Vornado Realty Trust Announces Third Quarter 2004 Results
PARAMUS, N.J.--(BUSINESS WIRE)--Nov. 5, 2004--Vornado Realty Trust (New York Stock Exchange: VNO) today reported:
Third Quarter 2004 Results
NET INCOME applicable to common shares for the quarter ended September 30, 2004 was $104.5 million, or $.79 per diluted share, versus $71.0 million, or $.60 per diluted share, for the quarter ended September 30, 2003.
Net income for the three months ended September 30, 2004 includes (i) $9.9 million for net gains on sale of real estate, (ii) $1.3 million for the Company's share of a gain on sale of a land parcel, partially offset by charges of (iii) $8.8 million for the Company's share of Alexander's accrued stock appreciation rights compensation expense and (iv) $1.5 million for costs of acquisition not consummated. These items, net of minority interest, increased net income by $0.7 million or $.01 per diluted share.
Net income for the quarter ended September 30, 2003 includes (i) a charge of $6.2 million for the Company's share of Alexander's accrued stock appreciation rights compensation expense and (ii) $.9 million of net gains on disposition of wholly-owned and partially-owned assets. These items, net of minority interest, reduced net income by $4.3 million, or $.04 per diluted share.
FUNDS FROM OPERATIONS(1) (FFO) applicable to common shares plus assumed conversions for the quarter ended September 30, 2004 was $156.7 million, or $1.18 per diluted share, compared to $123.9 million, or $1.04 per diluted share, for the prior year's quarter. Adjusting for certain items that affect comparability, the third quarter 2004 is 14.8% higher than the third quarter 2003 on a per share basis, as detailed below:
FOR THE THREE MONTHS ENDED
--------------------------------
(Amounts in thousands, September 30, September 30,
except per share amounts) 2004 2003
--------------- ----------------
Per Per
Amount Share Amount Share
-------- ------ --------- ------
FFO(1) applicable to common shares plus
assumed conversions, as shown above $156,703 $1.18 $123,914 $1.04
===== =====
Adjustments:
Add:
Alexander's stock appreciation rights
compensation expense 8,796 6,192
Costs of acquisition not consummated 1,475 --
Impairment loss - Newkirk MLP 759 --
Less:
Gain on sale of land parcel -
Alexander's 1,274 --
Minority interest share of above
adjustments 1,250 1,135
--------- ---------
FFO, applicable to common shares plus
assumed conversions, as adjusted for
comparability $165,209 $1.24 $128,971 $1.08
======== ===== ========= =====
(1) See page 5 for a reconciliation of net income to FFO for the
quarters ended September 30, 2004 and 2003.
Investments in Sears and GMH
Vornado filed its third quarter Form 10-Q today which included a discussion of its recent investments in Sears, Roebuck & Co. (New York Stock Exchange: S) and GMH Communities LP, a subsidiary of GMH Communities Trust (New York Stock Exchange: GCT). For further information concerning Vornado's 4.3% interest in Sears - see page 14 of the Form 10-Q. For further information concerning Vornado's GMH investment - see page 8 of the Form 10-Q.
Nine Months Ended September 30, 2004 Results
Net income applicable to common shares for the nine months ended September 30, 2004 was $337.4 million, or $2.59 per diluted share, versus $239.6 million, or $2.09 per diluted share, for the prior year's nine months.
Net income for the nine months ended September 30, 2004 includes (i) $79.8 million for gains on sale of real estate (primarily the Palisades Residential Complex in Fort Lee, New Jersey) and (ii) $7.5 million of gain on sale of Newkirk MLP option units, partially offset by charges of (iii) $20.9 million for the Company's share of Alexander's accrued stock appreciation rights compensation expense, (iv) $6.7 million for the Company's share of impairment charges of partially-owned entities, (v) $3.9 million for the write-off of unamortized issuance costs upon the redemption of certain of the Company's preferred shares and units, (vi) $1.5 million for costs of acquisition not consummated and (vii) $1.4 million for the Company's share of Alexander's loss on early extinguishment of debt. These items, net of minority interest, increased net income by $45.6 million, or $.35 per diluted share.
Net income for the nine months ended September 30, 2003 includes (i) the Company's $9.5 million share of Newkirk's net gains on sale of real estate and early extinguishment of debt and (ii) a $2.6 million net gain on sale of other real estate, partially offset by, (iii) a $9.5 million charge for the Company's share of Alexander's accrued stock appreciation rights compensation expense. These items, net of minority interest, increased net income by $2.0 million, or $.02 per diluted share.
FFO(1) applicable to common shares plus assumed conversions for the nine months ended September 30, 2004 was $446.9 million, or $3.41 per diluted share, compared to $387.4 million, or $3.33 per diluted share, for the prior year's nine months. Adjusting for certain items that affect comparability, the nine months ended 2004 is 5.3% higher than the nine months ended 2003 on a per share basis, as detailed below:
FOR THE NINE MONTHS ENDED
--------------------------------
(Amounts in thousands, September 30, September 30,
except per share amounts) 2004 2003
--------------- ----------------
Per Per
Amount Share Amount Share
--------- ----- -------- ------
FFO(1) applicable to common shares
plus assumed conversions,
as shown above $446,925 $3.41 $387,430 $3.33
===== =====
Adjustments:
Add:
Alexander's stock appreciation rights
compensation expense 20,880 9,477
Write-off of perpetual preferred share
and unit issuance costs 3,895 --
Impairment losses of partially-owned
entities 6,734 --
Costs of acquisition not consummated 1,475 --
Loss on early extinguishment of debt of
a partially-owned entity 1,434 --
Loss on Primestone settlement
of guarantees -- 1,388
Less:
Gain on sale of Newkirk MLP
option units 7,494 --
Gain on sales of land parcels
and condominiums 2,050 282
Gain on early extinguishment of debt
of a partially-owned entity -- 1,600
Minority interest share of
above adjustments 3,449 1,694
--------- --------
FFO, applicable to common shares
plus assumed conversions, as adjusted
for comparability $468,350 $3.57 $394,719 $3.39
======== ===== ======== ======
(1) See page 5 for a reconciliation of net income applicable to common
shares to FFO for the nine months ended September 30, 2004 and
2003.
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 NINE MONTHS ENDED
SEPTEMBER 30, 2004 AND 2003
FOR THE THREE FOR THE NINE
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------------------
(Amounts in thousands, except
per share amounts) 2004 2003 2004 2003
-------- -------- ---------- -----------
Revenues $416,850 $380,168 $1,209,954 $1,116,280
======== ======== ========== ===========
Income from continuing
operations $ 98,728 $ 70,526 $ 274,579 $ 238,971
Income from discontinued
operations 9,795 5,534 78,384 16,588
--------- ------- ---------- ----------
Net income 108,523 76,060 352,963 255,559
Preferred stock dividends (4,022) (5,079) (15,569) (15,930)
--------- ------- ---------- ----------
Net income applicable to
common shares $104,501 $70,981 $ 337,394 $ 239,629
========= ======= ========== ==========
Net income per common share:
Basic $ .83 $ .63 $ 2.71 $ 2.15
========= ======= ========== ==========
Diluted $ .79 $ .60 $ 2.59 $ 2.09
========= ======= ========= ==========
Average number of common
shares and share
equivalents outstanding:
Basic 126,397 113,028 124,624 111,217
========= ======== ========== ==========
Diluted 132,477 117,622 131,043 116,327
========= ======== ========== ==========
FFO applicable to common
shares plus assumed
conversions $156,703 $123,914 $ 446,925 $ 387,430
======== ======== ========== =========
FFO per diluted share $ 1.18 $ 1.04 $ 3.41 $ 3.33
======== ======== ========== =========
Average number of common
shares and share
equivalents outstanding
used for determining funds
from operations per
diluted share 132,477 119,193 131,043 116,327
========= ======== ========== ==========
The following table reconciles FFO(1)
and net income:
For the Three For the Nine
Months Ended Months Ended
(Amounts in thousands) September 30, September 30,
----------------- ------------------
2004 2003 2004 2003
-------- -------- -------- ---------
Net income $108,523 $ 76,060 $352,963 $255,559
Depreciation and amortization of
real property 56,799 49,926 164,931 150,499
Net gains on sale of real estate (9,850) (767) (75,755) (3,411)
Proportionate share of adjustments
to equity in net income of
partially-owned entities to
arrive at FFO:
Depreciation and amortization
of real property 13,080 13,522 39,623 40,307
Net gains on sale of real
estate (43) (28) (2,822) (6,952)
Minority interest's share of above
adjustments (8,050) (10,549) (18,832) (35,822)
--------- -------- -------- --------
FFO(1) 160,459 128,164 460,108 400,180
Preferred dividends (4,022) (5,079) (15,569) (15,930)
--------- -------- -------- --------
FFO applicable to common shares 156,437 123,085 444,539 384,250
Series A convertible preferred
dividends 266 829 805 3,180
Series E-1 convertible preferred
distributions -- -- 1,581 --
--------- -------- -------- --------
FFO applicable to common shares
plus assumed conversions $156,703 $123,914 $446,925 $387,430
======== ======== ======== =========
(1) 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 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 pages 1 and 2 of this press release.
CONTACT: Vornado Realty Trust
Joseph Macnow, 201-587-1000
SOURCE: Vornado Realty Trust