 18, 2019. The obligations under the Term Loan are guaranteed by both BPG Subsidiary Inc. (“BPG Sub”) and Brixmor OP GP LLC, the general partner of the Operating Partnership, (together, the “Parent Guarantors”). The Term Loan bears interest, at the Operating Partnership’s option, at a rate equal to a margin over either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus half of 1%, and (3) the LIBOR rate that would be payable on such day for a LIBOR rate loan with a one-month interest period plus 1% or (b) a LIBOR rate determined by reference to the BBA LIBOR rate for the interest period relevant to a particular borrowing. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans. Proceeds from borrowings under the Term Loan were used to repay outstanding borrowings on the Operating Partnership’s Unsecured Credit Facility.

On September 18, 2014, Brixmor LLC, an indirect subsidiary of the Operating Partnership, commenced a cash tender offer for $68.7 million of its unsecured notes at premiums ranging from 10.13% to 19.25% above par value. The unsecured notes have stated interest rates ranging from 6.90% to 7.97% and maturity dates ranging from August 14, 2026 to July 30, 2029. On October 17, 2014, upon completion of the tender offer, Brixmor LLC purchased $50.2 million principal amount of the unsecured notes.

In addition, during the nine months ended September 30, 2014, the Operating Partnership repaid $684.4 million of mortgages and secured loans and repaid $60.0 million of unsecured notes, resulting in a $2.6 million net loss on extinguishment of debt. These repayments were funded primarily from borrowings under the Operating Partnership’s Unsecured Credit Facility.

Pursuant to the terms of the Term Loan and Unsecured Credit Facility, the Operating Partnership among other things is subject to maintenance of various financial covenants. The Operating Partnership is currently in compliance with these covenants.

Debt Maturities

As of September 30, 2014 and December 31, 2013, the Operating Partnership had accrued interest of $24.0 million and $32.2 million outstanding, respectively. As of September 30, 2014, scheduled maturities of the Operating Partnership's outstanding debt obligations were as follows:

Year ending December 31,
2014 (remaining three months)	$	8,392
2015	726,304
2016	1,258,881
2017	622,233
2018	1,520,660
Thereafter	1,732,649
Total debt maturities	5,869,119
Net unamortized premiums on mortgages	73,333
Net unamortized discount on notes	(9,094		)
Total debt obligations	$	5,933,358

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7.     Financing Liabilities

As of September 30, 2014 and December 31, 2013, the Operating Partnership had the following financing liabilities outstanding:

	Carrying Value as of
	September 30, 2014		December 31, 2013		Stated Interest Rates	Scheduled Maturity Date
Financing Liabilities
Inland preferred interest (1)	$	121,470	$	130,966	11.00%	2015
Capital leases (2)	—		41,723		N/A	N/A
Total financing liabilities	121,470		172,689
Net unamortized premium	—		2,422
Total financing liabilities, net	$	121,470	$	175,111

(1) On December 6, 2010, the Operating Partnership formed a real estate venture with Inland American CP Investment, LLC (“Inland”). The Operating Partnership contributed 25 shopping centers with a fair value of approximately $471.0 million and Inland contributed cash of $121.5 million, resulting in Inland receiving a 70% ownership interest with a cumulative preferential share of cash flow generated by the shopping centers at an 11% stated return. The Operating Partnership received a 30% ownership interest, subordinated to Inland’s preferred interest. Due to the venture agreement providing Inland with the right to put its interest to the Operating Partnership for an amount of cash equal to the amount it contributed plus accrued interest beginning December 6, 2015, the Operating Partnership consolidates the real estate venture under the financing method which requires the amount Inland contributed to be reflected as a liability. The venture agreement also provided the Operating Partnership with the right to purchase Inland’s interest, beginning December 6, 2014, for an amount of cash determined on the same basis as described above. In October 2014, the Operating Partnership exercised its right to acquire Inland's interest and expects the transaction to close in December 2014.

(2) During the nine months ended September 30, 2014, the Operating Partnership exercised its option to purchase the underlying assets subject to the capital leases.

8.     Fair Value Disclosures

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

	September 30, 2014				December 31, 2013
	Carrying Amounts		Fair Value		Carrying Amounts		Fair Value
Mortgage and secured loans payable	$	3,277,320	$	3,448,809	$	4,021,259	$	4,179,640
Notes payable	284,563		320,238		339,851		371,393
Unsecured credit facility and term loan	2,371,475		2,371,475		1,620,179		1,620,179
Total debt obligations	$	5,933,358	$	6,140,522	$	5,981,289	$	6,171,212
Financing liabilities	$	121,470	$	121,470	$	175,111	$	175,111

The valuation methodology used to estimate the fair value of the Operating Partnership's fixed and variable-rate indebtedness and financing liabilities is based on discounted cash flows, with assumptions that include credit spreads, loan amounts and debt maturities. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition.

As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is included in GAAP that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs that are classified within Level 3 of the hierarchy).

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

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At September 30, 2014 and December 31, 2013, the fair values of the Operating Partnership’s marketable securities, valued based on quoted market prices, were classified within Level 1 of the fair value hierarchy. Conversely, at September 30, 2014 and December 31, 2013, the fair values of the Operating Partnership’s mortgage and secured loans, notes payable, financing liabilities and interest rate caps, valued based on discounted cash flow or other similar methodologies were classified within Level 3 of the fair value hierarchy.

9. Redeemable Non-controlling Interests

The redeemable non-controlling interests presented in these unaudited Condensed Consolidated Financial Statements relate to portions of a consolidated subsidiary held by non-controlling interest holders in a partnership that was formed to own certain real estate properties which were contributed to it in exchange for cash, the assumption of mortgage indebtedness and limited partnership units.

The changes in redeemable non-controlling interests are as follows:

	Nine Months Ended September 30, 2014			Year Ended December 31, 2013
Balance at beginning of period	$	21,467		$	21,467
Distributions to redeemable non-controlling interests	(966		)	(1,288		)
Preferred return	966			1,288
Balance at end of period	$	21,467		$	21,467

10. Stock Based Compensation

In 2011 and 2013 prior to BPG's IPO, certain employees of the Operating Partnership were granted long-term incentive awards which provided them with equity interests as an incentive to remain in the Operating Partnership’s service and align executives’ interests with those of the BPG's equity holders. The awards were granted to such employees by two of BPG's current equity holders, BRE Retail Holdco L.P. and Holdco II (the “Partnerships”), in the form of Class B Units in each of the Partnerships. The awards were granted with service, performance and market conditions. In connection with BPG's IPO, certain of these awards vested and the vested awards were exchanged for a combination of vested common shares of BPG and vested shares of BPG Sub. The remaining unvested Class B Units as of BPG's IPO effective date were exchanged for a combination of unvested restricted common shares of BPG and unvested restricted common shares of BPG Sub, (collectively, the “RSAs”). The RSAs are subject to the same vesting terms as those applicable to the exchanged Class B Units.

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

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

The Operating Partnership recognized $7.0 million and $3.7 million of equity based compensation expense for the nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014, the Operating Partnership had $22.2 million of total unrecognized compensation cost related to unvested stock compensation, including $5.8 million associated with a portion of the RSAs subject to performance and market conditions which vest on the date, if any, that the BPG's pre-IPO Owners receive cash proceeds resulting in a 15% internal rate of return on their investment in the BPG, subject to continued employment on such date. The remaining $16.4 million of unrecognized compensation cost

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related to unvested stock compensation is expected to be recognized over a weighted average period of approximately 2.1 years.

11. Earnings Per Unit

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

The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the nine months ended September 30, 2014 and 2013:

	Nine Months Ended September 30,
	2014			2013
Computation of Basic Earnings Per Unit:
Income (loss) from continuing operations	$	87,684		$	(65,266	)
Income attributable to non-controlling interests	(2,786		)	(1,018		)
Distributions on unvested restricted units	(805		)	—
Income (loss) from continuing operations attributable to partnership common units	84,093			(66,284		)
Income (loss) from discontinued operations, net of Series A interest	19			(41,584		)
Net income (loss) attributable to the Operating Partnership's common units for basic earnings per unit	$	84,112		$	(107,868	)
Weighted average number of vested common units outstanding - basic	302,407			238,834
Basic Earnings Per Unit Attributable to the Operating Partnership's Common Units:
Income (loss) from continuing operations	$	0.28		$	(0.28	)
Income (loss) from discontinued operations	—			(0.17		)
Net income (loss)	$	0.28		$	(0.45	)
Computation of Diluted Earnings Per Unit:
Income (loss) from continuing operations attributable to partnership common units	$	84,093		$	(66,284	)
Income (loss) from discontinued operations, net of Series A interest	19			(41,584		)
Net income (loss) attributable to the Operating Partnership's common units for diluted earnings per unit	$	84,112		$	(107,868	)
Weighted average common units outstanding - basic	302,407			238,834
Effect of dilutive securities:
Equity awards	1,139			—
Weighted average common units outstanding - diluted	303,546			238,834
Diluted Earnings Per Unit Attributable to the Operating Partnership's Common Units:
Income (loss) from continuing operations	$	0.28		$	(0.28	)
Income (loss) from discontinued operations	—			(0.17		)
Net income (loss)	$	0.28		$	(0.45	)

12.    Commitments and Contingencies

Leasing commitments

The Operating Partnership periodically enters into ground leases for neighborhood and community shopping centers which it operates and enters into office leases for administrative space. During the nine months ended September 30, 2014 and 2013, the Operating Partnership recognized rent expense associated with these leases of $7.1 million and

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$7.3 million, respectively. Minimum annual rental commitments associated with these leases during the next five years and thereafter are as follows: 2014, $2.7 million; 2015, $7.4 million; 2016, $7.0 million; 2017, $6.9 million; 2018, $6.5 million and thereafter, $98.3 million.

Insurance captive

In April 2007, the Operating Partnership formed a wholly owned captive insurance company, ERT CIC, LLC (“ERT CIC”) which underwrote the first layer of general liability insurance programs for the Operating Partnership’s wholly owned, majority owned and joint venture properties. The Operating Partnership formed ERT CIC as part of its overall risk management program and to stabilize insurance costs, manage exposure and recoup expenses through the functions of the captive program. The Operating Partnership capitalized ERT CIC in accordance with the applicable regulatory requirements. ERT CIC established annual premiums based on projections derived from the past loss experience of the Operating Partnership’s properties. ERT CIC engaged an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to ERT CIC may be adjusted based on this estimate and may be reimbursed by tenants pursuant to specific lease terms.

During 2012, the Operating Partnership replaced ERT-CIC with a newly formed, wholly owned captive insurance company, Brixmor Incap, LLC (“Incap”). Incap underwrites the first layer of general liability insurance programs for the Operating Partnership’s wholly owned, majority owned and joint venture properties. The Operating Partnership formed Incap as part of its overall risk management program and to stabilize insurance costs, manage exposure and recoup expenses through the functions of the captive program. The Operating Partnership has capitalized Incap in accordance with the applicable regulatory requirements. Incap established annual premiums based on projections derived from the past loss experience of the Operating Partnership’s properties. Incap has engaged an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to Incap may be adjusted based on this estimate and may be reimbursed by tenants pursuant to specific lease terms.

Environmental matters

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

Other legal matters

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

13.    Related-Party Transactions

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

As of September 30, 2014 and December 31, 2013, receivables from related parties were $4.2 million and $6.1 million, respectively, which are included in Receivables, net in the unaudited Condensed Consolidated Balance Sheets. As of September 30, 2014 and December 31, 2013, there were no material payables to related parties.

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EX-99.4

Exhibit 99.4

BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our Consolidated Financial Statements and related notes included in Exhibit 99.3 of this Form 8-K. Historical results and percentage relationships set forth in the Consolidated Statements of Operations and contained in the Consolidated Financial Statements and accompanying notes, including trends which might appear, should not be taken as indicative of future operations.

In this discussion, the terms “we,” “us,” “our” and the “Operating Partnership” refer to Brixmor Operating Partnership LP and its subsidiaries.

Executive Summary

Our Operating Partnership

We are a Delaware limited partnership that owns and operates the largest wholly owned portfolio of grocery-anchored community and neighborhood shopping centers in the United States. Our high quality national portfolio is diversified by geography, tenancy and retail format, and our shopping centers are primarily anchored by market-leading grocers.

The sole general partner of the Operating Partnership is Brixmor OP GP LLC, an entity that is wholly owned by BPG Subsidiary Inc. (“BPG Sub”). All of the outstanding common stock of BPG Subsidiary Inc. is owned by Brixmor Property Group Inc. (“BPG”), which is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “BRX.” The limited partners of the Operating Partnership are BPG Sub, and other limited partners consisting of certain investment funds affiliated with The Blackstone Group L.P. (together with such affiliates, “Blackstone” or our “Sponsor”) and current or former members of our management. BPG has made an election to qualify, and believes it is operating so as to qualify, as a Real Estate Investment Trust (“REIT”) for United States federal income tax purposes. Generally, a REIT is entitled to a deduction for dividends that it pays and therefore will not be subject to United States federal corporate income tax on its net taxable income that is currently distributed to its stockholders. To qualify as a REIT, certain income, asset, distribution, and organization tests must be satisfied. Although we are not classified as a REIT, we operate under REIT regulations so as to enable BPG to continue to qualify for REIT status.

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

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

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

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

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

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• Experienced Management - Senior members of our management team are experienced real estate operators with deep industry expertise and retailer relationships and have an average of 26 years of experience in the real estate industry and an average tenure of 14 years with the Operating Partnership.

Factors That May Influence our Future Results

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

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

Our operating expenses include property-related costs, including repairs and maintenance, roof repair, landscaping, parking lot repair, snow removal, utilities, property insurance costs, security, ground rent expense related to ground lease payments for which we are the lessee and various other property related costs. Increases in our operating expenses, to the extent they are not offset by revenue increases, impact our overall performance. For a further discussion of these and other factors that could impact our future results, performance or transactions, see Item 1A. “Risk Factors” in Brixmor Property Group Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Portfolio and Financial Highlights

• As of September 30, 2014, we owned interests in 522 shopping centers (the “Total Portfolio”), including 521 wholly owned shopping centers and one shopping center held through an unconsolidated joint venture.

• Billed occupancy for the Total Portfolio was 90.8%, 90.7% and 90.0% as of September 30, 2014, December 31, 2013 and December 31, 2012, respectively. Leased occupancy for the Total Portfolio was 92.7%, 92.4% and 91.3% as of September 30, 2014, December 31, 2013 and December 31, 2012, respectively.

• During the nine months ended September 30, 2014, we executed 1,616 leases in our Total Portfolio totaling 10.0 million square feet of GLA, including 610 new leases totaling 2.9 million square feet of GLA and 1,006 renewals totaling 7.1 million square feet of GLA. The ABR under the new leases increased 27.7% from the prior tenant’s ABR and increased 12.2% for both new and renewal leases on comparable space from the ABR under the prior leases. The average ABR per leased square foot of these new leases in our Total Portfolio is $13.46 and the average ABR per leased square foot of these new and renewal leases in our Total Portfolio is $12.42. The cost per square foot for tenant improvements and leasing commissions for new leases was $16.17 and $2.65, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.82 and $0.03, respectively.

• During 2013, we executed 2,244 leases in our Total Portfolio totaling 12.8 million square feet of GLA, including 787 new leases totaling 3.4 million square feet of GLA and 1,457 renewals totaling 9.4 million sq. ft. of GLA. The average ABR under the new leases increased 29.5% from the prior tenant’s ABR and increased 9.8% for both new and renewal leases on comparable space from the prior tenant’s ABR. The average ABR per leased square foot of these new leases in our IPO Portfolio is $13.69 and the average ABR per leased square foot of these new and renewal leases in our IPO Portfolio is $12.38. The cost per square foot for tenant improvements and leasing commissions for new leases was $12.58 and $2.98, respectively. The cost per square foot for tenant improvements and leasing commissions for renewal leases was $0.70 and $0.04, respectively.

• During 2012, we executed 2,273 leases in our Consolidated Portfolio totaling 12.8 million sq. ft. of GLA, including 715 new leases totaling 3.5 million sq. ft. of GLA and 1,558 renewals totaling 9.2 million sq. ft. The average ABR under the new leases increased 20.1% from the prior tenants' ABR and increased 6.2% for both new and renewal leases on comparable space from the prior tenants' ABR. The average ABR per leased sq. ft. of these new leases was $11.86 and the average ABR per leased sq. ft. of these new and renewal leases was $11.95. The cost per sq. ft. for tenant improvements and leasing commissions for new leases was $11.46 and $1.77, respectively. The cost per sq. ft. for tenant improvements and leasing commissions for renewal leases was $0.80 and $0.02, respectively.

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Disposition Activity

• In connection with the BPG's IPO, the Operating Partnership created a separate series of interest in the Operating Partnership that allocated to certain funds affiliated with The Blackstone Group L.P. and Centerbridge Partners, L.P. (owners of the Operating Partnership prior to BPG's IPO) (the “pre-IPO owners”) all of the economic consequences of ownership of the Operating Partnership's interest in certain properties that the Operating Partnership had historically held in its portfolio (the “Non-Core Properties”). During the nine months ended September 30, 2014, we transferred our ownership interests in 35 Non Core-Properties to the pre-IPO owners. The 35 Non-Core Properties distributed to the pre-IPO owners had a carrying value of $179.0 million and a fair value of $195.2 million, resulting in a gain of $16.2 million. The remaining Non-Core Property was transferred to the lender in satisfaction of the property's mortgage balance. In addition, we sold a building in one of our shopping centers for net proceeds of $2.8 million.

Results of Operations

Comparison of the Nine Months Ended September 30, 2014 to the Nine Months Ended September 30, 2013

Revenues (in thousands)

	Nine months ended September 30,
	2014		2013		$ Change
Revenues
Rental income	$	718,240	$	654,079	$	64,161
Expense reimbursements	197,835		179,534		18,301
Other revenues	6,290		8,006		(1,716		)
Total revenues	$	922,365	$	841,619	$	80,746

Rental income

The increase in rental income for the nine months ended September 30, 2014 of $64.2 million, as compared to the corresponding period in 2013, was primarily due to a $62.2 million increase in ABR driven by (i) an increase in billed occupancy from 90.2% as of September 30, 2013 to 90.8% as of September 30, 2014, (ii) an increase in leasing spreads of 12.2% for both new and renewal leases, and (iii) $42.1 million of ABR from the Acquired Properties, partially offset by (iv) a decrease in the amortization of above and below market lease intangibles and lease settlement income.

Expense reimbursements

The increase in expense reimbursements for the nine months ended September 30, 2014, of $18.3 million, as compared to the corresponding period in 2013, was primarily due to an increase in expense reimbursements related to the Acquired Properties and an increase in the recovery percentage for properties owned for the entirety of both periods to 86.8% for 2014, as compared to 85.1% for the same period in 2013. The increased percentage of recoveries from tenants is primarily attributable to increased occupancy of our portfolio coupled with reconciliation income due to year end billings.

Other revenues

The decrease in other revenues for the nine months ended September 30, 2014 of $1.7 million as compared to the corresponding period in 2013 was primarily due to a decrease in fee revenues resulting from the acquisition of the Acquired Properties at the time of the BPG's IPO, which were managed by the Operating Partnership prior to the BPG's IPO.

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Operating Expenses (in thousands)

	Nine months ended September 30,
	2014		2013		$ Change
Operating expenses
Operating costs	$	95,595	$	85,542	$	10,053
Real estate taxes	132,650		124,711		7,939
Depreciation and amortization	334,084		328,878		5,206
Provision for doubtful accounts	8,636		7,956		680
Impairment of real estate assets	—		1,531		(1,531		)
General and administrative	59,221		65,386		(6,165		)
Total operating expenses	$	630,186	$	614,004	$	16,182

Operating costs

The increase in operating costs for the nine months ended September 30, 2014 of $10.1 million, as compared to the corresponding period in 2013, was due to $6.0 million of operating costs for the Acquired Properties, increased insurance expenses, increased weather related expenses including snow removal expenses, utility expenses, roof and parking lot repairs and maintenance expenses.

Real estate taxes

The increase in real estate taxes for the nine months ended September 30, 2014 of $7.9 million, as compared to the corresponding period in 2013, was primarily due to the Acquired Properties and the purchase of 100% ownership in a previously unconsolidated joint venture.

Depreciation and amortization

The increase in depreciation and amortization for the nine months ended September 30, 2014 of $5.2 million, as compared to the corresponding period in 2013, was primarily due to $32.2 million of depreciation and amortization recorded in connection with the Acquired Properties, partially offset by a decrease in intangible asset amortization due to tenant lease expirations and lease terminations.

Provision for doubtful accounts

The increase in the provision for doubtful accounts for the nine months ended September 30, 2014 of $0.7 million, as compared to the corresponding period in 2013, was primarily due to the Acquired Properties.

Impairment of real estate assets

During the nine months ended September 30, 2014, we did not recognize any provisions for impairment. During the nine months ended September 30, 2013, we recognized provisions for impairment of $1.5 million relating to one land parcel. For purposes of measuring this provision, fair value was determined based upon contracts with buyers, adjusted to reflect associated disposition costs.

General and administrative

The decrease in general and administrative costs for the nine months ended September 30, 2014 of $6.2 million, as compared to the corresponding period in 2013, was primarily due to a $2.9 million decrease in expense associated with the acceleration of certain of our long term incentive plans in connection with BPG's IPO and a decrease in personnel related expenses associated with the realignment of certain corporate functions in 2013, partially offset by a $3.4 million increase in stock based compensation expense in 2014.

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Other Income and Expenses (in thousands)

	Nine months ended September 30,
	2014			2013			$ Change
Other income (expense)
Dividends and interest	$	431		$	621		$	(190	)
Interest expense	(199,464		)	(270,845		)	71,381
Gain on sale of real estate assets	378			2,223			(1,845		)
Gain (loss) on extinguishment of debt, net	(2,573		)	(17,783		)	15,210
Other	(5,335		)	(8,098		)	2,763
Total other income (expense)	$	(206,563	)	$	(293,882	)	$	87,319

Dividends and interest

Dividends and interest remained approximately the same for the nine months ended September 30, 2014, as compared to the corresponding period in 2013.

Interest expense

The decrease in interest expense for the nine months ended September 30, 2014 of $71.4 million, as compared to the corresponding period in 2013, was primarily due to the 2013 repayment of $2.6 billion of secured mortgage loans, unsecured notes and financing liabilities with a weighted-average interest rate of 5.71% and the 2014 repayment of $797.7 million of secured mortgages loans, unsecured notes and financing liabilities with a weighted-average interest rate of 4.67%, which decreased interest expense by $107.0 million, partially offset by an increase of $34.3 million of interest expense on our Unsecured Credit Facility and Term Loan. The secured mortgage loan and unsecured note repayments were financed primarily from proceeds of borrowings under our Unsecured Credit Facility and Term Loan which had a weighted average interest rate of 2.1% as of September 30, 2014 as well as from proceeds of our initial public offering.

Gain on sale of real estate assets

During the nine months ended September 30, 2014, we disposed of one building for net proceeds of $2.8 million, resulting in a gain of $0.4 million. During the nine months ended September 30, 2013, we disposed of two land parcel for net proceeds of $1.4 million, resulting in a gain of $1.1 million. In addition, the Operating Partnership purchased the remaining 70% interest in a shopping center held through an unconsolidated joint venture resulting in a gain of $1.1 million on the step-up of the original 30% interest.

Gain (loss) on extinguishment of debt, net

During the nine months ended September 30, 2014, we repaid $684.4 million of mortgage loans and repaid $60.0 million of unsecured notes, resulting in a $2.6 million net loss on extinguishment of debt. During the nine months ended September 30, 2013, we repaid $2.5 billion of mortgage loans, resulting in a $17.8 million net loss on extinguishment of debt.

Other

The decrease in other for the nine months ended September 30, 2014 of $2.8 million, as compared to the corresponding period in 2013, was primary due to a decrease in tenant litigation expenses and expenses related to BPG's IPO. In addition, during the nine months ended September 30, 2014, we had $2.6 million of income related to the settlement of a gain contingency associated with one of our properties, partially offset by $2.4 million of expense related to the termination of one of our corporate office leases.

Equity in Income of Unconsolidated Joint Ventures (in thousands)

	Nine months ended September 30,
	2014		2013		$ Change
Equity in income of unconsolidated joint ventures	$	248	$	1,001	$	(753	)
Gain on disposal of investments in unconsolidated joint ventures	$	1,820	$	—	$	1,820

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The decrease in equity in income of unconsolidated joint ventures for the nine months ended September 30, 2014 of $0.8 million, as compared to the corresponding period in 2013, was primarily due to the acquisition of the interests of an unconsolidated joint venture in 2013 and the disposal of our interests in three unconsolidated joint ventures during 2014, resulting in a gain of $1.8 million.

Discontinued Operations (in thousands)

	Nine months ended September 30,
	2014		2013			$ Change
Discontinued operations
Income (loss) from discontinued operations	$	4,787	$	(892	)	$	5,679
Gain on disposition of operating properties	14,426		2,631			11,795
Impairment of real estate held for sale	—		(43,323		)	43,323
Income (loss) from discontinued operations	$	19,213	$	(41,584	)	$	60,797

Income (loss) from discontinued operations

Results from discontinued operations include the results from the following: (i) 33 Non-Core Properties disposed of during the nine months ended September 30, 2014, and (ii) 18 shopping centers disposed of during 2013, including 11 Non-Core Properties. There were no properties classified as held for sale at September 30, 2014. The income from discontinued operations for the nine months ended September 30, 2014 includes a $6.1 million gain on extinguishment of debt related to one of the Non-Core Properties.

Gain on disposition of operating properties

During the nine months ended September 30, 2014, the gain on disposition of operating properties was attributable to the distribution of our interests in 35 Non-Core Properties to our pre-IPO owners. During the nine months ended September 30, 2013, we disposed of three properties for net proceeds of $10.7 million, resulting in a net gain of $2.6 million.

Impairment of real estate held for sale

During the nine months ended September 30, 2014, we did not recognize any provisions for impairment. During the nine months ended September 30, 2013, we recognized $43.3 million of provisions for impairment relating to 30 shopping centers and three land parcels. For purposes of measuring this provision, fair value was determined based on either of the following: (i) contracts with buyers or purchase offers from potential buyers, adjusted to reflect associated disposition costs; or (ii) internal analysis. The Operating Partnership believes the inputs utilized were reasonable in the context of applicable market conditions; however, due to the significance of the unobservable inputs to the overall fair value measures, including forecasted revenues and expenses based upon market conditions and expectations for growth, the Operating Partnership determined that such fair value measurements were classified within Level 3 of the fair value hierarchy.

Same Property Net Operating Income

Same Property NOI is calculated (using properties owned as of the end of both reporting periods and for the entirety of both periods excluding properties classified as discontinued operations), as rental income (minimum rent, percentage rents, tenant recoveries and other property income) less rental operating expenses (property operating expenses, real estate taxes and bad debt expense) of the properties owned by us. Same Property NOI excludes corporate level income (including transaction and other fees), lease termination income, straight-line rent and amortization of above-/below-market leases of the same property pool from the prior year reporting period to the current year reporting period.

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

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to financial results presented in accordance with GAAP. Computation of Same Property NOI may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs.

Comparison of the Nine Months Ended September 30, 2014 to the Nine Months Ended September 30, 2013

		Nine Months Ended September 30,
		2014			2013			Change
Number of properties		479			479			—
Percent billed		90.8		%	90.3		%	0.5%
Percent leased		92.7		%	92.2		%	0.5%
Revenues
	Rental income	$	626,909		$	607,368		$	19,541
	Expense reimbursements	187,465			180,861			6,604
	Percentage rents	4,481			4,968			(487		)
		818,855			793,197			25,658
Operating expenses
	Operating costs	(89,867		)	(87,114		)	(2,753		)
	Real estate taxes	(126,177		)	(125,428		)	(749		)
	Provisions for doubtful accounts	(8,174		)	(7,969		)	(205		)
		(224,218		)	(220,511		)	(3,707		)
Same property NOI		$	594,637		$	572,686		$	21,951

Same Property NOI increased $22.0 million or 3.8% for the nine months ended September 30, 2014, as compared to the same period in 2013, primarily due to (i) a $19.5 million increase in rental income driven by an increase in billed occupancy to 90.8% from 90.3% and (ii) an increase in the expense recovery percentage to 86.8% from 85.1% driven by increased occupancy of our portfolio coupled with reconciliation income due to year end billings. These increases were partially offset by increased weather related expenses including snow removal expenses, utility expenses, roof and parking lot repairs and maintenance expenses.

The following table provides a reconciliation of net loss attributable to the Brixmor Operating Partnership LP to Same Property NOI for the periods presented above (dollars in thousands):

	Nine Months Ended September 30,
	2014			2013
Net income (loss) attributable to Brixmor Operating Partnership LP	$	105,931		$	(107,868	)
Adjustments:
Revenue adjustments (1)	(51,226		)	(51,621		)
Depreciation and amortization	334,084			328,878
Impairment of real estate assets	—			1,531
General and administrative	59,221			65,386
Total other (income) expense	206,563			293,882
Equity in income of unconsolidated joint ventures	(248		)	(1,001		)
Gain on disposition of investments in unconsolidated joint ventures	(1,820		)	—
Pro rata share of same property NOI of unconsolidated joint ventures	547			545
(Income) loss from discontinued operations	(19,213		)	41,584
Net income (loss) attributable to non-controlling interests	966			1,018
Non-same property NOI	(40,168		)	352
Same property NOI	$	594,637		$	572,686

(1) Includes adjustments for lease settlement income, straight-line rents, above- and below-market rent amortization, net and fee

income from managed properties and unconsolidated joint ventures.

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Liquidity and Capital Resources

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

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

Sources

• cash and cash equivalents;

• operating cash flow;

• available borrowings under our existing revolving credit facility;

• issuance of long-term debt; and

• asset sales.

Uses

Short term:

• leasing costs and tenant improvements allowances;

• active anchor space repositioning/redevelopments;

• recurring maintenance capital expenditures;

• debt repayment requirements;

• corporate and administrative costs; and

• distribution payments.

Long term:

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

• acquisitions; and

• debt maturities.

During the nine months ended September 30, 2014, Moody's Investors Service assigned an investment grade issuer rating of Baa3 with a stable outlook to the Operating Partnership.

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

	Nine Months Ended September 30,
	2014			2013
Cash flows provided by operating activities	$	372,292		$	214,628
Cash flows used in investing activities	$	(135,042	)	$	(76,923	)
Cash flows provided by (used in) financing activities	$	(257,649	)	$	(99,311	)

Operating Activities

Cash and cash equivalents were $92.6 million and $113.0 million as of September 30, 2014 and December 31, 2013, respectively.

Our net cash flow provided by operating activities primarily consist of net income from property operations, adjusted for non-cash items including depreciation and amortization, gains and impairments, and equity based compensation expense.

For the nine months ended September 30, 2014, net cash flow provided by operating activities increased $157.7 million as compared to the corresponding period in 2013. The increase is primarily due to (i) an increase in Same Property NOI, (ii) increased NOI due to the acquisition of the Acquired Properties, (iii) a decrease in interest expense due to a reduction in our outstanding indebtedness as well as a decrease in the weighted average interest rate on outstanding indebtedness, (iv) a decrease in general and administrative expenses and (v) an increase in working capital due to an increase in cash flows from receivables and restricted cash, partially offset by a decrease in accounts payable accrued expenses and other liabilities due to timing of payments.

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Investing Activities

Net cash flow used in investing activities is impacted by the nature, timing and extent of improvements made to our shopping centers, allowances provided to our tenants, and our acquisition and disposition programs. Capital used to fund these activities, and the source thereof, can vary significantly from period to period based on, for example, negotiations with tenants and their willingness to pay higher base rents over the terms of their respective leases as well as the availability of operating cash flows. Net cash flow used in investing activities is also impacted by the level of recurring property capital expenditures in a given period. Recurring capital expenditures are costs to maintain properties and their common areas including new roofs, paving of parking lots and other general upkeep items. Recurring capital expenditures per square foot for the nine months ended September 30, 2014 and 2013, were $0.23 and $0.17, respectively.

For the nine months ended September 30, 2014, net cash flow used in investing activities increased $58.1 million as compared to the corresponding period in 2013. The increase was primarily due to a $42.1 million decrease in proceeds from sales of real estate assets and a $18.1 million increase in capital expenditures and investments in real estate assets, partially offset by a $3.1 million increase in restricted cash attributable to investing activities.

Currently, our anchor space repositioning/redevelopments in our Total Portfolio relate to 27 shopping centers for which we anticipate incurring approximately $99.4 million in improvements, of which $71.0 million had not yet been incurred as of September 30, 2014.

Financing Activities

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

For the nine months ended September 30, 2014, net cash used in financing activities increased $154.9 million as compared to the corresponding period in 2013. The increase was due to (i) an increase of $32.4 million of repayments of debt obligations, net of borrowings and (ii) an increase of $144.2 million in distributions to partners, partially offset by a decrease of $18.2 million in deferred financing costs.

Debt transactions

On March 18, 2014, the Operating Partnership entered into an unsecured $600.0 million term loan (the “Term Loan”) which matures on March 18, 2019. The obligations under the Term Loan are guaranteed by both BPG Subsidiary Inc. (“BPG Sub”) and Brixmor OP GP LLC, the general partner of the Operating Partnership, (together, the “Parent Guarantors”). The Term Loan bears interest, at the Operating Partnership’s option, at a rate equal to a margin over either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus half of 1%, and (3) the LIBOR rate that would be payable on such day for a LIBOR rate loan with a one-month interest period plus 1% or (b) a LIBOR rate determined by reference to the BBA LIBOR rate for the interest period relevant to a particular borrowing. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans. The margin on the Term Loan was 1.40% as of September 30, 2014. Pursuant to the terms of the Term Loan, the Operating Partnership among other things is subject to maintenance of various financial covenants. The Operating Partnership is currently in compliance with these covenants. Proceeds from the Term Loan were used to repay outstanding borrowings on the Operating Partnership’s Unsecured Credit Facility.

On September 18, 2014, Brixmor LLC, an indirect subsidiary of the Operating Partnership, commenced a cash tender offer for $68.7 million of its unsecured notes at premiums ranging from 10.13% to 19.25% above par value. The unsecured notes have stated interest rates ranging from 6.90% to 7.97% and maturity dates ranging from August 14, 2026 to July 30, 2029. On October 17, 2014, upon completion of the tender offer, Brixmor LLC purchased $50.2 million principal amount of the unsecured notes.

In addition, during the nine months ended September 30, 2014, the Operating Partnership repaid $684.4 million of mortgages and secured loans, repaid $60.0 million of unsecured notes, and repaid $53.3 million of financing liabilities, resulting in a net loss on extinguishment of $2.6 million. These repayments were funded primarily from borrowings under the Operating Partnership’s Unsecured Credit Facility.

During the remainder of 2014, we do not have any mortgage loans scheduled to mature and we have approximately $8.4 million of scheduled mortgage amortization payments. We currently intend to repay the $8.4 million of scheduled mortgage amortization payments using cash generated from operations.

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On July 16, 2013, the Operating Partnership entered into an unsecured credit facility (the “Unsecured Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Wells Fargo Bank, National Association, as syndication agents and Barclays Capital plc, Citibank, N.A., Deutsche Bank Securities Inc. and Royal Bank of Canada, as documentation agents.

Contractual Obligations

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

The following table summarizes our debt maturities (excluding options and fair market debt adjustments) and obligations under non-cancelable operating leases as of September 30, 2014.

Contractual Obligations	Payment due by period
(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt (1)	$	5,869,119	$	8,392	$	1,985,185	$	2,142,893	$	1,732,649
Interest payments (2)	968,092		68,701		451,970		271,940		175,481
Financing liabilities	121,470		—		121,470		—		—
Operating leases	128,778		2,716		14,393		13,344		98,325
Total	$	7,087,459	$	79,809	$	2,573,018	$	2,428,177	$	2,006,455

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

(2) We incur variable rate interest on $271.5 million and $600.0 million of debt related to the Unsecured Credit Facility and Term Loan, respectively. The margin associated with Unsecured Credit Facility borrowings is based on a total leverage based grid and ranges from 0.40% to 1.00%, for base rate loans, and 1.40% to 2.00%, for LIBOR rate loans. The margin on the Unsecured Credit Facility was 1.50% as of September 30, 2014. The margin associated with the Term Loan is based on a total leverage based grid and ranges from 0.35% to 0.75%, for base rate loans, and 1.35% to 1.75% for LIBOR rate loans. The margin on the Term Loan was 1.40% as of September 30, 2014.

Funds From Operations

FFO is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect funds from operations on the same basis.

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

We present FFO and FFO attributable to partners as we consider them important supplemental measures of our operating performance and we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. FFO and FFO attributable to partners should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of liquidity. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of FFO and FFO attributable to partners may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from FFO and FFO attributable to partners are significant components in understanding and addressing financial performance.

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The following table provides a reconciliation of net income (loss) to FFO and FFO attributable to partners is as follows (in thousands):

	Nine Months Ended September 30,
	2014			2013
Net income (loss)	$	106,897		$	(106,850	)
Gain on disposition of operating properties	(14,804		)	(2,631		)
Gain on disposition of unconsolidated joint ventures	(1,820		)	—
Depreciation and amortization-real estate related-continuing operations	332,286			327,370
Depreciation and amortization-real estate related-discontinued operations	431			9,467
Depreciation and amortization-real estate related-unconsolidated joint ventures	146			167
Impairment of operating properties	—			41,783
Impairment of unconsolidated joint ventures	—			—
FFO	423,136			269,306
Adjustments attributable to Series A interest and non-controlling interests not convertible into partnership common units	(6,200		)	(1,018		)
FFO attributable to partners	$	416,936		$	268,288

EBITDA and Adjusted EBITDA

Earnings before interest, tax depreciation and amortization (“EBITDA”) is calculated as the sum of net income (loss) in accordance with GAAP before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted for (i) acquisition related costs, (ii) gain (loss) on disposition of operating properties, (iii) impairment of real estate assets and real estate equity investments, (iv) gain (loss) on disposition of unconsolidated joint ventures, (v) gain (loss) on extinguishment of debt, and (vi) after adjustments attributable to Series A interest and non-controlling interests not convertible into partnership common units.

EBITDA and Adjusted EBITDA are supplemental, non-GAAP measures utilized in various financial ratios and are helpful to securities analysts, investors and other interested parties in the evaluation of REITs, as a measure of Brixmor’s operational performance because EBITDA and Adjusted EBITDA exclude various items that do not relate to or are not indicative of its operating performance. In addition, it includes the results of operations of real estate properties that have been sold or classified as real estate held for sale at the end of the reporting period. Accordingly, the use of EBITDA and Adjusted EBITDA in various ratios provides a meaningful performance measure as it relates to its ability to meet various coverage tests for the stated period.  EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as a measure of liquidity.

Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations and, accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of EBITDA and Adjusted EBITDA may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs. Investors are cautioned that items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and addressing financial performance.

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The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income (loss) (dollars in thousands):

	Nine Months Ended September 30,
	2014			2013
Net income (loss)	$	106,897		$	(106,850	)
Interest expense-continuing operations	199,464			270,845
Interest expense-discontinued operations	259			6,160
Interest expense-unconsolidated joint ventures	130			589
Federal and state taxes	2,951			2,850
Depreciation and amortization-continuing operations	334,084			328,878
Depreciation and amortization-discontinued operations	431			9,467
Depreciation and amortization-unconsolidated joint ventures	146			167
EBITDA	$	644,362		$	512,106
Acquisition-related costs	—			—
Gain on disposition of operating properties	(14,804		)	(2,631		)
Gain from development/land sales and acquisition of joint venture interests	—			(2,223		)
Gain on disposition of unconsolidated joint ventures	(1,820		)	—
Loss (gain) on extinguishment of debt, net	(3,501		)	18,509
Impairment of operating properties and land sales	—			1,531
Impairment of real estate held for sale	—			43,323
Impairments of real estate joint ventures	—			—
Adjustments to Series A interest and non-controlling interests not convertible into partnership common units	(381		)	(1,018		)
Total adjustments	(20,506		)	57,491
Adjusted EBITDA	$	623,856		$	569,597

Inflation

The majority of leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions contain clauses enabling us to receive percentage rents, which generally increase as prices rise but may be adversely impacted by tenant sales decreases, and/or escalation clauses which are typically related to increases in the consumer price index or similar inflation indices. In addition, we believe that many of our existing lease rates are below current market levels for comparable space and that upon renewal or re-rental such rates may be increased to be consistent with, or closer to, current market rates. This belief is based upon an analysis of relevant market conditions, including a comparison of comparable market rental rates, and upon the fact that many of our leases have been in place for a number of years and may not contain escalation clauses sufficient to match the increase in market rental rates over such time. Most of our leases require the tenant to pay its share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, we periodically evaluate our exposure to interest rate fluctuations, and may enter into interest rate protection agreements which mitigate, but do not eliminate, the effect of changes in interest rates on our floating rate loans.

In the normal course of business we also face risks that are either non-financial or non-qualitative. Such risks principally include credit risks and legal risks. For a discussion of other factors which may adversely affect our liquidity and capital resources, please see the section titled “Risk Factors” in Brixmor Property Group Inc.'s annual report on Form 10-K for the fiscal year ended December 31, 2013.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of September 30, 2014.

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