NEWS RELEASE
CONTACT:
 
6110 Executive Blvd., Suite 800
William T. Camp
Rockville, Maryland 20852
Executive Vice President and
Tel 301-984-9400
Chief Financial Officer
Fax 301-984-9610
E-Mail: bcamp@writ.com
www.writ.com
 
 
 
 
October 25, 2012

WASHINGTON REAL ESTATE INVESTMENT TRUST ANNOUNCES
THIRD QUARTER FINANCIAL AND OPERATING RESULTS

Washington Real Estate Investment Trust (“WRIT” or the “Company”) (NYSE: WRE), a leading owner and operator of diversified properties in the Washington, D.C. region, reported financial and operating results today for the quarter ended September 30, 2012:

▪
Core Funds from Operations(1), defined as Funds from Operations(1) (“FFO”) excluding acquisition expense, gains or losses on extinguishment of debt and impairment, was $31.9 million, or $0.48 per diluted share for the quarter ended September 30, 2012, compared to $32.4 million, or $0.48 per diluted share for the prior year period. FFO for the quarter ended September 30, 2012 was $32.1 million, or $0.48 per share, compared to $30.8 million, or $0.46 per share, in the same period one year ago.

▪
Net income attributable to the controlling interests for the quarter ended September 30, 2012 was $9.6 million, or $0.14 per diluted share, compared to $63.0 million, or $0.95 per diluted share, in the same period one year ago. Included in third quarter 2012 and third quarter 2011 net income, respectively, was a $3.7 million, or $0.06 per share, and a $56.6 million, or $0.86 per share, gain on sale of real estate.

“With the completion of our $300 million 3.95% unsecured debt transaction this quarter, we paid down our line balances in full as well as a portion of our upcoming 2013 debt maturities. We believe we are well-positioned to execute on acquisition opportunities in the months and years ahead.  On the operations side, our diversified portfolio continues to produce stable results. We expect that the upcoming election will provide greater clarity for our market, so tenants and investors can once again assess risk and return to normal business decision-making,” said George F. "Skip" McKenzie, President and Chief Executive Officer of WRIT.

Operating Results

The Company's overall portfolio Net Operating Income (“NOI”)(2) was $50.2 million compared to $47.0 million in the same period one year ago and $50.6 million in the second quarter of 2012. Overall portfolio physical occupancy for the third quarter was 89.2%, compared to 89.0% in the same period one year ago and 89.3% in the second quarter of 2012.

Same-store(3) portfolio physical occupancy for the third quarter was 89.5%, compared to 90.5% in the same period one year ago. Sequentially, same-store physical occupancy decreased 20 basis points (bps) compared to the second quarter of 2012. Same-store portfolio NOI for the third quarter decreased 1.4% and rental rate growth was 1.3%


Washington Real Estate Investment Trust
Page 2 of 10


compared to the same period one year ago.

▪
Multifamily: 15.9% of Total NOI - Multifamily properties' same-store NOI for the third quarter increased 3.6% compared to the same period one year ago. Rental rate growth was 3.4% while same-store physical occupancy increased 80 bps to 94.8%. Sequentially, same-store physical occupancy remained unchanged compared to the second quarter of 2012.
▪
Office: 48.3% of Total NOI - Office properties' same-store NOI for the third quarter decreased 5.7% compared to the same period one year ago. Rental rate growth was 0.7% while same-store physical occupancy decreased 240 bps to 85.3%, primarily due to previously announced expirations and move-outs at 1140 Connecticut Avenue, 2000 M Street, 7900 Westpark and 6110 Executive Boulevard. Sequentially, same-store physical occupancy increased 20 bps compared to the second quarter of 2012.
▪
Medical: 14.7% of Total NOI - Medical office properties' same-store NOI for the third quarter decreased 3.1% compared to the same period one year ago. Rental rate growth was 1.4% while same-store physical occupancy decreased 320 bps to 88.0%, primarily due to move-outs at Alexandria Professional Center, Woodholme Medical Center and 8501 Arlington Boulevard. Sequentially, same-store physical occupancy decreased 170 bps compared to the second quarter of 2012.
▪
Retail: 21.1% of Total NOI - Retail properties' same-store NOI for the third quarter increased 5.9% compared to the same period one year ago. Rental rate growth was 0.9% while same-store physical occupancy increased 110 bps to 92.7%. Sequentially, same-store physical occupancy decreased 50 bps compared to the second quarter of 2012.

Leasing Activity

During the third quarter, WRIT signed commercial leases for 221,344 square feet with an average rental rate increase of 11.3% over expiring lease rates on a GAAP basis, an average lease term of 5.2 years, tenant improvement costs of $19.63 per square foot and leasing commissions and incentives of $12.15 per square foot.

▪
Rental rates for new and renewed office leases increased 11.7% to $36.35 per square foot, with $20.73 per square foot in tenant improvement costs and $14.86 per square foot in leasing commissions and incentives. Weighted average term for new and renewed leases was 4.8 years.

▪
Rental rates for new and renewed medical office leases increased 5.7% to $33.30 per square foot, with $27.65 per square foot in tenant improvement costs and $9.87 per square foot in leasing commissions and incentives. Weighted average term for new and renewed leases was 6.9 years.

▪
Rental rates for new and renewed retail leases increased 16.3% to $40.50 per square foot, with $3.74 per square foot in tenant improvement costs and $2.96 per square foot in leasing commissions and incentives. Weighted average term for new and renewed leases was 4.7 years.

Dispositions

In the third quarter WRIT sold 1700 Research Boulevard, a 101,000 square foot office building in Rockville, Maryland, for $14.25 million and a net book gain of $3.7 million. The property was built in 1982 and acquired by WRIT in 1999.

Financing Activity

WRIT priced an underwritten public offering of $300 million aggregate principal amount of senior unsecured notes due October 15, 2022. The notes have an annual coupon rate of 3.95% and were priced at 99.438% of the principal amount. J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC and Credit Suisse Securities (USA) LLC were the Joint Book-Running Managers for the offering.

WRIT utilized part of the proceeds from the unsecured debt transaction to pay down its line of credit balances in full from $221 million at June 30, 2012 to $0 at September 30, 2012.

In the third quarter and subsequent to quarter end, WRIT prepaid without penalty two mortgages totaling $29.3 million. Frederick Crossing Shopping Center and 15005 Shady Grove Road had respective interest rates of 5.95% and 5.73%.





Washington Real Estate Investment Trust
Page 3 of 10


Guidance

Management is narrowing the 2012 Core FFO guidance range to $1.87 - $1.90 from $1.87 - $1.97, primarily due to the impact of the September debt issuance and lower than expected acquisition volume.  Management expects to discuss this change on the Conference Call.

Dividends

On September 30, 2012, WRIT paid a quarterly dividend of $0.30 per share.

Conference Call Information

The Conference Call for 3rd Quarter Earnings is scheduled for Friday, October 26, 2012 at 11:00 A.M. Eastern time. Conference Call access information is as follows:

USA Toll Free Number:            1-877-407-9205
International Toll Number:        1-201-689-8054

The instant replay of the Conference Call will be available until November 9, 2012 at 11:59 P.M. Eastern time. Instant replay access information is as follows:

USA Toll Free Number:            1-877-660-6853
International Toll Number:        1-201-612-7415
Conference ID:                400528

The live on-demand webcast of the Conference Call will be available on the Investor section of WRIT's website at www.writ.com. On-line playback of the webcast will be available for two weeks following the Conference Call.

About WRIT

WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington metro region. WRIT owns a diversified portfolio of 71 properties totaling approximately 9 million square feet of commercial space and 2,540 multifamily units, and land held for development. These 71 properties consist of 26 office properties, 18 medical office properties, 16 retail centers and 11 multifamily properties. WRIT shares are publicly traded on the New York Stock Exchange (NYSE:WRE).
Note: WRIT's press releases and supplemental financial information are available on the company website at www.writ.com or by contacting Investor Relations at (301) 984-9400.
Certain statements in our earnings release and on our conference call are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, the potential for federal government budget reductions, changes in general and local economic and real estate market conditions, the timing and pricing of lease transactions, the effect of the current credit and financial market conditions, the availability and cost of capital, fluctuations in interest rates, tenants' financial conditions, levels of competition, the effect of government regulation, the impact of newly adopted accounting principles, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2011 Form 10-K and second quarter 2012 Form 10-Q. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

(1) Funds From Operations (“FFO”) - The National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) associated with sales of property, impairment of depreciable real estate and real estate depreciation and amortization. FFO is a non-GAAP measure and does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. We consider FFO to be a standard supplemental measure for equity real estate investment trusts (“REITs”) because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs.

Core Funds From Operations (“Core FFO”) is calculated by adjusting FFO for the following items (which we believe are not indicative of the performance of WRIT's operating portfolio and affect the comparative measurement of WRIT's operating performance over time): (1) gains or losses on extinguishment of debt, (2) real estate impairment not already excluded from FFO and (3) costs related to the acquisition of properties, as


Washington Real Estate Investment Trust
Page 4 of 10


appropriate. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FFO serves as a useful, supplementary measure of WRIT's ability to incur and service debt and to distribute dividends to its shareholders. Core FFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

(2) Net Operating Income (“NOI”), defined as real estate rental revenue less real estate expenses, is a non-GAAP measure. NOI is calculated as net income, less non-real estate revenue and the results of discontinued operations (including the gain on sale, if any), plus interest expense, depreciation and amortization, general and administrative expenses, acquisition costs and real estate impairment. We provide NOI as a supplement to net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. It is the primary performance measure we use to assess the results of our operations at the property level.

(3) For purposes of evaluating comparative operating performance, we categorize our properties as “same-store” or “non-same-store”. A same-store property is one that was owned for the entirety of the periods being evaluated. A non-same-store property is one that was acquired or placed into service during either of the periods being evaluated.

(4) Funds Available for Distribution (“FAD”) is a non-GAAP measure. It is calculated by subtracting from FFO (1) recurring expenditures, tenant improvements and leasing costs that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight-line rents, then adding (3) non-real estate depreciation and amortization, (4) amortization of restricted share and unit compensation, and adding or subtracting amortization of lease intangibles, as appropriate. We consider FAD to be a measure of a REIT's ability to incur and service debt and to distribute dividends to its shareholders. FAD is a non-standardized measure and may be calculated differently by other REITs.

Physical Occupancy Levels by Same-Store Properties (i) and All Properties
 
Physical Occupancy
 
Same-Store Properties
 
All Properties
 
3rd QTR
 
3rd QTR
 
3rd QTR
 
3rd QTR
Segment
2012
 
2011
 
2012
 
2011
Multifamily
94.8
%
 
94.0
%
 
94.8
%
 
94.0
%
Office
85.3
%
 
87.7
%
 
86.2
%
 
88.6
%
Medical Office
88.0
%
 
91.2
%
 
85.0
%
 
87.2
%
Retail
92.7
%
 
91.6
%
 
92.8
%
 
92.3
%
Industrial
—
%
 
—
%
 
—
%
 
75.4
%
 
 
 
 
 
 
 
 
Overall Portfolio
89.5
%
 
90.5
%
 
89.2
%
 
89.0
%

(i) Same-Store properties include all stabilized properties that were owned for the entirety of the current and prior year reporting periods. We consider newly constructed properties to be stabilized when they achieve 90% occupancy. For Q3 2012 and Q3 2011, same-store properties exclude:
Multifamily Acquisitions: none;
Office Acquisitions: Fairgate at Ballston, Braddock Metro Center and John Marshall II;
Medical Office Acquisition: 19500 at Riverside Office Park (formerly Lansdowne Medical Office Building);
Retail Acquisition: Olney Village Center.

Also excluded from Same-Store Properties in Q3 2012 and Q3 2011 are:
Held for Sale and Sold Properties: 1700 Research Boulevard, Plumtree Medical Center, the Atrium Building and the Industrial Portfolio (all industrial properties and the Crescent and Albemarle Point).





Washington Real Estate Investment Trust
Page 5 of 10


 WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
OPERATING RESULTS
2012
 
2011
 
2012
 
2011
Revenue
 
 
 
 
 
 
 
Real estate rental revenue
$
77,108

 
$
70,550

 
$
227,912

 
$
208,743

Expenses
 
 
 
 
 
 
 
Real estate expenses
26,901

 
23,557

 
77,485

 
69,676

Depreciation and amortization
26,127

 
23,108

 
76,936

 
66,777

Acquisition costs
(164
)
 
1,600

 
144

 
3,571

General and administrative
3,173

 
3,837

 
10,943

 
11,588

 
56,037

 
52,102

 
165,508

 
151,612

Real estate operating income
21,071

 
18,448

 
62,404

 
57,131

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(15,985
)
 
(16,443
)
 
(47,286
)
 
(50,071
)
Other income
237

 
270

 
733

 
886

 
(15,748
)
 
(16,173
)
 
(46,553
)
 
(49,185
)
 
 
 
 
 
 
 
 
Income from continuing operations
5,323

 
2,275

 
15,851

 
7,946

 
 
 
 
 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale
514

 
4,087

 
1,175

 
10,833

Gain on sale of real estate
3,724

 
56,639

 
3,724

 
56,639

Income tax expense
—

 
35

 
—

 
(1,138
)
Net income
9,561

 
63,036

 
20,750

 
74,280

Less: Net income attributable to noncontrolling interests in subsidiaries
—

 
(28
)
 
—

 
(85
)
Net income attributable to the controlling interests
$
9,561

 
$
63,008

 
$
20,750

 
$
74,195

 
 
 
 
 
 
 
 
Income from continuing operations attributable to the controlling interests
5,323

 
2,275

 
15,851

 
7,946

Continuing operations real estate depreciation and amortization
26,127

 
23,108

 
76,936

 
66,777

Funds from continuing operations(1)
$
31,450

 
$
25,383

 
$
92,787

 
$
74,723

 
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale attributable to the controlling interests
514

 
4,059

 
1,175

 
10,748

Real estate impairment
—

 
—

 
—

 
599

Discontinued operations real estate depreciation and amortization
91

 
1,314

 
867

 
8,353

Funds from discontinued operations
605

 
5,373

 
2,042

 
19,700

 
 
 
 
 
 
 
 
Funds from operations(1)
$
32,055

 
$
30,756

 
$
94,829

 
$
94,423

 
 
 
 
 
 
 
 
Tenant improvements
(5,216
)
 
(2,469
)
 
(11,639
)
 
(6,789
)
External and internal leasing commissions capitalized
(2,144
)
 
(3,859
)
 
(6,823
)
 
(7,207
)
Recurring capital improvements
(1,362
)
 
(2,148
)
 
(5,893
)
 
(5,911
)
Straight-line rents, net
(847
)
 
(715
)
 
(2,527
)
 
(1,958
)
Non-cash fair value interest expense
216

 
145

 
673

 
515

Non real estate depreciation & amortization of debt costs
987

 
1,126

 
2,943

 
2,888

Amortization of lease intangibles, net
(32
)
 
(329
)
 
(35
)
 
(1,020
)
Amortization and expensing of restricted share and unit compensation
1,206

 
1,376

 
3,944

 
4,121

Funds available for distribution(4)
$
24,863

 
$
23,883

 
$
75,472

 
$
79,062

 
 
 
 
 
 
 
 
Note: Certain prior period amounts have been reclassified to conform to the current presentation.


Washington Real Estate Investment Trust
Page 6 of 10



 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
Per share data attributable to the controlling interests:
 
2012
 
2011
 
2012
 
2011
Income from continuing operations
(Basic)
$
0.08

 
$
0.03

 
$
0.24

 
$
0.12

 
(Diluted)
$
0.08

 
$
0.03

 
$
0.24

 
$
0.12

Net income
(Basic)
$
0.14

 
$
0.95

 
$
0.31

 
$
1.12

 
(Diluted)
$
0.14

 
$
0.95

 
$
0.31

 
$
1.12

Funds from continuing operations
(Basic)
$
0.47

 
$
0.38

 
$
1.40

 
$
1.13

 
(Diluted)
$
0.47

 
$
0.38

 
$
1.39

 
$
1.13

Funds from operations
(Basic)
$
0.48

 
$
0.46

 
$
1.42

 
$
1.42

 
(Diluted)
$
0.48

 
$
0.46

 
$
1.42

 
$
1.42

 
 
 
 
 
 
 
 
 
Dividends paid
 
$
0.3000

 
$
0.4338

 
$
1.1676

 
$
1.3014

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
66,246

 
66,017

 
66,227

 
65,953

Fully diluted weighted average shares outstanding
 
66,379

 
66,064

 
66,363

 
65,987




Washington Real Estate Investment Trust
Page 7 of 10


WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
 
 
 
 
 
September 30, 2012
 
December 31, 2011
Assets
 
 
 
Land
$
483,198

 
$
465,445

Income producing property
1,966,032

 
1,899,440

 
2,449,230

 
2,364,885

Accumulated depreciation and amortization
(583,706
)
 
(521,503
)
Net income producing property
1,865,524

 
1,843,382

Development in progress
48,106

 
43,089

Total real estate held for investment, net
1,913,630

 
1,886,471

Investment in real estate held for sale, net
18,264

 
27,669

Cash and cash equivalents
68,403

 
12,765

Restricted cash
19,615

 
19,229

Rents and other receivables, net of allowance for doubtful accounts of $10,556 and $8,683 respectively
57,704

 
53,227

Prepaid expenses and other assets
120,486

 
120,075

Other assets related to properties sold or held for sale
693

 
1,322

Total assets
$
2,198,795

 
$
2,120,758

 
 
 
 
Liabilities
 
 
 
Notes payable
$
906,058

 
$
657,470

Mortgage notes payable
398,511

 
423,291

Lines of credit
—

 
99,000

Accounts payable and other liabilities
54,916

 
51,079

Advance rents
13,829

 
13,584

Tenant security deposits
9,771

 
8,728

Other liabilities related to properties sold or held for sale
4,646

 
4,774

Total liabilities
1,387,731

 
1,257,926

 
 
 
 
Equity
 
 
 
Shareholders' equity
 
 
 
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued and outstanding
—

 
—

Shares of beneficial interest, $0.01 par value; 100,000 shares authorized; 66,326 and 66,265 shares issued and 66,325 and 66,265 shares outstanding at September 30, 2012 and December 31, 2011, respectively
662

 
662

Additional paid-in capital
1,143,554

 
1,138,478

Distributions in excess of net income
(337,151
)
 
(280,096
)
Total shareholders' equity
807,065

 
859,044

 
 
 
 
Noncontrolling interests in subsidiaries
3,999

 
3,788

Total equity
811,064

 
862,832

 
 
 
 
Total liabilities and equity
$
2,198,795

 
$
2,120,758

 
 
 
 
Note: Certain prior year amounts have been reclassified to conform to the current year presentation.




Washington Real Estate Investment Trust
Page 8 of 10


The following tables contain reconciliations of net income to same-store net operating income for the periods presented:
 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2012
Multifamily
 
Office
 
Medical Office
 
Retail
 
Total
Same-store net operating income(3)
$
7,992

 
$
20,337

 
$
7,271

 
$
9,595

 
$
45,195

Add: Net operating income from non-same-store properties(3)
—

 
3,902

 
116

 
994

 
5,012

Total net operating income(2)
$
7,992

 
$
24,239

 
$
7,387

 
$
10,589

 
$
50,207

Add/(deduct):
 
 
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
 
 
237

Acquisition costs
 
 
 
 
 
 
 
 
164

Interest expense
 
 
 
 
 
 
 
 
(15,985
)
Depreciation and amortization
 
 
 
 
 
 
 
 
(26,127
)
General and administrative expenses
 
 
 
 
 
 
 
 
(3,173
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
 
 
514

Gain on sale of real estate
 
 
 
 
 
 
 
 
3,724

Net income
 
 
 
 
 
 
 
 
9,561

Less: Net income attributable to noncontrolling interests in subsidiaries
 
 
 
 
 
 
 
 
—

Net income attributable to the controlling interests
 
 
 
 
 
 
 
 
$
9,561

 
 
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2011
Multifamily
 
Office
 
Medical Office
 
Retail
 
Total
Same-store net operating income(3)
$
7,714

 
$
21,558

 
$
7,500

 
$
9,061

 
$
45,833

Add: Net operating income from non-same-store properties(3)
—

 
751

 
37

 
372

 
1,160

Total net operating income(2)
$
7,714

 
$
22,309

 
$
7,537

 
$
9,433

 
$
46,993

Add/(deduct):
 
 
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
 
 
270

Acquisition costs
 
 
 
 
 
 
 
 
(1,600
)
Interest expense
 
 
 
 
 
 
 
 
(16,443
)
Depreciation and amortization
 
 
 
 
 
 
 
 
(23,108
)
General and administrative expenses
 
 
 
 
 
 
 
 
(3,837
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
 
 
4,087

Gain on sale of real estate
 
 
 
 
 
 
 
 
56,639

Income tax expense
 
 
 
 
 
 
 
 
35

Net income
 
 
 
 
 
 
 
 
63,036

Less: Net income attributable to noncontrolling interests in subsidiaries
 
 
 
 
 
 
 
 
(28
)
Net income attributable to the controlling interests
 
 
 
 
 
 
 
 
$
63,008





Washington Real Estate Investment Trust
Page 9 of 10



The following tables contain reconciliations of net income to same-store net operating income for the periods presented:
 
 
 
 
 
 
 
 
 
 
Period Ended September 30, 2012
Multifamily
 
Office
 
Medical Office
 
Retail
 
Total
Same-store net operating income(3)
$
24,056

 
$
57,437

 
$
21,984

 
$
28,524

 
$
132,001

Add: Net operating income from non-same-store properties(3)
—

 
15,148

 
271

 
3,007

 
18,426

Total net operating income(2)
$
24,056

 
$
72,585

 
$
22,255

 
$
31,531

 
$
150,427

Add/(deduct):
 
 
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
 
 
733

Acquisition costs
 
 
 
 
 
 
 
 
(144
)
Interest expense
 
 
 
 
 
 
 
 
(47,286
)
Depreciation and amortization
 
 
 
 
 
 
 
 
(76,936
)
General and administrative expenses
 
 
 
 
 
 
 
 
(10,943
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
 
 
1,175

Gain on sale of real estate
 
 
 
 
 
 
 
 
3,724

Net income
 
 
 
 
 
 
 
 
20,750

Less: Net income attributable to noncontrolling interests in subsidiaries
 
 
 
 
 
 
 
 
—

Net income attributable to the controlling interests
 
 
 
 
 
 
 
 
$
20,750

 
 
 
 
 
 
 
 
 
 
Period Ended September 30, 2011
Multifamily
 
Office
 
Medical Office
 
Retail
 
Total
Same-store net operating income(3)
$
23,229

 
$
60,897

 
$
22,788

 
$
26,284

 
$
133,198

Add: Net operating income from non-same-store properties(3)
—

 
5,518

 
(21
)
 
372

 
5,869

Total net operating income(2)
$
23,229

 
$
66,415

 
$
22,767

 
$
26,656

 
$
139,067

Add/(deduct):
 
 
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
 
 
886

Acquisition costs
 
 
 
 
 
 
 
 
(3,571
)
Interest expense
 
 
 
 
 
 
 
 
(50,071
)
Depreciation and amortization
 
 
 
 
 
 
 
 
(66,777
)
General and administrative expenses
 
 
 
 
 
 
 
 
(11,588
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
 
 
10,833

Gain on sale of real estate
 
 
 
 
 
 
 
 
56,639

Income tax expense
 
 
 
 
 
 
 
 
(1,138
)
Net income
 
 
 
 
 
 
 
 
74,280

Less: Net income attributable to noncontrolling interests in subsidiaries
 
 
 
 
 
 
 
 
(85
)
Net income attributable to the controlling interests
 
 
 
 
 
 
 
 
$
74,195




Washington Real Estate Investment Trust
Page 10 of 10


The following table contains a reconciliation of net income attributable to the controlling interests to core funds from operations for the periods presented:
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2012
 
2011
 
2012
 
2011
Net income attributable to the controlling interests
 
$
9,561

 
$
63,008

 
$
20,750

 
$
74,195

Add/(deduct):
 
 
 
 
 
 
 
 
Real estate depreciation and amortization
 
26,127

 
23,108

 
76,936

 
66,777

Discontinued operations:
 
 
 
 
 
 
 
 
Gain on sale of real estate
 
(3,724
)
 
(56,639
)
 
(3,724
)
 
(56,639
)
Income tax expense
 
—

 
(35
)
 
—

 
1,138

Real estate impairment
 
—

 
—

 
—

 
599

Real estate depreciation and amortization
 
91

 
1,314

 
867

 
8,353

Funds from operations(1)
 
32,055

 
30,756

 
94,829

 
94,423

Add/(deduct):
 
 
 
 
 
 
 
 
Acquisition costs
 
(164
)
 
1,600

 
144

 
3,571

Core funds from operations(1)
 
$
31,891

 
$
32,356

 
$
94,973

 
$
97,994

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
Per share data attributable to the controlling interests:
 
2012
 
2011
 
2012
 
2011
Funds from operations
(Basic)
$
0.48

 
$
0.46

 
$
1.42

 
$
1.42

 
(Diluted)
$
0.48

 
$
0.46

 
$
1.42

 
$
1.42

Core FFO
(Basic)
$
0.48

 
$
0.48

 
$
1.43

 
$
1.48

 
(Diluted)
$
0.48

 
$
0.48

 
$
1.42

 
$
1.48

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
66,246

 
66,017

 
66,227

 
65,953

Fully diluted weighted average shares outstanding
 
66,379

 
66,064

 
66,363

 
65,987