Vornado Announces Fourth Quarter 2010 FFO of $1.76 Per Share
PARAMUS, N.J.--(BUSINESS WIRE)-- VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:
Fourth Quarter 2010 Results
NET INCOME attributable to common shareholders for the quarter ended December 31, 2010 was $243.4 million, or $1.31 per diluted share, compared to a net loss of $151.2 million, or $0.84 per diluted share, for the quarter ended December 31, 2009. Net income for the quarter ended December 31, 2010 and net loss for the quarter ended December 31, 2009 include $62.7 million and $2.6 million, respectively, of net gains on sale of real estate. In addition, the quarters ended December 31, 2010 and 2009 include certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the quarter ended December 31, 2010 by $169.6 million, or $0.89 per diluted share and increased net loss attributable to common shareholders for the quarter ended December 31, 2009 by $184.3 million, or $1.02 per diluted share.
FUNDS FROM OPERATIONS attributable to common shareholders plus assumed conversions (“FFO”) for the quarter ended December 31, 2010 was $335.8 million, or $1.76 per diluted share, compared to $20 thousand, or $0.00 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 December 31, 2010 and 2009 was $224.2 million and $186.1 million, or $1.17 and $1.02 per diluted share, respectively.
| (Amounts in thousands, except per share amounts) | For the Quarters Ended | |||||||
| December 31, | ||||||||
| 2010 | 2009 | |||||||
| FFO (1) | $ | 335,759 | $ | 20 | ||||
| Per Share | $ | 1.76 | $ | - | ||||
| Items that affect comparability (income) expense: | ||||||||
| (Income) from the mark-to-market of derivative positions in marketable equity securities | $ | (97,904 | ) | $ | - | |||
| Net (gain) loss on early extinguishment of debt | (93,946 | ) | 52,911 | |||||
| Non-cash asset write-downs: | ||||||||
| Real estate - development related | 94,513 | 80,834 | ||||||
| Other real estate assets | 28,000 | 6,989 | ||||||
| Partially owned entities | 11,481 | 17,820 | ||||||
| Marketable equity securities | - | 3,361 | ||||||
| Non-cash mezzanine loans receivable loss accrual (reversal) | (60,000 | ) | 68,000 | |||||
| Net (gain) resulting from Lexington's stock issuance | (7,712 | ) | - | |||||
| Acquisition costs | 4,094 | - | ||||||
| Income from terminated sale of land | - | (27,089 | ) | |||||
| FFO attributable to discontinued operations | (1,124 | ) | (3,625 | ) | ||||
| Other, net | 3,174 | 2,204 | ||||||
| (119,424 | ) | 201,405 | ||||||
| Noncontrolling interests' share of above adjustments | 7,835 | (15,300 | ) | |||||
| Items that affect comparability, net (income) expense | $ | (111,589 | ) | $ | 186,105 | |||
| Per Share | $ | (0.59 | ) | $ | 1.02 | |||
| FFO as adjusted for comparability | $ | 224,170 | $ | 186,125 | ||||
| Per Share | $ | 1.17 | $ | 1.02 | ||||
| (1) See page 4 for a reconciliation of our net income (loss) to FFO for the quarters ended December 31, 2010 and 2009. | ||||||||
Year Ended 2010 Results
NET INCOME attributable to common shareholders for the year ended December 31, 2010 was $596.7 million, or $3.24 per diluted share, compared to $49.1 million, or $0.28 per diluted share, for the year ended December 31, 2009. Net income for the years ended December 31, 2010 and 2009 include $63.0 million and $46.6 million, respectively, of net gains on sale of real estate. In addition, the years ended December 31, 2010 and 2009 include certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the year ended December 31, 2010 by $175.8 million, or $0.95 per diluted share and decreased net income attributable to common shareholders for the year ended December 31, 2009 by $236.0 million, or $1.36 per diluted share.
FFO for the year ended December 31, 2010 was $1,149.8 million, or $6.05 per diluted share, compared to $583.6 million, or $3.36 per diluted share, for the prior year. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the year ended December 31, 2010 and 2009 was $1,022.1 million and $848.6 million, or $5.38 and $4.89 per diluted share, respectively.
| (Amounts in thousands, except per share amounts) | For the Years Ended | |||||||
| December 31, | ||||||||
| 2010 | 2009 | |||||||
| FFO (1) | $ | 1,149,781 | $ | 583,596 | ||||
| Per Share | $ | 6.05 | $ | 3.36 | ||||
| Items that affect comparability (income) expense: | ||||||||
| (Income) from the mark-to-market of derivative positions in marketable equity securities | $ | (130,153 | ) | $ | - | |||
| Net (gain) loss on early extinguishment of debt | (92,150 | ) | 25,915 | |||||
| Non-cash asset write-downs: | ||||||||
| Real estate - development related | 94,513 | 80,834 | ||||||
| Other real estate assets | 33,000 | 6,989 | ||||||
| Partially owned entities | 11,481 | 36,941 | ||||||
| Marketable equity securities | - | 3,361 | ||||||
| Non-cash mezzanine loans receivable loss accrual (reversal) | (53,100 | ) | 190,738 | |||||
| Litigation loss accrual and acquisitions costs | 17,001 | - | ||||||
| Default interest and fees accrued on three loans in special servicing | 15,079 | - | ||||||
| Net (gain) resulting from Lexington's stock issuance | (13,710 | ) | - | |||||
| Discount on redemption of preferred units and shares | (11,354 | ) | - | |||||
| Real Estate Fund organization costs | 6,482 | - | ||||||
| Our share of partially owned entities: | ||||||||
| Toys - purchase accounting adjustments and litigation settlement income | - | (24,146 | ) | |||||
| Alexander's - income tax benefit and stock appreciation rights | (641 | ) | (24,773 | ) | ||||
| Income from terminated sale of land | - | (27,089 | ) | |||||
| Write-off of unamortized costs from the voluntary surrender of equity awards | - | 32,588 | ||||||
| FFO attributable to discontinued operations | (11,086 | ) | (21,240 | ) | ||||
| Other, net | (2,492 | ) | 8,063 | |||||
| (137,130 | ) | 288,181 | ||||||
| Noncontrolling interests' share of above adjustments | 9,408 | (23,174 | ) | |||||
| Items that affect comparability, net (income) expense | $ | (127,722 | ) | $ | 265,007 | |||
| Per Share | $ | (0.67 | ) | $ | 1.53 | |||
| FFO as adjusted for comparability | $ | 1,022,059 | $ | 848,603 | ||||
| Per Share | $ | 5.38 | $ | 4.89 | ||||
| (1) See page 4 for a reconciliation of our net income to FFO for the years ended December 31, 2010 and 2009. | ||||||||
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. 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, 2010. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.
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VORNADO REALTY TRUST |
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OPERATING RESULTS FOR THE QUARTERS AND YEARS ENDED |
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DECEMBER 31, 2010 AND 2009 |
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| For The Quarters | For The Years | |||||||||||||||
| (Amounts in thousands, except per share amounts) | Ended December 31, | Ended December 31, | ||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenues | $ | 712,957 | $ | 706,552 | $ | 2,779,727 | $ | 2,696,692 | ||||||||
| Income (loss) from continuing operations | 281,745 | (134,747 | ) | 728,411 | 87,983 | |||||||||||
| Income (loss) from discontinued operations | 399 | (8,703 | ) | (20,380 | ) | 40,467 | ||||||||||
| Net income (loss) | 282,144 | (143,450 | ) | 708,031 | 128,450 | |||||||||||
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Net (income) loss attributable to noncontrolling interests in consolidated subsidiaries |
(3,430 | ) | (603 | ) | (4,920 | ) | 2,839 | |||||||||
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Net (income) loss attributable to noncontrolling interests in the Operating Partnership, including unit distributions |
(21,741 | ) | 7,130 | (55,228 | ) | (25,120 | ) | |||||||||
| Net income (loss) attributable to Vornado | 256,973 | (136,923 | ) | 647,883 | 106,169 | |||||||||||
| Preferred share dividends | (13,559 | ) | (14,269 | ) | (55,534 | ) | (57,076 | ) | ||||||||
| Discount on preferred share redemptions | - | - | 4,382 | - | ||||||||||||
| Net income (loss) attributable to common shareholders | $ | 243,414 | $ | (151,192 | ) | $ | 596,731 | $ | 49,093 | |||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | 1.33 | $ | (0.84 | ) | $ | 3.27 | $ | 0.28 | |||||||
| Diluted | $ | 1.31 | $ | (0.84 | ) | $ | 3.24 | $ | 0.28 | |||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 183,308 | 179,832 | 182,340 | 171,595 | ||||||||||||
| Diluted | 190,849 | 179,832 | 184,159 | 173,503 | ||||||||||||
| FFO attributable to common shareholders plus assumed conversions | $ | 335,759 | $ | 20 | $ | 1,149,781 | $ | 583,596 | ||||||||
| FFO per diluted share | $ | 1.76 | $ | - | $ | 6.05 | $ | 3.36 | ||||||||
| Weighted average shares used in determining FFO per diluted share | 190,849 | 182,459 | 189,894 | 173,578 | ||||||||||||
| The following table reconciles our net income (loss) to FFO: | ||||||||||||||||
| For The Quarters | For The Years | |||||||||||||||
| (Amounts in thousands, except per share amounts) | Ended December 31, | Ended December 31, | ||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Reconciliation of our net income (loss) to FFO: | ||||||||||||||||
| Net income (loss) attributable to Vornado | $ | 256,973 | $ | (136,923 | ) | $ | 647,883 | $ | 106,169 | |||||||
| Depreciation and amortization of real property | 124,024 | 133,023 | 505,806 | 508,572 | ||||||||||||
| Net gain on sales of real estate | (57,248 | ) | (2,629 | ) | (57,248 | ) | (45,282 | ) | ||||||||
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Proportionate share of adjustments to equity in net income of Toys, to arrive at FFO: |
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| Depreciation and amortization of real property | 16,878 | 15,527 | 70,174 | 65,358 | ||||||||||||
| Net gain on sales of real estate | - | - | - | (164 | ) | |||||||||||
| Income tax effect of above adjustments | (5,907 | ) | (5,435 | ) | (24,561 | ) | (22,819 | ) | ||||||||
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Proportionate share of adjustments to equity in net income of partially owned entities, excluding Toys, to arrive at FFO: |
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| Depreciation and amortization of real property | 19,596 | 22,692 | 78,151 | 75,200 | ||||||||||||
| Net gain on sales of real estate | (5,470 | ) | (3 | ) | (5,784 | ) | (1,188 | ) | ||||||||
| Noncontrolling interests' share of above adjustments | (6,080 | ) | (11,963 | ) | (39,565 | ) | (45,344 | ) | ||||||||
| FFO | 342,766 | 14,289 | 1,174,856 | 640,502 | ||||||||||||
| Preferred share dividends | (13,559 | ) | (14,269 | ) | (55,534 | ) | (57,076 | ) | ||||||||
| Discount on preferred share redemptions | - | - | 4,382 | - | ||||||||||||
| FFO attributable to common shareholders | 329,207 | 20 | 1,123,704 | 583,426 | ||||||||||||
| Interest on 3.875% exchangeable senior debentures | 6,512 | - | 25,917 | - | ||||||||||||
| Convertible preferred share dividends | 40 | - | 160 | 170 | ||||||||||||
| FFO attributable to common shareholders plus assumed conversions | $ | 335,759 | $ | 20 | $ | 1,149,781 | $ | 583,596 | ||||||||
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 gains from sales of depreciated real estate assets, 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 (loss) 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. A reconciliation of FFO to FFO as adjusted for comparability is provided on page 1 of this press release.
Source: Vornado Realty Trust
Contact:Vornado Realty Trust
Joseph Macnow, 201-587-1000