VORNADO REALTY TRUST (NYSE:VNO) filed its Form 10-Q for the quarter
ended September 30, 2014 today and reported:
NET INCOME attributable to common shareholders for the quarter ended
September 30, 2014 was $131.2 million, or $0.69 per diluted share,
compared to $83.0 million, or $0.44 per diluted share for the quarter
ended September 30, 2013. Net income for the quarters ended September
30, 2014 and 2013 include $57.8 million and $16.1 million, respectively,
of net gains on sale of real estate and $2.5 million of real estate
impairment losses in the quarter ended September 30, 2013. In addition,
the quarters ended September 30, 2014 and 2013 include certain other
items that affect comparability, which are listed in the table below.
Adjusting net income attributable to common shareholders for net gains
on sale of real estate, real estate impairment losses and the items in
the table below, net of amounts attributable to noncontrolling
interests, net income attributable to common shareholders for the
quarters ended September 30, 2014 and 2013 was $107.9 million and $103.6
million, or $0.57 and $0.55 per diluted share, respectively.
FUNDS FROM OPERATIONS attributable to common shareholders plus assumed
conversions (“FFO”) for the quarter ended September 30, 2014 was $217.4
million, or $1.15 per diluted share, compared to $210.6 million, or
$1.12 per diluted share for the prior year’s quarter. Adjusting FFO for
certain items that affect comparability which are listed in the table
below, FFO for the quarters ended September 30, 2014 and 2013 was $248.2
million and $231.9 million, or $1.31 and $1.23 per diluted share,
respectively.
(Amounts in thousands, except per share amounts)
|
For the Three Months Ended September 30,
|
|
|
|
2014
|
|
2013
|
FFO (1)
|
$
|
217,362
|
|
|
$
|
210,627
|
|
Per Share
|
$
|
1.15
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
Items that affect comparability income (expense):
|
|
|
|
|
|
|
Toys "R" Us Negative FFO
|
$
|
(18,035
|
)
|
|
$
|
(22,343
|
)
|
|
Impairment loss and loan loss reserve on investment in Suffolk Downs
|
|
(10,263
|
)
|
|
|
-
|
|
|
Acquisition and transaction related costs
|
|
(7,105
|
)
|
|
|
(2,818
|
)
|
|
Net gain on sale of residential condominiums
|
|
2,665
|
|
|
|
134
|
|
|
FFO from discontinued operations
|
|
335
|
|
|
|
7,169
|
|
|
Losses from the disposition of investment in J.C. Penney
|
|
-
|
|
|
|
(38,126
|
)
|
|
Net gain on sale of marketable securities
|
|
-
|
|
|
|
31,741
|
|
|
Other, net
|
|
(324
|
)
|
|
|
1,377
|
|
|
|
|
|
(32,727
|
)
|
|
|
(22,866
|
)
|
Noncontrolling interests' share of above adjustments
|
|
1,903
|
|
|
|
1,596
|
|
Items that affect comparability, net
|
$
|
(30,824
|
)
|
|
$
|
(21,270
|
)
|
|
|
|
|
|
|
|
|
FFO as adjusted for comparability
|
$
|
248,186
|
|
|
$
|
231,897
|
|
Per Share
|
$
|
1.31
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See page 4 for a reconciliation of our net income to FFO for the
three months ended September 30, 2014 and 2013.
|
Nine Months 2014 Results
NET INCOME attributable to common shareholders for the nine months ended
September 30, 2014 was $270.2 million, or $1.43 per diluted share,
compared to $460.9 million, or $2.46 per diluted share for the nine
months ended September 30, 2013. Net income for the nine months ended
September 30, 2014 and 2013 include $57.8 million and $284.5 million,
respectively, of net gains on sale of real estate, and $20.8 million and
$10.8 million, respectively, of real estate impairment losses. In
addition, the nine months ended September 30, 2014 and 2013 include
certain items that affect comparability, which are listed in the table
below. Adjusting net income attributable to common shareholders for real
estate impairment losses, net gains on sale of real estate, and the
items in the table below, net of amounts attributable to noncontrolling
interests, net income attributable to common shareholders for the nine
months ended September 30, 2014 and 2013 was $315.6 million and $282.5
million, or $1.67 and $1.51 per diluted share, respectively.
FFO for the nine months ended September 30, 2014 was $684.2 million, or
$3.63 per diluted share, compared to $647.8 million, or $3.45 per
diluted share for the prior year’s nine months. Adjusting FFO for
certain items that affect comparability which are listed in the table
below, FFO for the nine months ended September 30, 2014 and 2013 was
$750.4 million and $683.3 million, or $3.98 and $3.64 per diluted share,
respectively.
(Amounts in thousands, except per share amounts)
|
For the Nine Months Ended September 30,
|
|
|
|
2014
|
|
2013
|
FFO (1)
|
$
|
684,247
|
|
|
$
|
647,767
|
|
Per Share
|
$
|
3.63
|
|
|
$
|
3.45
|
|
|
|
|
|
|
|
|
|
Items that affect comparability income (expense):
|
|
|
|
|
|
|
Toys "R" Us Negative FFO (including impairment losses of $75,196 and
$78,542,
|
|
|
|
|
|
|
|
respectively)
|
$
|
(60,630
|
)
|
|
$
|
(30,747
|
)
|
|
Net gain on sale of residential condominiums and a land parcel in
2014
|
|
13,205
|
|
|
|
1,139
|
|
|
Acquisition and transaction related costs
|
|
(12,972
|
)
|
|
|
(6,769
|
)
|
|
Impairment loss and loan loss reserve on investment in Suffolk Downs
|
|
(10,263
|
)
|
|
|
-
|
|
|
FFO from discontinued operations, including LNR in 2013
|
|
6,316
|
|
|
|
42,179
|
|
|
Defeasance cost in connection with the refinancing of 909 Third
Avenue
|
|
(5,589
|
)
|
|
|
-
|
|
|
Losses from the disposition of investment in J.C. Penney
|
|
-
|
|
|
|
(127,888
|
)
|
|
Stop & Shop litigation settlement income
|
|
-
|
|
|
|
59,599
|
|
|
Net gain on sale of marketable securities
|
|
-
|
|
|
|
31,741
|
|
|
The Mart reduction-in-force and severance costs
|
|
-
|
|
|
|
(4,154
|
)
|
|
Preferred unit and share redemptions
|
|
-
|
|
|
|
(1,130
|
)
|
|
Other, net
|
|
(324
|
)
|
|
|
(1,742
|
)
|
|
|
|
(70,257
|
)
|
|
|
(37,772
|
)
|
Noncontrolling interests' share of above adjustments
|
|
4,096
|
|
|
|
2,198
|
|
Items that affect comparability, net
|
$
|
(66,161
|
)
|
|
$
|
(35,574
|
)
|
|
|
|
|
|
|
|
|
FFO as adjusted for comparability
|
$
|
750,408
|
|
|
$
|
683,341
|
|
Per Share
|
$
|
3.98
|
|
|
$
|
3.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See page 4 for a reconciliation of our net income to FFO for the
nine months ended September 30, 2014 and 2013.
|
Supplemental Financial Information
Further details regarding results of operations, properties and tenants
can be accessed at the Company’s website www.vno.com.
Vornado Realty Trust is a fully – integrated equity real estate
investment trust.
Certain statements contained herein may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
For a discussion of factors that could materially affect the outcome of
our forward-looking statements and our future results and financial
condition, see “Risk Factors” in Part I, Item 1A, of our Annual Report
on Form 10-K, as amended, for the year ended December 31, 2013. Such
factors include, among others, risks associated with the timing of and
costs associated with property improvements, financing commitments and
general competitive factors.
(tables to follow)
VORNADO REALTY TRUST
|
OPERATING RESULTS FOR THE THREE AND NINE
MONTHS ENDED
|
SEPTEMBER 30, 2014 AND 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
|
|
For the Nine Months
|
|
|
Ended September 30,
|
|
Ended September 30,
|
(Amounts in thousands, except per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
670,909
|
|
|
$
|
668,989
|
|
|
$
|
1,997,702
|
|
|
$
|
2,058,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
111,066
|
|
|
$
|
107,973
|
|
|
$
|
371,240
|
|
|
$
|
303,510
|
|
Income from discontinued operations
|
|
|
58,131
|
|
|
|
24,278
|
|
|
|
61,800
|
|
|
|
299,989
|
|
Net income
|
|
|
169,197
|
|
|
|
132,251
|
|
|
|
433,040
|
|
|
|
603,499
|
|
Less net income attributable to noncontrolling interests in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated subsidiaries
|
|
|
(9,685
|
)
|
|
|
(23,833
|
)
|
|
|
(85,239
|
)
|
|
|
(50,049
|
)
|
|
Operating Partnership
|
|
|
(7,975
|
)
|
|
|
(5,032
|
)
|
|
|
(16,514
|
)
|
|
|
(27,814
|
)
|
|
Preferred unit distributions of the Operating Partnership
|
|
|
(13
|
)
|
|
|
(12
|
)
|
|
|
(38
|
)
|
|
|
(1,146
|
)
|
Net income attributable to Vornado
|
|
|
151,524
|
|
|
|
103,374
|
|
|
|
331,249
|
|
|
|
524,490
|
|
Preferred share dividends
|
|
|
(20,365
|
)
|
|
|
(20,369
|
)
|
|
|
(61,099
|
)
|
|
|
(62,439
|
)
|
Preferred unit and share redemptions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,130
|
)
|
Net income attributable to common shareholders
|
|
$
|
131,159
|
|
|
$
|
83,005
|
|
|
$
|
270,150
|
|
|
$
|
460,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share - Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net
|
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
1.13
|
|
|
$
|
0.97
|
|
|
Income from discontinued operations, net
|
|
|
0.29
|
|
|
|
0.11
|
|
|
|
0.31
|
|
|
|
1.50
|
|
|
Net income per common share
|
|
$
|
0.70
|
|
|
$
|
0.44
|
|
|
$
|
1.44
|
|
|
$
|
2.47
|
|
|
Weighted average shares outstanding
|
|
|
187,671
|
|
|
|
186,969
|
|
|
|
187,503
|
|
|
|
186,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share - Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net
|
|
$
|
0.40
|
|
|
$
|
0.33
|
|
|
$
|
1.12
|
|
|
$
|
0.96
|
|
|
Income from discontinued operations, net
|
|
|
0.29
|
|
|
|
0.11
|
|
|
|
0.31
|
|
|
|
1.50
|
|
|
Net income per common share
|
|
$
|
0.69
|
|
|
$
|
0.44
|
|
|
$
|
1.43
|
|
|
$
|
2.46
|
|
|
Weighted average shares outstanding
|
|
|
188,812
|
|
|
|
187,724
|
|
|
|
188,592
|
|
|
|
187,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders plus assumed conversions
|
|
$
|
217,362
|
|
|
$
|
210,627
|
|
|
$
|
684,247
|
|
|
$
|
647,767
|
|
Per diluted share
|
|
$
|
1.15
|
|
|
$
|
1.12
|
|
|
$
|
3.63
|
|
|
$
|
3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO as adjusted for comparability
|
|
$
|
248,186
|
|
|
$
|
231,897
|
|
|
$
|
750,408
|
|
|
$
|
683,341
|
|
Per diluted share
|
|
$
|
1.31
|
|
|
$
|
1.23
|
|
|
$
|
3.98
|
|
|
$
|
3.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in determining FFO per diluted share
|
|
|
188,812
|
|
|
|
187,771
|
|
|
|
188,592
|
|
|
|
187,679
|
|
|
|
|
The following table reconciles our net income to FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
For the Three Months
|
|
For the Nine Months
|
|
|
|
|
Ended September 30,
|
|
Ended September 30,
|
Reconciliation of our net income to FFO:
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income attributable to Vornado
|
|
$
|
151,524
|
|
|
$
|
103,374
|
|
|
$
|
331,249
|
|
|
$
|
524,490
|
|
Depreciation and amortization of real property
|
|
|
123,578
|
|
|
|
117,901
|
|
|
|
387,549
|
|
|
|
377,142
|
|
Net gains on sale of real estate
|
|
|
(57,796
|
)
|
|
|
(16,087
|
)
|
|
|
(57,796
|
)
|
|
|
(284,081
|
)
|
Real estate impairment losses
|
|
|
-
|
|
|
|
720
|
|
|
|
20,842
|
|
|
|
4,727
|
|
Proportionate share of adjustments to equity in net income of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toys, to arrive at FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of real property
|
|
|
1,350
|
|
|
|
16,430
|
|
|
|
21,579
|
|
|
|
53,235
|
|
|
|
Net gains on sale of real estate
|
|
|
(760
|
)
|
|
|
-
|
|
|
|
(760
|
)
|
|
|
-
|
|
|
|
Real estate impairment losses
|
|
|
-
|
|
|
|
1,826
|
|
|
|
-
|
|
|
|
6,096
|
|
|
|
Income tax effect of above adjustments
|
|
|
(207
|
)
|
|
|
(6,390
|
)
|
|
|
(7,287
|
)
|
|
|
(20,766
|
)
|
Proportionate share of adjustments to equity in net income of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
partially owned entities, excluding Toys, to arrive at FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of real property
|
|
|
25,254
|
|
|
|
20,931
|
|
|
|
71,837
|
|
|
|
62,247
|
|
|
|
Net gains on sale of real estate
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(465
|
)
|
Noncontrolling interests' share of above adjustments
|
|
|
(5,240
|
)
|
|
|
(7,736
|
)
|
|
|
(21,916
|
)
|
|
|
(11,343
|
)
|
FFO
|
|
|
237,703
|
|
|
|
230,969
|
|
|
|
745,297
|
|
|
|
711,282
|
|
Preferred share dividends
|
|
|
(20,365
|
)
|
|
|
(20,369
|
)
|
|
|
(61,099
|
)
|
|
|
(62,439
|
)
|
Preferred unit and share redemptions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,130
|
)
|
FFO attributable to common shareholders
|
|
|
217,338
|
|
|
|
210,600
|
|
|
|
684,198
|
|
|
|
647,713
|
|
Convertible preferred share dividends
|
|
|
24
|
|
|
|
27
|
|
|
|
49
|
|
|
|
54
|
|
FFO attributable to common shareholders plus assumed conversions
|
|
$
|
217,362
|
|
|
$
|
210,627
|
|
|
$
|
684,247
|
|
|
$
|
647,767
|
|
FFO is computed in accordance with the definition adopted by the Board
of Governors of the National Association of Real Estate Investment
Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss
adjusted to exclude net gain from sales of depreciated real estate
assets, real estate impairment losses, depreciation and amortization
expense from real estate assets, extraordinary items and other specified
non-cash items, including the pro rata share of such adjustments of
unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP
financial measures used by management, investors and analysts to
facilitate meaningful comparisons of operating performance between
periods and among our peers because it excludes the effect of real
estate depreciation and amortization and net gains on sales, which are
based on historical costs and implicitly assume that the value of real
estate diminishes predictably over time, rather than fluctuating based
on existing market conditions. FFO does not represent cash generated
from operating activities and is not necessarily indicative of cash
available to fund cash requirements and should not be considered as an
alternative to net income as a performance measure or cash flow as a
liquidity measure. FFO may not be comparable to similarly titled
measures employed by other companies. A reconciliation of our net income
to FFO is provided above. In addition to FFO, we also disclose FFO
before certain items that affect comparability. Although this non-GAAP
measure clearly differs from NAREIT’s definition of FFO, we believe it
provides a meaningful presentation of operating performance.
Reconciliations of FFO to FFO as adjusted for comparability is provided
on page 1 and page 2 of this press release.
Conference Call and Audio Webcast
As previously announced, the Company will host a quarterly earnings
conference call and an audio webcast on Tuesday November 4, 2014 at
10:00 a.m. Eastern Time (ET). The conference call can be accessed by
dialing 800-708-4539 (domestic) or 847-619-6396 (international) and
indicating to the operator the passcode 38322664. A telephonic replay of
the conference call will be available from 1:00 p.m. ET on November
4, 2014 through December 4, 2014. To access the replay, please dial
888-843-7419 and enter the passcode 38322664#. A live webcast of the
conference call will be available on the Company’s website at www.vno.com
and an online playback of the webcast will be available on the website
for 90 days following the conference call.
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