For the Quarters
(Amounts in thousands)	Ended December 31,
	2009				2008
FFO (Negative FFO) (1)	$	20			$	(88,154	)
Per Share	$	0.00			$	(0.57	)
Items that affect comparability (income) expense:
Non-cash asset write-downs:
Real estate – development related	$	80,834			$	71,793
Mezzanine loans loss accrual		68,000				—
Partially owned entities		17,820				162,544
Marketable securities			3,361			55,471
Other real estate assets			6,989			1,645
Net loss (gain) on early extinguishment of debt		52,911				(9,820	)
Income from terminated sale of land		(27,089		)		—
Our share of Alexander’s reversal of stock appreciation rights compensation expense			—			(14,188	)
Derivative positions in marketable equity securities			—			7,928
Other, net			2,204			8,426
		205,030				283,799
Noncontrolling interests’ share of above adjustments		(15,575		)		(30,293	)
Total items that affect comparability	$	189,455			$	253,506
Per Share	$	1.04			$	1.64
FFO as adjusted for comparability	$	189,475			$	165,352
Per Share	$	1.04			$	1.07

Year Ended December 31, 2009 Results

     NET INCOME attributable to common shareholders for the year ended December 31, 2009 was $49.1 million, or $0.28 per diluted share, versus $302.2 million, or $1.91 per diluted share, for the year ended December 31, 2008. Net income for the years ended December 31, 2009 and 2008 includes $46.6 million, and $67.0 million, respectively, of net gains on sale of real estate. In addition, net income for the years ended December 31, 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 year ended December 31, 2009 by $241.6 million, or $1.39 per diluted share and increased net income attributable to common shareholders for the year ended December 31, 2008 by $17.6 million, or $0.11 per diluted share.

     FFO for the year ended December 31, 2009 was $583.6 million, or $3.36 per diluted share, compared to $813.1 million, or $4.97 per diluted share, for the year ended December 31, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the years ended December 31, 2009 and 2008 was $868.1 million and $849.3 million, or $5.00 and $5.19 per diluted share, respectively.

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(1)	See page 4 for a reconciliation of our net income to FFO for the years ended December 31, 2009 and 2008.

Supplemental Financial Information
     Further details regarding financial results, properties and tenants can be accessed at 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, 2009. 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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VORNADO REALTY TRUST
OPERATING RESULTS FOR THE QUARTERS AND YEARS ENDED
DECEMBER 31, 2009 AND 2008

 

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     The following table reconciles our net income to FFO:

 

     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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