Vornado Announces Certain Items to be Included in its Third Quarter 2017 Financial Results
October 03 2017 - 6:48PM
Vornado Realty Trust (NYSE:VNO) today announced that its financial
results for the quarter ended September 30, 2017 will include the
following:
- $53.6 million of transaction costs (previously announced) in
connection with the spin-off of JBG SMITH on July 17, 2017.
JBG SMITH, Vornado’s former Washington DC segment, had net
income of $3.9 million ($10.1 million on a Funds From Operations
(non-GAAP) (“FFO”) basis) for the period from July 1, 2017 through
July 17, 2017 before the spin-off. Both the
transaction costs and the operating results will be classified as
discontinued operations.
- $44.5 million non-cash impairment loss on Vornado’s investment
in Pennsylvania REIT (NYSE:PEI), as required by GAAP because of a
sustained trading stock price below our carrying value.
Vornado received PEI operating partnership units as part of the
sale proceeds of the Springfield Mall in March 2015.
- $7.7 million of negative mark-to-market fair value adjustments
from Vornado’s real estate fund (which is in wind
down).
- $1.8 million net loss from other items ($1.0 million of income
on an FFO basis).
The above amounts aggregate to a net loss of
$0.51 per diluted share, after noncontrolling interests, which will
be included in Vornado’s third quarter 2017 “net income
attributable to common shareholders” and will be excluded from “net
income attributable to common shareholders, as adjusted.” On
an FFO basis, the above amounts aggregate to a net loss of $0.47
per diluted share, after noncontrolling interests, which will be
included in “total FFO” and will be excluded from “FFO, as
adjusted.”
Vornado notes that the above amounts are
preliminary estimates and subject to the completion of financial
closing procedures and review procedures performed by its
independent auditors. There can be no assurance that Vornado’s
final results will not differ from these preliminary estimates as a
result of quarter-end closing, review procedures, or review
adjustments, and any such changes could be material.
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.
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.
CONTACT:JOSEPH MACNOW (212)
894-7000
Vornado Realty (NYSE:VNO)
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