Vornado Reports Fourth Quarter and Year-End Results
PARAMUS, N.J.--(BUSINESS WIRE)--Feb. 25, 2005--VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:
Year Ended December 31, 2004 Results
NET INCOME applicable to common shares for the year ended December 31, 2004 was $571.0 million, or $4.35 per diluted share, versus $439.9 million, or $3.80 per diluted share, for the prior year. Net income for the years ended December 31, 2004 and 2003 includes the adjustments listed in the table below, as well as net gains on sales of real estate of $75.8 million and $161.8 million (primarily Palisades in 2004 and Two Park Avenue in 2003). These items, net of minority interest, increased net income by $177.5 million, or $1.33 per diluted share for the year ended December 31, 2004 and $117.9 million, or $1.01 per diluted share for the year ended December 31, 2003.
FUNDS FROM OPERATIONS (FFO)(1) applicable to common shares plus assumed conversions for the year ended December 31, 2004 was $750.0 million, or $5.63 per diluted share, compared to $518.2 million, or $4.44 per diluted share, for the prior year. Adjusting for certain items that affect comparability, the year ended December 31, 2004 is 5.3% higher than the prior year on a per share basis, as detailed below:
FOR THE YEAR ENDED
-------------------------------
(Amounts in thousands, except per share December 31, December 31,
amounts) 2004 2003
-------------------------------
Amount Per Amount Per
Share Share
-------------------------------
FFO(1) applicable to common shares plus
assumed conversions, as shown above $ 750,043 $5.63 $518,242 $4.44
--------- ===== -------- =====
Adjustments:
Net gain on mark-to-market of Sears
option shares (81,730) --
Net gains on investment in GMH
Communities L.P. (61,451) --
Net gain on investment in Americold
and income from Vornado Operating
Company, net of litigation costs (19,044) --
Alexander's stock appreciation rights
compensation expense 25,340 14,868
Impairment losses on partially-owned
entities, write-off of perpetual
preferred issuance costs and other 12,104 3,575
Bonuses to four executive vice
presidents in connection with
Alexander's 6,500 --
Gain on sale of Newkirk MLP option
units (7,494) --
Gains on sales of land parcels and
condominiums (2,050) (282)
Loss (gain) on early extinguishment of
debt of partially-owned entities 1,434 (1,600)
Minority interest share of above
adjustments 15,404 (3,115)
--------- --------
Subtotal adjustments (110,987) 13,446
--------- --------
FFO, applicable to common shares plus
assumed conversions, as adjusted for
comparability $ 639,056 $4.80 $531,688 $4.56
========= ===== ======== =====
(1) See page 4 for a reconciliation of net income to FFO for the years
ended December 31, 2004 and 2003.
Fourth Quarter 2004 Results
Net income applicable to common shares for the quarter ended December 31, 2004 was $233.6 million, or $1.73 per diluted share, versus $200.3 million, or $1.66 per diluted share, for the quarter ended December 31, 2003. Net income for the quarters ended December 31, 2004 and 2003 includes the adjustments listed in the table below. In addition, the quarter ended December 31, 2003 includes net gains on sales of real estate of $158.4 million (Two Park Avenue). These items, net of minority interest, increased net income by $133.7 million or $0.99 per diluted share for the quarter ended December 31, 2004, and $123.6 million or $1.02 per share for the quarter ended December 31, 2003.
FFO(1) applicable to common shares plus assumed conversions for the quarter ended December 31, 2004 was $299.4 million, or $2.22 per diluted share, compared to $130.7 million, or $1.08 per diluted share, for the prior year's quarter. Adjusting for certain items that affect comparability, the fourth quarter 2004 is 8.8% higher than the fourth quarter 2003 on a per share basis, as detailed below:
FOR THE THREE MONTHS ENDED
-------------------------------
(Amounts in thousands, except per share December 31, December 31,
amounts) 2004 2003
-------------------------------
Amount Per Amount Per
Share Share
-------------------------------
FFO(1) applicable to common shares plus
assumed conversions, as shown above $ 299,441 $2.22 $130,729 $1.08
--------- ===== -------- =====
Adjustments:
Net gain on mark-to-market of Sears
option shares (81,730) --
Net gains on investment in GMH
Communities L.P. (61,451) --
Net gain on investment in Americold
and income from Vornado Operating
Company, net of litigation costs (19,044) --
Bonuses to four executive vice
presidents in connection
with Alexander's 6,500 --
Alexander's stock appreciation rights
compensation expense 4,460 5,391
Write-off of perpetual preferred
issuance costs and other -- 2,187
Minority interest share of above
adjustments 17,523 (1,369)
--------- --------
Subtotal adjustments (133,742) 6,209
--------- --------
FFO, applicable to common shares plus
assumed conversions, as adjusted for
comparability $ 165,699 $1.23 $136,938 $1.13
========= ===== ======== =====
(1) See page 4 for a reconciliation of net income to FFO for the
quarters ended December 31, 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. See the Company's annual report on Form 10-K for the year ended December 31, 2004 for further discussion of trends, risks, uncertainties and other factors.
VORNADO REALTY TRUST
OPERATING RESULTS FOR THE QUARTER AND YEAR ENDED
DECEMBER 31, 2004 AND 2003
FOR THE THREE FOR THE YEAR ENDED
MONTHS ENDED DECEMBER 31,
DECEMBER 31,
----------------------------------------
(Amounts in thousands, except
per share amounts) 2004 2003 2004 2003
-------- -------- ---------- ----------
Revenues $504,714 $385,349 $1,707,262 $1,497,983
======== ======== ========== ==========
Income from continuing
operations $239,753 $ 46,603 $ 514,320 $ 284,315
Income from discontinued
operations 201 158,541 78,597 176,388
-------- -------- ---------- ----------
Net income 239,954 205,144 592,917 460,703
Preferred stock dividends (6,351) (4,885) (21,920) (20,815)
-------- -------- ---------- ----------
Net income applicable to
common shares $233,603 $200,259 $ 570,997 $ 439,888
======== ======== ========== ==========
Net income per common
share:
Basic $ 1.84 $ 1.73 $ 4.56 $ 3.92
======== ======== ========== ==========
Diluted $ 1.73 $ 1.66 $ 4.35 $ 3.80
======== ======== ========== ==========
Average number of common
shares and share
equivalents outstanding:
Basic 127,071 115,685 125,241 112,343
======== ======== ========== ==========
Diluted 135,142 120,894 133,135 116,651
======== ======== ========== ==========
FFO applicable to common
shares plus assumed
conversions $299,441 $130,729 $ 750,043 $ 518,242
======== ======== ========== ==========
FFO per diluted share $ 2.22 $ 1.08 $ 5.63 $ 4.44
======== ======== ========== ==========
Average number of common
shares and share
equivalents outstanding
used for determining funds
from operations
per diluted share 135,142 120,894 133,135 116,651
======== ======== ========== ==========
The following table reconciles FFO(1) and net income:
For the Three
Months Ended For the Year Ended
(Amounts in thousands) December 31, December 31,
--------------------------------------
2004 2003 2004 2003
-------- --------- -------- ---------
Net income $239,954 $ 205,144 $592,917 $ 460,703
Depreciation and amortization of
real property 63,367 58,125 228,298 208,624
Net (gains) losses on sale of
real estate -- (158,378) (75,755) (161,789)
Proportionate share of
adjustments to equity in net
income of partially-owned
entities to arrive at FFO:
Depreciation and
amortization of real
property 9,817 14,455 49,440 54,762
Net (gains) losses on sale
of real estate (226) 219 (3,048) (6,733)
Minority interest's share of
above adjustments (9,159) 15,742 (27,991) (20,080)
-------- --------- -------- ---------
FFO(1) 303,753 135,307 763,861 535,487
Preferred dividends (6,351) (4,885) (21,920) (20,815)
-------- --------- -------- ---------
FFO applicable to common shares 297,402 130,422 741,941 514,672
Series B-1 and B-2 convertible
preferred dividends 1,522 -- 4,710 --
Series A convertible preferred
dividends 263 307 1,068 3,570
Series F-1 convertible preferred
distributions 254 -- 743 --
Series E-1 convertible preferred
distributions -- -- 1,581 --
-------- --------- -------- ---------
FFO applicable to common shares
plus assumed conversions $299,441 $ 130,729 $750,043 $ 518,242
======== ========= ======== =========
(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, Paramus, NJ
Joseph Macnow, 201/587-1000
SOURCE: VORNADO REALTY TRUST