Press Release

Contact:

Joseph Macnow
Work(201) 587-1000
July 31, 2017

Vornado Announces Second Quarter 2017 Financial Results

NEW YORK......VORNADO REALTY TRUST (New York Stock Exchange: VNO) filed its Form 10-Q for the quarter ended June 30, 2017 today and reported:

Quarter Ended June 30, 2017 Financial Results

  • NET INCOME attributable to common shareholders for the quarter ended June 30, 2017 was $116.0 million, or $0.61 per diluted share, compared to $220.5 million, or $1.16 per diluted share, for the prior year's quarter. Adjusting net income attributable to common shareholders (non-GAAP) for the items listed in the table on the following page, net income attributable to common shareholders for the quarters ended June 30, 2017 and 2016 was $82.0 million and $66.5 million, or $0.43 and $0.35 per diluted share, respectively.
  • FUNDS FROM OPERATIONS attributable to common shareholders plus assumed conversions (non-GAAP) ("FFO") for the quarter ended June 30, 2017 was $257.7 million, or $1.35 per diluted share, compared to $229.4 million, or $1.21 per diluted share, for the prior year's quarter. Adjusting FFO for the items listed in the table on page 3, FFO for the quarters ended June 30, 2017 and 2016 was $237.9 million and $225.0 million, or $1.25 and $1.19 per diluted share, respectively.

Six Months Ended June 30, 2017 Financial Results

  • NET INCOME attributable to common shareholders for the six months ended June 30, 2017 was $163.7 million, or $0.86 per diluted share, compared to $106.3 million, or $0.56 per diluted share, for the six months ended June 30, 2016. Adjusting net income attributable to common shareholders for the items listed in the table on the following page, net income attributable to common shareholders for the six months ended June 30, 2017 and 2016 was $138.6 million and $107.2 million, or $0.73 and $0.56 per diluted share, respectively.
  • FFO for the six months ended June 30, 2017 was $463.4 million, or $2.43 per diluted share, compared to $433.1 million, or $2.28 per diluted share, for the prior year's six months. Adjusting FFO for the items listed in the table on page 3, FFO for the six months ended June 30, 2017 and 2016 was $453.6 million and $424.0 million, or $2.38 and $2.23 per diluted share, respectively.

Basis of Reporting

      The above data for both the three and six month periods ended June 30, 2017 and 2016 includes the results of our Washington, DC segment in (i) net income attributable to common shareholders, (ii) net income attributable to common shareholders, as adjusted, (iii) FFO and (iv) FFO, as adjusted. The Washington, DC segment was spun off from Vornado Realty Trust on July 17, 2017. Beginning in the third quarter of 2017, these results will be shown as discontinued operations and will not be included in net income attributable to common shareholders, as adjusted and FFO, as adjusted for all periods presented.

Supplemental Financial Information

      Further details regarding 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. For a discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see "Risk Factors" in Part I, Item 1A, of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2016. 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)

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The following table reconciles our net income to net income, as adjusted (non-GAAP):

 

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
 
  2017    2016   2017    2016  
Net income attributable to common shareholders $ 115,972   $ 220,463   $ 163,724   $ 106,300  
     Per diluted share $ 0.61   $ 1.16   $ 0.86   $ 0.56  
 
Certain items that impact net income attributable to                        
   common shareholders:                        
     Net gain on repayment of our Suffolk Downs JV debt investments $ 11,373   $ -   $ 11,373   $ -  
     Acquisition and transaction related costs   (6,471 )   (2,879 )   (14,476 )   (7,486 )
     Net income (loss) from discontinued operations and                        
          sold properties   663     104     824     (1,325 )
     (Loss) income from real estate fund investments, net   (304 )   7,544     (3,539 )   12,855  
     Net gains on sale of real estate   -     161,721     2,267     161,721  
     Default interest on Skyline properties mortgage loan   -     (2,711 )   -     (2,711 )
     Skyline properties impairment loss   -     -     -     (160,700 )
     Other   -     -     501     714  
     Our share of partially owned entities:                        
          Net gain resulting from Urban Edge Properties ("UE")                        
               operating partnership unit issuances   15,900     -     15,900     -  
          Net gains on sale of real estate   15,339     319     17,192     319  
          Real estate impairment losses   (167 )   (49 )   (3,218 )   (4,402 )
          Other   (67 )   (25 )   (67 )   (25 )
    36,266     164,024     26,757     (1,040 )
Noncontrolling interests' share of above adjustments   (2,245 )   (10,104 )   (1,662 )   91  
Total of certain items that impact net income attributable to                        
   common shareholders, net $ 34,021   $ 153,920   $ 25,095   $ (949 )
 
Net income attributable to common shareholders,                        
     as adjusted (non-GAAP) $ 81,951   $ 66,543   $ 138,629   $ 107,249  
     Per diluted share (non-GAAP) $ 0.43   $ 0.35   $ 0.73   $ 0.56  

 

 

2

The following table reconciles our FFO (non-GAAP) to FFO, as adjusted (non-GAAP):

 

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
 
  2017    2016   2017    2016  
FFO (non-GAAP) (1) $ 257,673   $ 229,432   $ 463,422   $ 433,104  
     Per diluted share (non-GAAP) $ 1.35   $ 1.21   $ 2.43   $ 2.28  
 
Certain items that impact FFO:                        
     Net gain on repayment of our Suffolk Downs JV debt investments $ 11,373   $ -   $ 11,373   $ -  
     Acquisition and transaction related costs   (6,471 )   (2,879 )   (14,476 )   (7,486 )
     FFO from discontinued operations and sold properties   663     2,889     824     6,349  
     (Loss) income from real estate fund investments, net   (304 )   7,544     (3,539 )   12,855  
     Default interest on Skyline properties mortgage loan   -     (2,711 )   -     (2,711 )
     Other   -     -     501     714  
     Our share of partially owned entities:                        
          Net gain resulting from UE operating partnership                        
               unit issuances   15,900     -     15,900     -  
          Other   (67 )   (25 )   (67 )   (25 )
    21,094     4,818     10,516     9,696  
Noncontrolling interests' share of above adjustments   (1,306 )   (400 )   (653 )   (594 )
Total of certain items that impact FFO, net $ 19,788   $ 4,418   $ 9,863   $ 9,102  
 
FFO, as adjusted (non-GAAP) $ 237,885   $ 225,014   $ 453,559   $ 424,002  
     Per diluted share (non-GAAP) $ 1.25   $ 1.19   $ 2.38   $ 2.23  

__________________________________________

(1) See page 5 for a reconciliation of our net income to FFO for the three and six months ended June 30, 2017 and 2016.

 

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VORNADO REALTY TRUST
OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2017 AND 2016

 

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
 
  2017    2016   2017    2016  
Revenues $ 626,039   $ 621,708   $ 1,246,887   $ 1,234,745  
 
Income from continuing operations $ 146,821   $ 265,907   $ 218,240   $ 173,583  
Income from discontinued operations   663     2,475     3,091     3,191  
Net income   147,484     268,382     221,331     176,774  
Less net income attributable to noncontrolling interests in:                        
     Consolidated subsidiaries   (7,677 )   (13,025 )   (14,414 )   (22,703 )
     Operating Partnership   (7,706 )   (14,531 )   (10,935 )   (7,044 )
Net income attributable to Vornado   132,101     240,826     195,982     147,027  
Preferred share dividends   (16,129 )   (20,363 )   (32,258 )   (40,727 )
Net income attributable to common shareholders $ 115,972   $ 220,463   $ 163,724   $ 106,300  
 
 
Income per common share - Basic:                        
     Income from continuing operations, net $ 0.61   $ 1.16   $ 0.84   $ 0.54  
     Income from discontinued operations, net   -     0.01     0.02     0.02  
     Net income per common share $ 0.61   $ 1.17   $ 0.86   $ 0.56  
     Weighted average shares outstanding   189,395     188,772     189,304     188,715  
 
Income per common share - Diluted:                        
     Income from continuing operations, net $ 0.61   $ 1.15   $ 0.84   $ 0.54  
     Income from discontinued operations, net   -     0.01     0.02     0.02  
     Net income per common share $ 0.61   $ 1.16   $ 0.86   $ 0.56  
     Weighted average shares outstanding   190,444     189,885     190,674     190,000  
 
 
FFO (non-GAAP) $ 257,673   $ 229,432   $ 463,422   $ 433,104  
     Per diluted share (non-GAAP) $ 1.35   $ 1.21   $ 2.43   $ 2.28    
 
FFO, as adjusted (non-GAAP) $ 237,885   $ 225,014   $ 453,559   $ 424,002  
     Per diluted share (non-GAAP) $ 1.25   $ 1.19   $ 2.38   $ 2.23  
 
Weighted average shares used in determining FFO                        
     per diluted share (non-GAAP)   190,444     189,885     190,450     190,043  
 

 

4

The following table reconciles net income to FFO:

 

(Amounts in thousands, except per share amounts) For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
 
  2017    2016   2017    2016  
Net income attributable to common shareholders $ 115,972   $ 220,463   $ 163,724   $ 106,300  
     Per diluted share $ 0.61   $ 1.16   $ 0.86   $ 0.56  
 
FFO adjustments:                        
Depreciation and amortization of real property $ 128,527   $ 133,218   $ 258,996   $ 267,339  
Net gains on sale of real estate   -     (161,721 )   (2,267 )   (161,721 )
Real estate impairment losses   -     -     -     160,700  
Proportionate share of adjustments to equity in net income (loss) of                        
     partially owned entities to arrive at FFO:                        
          Depreciation and amortization of real property   37,682     38,308     76,756     77,354  
          Net gains on sale of real estate   (15,339 )   (319 )   (17,192 )   (319 )
          Real estate impairment losses   167     49     3,218     4,402  
    151,037     9,535     319,511     347,755  
Noncontrolling interests' share of above adjustments   (9,356 )   (588 )   (19,873 )   (21,469 )
FFO adjustments, net $ 141,681   $ 8,947   $ 299,638   $ 326,286  
 
FFO attributable to common shareholders (non-GAAP) $ 257,653   $ 229,410   $ 463,362   $ 432,586  
Convertible preferred share dividends   20     22     60     43  
Earnings allocated to Out-Performance Plan units   -     -     -     475  
FFO attributable to common shareholders plus assumed                        
     conversions (non-GAAP) $ 257,673   $ 229,432   $ 463,422   $ 433,104  
     Per diluted share (non-GAAP) $ 1.35   $ 1.21   $ 2.43   $ 2.28  

 

      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 GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. A reconciliation of our net income to FFO is provided above. In addition to FFO, we also disclose FFO, as adjusted. Although this non-GAAP measure clearly differs from NAREIT's definition of FFO, we believe it provides a meaningful presentation of operating performance. Reconciliations of FFO to FFO, as adjusted are provided on page 3 of this press release.

Conference Call and Audio Webcast

      As previously announced, the Company will host a quarterly earnings conference call and an audio webcast on Tuesday, August 1, 2017 at 10:00 a.m. Eastern Time (ET). The conference call can be accessed by dialing 800-708-4540 (domestic) or 847-619-6397 (international) and indicating to the operator the passcode 45172407. A telephonic replay of the conference call will be available from 1:00 p.m. ET on August 1, 2017 through August 31, 2017. To access the replay, please dial 888-843-7419 and enter the passcode 45172407#. A live webcast of the conference call will be available on the Company's website at www.vno.com and an online playback of the webcast will be available on the website for 90 days following the conference call.

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