Vornado Announces Fourth Quarter 2012 Financial Results

  Vornado Announces Fourth Quarter 2012 Financial Results

Business Wire

PARAMUS, N.J. -- February 26, 2013

VORNADO REALTY TRUST (New York Stock Exchange: VNO) filed its Form 10-K for
the year ended December 31, 2012 today and reported:

Fourth Quarter 2012 Results

NET INCOME attributable to common shareholders for the quarter ended December
31, 2012 was $62.6million, or $0.33per diluted share, compared to $69.5
million, or $0.37 per diluted share for the quarter ended December 31, 2011.
Net income for the quarters ended December 31, 2012 and 2011 includes $281.5
million and $1.9 million, respectively, of net gains on sale of real estate,
and $117.9 million and $28.8 million, respectively, of real estate impairment
losses. In addition, the quarters ended December 31,2012 and 2011 include
certain other items that affect comparability which are listed in the table
below. Adjusting net income attributable to common shareholders for net gains
on sale of real estate, real estate impairment losses and the items in the
table below, net of amounts attributable to noncontrolling interests, net
income attributable to common shareholders for the quarters ended December 31,
2012 and 2011 was $81.3 million and $20.9 million, or $0.43 and $0.11 per
diluted share, respectively.

FUNDS FROM OPERATIONS attributable to common shareholders plus assumed
conversions (“FFO”) for the quarter ended December 31, 2012 was $55.9million,
or $0.30 per diluted share, compared to $280.4 million, or $1.46 per diluted
share for the prior year’s quarter. Adjusting FFO for certain items that
affect comparability which are listed in the table below, FFO for the quarters
ended December 31, 2012 and 2011 was $228.6 million and $197.9 million, or
$1.22 and $1.03 per diluted share, respectively.

                                       
(Amounts in thousands, except per          For the Quarters Ended December 31,
share amounts)
                                           2012               2011        
FFO (1)                                    $   55,890          $  280,369  
Per Share                                  $   0.30            $  1.46     
                                                                   
Items that affect comparability
income (expense):
Non-cash impairment loss on J.C.           $   (224,937   )     $  -
Penney owned shares
(Loss) income from the
mark-to-market of J.C. Penney                  (22,472    )        40,120
derivative position
Non-cash impairment loss on                    (40,000    )        -
investment in Toys
Accelerated amortization of discount
on investment in subordinated debt             60,396              -
of Independence Plaza
1290 Avenue of the Americas and 555
California Street priority return              25,260              -
and income tax benefit
Net gain resulting from Lexington              14,116              -
Realty Trust's stock issuance
FFO attributable to discontinued
operations, including our share of
discontinued operations
of Alexander's                                 12,736              25,398
Recognition of disputed receivable             -                   23,521
from Stop & Shop
Other, net                                     (8,825     )        (1,014   )
                                               (183,726   )        88,025
Noncontrolling interests' share of             11,056             (5,532   )
above adjustments
Items that affect comparability, net       $   (172,670   )     $  82,493   
FFO as adjusted for comparability          $   228,560         $  197,876  
Per Share                                  $   1.22            $  1.03     


____________________________________________________________
(1)    See page 4 for a reconciliation of our net income to FFO for the
        quarters ended December 31, 2012 and 2011.
        

Year Ended 2012 Results

NET INCOME attributable to common shareholders for the year ended December 31,
2012 was $549.3million, or $2.94per diluted share, compared to $601.8
million, or $3.23 per diluted share for the year ended December 31, 2011. Net
income for the years ended December 31, 2012 and 2011 includes $487.4 million
and $61.4 million, respectively, of net gains on sale of real estate, and
$141.6 million and $28.8 million, respectively, of real estate impairment
losses. In addition, the years ended December 31, 2012 and 2011 include
certain other items that affect comparability which are listed in the table
below. Adjusting net income attributable to common shareholders for net gains
on sale of real estate, real estate impairment losses and the items in the
table below, net of amounts attributable to noncontrolling interests, net
income attributable to common shareholders for the years ended December 31,
2012 and 2011 was $384.4 million and $314.1 million, or $2.06 and $1.68 per
diluted share, respectively.

FFO for the year ended December 31, 2012 was $818.6million, or $4.39 per
diluted share, compared to $1,231.0million, or $6.42 per diluted share for
the prior year. Adjusting FFO for certain items that affect comparability
which are listed in the table below, FFO for the years ended December 31, 2012
and 2011 was $964.1 million and $939.3 million, or $5.17 and $4.90 per diluted
share, respectively.

                                          
(Amounts in thousands, except per share       For the Years Ended December 31,
amounts)
                                              2012             2011        
FFO (1)                                       $  818,565        $ 1,230,973 
Per Share                                     $  4.39           $ 6.42      
                                                                   
Items that affect comparability income
(expense):
Non-cash impairment loss on J.C. Penney       $  (224,937  )     $ -
owned shares
(Loss) income from the mark-to-market            (75,815   )       12,984
of J.C. Penney derivative position
Non-cash impairment loss on investment           (40,000   )       -
in Toys
FFO attributable to discontinued
operations, including our share of
discontinued operations
of Alexander's                                   68,501            91,938
Accelerated amortization of discount on
investment in subordinated debt of               60,396            -
Independence Plaza
1290 Avenue of the Americas and 555
California Street priority return and            25,260            -
income tax benefit
After-tax net gain on sale of Canadian           19,657            -
Trade Shows
Net gain resulting from Lexington                14,116            9,760
Realty Trust's stock issuance
Net gain on extinguishment of debt               -                 83,907
Mezzanine loan loss reversal and gain            -                 82,744
on disposition
Recognition of disputed receivable from          -                 23,521
Stop & Shop
Other, net                                       (2,339    )       6,440     
                                                 (155,161  )       311,294
Noncontrolling interests' share of               9,601            (19,594   )
above adjustments
Items that affect comparability, net          $  (145,560  )     $ 291,700   
FFO as adjusted for comparability             $  964,125        $ 939,273   
Per Share                                     $  5.17           $ 4.90      
                                                                   

____________________________________________________________
(1)    See page 4 for a reconciliation of our net income to FFO for the years
        ended December 31, 2012 and 2011.
        

Supplemental Financial Information

Further details regarding the Company’s 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, 2012. 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 TRUST
OPERATING RESULTS FOR THE QUARTERS AND YEARS ENDED
DECEMBER 31, 2012 AND 2011
                                                          

                                                                   
                     For The Quarters            For The Years
(Amounts in
thousands,           Ended December 31,          Ended December 31,
except per
share amounts)
                     2012         2011         2012           2011        
                                                                   
Revenues             $ 697,654    $ 689,959    $ 2,766,457    $ 2,732,836 
                                                                   
Income from
continuing             50,432        105,275       408,599         578,885
operations
Income (loss)
from                   41,461       (8,288  )     285,942        161,115   
discontinued
operations
Net income             91,893        96,987        694,541         740,000
Less net
income
attributable
to
noncontrolling
interests in:
Consolidated           (1,090  )     (1,143  )     (32,018   )     (21,786   )
Subsidiaries
Operating              (3,882  )     (4,674  )     (35,327   )     (41,059   )
Partnership
Preferred unit
distributions
of the                 (786    )     (3,874  )     (9,936    )     (14,853   )
Operating
Partnership
Net income
attributable           86,135        87,296        617,260         662,302
to Vornado
Preferred
share                  (20,750 )     (17,788 )     (76,937   )     (65,531   )
dividends
Discount on
preferred              (2,752  )     -            8,948          5,000     
share and unit
redemptions
Net income
attributable         $ 62,633     $ 69,508     $ 549,271      $ 601,771   
to common
shareholders
                                                                   
Net income per
common share:
Basic                $ 0.34       $ 0.38       $ 2.95         $ 3.26      
Diluted              $ 0.33       $ 0.37       $ 2.94         $ 3.23      
                                                                   
Weighted
average
shares:
Basic                  186,267      184,571      185,810        184,308   
Diluted                186,866      185,963      186,530        186,021   
                                                                   
FFO
attributable
to common            $ 55,890     $ 280,369    $ 818,565      $ 1,230,973 
shareholders
plus assumed
conversions
Per diluted          $ 0.30       $ 1.46       $ 4.39         $ 6.42      
share
                                                                   
FFO as
adjusted for         $ 228,560    $ 197,876    $ 964,125      $ 939,273   
comparability
Per diluted          $ 1.22       $ 1.03       $ 5.17         $ 4.90      
share
                                                                   
Weighted
average shares
used in                186,866      191,751      186,530        191,757   
determining
FFO per
diluted share
                                                                   


The following table reconciles our net income to FFO:
                                                          
                     For The Quarters             For The Years
(Amounts in          Ended December 31,           Ended December 31,
thousands)
                     2012          2011         2012          2011        
Reconciliation
of our net
income to FFO:
Net income
attributable         $ 86,135       $ 87,296      $ 617,260      $ 662,302
to Vornado
Depreciation
and
amortization           125,069        152,655       504,407        530,113
of real
property
Net gains on
sale of real           (41,998  )     -             (245,799 )     (51,623   )
estate
Real estate
impairment             116,453        28,799        129,964        28,799
losses
Proportionate
share of
adjustments to
equity in net
income of
Toys, to
arrive at FFO:
Depreciation
and
amortization           17,777         18,039        68,483         70,883
of real
property
Net gains on
sale of real           -              -             -              (491      )
estate
Real estate
impairment             1,430          -             9,824          -
losses
Income tax
effect of              (6,728   )     (6,314  )     (27,493  )     (24,634   )
above
adjustments
Proportionate
share of
adjustments to
equity in net
income of
partially
owned
entities,
excluding
Toys, to
arrive at FFO:
Depreciation and
amortization of real   20,387         26,699        86,197         99,992
property
Net gains on
sale of real           (239,551 )     (1,916  )     (241,602 )     (9,276    )
estate
Real estate
impairment             -              -             1,849          -
losses
Noncontrolling
interests'             418           (13,733 )     (16,649  )     (40,957   )
share of above
adjustments
FFO                    79,392         291,525       886,441        1,265,108
Preferred
share                  (20,750  )     (17,788 )     (76,937  )     (65,531   )
dividends
Discount on
preferred              (2,752   )     -            8,948         5,000     
share and unit
redemptions
FFO
attributable           55,890         273,737       818,452        1,204,577
to common
shareholders
Interest on
3.88%
exchangeable           -              6,602         -              26,272
senior
debentures
Convertible
preferred              -             30           113           124       
share
dividends
FFO
attributable
to common            $ 55,890      $ 280,369    $ 818,565     $ 1,230,973 
shareholders
plus assumed
conversions
                                                                   

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 gain from sales of depreciated real estate assets, real estate impairment
losses, depreciation and amortization expense from real estate assets,
extraordinary items 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 page 1 and page 2 of this press
release.

Conference Call and Audio Webcast

As previously announced, the Company will host a quarterly earnings conference
call and audio webcast on February27,2013 at 10:00 a.m. Eastern Time (ET).
The conference call can be accessed by dialing 800-446-2782 (domestic) or
847-413-3235 (international) and indicating to the operator the passcode
34178055. A telephonic replay of the conference call will be available from
12:30 p.m. ET on February 27, 2013 through March 29, 2013. To access the
replay, please dial 888-843-7419 and enter the passcode 34178055#. 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.

Contact:

Vornado Realty Trust
Joseph Macnow, 201-587-1000
 
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