VORNADO REALTY TRUST (NYSE:VNO) reported today:
Quarter Ended March 31, 2018 Financial
Results
NET LOSS attributable to common shareholders for
the quarter ended March 31, 2018 was $17.8 million, or $0.09 per
diluted share compared to net income attributable to common
shareholders of $47.8 million, or $0.25 per diluted share, for the
prior year's quarter. Adjusting net (loss) income
attributable to common shareholders for the items listed in the
table below, net income attributable to common shareholders, as
adjusted (non-GAAP) for the quarters ended March 31, 2018 and 2017
was $56.4 million and $46.9 million, or $0.30 and $0.25 per diluted
share, respectively.
The following table reconciles our net (loss)
income attributable to common shareholders to net income
attributable to common shareholders, as adjusted (non-GAAP):
| |
|
| (Amounts in thousands,
except per share amounts) |
For the Three Months Ended March
31, |
| |
2018 |
|
2017 |
| Net (loss) income
attributable to common shareholders |
$ |
(17,841 |
) |
|
$ |
47,752 |
|
| Per
diluted share |
$ |
(0.09 |
) |
|
$ |
0.25 |
|
| |
|
|
|
| Certain expense
(income) items that impact net (loss) income attributable to common
shareholders: |
|
|
|
| Decrease
in fair value of marketable securities resulting from a new GAAP
accounting standard effective January 1, 2018 |
$ |
34,660 |
|
|
$ |
— |
|
| Our share
of potential additional New York City transfer taxes based on a Tax
Tribunal interpretation which Vornado is appealing |
23,503 |
|
|
— |
|
| Preferred
share issuance costs |
14,486 |
|
|
— |
|
| 666 Fifth
Avenue Office Condominium (49.5% interest) |
3,492 |
|
|
10,197 |
|
| Our share
of real estate fund investments (excluding our $4,252 share of One
Park Avenue potential additional transfer taxes and reduction in
carried interest) |
(814 |
) |
|
3,235 |
|
| Loss
(income) from discontinued operations (primarily related to JBG
SMITH Properties operating results and transaction costs through
July 17, 2017 spin-off) |
363 |
|
|
(15,318 |
) |
|
Other |
3,420 |
|
|
949 |
|
| |
79,110 |
|
|
(937 |
) |
| Noncontrolling
interests' share of above adjustments |
(4,881 |
) |
|
58 |
|
| Total of certain
expense (income) items that impact net (loss) income attributable
to common shareholders |
$ |
74,229 |
|
|
$ |
(879 |
) |
| |
|
|
|
| Net income attributable
to common shareholders, as adjusted (non-GAAP) |
$ |
56,388 |
|
|
$ |
46,873 |
|
| Per
diluted share (non-GAAP) |
$ |
0.30 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
FUNDS FROM OPERATIONS ("FFO") attributable to common
shareholders plus assumed conversions (non-GAAP) for the quarter
ended March 31, 2018 was $102.5 million, or $0.54 per diluted
share, compared to $205.7 million, or $1.08 per diluted share, for
the prior year's quarter. Adjusting FFO attributable to
common shareholders plus assumed conversions for the items listed
in the table below, FFO attributable to common shareholders plus
assumed conversions, as adjusted (non-GAAP) for the quarters ended
March 31, 2018 and 2017 was $173.8 million and $160.1 million, or
$0.91 and $0.84 per diluted share, respectively.
The following table reconciles our FFO attributable to common
shareholders plus assumed conversions (non-GAAP) to FFO, as
adjusted attributable to common shareholders plus assumed
conversions (non-GAAP):
| |
|
| (Amounts in thousands,
except per share amounts) |
For the Three Months Ended March
31, |
| |
2018 |
|
2017 |
| FFO attributable to
common shareholders plus assumed conversions
(non-GAAP)(1) |
$ |
102,479 |
|
|
$ |
205,729 |
|
| Per
diluted share (non-GAAP) |
$ |
0.54 |
|
|
$ |
1.08 |
|
| |
|
|
|
| Certain expense
(income) items that impact FFO attributable to common shareholders
plus assumed conversions: |
|
|
|
| Decrease
in fair value of marketable securities resulting from a new GAAP
accounting standard effective January 1, 2018 |
$ |
34,660 |
|
|
$ |
— |
|
| Our share
of potential additional New York City transfer taxes based on a Tax
Tribunal interpretation which Vornado is appealing |
23,503 |
|
|
— |
|
| Preferred
share issuance costs |
14,486 |
|
|
— |
|
| Our share
of real estate fund investments (excluding our $4,252 share of One
Park Avenue potential additional transfer taxes and reduction in
carried interest) |
(814 |
) |
|
3,235 |
|
| FFO from
discontinued operations (primarily related to JBG SMITH Properties
operating results and transaction costs through July 17, 2017
spin-off) |
363 |
|
|
(48,093 |
) |
| 666 Fifth
Avenue Office Condominium (49.5% interest) |
137 |
|
|
(3,553 |
) |
|
Other |
3,721 |
|
|
(249 |
) |
| |
76,056 |
|
|
(48,660 |
) |
| Noncontrolling
interests' share of above adjustments |
(4,693 |
) |
|
3,036 |
|
| Total of certain
expense (income) items that impact FFO attributable to common
shareholders plus assumed conversions |
$ |
71,363 |
|
|
$ |
(45,624 |
) |
| |
|
|
|
| FFO attributable to
common shareholders plus assumed conversions, as adjusted
(non-GAAP) |
$ |
173,842 |
|
|
$ |
160,105 |
|
| Per
diluted share (non-GAAP) |
$ |
0.91 |
|
|
$ |
0.84 |
|
____________________________________________________________
- See page 9 for a reconciliation of our net (loss) income
attributable to common shareholders to FFO attributable to common
shareholders plus assumed conversions (non-GAAP) for the three
months ended March 31, 2018 and 2017.
Acquisition Activity
On February 9, 2018, we acquired 537 West 26th
Street, a 14,000 square foot commercial property adjacent to our
260 Eleventh Avenue office property and 55,000 square feet of
additional zoning air rights, for $44,000,000.
Disposition Activity
On January 17, 2018, Vornado Capital Partners
Real Estate Fund (the "Fund") completed the sale of the retail
condominium at 11 East 68th Street, a property located on Madison
Avenue and 68th Street, for $82,000,000. From the inception
of this investment through its disposition, the Fund realized a
$46,259,000 net gain.
Financing Activities
On January 4 and 11, 2018, we redeemed all of
the outstanding 6.625% Series G and Series I cumulative redeemable
preferred shares at their redemption price of $25.00 per share, or
$470,000,000 in the aggregate, plus accrued and unpaid dividends
through the date of redemption, and expensed $14,486,000 of
previously capitalized issuance costs.
On January 5, 2018, we completed a $100,000,000
refinancing of 33-00 Northern Boulevard (Center Building), a
471,000 square foot office building in Long Island City, New
York. The seven-year loan is at LIBOR plus 1.80%, which was
swapped to a fixed rate of 4.14%. We realized net proceeds of
approximately $37,200,000 after repayment of the existing 4.43%
$59,800,000 mortgage and closing costs.
First Quarter Leasing Activity:
- 424,000 square feet of New York Office space (359,000 square
feet at share) at an initial rent of $82.07 per square foot and a
weighted average term of 10.5 years. The GAAP and cash
mark-to-markets on the 285,000 square feet of second generation
space were positive 62.5% and 50.3%, respectively. Excluding a
77,000 square foot lease at 770 Broadway, the GAAP and cash
mark-to-markets were positive 20.2% and 12.5%, respectively. Tenant
improvements and leasing commissions were $9.33 per square foot per
annum, or 11.4% of initial rent.
- 77,000 square feet of New York Retail space (all at share and
all second generation) at an initial rent of $212.03 per square
foot and a weighted average term of 4.5 years. The GAAP and
cash mark-to-markets were negative 12.3% and 20.1%, respectively.
Excluding a 43,000 square foot lease at 435 Seventh Avenue, the
GAAP and cash mark-to-markets were positive 19.2% and 4.9%,
respectively. Tenant improvements and leasing commissions were
$14.06 per square foot per annum, or 6.6% of initial rent.
- 119,000 square feet at theMART (all at share) at an initial
rent of $50.39 per square foot and a weighted average term of 5.7
years. The GAAP and cash mark-to-markets on the 113,000
square feet of second generation space were positive 36.6% and
28.0%, respectively. Tenant improvements and leasing commissions
were $4.19 per square foot per annum, or 8.3% of initial rent.
- 89,000 square feet at 555 California Street (62,000 square feet
at share) at an initial rent of $85.89 per square foot and a
weighted average term of 7.1 years. The GAAP and cash
mark-to-markets on the 30,000 square feet of second generation
space were positive 39.3% and 17.0%, respectively. Tenant
improvements and leasing commissions were $11.64 per square foot
per annum, or 13.6% of initial rent.
Same Store Net Operating Income ("NOI"):
The percentage increase (decrease) in same store NOI and same
store NOI - cash basis of our New York segment, theMART and 555
California Street are summarized below.
| |
|
|
|
|
|
|
| |
|
New York |
|
theMART |
|
555 California Street |
| Same store
NOI at share % increase (decrease): |
|
|
|
|
|
| |
Three months ended
March 31, 2018 compared to March 31, 2017 |
4.0 |
% |
(1) |
3.4 |
% |
|
12.3 |
% |
| |
Three months ended
March 31, 2018 compared to December 31, 2017 |
(5.6 |
)% |
(1) |
10.7 |
% |
(2) |
12.6 |
% |
| |
|
|
|
|
|
|
| Same store
NOI at share - cash basis % increase (decrease): |
|
|
|
|
|
| |
Three months ended
March 31, 2018 compared to March 31, 2017 |
5.6 |
% |
(1) |
10.0 |
% |
|
13.3 |
% |
| |
Three months ended
March 31, 2018 compared to December 31, 2017 |
(4.5 |
)% |
(1) |
10.9 |
% |
(2) |
7.6 |
% |
| |
|
|
|
|
|
|
|
|
|
____________________
| |
|
|
| |
|
Increase (Decrease) |
| (1) |
Excluding Hotel
Pennsylvania - same store NOI at share % increase (decrease): |
|
| |
Three months ended
March 31, 2018 compared to March 31, 2017 |
3.7 |
% |
| |
Three months ended
March 31, 2018 compared to December 31, 2017 |
(2.2 |
)% |
| |
|
|
| |
Excluding Hotel
Pennsylvania - same store NOI at share - cash basis % increase
(decrease): |
|
| |
Three months ended
March 31, 2018 compared to March 31, 2017 |
5.3 |
% |
| |
Three months ended
March 31, 2018 compared to December 31, 2017 |
(0.8 |
)% |
| |
|
|
|
|
(2) |
Excluding tradeshows
seasonality, same store NOI at share and same store NOI at share -
cash basis decreased by 0.7% and 0.5%, respectively. |
|
|
| |
|
|
|
NOI:
The elements of our New York and Other NOI for the three months
ended March 31, 2018, March 31, 2017 and December 31, 2017 are
summarized below.
| |
|
| |
For the Three Months Ended |
| (Amounts in
thousands) |
March 31, |
|
December 31, 2017 |
| |
2018 |
|
2017 |
|
| New York: |
|
|
|
|
|
|
Office |
$ |
187,156 |
|
|
$ |
174,724 |
|
|
$ |
189,481 |
|
|
Retail |
87,909 |
|
|
89,048 |
|
|
90,853 |
|
|
Residential |
6,141 |
|
|
6,278 |
|
|
5,920 |
|
|
Alexander's |
11,575 |
|
|
11,743 |
|
|
11,656 |
|
| Hotel
Pennsylvania |
(4,185 |
) |
|
(4,638 |
) |
|
6,318 |
|
| Total New
York |
288,596 |
|
|
277,155 |
|
|
304,228 |
|
| |
|
|
|
|
|
| Other: |
|
|
|
|
|
|
theMART |
26,875 |
|
|
25,889 |
|
|
24,249 |
|
| 555
California Street |
13,511 |
|
|
12,034 |
|
|
12,003 |
|
| Other
investments |
20,054 |
|
|
22,080 |
|
|
23,377 |
|
| Total
Other |
60,440 |
|
|
60,003 |
|
|
59,629 |
|
| |
|
|
|
|
|
| NOI at share |
$ |
349,036 |
|
|
$ |
337,158 |
|
|
$ |
363,857 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
NOI - Cash Basis:
The elements of our New York and Other NOI - cash basis for the
three months ended March 31, 2018, March 31, 2017 and December
31, 2017 are summarized below.
| |
|
| |
For the Three Months Ended |
| (Amounts in
thousands) |
March 31, |
|
December 31,
2017 |
| |
2018 |
|
2017 |
|
| New York: |
|
|
|
|
|
|
Office |
$ |
178,199 |
|
|
$ |
166,339 |
|
|
$ |
175,787 |
|
Retail |
79,589 |
|
|
79,419 |
|
|
83,320 |
|
Residential |
5,599 |
|
|
5,542 |
|
|
5,325 |
|
Alexander's |
12,039 |
|
|
12,088 |
|
|
12,004 |
| Hotel
Pennsylvania |
(4,153 |
) |
|
(4,605 |
) |
|
6,351 |
| Total New
York |
271,273 |
|
|
258,783 |
|
|
282,787 |
| |
|
|
|
|
|
| Other: |
|
|
|
|
|
|
theMART |
27,079 |
|
|
24,532 |
|
|
24,396 |
| 555
California Street |
12,826 |
|
|
11,325 |
|
|
11,916 |
| Other
investments |
19,910 |
|
|
22,037 |
|
|
23,179 |
| Total
Other |
59,815 |
|
|
57,894 |
|
|
59,491 |
| |
|
|
|
|
|
| NOI at share - cash
basis |
$ |
331,088 |
|
|
$ |
316,677 |
|
|
$ |
342,278 |
| |
|
|
|
|
|
|
|
|
|
|
Development/Redevelopment as of March 31,
2018
| (in
thousands, except square feet) |
|
|
|
|
|
|
|
(At Share) |
|
|
|
|
|
|
|
|
Full Quarter Stabilized
Operations |
|
|
|
|
|
Property Rentable Sq.
Ft. |
|
Excluding Land Costs |
|
|
|
|
|
|
Initial Occupancy |
|
|
Current Projects: |
|
Segment |
|
|
Incremental Budget |
|
Amount Expended |
|
|
% Complete |
|
Start |
|
|
| 220 Central Park South - residential condominiums |
|
Other |
|
397,000 |
|
|
$ |
1,400,000 |
|
|
$ |
970,000 |
|
(1) |
|
69.3 |
% |
|
Q3 2012 |
|
N/A |
|
N/A |
| Moynihan
Office Building - (50.1% interest)(2) |
|
New
York |
|
850,000 |
|
|
400,000 |
|
|
30,375 |
|
|
|
7.6 |
% |
|
Q2
2017 |
|
Q3
2020 |
|
Q2
2022 |
| One Penn
Plaza - renovation(3) |
|
New
York |
|
2,530,000 |
|
|
200,000 |
|
|
2,460 |
|
|
|
1.2 |
% |
|
Q4
2018 |
|
N/A |
|
N/A |
| 61 Ninth
Avenue - office/retail (45.1% interest)(4) |
|
New
York |
|
170,000 |
|
|
69,000 |
|
|
51,826 |
|
|
|
75.1 |
% |
|
Q1
2016 |
|
Q2
2018 |
|
Q2
2019 |
| 512 West
22nd Street - office/retail (55.0% interest) |
|
New
York |
|
173,000 |
|
|
72,000 |
|
|
44,521 |
|
(5) |
|
61.8 |
% |
|
Q4
2015 |
|
Q3
2018 |
|
Q1
2020 |
| 345
Montgomery Street (555 California Street) (70.0% interest) |
|
Other |
|
64,000 |
|
|
32,000 |
|
|
3,157 |
|
(6) |
|
9.9 |
% |
|
Q1
2018 |
|
Q3
2019 |
|
Q3
2020 |
| 606
Broadway - office/retail (50.0% interest) |
|
New
York |
|
34,000 |
|
|
30,000 |
|
|
19,195 |
|
(7) |
|
64.0 |
% |
|
Q2
2016 |
|
Q4
2018 |
|
Q2
2020 |
| 825
Seventh Avenue - office (50.0% interest) |
|
New
York |
|
165,000 |
|
|
15,000 |
|
|
1,103 |
|
|
|
7.4 |
% |
|
Q2
2018 |
|
Q1
2020 |
|
Q1
2021 |
| Total current projects |
|
|
|
|
|
|
|
$ |
1,122,637 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Future Opportunities: |
|
Segment |
|
Property Zoning Sq. Ft. |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Penn Plaza
- multiple opportunities - office/residential/retail |
|
New
York |
|
TBD |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hotel
Pennsylvania |
|
New
York |
|
2,052,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 260
Eleventh Avenue - office(8) |
|
New
York |
|
300,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Undeveloped Land: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 29, 31, 33
West 57th Street (50.0% interest) |
|
New
York |
|
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 527 West
Kinzie, Chicago |
|
Other |
|
330,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total undeveloped land |
|
|
|
480,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________
- Excludes land and acquisition costs of $515,426.
- Excludes $115,230 for our share of the upfront contribution of
$230,000. The building and land are subject to a lease which
expires in 2116.
- The building is subject to a ground lease which expires in
2098.
- The building is subject to a ground lease which expires in
2115.
- Excludes land and acquisition costs of $57,000.
- Excludes land and building costs of $31,000.
- Excludes land and acquisition costs of $22,703.
- The building is subject to a ground lease which expires in
2114.
Conference Call and Audio Webcast
As previously announced, the Company will host a
quarterly earnings conference call and an audio webcast on Tuesday,
May 1, 2018 at 10:00 a.m. Eastern Time (ET). The
conference call can be accessed by dialing 888-771-4371 (domestic)
or 847-585-4405 (international) and indicating to the operator the
passcode 46816083. A telephonic replay of the
conference call will be available from 1:00 p.m. ET on May
1, 2018 through May 31, 2018. To access the replay,
please dial 888-843-7419 and enter the passcode 46816083#. 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.
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 for the year ended December 31, 2017.
Such factors include, among others, risks associated with the
timing of and costs associated with property improvements,
financing commitments and general competitive factors.
| |
|
|
| VORNADO REALTY
TRUSTCONSOLIDATED BALANCE SHEETS |
|
| |
|
|
| |
As of |
|
| (Amounts in thousands,
except unit, share, and per share amounts) |
March 31, 2018 |
|
December 31,
2017 |
|
|
ASSETS |
|
|
|
|
| Real estate, at
cost: |
|
|
|
|
| Land |
$ |
3,170,158 |
|
|
$ |
3,143,648 |
|
| Buildings
and improvements |
9,946,225 |
|
|
9,898,605 |
|
|
Development costs and construction in progress |
1,705,244 |
|
|
1,615,101 |
|
| Leasehold
improvements and equipment |
104,710 |
|
|
98,941 |
|
|
Total |
14,926,337 |
|
|
14,756,295 |
|
| Less
accumulated depreciation and amortization |
(2,962,983 |
) |
|
(2,885,283 |
) |
| Real estate, net |
11,963,354 |
|
|
11,871,012 |
|
| Cash and cash
equivalents |
1,327,384 |
|
|
1,817,655 |
|
| Restricted cash |
90,684 |
|
|
97,157 |
|
| Marketable
securities |
149,766 |
|
|
182,752 |
|
| Tenant and other
receivables, net of allowance for doubtful accounts of $5,171 and
$5,526 |
64,387 |
|
|
58,700 |
|
| Investments in
partially owned entities |
1,033,228 |
|
|
1,056,829 |
|
| Real estate fund
investments |
336,552 |
|
|
354,804 |
|
| Receivable arising from
the straight-lining of rents, net of allowance of $739 and
$954 |
934,535 |
|
|
926,711 |
|
| Deferred leasing costs,
net of accumulated amortization of $194,078 and $191,827 |
405,209 |
|
|
403,492 |
|
| Identified intangible
assets, net of accumulated amortization of $157,062 and
$150,837 |
152,834 |
|
|
159,260 |
|
| Assets related to
discontinued operations |
275 |
|
|
1,357 |
|
| Other assets |
406,275 |
|
|
468,205 |
|
| |
$ |
16,864,483 |
|
|
$ |
17,397,934 |
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
EQUITY |
|
|
|
|
| Mortgages payable,
net |
$ |
8,102,238 |
|
|
$ |
8,137,139 |
|
| Senior unsecured notes,
net |
843,125 |
|
|
843,614 |
|
| Unsecured term loan,
net |
749,114 |
|
|
748,734 |
|
| Unsecured revolving
credit facilities |
80,000 |
|
|
— |
|
| Accounts payable and
accrued expenses |
431,094 |
|
|
415,794 |
|
| Deferred revenue |
200,648 |
|
|
227,069 |
|
| Deferred compensation
plan |
109,525 |
|
|
109,177 |
|
| Liabilities related to
discontinued operations |
1,176 |
|
|
3,620 |
|
| Preferred shares
redeemed on January 4 and 11, 2018 |
— |
|
|
455,514 |
|
| Other liabilities |
465,659 |
|
|
464,635 |
|
| Total
liabilities |
10,982,579 |
|
|
11,405,296 |
|
| Commitments and
contingencies |
|
|
|
|
| Redeemable
noncontrolling interests: |
|
|
|
|
| Class A
units - 12,653,821 and 12,528,899 units outstanding |
851,598 |
|
|
979,509 |
|
| Series D
cumulative redeemable preferred units - 177,101 units
outstanding |
5,428 |
|
|
5,428 |
|
|
Total redeemable noncontrolling interests |
857,026 |
|
|
984,937 |
|
| Vornado's
shareholders' equity: |
|
|
|
|
| Preferred
shares of beneficial interest: no par value per share; authorized
110,000,000 shares; issued and outstanding 36,799,573 shares |
891,325 |
|
|
891,988 |
|
| Common
shares of beneficial interest: $0.04 par value per share;
authorized 250,000,000 shares; issued and outstanding 190,169,168
and 189,983,858 shares |
7,584 |
|
|
7,577 |
|
|
Additional capital |
7,629,013 |
|
|
7,492,658 |
|
| Earnings
less than distributions |
(4,198,088 |
) |
|
(4,183,253 |
) |
|
Accumulated other comprehensive income |
30,258 |
|
|
128,682 |
|
|
Total Vornado shareholders' equity |
4,360,092 |
|
|
4,337,652 |
|
| Noncontrolling
interests in consolidated subsidiaries |
664,786 |
|
|
670,049 |
|
| Total
equity |
5,024,878 |
|
|
5,007,701 |
|
| |
$ |
16,864,483 |
|
|
$ |
17,397,934 |
|
| |
|
|
|
|
|
|
|
| |
|
| VORNADO REALTY TRUSTOPERATING
RESULTS |
| |
|
| (Amounts in thousands,
except per share amounts) |
For the Three Months Ended March
31, |
| |
2018 |
|
2017 |
| Revenues |
$ |
536,437 |
|
|
$ |
508,058 |
|
| |
|
|
|
| Income from continuing
operations |
$ |
645 |
|
|
$ |
58,529 |
|
| (Loss) income from
discontinued operations |
(363 |
) |
|
15,318 |
|
| Net income |
282 |
|
|
73,847 |
|
| Less net loss (income)
attributable to noncontrolling interests in: |
|
|
|
|
Consolidated subsidiaries |
8,274 |
|
|
(6,737 |
) |
| Operating
Partnership |
1,124 |
|
|
(3,229 |
) |
| Net income attributable
to Vornado |
9,680 |
|
|
63,881 |
|
| Preferred share
dividends |
(13,035 |
) |
|
(16,129 |
) |
| Preferred share
issuance costs |
(14,486 |
) |
|
— |
|
| Net (loss) income
attributable to common shareholders |
$ |
(17,841 |
) |
|
$ |
47,752 |
|
| |
|
|
|
| (Loss) income per
common share - Basic: |
|
|
|
| (Loss)
income from continuing operations, net |
$ |
(0.09 |
) |
|
$ |
0.18 |
|
| Income
from discontinued operations, net |
— |
|
|
0.07 |
|
| Net
(loss) income per common share |
$ |
(0.09 |
) |
|
$ |
0.25 |
|
| Weighted
average shares outstanding |
190,081 |
|
|
189,210 |
|
| |
|
|
|
| (Loss) income per
common share - Diluted: |
|
|
|
| (Loss)
income from continuing operations, net |
$ |
(0.09 |
) |
|
$ |
0.18 |
|
| Income
from discontinued operations, net |
— |
|
|
0.07 |
|
| Net
(loss) income per common share |
$ |
(0.09 |
) |
|
$ |
0.25 |
|
| Weighted
average shares outstanding |
190,081 |
|
|
190,372 |
|
| |
|
|
|
| FFO attributable to
common shareholders plus assumed conversions (non-GAAP) |
$ |
102,479 |
|
|
$ |
205,729 |
|
| Per
diluted share (non-GAAP) |
$ |
0.54 |
|
|
$ |
1.08 |
|
| |
|
|
|
| FFO attributable to
common shareholders plus assumed conversions, as adjusted
(non-GAAP) |
$ |
173,842 |
|
|
$ |
160,105 |
|
| Per
diluted share (non-GAAP) |
$ |
0.91 |
|
|
$ |
0.84 |
|
| |
|
|
|
| Weighted average shares
used in determining FFO per diluted share |
191,057 |
|
|
190,412 |
|
| |
|
|
|
|
|
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS
The following table reconciles net (loss) income attributable to
common shareholders to FFO attributable to common shareholders plus
assumed conversions:
| |
|
|
| (Amounts in thousands,
except per share amounts) |
For the Three Months Ended March
31, |
|
| |
2018 |
|
2017 |
|
| Net (loss) income
attributable to common shareholders |
$ |
(17,841 |
) |
|
$ |
47,752 |
|
| Per
diluted share |
$ |
(0.09 |
) |
|
$ |
0.25 |
|
| |
|
|
|
|
| FFO adjustments: |
|
|
|
|
| Depreciation and
amortization of real property |
$ |
100,410 |
|
|
$ |
130,469 |
|
| Net gains on sale of
real estate |
— |
|
|
(2,267 |
) |
|
Proportionate share of adjustments to equity in net (loss) income
of partially owned entities to arrive at FFO: |
|
|
|
|
|
Depreciation and amortization of real property |
28,106 |
|
|
39,074 |
|
| Net gains
on sale of real estate |
(305 |
) |
|
(1,853 |
) |
| Real
estate impairment losses |
4 |
|
|
3,051 |
|
| |
128,215 |
|
|
168,474 |
|
| Noncontrolling
interests' share of above adjustments |
(7,911 |
) |
|
(10,517 |
|
| FFO adjustments,
net |
$ |
120,304 |
|
|
$ |
157,957 |
|
| |
|
|
|
|
| FFO attributable to
common shareholders (non-GAAP) |
$ |
102,463 |
|
|
$ |
205,709 |
|
| Convertible preferred
share dividends |
16 |
|
|
20 |
|
| FFO
attributable to common shareholders plus assumed conversions
(non-GAAP) |
$ |
102,479 |
|
|
$ |
205,729 |
|
| Per
diluted share (non-GAAP) |
$ |
0.54 |
|
|
$ |
1.08 |
|
|
|
|
|
|
|
|
|
|
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 (loss) income attributable to common
shareholders to FFO attributable to common shareholders plus
assumed conversions is provided above. In addition to FFO
attributable to common shareholders plus assumed conversions, we
also disclose FFO attributable to common shareholders plus assumed
conversions, 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 attributable to common shareholders plus
assumed conversions to FFO attributable to common shareholders plus
assumed conversions, as adjusted are provided on page 2 of this
press release.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below is a reconciliation of net income to NOI by segment for
the three months ended March 31, 2018, March 31, 2017 and
December 31, 2017.
| |
|
|
| |
For the Three Months Ended |
|
| (Amounts in
thousands) |
March 31, |
|
December 31,
2017 |
|
| |
2018 |
|
2017 |
|
|
| Net income |
$ |
282 |
|
|
$ |
73,847 |
|
|
$ |
53,551 |
|
| |
|
|
|
|
|
|
| Deduct: |
|
|
|
|
|
|
| Loss (income) from
partially owned entities |
9,904 |
|
|
(1,358 |
) |
|
(9,622 |
) |
| Loss (income) from real
estate fund investments |
8,807 |
|
|
(268 |
) |
|
(4,889 |
) |
| Interest and other
investment loss (income), net |
24,384 |
|
|
(6,695 |
) |
|
(8,294 |
) |
| Net gains on
disposition of wholly owned and partially owned assets |
— |
|
|
(501 |
) |
|
— |
|
| Loss (income) from
discontinued operations |
363 |
|
|
(15,318 |
) |
|
(1,273 |
) |
| NOI
attributable to noncontrolling interests in consolidated
subsidiaries |
(17,312 |
) |
|
(16,338 |
) |
|
(16,533 |
) |
| |
|
|
|
|
|
|
| Add: |
|
|
|
|
|
|
| Depreciation and
amortization expense |
108,686 |
|
|
105,128 |
|
|
114,166 |
|
| General and
administrative expense |
43,633 |
|
|
47,237 |
|
|
35,139 |
|
| Transaction related
costs and other |
13,156 |
|
|
752 |
|
|
703 |
|
| NOI from partially
owned entities |
67,513 |
|
|
66,097 |
|
|
69,175 |
|
| Interest and debt
expense |
88,166 |
|
|
82,724 |
|
|
93,073 |
|
| Income tax expense |
1,454 |
|
|
1,851 |
|
|
38,661 |
|
| NOI at share |
349,036 |
|
|
337,158 |
|
|
363,857 |
|
| Non cash
adjustments for straight-line rents, amortization of acquired
below-market leases, net and other |
(17,948 |
) |
|
(20,481 |
) |
|
(21,579 |
) |
| NOI at share - cash
basis |
$ |
331,088 |
|
|
$ |
316,677 |
|
|
$ |
342,278 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
NOI represents total revenues less operating expenses. We
consider NOI to be the primary non-GAAP financial measure for
making decisions and assessing the unlevered performance of our
segments as it relates to the total return on assets as opposed to
the levered return on equity. As properties are bought and sold
based on NOI, we utilize this measure to make investment decisions
as well as to compare the performance of our assets to that of our
peers. NOI should not be considered a substitute for net income.
NOI may not be comparable to similarly titled measures employed by
other companies.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI to same store NOI for our New
York segment, theMART and 555 California Street for the three
months ended March 31, 2018 compared to March 31, 2017.
| |
|
|
|
|
|
|
| (Amounts in
thousands) |
New York |
|
theMART |
|
555 California Street |
|
| NOI at
share for the three months ended March 31, 2018 |
$ |
288,596 |
|
|
$ |
26,875 |
|
|
$ |
13,511 |
|
| |
Less NOI at share
from: |
|
|
|
|
|
|
| |
Acquisitions |
(350 |
) |
|
(85 |
) |
|
— |
|
| |
Dispositions |
40 |
|
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
(412 |
) |
|
— |
|
|
— |
|
| |
Lease
termination income, net of straight-line and FAS 141
adjustments |
(1,127 |
) |
|
— |
|
|
— |
|
| |
Other
non-operating income, net |
(579 |
) |
|
— |
|
|
— |
|
| Same store NOI at share for the three months ended March 31,
2018 |
$ |
286,168 |
|
|
$ |
26,790 |
|
|
$ |
13,511 |
|
| |
|
|
|
|
|
|
| NOI at share for the three months ended March 31, 2017 |
$ |
277,155 |
|
|
$ |
25,889 |
|
|
$ |
12,034 |
|
| |
Less NOI at share
from: |
|
|
|
|
|
|
| |
Acquisitions |
— |
|
|
31 |
|
|
— |
|
| |
Dispositions |
(228 |
) |
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
16 |
|
|
— |
|
|
— |
|
| |
Lease
termination income, net of straight-line and FAS 141
adjustments |
(638 |
) |
|
(20 |
) |
|
— |
|
| |
Other
non-operating income, net |
(1,084 |
) |
|
— |
|
|
— |
|
| Same store NOI at share for the three months ended March 31,
2017 |
$ |
275,221 |
|
|
$ |
25,900 |
|
|
$ |
12,034 |
|
| |
|
|
|
|
|
|
| Increase in same store NOI at share for the three months ended
March 31, 2018 compared to March 31, 2017 |
$ |
10,947 |
|
|
$ |
890 |
|
|
$ |
1,477 |
|
| |
|
|
|
|
|
|
|
| % increase
in same store NOI at share |
4.0 |
% |
(1) |
3.4 |
% |
|
12.3 |
% |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share increased
by 3.7%.
Same store NOI represents NOI from operations which are owned by
us and in service in both the current and prior year reporting
periods. Same store NOI - cash basis is NOI from operations
before straight-line rental income and expense, amortization of
acquired below and above market leases, net and other non-cash
adjustments which are owned by us and in service in both the
current and prior year reporting periods. We present these
non-GAAP measures to (i) facilitate meaningful comparisons of the
operational performance of our properties and segments, (ii) make
decisions on whether to buy, sell or refinance properties, and
(iii) compare the performance of our properties and segments to
those of our peers. Same store NOI and same store NOI - cash
basis should not be considered as an alternative to net income or
cash flow from operations and may not be comparable to similarly
titled measures employed by other companies.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI - cash basis to same store NOI
- cash basis for our New York segment, theMART and 555 California
Street for the three months ended March 31, 2018 compared to March
31, 2017.
| |
|
|
|
|
|
|
| (Amounts in
thousands) |
New York |
|
theMART |
|
555 California Street |
|
| NOI at
share - cash basis for the three months ended March 31, 2018 |
$ |
271,273 |
|
|
$ |
27,079 |
|
|
$ |
12,826 |
|
| |
Less NOI at share -
cash basis from: |
|
|
|
|
|
|
| |
Acquisitions |
(200 |
) |
|
(85 |
) |
|
— |
|
| |
Dispositions |
40 |
|
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
(603 |
) |
|
— |
|
|
— |
|
| |
Lease
termination income |
(1,061 |
) |
|
— |
|
|
— |
|
| |
Other
non-operating income, net |
(579 |
) |
|
— |
|
|
— |
|
| Same store NOI at share - cash basis for the three months ended
March 31, 2018 |
$ |
268,870 |
|
|
$ |
26,994 |
|
|
$ |
12,826 |
|
| |
|
|
|
|
|
|
|
| NOI at
share - cash basis for the three months ended March 31, 2017 |
$ |
258,783 |
|
|
$ |
24,532 |
|
|
$ |
11,325 |
|
| |
Less NOI at share -
cash basis from: |
|
|
|
|
|
|
| |
Acquisitions |
— |
|
|
31 |
|
|
— |
|
| |
Dispositions |
(228 |
) |
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
106 |
|
|
— |
|
|
— |
|
| |
Lease
termination income |
(3,030 |
) |
|
(31 |
) |
|
— |
|
| |
Other
non-operating income, net |
(1,029 |
) |
|
— |
|
|
— |
|
| Same store NOI at share - cash basis for the three months ended
March 31, 2017 |
$ |
254,602 |
|
|
$ |
24,532 |
|
|
$ |
11,325 |
|
| |
|
|
|
|
|
|
| Increase in same store NOI at share - cash basis for the three
months ended March 31, 2018 compared to March 31, 2017 |
$ |
14,268 |
|
|
$ |
2,462 |
|
|
$ |
1,501 |
|
| |
|
|
|
|
|
|
| % increase
in same store NOI at share - cash basis |
5.6 |
% |
(1) |
10.0 |
% |
|
13.3 |
% |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share - cash
basis increased by 5.3%.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI to same store NOI for our New
York segment, theMART and 555 California Street for the three
months ended March 31, 2018 compared to December 31, 2017.
| |
|
|
|
|
|
|
| (Amounts in
thousands) |
New York |
|
theMART |
|
555 California Street |
|
| NOI at
share for the three months ended March 31, 2018 |
$ |
288,596 |
|
|
$ |
26,875 |
|
|
$ |
13,511 |
|
| |
Less NOI at share
from: |
|
|
|
|
|
|
| |
Acquisitions |
(109 |
) |
|
(85 |
) |
|
— |
|
| |
Dispositions |
40 |
|
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
(412 |
) |
|
— |
|
|
— |
|
| |
Lease
termination income, net of straight-line and FAS 141
adjustments |
(1,127 |
) |
|
— |
|
|
— |
|
| |
Other
non-operating income, net |
(579 |
) |
|
— |
|
|
— |
|
| Same store NOI at share for the three months ended March 31,
2018 |
$ |
286,409 |
|
|
$ |
26,790 |
|
|
$ |
13,511 |
|
| |
|
|
|
|
|
|
| NOI at share for the three months ended December 31, 2017 |
$ |
304,228 |
|
|
$ |
24,249 |
|
|
$ |
12,003 |
|
| |
Less NOI at share
from: |
|
|
|
|
|
|
| |
Acquisitions |
2 |
|
|
(46 |
) |
|
— |
|
| |
Dispositions |
(8 |
) |
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
309 |
|
|
— |
|
|
— |
|
| |
Lease
termination income, net of straight-line and FAS 141
adjustments |
(984 |
) |
|
— |
|
|
— |
|
| |
Other
non-operating income, net |
(16 |
) |
|
— |
|
|
— |
|
| Same store NOI at share for the three months ended December 31,
2017 |
$ |
303,531 |
|
|
$ |
24,203 |
|
|
$ |
12,003 |
|
| |
|
|
|
|
|
|
| (Decrease) increase in same store NOI at share for the three
months ended March 31, 2018 compared to December 31, 2017 |
$ |
(17,122 |
) |
|
$ |
2,587 |
|
|
$ |
1,508 |
|
| |
|
|
|
|
|
|
|
| %
(decrease) increase in same store NOI at share |
(5.6 |
)% |
(1) |
10.7 |
% |
(2) |
12.6 |
% |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share decreased
by 2.2%.
- Excluding tradeshows seasonality, same store NOI at share
decreased by 0.7%.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI - cash basis to same store NOI
- cash basis for our New York segment, theMART and 555 California
Street for the three months ended March 31, 2018 compared to
December 31, 2017.
| |
|
|
|
|
|
|
| (Amounts in
thousands) |
New York |
|
theMART |
|
555 California Street |
|
| NOI at
share - cash basis for the three months ended March 31, 2018 |
$ |
271,273 |
|
|
$ |
27,079 |
|
|
$ |
12,826 |
|
| |
Less NOI at share -
cash basis from: |
|
|
|
|
|
|
| |
Acquisitions |
(109 |
) |
|
(85 |
) |
|
— |
|
| |
Dispositions |
40 |
|
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
(603 |
) |
|
— |
|
|
— |
|
| |
Lease
termination income |
(1,061 |
) |
|
— |
|
|
— |
|
| |
Other
non-operating income, net |
(579 |
) |
|
— |
|
|
— |
|
| Same store NOI at share - cash basis for the three months ended
March 31, 2018 |
$ |
268,961 |
|
|
$ |
26,994 |
|
|
$ |
12,826 |
|
| |
|
|
|
|
|
|
|
| NOI at
share - cash basis for the three months ended December 31,
2017 |
$ |
282,787 |
|
|
$ |
24,396 |
|
|
$ |
11,916 |
|
| |
Less NOI at share -
cash basis from: |
|
|
|
|
|
|
| |
Acquisitions |
2 |
|
|
(46 |
) |
|
— |
|
| |
Dispositions |
(8 |
) |
|
— |
|
|
— |
|
| |
Development properties placed into and out of service |
253 |
|
|
— |
|
|
— |
|
| |
Lease
termination income |
(1,393 |
) |
|
— |
|
|
— |
|
| |
Other
non-operating income, net |
(16 |
) |
|
— |
|
|
— |
|
| Same store NOI at share - cash basis for the three months ended
December 31, 2017 |
$ |
281,625 |
|
|
$ |
24,350 |
|
|
$ |
11,916 |
|
| |
|
|
|
|
|
|
| (Decrease) increase in same store NOI at share - cash basis for
the three months ended March 31, 2018 compared to December 31,
2017 |
$ |
(12,664 |
) |
|
$ |
2,644 |
|
|
$ |
910 |
|
| |
|
|
|
|
|
|
| %
(decrease) increase in same store NOI at share - cash basis |
(4.5 |
)% |
(1) |
10.9 |
% |
(2) |
7.6 |
% |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share - cash
basis decreased by 0.8%.
- Excluding tradeshows seasonality, same store NOI at share -
cash basis decreased by 0.5%.
| CONTACT: |
JOSEPH MACNOW |
| |
(212) 894-7000 |
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