Vornado Announces Fourth Quarter 2007 FFO of $1.18 Per Share and Full Year FFO of $5.89 Per Share
PARAMUS, N.J.--(BUSINESS WIRE)--
VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:
Fourth Quarter 2007 Financial Results
NET INCOME applicable to common shares for the quarter ended December 31, 2007 was $90.9 million, or $0.57 per diluted share, versus $105.4 million, or $0.69 per diluted share, for the quarter ended December 31, 2006. Net income for the quarters ended December 31, 2007 and 2006 includes certain items that affect comparability which are listed in the table below. Net income for the quarter ended December 31, 2007 also includes net gains on sales of real estate of $43.9 million. The aggregate of these items, net of minority interest, increased net income applicable to common shares for the quarter ended December 31, 2007 by $21.6 million, or $0.13 per diluted share and increased net income applicable to common shares for the quarter ended December 31, 2006 by $51.1 million, or $0.32 per diluted share.
FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions ("FFO") for the quarter ended December 31, 2007 was $193.4 million, or $1.18 per diluted share, compared to $211.8 million, or $1.34 per diluted share, for the quarter ended December 31, 2006. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarters ended December 31, 2007 and 2006 was $211.8 million and $162.8 million, or $1.29 and $1.03 per share, respectively.
For the Quarter
(Amounts in thousands, except per share amounts) Ended December 31,
-------------------
2007 2006
--------- ---------
FFO applicable to common shares plus assumed
conversions (1) $193,412 $211,812
========= =========
Per Share $ 1.18 $ 1.34
========= =========
Items that affect comparability expense (income):
MPH mezzanine loan loss accrual $ 57,000 $ --
Derivatives:
McDonalds shares (29,108) (78,234)
Other (7,425) (9,386)
32.8% share of Alexander's
Stock appreciation rights (5,289) 30,687
Other:
Costs of acquisitions not consummated 1,568 --
Net gain recognized upon merger of Newkirk
Realty Trust and Lexington Realty Trust -- (10,794)
Prepayment penalties and write-off of
unamortized financing costs -- 8,513
H Street litigation costs -- 2,998
Other, net 3,418 2,000
--------- ---------
20,164 (54,216)
Minority limited partners' share of above
adjustments (1,825) 5,202
--------- ---------
$ 18,339 $(49,014)
========= =========
Per share $ 0.11 $ (0.31)
========= =========
FFO as adjusted for comparability $211,751 $162,798
========= =========
Per share $ 1.29 $ 1.03
========= =========
(1) See page 4 for a reconciliation of net income to FFO for the
quarters ended December 31, 2007 and 2006.
Year Ended December 31, 2007 Financial Results
NET INCOME applicable to common shares for the year ended December 31, 2007 was $511.7 million, or $3.23 per diluted share, versus $502.6 million, or $3.35 per diluted share, for the year ended December 31, 2006. Net income for the years ended December 31, 2007 and 2006 includes certain items that affect comparability which are listed in the table below. Net income for the years ended December 31, 2007 and 2006 also includes our share of net gains on sales of real estate of $76.3 million and $46.9 million, respectively. The aggregate of these items, net of minority interest, increased net income applicable to common shares for the year ended December 31, 2007 by $133.7 million, or $0.81 per diluted share and increased net income applicable to common shares for the year ended December 31, 2006 by $166.1 million, or $1.07 per diluted share.
FFO for the year ended December 31, 2007 was $966.6 million, or $5.89 per diluted share, compared to $858.7 million, or $5.51 per diluted share, for the year ended December 31, 2006. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the year ended December 31, 2007 and 2006 was $902.4 million and $734.1 million, or $5.50 and $4.71 per share, respectively.
For the Year
(Amounts in thousands, except per share amounts) Ended December 31,
---------------------
2007 2006
---------- ----------
FFO applicable to common shares plus assumed
conversions (1) $ 966,638 $ 858,693
========== ==========
Per Share $ 5.89 $ 5.51
========== ==========
Items that affect comparability (income)
expense:
Derivatives and related marketable securities:
McDonalds shares $(131,911) $(138,815)
Net gain on sale of Sears Canada -- (55,438)
Sears Holdings shares -- (18,611)
GMH Warrants -- 16,370
Other (4,682) (12,153)
MPH mezzanine loan loss accrual 57,000 --
32.8% share of Alexander's:
Stock appreciation rights (14,280) 49,043
Net gain on sale of 731 Lexington Avenue
condominiums -- (4,580)
Other:
Costs of acquisition not consummated 10,375
Prepayment penalties and write-off of
unamortized financing costs 7,562 21,994
H Street litigation costs 1,891 9,592
Net gain recognized upon merger of Newkirk
Realty Trust and Lexington Realty Trust -- (10,362)
Other, net 3,496 5,126
---------- ----------
(70,549) (137,834)
Minority limited partners' share of above
adjustments 6,297 13,204
---------- ----------
$ (64,252) $(124,630)
========== ==========
Per share $ (0.39) $ (0.80)
========== ==========
FFO as adjusted for comparability $ 902,386 $ 734,063
========== ==========
Per share $ 5.50 $ 4.71
========== ==========
(1) See page 4 for a reconciliation of net income to FFO for the year
ended December 31, 2007 and 2006.
Supplemental Financial Information
Further details regarding the Company's 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. 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 QUARTER AND YEAR ENDED
DECEMBER 31, 2007 AND 2006
----------------------------------------------------------------------
FOR THE QUARTER FOR THE YEAR
ENDED DECEMBER 31 ENDED DECEMBER 31
------------------- -----------------------
(Amounts in thousands,
except per share amounts) 2007 2006 2007 2006
--------- --------- ----------- -----------
Revenues $888,464 $722,549 $3,270,629 $2,701,037
========= ========= =========== ===========
Income from continuing
operations $ 79,147 $137,275 $ 576,972 $ 603,105
Income from discontinued
operations 34,124 (270) 58,716 37,595
--------- --------- ----------- -----------
Income before allocation
to limited partners 113,271 137,005 635,688 640,700
Minority limited partners'
interest in the Operating
Partnership (3,238) (12,411) (47,508) (58,712)
Perpetual preferred unit
distributions of the
Operating Partnership (4,819) (4,818) (19,274) (21,848)
--------- --------- ----------- -----------
Net income 105,214 119,776 568,906 560,140
Preferred share dividends (14,291) (14,349) (57,177) (57,511)
--------- --------- ----------- -----------
Net income applicable to
common shares $ 90,923 $105,427 $ 511,729 $ 502,629
========= ========= =========== ===========
Net income per common
share:
Basic $ 0.60 $ 0.73 $ 3.37 $ 3.54
========= ========= =========== ===========
Diluted $ 0.57 $ 0.69 $ 3.23 $ 3.35
========= ========= =========== ===========
Average number of
common shares and
share equivalents
outstanding:
Basic 152,573 144,319 151,949 142,145
========= ========= =========== ===========
Diluted 158,302 152,338 158,558 150,411
========= ========= =========== ===========
FFO applicable to common
shares plus assumed
conversions $193,412 $211,812 $ 966,638 $ 858,693
========= ========= =========== ===========
FFO per diluted share $ 1.18 $ 1.34 $ 5.89 $ 5.51
========= ========= =========== ===========
Average number of
common shares and
share equivalents
outstanding used for
determining FFO per
diluted share 163,974 157,897 164,117 155,802
========= ========= =========== ===========
The following table reconciles net income to FFO:
For The Quarter For The Year
(Amounts in thousands) Ended December 31, Ended December 31,
------------------- ---------------------
2007 2006 2007 2006
--------- --------- ----------- ---------
Net income $105,214 $119,776 $ 568,906 $560,140
Depreciation and
amortization of real
property 125,989 90,896 451,313 337,730
Net gains on sale of real
estate (37,869) -- (60,811) (33,769)
Proportionate share of
adjustments to equity in
net income of Toys to
arrive at FFO:
Depreciation and
amortization of real
property 16,260 19,054 85,244 60,445
Net gains on sale of
real estate (2,519) (2,178) (3,012) (2,178)
Income tax effect of
above adjustments (4,809) (5,007) (28,781) (21,038)
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 12,679 11,029 48,770 45,184
Net gains on sale of
real estate (3,471) (146) (12,451) (10,988)
Minority limited partners'
share of above adjustments (9,094) (11,960) (46,664) (39,809)
--------- --------- ----------- ---------
FFO 202,380 221,464 1,002,514 895,717
Preferred share dividends (14,291) (14,349) (57,177) (57,511)
--------- --------- ----------- ---------
FFO applicable to common
shares 188,089 207,115 945,337 838,206
Interest on 3.875%
exchangeable senior
debentures 5,256 4,575 21,024 19,856
Series A convertible
preferred share dividends 67 122 277 631
--------- --------- ----------- ---------
FFO applicable to common
shares plus assumed
conversions $193,412 $211,812 $ 966,638 $858,693
========= ========= =========== =========
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 net income or loss determined in accordance with Generally Accepted Accounting Principles ("GAAP"), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO and FFO per diluted share are used by management, investors and industry analysts as supplemental measures of operating performance of equity REITs. FFO and FFO per diluted share should be evaluated along with GAAP net income and income per diluted share (the most directly comparable GAAP measures), as well as cash flow from operating activities, investing activities and financing activities, in evaluating the operating performance of equity REITs. Management believes that FFO and FFO per diluted share are helpful to investors as supplemental performance measures because these measures exclude the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, these non-GAAP measures can facilitate comparisons of operating performance between periods and among other equity REITs. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as disclosed in the Company's Consolidated Statements of Cash Flows. FFO should not be considered as an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flows as a measure of liquidity. In addition to FFO, the Company also discloses FFO before certain items that affect comparability. Although this non-GAAP measure clearly differs from NAREIT's definition of FFO, the Company believes it provides a meaningful presentation of operating performance. A reconciliation of net income to FFO is provided above. In addition, a reconciliation of FFO to FFO before certain items that affect comparability is provided on page 1 and 2 of this press release.
Source: Vornado Realty Trust
Contact: Vornado Realty Trust Joseph Macnow, 201-587-1000