Vornado Announces Certain Items to be Included in its Fourth Quarter 2018 Financial Results
January 23, 2019 04:30 PM Eastern Standard Time
NEW YORK…..Vornado Realty Trust (NYSE: VNO) today announced that its financial results for the quarter ended December 31, 2018 will include the items listed below, resulting in additional net income of $0.26 per diluted share for the quarter. These items will be included in Vornado’s fourth quarter 2018 “net income attributable to common shareholders” and will be excluded from “net income attributable to common shareholders, as adjusted.” These items will increase "FFO attributable to common shareholders plus assumed conversions" in the fourth quarter 2018 by $0.20 per diluted share and will be excluded from “FFO attributable to common shareholders plus assumed conversions, as adjusted.”
$67.3 million of after-tax net income and FFO resulting from the sale of condominium units at 220 Central Park South
$27.3 million of after-tax net income (not included in FFO) resulting from a non-cash purchase price fair value adjustment relating to Vornado's acquisition of a 44.9% additional ownership interest of the joint venture that is developing the Farley Post Office Building, bringing its total ownership interest to 95.0%
$24.4 million of loss and negative FFO resulting from the non-cash mark-to-market fair value adjustments from Vornado's real estate fund (which is in wind-down)
a $12.0 million (not included in FFO) non-cash real estate impairment loss
$5.5 million of net loss ($1.7 million of negative FFO) from other items
In accordance with the National Association of Real Estate Investment Trusts (“NAREIT”) December 2018 restated definition of FFO, Vornado has elected to exclude the mark-to-market adjustments of marketable equity securities from the calculation of FFO. Vornado's FFO for the nine months ended September 30, 2018 has been adjusted to exclude the $26.6 million or $0.13 per share decrease in fair value of marketable equity securities previously reported. “Net income attributable to common shareholders" for the fourth quarter and year ended December 31, 2018 will include $3.7 million and $30.3 million, respectively, of decrease in fair value of marketable equity securities (not included in “net income attributable to common shareholders, as adjusted").
Further, in the fourth quarter of 2018, the tax-assessed value of theMART increased and as a result, 2018 real estate tax expense will be approximately $12 million, or $0.06 per share, higher than previously estimated. Accordingly, "net income attributable to common shareholders," "net income attributable to common shareholders, as adjusted," "FFO attributable to common shareholders plus assumed conversions" and "FFO attributable to common shareholders plus assumed conversions, as adjusted" for the quarter ended December 31, 2018 includes the additional real estate tax expense. In summary, the increase in real estate taxes accrued and expensed in 2018, will be paid in 2019 and approximately 80% reimbursed by tenants in 2019.
The above amounts are preliminary estimates. There can be no assurance that Vornado’s final results will not differ from these preliminary estimates as a result of quarter-end closing procedures, review procedures, or review adjustments, and any such changes could be material.