Vornado Announces Fourth Quarter 2013 Financial Results.
PARAMUS, N.J.--(BUSINESS WIRE)-- Vornado Realty Trust (NYSE:VNO) filed its Form 10-K for the year ended December 31, 2013 today and reported:
Fourth Quarter 2013 Results
NET LOSS attributable to common shareholders for the quarter ended December 31, 2013 was $68.9 million, or $0.37 per diluted share, compared to net income of $62.6 million, or $0.33 per diluted share for the quarter ended December 31, 2012. Net loss for the quarter ended December 31, 2013 and net income for the quarter ended December 31, 2012 include $127.5 million and $281.5 million, respectively, of net gains on sale of real estate, and $32.9 million and $117.9 million, respectively, of real estate impairment losses. In addition, the quarters ended December 31, 2013 and 2012 include certain other items that affect comparability which are listed in the table below. Adjusting net income attributable to common shareholders for net gains on sale of real estate, real estate impairment losses and the items in the table below, net of amounts attributable to noncontrolling interests, net income attributable to common shareholders for the quarters ended December 31, 2013 and 2012 was $107.6 million and $77.4 million, or $0.57 and $0.41 per diluted share, respectively.
FUNDS FROM OPERATIONS attributable to common shareholders plus assumed conversions (“FFO”) for the quarter ended December 31, 2013 was a negative $6.8 million, or $0.04 per diluted share, compared to a positive $55.9 million, or $0.30 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, 2013 and 2012 was $248.7 million and $207.3 million, or $1.33 and $1.11 per diluted share, respectively.
| (Amounts in thousands, except per share amounts) | For the Quarters Ended December 31, | ||||||||||
| 2013 | 2012 | ||||||||||
| (Negative FFO) FFO (1) | $ | (6,784 | ) | $ | 55,890 | ||||||
| Per Share | $ | (0.04 | ) | $ | 0.30 | ||||||
| Items that affect comparability income (expense): | |||||||||||
| Toys "R" Us Negative FFO (including impairment losses of $162,215 and $40,000, respectively) | $ | (282,041 | ) | $ | (61,358 | ) | |||||
| Acquisition related costs | (18,088 | ) | (6,934 | ) | |||||||
| Non-cash impairment loss on J.C. Penney common shares | - | (224,937 | ) | ||||||||
| Loss from the mark-to-market of J.C. Penney derivative position | - | (22,472 | ) | ||||||||
| Net gain on sale of land parcels and residential condominiums | 23,988 | - | |||||||||
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FFO attributable to discontinued operations, including LNR and discontinued operations of Alexander's in 2012 |
1,671 | 46,365 | |||||||||
| Accelerated amortization of discount on investment in subordinated debt of Independence Plaza | - | 60,396 | |||||||||
| 1290 Avenue of the Americas and 555 California Street priority return and income tax benefit | - | 25,260 | |||||||||
| Net gain resulting from Lexington Realty Trust's stock issuance | - | 14,116 | |||||||||
| Other, net | 3,436 | 8,425 | |||||||||
| (271,034 | ) | (161,139 | ) | ||||||||
| Noncontrolling interests' share of above adjustments | 15,555 | 9,778 | |||||||||
| Items that affect comparability, net | $ | (255,479 | ) | $ | (151,361 | ) | |||||
| FFO as adjusted for comparability | $ | 248,695 | $ | 207,251 | |||||||
| Per Share | $ | 1.33 | $ | 1.11 | |||||||
| (1) See page 4 for a reconciliation of our net (loss) income to (Negative FFO) FFO for the quarters ended December 31, 2013 and 2012. | |||||||||||
Year Ended 2013 Results
NET INCOME attributable to common shareholders for the year ended December 31, 2013 was $392.0 million, or $2.09 per diluted share, compared to $549.3 million, or $2.94 per diluted share for the year ended December 31, 2012. Net income for the years ended December 31, 2013 and 2012 includes $412.1 million and $487.4 million, respectively, of net gains on sale of real estate, and $43.7 million and $141.6 million, respectively, of real estate impairment losses. In addition, the years ended December 31, 2013 and 2012 include certain other items that affect comparability which are listed in the table below. Adjusting net income attributable to common shareholders for net gains on sale of real estate, real estate impairment losses and the items in the table below, net of amounts attributable to noncontrolling interests, net income attributable to common shareholders for the years ended December 31, 2013 and 2012 was $395.3 million and $262.2 million, or $2.11 and $1.40 per diluted share, respectively.
FFO for the year ended December 31, 2013 was $641.0 million, or $3.41 per diluted share, compared to $818.6 million, or $4.39 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 years ended December 31, 2013 and 2012 was $941.5 million and $778.5 million, or $5.01 and $4.18 per diluted share, respectively.
| (Amounts in thousands, except per share amounts) | For the Years Ended December 31, | |||||||||
| 2013 | 2012 | |||||||||
| FFO (1) | $ | 641,037 | $ | 818,565 | ||||||
| Per Share | $ | 3.41 | $ | 4.39 | ||||||
| Items that affect comparability income (expense): | ||||||||||
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Toys "R" Us (Negative FFO) FFO (including impairment losses of $240,757 and $40,000, respectively) |
$ | (312,788 | ) | $ | 65,673 | |||||
| Loss on sale of J.C. Penney common shares | (54,914 | ) | - | |||||||
| Non-cash impairment loss on J.C. Penney common shares | (39,487 | ) | (224,937 | ) | ||||||
| Loss from the mark-to-market of J.C. Penney derivative position | (33,487 | ) | (75,815 | ) | ||||||
| Acquisition related costs | (24,857 | ) | (11,248 | ) | ||||||
| Preferred unit and share redemptions | (1,130 | ) | 8,948 | |||||||
| Stop & Shop litigation settlement income | 59,599 | - | ||||||||
| Net gain on sale of marketable securities, land parcels and residential condominiums | 58,245 | 13,347 | ||||||||
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FFO attributable to discontinued operations, including LNR, and discontinued operations of Alexander's in 2012 |
33,928 | 153,179 | ||||||||
| Accelerated amortization of discount on investment in subordinated debt of Independence Plaza | - | 60,396 | ||||||||
| After-tax net gain on sale of Canadian Trade Shows | - | 19,657 | ||||||||
| Net gain resulting from Lexington Realty Trust's stock issuance | - | 14,116 | ||||||||
| 1290 Avenue of the Americas and 555 California Street priority return | - | 13,222 | ||||||||
| Other, net | (3,890 | ) | 6,196 | |||||||
| (318,781 | ) | 42,734 | ||||||||
| Noncontrolling interests' share of above adjustments | 18,347 | (2,644 | ) | |||||||
| Items that affect comparability, net | $ | (300,434 | ) | $ | 40,090 | |||||
| FFO as adjusted for comparability | $ | 941,471 | $ | 778,475 | ||||||
| Per Share | $ | 5.01 | $ | 4.18 | ||||||
| (1) See page 4 for a reconciliation of our net (loss) income to FFO for the years ended December 31, 2013 and 2012. | ||||||||||
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, 2013. 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, 2013 AND 2012 |
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| For The Quarters | For The Years | ||||||||||||||||||||
| (Amounts in thousands, except per share amounts) | Ended December 31, | Ended December 31, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| Revenues | $ | 673,308 | $ | 686,693 | $ | 2,760,909 | $ | 2,736,232 | |||||||||||||
| (Loss) income from continuing operations | (168,474 | ) | 51,936 | 140,227 | 402,188 | ||||||||||||||||
| Income from discontinued operations | 129,715 | 39,957 | 424,513 | 292,353 | |||||||||||||||||
| Net (loss) income | (38,759 | ) | 91,893 | 564,740 | 694,541 | ||||||||||||||||
| Less net income attributable to noncontrolling interests in: | |||||||||||||||||||||
| Consolidated Subsidiaries | (13,903 | ) | (1,090 | ) | (63,952 | ) | (32,018 | ) | |||||||||||||
| Operating Partnership | 4,155 | (3,882 | ) | (23,659 | ) | (35,327 | ) | ||||||||||||||
| Preferred unit distributions of the Operating Partnership | (12 | ) | (786 | ) | (1,158 | ) | (9,936 | ) | |||||||||||||
| Net (loss) income attributable to Vornado | (48,519 | ) | 86,135 | 475,971 | 617,260 | ||||||||||||||||
| Preferred share dividends | (20,368 | ) | (20,750 | ) | (82,807 | ) | (76,937 | ) | |||||||||||||
| Preferred unit and share redemptions | - | (2,752 | ) | (1,130 | ) | 8,948 | |||||||||||||||
| Net (loss) income attributable to common shareholders | $ | (68,887 | ) | $ | 62,633 | $ | 392,034 | $ | 549,271 | ||||||||||||
| Net (loss) income per common share: | |||||||||||||||||||||
| Basic | $ | (0.37 | ) | $ | 0.34 | $ | 2.10 | $ | 2.95 | ||||||||||||
| Diluted | $ | (0.37 | ) | $ | 0.33 | $ | 2.09 | $ | 2.94 | ||||||||||||
| Weighted average shares: | |||||||||||||||||||||
| Basic | 187,109 | 186,267 | 186,941 | 185,810 | |||||||||||||||||
| Diluted | 187,109 | 186,866 | 187,709 | 186,530 | |||||||||||||||||
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(Negative FFO) FFO attributable to common shareholders plus assumed conversions |
$ | (6,784 | ) | $ | 55,890 | $ | 641,037 | $ | 818,565 | ||||||||||||
| Per diluted share | $ | (0.04 | ) | $ | 0.30 | $ | 3.41 | $ | 4.39 | ||||||||||||
| FFO as adjusted for comparability | $ | 248,695 | $ | 207,251 | $ | 941,471 | $ | 778,475 | |||||||||||||
| Per diluted share | $ | 1.33 | $ | 1.11 | $ | 5.01 | $ | 4.18 | |||||||||||||
| Weighted average shares used in determining FFO per diluted share | 187,109 | 186,866 | 187,757 | 186,530 | |||||||||||||||||
| The following table reconciles our net (loss) income to (Negative FFO) FFO: | ||||||||||||||||||||
| For The Quarters | For The Years | |||||||||||||||||||
| (Amounts in thousands) | Ended December 31, | Ended December 31, | ||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| Reconciliation of our net (loss) income to (Negative FFO) FFO: | ||||||||||||||||||||
| Net (loss) income attributable to Vornado | $ | (48,519 | ) | $ | 86,135 | $ | 475,971 | $ | 617,260 | |||||||||||
| Depreciation and amortization of real property | 124,611 | 125,069 | 501,753 | 504,407 | ||||||||||||||||
| Net gains on sale of real estate | (127,512 | ) | (41,998 | ) | (411,593 | ) | (245,799 | ) | ||||||||||||
| Real estate impairment losses | 32,443 | 116,453 | 37,170 | 129,964 | ||||||||||||||||
| Proportionate share of adjustments to equity in net income of | ||||||||||||||||||||
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Toys, to arrive at FFO: |
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| Depreciation and amortization of real property | 16,506 | 17,777 | 69,741 | 68,483 | ||||||||||||||||
| Real estate impairment losses | 456 | 1,430 | 6,552 | 9,824 | ||||||||||||||||
| Income tax effect of above adjustments | (5,937 | ) | (6,728 | ) | (26,703 | ) | (27,493 | ) | ||||||||||||
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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 | 25,282 | 20,387 | 87,529 | 86,197 | ||||||||||||||||
| Net gains on sale of real estate | - | (239,551 | ) | (465 | ) | (241,602 | ) | |||||||||||||
| Real estate impairment losses | - | - | - | 1,849 | ||||||||||||||||
| Noncontrolling interests' share of above adjustments | (3,746 | ) | 418 | (15,089 | ) | (16,649 | ) | |||||||||||||
| FFO | 13,584 | 79,392 | 724,866 | 886,441 | ||||||||||||||||
| Preferred share dividends | (20,368 | ) | (20,750 | ) | (82,807 | ) | (76,937 | ) | ||||||||||||
| Preferred unit and share redemptions | - | (2,752 | ) | (1,130 | ) | 8,948 | ||||||||||||||
| (Negative FFO) FFO attributable to common shareholders | (6,784 | ) | 55,890 | 640,929 | 818,452 | |||||||||||||||
| Convertible preferred share dividends | - | - | 108 | 113 | ||||||||||||||||
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(Negative FFO) FFO attributable to common shareholders plus assumed conversions |
$ | (6,784 | ) | $ | 55,890 | $ | 641,037 | $ | 818,565 | |||||||||||
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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 flows 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. A reconciliation of FFO to FFO as adjusted for comparability is provided on page 1 and page 2 of this press release.
Conference Call and Audio Webcast
As previously announced, the Company will host a quarterly earnings conference call and audio webcast on February 25, 2014 at 10:00 a.m. Eastern Time (ET). The conference call can be accessed by dialing 800-708-4539 (domestic) or 847-619-6396 (international) and indicating to the operator the passcode 36581010. A telephonic replay of the conference call will be available from 1:00 p.m. ET on February 25, 2014 through March 27, 2014. To access the replay, please dial 888-843-7419 and enter the passcode 36581010#. 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 for 90 days following the conference call.
Vornado Realty Trust
Stephen Theriot, 201-587-1000
Source: Vornado Realty Trust