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 for the quarter ended September 30, 2023 and reported its financial results.

Additional information regarding our results of operations, properties, and tenants can be found in our Third Quarter 2023 Investor Package, which is posted in the Investor Relations section of our website at www.jbgsmith.com. We encourage investors to consider the information presented here with the information in that document.

Third Quarter 2023 Highlights

Net income (loss), Funds From Operations ("FFO") and Core FFO attributable to common shareholders were:


THIRD QUARTER AND YEAR-TO-DATE COMPARISON
in millions, except per share amounts	Three Months Ended												Nine Months Ended
	September 30, 2023						September 30, 2022						September 30, 2023						September 30, 2022
	Amount			Per Diluted Share			Amount			Per Diluted Share			Amount			Per Diluted Share			Amount		Per Diluted Share
Net income (loss) ⁽¹⁾	$	(58.0	)	$	(0.58	)	$	(19.3	)	$	(0.17	)	$	(47.4	)	$	(0.45	)	$	104.0	$	0.86
FFO	$	40.1		$	0.40		$	40.1		$	0.35		$	106.5		$	0.98		$	125.0	$	1.03
Core FFO	$	41.0		$	0.40		$	41.2		$	0.36		$	118.0		$	1.09		$	121.0	$	1.00
___________________________
(1) Includes impairment losses recorded in connection with the preparation and review of our third quarter 2023 consolidated financial statements totaling $59.3 million related to real estate assets, and impairment losses recorded by our unconsolidated real estate ventures, of which our proportionate share was $3.3 million and $15.4 million in 2023 and 2022.

Annualized Net Operating Income ("NOI") for the three months ended September 30, 2023 was $319.8 million, compared to $317.5 million for the three months ended June 30, 2023, at our share. Excluding the assets that were sold or recapitalized, Annualized NOI for the three months ended September 30, 2023 was $313.7 million, compared to $310.7 million for the three months ended June 30, 2023, at our share.
- The increase in Annualized NOI excluding the assets that were sold or recapitalized was substantially attributable to (i) an increase in our commercial portfolio NOI due to the burn off of free rent, partially offset by lower occupancy and higher utilities expense as a result of seasonality, and (ii) a decrease in our multifamily portfolio NOI due to higher concessions and turnover costs, partially offset by higher occupancy and rents.
Same Store NOI ("SSNOI") at our share increased 3.7% quarter-over-quarter to $76.9 million for the three months ended September 30, 2023. SSNOI at our share increased 0.5% year-over-year to $225.9 million for the nine months ended September 30, 2023.
- The increase in SSNOI for the three months ended September 30, 2023 was substantially attributable to (i) higher occupancy and rents, partially offset by higher concessions and higher operating expenses in our multifamily portfolio and (ii) higher vacancy, partially offset by the burn off of free rent and an increase in parking revenue in our commercial portfolio.

Operating Portfolio

The operating commercial portfolio was 85.6% leased and 84.4% occupied as of September 30, 2023, compared to 86.3% and 84.0% as of June 30, 2023, at our share.
The operating multifamily portfolio was 96.9% leased and 95.6% occupied as of September 30, 2023, compared to 96.8% and 93.7% as of June 30, 2023, at our share.
Executed approximately 434,000 square feet of office leases at our share during the three months ended September 30, 2023, comprising approximately 9,000 square feet of first-generation leases and approximately 425,000 square feet of second-generation leases, which generated a 0.9% rental rate increase on a GAAP basis and a 0.1% rental rate decrease on a cash basis.
Executed approximately 757,000 square feet of office leases at our share during the nine months ended September 30, 2023, comprising approximately 50,000 square feet of first-generation leases and approximately 707,000 square feet of second-generation leases, which generated a 2.4% rental rate increase on a GAAP basis and a 0.7% rental rate increase on a cash basis.

Development Portfolio

Under-Construction

As of September 30, 2023, we had two multifamily assets under construction consisting of 1,583 units at our share.

Development Pipeline

As of September 30, 2023, we had 20 assets in the development pipeline consisting of 9.8 million square feet of estimated potential development density at our share.

Third-Party Asset Management and Real Estate Services Business

For the three months ended September 30, 2023, revenue from third-party real estate services, including reimbursements, was $23.9 million. Excluding reimbursements and service revenue from our interests in real estate ventures, revenue from our third-party asset management and real estate services business was $12.7 million, primarily driven by $5.8 million of property and asset management fees, $4.3 million of development fees, $1.3 million of other service revenue and $1.0 million of leasing fees.

Balance Sheet

As of September 30, 2023, our total enterprise value was approximately $4.1 billion, comprising 111.4 million common shares and units valued at $1.6 billion, and debt (net of premium / (discount) and deferred financing costs) at our share of $2.6 billion, less cash and cash equivalents at our share of $138.3 million.
As of September 30, 2023, we had $130.5 million of cash and cash equivalents ($138.3 million of cash and cash equivalents at our share), and $657.5 million of capacity under our revolving credit facility.
Net Debt to annualized Adjusted EBITDA at our share for the three months ended September 30, 2023 was 8.1x, and our Net Debt / total enterprise value was 60.5% as of September 30, 2023.

Investing and Financing Activities

On August 24, 2023, one of our unconsolidated real estate ventures sold Stonebridge at Potomac Town Center, a 504,327 square foot commercial asset in Woodbridge, Virginia, for $17.3 million at our 10.0% share.
On September 20, 2023, we sold Falkland Chase – South & West and Falkland Chase – North, multifamily assets in Silver Spring, Maryland, totaling 438 units, for $95.0 million.
An increase of $30.0 million in borrowings under our revolving credit facility.
We repurchased and retired 7.9 million common shares for $120.8 million, a weighted average purchase price per share of $15.24.

Subsequent to September 30, 2023:

On October 4, 2023, we sold 5 M Street Southwest, an asset in our development pipeline located in Washington, DC with an estimated potential development density of 664,700 square feet, for $29.5 million.
We repurchased and retired 2.0 million common shares for $28.0 million, a weighted average purchase price per share of $13.85, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Dividends

On October 31, 2023, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on December 1, 2023 to shareholders of record as of November 17, 2023.

About JBG SMITH

JBG SMITH owns, operates, invests in, and develops mixed-use properties in high growth and high barrier-to-entry submarkets in and around Washington, DC. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, DC metropolitan area. Approximately two-thirds of JBG SMITH's holdings are in the National Landing submarket in Northern Virginia, which is anchored by four key demand drivers: Amazon's new headquarters; Virginia Tech's under-construction $1 billion Innovation Campus; the submarket's proximity to the Pentagon; and JBG SMITH's deployment of next-generation public and private 5G digital infrastructure. JBG SMITH's dynamic portfolio currently comprises 14.7 million square feet of high-growth office, multifamily, and retail assets at share, 99% of which are Metro-served. It also maintains a development pipeline encompassing 9.8 million square feet of mixed-use, primarily multifamily, development opportunities. JBG SMITH is committed to the operation and development of green, smart, and healthy buildings and plans to maintain carbon neutral operations annually. For more 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, financial condition and business of JBG SMITH Properties ("JBG SMITH", the "Company", "we", "us", "our" or similar terms) 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", "hypothetical", "potential", "believes", "expects", "anticipates", "estimates", "intends", "plans", "would", "may" or similar expressions in this earnings release. We also note the following forward-looking statements: changes to the amount and manner in which tenants use space; our annual dividend per share and dividend yield; whether in the case of our under-construction assets and assets in the development pipeline, estimated square feet, estimated number of units and estimated potential development density are accurate; expected timing, completion, modifications and delivery dates for the projects we are developing; the ability of any or all of our demand drivers to materialize and their effect on economic impact, job growth, expansion of public transportation and related demand in the National Landing submarket; planned infrastructure and educational improvements related to Amazon's additional headquarters and the Virginia Tech Innovation Campus; our development plans related to National Landing; whether we will be able to successfully shift the majority of our portfolio to multifamily; and whether the allocation of capital to our share repurchase plan has any impact on our share price.

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," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10‑K for the year ended December 31, 2022 and other periodic reports the Company files with the Securities and Exchange Commission. 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 to reflect events or circumstances occurring 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 asset-by-asset basis by applying our percentage economic interest to each applicable line item of that asset'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 a substantial portion of our assets are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors valuable 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.

With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third-party not involved. We and our respective co-venturers may each have the right to trigger a buy-sell or forced sale arrangement, which could cause us to sell our interest, or acquire our co-venturers' interests, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction. Our real estate ventures may be subject to debt, and the repayment or refinancing of such debt may require equity capital calls. To the extent our co-venturers do not meet their obligations to us or our real estate ventures or they act inconsistent with the interests of the real estate venture, we may be adversely affected. Because of these limitations, 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.

Occupancy, non-GAAP financial measures, leverage metrics, operating assets and operating metrics presented in our investor package exclude our 10.0% subordinated interest in one commercial building, our 33.5% subordinated interest in four commercial buildings, and our 49.0% interest in three commercial buildings, as well as the associated non-recourse mortgage loans, held through unconsolidated real estate ventures, as our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures, and we have not guaranteed their obligations or otherwise committed to providing financial support.

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 earnings 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" financial information, the following non-GAAP measures are included in this release:

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and "Adjusted EBITDA" are non-GAAP financial measures. EBITDA and EBITDAre are used by management as supplemental operating performance measures, which we believe help 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 outstanding debt and the impact of our interest rate swaps and caps) and certain non-cash expenses (primarily depreciation and amortization expense on our assets). EBITDAre is computed in accordance with the definition established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expense, gains and losses on sales of real estate and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments of unconsolidated real estate ventures. These supplemental measures may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA and EBITDAre are not substitutes for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA represents EBITDAre adjusted for items we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gain (loss) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, lease liability adjustments, income from investments, business interruption insurance proceeds, litigation settlement proceeds and share-based compensation expense related to the Formation Transaction and special equity awards. 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, EBITDAre and Adjusted EBITDA have limitations as analytical tools, we use EBITDA, EBITDAre and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA, EBITDAre and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results.

Funds from Operations ("FFO"), "Core FFO" and Funds Available for Distribution ("FAD") are non-GAAP financial measures. FFO is computed in accordance with the definition established by Nareit in the Nareit FFO White Paper - 2018 Restatement. Nareit defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization expense related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments for unconsolidated real estate 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, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gain (loss) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, share-based compensation expense related to the Formation Transaction and special equity awards, lease liability adjustments, income from investments, business interruption insurance proceeds, litigation settlement proceeds, amortization of the management contracts intangible and the mark-to-market of derivative instruments, including our share of such adjustments for unconsolidated real estate ventures.

FAD represents Core FFO adjusted for recurring tenant improvements, leasing commissions and other capital expenditures, net deferred rent activity, third-party lease liability assumption (payments) refunds, recurring share-based compensation expense, accretion of acquired below-market leases, net of amortization of acquired above-market leases, amortization of debt issuance costs and other non-cash income and charges, including our share of such adjustments for unconsolidated real estate ventures. FAD is presented solely as a supplemental disclosure that management believes provides useful information as it relates to our ability to fund dividends.

We believe FFO, Core FFO and FAD 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, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions, and other non-comparable income and expenses. FFO, Core FFO and FAD 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 (loss) (computed in accordance with GAAP) as a performance measure or cash flow as a liquidity measure. FFO, Core FFO and FAD may not be comparable to similarly titled measures used by other companies.

"Net Debt" is a non-GAAP financial measurement. Net Debt represents our total consolidated and unconsolidated indebtedness less cash and cash equivalents at our share. Net Debt is an important component in the calculations of Net Debt to Annualized Adjusted EBITDA and Net Debt / total enterprise value. We believe that Net Debt is a meaningful non-GAAP financial measure useful to investors because we review Net Debt as part of the management of our overall financial flexibility, capital structure and leverage. We may utilize a considerable portion of our cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents at our share may not be solely controlled by us. The deduction of cash and cash equivalents at our share from consolidated and unconsolidated indebtedness in the calculation of Net Debt, therefore, should not be understood to mean that it is available exclusively for debt reduction at any given time.

Net Operating Income ("NOI") and "Annualized NOI" are non-GAAP financial measures management uses to assess an asset's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of Free Rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, 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 the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our financial statements. NOI should not be considered as an alternative to net income (loss) attributable to common shareholders as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Annualized NOI, for all assets except Crystal City Marriott, represents NOI for the three months ended September 30, 2023 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12‑month NOI as of September 30, 2023. Management believes Annualized NOI provides useful information in understanding our 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 earnings release. There can be no assurance that the Annualized NOI shown will reflect our actual results of operations over any 12‑month period.

Definitions

"Development Pipeline" refers to assets that have the potential to commence construction subject to receipt of full entitlements, completion of design and market conditions where we (i) own land or control the land through a ground lease or (ii) are under a long-term conditional contract to purchase, or enter into, a leasehold interest with respect to land.

"Estimated Potential Development Density" reflects management's estimate of developable gross square feet based on our current business plans with respect to real estate owned or controlled as of September 30, 2023. Our current business plans may contemplate development of less than the maximum potential development density for individual assets. As market conditions change, our business plans, and therefore, the Estimated Potential Development Density, could change accordingly. Given timing, zoning requirements and other factors, we make no assurance that Estimated Potential Development Density amounts will become actual density to the extent we complete development of assets for which we have made such estimates.

"First-generation" is a lease on space that had been vacant for at least nine months or a lease on newly delivered space.

"Formation Transaction" refers collectively to the spin-off on July 17, 2017 of substantially all of the assets and liabilities of Vornado Realty Trust's Washington, DC segment, which operated as Vornado / Charles E. Smith, and the acquisition of the management business and certain assets and liabilities of The JBG Companies.

"Free Rent" means the amount of base rent and tenant reimbursements that are abated according to the applicable lease agreement(s).

"GAAP" means accounting principles generally accepted in the United States of America.

"In-Service" refers to commercial or multifamily operating assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of September 30, 2023.

"Non-Same Store" refers to all operating assets excluded from the same store pool.

"Same Store" refers to the pool of assets that were in-service 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.

"Second-generation" is a lease on space that had been vacant for less than nine months.

"Transaction and Other Costs" include pursuit costs related to completed, potential and pursued transactions, demolition costs, severance and other costs.

"Under-Construction" refers to assets that were under construction during the three months ended September 30, 2023.


CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

in thousands	September 30, 2023			December 31, 2022

ASSETS
Real estate, at cost:
Land and improvements	$	1,207,873		$	1,302,569
Buildings and improvements		4,037,280			4,310,821
Construction in progress, including land		709,878			544,692
		5,955,031			6,158,082
Less: accumulated depreciation		(1,355,355	)		(1,335,000	)
Real estate, net		4,599,676			4,823,082
Cash and cash equivalents		130,522			241,098
Restricted cash		38,257			32,975
Tenant and other receivables		44,080			56,304
Deferred rent receivable		171,121			170,824
Investments in unconsolidated real estate ventures		296,397			299,881
Intangible assets, net		139,876			162,246
Other assets, net		217,903			117,028
Assets held for sale		28,336			—
TOTAL ASSETS	$	5,666,168		$	5,903,438

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Liabilities:
Mortgage loans, net	$	1,727,133		$	1,890,174
Revolving credit facility		92,000			—
Term loans, net		716,953			547,072
Accounts payable and accrued expenses		135,085			138,060
Other liabilities, net		145,550			132,710
Total liabilities		2,816,721			2,708,016
Commitments and contingencies
Redeemable noncontrolling interests		444,361			481,310
Total equity		2,405,086			2,714,112
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	5,666,168		$	5,903,438

___________________________
Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

in thousands, except per share data	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
REVENUE
Property rental	$	120,294		$	119,811		$	364,919		$	368,445
Third-party real estate services, including reimbursements		23,942			21,845			69,588			67,972
Other revenue		7,326			5,958			22,112			18,667
Total revenue		151,562			147,614			456,619			455,084
EXPENSES
Depreciation and amortization		50,265			50,056			152,914			157,597
Property operating		37,588			36,380			109,112			112,469
Real estate taxes		14,413			14,738			44,061			47,870
General and administrative:
Corporate and other		11,246			12,072			42,462			42,669
Third-party real estate services		21,405			21,230			67,333			72,422
Share-based compensation related to Formation Transaction and special equity awards		46			548			397			4,369
Transaction and other costs		1,830			1,746			7,794			4,632
Total expenses		136,793			136,770			424,073			442,028
OTHER INCOME (EXPENSE)
Loss from unconsolidated real estate ventures, net		(2,263	)		(13,867	)		(1,320	)		(12,829	)
Interest and other income, net		7,774			984			14,132			16,902
Interest expense		(27,903	)		(17,932	)		(80,580	)		(50,251	)
Gain on the sale of real estate, net		906			—			41,606			158,631
Loss on the extinguishment of debt		—			(1,444	)		(450	)		(3,073	)
Impairment loss		(59,307	)		—			(59,307	)		—
Total other income (expense)		(80,793	)		(32,259	)		(85,919	)		109,380
INCOME (LOSS) BEFORE INCOME TAX EXPENSE		(66,024	)		(21,415	)		(53,373	)		122,436
Income tax expense		(77	)		(166	)		(672	)		(2,600	)
NET INCOME (LOSS)		(66,101	)		(21,581	)		(54,045	)		119,836
Net (income) loss attributable to redeemable noncontrolling interests		7,926			2,546			5,961			(15,712	)
Net (income) loss attributable to noncontrolling interests		168			(258	)		703			(174	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(58,007	)	$	(19,293	)	$	(47,381	)	$	103,950
EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED	$	(0.58	)	$	(0.17	)	$	(0.45	)	$	0.86
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED		101,445			114,360			108,351			120,741
_____________________________
Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.


EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)
(Unaudited)

dollars in thousands	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

EBITDA, EBITDAre and Adjusted EBITDA
Net income (loss)	$	(66,101	)	$	(21,581	)	$	(54,045	)	$	119,836
Depreciation and amortization expense		50,265			50,056			152,914			157,597
Interest expense		27,903			17,932			80,580			50,251
Income tax expense		77			166			672			2,600
Unconsolidated real estate ventures allocated share of above adjustments		4,499			7,725			12,781			27,048
EBITDA attributable to noncontrolling interests		(2	)		(28	)		(4	)		(101	)
EBITDA	$	16,641		$	54,270		$	192,898		$	357,231
Gain on the sale of real estate, net		(906	)		—			(41,606	)		(158,631	)
Gain on the sale of unconsolidated real estate assets		(641	)		—			(641	)		(6,179	)
Real estate impairment loss		59,307			—			59,307			—
Impairment related to unconsolidated real estate ventures ⁽¹⁾		3,319			15,401			3,319			15,401

EBITDAre	$	77,720		$	69,671		$	213,277		$	207,822
Transaction and other costs, net of noncontrolling interests ⁽²⁾		1,830			1,746			7,794			4,598
Litigation settlement proceeds, net		(3,455	)		—			(3,455	)		—
(Income) loss from investments, net		221			567			(1,114	)		(14,721	)
Loss on the extinguishment of debt		—			1,444			450			3,073
Share-based compensation related to Formation Transaction and special equity awards		46			548			397			4,369
Earnings and distributions in excess of our investment in unconsolidated real estate venture		(80	)		(18	)		(588	)		(583	)
Lease liability adjustments		—			—			(154	)		—
Unconsolidated real estate ventures allocated share of above adjustments		31			34			33			2,079

Adjusted EBITDA	$	76,313		$	73,992		$	216,640		$	206,637

Net Debt to Annualized Adjusted EBITDA ⁽³⁾	8.1x			7.9x			8.5x			8.4x

							September 30, 2023			September 30, 2022
Net Debt (at JBG SMITH Share)
Consolidated indebtedness ⁽⁴⁾							$	2,523,354		$	2,382,429
Unconsolidated indebtedness ⁽⁴⁾								79,992			215,341
Total consolidated and unconsolidated indebtedness								2,603,346			2,597,770
Less: cash and cash equivalents								138,282			272,388
Net Debt (at JBG SMITH Share)							$	2,465,064		$	2,325,382
___________________________
Note: All EBITDA measures as shown above are attributable to common limited partnership units ("OP Units") and certain fully-vested incentive equity awards that may be convertible into OP Units.
(1) Related to decreases in the value of the underlying real estate assets.
(2) Includes pursuit costs related to completed, potential and pursued transactions, demolition costs, severance and other costs.
(3) Quarterly Adjusted EBITDA is annualized by multiplying by four. Adjusted EBITDA for the nine months ended September 30, 2023 and 2022 is annualized by multiplying by 1.33.
(4) Net of premium/discount and deferred financing costs.


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)
(Unaudited)

in thousands, except per share data	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022

FFO and Core FFO
Net income (loss) attributable to common shareholders	$(58,007)	$(19,293)	$(47,381)	$103,950
Net income (loss) attributable to redeemable noncontrolling interests	(7,926)	(2,546)	(5,961)	15,712
Net income (loss) attributable to noncontrolling interests	(168)	258	(703)	174
Net income (loss)	(66,101)	(21,581)	(54,045)	119,836
Gain on the sale of real estate, net of tax	(906)	—	(41,606)	(155,506)
Gain on the sale of unconsolidated real estate assets	(641)	—	(641)	(6,179)
Real estate depreciation and amortization	48,568	47,840	147,681	150,599
Real estate impairment loss	59,307	—	59,307	—
Impairment related to unconsolidated real estate ventures ⁽¹⁾	3,319	15,401	3,319	15,401
Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures	2,984	4,999	8,855	18,285
FFO attributable to noncontrolling interests	168	(336)	703	(409)
FFO Attributable to OP Units	$46,698	$46,323	$123,573	$142,027
FFO attributable to redeemable noncontrolling interests	(6,600)	(6,227)	(17,050)	(17,070)
FFO Attributable to Common Shareholders	$40,098	$40,096	$106,523	$124,957

FFO attributable to OP Units	$46,698	$46,323	$123,573	$142,027
Transaction and other costs, net of tax and noncontrolling interests ⁽²⁾	1,755	1,597	7,465	4,332
Litigation settlement proceeds, net	(3,455)	—	(3,455)	—
(Income) loss from investments, net of tax	165	567	(836)	(10,928)
(Gain) loss from mark-to-market on derivative instruments, net of noncontrolling interests	1,572	(2,779)	6,714	(8,173)
Loss on the extinguishment of debt	—	1,444	450	3,073
Earnings and distributions in excess of our investment in unconsolidated real estate venture	(80)	(18)	(588)	(583)
Share-based compensation related to Formation Transaction and special equity awards	46	548	397	4,369
Lease liability adjustments	—	—	(154)	—
Amortization of management contracts intangible, net of tax	1,031	1,105	3,161	3,316
Unconsolidated real estate ventures allocated share of above adjustments	63	(416)	104	1,129
Core FFO Attributable to OP Units	$47,795	$48,371	$136,831	$138,562
Core FFO attributable to redeemable noncontrolling interests	(6,755)	(7,158)	(18,858)	(17,541)
Core FFO Attributable to Common Shareholders	$41,040	$41,213	$117,973	$121,021
FFO per common share - diluted	$0.40	$0.35	$0.98	$1.03
Core FFO per common share - diluted	$0.40	$0.36	$1.09	$1.00
Weighted average shares - diluted (FFO and Core FFO)	101,461	114,387	108,359	120,752

See footnotes under table below.


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)
(Unaudited)

in thousands, except per share data	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

FAD
Core FFO attributable to OP Units	$	47,795		$	48,371		$	136,831		$	138,562
Recurring capital expenditures and Second-generation tenant improvements and leasing commissions ⁽³⁾		(9,225	)		(10,094	)		(28,621	)		(37,096	)
Straight-line and other rent adjustments ⁽⁴⁾		(5,226	)		(6,018	)		(19,914	)		(9,787	)
Third-party lease liability assumption (payments) refunds		—			—			70			(25	)
Share-based compensation expense		5,995			5,714			24,480			26,378
Amortization of debt issuance costs		3,372			1,122			6,022			3,433
Unconsolidated real estate ventures allocated share of above adjustments		875			(2,618	)		1,918			(3,555	)
Non-real estate depreciation and amortization		323			740			1,019			2,568
FAD available to OP Units (A)	$	43,909		$	37,217		$	121,805		$	120,478
Distributions to common shareholders and unitholders(B)	$	26,801		$	29,833		$	84,104		$	94,204
FAD Payout Ratio (B÷A) ⁽⁵⁾		61.0	%		80.2	%		69.0	%		78.2	%

Capital Expenditures
Maintenance and recurring capital expenditures	$	3,964		$	4,944		$	11,644		$	15,855
Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures		10			84			45			478
Second-generation tenant improvements and leasing commissions		5,222			5,038			16,769			20,345
Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures		29			28			163			418
Recurring capital expenditures and Second-generation tenant improvements and leasing commissions		9,225			10,094			28,621			37,096
Non-recurring capital expenditures		10,422			13,832			31,019			40,194
Share of non-recurring capital expenditures from unconsolidated real estate ventures		—			9			5			58
First-generation tenant improvements and leasing commissions		7,288			13,627			14,587			22,274
Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures		94			321			647			1,038
Non-recurring capital expenditures		17,804			27,789			46,258			63,564
Total JBG SMITH Share of Capital Expenditures	$	27,029		$	37,883		$	74,879		$	100,660
___________________________
(1) Related to decreases in the value of the underlying real estate assets.
(2) Includes pursuit costs related to completed, potential and pursued transactions, demolition costs, severance and other costs.
(3) Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures.
(4) Includes straight-line rent, above/below market lease amortization and lease incentive amortization.
(5) The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations.


NOI RECONCILIATIONS (NON-GAAP)
(Unaudited)

dollars in thousands	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

Net income (loss) attributable to common shareholders	$	(58,007	)	$	(19,293	)	$	(47,381	)	$	103,950
Add:
Depreciation and amortization expense		50,265			50,056			152,914			157,597
General and administrative expense:
Corporate and other		11,246			12,072			42,462			42,669
Third-party real estate services		21,405			21,230			67,333			72,422
Share-based compensation related to Formation Transaction and special equity awards		46			548			397			4,369
Transaction and other costs		1,830			1,746			7,794			4,632
Interest expense		27,903			17,932			80,580			50,251
Loss on the extinguishment of debt		—			1,444			450			3,073
Impairment loss		59,307			—			59,307			—
Income tax expense		77			166			672			2,600
Net income (loss) attributable to redeemable noncontrolling interests		(7,926	)		(2,546	)		(5,961	)		15,712
Net income (loss) attributable to noncontrolling interests		(168	)		258			(703	)		174
Less:
Third-party real estate services, including reimbursements revenue		23,942			21,845			69,588			67,972
Other revenue		2,704			1,764			8,276			5,758
Loss from unconsolidated real estate ventures, net		(2,263	)		(13,867	)		(1,320	)		(12,829	)
Interest and other income, net		7,774			984			14,132			16,902
Gain on the sale of real estate, net		906			—			41,606			158,631

Consolidated NOI		72,915			72,887			225,582			221,015
NOI attributable to unconsolidated real estate ventures at our share		5,374			7,107			14,977			22,371
Non-cash rent adjustments ⁽¹⁾		(5,226	)		(6,018	)		(19,914	)		(9,787	)
Other adjustments ⁽²⁾		5,803			6,230			17,820			20,689
Total adjustments		5,951			7,319			12,883			33,273
NOI	$	78,866		$	80,206		$	238,465		$	254,288
Less: out-of-service NOI loss ⁽³⁾		(995	)		(548	)		(2,606	)		(4,043	)
Operating Portfolio NOI	$	79,861		$	80,754		$	241,071		$	258,331
Non-Same Store NOI ⁽⁴⁾		3,003			6,626			15,181			33,512
Same Store NOI ⁽⁵⁾	$	76,858		$	74,128		$	225,890		$	224,819

Change in Same Store NOI		3.7	%					0.5	%
Number of properties in Same Store pool		48						46
_________________________
(1) Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization.
(2) Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and related party management fees.
(3) Includes the results of our Under-Construction assets and assets in the Development Pipeline.
(4) Includes the results of properties that were not In-Service for the entirety of both periods being compared, including disposed properties, and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.
(5) Includes the results of the properties that are owned, operated and In-Service for the entirety of both periods being compared.

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