Vornado Announces Second Quarter 2007 FFO of $1.72 per share
PARAMUS, N.J.--(BUSINESS WIRE)--
VORNADO REALTY TRUST (NYSE: VNO) today reported:
Second Quarter 2007 Results
NET INCOME applicable to common shares for the quarter ended June 30, 2007 was $151.6 million, or $0.96 per diluted share, versus $148.8 million, or $0.99 per diluted share, for the quarter ended June 30, 2006. Net income for the quarters ended June 30, 2007 and 2006 includes certain items that affect comparability which are listed in the table below. Net income for the quarter ended June 30, 2006 also includes a $17.6 million net gain on sale of real estate. The aggregate of these items, net of minority interest, increased net income applicable to common shares for the quarter ended June 30, 2007 by $63.6 million, or $0.39 per diluted share and increased net income applicable to common shares for the quarter ended June 30, 2006 by $55.8 million, or $0.36 per diluted share.
FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions ("FFO") for the quarter ended June 30, 2007 was $281.7 million, or $1.72 per diluted share, compared to $230.4 million, or $1.49 per diluted share, for the quarter ended June 30, 2006. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarters ended June 30, 2007 and 2006 was $218.6 million and $190.5 million, or $1.33 and $1.23 per share, respectively.
For the Quarter
(Amounts in thousands, except per share amounts) Ended June 30,
-----------------
2007 2006
-------- --------
FFO applicable to common shares plus assumed
conversions (1) $281,741 $230,430
======= =======
Per Share $ 1.72 $ 1.49
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Items that affect comparability (income) expense:
Derivatives:
McDonalds shares $(71,390)$ 14,515
GMH Warrants -- (4,105)
Other (684) --
32.8% share of Alexander's:
Stock appreciation rights (1,222) (4,836)
Net gain on sale of 731 Lexington Avenue
condominiums -- (2,722)
Other:
India Property Fund organization costs 1,677 --
Net gain on sale of Sears Canada common shares -- (55,438)
Prepayment penalties and write-off of
unamortized financing costs -- 4,933
H Street litigation costs -- 2,093
Other, net 2,131 1,415
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(69,488) (44,145)
Minority limited partners' share of above
adjustments 6,347 4,237
------- -------
$(63,141)$(39,908)
======= =======
Per share $ (0.39)$ (0.26)
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FFO as adjusted for comparability $218,600 $190,522
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Per share $ 1.33 $ 1.23
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(1) See page 4 for a reconciliation of net income to FFO for the quarters ended June 30, 2007 and 2006.
First Half 2007 Results
NET INCOME applicable to common shares for the six months ended June 30, 2007 was $304.3 million, or $1.92 per diluted share, versus $283.6 million, or $1.90 per diluted share, for the six months ended June 30, 2006. Net income for the six months ended June 30, 2007 and 2006 includes certain items that affect comparability which are listed in the table below. Net income for the six months ended June 30, 2006 also includes $33.8 million for our share of net gains on sale of real estate. The aggregate of these items, net of minority interest, increased net income applicable to common shares for the six months ended June 30, 2007 by $61.3 million, or $0.37 per diluted share and increased net income applicable to common shares for the six months ended June 30, 2006 by $62.5 million, or $0.40 per diluted share.
FFO for the six months ended June 30, 2007 was $551.9 million, or $3.36 per diluted share, compared to $442.3 million, or $2.86 per diluted share, for the six months ended June 30, 2006. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the six months ended June 30, 2007 and 2006 was $491.1 million and $409.3 million, or $2.99 and $2.65 per share, respectively.
For the Six Months
(Amounts in thousands, except per share amounts) Ended June 30,
------------------
2007 2006
--------- --------
FFO applicable to common shares plus assumed
conversions (1) $551,906 $442,346
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Per Share $ 3.36 $ 2.86
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Items that affect comparability (income) expense:
Derivatives:
McDonalds shares $(74,613)$ 8,215
Sears Holdings shares -- (18,611)
GMH Warrants -- 16,370
Other (6,841) --
32.8% share of Alexander's:
Stock appreciation rights (5,916) 7,559
Net gain on sale of 731 Lexington Avenue
condominiums -- (4,580)
Other:
Costs of acquisition not consummated 8,807 --
Prepayment penalties and write-off of
unamortized financing costs 5,861 4,933
India Property Fund organization costs 1,677 --
H Street litigation costs 1,891 3,561
Net gain on sale of Sears Canada -- (55,438)
Other, net 2,131 1,415
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(67,003) (36,576)
Minority limited partners' share of above
adjustments 6,152 3,536
------- -------
$(60,851)$(33,040)
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Per share $ (0.37)$ (0.21)
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FFO as adjusted for comparability $491,055 $409,306
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Per share $ 2.99 $ 2.65
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(1) See page 4 for a reconciliation of net income to FFO for the six months ended June 30, 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 THREE AND SIX MONTHS ENDED
JUNE 30, 2007 AND 2006
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FOR THE THREE
MONTHS FOR THE SIX MONTHS
ENDED JUNE, 30 ENDED JUNE, 30
----------------- ---------------------
(Amounts in thousands, except
per share amounts) 2007 2006 2007 2006
-------- -------- ---------- ----------
Revenues $793,457 $663,032 $1,530,513 $1,310,369
======= ======= ========= =========
Income from continuing
operations $187,631 $169,105 $ 376,588 $ 322,429
(Loss) income from
discontinued operations (40) 16,762 (71) 33,497
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Income before allocation to
limited partners 187,591 185,867 376,517 355,926
Minority limited partners'
interest in the
Operating Partnership (16,852) (17,324) (34,029) (33,198)
Perpetual preferred unit
distributions of the
Operating Partnership (4,819) (5,374) (9,637) (10,347)
------- ------- --------- ---------
Net income 165,920 163,169 332,851 312,381
Preferred share dividends (14,295) (14,404) (28,591) (28,811)
------- ------- --------- ---------
Net income applicable to
common shares $151,625 $148,765 $ 304,260 $ 283,570
======= ======= ========= =========
Net income per common
share:
Basic $ 1.00 $ 1.05 $ 2.01 $ 2.01
======= ======= ========= =========
Diluted $ 0.96 $ 0.99 $ 1.92 $ 1.90
======= ======= ========= =========
Average number of
common shares and
share equivalents
outstanding:
Basic 151,794 141,418 151,612 141,275
======= ======= ========= =========
Diluted 164,241 154,893 164,209 154,650
======= ======= ========= =========
FFO applicable to common
shares plus assumed
conversions $281,741 $230,430 $ 551,906 $ 442,346
======= ======= ========= =========
FFO per diluted share $ 1.72 $ 1.49 $ 3.36 $ 2.86
======= ======= ========= =========
Average number of common
shares and share
equivalents
outstanding used for
determining FFO per
diluted share 164,241 154,893 164,209 154,650
======= ======= ========= =========
The following table reconciles net income to FFO:
For The Three For The Six
Months Months
(Amounts in thousands) Ended June 30, Ended June 30,
----------------- -----------------
2007 2006 2007 2006
-------- -------- -------- --------
Net income $165,920 $163,169 $332,851 $312,381
Depreciation and amortization of
real property 114,511 84,156 208,176 160,599
Net gains on sale of real estate -- (17,609) -- (33,769)
Proportionate share of
adjustments to equity in net
income of Toys to arrive at FFO:
Depreciation and amortization
of real property 17,112 12,155 51,035 27,923
Net (gains) losses on sale of
real estate (493) 658 (493) 329
Income tax effect of above
adjustments (5,807) (4,928) (17,690) (10,841)
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 13,403 10,856 22,464 20,097
Minority limited partners' share
of above
adjustments (13,882) (8,896) (26,500) (16,120)
------- ------- ------- -------
FFO 290,764 239,561 569,843 460,599
Preferred share dividends (14,295) (14,404) (28,591) (28,811)
------- ------- ------- -------
FFO applicable to common shares 276,469 225,157 541,242 431,788
Interest on 3.875% exchangeable
senior debentures 5,203 5,094 10,512 10,188
Series A convertible preferred
share dividends 69 179 142 370
------- ------- ------- -------
FFO applicable to common shares
plus assumed
conversions $281,741 $230,430 $551,906 $442,346
======= ======= ======= =======
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