Vornado Realty Trust (NYSE:VNO) announced today that it will record its 32.7% share of Toys “R” Us’ third quarter financial results in its fourth quarter ending December 31, 2011. Vornado’s results will include a net loss of $32,254,000, or $0.16 per diluted share, compared to a net loss of $30,685,000, or $0.15 per diluted share recorded in the quarter ended December 31, 2010.
Vornado’s share of negative Funds From Operations (“FFO”) before income taxes for the quarter ended December 31, 2011 will be $45,261,000, or $0.22 per diluted share, compared to negative FFO before income taxes of $57,311,000, or $0.28 per diluted share in the prior year’s quarter. Vornado’s share of negative FFO after income taxes for the quarter ended December 31, 2011 will be $20,529,000, or $0.10 per diluted share, compared to negative FFO after income taxes of $19,714,000, or $0.10 per diluted share in the prior year’s quarter.
The business of Toys is highly seasonal; historically, Toys’ fourth quarter net income accounts for more than 80% of its fiscal year net income.
Attached is a summary of Toys’ financial results and Vornado’s 32.7% share of its equity in Toys’ net loss, as well as reconciliations of net loss to earnings before interest, taxes, depreciation and amortization (“EBITDA”) and FFO.Vornado Realty Trust is a fully-integrated equity real estate investment trust. Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.
Toys "R" Us, Inc.
Condensed Consolidated Statements of Operations – Unaudited
|For the Quarter Ended|
|October 29, 2011||October 30, 2010|
|(Amounts in thousands)||Results on aHistoricalBasis||Results onVornado’sPurchase PriceAccountingBasis||Results onVornado’sPurchase PriceAccountingBasis|
|Cost of sales||1,714,000||1,714,000||1,732,000|
|Selling, general and administrative expenses||973,000||980,300||965,000|
|Depreciation and amortization||99,000||101,300||96,100|
|Other (income) expense, net||(11,000||)||(1,800||)||600|
|Total operating expenses||1,061,000||1,079,800||1,061,700|
|Loss before income taxes||(179,000||)||(200,700||)||(236,200||)|
|Income tax benefit||86,000||95,000||133,000|
|Net loss attributable to Toys “R” Us, Inc.||$||(93,000||)||$||(105,700||)||$||(103,200||)|
|Vornado’s 32.7% equity in Toys’ net loss||$||(34,543||)||$||(33,757||)|
|Management fee from Toys, net||2,289||2,984|
|Interest income on credit facility||-||88|
|Total Vornado net loss from its investment in Toys||$||(32,254||)||$||(30,685||)|
|See page 3 for a reconciliation of net loss to negative FFO.|
Reconciliation of Vornado’s net loss from its investment in Toys to EBITDA (1):
|Interest and debt expense||35,589||53,481|
|Depreciation and amortization||33,105||31,434|
|Income tax benefit||(31,046||)||(43,504||)|
|Vornado’s share of Toys’ EBITDA (1)||$||5,394||$||10,726|
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