Vornado Realty Trust Second Quarter 2005 Results
PARAMUS, N.J.--(BUSINESS WIRE)--July 29, 2005--VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:
Second Quarter 2005 Results
NET INCOME applicable to common shares for the quarter ended June 30, 2005 was $172.7 million, or $1.25 per diluted share, versus $158.4 million, or $1.21 per diluted share, for the quarter ended June 30, 2004. Net income for the three months ended June 30, 2005 includes a $31.6 million net gain on sale of 400 N. LaSalle Residential Tower, as well as certain items that affect comparability which are listed in the table below. Net income for the three months ended June 30, 2004 includes a $65.9 million net gain on sale of the Palisades Residential Complex in Fort Lee, New Jersey, as well as certain items that affect comparability which are listed in the table below. These items net of minority interest, increased net income by $72.9 or $.51 per diluted share for the quarter ended June 30, 2005 and increased net income by $56.7 million or $.43 per diluted share in the prior year's quarter.
FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions (FFO)(1) for the quarter ended June 30, 2005 was $215.8 million(1), or $1.51 per diluted share, compared to $159.7 million(1), or $1.22 per diluted share, for the prior year's quarter. Adjusting FFO for certain items that affect comparability, second quarter 2005 FFO is 2.4% lower than second quarter 2004 on a per share basis, as detailed below:
FOR THE THREE MONTHS ENDED
-------------------------------------
(Amounts in thousands, except per June 30, 2005June 30, 2004
share amounts)
----------------- -------------------
Amount Per Share Amount Per Share
-------- -------- -------- ----------
FFO as shown above (1) $215,802 $ 1.51 $159,674 $ 1.22
========= ==========
Adjustments:
Income from mark-to-market of
Sears Holdings derivative
position (37,860) --
Income from mark-to-market of
GMH Communities LP warrants (12,741) --
Net gain on sale of Alexander's
condominiums (5,541) --
Impairment losses of partially-
owned entities 3,520 5,975
Alexander's stock appreciation
rights compensation expense 2,034 2,171
Net gain on sale of Newkirk MLP
option units -- (7,494)
Limited partners' share of above
adjustments 5,694 (86)
-------- --------
FFO, as adjusted for
comparability $170,908 $ 1.20 $160,240 $ 1.23
======== ======== ======== ==========
(1) See page 4 for a reconciliation of net income applicable to common
shares to FFO for the quarters ended June 30, 2005 and 2004.
First Half 2005 Results
Net income applicable to common shares for the six months ended June 30, 2005 was $360.1 million, or $2.63 per diluted share, versus $232.9 million, or $1.81 per diluted share, for the six months ended June 30, 2004. Net income for the six months ended June 30, 2005 includes a $31.6 million net gain on sale of 400 N. LaSalle, as well as certain items that affect comparability which are listed in the table below. Net income for the six months ended June 30, 2004 includes (i) a $65.9 million net gain on sale of the Palisades Residential Complex in Fort Lee, New Jersey, (ii) the Company's $2.8 million share of net gains on sale of real estate of partially-owned entities, as well as (iii) certain items that affect comparability which are listed in the table below. These items, net of minority interest, increased net income by $153.7 million, or $1.11 per diluted share in the six months ended June 30, 2005 and increased net income by $45.9 million, or $.36 per diluted share in the six months ended June 30, 2004.
FFO(1) for the six months ended June 30, 2005 was $465.0 million, or $3.35 per diluted share, compared to $288.6 million, or $2.24 per diluted share, for the prior year's six months. Adjusting FFO for certain items that affect comparability, first half 2005 FFO is 4.3% higher than first half 2004 on a per share basis, as detailed below:
FOR THE SIX MONTHS ENDED
-------------------------------------
(Amounts in thousands, except per June 30, 2005June 30, 2004
share amounts)
------------------ ------------------
Amount Per Share Amount Per Share
-------- --------- -------- ---------
FFO as shown above $465,011 $ 3.35 $288,649 $ 2.24
========= =========
Adjustments:
Net gain on conversion of Sears
common shares and derivative
position to Sears Holdings
common shares and derivative
position (86,094) --
Income from mark-to-market of
Sears Holdings derivative
position (45,759) --
Net gain on sale of Alexander's
condominiums (26,174) --
Income from mark-to-market of
GMH Communities LP warrants (2,563) --
Net gain on sales of land
parcels and condominiums (1,469) (776)
Alexander's stock appreciation
rights compensation expense 9,467 12,084
Write-off of perpetual preferred
share and unit issuance costs 6,052 3,895
Impairment losses of partially-
owned entities 4,016 5,975
Loss on early extinguishment of
debt of a partially-owned
entity -- 1,434
Net gain on sale of Newkirk MLP
option units -- (7,494)
Limited partners' share of above
adjustments 16,748 (2,176)
--------- ---------
FFO, as adjusted for
comparability $339,235 $ 2.44 $ 301,591 $ 2.34
======== ========= ======== =========
(1) See page 4 for a reconciliation of net income applicable to common
shares to FFO for the six months ended June 30, 2005 and 2004.
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, 2005 AND 2004
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------------- --------------------
(Amounts in thousands,
except per share amounts) 2005 2004 2005 2004
---------- ---------- ---------- ---------
Revenues $ 594,785 $ 398,996 $1,193,454 $791,441
========== ========== ========== =========
Income from continuing
operations $ 188,493 $ 136,907 $ 433,258 $250,975
Income from discontinued
operations 31,716 67,053 32,506 67,179
---------- ---------- ---------- ---------
Income before allocation to
limited partners 220,209 203,960 465,764 318,154
Limited partners' interest
in the Operating
Partnership (23,975) (25,011) (51,170) (39,468)
Perpetual preferred unit
distributions of the
Operating Partnership (15,152) (16,948) (33,693) (34,246)
---------- ---------- ---------- ---------
Net income 181,082 162,001 380,901 244,440
Preferred stock dividends (8,385) (3,565) (20,771) (11,547)
---------- ---------- ---------- ---------
Net income applicable to
common shares $ 172,697 $ 158,436 $ 360,130 $232,893
========== ========== ========== =========
Net income per common
share:
Basic $ 1.33 $ 1.26 $ 2.79 $ 1.89
========== ========== ========== =========
Diluted $ 1.25 $ 1.21 $ 2.63 $ 1.81
========== ========== ========== =========
Average number of
common shares and
share equivalents
outstanding:
Basic 130,178 125,468 129,254 123,539
========== ========== ========== =========
Diluted 142,813 130,744 139,003 129,087
========== ========== ========== =========
FFO applicable to common
shares plus assumed
conversions $ 215,802 $ 159,674 $ 465,011 $288,649
========== ========== ========== =========
FFO per diluted share $ 1.51 $ 1.22 $ 3.35 $ 2.24
========== ========== ========== =========
Average number of common
shares and share
equivalents outstanding
used for determining
funds from operations
per diluted share 142,813 130,744 139,003 129,087
========== ========== ========== =========
The following table reconciles FFO and net income:
(Amounts in thousands, except For The Three Months For The Six Months
per share amounts) Ended June 30, Ended June 30,
-------------------- ------------------
Reconciliation of Net Income to
FFO: 2005 2004 2005 2004
---------- --------- --------- --------
Net income $ 181,082 $ 162,001 $380,901 $244,440
Depreciation and amortization
of real property 68,418 54,492 132,294 108,132
Net gain on sale of real estate (31,614) (65,905) (31,614) (65,905)
Proportionate share of
adjustments to equity in net
income of partially-owned
entities to arrive at FFO:
Depreciation and
amortization of real
property 6,290 13,442 12,587 26,546
Net gain on sale of real
estate (79) (862) (214) (2,779)
Limited partners' share of
above adjustments (5,244) (196) (14,245) (10,782)
---------- --------- --------- --------
FFO 218,853 162,972 479,709 299,652
Preferred share dividends (8,385) (3,565) (20,771) (11,547)
---------- --------- --------- --------
FFO applicable to common shares 210,468 159,407 458,938 288,105
Interest on 3.875% exchangeable
senior debentures 5,094 -- 5,578 --
Series A convertible preferred
share dividends 240 267 495 544
---------- --------- --------- --------
FFO applicable to common shares
plus assumed conversions $ 215,802 $ 159,674 $465,011 $288,649
========== ========= ========= ========
(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