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Vornado Announces Second Quarter 2012 Financial Results

FFO for the six months ended June 30, 2012 was $516.3 million, or $2.72 per diluted share, compared to $749.3 million, or $3.91 per diluted share, for the prior year’s six months. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the six months ended June 30, 2012 and 2011 was $549.9 million and $543.7 million, or $2.90 and $2.84 per diluted share, respectively.

 
(Amounts in thousands, except per share amounts)         For the Six Months Ended June 30,
2012       2011
FFO (1) $ 516,328 $ 749,349
Per Share $ 2.72 $ 3.91
 
Items that affect comparability income (expense):
(Loss) income from the mark-to-market of J.C. Penney derivative position $ (57,687) $ 10,401
FFO attributable to discontinued operations 21,200 29,028
Net gain on sale of condominiums 1,274 4,586
Net gain on extinguishment of debt - 83,907
Mezzanine loans loss reversal and net gain on disposition - 82,744
Our share of LNR's asset sales and tax settlement gains - 14,997
Net gain resulting from Lexington's stock issuances - 9,760
Buy-out of a below-market lease - (15,000)
Other, net (620) (978)
(35,833) 219,445
Noncontrolling interests' share of above adjustments 2,216 (13,820)
Items that affect comparability, net $ (33,617) $ 205,625
FFO as adjusted for comparability $ 549,945 $ 543,724
Per Share $ 2.90 $ 2.84
 
(1) See page 4 for a reconciliation of our net income to FFO for the six months ended June 30, 2012 and 2011.
 

Conference Call and Audio Webcast

As previously announced, the Company will host a quarterly earnings conference call and audio webcast on August 7, 2012 at 1:00 p.m. Eastern Daylight Time (EDT). The conference call can be accessed by dialing 800-446-1671 (domestic) or 847-413-3362 (international) and entering the passcode 32838269. A telephonic replay of the conference call will be available from 4:00 p.m. EDT on August 7, 2012 through August 21, 2012. To access the replay, please dial 888-843-7419 and enter the passcode 32838269#. A live webcast of the conference call will be available on the Company’s website www.vno.com and an online playback of the webcast will be available on the website for 90 days following the conference call.

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, 2011. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.

 

VORNADO REALTY TRUST

OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2012 AND 2011

 
        For the Three Months       For the Six Months
Ended June 30, Ended June 30,
(Amounts in thousands, except per share amounts) 2012       2011 2012       2011
 
Revenues $ 700,591 $ 696,038 $ 1,403,015 $ 1,397,437
 
Income from continuing operations $ 46,216 $ 120,600 $ 263,305 $ 424,589
Income from discontinued operations 12,012 10,369 75,187 152,201
Net income 58,228 130,969 338,492 576,790
Less net income attributable to noncontrolling interests in:
Consolidated subsidiaries (14,721) (13,657) (24,318) (15,007)
Operating Partnership, including unit distributions (5,210) (8,731) (24,355) (40,539)
Net income attributable to Vornado 38,297 108,581 289,819 521,244
Preferred share dividends (17,787) (16,668) (35,574) (30,116)
Net income attributable to common shareholders $ 20,510 $ 91,913 $ 254,245 $ 491,128
 
 
Net income per common share:
Basic $ 0.11 $ 0.50 $ 1.37 $ 2.67
Diluted $ 0.11 $ 0.49 $ 1.36 $ 2.63
 
Weighted average shares:
Basic 185,673 184,268 185,521 184,129
Diluted 186,342 186,144 186,271 191,736
 
 
FFO attributable to common shareholders plus assumed conversions $ 166,672 $ 243,418 $ 516,328 $ 749,349
Per diluted share $ 0.89 $ 1.27 $ 2.72 $ 3.91
 
FFO as adjusted for comparability $ 211,598 $ 220,260 $ 549,945 $ 543,724
Per diluted share $ 1.13 $ 1.15 $ 2.90 $ 2.84
 
Weighted average shares used in determining FFO per diluted share 186,391 191,935 189,701 191,736
 
 
The following table reconciles our net income to FFO:
 
(Amounts in thousands)         For the Three Months       For the Six Months
Ended June 30, Ended June 30,
Reconciliation of our net income to FFO: 2012       2011 2012       2011
Net income attributable to Vornado $ 38,297 $ 108,581 $ 289,819 $ 521,244
Depreciation and amortization of real property 126,063 124,326 258,621 248,647
Net gains on sale of real estate (16,896) (458) (72,713) (51,623)
Real estate impairment losses 13,511 - 13,511 -
Proportionate share of adjustments to equity in net income
of Toys, to arrive at FFO:
Depreciation and amortization of real property 16,513 17,168 33,801 34,897
Net gains on sale of real estate - (491) - (491)
Real estate impairment losses 1,368 - 8,394 -
Income tax effect of above adjustments (6,351) (5,835) (14,848) (12,040)
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 21,684 22,233 43,060 46,202
Net gains on sale of real estate (234) (2,120) (895) (3,769)
Real estate impairment losses - - 1,849 -
Noncontrolling interests' share of above adjustments (9,524) (9,906) (16,584) (16,756)
FFO 184,431 253,498 544,015 766,311
Preferred share dividends (17,787) (16,668) (35,574) (30,116)
FFO attributable to common shareholders 166,644 236,830 508,441 736,195
Interest on 3.88% exchangeable senior debentures - 6,556 7,830 13,090
Convertible preferred share dividends 28 32 57 64
FFO attributable to common shareholders plus assumed conversions $ 166,672 $ 243,418 $ 516,328 $ 749,349
 
 

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 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 are provided on page 1 and page 2 of this press release.

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