By John Kell
Vornado Realty Trust (VNO) disclosed income from its share of
Toys "R" Us Inc.'s fourth-quarter results would be erased by a
corresponding impairment loss.
The real-estate investment trust, which bought a stake in the
toy retailer in 2005, said it earned $78.5 million in equity from
Toys 'R' Us' fourth quarter ended Feb. 2. But an impairment loss of
the same amount negated the income derived from Vornado's 32.5%
stake in Toys "R" Us.
Still, Vornado's income tied to Toys "R" Us after the impairment
loss for the first quarter will total $1.76 million, or a penny a
share, representing earned management fees that aren't subject to
impairment.
The company's share of the retailer's funds from operations is 8
cents a share, down sharply from 65 cents a share in the prior-year
period.
Toys "R" Us was purchased in 2005 by Vornado and private-equity
firms Bain Capital LLC and KKR & Co. (KKR) for $6.6 billion.
The retailer dropped plans for an initial public offering earlier
this year after almost three years of withering sales and
heightened competition from online players.
Vornado's shares were flat in after-hours trading.
Write to John Kell at john.kell@dowjones.com
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