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 23, 2013
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, 2013:

Third Quarter 2013 Highlights

•
Generated Core Funds from Operations (FFO) of $0.46 per diluted share for the quarter
•
Improved same-store physical occupancy in the office portfolio 30 bps and multifamily portfolio 100 bps over second quarter 2013
•
Produced same-store net operating income growth of 1.5% over third quarter of 2012
•
Executed 86 new and renewal leases totaling 480,495 square feet at an average rental rate increase of 4.0% over in-place rents for new leases and average rental rate increase of 11.7% over in-place rents for renewal leases
•
Entered into four separate contracts with a single buyer to sell the medical office portfolio and two office assets for $500,750,000
•
Named Paul T. McDermott as the company's new President and Chief Executive Officer
•
Acquired The Paramount, a 135 unit apartment building located in Arlington, Virginia, on October 1, 2013, subsequent to quarter end

“We have made significant strides repositioning our portfolio into our three core business lines: multifamily, office and retail, continuing our live, work, shop strategic focus on urban, metro-centric assets as well as assets in exceptional demographic areas. When the closing of our medical office portfolio sale and expected reinvestment of the proceeds are complete, we will have recycled roughly one-third of our total market capitalization over the past three years," said Paul T. McDermott, President and Chief Executive Officer.

Financial Highlights

Core Funds from Operations(1), defined as Funds from Operations(1) (“FFO”) excluding acquisition expense, gains or losses on extinguishment of debt, severance expense and impairment, was $30.6 million, or $0.46 per diluted share for the quarter ended September 30, 2013, compared to $31.9 million, or $0.48 per diluted share for the prior year period. FFO for the quarter ended September 30, 2013 was $30.2 million, or $0.45 per diluted share, compared to $32.1 million, or $0.48 per diluted share, in the same period one year ago.

Net income attributable to the controlling interests for the quarter ended September 30, 2013 was $5.8 million, or $0.09 per diluted share, compared to $9.6 million, or $0.14 per diluted share, in the same period one year ago.

Operating Results

The Company's overall portfolio Net Operating Income (“NOI”)(2) was $42.6 million compared to $41.9 million in the same period one year ago and $42.2 million in the second quarter of 2013. Overall portfolio physical occupancy for


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the third quarter was 88.7%, compared to 89.2% in the same period one year ago and 89.1% in the second quarter of 2013.

Same-store(3) portfolio physical occupancy for the third quarter was 89.6%, compared to 90.0% in the same period one year ago. Same-store portfolio NOI for the third quarter increased 1.5% compared to the same period one year ago and rental rate growth was 2.2%.
 
▪
Office: 55.7% of Total NOI - Office properties' same-store NOI for the third quarter increased 1.5% compared to the same period one year ago. Rental rate growth was 1.7% while same-store physical occupancy increased 10 bps to 86.4%. Sequentially, same-store physical occupancy increased 30 bps compared to the second quarter of 2013.
▪
Retail: 25.3% of Total NOI - Retail properties' same-store NOI for the third quarter increased 1.8% compared to the same period one year ago. Rental rate growth was 3.3% while same-store physical occupancy decreased 140 bps to 91.4%. Sequentially, same-store physical occupancy decreased 180 bps compared to the second quarter of 2013.
▪
Multifamily: 19.0% of Total NOI - Multifamily properties' same-store NOI for the third quarter increased 1.3% compared to the same period one year ago. Rental rate growth was 2.6% while same-store physical occupancy decreased 70 bps to 94.1%. Sequentially, same-store physical occupancy increased 100 bps compared to the second quarter of 2013.

Leasing Activity

During the third quarter, WRIT signed commercial leases totaling 480,495 square feet, including 202,394 square feet of new leases and 278,101 square feet of renewal leases, as follows (all dollar amounts are on a per square foot basis):
 
Square Feet
Weighted Average Term
(in years)
Weighted Average Rental Rates
Weighted Average Rental Rate % Increase
Tenant Improvements
Leasing Commissions and Incentives
New:
 
 
 
 
 
 
Office
147,194

11.1

$
33.06

1.2
%
$
55.91

$
46.07

Retail
49,396

9.8

23.45

18.1
%
15.21

10.49

Medical Office
5,804

5.2

40.01

1.1
%
17.51

17.22

Total
202,394

10.6

30.91

4.0
%
44.88

36.56

 
 
 
 
 
 
 
Renewal:
 
 
 
 
 
 
Office
140,894

6.6

$
42.04

8.2
%
$
19.79

$
19.50

Retail
112,736

7.3

24.43

21.7
%
0.25

1.57

Medical Office
24,471

3.0

29.48

7.2
%
4.67

2.82

Total
278,101

6.5

33.80

11.7
%
10.54

10.77


Acquisition and Disposition Activity

WRIT announced that it has entered into four separate contracts with a single buyer to sell all of its medical office assets and two office assets comprising a total of 1.5 million square feet. The portfolio consists of 17 medical office buildings and two suburban office buildings, 6565 Arlington Boulevard and Woodholme Center, as well as a land parcel located in Alexandria, Virginia. Management projects the closing date for the first two transactions to be November 12, 2013 and the outside closing date for the second two transactions to be January 31, 2014. The combined sale price is $500,750,000, or $329 per square foot.

Subsequent to quarter end, WRIT acquired The Paramount, a 135 unit apartment building located in Arlington, Virginia, for $48.2 million. The purchase price values the units at approximately $345,000 per unit, based on an average unit size of 1,015 square feet. The capitalization rate for the transaction is approximately 5.2%. The Paramount is a seventeen-story building with a two-level below grade parking garage located at 1425 South Eads Street and is within


Washington Real Estate Investment Trust
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walking distance to both the Crystal City and Pentagon City Metro Stations (Blue and Yellow lines). The property was built in 1984 and is 94% occupied. WRIT funded the acquisition with available capacity on its line of credit.

2013 Updated Guidance

Fourth quarter 2013 NOI and occupancy are projected to be consistent with third quarter 2013 for the same-store portfolio. The first two transactions of the medical office portfolio sale are expected to close on November 12, 2013 and projected to negatively impact the fourth quarter Core FFO by $0.04 per diluted share. Partially offsetting this amount will be the impact of the acquisition of The Paramount, which is expected to have a positive $0.01 per diluted share quarterly impact to Core FFO. The fourth quarter general and administrative expenses are expected to increase $0.07 to $0.08 per diluted share. This increase is attributable to an estimated $0.03 to $0.04 per diluted share charge pursuant to the 2011-2013 long-term incentive compensation plan and a projected $0.04 per diluted share impact related to severance costs associated with the departing CEO and the employees affected by the medical office portfolio sale. Severance costs are excluded from Core FFO. Thus, the overall 2013 Core FFO per diluted share is projected to be $1.76-$1.78, with the fourth quarter Core FFO per diluted share projected to be $0.39-$0.41.

Dividends

On September 30, 2013, WRIT paid a quarterly dividend of $0.30 per share.

Conference Call Information

The Conference Call for 3rd Quarter Earnings is scheduled for Thursday, October 24, 2013 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 7, 2013 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:                100295

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 70 properties, totaling approximately 8 million square feet of commercial space and 2,675 multifamily units, and land held for development. These 70 properties consist of 25 office properties, 17 medical office properties, 16 retail centers and 12 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 timing of the closings on the sale of the medical office portfolio, 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 2012 Form 10-K and subsequent Quarterly Reports on Form 10-Q. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.



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(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) costs related to the acquisition of properties, (3) severance expense related to corporate reorganization and related to the CEO's retirement and (4) property impairments not already excluded from FFO, as 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
2013
 
2012
 
2013
 
2012
Multifamily
94.1
%
 
94.8
%
 
94.1
%
 
94.8
%
Office
86.4
%
 
86.3
%
 
86.1
%
 
86.2
%
Medical Office
—
%
 
—
%
 
84.6
%
 
85.0
%
Retail
91.4
%
 
92.8
%
 
91.4
%
 
92.8
%
 
 
 
 
 
 
 
 
Overall Portfolio
89.6
%
 
90.0
%
 
88.7
%
 
89.2
%

(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 2013 and Q3 2012, same-store properties exclude:

Acquisitions: none;

Also excluded from Same-Store Properties in Q3 2013 and Q3 2012 are:

Sold Properties: 1700 Research Boulevard, Plumtree Medical Center and the Atrium Building;

Held for Sale Properties: Medical Office Portfolio (Woodholme Center, 6565 Arlington Boulevard, 2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park (formerly Lansdowne Medical Office Building), 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, II and III, Woodholme Medical Office Building, Woodburn Medical Park I and II, and Prosperity Medical Center I, II and III.)


Washington Real Estate Investment Trust
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 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
2013
 
2012
 
2013
 
2012
Revenue
 
 
 
 
 
 
 
Real estate rental revenue
$
65,828

 
$
64,471

 
$
196,303

 
$
190,134

Expenses
 
 
 
 
 
 
 
Real estate expenses
23,243

 
22,527

 
69,467

 
64,820

Depreciation and amortization
21,168

 
21,682

 
63,328

 
63,593

Acquisition costs
148

 
(164
)
 
448

 
144

General and administrative
3,850

 
3,173

 
11,717

 
10,943

 
48,409

 
47,218

 
144,960

 
139,500

Real estate operating income
17,419

 
17,253

 
51,343

 
50,634

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(15,930
)
 
(14,886
)
 
(47,944
)
 
(43,983
)
Other income
220

 
237

 
705

 
733

 
(15,710
)
 
(14,649
)
 
(47,239
)
 
(43,250
)
 
 
 
 
 
 
 
 
Income from continuing operations
1,709

 
2,604

 
4,104

 
7,384

 
 
 
 
 
 
 
 
Discontinued operations:
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale
4,131

 
3,233

 
11,139

 
9,642

Gain on sale of real estate
—

 
3,724

 
3,195

 
3,724

Net income
5,840

 
9,561

 
18,438

 
20,750

Less: Net income attributable to noncontrolling interests in subsidiaries
—

 
—

 
—

 
—

Net income attributable to the controlling interests
$
5,840

 
$
9,561

 
$
18,438

 
$
20,750

 
 
 
 
 
 
 
 
Income from continuing operations
1,709

 
2,604

 
4,104

 
7,384

Continuing operations real estate depreciation and amortization
21,168

 
21,682

 
63,328

 
63,593

Funds from continuing operations(1)
$
22,877

 
$
24,286

 
$
67,432

 
$
70,977

 
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale
4,131

 
3,233

 
11,139

 
9,642

Discontinued operations real estate depreciation and amortization
3,215

 
4,536

 
12,161

 
14,210

Funds from discontinued operations
7,346

 
7,769

 
23,300

 
23,852

 
 
 
 
 
 
 
 
Funds from operations(1)
$
30,223

 
$
32,055

 
$
90,732

 
$
94,829

 
 
 
 
 
 
 
 
Tenant improvements
(3,957
)
 
(5,216
)
 
(13,850
)
 
(11,639
)
External and internal leasing commissions capitalized
(3,746
)
 
(2,144
)
 
(8,694
)
 
(6,823
)
Recurring capital improvements
(1,917
)
 
(1,362
)
 
(4,949
)
 
(5,893
)
Straight-line rents, net
(578
)
 
(847
)
 
(1,404
)
 
(2,527
)
Non-cash fair value interest expense
255

 
216

 
764

 
673

Non real estate depreciation & amortization of debt costs
939

 
987

 
2,830

 
2,943

Amortization of lease intangibles, net
129

 
(32
)
 
256

 
(35
)
Amortization and expensing of restricted share and unit compensation
1,215

 
1,206

 
3,588

 
3,944

Funds available for distribution(4)
$
22,563

 
$
24,863

 
$
69,273

 
$
75,472

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


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Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
Per share data:
 
2013
 
2012
 
2013
 
2012
Income from continuing operations
(Basic)
$
0.03

 
$
0.04

 
$
0.06

 
$
0.11

 
(Diluted)
$
0.03

 
$
0.04

 
$
0.06

 
$
0.11

Net income
(Basic)
$
0.09

 
$
0.14

 
$
0.27

 
$
0.31

 
(Diluted)
$
0.09

 
$
0.14

 
$
0.27

 
$
0.31

Funds from continuing operations
(Basic)
$
0.34

 
$
0.37

 
$
1.01

 
$
1.07

 
(Diluted)
$
0.34

 
$
0.37

 
$
1.01

 
$
1.07

Funds from operations
(Basic)
$
0.45

 
$
0.48

 
$
1.36

 
$
1.42

 
(Diluted)
$
0.45

 
$
0.48

 
$
1.36

 
$
1.42

 
 
 
 
 
 
 
 
 
Dividends paid
 
$
0.3000

 
$
0.3000

 
$
0.9000

 
$
1.1675

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
66,410

 
66,246

 
66,403

 
66,227

Fully diluted weighted average shares outstanding
 
66,561

 
66,379

 
66,545

 
66,363




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WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
 
 
 
 
September 30, 2013
 
December 31, 2012
 
(unaudited)
 
(unaudited)
Assets
 
 
 
Land
$
418,008

 
$
418,008

Income producing property
1,624,617

 
1,587,375

 
2,042,625

 
2,005,383

Accumulated depreciation and amortization
(548,549
)
 
(497,057
)
Net income producing property
1,494,076

 
1,508,326

Development in progress
55,580

 
45,270

Total real estate held for investment, net
1,549,656

 
1,553,596

Investment in real estate held for sale, net
346,157

 
364,999

Cash and cash equivalents
7,923

 
19,105

Restricted cash
7,547

 
13,423

Rents and other receivables, net of allowance for doubtful accounts of $8,271 and $10,442 respectively
48,619

 
46,904

Prepaid expenses and other assets
110,116

 
107,303

Other assets related to properties sold or held for sale
18,337

 
19,046

Total assets
$
2,088,355

 
$
2,124,376

 
 
 
 
Liabilities
 
 
 
Notes payable
$
846,576

 
$
906,190

Mortgage notes payable
290,838

 
319,025

Lines of credit
85,000

 
—

Accounts payable and other liabilities
57,116

 
50,094

Advance rents
11,749

 
12,925

Tenant security deposits
7,639

 
7,642

Liabilities related to properties sold or held for sale
31,275

 
32,357

Total liabilities
1,330,193

 
1,328,233

 
 
 
 
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; 66,500 and 66,437 shares issued and outstanding, respectively
665

 
664

Additional paid-in capital
1,148,837

 
1,145,515

Distributions in excess of net income
(395,816
)
 
(354,122
)
Total shareholders' equity
753,686

 
792,057

 
 
 
 
Noncontrolling interests in subsidiaries
4,476

 
4,086

Total equity
758,162

 
796,143

 
 
 
 
Total liabilities and equity
$
2,088,355

 
$
2,124,376

 
 
 
 
 




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The following tables contain reconciliations of net income to same-store net operating income for the periods presented (in thousands):
 
 
 
 
 
 
 
 
Quarter Ended September 30, 2013
Multifamily
 
Office
 
Retail
 
Total
Same-store net operating income(3)
$
8,098

 
$
23,758

 
$
10,783

 
$
42,639

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

 
(54
)
 
—

 
(54
)
Total net operating income(2)
$
8,098

 
$
23,704

 
$
10,783

 
$
42,585

Add/(deduct):
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
220

Acquisition costs
 
 
 
 
 
 
(148
)
Interest expense
 
 
 
 
 
 
(15,930
)
Depreciation and amortization
 
 
 
 
 
 
(21,168
)
General and administrative expenses
 
 
 
 
 
 
(3,850
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
4,131

Net income
 
 
 
 
 
 
5,840

Less: Net income attributable to noncontrolling interests in subsidiaries
 
 
 
 
 
 
—

Net income attributable to the controlling interests
 
 
 
 
 
 
$
5,840

 
 
 
 
 
 
 
 
Quarter Ended September 30, 2012
Multifamily
 
Office
 
Retail
 
Total
Same-store net operating income(3)
$
7,992

 
$
23,410

 
$
10,589

 
$
41,991

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

 
(47
)
 
—

 
(47
)
Total net operating income(2)
$
7,992

 
$
23,363

 
$
10,589

 
$
41,944

Add/(deduct):
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
237

Acquisition costs
 
 
 
 
 
 
164

Interest expense
 
 
 
 
 
 
(14,886
)
Depreciation and amortization
 
 
 
 
 
 
(21,682
)
General and administrative expenses
 
 
 
 
 
 
(3,173
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
3,233

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





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The following tables contain reconciliations of net income to same-store net operating income for the periods presented (in thousands):
 
 
 
 
 
 
 
 
Period Ended September 30, 2013
Multifamily
 
Office
 
Retail
 
Total
Same-store net operating income(3)
$
23,934

 
$
68,627

 
$
31,750

 
$
124,311

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

 
2,525

 
—

 
2,525

Total net operating income(2)
$
23,934

 
$
71,152

 
$
31,750

 
$
126,836

Add/(deduct):
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
705

Acquisition costs
 
 
 
 
 
 
(448
)
Interest expense
 
 
 
 
 
 
(47,944
)
Depreciation and amortization
 
 
 
 
 
 
(63,328
)
General and administrative expenses
 
 
 
 
 
 
(11,717
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
11,139

Gain on sale of real estate
 
 
 
 
 
 
3,195

Net income
 
 
 
 
 
 
18,438

Less: Net income attributable to noncontrolling interests in subsidiaries
 
 
 
 
 
 
—

Net income attributable to the controlling interests
 
 
 
 
 
 
$
18,438

 
 
 
 
 
 
 
 
Period Ended September 30, 2012
Multifamily
 
Office
 
Retail
 
Total
Same-store net operating income(3)
$
24,056

 
$
68,850

 
$
31,531

 
$
124,437

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

 
877

 
—

 
877

Total net operating income(2)
$
24,056

 
$
69,727

 
$
31,531

 
$
125,314

Add/(deduct):
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
733

Acquisition costs
 
 
 
 
 
 
(144
)
Interest expense
 
 
 
 
 
 
(43,983
)
Depreciation and amortization
 
 
 
 
 
 
(63,593
)
General and administrative expenses
 
 
 
 
 
 
(10,943
)
Income from operations of properties sold or held for sale
 
 
 
 
 
 
9,642

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





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 (in thousands, except per share data):
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2013
 
2012
 
2013
 
2012
Net income attributable to the controlling interests
 
$
5,840

 
$
9,561

 
$
18,438

 
$
20,750

Add/(deduct):
 
 
 
 
 
 
 
 
Real estate depreciation and amortization
 
21,168

 
21,682

 
63,328

 
63,593

Discontinued operations:
 
 
 
 
 
 
 
 
Gain on sale of real estate
 
—

 
(3,724
)
 
(3,195
)
 
(3,724
)
Real estate depreciation and amortization
 
3,215

 
4,536

 
12,161

 
14,210

Funds from operations(1)
 
30,223

 
32,055

 
90,732

 
94,829

Add/(deduct):
 
 
 
 
 
 
 
 
Acquisition costs
 
148

 
(164
)
 
448

 
144

Severance expense
 
250

 
—

 
333

 
—

Core funds from operations(1)
 
$
30,621

 
$
31,891

 
$
91,513

 
$
94,973

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Per share data:
 
2013
 
2012
 
2013
 
2012
Funds from operations
(Basic)
$
0.45

 
$
0.48

 
$
1.36

 
$
1.42

 
(Diluted)
$
0.45

 
$
0.48

 
$
1.36

 
$
1.42

Core FFO
(Basic)
$
0.46

 
$
0.48

 
$
1.37

 
$
1.43

 
(Diluted)
$
0.46

 
$
0.48

 
$
1.37

 
$
1.42

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
66,410

 
66,246

 
66,403

 
66,227

Fully diluted weighted average shares outstanding
 
66,561

 
66,379

 
66,545

 
66,363