Vornado Announces Third Quarter 2007 FFO of $1.35 Per Share
PARAMUS, N.J.--(BUSINESS WIRE)--
VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:
Third Quarter 2007 Financial Results
NET INCOME applicable to common shares for the quarter ended September 30, 2007 was $116.5 million, or $0.74 per diluted share, versus $113.6 million, or $0.76 per diluted share, for the quarter ended September 30, 2006. Net income for the quarters ended September 30, 2007 and 2006 includes certain items that affect comparability which are listed in the table below. Net income for the quarters ended September 30, 2007 and 2006 also includes net gains on sales of real estate of $31.9 million and $10.8 million, respectively. The aggregate of these items, net of minority interest, increased net income applicable to common shares for the quarter ended September 30, 2007 by $50.5 million, or $0.31 per diluted share and increased net income applicable to common shares for the quarter ended September 30, 2006 by $52.3 million, or $0.34 per diluted share.
FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions ("FFO") for the quarter ended September 30, 2007 was $221.2 million, or $1.35 per diluted share, compared to $204.5 million, or $1.31 per diluted share, for the quarter ended September 30, 2006. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarters ended September 30, 2007 and 2006 was $199.7 million and $162.4 million, or $1.22 and $1.04 per share, respectively.
For the Quarter
(Amounts in thousands, except per share amounts) Ended September 30,
-------------------
2007 2006
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FFO applicable to common shares plus assumed
conversions (1) $221,199 $204,535
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Per Share $ 1.35 $ 1.31
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Items that affect comparability (income) expense:
Derivatives:
McDonalds shares $(28,190) $(68,796)
Other 9,584 (1,891)
32.8% share of Alexander's:
Stock appreciation rights (3,075) 10,797
Other:
Gain on sale of H Street land parcels (4,803) --
Prepayment penalties and write-off of
unamortized financing costs 1,701 8,548
H Street litigation costs -- 3,033
Other, net 1,073 1,711
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(23,710) (46,598)
Minority limited partners' share of above
adjustments 2,177 4,436
------- -------
$(21,533) $(42,162)
======= =======
Per share $ (0.13) $ (0.27)
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FFO as adjusted for comparability $199,666 $162,373
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Per share $ 1.22 $ 1.04
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(1) See page 4 for a reconciliation of net income to FFO for the
quarters ended September 30, 2007 and 2006.
Nine Months Ended September 2007 Financial Results
NET INCOME applicable to common shares for the nine months ended September 30, 2007 was $420.8 million, or $2.65 per diluted share, versus $397.2 million, or $2.66 per diluted share, for the nine months ended September 30, 2006. Net income for the nine months ended September 30, 2007 and 2006 includes certain items that affect comparability which are listed in the table below. Net income for the nine months ended September 30, 2007 and 2006 also includes our share of net gains on sales of real estate of $32.4 million and $44.6 million, respectively. The aggregate of these items, net of minority interest, increased net income applicable to common shares for the nine months ended September 30, 2007 by $111.9 million, or $0.68 per diluted share and increased net income applicable to common shares for the nine months ended September 30, 2006 by $115.3 million, or $0.74 per diluted share.
FFO for the nine months ended September 30, 2007 was $773.5 million, or $4.71 per diluted share, compared to $646.9 million, or $4.17 per diluted share, for the nine months ended September 30, 2006. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the nine months ended September 30, 2007 and 2006 was $691.0 million and $570.9 million, or $4.21 and $3.68 per share, respectively.
For the Nine Months
(Amounts in thousands, except per share amounts) Ended September 30,
--------------------
2007 2006
---------- ---------
FFO applicable to common shares plus assumed
conversions (1) $ 773,457 $646,881
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Per Share $ 4.71 $ 4.17
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Items that affect comparability (income) expense:
Derivatives:
McDonalds shares $(102,803) $(60,581)
Sears Holdings shares -- (18,611)
GMH Warrants -- 16,370
Other 2,743 (2,767)
32.8% share of Alexander's:
Stock appreciation rights (8,991) 18,356
Net gain on sale of 731 Lexington Avenue
condominiums -- (4,580)
Other:
Gain on sale of H Street land parcels (4,803) --
Costs of acquisition not consummated 8,807 --
Prepayment penalties and write-off of
unamortized financing costs 7,562 13,481
India Property Fund organization costs 1,677 --
H Street litigation costs 1,891 6,594
Net gain on sale of Sears Canada -- (55,438)
Other, net 3,204 3,126
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(90,713) (84,050)
Minority limited partners' share of above
adjustments 8,304 8,062
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$ (82,409) $(75,988)
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Per share $ (0.50) $ (0.49)
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FFO as adjusted for comparability $ 691,048 $570,893
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Per share $ 4.21 $ 3.68
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(1) See page 4 for a reconciliation of net income to FFO for the nine
months ended September 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
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OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED
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SEPTEMBER 30, 2007 AND 2006
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FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
SEPTEMBER, 30 SEPTEMBER, 30
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(Amounts in thousands,
except per share amounts) 2007 2006 2007 2006
-------- -------- ---------- ----------
Revenues $853,036 $675,931 $2,382,165 $1,978,488
======= ======= ========= =========
Income from continuing
operations $121,245 $147,192 $ 497,825 $ 465,830
Income from discontinued
operations 24,655 577 24,592 37,865
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Income before allocation
to limited partners 145,900 147,769 522,417 503,695
Minority limited partners'
interest in the Operating
Partnership (10,241) (13,103) (44,270) (46,301)
Perpetual preferred unit
distributions of the
Operating Partnership (4,818) (6,683) (14,455) (17,030)
------- ------- --------- ---------
Net income 130,841 127,983 463,692 440,364
Preferred share dividends (14,295) (14,351) (42,886) (43,162)
------- ------- --------- ---------
Net income applicable to
common shares $116,546 $113,632 $ 420,806 $ 397,202
======= ======= ========= =========
Net income per common
share:
Basic $ 0.77 $ 0.80 $ 2.77 $ 2.81
======= ======= ========= =========
Diluted $ 0.74 $ 0.76 $ 2.65 $ 2.66
======= ======= ========= =========
Average number of
common shares and
share equivalents
outstanding:
Basic 151,990 141,684 151,739 141,413
======= ======= ========= =========
Diluted 158,513 150,096 158,745 149,637
======= ======= ========= =========
FFO applicable to common
shares plus assumed
conversions $221,199 $204,535 $ 773,457 $ 646,881
======= ======= ========= =========
FFO per diluted share $ 1.35 $ 1.31 $ 4.71 $ 4.17
======= ======= ========= =========
Average number of
common shares and
share equivalents
outstanding used for
determining FFO per
diluted share 164,072 155,628 164,213 155,168
======= ======= ========= =========
The following table reconciles net income to FFO:
For The Three For The Nine
Months Ended Months Ended
(Amounts in thousands) September 30, September 30,
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
Net income $130,841 $127,983 $463,692 $440,364
Depreciation and amortization
of real property 117,148 86,235 325,324 246,834
Net gains on sale of real
estate (22,942) -- (22,942) (33,769)
Proportionate share of
adjustments to equity in net
income of Toys to arrive at
FFO:
Depreciation and
amortization of real
property 17,949 13,468 68,984 41,391
Net gains on sale of real
estate -- (329) (493) --
Income tax effect of above
adjustments (6,282) (5,190) (23,972) (16,031)
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 13,506 14,058 36,091 34,155
Net gains on sale of real
estate (8,980) (10,842) (8,980) (10,842)
Minority limited partners'
share of above adjustments (11,070) (11,729) (37,570) (27,849)
------- ------- ------- -------
FFO 230,170 213,654 800,134 674,253
Preferred share dividends (14,295) (14,351) (42,886) (43,162)
------- ------- ------- -------
FFO applicable to common
shares 215,875 199,303 757,248 631,091
Interest on 3.875%
exchangeable senior
debentures 5,256 5,093 15,768 15,281
Series A convertible preferred
share dividends 68 139 441 509
------- ------- ------- -------
FFO applicable to common
shares plus assumed
conversions $221,199 $204,535 $773,457 $646,881
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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 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