Contact:
    JOSEPH MACNOW
    (201) 587-1000

    NOVEMBER 03, 2009
    Vornado Announces Third Quarter 2009 FFO of $1.25 per share.

    PARAMUS, NEW JERSEY……VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:

    Third Quarter 2009 Results

          NET INCOME attributable to common shareholders for the quarter ended September 30, 2009 was $126.3 million, or $0.69 per diluted share, versus $22.7 million, or $0.14 per diluted share, for the quarter ended September 30, 2008. Net income for the quarters ended September 30, 2009 and 2008 includes $43.3 million and $1.3 million, respectively, of net gains on sale of real estate. In addition, net income for the quarters ended September 30, 2009 and 2008 includes certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the quarter ended September 30, 2009 by $52.8 million, or $0.29 per diluted share and decreased net income attributable to common shareholders for the quarter ended September 30, 2008 by $32.3 million, or $0.20 per diluted share.

          FUNDS FROM OPERATIONS attributable to common shareholders plus assumed conversions (“FFO”) for the quarter ended September 30, 2009 was $234.2 million, or $1.25 per diluted share, compared to $159.8 million, or $0.97 per diluted share, for the quarter ended September 30, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarters ended September 30, 2009 and 2008 was $221.4 million and $193.3 million, or $1.18 and $1.17 per diluted share, respectively.

      For the Three Months  
      Ended September 30,  
    (Amounts in thousands, except per share amounts)   2009   2008  
     
    FFO attributable to common shareholders plus assumed conversions (1)   $ 234,246     $ 159,838  
    Per Share   $ 1.25     $ 0.97  
     
    Items that affect comparability (income) expense:                
            Our share of partially owned entities’ adjustments:                
                  Lexington Realty Trust – impairment losses related to its                
                     investment in Concord Debt Holdings LLC   $ 14,541     $ 7,175  
                  Toys “R” Us – litigation settlement income     (10,200 )       —  
                  Alexander’s:                
                        Income tax benefit     (13,668 )       —  
                        Stock appreciation rights     —       14,557  
            Net gains on early extinguishment of debt     (3,407 )       —  
            Marketable equity securities – impairment losses     —       11,808  
            Derivative positions in marketable equity securities     —       3,982  
            Other, net     (1,172 )       (721 )  
        (13,906 )       36,801  
    Noncontrolling interests’ share of above adjustments     1,036       (3,347 )  
    Items that affect comparability, net   $ (12,870 )     $ 33,454  
    Per share   $ (0.07 )     $ 0.20  
     
    FFO as adjusted for comparability   $ 221,376     $ 193,292  
    Per share   $ 1.18     $ 1.17  
    ________________
    (1)      

    See page 4 for a reconciliation of our net income to FFO for the quarters ended September 30, 2009 and 2008.

    -1-

    Nine Months Ended September 30, 2009 Results

          NET INCOME attributable to common shareholders for the nine months ended September 30, 2009 was $200.3 million, or $1.16 per diluted share, versus $529.2 million, or $3.22 per diluted share, for the nine months ended September 30, 2008. Net income for the nine months ended September 30, 2009 and 2008 includes $44.0 million, and $65.9 million, respectively, of net gains on sale of real estate. In addition, net income for the nine months ended September 30, 2009 and 2008 includes certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, decreased net income attributable to common shareholders for the nine months ended September 30, 2009 by $55.4 million, or $0.32 per diluted share and increased net income attributable to common shareholders for the nine months ended September 30, 2008 by $274.8 million, or $1.67 per diluted share.

          FFO for the nine months ended September 30, 2009 was $602.8 million, or $3.37 per diluted share, compared to $894.8 million, or $5.27 per diluted share, for the nine months ended September 30, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the nine months ended September 30, 2009 and 2008 was $698.9 million and $672.6 million, or $3.90 and $3.96 per diluted share, respectively.

      For the Nine Months  
      Ended September 30,  
    (Amounts in thousands, except per share amounts)   2009       2008  
    FFO attributable to common shareholders plus assumed conversions (1)   $ 602,825     $ 894,829  
    Per Share   $ 3.37     $ 5.27  
     
    Items that affect comparability (income) expense:                
            Mezzanine loans receivable loss accrual (reversal)   $ 122,738     $ (10,300 )  
            Write-off of unamortized costs from the voluntary surrender of equity awards     32,588       —  
            Net gains on early extinguishment of debt     (26,996 )       —  
            Our share of partially owned entities’ adjustments:                
                  Lexington Realty Trust – impairment losses related to its                
                     investment in Concord Debt Holdings LLC     19,121       7,175  
                  Toys “R” Us:                
                              Non-cash purchase price accounting adjustments     (13,946 )       14,900  
                              Litigation settlement income     (10,200 )       —  
                  Alexander’s:                
                              Stock appreciation rights     (11,105 )       7,605  
                              Income tax benefit     (13,668 )       —  
                  Filene’s, Boston – lease termination payment     7,650       —  
                  Development joint ventures – non-cash asset write-downs     —       34,200  
            Reversal of deferred income taxes initially recorded in connection with H Street acquisition     —       (222,174 )  
            Net gain on sale of our 47.6% interest in Americold Realty Trust     —       (112,690 )  
            Derivative positions in marketable equity securities     —       25,812  
            Marketable equity securities – impairment losses     —       20,881  
            Other, net     (1,791 )       (3,341 )  
        104,391       (237,932 )  
    Americold’s FFO – sold on March 31, 2008     —       (6,098 )  
        104,391       (244,030 )  
    Noncontrolling interests’ share of above adjustments     (8,314 )       21,829  
    Items that affect comparability, net   $ 96,077     $ (222,201 )  
    Per share   $ 0.53     $ (1.31 )  
     
    FFO as adjusted for comparability   $ 698,902     $ 672,628  
    Per share   $ 3.90     $ 3.96  
    ________________
    (1)      

    See page 4 for a reconciliation of our net income to FFO for the nine months ended September 30, 2009 and 2008.


    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. 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 for the year ended December 31, 2008. 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)
    -2-

     

    VORNADO REALTY TRUST

    OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED
    SEPTEMBER 30, 2009 AND 2008

      For The Three Months     For The Nine Months  
      Ended September 30,     Ended September 30,  
    (Amounts in thousands, except per share amounts)   2009     2008     2009   2008  
     
    Revenues   $ 671,219     $ 676,068     $ 2,023,575   $   1,997,533  
     
    Income from continuing operations   $ 112,523     $ 42,701     $ 222,624   $   466,298  
    Income from discontinued operations     43,321       846       49,276     172,814  
    Net income     155,844       43,547       271,900     639,112  
    Net income attributable to noncontrolling interests,                              
        including unit distributions     (15,227 )       (6,540 )       (28,808 )     (67,135 )  
    Net income attributable to Vornado     140,617       37,007       243,092     571,977  
    Preferred share dividends     (14,269 )       (14,271 )       (42,807 )     (42,820 )  
    Net income attributable to common shareholders   $ 126,348     $ 22,736     $ 200,285   $ 529,157  
     
    Net income per common share:                              
            Basic   $ 0.70     $ 0.14     $ 1.17   $   3.32  
            Diluted   $ 0.69     $ 0.14     $ 1.16   $   3.22  
     
    Weighted average number of common shares and                              
        share equivalents outstanding:                              
            Basic     179,422       159,761       171,620     159,405  
            Diluted     181,710       164,424       173,178     164,099  
     
    FFO attributable to common shareholders plus assumed conversions   $ 234,246     $ 159,838     $ 602,825   $   894,829  
     
    FFO per diluted share   $ 1.25     $ 0.97     $ 3.37   $   5.27  
                                 
    Weighted average number of common shares and share  equivalents                            
        outstanding used in determining FFO per diluted share     187,474       164,505       179,018     169,863  

    -3-

     

    The following table reconciles our net income to FFO:

      For The Three Months     For The Nine Months  
      Ended September 30,     Ended September 30,  
    (Amounts in thousands)   2009     2008     2009     2008  
     
    Net income attributable to Vornado   $ 140,617     $ 37,007     $ 243,092     $ 571,977  
    Depreciation and amortization of real property     122,760       127,975       375,549       380,062  
    Net gains on sale of real estate     (42,653 )       (112 )       (42,653 )       (57,523 )  
    Proportionate share of adjustments to equity in net                                
        income of partially owned entities, excluding Toys,                                
        to arrive at FFO:                                
                Depreciation and amortization of real property     18,552       12,524       52,508       35,778  
                Net gains on sale of real estate     (512 )       (1,037 )       (1,185 )       (8,231 )  
    Proportionate share of adjustments equity in net                                
        income of Toys to arrive at FFO:                                
                Depreciation and amortization of real property     17,685       17,892       49,831       50,902  
                Net gains on sale of real estate     (164 )       (164 )       (164 )       (164 )  
                Income tax effect of above adjustments     (6,133 )       (6,205 )       (17,384 )       (17,981 )  
    Noncontrolling interests’ share of above                                
        adjustments     (8,146 )       (13,816 )       (33,358 )       (36,232 )  
    FFO     242,006       174,064       626,236       918,588  
    Preferred share dividends     (14,269 )       (14,271 )       (42,807 )       (42,820 )  
    FFO attributable to common shareholders     227,737       159,793       583,429       875,768  
    Interest on 3.875% exchangeable senior debentures     6,466       —       19,268       18,916  
    Series A convertible preferred share dividends     43       45       128       145  
    FFO attributable to common shareholders plus assumed                                
        conversions   $ 234,246     $ 159,838     $ 602,825     $   894,829  

          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 and GAAP extraordinary items, and to include 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 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 flows 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 before certain items that affect comparability. Although this non-GAAP measure clearly differs from NAREIT’s definition of FFO, we believe it provides a meaningful presentation of operating performance. A reconciliation of FFO to FFO as adjusted for comparability is provided on pages 1 and 2 of this press release.

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    -4-