Vornado Realty Trust Reports Second Quarter 2004 Results
PARAMUS, N.J.--(BUSINESS WIRE)--Aug. 6, 2004--VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:
Second Quarter 2004 Results
NET INCOME applicable to common shares for the quarter ended June 30, 2004 was $158.4 million, or $1.21 per diluted share, versus $82.3 million, or $.71 per diluted share, for the quarter ended June 30, 2003.
Net income for the three months ended June 30, 2004 includes (i) a $65.9 million gain on sale of the Palisades Residential Complex in Fort Lee, New Jersey, (ii) a $7.5 million gain on sale of Newkirk Master Limited Partnership ("MLP") option units, partially offset by (iii) $6.0 million for the Company's share of impairment charges of partially-owned entities, and (iv) a $2.2 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 $56.7 million or $.43 per diluted share.
Net income for the three months ended June 30, 2003 includes (i) the Company's $1.9 million share of Newkirk MLP's net gains on sale of real estate, (ii) a $3.3 million charge for the Company's share of Alexander's accrued stock appreciation rights compensation expense and (iii) a $1.4 million loss on settlement of the Primestone guarantees. These items, net of minority interest, reduced net income by $2.2 million or $.02 per diluted share.
FUNDS FROM OPERATIONS (FFO) for the quarter ended June 30, 2004 was $159.7 million(1), or $1.22 per diluted share, compared to $133.4 million(1), or $1.14 per diluted share, for the prior year's quarter. Adjusting FFO for certain items that affect comparability, second quarter 2004 FFO is 5.1% higher than second quarter 2003 on a per share basis, as detailed below:
FOR THE THREE MONTHS ENDED
(Amounts in thousands, except per
share amounts) June 30, 2004June 30, 2003
Amount Per Amount Per
Share Share
FFO as shown above (1) $159,674 $1.22 $133,410 $1.14
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Adjustments:
Add:
Impairment loss - Starwood Ceruzzi 3,833 --
Impairment loss - Newkirk MLP 2,142 --
Alexander's stock appreciation
rights compensation expense 2,171 3,285
Loss on Primestone settlement of
guarantees and other -- 1,294
Less:
Gain on sale of Newkirk MLP option
units 7,494 --
Minority interest share of above
adjustments 86 838
-- ---
FFO, as adjusted for comparability $160,240 $1.23 $137,151 $1.17
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(1) See page 4 for a reconciliation of net income applicable to common
shares to FFO for the quarters ended June 30, 2004 and 2003.
First Half 2004 Results
Net income applicable to common shares for the six months ended June 30, 2004 was $232.9 million, or $1.81 per diluted share, versus $168.6 million, or $1.49 per diluted share, for the six months ended June 30, 2003.
Net income for the six months ended June 30, 2004 includes (i) a $65.9 million gain on sale of the Palisades Residential Complex in Fort Lee, New Jersey, (ii) a $7.5 million gain on sale of Newkirk MLP option units, (iii) the Company's $2.8 million share of net gains on sale of real estate of partially-owned entities, partially offset by (iv) a $12.1 million charge for the Company's share of Alexander's accrued stock appreciation rights compensation expense, (v) $6.0 million for the Company's share of impairment charges of partially-owned entities, (vi) $3.9 million for the write-off of unamortized issuance costs upon the redemption of certain of the Company's preferred shares and units, and (vii) $1.4 million for the Company's share of losses on early extinguishment of debt of a partially owned entity. These items, net of minority interest, increased net income by $45.2 million, or $.35 per diluted share.
Net income for the six months ended June 30, 2003 includes (i) the Company's $9.9 million share of Newkirk's net gains on sale of real estate and early extinguishment of debt, (ii) a $2.6 million net gain on sale of other real estate, partially offset by (iii) a $3.3 million charge for the Company's share of Alexander's accrued stock appreciation rights compensation expense and (iv) a $1.4 million loss on settlement of the Primestone guarantees. These items, net of minority interest, increased net income by $6.4 million, or $.06 per diluted share.
FFO for the six months ended June 30, 2004 was $288.6 million, or $2.24 per diluted share, compared to $263.5 million(1), or $2.29 per diluted share, for the prior year's six months. Adjusting FFO for certain items that affect comparability, first half 2004 FFO is 1.3% higher than first half 2003 on a per share basis, as detailed below:
FOR THE SIX MONTHS ENDED
(Amounts in thousands, except per
share amounts) June 30, 2004June 30, 2003
Amount Per Amount Per
Share Share
FFO as shown above (1) $288,649 $2.24 $263,515 $2.29
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Adjustments:
Add:
Alexander's stock appreciation
rights compensation expense 12,084 3,285
Write-off of perpetual preferred
share and unit issuance costs 3,895 --
Impairment loss - Starwood Ceruzzi 3,833 --
Impairment loss - Newkirk MLP 2,142 --
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 776 282
Gain on early extinguishment of debt
of a partially-owned entity -- 1,600
Minority interest share of above
adjustments 2,176 533
----- ---
FFO, as adjusted for comparability $301,591 $2.34 $265,773 $2.31
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(1) See page 4 for a reconciliation of net income applicable to common
shares to FFO for the six months ended June 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.
(tables to follow)
VORNADO REALTY TRUST
OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2004 AND 2003
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
(Amounts in thousands, except
per share amounts) 2004 2003 2004 2003
Revenues $400,054 $371,135 $793,104 $736,112
======== ======== ======== ========
Income from continuing
operations $ 94,239 $ 82,802 $175,851 $168,445
Income from discontinued
operations 67,762 4,955 68,589 11,054
------ ----- ------ ------
Net income 162,001 87,757 244,440 179,499
Preferred stock dividends (3,565) (5,426) (11,547) (10,851)
------- ------- -------- --------
Net income applicable to common
shares $158,436 $ 82,331 $232,893 $168,648
======== ======== ======== ========
Net income per common share:
Basic $ 1.26 $ .74 $ 1.89 $ 1.53
======== ======== ======== ========
Diluted $ 1.21 $ .71 $ 1.81 $ 1.49
======== ======== ======== ========
Average number of common
shares and share equivalents
outstanding:
Basic 125,468 111,478 123,539 110,297
======= ======= ======= =======
Diluted 130,744 116,881 129,087 115,086
======= ======= ======= =======
FFO applicable to common
shares $159,674 $133,410 $288,649 $263,515
======== ======== ======== ========
FFO per diluted share $ 1.22 $ 1.14 $ 2.24 $ 2.29
======== ======== ======== ========
Average number of common
shares and share equivalents
outstanding used for
determining funds from
operations per
diluted share 130,744 116,881 129,087 115,086
======= ======= ======= =======
The following table reconciles FFO and net income:
For the Three Months For the Six Months
Ended June 30, Ended June 30,
(Amounts in thousands)
2004 2003 2004 2003
Net income applicable to common
shares $158,436 $ 82,331 $232,893 $168,648
Depreciation and amortization
of real property 54,492 51,066 108,132 100,573
Net gains on sale of real
estate (65,905) -- (65,905) (2,644)
Proportionate share of
adjustments to equity in net
income of partially-owned
entities to arrive at FFO:
Depreciation and amortization
of real property 13,442 13,537 26,546 26,785
Net gains on sale of real
estate (862) (1,417) (2,779) (6,924)
Minority interest's share of above
adjustments (196) (13,283) (10,782) (25,274)
----- -------- -------- --------
159,407 132,234 288,105 261,164
Series A preferred dividends 267 1,176 544 2,351
--- ----- --- -----
FFO applicable to common
shares(1) $159,674 $133,410 $288,649 $263,515
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(1) FFO does not represent cash generated from operating activities in
accordance with accounting principles generally accepted in the
United States of America and is not necessarily indicative of cash
available to fund cash needs which is disclosed in the
Consolidated Statements of Cash Flows for the applicable periods.
FFO should not be considered as an alternative to net income as an
indicator of the Company's operating performance. Management
considers FFO a relevant supplemental measure of operating
performance because it provides a basis for comparison among
REITs. Funds from operations is computed in accordance with the
National Association of Real Estate Investment Trust's ("NAREIT")
definition, which may not be comparable to FFO reported by other
REITs that do not compute FFO in accordance with NAREIT's
definition. 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