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Vornado Announces Second Quarter 2019 Financial Results

Vornado Announces Second Quarter 2019 Financial Results

NEW YORK, July 29, 2019 (GLOBE NEWSWIRE) -- VORNADO REALTY TRUST (VNO) reported today:

Quarter Ended June 30, 2019 Financial Results

NET INCOME attributable to common shareholders for the quarter ended June 30, 2019 was $2.400 billion, or $12.56 per diluted share, compared to $111,534,000, or $0.58 per diluted share, for the prior year's quarter. Adjusting net income attributable to common shareholders for the items that impact the comparability of period-to-period net income listed in the table on the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the quarters ended June 30, 2019 and 2018 was $42,552,000 and $68,759,000, or $0.22 and $0.36 per diluted share, respectively.

FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended June 30, 2019 was $164,329,000, or $0.86 per diluted share, compared to $194,653,000, or $1.02 per diluted share, for the prior year's quarter.  Adjusting FFO attributable to common shareholders plus assumed conversions for the items that impact the comparability of period-to-period FFO listed in the table on page 3, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarters ended June 30, 2019 and 2018 was $173,775,000 and $186,405,000, or $0.91 and $0.98 per diluted share, respectively.

The decreases in "net income attributable to common shareholders, as adjusted" and "FFO attributable to common shareholders plus assumed conversions, as adjusted" were partially due to $8,387,000 (at share), or $0.04 per diluted share, from the non-cash write-off of straight-line rent receivables and $5,645,000, or $0.03 per diluted share, of non-cash expense for the time-based equity compensation granted in connection with the previously announced new leadership group.

Six Months Ended June 30, 2019 Financial Results

NET INCOME attributable to common shareholders for the six months ended June 30, 2019 was $2.582 billion, or $13.51 per diluted share, compared to $93,693,000, or $0.49 per diluted share, for the six months ended June 30, 2018. Adjusting net income attributable to common shareholders for the items that impact the comparability of period-to-period net income listed in the table on the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the six months ended June 30, 2019 and 2018 was $67,466,000 and $124,234,000, or $0.35 and $0.65 per diluted share, respectively.

FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the six months ended June 30, 2019 was $412,013,000, or $2.16 per diluted share, compared to $329,653,000, or $1.72 per diluted share, for the six months ended June 30, 2018. Adjusting FFO attributable to common shareholders plus assumed conversions for the items that impact the comparability of period-to-period FFO listed in the table on page 3, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the six months ended June 30, 2019 and 2018 was $323,790,000 and $359,276,000, or $1.70 and $1.88 per diluted share, respectively.

The decreases in "net income attributable to common shareholders, as adjusted" and "FFO attributable to common shareholders plus assumed conversions, as adjusted" were partially due to (i) $8,387,000 (at share), or $0.04 per diluted share, from the non-cash write-off of straight-line rent receivables, (ii) $5,645,000, or $0.03 per diluted share, of non-cash expense for the time-based equity compensation granted in connection with the previously announced new leadership group and (iii) $13,633,000, or $0.07 per share, of non-cash expense for the accelerated vesting of previously issued OP Units and Vornado restricted stock due to the removal of the time-based vesting requirement to participants who have reached 65 years of age.

The following table reconciles our net income attributable to common shareholders to net income attributable to common shareholders, as adjusted (non-GAAP):

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
  2019   2018   2019   2018
Net income attributable to common shareholders $ 2,400,195     $ 111,534     $ 2,581,683     $ 93,693  
Per diluted share $ 12.56     $ 0.58     $ 13.51     $ 0.49  
               
Certain (income) expense items that impact net income attributable to common shareholders:              
Net gain on transfer to Fifth Avenue and Times Square retail JV, net of $11,945 attributable to noncontrolling interests $ (2,559,154 )   $     $ (2,559,154 )   $  
Non-cash impairment losses and related write-offs, substantially 608 Fifth Avenue 108,592         108,592      
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units (88,921 )       (219,875 )    
Our share of loss (income) from real estate fund investments 20,758     (551 )   23,662     (1,365 )
Mark-to-market (increase) decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from March 12, 2019) (1,313 )       14,336      
Net gains on sale of real estate     (24,449 )       (24,436 )
Mark-to-market (increase) decrease in Lexington Realty Trust ("Lexington") common shares (sold on March 1, 2019)     (15,883 )   (16,068 )   16,992  
Profit participation on the April 2018 sale of 701 Seventh Avenue     (5,457 )       (5,457 )
Previously capitalized internal leasing costs(1)     (1,358 )       (2,706 )
Our share of loss from 666 Fifth Avenue Office Condominium (49.5% interest)     1,269         4,761  
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on March 4, 2019)         (62,395 )    
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022         22,540      
Our share of disputed additional New York City transfer taxes             23,503  
Preferred share issuance costs             14,486  
Other 2,802     817     3,954     6,792  
  (2,517,236 )   (45,612 )   (2,684,408 )   32,570  
Noncontrolling interests' share of above adjustments 159,593     2,837     170,191     (2,029 )
Total of certain (income) expense items that impact net income attributable to common shareholders $ (2,357,643 )   $ (42,775 )   $ (2,514,217 )   $ 30,541  
               
Net income attributable to common shareholders, as adjusted (non-GAAP) $ 42,552     $ 68,759     $ 67,466     $ 124,234  
Per diluted share (non-GAAP) $ 0.22     $ 0.36     $ 0.35     $ 0.65  

____________________________________________________________
See notes on the following page.

 

The following table reconciles our FFO attributable to common shareholders plus assumed conversions (non-GAAP) to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP):

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
  2019   2018   2019   2018
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(2) $ 164,329     $ 194,653     $ 412,013     $ 329,653  
Per diluted share (non-GAAP) $ 0.86     $ 1.02     $ 2.16     $ 1.72  
               
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions:              
After-tax net gain on sale of 220 CPS condominium units $ (88,921 )   $     $ (219,875 )   $  
Non-cash impairment loss and related write-offs on 608 Fifth Avenue 77,156         77,156      
Our share of loss (income) from real estate fund investments 20,758     (551 )   23,662     (1,365 )
Profit participation on the April 2018 sale of 701 Seventh Avenue     (5,457 )       (5,457 )
Our share of FFO from 666 Fifth Avenue Office Condominium (49.5% interest)     (2,178 )       (2,041 )
Previously capitalized internal leasing costs(1)     (1,358 )       (2,706 )
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022         22,540      
Our share of disputed additional New York City transfer taxes             23,503  
Preferred share issuance costs             14,486  
Other 1,092     749     2,298     5,033  
  10,085     (8,795 )   (94,219 )   31,453  
Noncontrolling interests' share of above adjustments (639 )   547     5,996     (1,830 )
Total of certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions, net $ 9,446     $ (8,248 )   $ (88,223 )   $ 29,623  
               
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) $ 173,775     $ 186,405     $ 323,790     $ 359,276  
Per diluted share (non-GAAP) $ 0.91     $ 0.98     $ 1.70     $ 1.88  

____________________________________________________________

(1) "Net income, as adjusted" and "FFO, as adjusted" for the three and six months ended June 30, 2018 have been reduced by $1,358 and $2,706, or $0.01 and $0.01 per diluted share, respectively for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized.
(2) See page 11 for a reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and six months ended June 30, 2019 and 2018.

Dispositions:

220 CPS

During the three months ended June 30, 2019, we closed on the sale of 11 condominium units at 220 CPS for net proceeds aggregating $265,250,000 resulting in a financial statement net gain of $111,713,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, $22,792,000 of income tax expense was recognized in our consolidated statements of income.

Fifth Avenue and Times Square JV

On April 18, 2019 (the “Closing Date”), we entered into a transaction agreement (the “Transaction Agreement”) with a group of institutional investors (the “Investors”). The Transaction Agreement provides for a series of transactions (collectively, the “Transaction”) pursuant to which (i) prior to the Closing Date, we contributed our interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the “Properties”) to subsidiaries of a newly formed joint venture (“Fifth Avenue and Times Square JV”) and (ii) on the Closing Date, transferred a 48.5% common interest in Fifth Avenue and Times Square JV to the Investors. The 48.5% common interest in the joint venture represents an effective 47.2% interest in the Properties (of which 45.4% was transferred from Vornado). The Properties include approximately 489,000 square feet of retail space, 327,000 square feet of office space, signage associated with 1535 and 1540 Broadway, the parking garage at 1540 Broadway and the theatre at 1535 Broadway.

We retained the remaining 51.5% common interest in Fifth Avenue and Times Square JV which represents an effective 51.0% interest in the Properties and an aggregate $1.828 billion of preferred equity interests in certain of the properties. We also provided $500,000,000 of temporary preferred equity on 640 Fifth Avenue until May 23, 2019 when mortgage financing was completed. All of the preferred equity has an annual coupon of 4.25% for the first five years, increasing to 4.75% for the next five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.

Net cash proceeds from the Transaction were $1.186 billion, after (i) deductions for the defeasance of a $390,000,000 mortgage loan on 666 Fifth Avenue and the repayment of a $140,000,000 mortgage loan on 655 Fifth Avenue, (ii) proceeds from a $500,000,000 mortgage loan on 640 Fifth Avenue, described below, (iii) approximately $23,000,000 used to purchase noncontrolling investors' interests and (iv) approximately $53,000,000 of transaction costs (including $17,000,000 of costs related to the defeasance of the 666 Fifth Avenue mortgage loan).

We continue to manage and lease the Properties. We share control with the Investors over major decisions of the joint venture, including decisions regarding leasing, operating and capital budgets, and refinancings. Accordingly, we no longer hold a controlling financial interest in the Properties which has been transferred to the joint venture. As a result, our investment in Fifth Avenue and Times Square JV is accounted for under the equity method from the date of transfer. The Transaction valued the Properties at $5,556,000,000 resulting in a financial statement net gain of $2,571,099,000, before noncontrolling interest of $11,945,000, including the related step-up in our basis of the retained portion of the assets to fair value. The net gain is included in "net gain on transfer to Fifth Avenue and Times Square JV" on our consolidated statements of income for the three and six months ended June 30, 2019. The gain for tax purposes was approximately $735,000,000.

On May 23, 2019, we received $500,000,000 from the redemption of our preferred equity in 640 Fifth Avenue. The preferred equity was redeemed from the proceeds of a $500,000,000 mortgage financing that was completed on the property. The five year loan, which is guaranteed by us, is interest only at LIBOR plus 1.01%. The interest rate was swapped for four years to a fixed rate of 3.07%.

330 Madison Avenue (Subsequent Event)

On July 11, 2019, we sold our 25% interest in 330 Madison Avenue to our joint venture partner. We received net proceeds of approximately $100,000,000 after deducting our share of the existing $500,000,000 mortgage loan. The third quarter financial statement gain will be approximately $159,000,000. The tax gain will be approximately $138,000,000.

Financings:

On May 24, 2019, we extended our $375,000,000 mortgage loan on 888 Seventh Avenue, a 886,000 square foot Manhattan office building, from December 2020 to December 2025. The interest rate on the extended mortgage loan is LIBOR plus 1.70% (4.11% as of June 30, 2019). Pursuant to an existing swap agreement, the interest rate on the $375,000,000 mortgage loan has been swapped to 3.25% through December 2020.

On June 28, 2019, a joint venture, in which we have a 55% interest, completed a $145,700,000 refinancing of 512 West 22nd Street, a 173,000 square foot office building in the West Chelsea submarket of Manhattan. The four-year interest only loan carries a rate of LIBOR plus 2.00% (4.40% as of June 30, 2019) and matures in June 2023 with a one-year extension option. The loan replaces the previous $126,000,000 construction loan that bore interest at LIBOR plus 2.65% and was scheduled to mature in 2019.

Leasing:

  • 221,000 square feet of New York Office space (155,000 square feet at share) at an initial rent of $83.54 per square foot and a weighted average term of 7.2 years. The GAAP and cash mark-to-market rent on the 80,000 square feet of second generation space were positive 5.9% and 3.3%, respectively. Tenant improvements and leasing commissions were $9.83 per square foot per annum, or 11.8% of initial rent.

  • 70,000 square feet of New York Retail space (67,000 square feet at share) at an initial rent of $162.44 per square foot and a weighted average term of 19.6 years. The GAAP and cash mark-to-market rent on the 64,000 square feet of second generation space were positive 44.4% and 18.7%, respectively. Tenant improvements and leasing commissions were $3.74 per square foot per annum, or 2.3% of initial rent.

  • 30,000 square feet at theMART at an initial rent of $63.83 per square foot and a weighted average term of 4.1 years. The GAAP and cash mark-to-market rent on the 30,000 square feet of second generation space were positive 14.9% and 6.0%, respectively. Tenant improvements and leasing commissions were $1.52 per square foot per annum, or 2.4% of initial rent.

  • 30,000 square feet at 555 California Street (21,000 square feet at share) at an initial rent of $86.00 per square foot and a weighted average term of 5.1 years. The GAAP and cash mark-to-market rent on the 21,000 square feet of second generation space were positive 32.2% and 12.8%, respectively. Tenant improvements and leasing commissions were $6.13 per square foot per annum, or 7.1% of initial rent.

Same Store Net Operating Income ("NOI") At Share:

The percentage increase (decrease) in same store NOI at share and same store NOI at share - cash basis of our New York segment, theMART and 555 California Street are summarized below.

    Total   New York(2)   theMART   555
California
Street
Same store NOI at share % increase (decrease)(1):              
  Three months ended June 30, 2019 compared to June 30, 2018 1.2 %   (0.7 )%   12.1 %   13.0 %
  Six months ended June 30, 2019 compared to June 30, 2018 0.5 %   (0.4 )%   4.7 %   10.2 %
  Three months ended June 30, 2019 compared to March 31, 2019 7.2 %   4.1 %   42.3 %   6.4 %
                 
Same store NOI at share - cash basis % increase(1):              
  Three months ended June 30, 2019 compared to June 30, 2018 4.3 %   2.5 %   15.5 %   12.9 %
  Six months ended June 30, 2019 compared to June 30, 2018 3.7 %   2.6 %   8.9 %   13.9 %
  Three months ended June 30, 2019 compared to March 31, 2019 8.3 %   5.5 %   38.1 %   5.8 %

____________________

(1 ) See pages 13 through 18 for same store NOI at share and same store NOI at share - cash basis reconciliations.    
    Increase
(2 ) Excluding Hotel Pennsylvania, same store NOI at share % increase:  
  Three months ended June 30, 2019 compared to June 30, 2018 0.0 %
  Six months ended June 30, 2019 compared to June 30, 2018 0.3 %
  Three months ended June 30, 2019 compared to March 31, 2019 0.0 %
     
  Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase:  
  Three months ended June 30, 2019 compared to June 30, 2018 3.3 %
  Six months ended June 30, 2019 compared to June 30, 2018 3.3 %
  Three months ended June 30, 2019 compared to March 31, 2019 1.2 %
       

NOI At Share:

The elements of our New York and Other NOI at share for the three and six months ended June 30, 2019 and 2018 and the three months ended March 31, 2019 are summarized below.

(Amounts in thousands) For the Three Months Ended   For the Six Months Ended
June 30,
  June 30,   March 31,
2019
 
  2019   2018     2019   2018
New York:                  
Office(1) $ 179,592     $ 184,867     $ 183,540     $ 363,132     $ 372,023  
Retail(1) 57,063     87,109     88,267     145,330     175,018  
Residential 5,908     6,338     6,045     11,953     12,479  
Alexander's Inc. ("Alexander's") 11,108     11,909     11,322     22,430     23,484  
Hotel Pennsylvania 4,031     5,644     (5,816 )   (1,785 )   1,459  
Total New York 257,702     295,867     283,358     541,060     584,463  
                   
Other:                  
theMART 30,974     27,816     23,523     54,497     54,691  
555 California Street 15,358     13,660     14,501     29,859     27,171  
Other investments 4,875     17,086     16,390     21,265     37,140  
Total Other 51,207     58,562     54,414     105,621     119,002  
                   
NOI at share $ 308,909     $ 354,429     $ 337,772     $ 646,681     $ 703,465  

____________________

(1) Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.

NOI At Share - Cash Basis:

The elements of our New York and Other NOI at share - cash basis for the three and six months ended June 30, 2019 and 2018 and the three months ended March 31, 2019 are summarized below.

(Amounts in thousands) For the Three Months Ended   For the Six Months Ended
June 30,
  June 30,   March 31,
2019
 
  2019   2018     2019   2018
New York:                  
Office(1) $ 178,806     $ 180,710     $ 184,370     $ 363,176     $ 358,909  
Retail(1) 66,726     79,139     80,936     147,662     158,728  
Residential 5,303     5,463     5,771     11,074     11,062  
Alexander's 11,322     12,098     11,527     22,849     24,137  
Hotel Pennsylvania 3,982     5,744     (5,864 )   (1,882 )   1,591  
Total New York 266,139     283,154     276,740     542,879     554,427  
                   
Other:                  
theMART 31,984     27,999     24,912     56,896     55,078  
555 California Street 15,595     13,808     14,745     30,340     26,634  
Other investments 4,939     16,987     16,194     21,133     36,897  
Total Other 52,518     58,794     55,851     108,369     118,609  
                   
NOI at share - cash basis $ 318,657     $ 341,948     $ 332,591     $ 651,248     $ 673,036  

____________________

(1) Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.

Penn District - Active Development/Redevelopment Summary as of June 30, 2019

(Amounts in thousands, except square feet)    
        Property
Rentable
Sq. Ft.
                  Projected
Incremental
Cash Yield
Active Penn District Projects   Segment     Incremental
Budget(1)
  Amount
Expended
  Remainder
to be
Expended
  Stabilization
Year
 
Farley (95% interest)   New York   845,000     1,030,000   (2) 438,581     591,419     2022   7.4 %
PENN2 - as expanded   New York   1,795,000     750,000     26,713     723,287     2024   8.4 %
PENN1(3)   New York   2,543,000     325,000     48,832     276,168     N/A   13.5%(3)(4)  
Districtwide Improvements   New York   N/A   100,000         100,000     N/A   N/A  
Total Active Penn District Projects           2,205,000     514,126     1,690,874   (5)     8.3 %

___________________

(1) Excluding debt and equity carry.
(2) Net of anticipated historic tax credits.
(3) Property is ground leased through 2098, as fully extended. Fair market value resets occur in 2023, 2048 and 2073. The 13.5% projected return is before the ground rent reset in 2023, which may be material.
(4) Achieved as existing leases roll; average remaining lease term 5.4 years.
(5) Expected to be funded from our balance sheet, principally from 220 CPS net sales proceeds.

There can be no assurance that the above projects will be completed, completed on schedule or within budget. In addition, there can be no assurance that the Company will be successful in leasing the properties on the expected schedule or at the assumed rental rates.

Conference Call and Audio Webcast

As previously announced, the Company will host a quarterly earnings conference call and an audio webcast on Tuesday, July 30, 2019 at 10:00 a.m. Eastern Time (ET). The conference call can be accessed by dialing 888-771-4371 (domestic) or 847-585-4405 (international) and indicating to the operator the passcode 48773624. A telephonic replay of the conference call will be available from 1:30 p.m. ET on July 30, 2019 through August 29, 2019. To access the replay, please dial 888-843-7419 and enter the passcode 48773624#.  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 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 for the year ended December 31, 2018. 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
CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except unit, share, and per share amounts) As of
  June 30, 2019   December 31, 2018
ASSETS      
Real estate, at cost:      
Land $ 2,609,869     $ 3,306,280  
Buildings and improvements 7,813,812     10,110,992  
Development costs and construction in progress 1,835,054     2,266,491  
Moynihan Train Hall development expenditures 665,226     445,693  
Leasehold improvements and equipment 118,428     108,427  
Total 13,042,389     16,237,883  
Less accumulated depreciation and amortization (2,894,202 )   (3,180,175 )
Real estate, net 10,148,187     13,057,708  
Right-of-use assets 380,214      
Cash and cash equivalents 922,604     570,916  
Restricted cash 154,306     145,989  
Marketable securities 41,081     152,198  
Tenant and other receivables, net of allowance for doubtful accounts of $4,154 as of December 31, 2018 85,153     73,322  
Investments in partially owned entities 4,025,534     858,113  
Real estate fund investments 306,596     318,758  
220 Central Park South condominium units ready for sale 328,786     99,627  
Receivable arising from the straight-lining of rents, net of allowance of $1,644 as of December 31, 2018 749,198     935,131  
Deferred leasing costs, net of accumulated amortization of $187,478 and $207,529 357,511     400,313  
Identified intangible assets, net of accumulated amortization of $98,187 and $172,114 32,478     136,781  
Other assets 382,209     431,938  
  $ 17,913,857     $ 17,180,794  
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY      
Mortgages payable, net $ 6,256,808     $ 8,167,798  
Senior unsecured notes, net 445,465     844,002  
Unsecured term loan, net 745,331     744,821  
Unsecured revolving credit facilities 80,000     80,000  
Lease liabilities 483,011      
Moynihan Train Hall obligation 665,226     445,693  
Accounts payable and accrued expenses 392,581     430,976  
Deferred revenue 66,835     167,730  
Deferred compensation plan 99,879     96,523  
Other liabilities 320,515     311,806  
Total liabilities 9,555,651     11,289,349  
Commitments and contingencies      
Redeemable noncontrolling interests:      
Class A units - 13,377,956 and 12,544,477 units outstanding 857,527     778,134  
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding 4,535     5,428  
Total redeemable noncontrolling interests 862,062     783,562  
Shareholders' equity:      
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,797,280 and 36,798,580 shares 891,256     891,294  
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 190,813,470 and 190,535,499 shares 7,611     7,600  
Additional capital 7,845,748     7,725,857  
Earnings less than distributions (1,845,995 )   (4,167,184 )
Accumulated other comprehensive (loss) income (38,066 )   7,664  
Total shareholders' equity 6,860,554     4,465,231  
Noncontrolling interests in consolidated subsidiaries 635,590     642,652  
Total equity 7,496,144     5,107,883  
  $ 17,913,857     $ 17,180,794  

 

VORNADO REALTY TRUST
OPERATING RESULTS

 

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
  2019   2018   2019   2018
Revenues $ 463,103     $ 541,818     $ 997,771     $ 1,078,255  
               
Income from continuing operations $ 2,596,633     $ 104,655     $ 2,809,814     $ 105,300  
Income (loss) from discontinued operations 60     683     (77 )   320  
Net income 2,596,693     105,338     2,809,737     105,620  
Less net (income) loss attributable to noncontrolling interests in:              
Consolidated subsidiaries (21,451 )   26,175     (28,271 )   34,449  
Operating Partnership (162,515 )   (7,445 )   (174,717 )   (6,321 )
Net income attributable to Vornado 2,412,727     124,068     2,606,749     133,748  
Preferred share dividends (12,532 )   (12,534 )   (25,066 )   (25,569 )
Preferred share issuance costs             (14,486 )
NET INCOME attributable to common shareholders $ 2,400,195     $ 111,534     $ 2,581,683     $ 93,693  
               
INCOME PER COMMON SHARE – BASIC:              
Net income per common share $ 12.58     $ 0.59     $ 13.53     $ 0.49  
Weighted average shares outstanding 190,781     190,200     190,735     190,141  
               
INCOME PER COMMON SHARE – DILUTED:              
Net income per common share $ 12.56     $ 0.58     $ 13.51     $ 0.49  
Weighted average shares outstanding 191,058     191,168     191,030     191,190  
               
FFO attributable to common shareholders plus assumed conversions (non-GAAP) $ 164,329     $ 194,653     $ 412,013     $ 329,653  
Per diluted share (non-GAAP) $ 0.86     $ 1.02     $ 2.16     $ 1.72  
               
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) $ 173,775     $ 186,405     $ 323,790     $ 359,276  
Per diluted share (non-GAAP) $ 0.91     $ 0.98     $ 1.70     $ 1.88  
               
Weighted average shares used in determining FFO per diluted share 191,058     191,168     191,026     191,113  

 

VORNADO REALTY TRUST
NON-GAAP RECONCILIATIONS

The following table reconciles net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions:

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
  2019   2018   2019   2018
Reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions:              
Net income attributable to common shareholders $ 2,400,195     $ 111,534     $ 2,581,683     $ 93,693  
Per diluted share $ 12.56     $ 0.58     $ 13.51     $ 0.49  
               
FFO adjustments:              
Depreciation and amortization of real property $ 105,453     $ 103,599     $ 213,936     $ 204,009  
Net gains on sale of real estate     (24,177 )       (24,177 )
Real estate impairment losses 31,436         31,436      
Net gain on transfer to Fifth Avenue and Times Square JV, net of $11,945 attributable to noncontrolling interests (2,559,154 )       (2,559,154 )    
Net gain from sale of UE common shares (sold on March 4, 2019)         (62,395 )    
(Increase) decrease in fair value of marketable securities:              
PREIT (1,313 )       14,336      
Lexington (sold on March 1, 2019)     (15,883 )   (16,068 )   16,992  
Other 1     (1 )   (41 )   110  
Proportionate share of adjustments to equity in net income (loss) of partially owned entities to arrive at FFO:              
Depreciation and amortization of real property 34,631     25,488     59,621     53,594  
Net gains on sale of real estate     (272 )       (577 )
Decrease (increase) in fair value of marketable securities 1,709     (140 )   1,697     1,534  
  (2,387,237 )   88,614     (2,316,632 )   251,485  
Noncontrolling interests' share of above adjustments 151,357     (5,511 )   146,933     (15,557 )
FFO adjustments, net $ (2,235,880 )   $ 83,103     $ (2,169,699 )   $ 235,928  
               
FFO attributable to common shareholders $ 164,315     $ 194,637     $ 411,984     $ 329,621  
Convertible preferred share dividends 14     16     29     32  
FFO attributable to common shareholders plus assumed conversions $ 164,329     $ 194,653     $ 412,013     $ 329,653  
Per diluted share $ 0.86     $ 1.02     $ 2.16     $ 1.72  
               
Reconciliation of Weighted Average Shares              
Weighted average common shares outstanding 190,781     190,200     190,735     190,141  
Effect of dilutive securities:              
Employee stock options and restricted share awards 243     930     256     934  
Convertiblenull