JBG SMITH Announces Third Quarter 2017 Results

CHEVY CHASE, Md.--()--JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today filed its Form 10-Q and reported results for the quarter ended September 30, 2017.

“net income (computed in accordance with GAAP), excluding gains (or losses) from sales of, or impairment charges related to, depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.”

Additional information regarding our results of operations, properties and tenants can be found in our Third Quarter 2017 Investor Report, which is posted on the investor relations section of our website at www.jbgsmith.com.

Third Quarter 2017 Financial Results

  • Net loss attributable to common shareholders was $(69.8) million, or $(0.61) per diluted share.
  • Funds From Operations (“FFO”) attributable to common shareholders was $(27.3) million, or $(0.24) per diluted share.
  • Core Funds From Operations (“Core FFO”) attributable to common shareholders was $54.8 million, or $0.48 per diluted share.
  • Note that our acquisition of the management business and certain assets and liabilities of The JBG Companies (the “JBG Assets”) has been accounted for as a business combination and the results from these operations have been included in our financial results commencing on July 18, 2017. Accordingly, these amounts exclude the net loss, FFO, and Core FFO from the JBG Assets for the period July 1, 2017 to July 17, 2017.

Operating Portfolio Highlights

Unless otherwise specified, for purposes of our operating portfolio highlights, we have combined the financial and operating information of the properties received from Vornado Realty Trust (the “Vornado Included Assets”) in the spin-off on July 17, 2017 and the JBG Assets as if the Vornado Included Assets and the JBG Assets had been combined since the beginning of the applicable periods.

  • Annualized Net Operating Income (“NOI”) was $362.2 million for the three months ended September 30, 2017, compared to $354.1 million for the three months ended June 30, 2017.
  • The operating office portfolio was 88.2% leased and 87.5% occupied as of September 30, 2017, compared to 87.5% and 86.2% as of June 30, 2017.
  • The operating multifamily portfolio was 96.2% leased and 94.6% occupied as of September 30, 2017, compared to 96.8% and 93.9% as of June 30, 2017.
  • The operating other portfolio (excluding the Crystal City Marriott Hotel) was 98.8% leased and 97.6% occupied as of September 30, 2017, compared to 96.3% and 96.3% as of June 30, 2017.
  • Executed approximately 206,000 square feet of office leases at JBG SMITH’s share, consisting of 19 new office leases, totaling approximately 111,000 square feet, and approximately 95,000 square feet of second generation leases, generating flat rent spreads on a GAAP basis and negative 2.1% on a cash basis.
  • Same Store Net Operating Income (“SSNOI”) increased 6.3% to $70.3 million for the three months ended September 30, 2017, compared to $66.1 million for the three months ended September 30, 2016 and 3.1% to $205.4 million for the nine months ended September 30, 2017, compared to $199.1 million for the nine months ended September 30, 2016. The increase in SSNOI is largely attributable to the expiration of rent abatements and higher rental revenue from lease commencements. The same store pool as of September 30, 2017 includes only the assets that were stabilized for the entirety of both periods being compared and does not include any JBG Assets. If the JBG Assets that had been stabilized for the entirety of both periods being compared had been included in the same store pool, the increase in SSNOI in 2017 would have been slightly higher in both comparison periods.

Development Portfolio Highlights

Under Construction

  • As of September 30, 2017, there were nine assets under construction (four office assets, four multifamily assets, and one other asset), consisting of 1.2 million square feet and 1,149 units both at our share.
  • During the third quarter, we commenced construction on one asset (Stonebridge at Potomac Town Center – Phase II).

Near-Term Development

  • As of September 30, 2017, there was one asset in near-term development, a multifamily asset, consisting of 303 units at our share.

Future Development Pipeline

  • As of September 30, 2017, there were 42 future development assets consisting of 17.6 million square feet of estimated potential density at our share.

Third-Party Asset Management and Real Estate Services Business

  • For the three months ended September 30, 2017, revenue from third-party real estate services, including reimbursements was $25.1 million. Our share of revenue from the third-party asset management and real estate services business was $14.8 million of which approximately $5.2 million came from property management fees, $5.9 million came from asset management fees, $1.2 million came from leasing fees, $1.6 million came from development fees, $0.7 million came from construction management fees, and $0.2 million came from other service revenue.
  • The general and administrative expenses allocated to the third-party asset management and real estate services business were $21.2 million for the three months ended September 30, 2017, or $10.8 million at our share.
  • These amounts exclude both revenue and allocated general and administrative expenses for the JBG Assets for the period July 1, 2017 to July 17, 2017.

Balance Sheet

  • We had $2.15 billion of debt ($2.52 billion including our share of debt of unconsolidated ventures) as of September 30, 2017. Of the $2.52 billion of debt at our share, approximately 42.0% was fixed-rate and approximately 58% was variable-rate.
  • As of September 30, 2017, our enterprise value was approximately $6.86 billion, comprised of 137.74 million common shares and units valued at $4.71 billion, and net debt at our share of $2.15 billion.
  • The weighted average interest rate of our debt was 3.73% at September 30, 2017.
  • As of September 30, 2017, we had $367.9 million of cash and cash equivalents and $1.23 billion of capacity under our credit facility.
  • Net Debt / Adjusted EBITDA at our share was 6.6x and our Net Debt / Total Enterprise Value was 31.3%.

Financing Activities

  • On July 18, 2017, we entered into a $1.4 billion credit facility, consisting of a $1.0 billion revolving credit facility with a four-year term, and two $200.0 million term loans with 5.5-year and 7-year terms, respectively.
  • Additionally, during the third quarter we:
    • Closed a $145.0 million construction loan on West Half, an under construction multifamily asset located in the Ballpark/Southeast submarket in Washington, DC. The loan has a four-year initial term and is interest-only at LIBOR + 2.85%.
    • Repaid approximately $181.7 million of secured debt, including:
      • A $74.3 million loan on 2011 Crystal Drive, an office asset in Crystal City, Virginia;
      • Two loans with an aggregate balance of approximately $28.4 million at 1900 N Street, an under-construction office asset in the CBD of Washington, DC;
      • Two loans with an aggregate balance of approximately $43.6 million at 1700 M Street, land in the future development pipeline;
      • A $15.0 million mezzanine loan at 7200 Wisconsin Avenue, an office asset in Bethesda, Maryland;
      • A $12.5 million loan at 4747 Bethesda Avenue, an office asset in Bethesda, Maryland, and
      • A $7.9 million loan at North End Retail, a retail asset located in the U Street/Shaw submarket in Washington, DC.
  • Subsequent to September 30, 2017, we:
    • Closed a $78.0 million loan on 1235 South Clark, an office asset in Crystal City, Virginia. The loan has a 10-year term and a fixed interest rate of 3.94%.
    • Closed a $110.0 million refinancing on Atlantic Plumbing, a multifamily asset in the U Street/Shaw submarket of Washington, DC. The loan has a 5-year term and a floating interest rate of LIBOR + 1.50%. A prior swap agreement has been novated to synthetically fix the interest rate through September 2020. At closing, $100.0 million was funded, which was used in part to repay the existing $88.4 million loan. We have the ability to draw an additional $10.0 million based on the asset’s performance.
    • Repaid a $67.3 million loan at 220 20th Street, a multifamily asset located in Crystal City, Virginia.
    • Entered into agreements in the specified notional amounts to swap variable interest rates to fixed rates on the following debt instruments:
      • $50.0 million related to our Tranche A-1 Term Loan;
      • $107.7 million related to our mortgage loan on RTC - West; and
      • $107.5 million related to our mortgage loan on 800 North Glebe Road.

Dividends

On November 9, 2017, we declared a dividend of $0.225 per common share, equating to an annualized dividend of $0.90 per common share. The dividend is payable on November 30, 2017 to common shareholders of record as of November 20, 2017.

About JBG SMITH

JBG SMITH is an S&P 400 company that owns, operates, invests in and develops assets concentrated in leading urban infill submarkets in and around Washington, DC. Our mixed-use operating portfolio comprises approximately 20 million square feet of high-quality office, multifamily and retail assets, 98% of which are Metro-served. With a focus on placemaking, we drive synergies across the portfolio and create amenity-rich, walkable neighborhoods. JBG SMITH’s future development pipeline includes 17.6 million square feet of potential development density. For additional information on JBG SMITH please visit www.jbgsmith.com.

Forward Looking Statements

Certain statements contained herein may constitute “forward-looking statements” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results of JBG SMITH Properties (“JBG SMITH” or the “Company”) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximate”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans”, “would”, “may” or similar expressions in this press release. We also note the following forward-looking statements: our expected annualized dividend per share and dividend yield, in the case of our construction and near-term development assets, the estimated square feet and units; and in the case of our future development assets, estimated potential development density. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forward looking statements and other risks and uncertainties, see “Risk Factors” and the Cautionary Statement Concerning Forward-Looking Statements in JBG SMITH’s Registration Statement on Form 10, as amended, filed with the Securities and Exchange Commission (the “SEC”) and declared effective on June 26, 2017 as well as the final Information Statement (the “Information Statement”) filed with the SEC as Exhibit 99.1 to our Current Report on Form 8-K filed on June 27, 2017. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements after the date hereof.

Pro Rata Information

We present certain financial information and metrics in this release “at JBG SMITH Share,” which refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures (collectively, “real estate ventures”) as applied to these financial measures and metrics. Financial information “at JBG SMITH Share” is calculated on an entity-by-entity basis by applying our percentage economic interest to each applicable line item of that entity’s financial information. “At JBG SMITH Share” information, which we also refer to as being “at share,” “our pro rata share” or “our share,” is not, and is not intended to be, a presentation in accordance with GAAP. Given that greater than 29% of our assets, as measured by total square feet, are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors important information regarding a significant component of our portfolio, its composition, performance and capitalization.

We do not control the unconsolidated real estate ventures and do not have a legal claim to our co-venturers’ share of assets, liabilities, revenue and expenses. The operating agreements of the unconsolidated real estate ventures generally allow each co-venturer to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions. For risks related to our real estate ventures, whether consolidated or unconsolidated, please refer to the risk factors contained in the Information Statement. The non-GAAP “at JBG SMITH Share” financial information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP.

Non-GAAP Financial Measures

This release includes non-GAAP financial measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why JBG SMITH’s management believes that the presentation of these measures provides useful information to investors regarding JBG SMITH’s financial condition and results of operations. Reconciliations of certain non-GAAP measures to the most directly comparable GAAP financial measure are included in this release. Our presentation of non-GAAP financial measures may not be comparable to similar non-GAAP measures used by other companies.

In addition to “at share” measures corresponding to each non-GAAP measure set forth below and the “at share” measure corresponding to third-party asset management and real estate services business revenue, the following non-GAAP measures are included in this release:

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA

Management uses EBITDA as a supplemental operating performance measure and believes it helps investors and lenders meaningfully evaluate and compare our operating performance from period to-period by removing from our operating results the impact of our capital structure (primarily interest charges from our consolidated outstanding debt and the impact of our interest rate swaps) and certain non-cash expenses (primarily depreciation and amortization on our assets). This supplemental measure may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA is not a substitute for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.

“Adjusted EBITDA,” a non-GAAP financial measure, represents EBITDA adjusted for items we believe are not representative of ongoing operating results, such as non-recurring transaction and other costs, gain (loss) on the extinguishment of debt, gain on the bargain purchase of a business, impairment of real estate and investments in unconsolidated joint ventures, share-based compensation expense related to the formation transaction, and the mark-to-market of interest rate swaps. We believe that adjusting such items not considered part of our comparable operations, provides a meaningful measure to evaluate and compare our performance from period-to-period.

Because EBITDA and Adjusted EBITDA have limitations as analytical tools, we use EBITDA and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results.

Funds from Operations ("FFO") and Core FFO

FFO is a non-GAAP financial measure computed in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as “net income (computed in accordance with GAAP), excluding gains (or losses) from sales of, or impairment charges related to, depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.”

"Core FFO" represents FFO adjusted to exclude items which we believe are not representative of ongoing operating results, such as transaction and other costs, gains (or losses) on extinguishment of debt, gain on the bargain purchase of a business, gains (or losses) on the disposal of non-depreciable assets, share-based compensation expense related to the Formation Transaction, and the mark-to-market of interest rate swaps.

We believe FFO and Core FFO are meaningful non-GAAP financial measures useful in comparing our levered operating performance from period to period and as compared to similar real estate companies because these non-GAAP measures exclude real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO and Core FFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO and Core FFO may not be comparable to similarly titled measures used by other companies.

Net Operating Income ("NOI") and Annualized NOI

“NOI” is a non-GAAP financial measure management uses to measure the operating performance of our assets and consists of property-related revenue (which includes base rent, tenant reimbursements and other operating revenue) less operating expenses and ground rent, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and amortization of acquired above-market leases and below-market ground lease intangibles. Annualized NOI represents NOI for the three months ended September 30, 2017 multiplied by four. Management believes Annualized NOI provides useful information in understanding JBG SMITH’s financial performance over a 12-month period, however, investors and other users are cautioned against attributing undue certainty to our calculation of Annualized NOI. Actual NOI for any 12-month period will depend on a number of factors beyond our ability to control or predict, including general capital markets and economic conditions, any bankruptcy, insolvency, default or other failure to pay rent by one or more of our tenants and the destruction of one or more of our assets due to terrorist attack, natural disaster or other casualty, among others. We do not undertake any obligation to update our calculation to reflect events or circumstances occurring after the date of this supplemental information package. There can be no assurance that the annualized NOI shown will reflect JBG SMITH’s actual results of operations over any 12-month period.

Same Store and Non-Same Store

“Same store” refers to the pool of assets that were stabilized for the entirety of both periods being compared, except for assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared. No JBG Assets are included in the same store pool.

 

CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS

   
in thousands, September 30,
2017
December 31,
2016
         
ASSETS    
Real estate, at cost:
Land and improvements $ 1,272,997 $ 939,592
Buildings and improvements 3,662,853 3,064,466
Construction in progress, including land 906,680   151,333  
5,842,530 4,155,391
Less accumulated depreciation (982,454 ) (930,769 )
Real estate, net 4,860,076 3,224,622
Cash and cash equivalents 367,896 29,000
Restricted cash 17,521 3,263
Tenant and other receivables, net 50,474 33,380
Deferred rent receivable, net 145,683 136,582
Investments in and advances to unconsolidated real estate ventures 284,986 45,776
Receivable from former parent 75,062
Other assets, net   288,391     112,955  
TOTAL ASSETS   $ 6,015,027     $ 3,660,640  
         
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY        
Liabilities:
Mortgages payable, net $ 1,977,674 $ 1,165,014
Revolving credit facility 115,751
Unsecured term loan, net 46,389
Payable to former parent 283,232
Accounts payable and accrued expenses 131,627 40,923
Other liabilities, net 100,774   49,487  
Total liabilities 2,372,215   1,538,656  
Commitments and contingencies
Redeemable noncontrolling interests 567,001
Total equity   3,075,811     2,121,984  
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY   $ 6,015,027     $ 3,660,640  
    __________________
Note: For complete financial statements, please refer to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2017.
 
 

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

   
in thousands, except per share data Three Months Ended September 30, Nine Months Ended September 30,
2017   2016 2017   2016
REVENUE
Property rentals $ 116,458 $ 103,265 $ 316,899 $ 299,497
Tenant reimbursements 9,593 10,231 27,161 28,428
Third-party real estate services, including reimbursements 25,141   8,297   38,881   24,617  
Other income 1,158   1,564   3,701   3,938  
Total revenue 152,350   123,357   386,642   356,480  
EXPENSES
Depreciation and amortization 43,951 31,377 109,726 98,291
Property operating 29,634 27,287 77,341 75,087
Real estate taxes 17,194 14,462 47,978 43,712
General and administrative:
Corporate and other 10,593 10,913 35,536 36,040
Third-party real estate services 21,178 4,779 30,362 14,272
Share-based compensation related to Formation Transaction 14,445 14,445
Transaction and other costs 104,095   1,528   115,173   1,528  
Total operating expenses 241,090   90,346   430,561   268,930  
OPERATING (LOSS) INCOME (88,740 ) 33,011 (43,919 ) 87,550
(Loss) income from unconsolidated real estate ventures (1,679 ) 584 (1,365 ) (952 )
Interest and other (loss) income, net (379 ) 749 1,366 2,292
Interest expense (15,309 ) (13,028 ) (43,813 ) (38,662 )
Loss on extinguishment of debt (689 ) (689 )
Gain on bargain purchase 27,771     27,771    
(LOSS) INCOME BEFORE INCOME TAX EXPENSE (79,025 ) 21,316 (60,649 ) 50,228
Income tax benefit (expense) 1,034   (302 ) 317   (884 )
NET (LOSS) INCOME (77,991 ) 21,014 (60,332 ) 49,344
Net loss attributable to redeemable noncontrolling interests JBG SMITH LP   8,160         2,481      

NET (LOSS) INCOME ATTRIBUTABLE TO JBG SMITH PROPERTIES

  $ (69,831 )   $ 21,014     $ (57,851 )   $ 49,344  
(LOSS) EARNINGS PER COMMON SHARE:
Basic $ (0.61 ) $ 0.21 $ (0.55 ) $ 0.49
Diluted $ (0.61 ) $ 0.21 $ (0.55 ) $ 0.49

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -

Basic and Diluted 114,744 100,571 105,347 100,571
    __________________
Note: For complete financial statements, please refer to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2017.
 
 

EBITDA AND ADJUSTED EBITDA (NON-GAAP)

 
Three Months Ended

dollars in thousands

September 30, 2017

 

     
EBITDA and Adjusted EBITDA      
Net loss

$

(77,991 )
Depreciation and amortization expense 43,951
Interest expense (1) 15,309
Income tax expense (1,034 )
Unconsolidated real estate ventures allocated share of above adjustments     9,151  
EBITDA   $ (10,614 )
Transaction and other costs 104,095
Loss on extinguishment of debt 689
Gain on bargain purchase (27,771 )
Share-based compensation related to Formation Transaction     14,445  
Adjusted EBITDA   $ 80,844  
       
Net Debt to Adjusted EBITDA (2)     6.6x
 

September 30,
2017

Net Debt (at JBG SMITH Share)
Consolidated indebtedness $ 2,140,037
Unconsolidated indebtedness

 

389,237

 

Total consolidated and unconsolidated indebtedness

 

2,529,274

Less: cash and cash equivalents

 

383,363

 
Net Debt (at JBG SMITH Share) $ 2,145,911  
    ____________________
Note: Excludes the financial information of the JBG Assets for the period July 1, 2017 to July 17, 2017.
 
(1) Interest expense includes amortization of deferred financing costs, premiums/discounts and the mark-to-market of interest rate swaps and caps.
(2) Adjusted EBITDA for the three months ended September 30, 2017 is annualized by multiplying by four.
 
 

FFO AND CORE FFO (NON-GAAP)

 
  Three Months Ended

in thousands, except per share data

September 30, 2017
     
FFO and Core FFO    
Net Loss attributable to JBG SMITH Properties $ (69,831 )
Net loss attributable to redeemable noncontrolling interests   (8,160 )
Net loss (77,991 )
Real estate depreciation and amortization 41,393
Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures     6,059  
FFO attributable to the operating partnership common units   $ (30,539 )
FFO attributable to redeemable noncontrolling interests 3,195
FFO attributable to diluted common shareholders (A) (27,344 )
 
FFO attributable to the operating partnership common units (30,539 )
Transaction and other costs 104,095
Loss on extinguishment of debt 689
Gain on bargain purchase (27,771 )
Share-based compensation related to Formation Transaction 14,445
Amortization of management contract intangible     1,753  
Core FFO attributable to the operating partnership common units   $ 62,672  
Core FFO attributable to redeemable noncontrolling interests (7,825 )
Core FFO attributable to diluted common shareholders (B) $ 54,847
FFO per diluted common share (A÷C) $ (0.24 )
Core FFO per diluted common share (B÷C) $ 0.48
Weighted average diluted shares (C) 114,744
    _______________
Note: Excludes net income (loss) from JBG Assets for the period July 1, 2017 to July 17, 2017.
 
 

NOI RECONCILIATIONS (NON-GAAP)

 
  Three Months Ended   Nine Months Ended

dollars in thousands

September 30, 2017 September 30, 2017
Net (loss) income attributable to JBG SMITH Properties $(69,831 ) $ (57,851 )
Add:
Depreciation and amortization expense 43,951 109,726
General and administrative expense:
Corporate and other 10,593 35,536
Third-party real estate services 21,178 30,362
Share-based compensation related to Formation Transaction 14,445 14,445
Transaction and other costs 104,095 115,173
Interest expense 15,309 43,813
Loss on extinguishment of debt 689 689
Income tax benefit (1,034 ) (317 )
Less:
Third-party real estate services, including reimbursements 25,141 38,881
Other income 1,158 3,701
(Loss) income from unconsolidated real estate ventures (1,679 ) (1,365 )
Interest and other (loss) income, net (379 ) 1,366
Gain on bargain purchase 27,771 27,771
Net loss attributable to redeemable noncontrolling interests 8,160     2,481  
Total 79,223     218,741  
Adjustment (1)   11,315       45,645  
NOI   $ 90,538     $ 264,386  
Non-same store NOI   20,266       59,029  
Same store NOI   $70,272     $ 205,357  
 
Number of properties in same store pool 36 36
    __________________
(1)   Adjustment to: (i) include the financial information of the JBG Assets as if the Combination had been completed as of the beginning of the periods presented; (ii) include proportionate share of NOI attributable to unconsolidated real estate ventures; (iii) include other income related to operating properties; (iv) exclude straight-line rent, above/below market lease amortization and lease incentive amortization; and (v) exclude NOI related to non-operating assets.
 
 

NOI RECONCILIATIONS (NON-GAAP)

 
  Three Months Ended   Nine Months Ended

dollars in thousands

September 30, 2016 September 30, 2016
Net (loss) income attributable to JBG SMITH Properties $ 21,014 $ 49,344
Add:
Depreciation and amortization expense 31,377 98,291
General and administrative expense:
Corporate and other 10,913 36,040
Third-party real estate services 4,779 14,272
Transaction and other costs 1,528 1,528
Interest expense 13,028 38,662
Income tax expense 302 884
Less:
Third-party real estate services, including reimbursements 8,297 24,617
Other income 1,564 3,938
Income (loss) from unconsolidated real estate ventures 584 (952 )
Interest and other income, net   749     2,292  
Total   71,747     209,126  
Adjustments (1)     10,492       30,762  
NOI   $ 82,238     $ 239,888  
Non-same store NOI     16,137       40,792  
Same store NOI   $ 66,102     $ 199,096  
 
Number of properties in same store pool 36 36
    __________________
(1)   Adjustment to: (i) include the financial information of the JBG Assets as if the Combination had been completed as of the beginning of the periods presented; (ii) include proportionate share of NOI attributable to unconsolidated real estate ventures; (iii) include other income related to operating properties; (iv) exclude straight-line rent, above/below market lease amortization and lease incentive amortization; and (v) exclude NOI related to non-operating assets.

Contacts

JBG SMITH
Jaime Marcus, 240-333-3643
SVP, Investor Relations
jmarcus@jbgsmith.com

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