Vornado Announces Third Quarter 2009 FFO of $1.25 Per Share

PARAMUS, N.J., Nov 03, 2009 (BUSINESS WIRE) -- VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported: Third Quarter 2009 Results NET INCOME attributable to common shareholders for the quarter ended September 30, 2009 was $126.3 million, or $0.69 per diluted share, versus $22.7 million, or $0.14 per diluted share, for the quarter ended September 30, 2008. Net income for the quarters ended September 30, 2009 and 2008 includes $43.3 million and $1.3 million, respectively, of net gains on sale of real estate. In addition, net income for the quarters ended September 30, 2009 and 2008 includes certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the quarter ended September 30, 2009 by $52.8 million, or $0.29 per diluted share and decreased net income attributable to common shareholders for the quarter ended September 30, 2008 by $32.3 million, or $0.20 per diluted share.

FUNDS FROM OPERATIONS attributable to common shareholders plus assumed conversions ("FFO") for the quarter ended September 30, 2009 was $234.2 million, or $1.25 per diluted share, compared to $159.8 million, or $0.97 per diluted share, for the quarter ended September 30, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarters ended September 30, 2009 and 2008 was $221.4 million and $193.3 million, or $1.18 and $1.17 per diluted share, respectively.

For the Three Months Ended September 30, (Amounts in thousands, except per share amounts) 2009 2008 FFO attributable to common shareholders plus assumed conversions $ 234,246 $ 159,838 (1) Per Share $ 1.25 $ 0.97 Items that affect comparability (income) expense: Our share of partially owned entities' adjustments: Lexington Realty Trust - impairment losses related to its $ 14,541 $ 7,175 investment in Concord Debt Holdings LLC Toys "R" Us - litigation settlement income (10,200 ) - Alexander's: Income tax benefit (13,668 ) - Stock appreciation rights - 14,557 Net gains on early extinguishment of debt (3,407 ) - Marketable equity securities - impairment losses - 11,808 Derivative positions in marketable equity securities - 3,982 Other, net (1,172 ) (721 ) (13,906 ) 36,801 Noncontrolling interests' share of above adjustments 1,036 (3,347 ) Items that affect comparability, net $ (12,870 ) $ 33,454 Per share $ (0.07 ) $ 0.20 FFO as adjusted for comparability $ 221,376 $ 193,292 Per share $ 1.18 $ 1.17 (1) See page 4 for a reconciliation of our net income to FFO for the quarters ended September 30, 2009 and 2008.

Nine Months Ended September 30, 2009 Results NET INCOME attributable to common shareholders for the nine months ended September 30, 2009 was $200.3 million, or $1.16 per diluted share, versus $529.2 million, or $3.22 per diluted share, for the nine months ended September 30, 2008. Net income for the nine months ended September 30, 2009 and 2008 includes $44.0 million, and $65.9 million, respectively, of net gains on sale of real estate. In addition, net income for the nine months ended September 30, 2009 and 2008 includes certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, decreased net income attributable to common shareholders for the nine months ended September 30, 2009 by $55.4 million, or $0.32 per diluted share and increased net income attributable to common shareholders for the nine months ended September 30, 2008 by $274.8 million, or $1.67 per diluted share.

FFO for the nine months ended September 30, 2009 was $602.8 million, or $3.37 per diluted share, compared to $894.8 million, or $5.27 per diluted share, for the nine months ended September 30, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the nine months ended September 30, 2009 and 2008 was $698.9 million and $672.6 million, or $3.90 and $3.96 per diluted share, respectively.

For the Nine Months Ended September 30, (Amounts in thousands, except per share amounts) 2009 2008 FFO attributable to common shareholders plus assumed conversions $ 602,825 $ 894,829 (1) Per Share $ 3.37 $ 5.27 Items that affect comparability (income) expense: Mezzanine loans receivable loss accrual (reversal) $ 122,738 $ (10,300 ) Write-off of unamortized costs from the voluntary surrender of 32,588 - equity awards Net gains on early extinguishment of debt (26,996 ) - Our share of partially owned entities' adjustments: Lexington Realty Trust - impairment losses related to its 19,121 7,175 investment in Concord Debt Holdings LLC Toys "R" Us: Non-cash purchase price accounting adjustments (13,946 ) 14,900 Litigation settlement income (10,200 ) - Alexander's: Stock appreciation rights (11,105 ) 7,605 Income tax benefit (13,668 ) - Filene's, Boston - lease termination payment 7,650 - Development joint ventures - non-cash asset write-downs - 34,200 Reversal of deferred income taxes initially recorded in connection - (222,174 ) with H Street acquisition Net gain on sale of our 47.6% interest in Americold Realty Trust - (112,690 ) Derivative positions in marketable equity securities - 25,812 Marketable equity securities - impairment losses - 20,881 Other, net (1,791 ) (3,341 ) 104,391 (237,932 ) Americold's FFO - sold on March 31, 2008 - (6,098 ) 104,391 (244,030 ) Noncontrolling interests' share of above adjustments (8,314 ) 21,829 Items that affect comparability, net $ 96,077 $ (222,201 ) Per share $ 0.53 $ (1.31 ) FFO as adjusted for comparability $ 698,902 $ 672,628 Per share $ 3.90 $ 3.96 (1) See page 4 for a reconciliation of our net income to FFO for the nine months ended September 30, 2009 and 2008.

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, 2008. 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 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 ForTheThreeMonths For The Nine Months EndedSeptember30, Ended September 30, (Amounts in thousands, except per share amounts) 2009 2008 2009 2008 Revenues $ 671,219 $ 676,068 $ 2,023,575 $ 1,997,533 Income from continuing operations $ 112,523 $ 42,701 $ 222,624 $ 466,298 Income from discontinued operations 43,321 846 49,276 172,814 Net income 155,844 43,547 271,900 639,112 Net income attributable to noncontrolling interests, including (15,227 ) (6,540 ) (28,808 ) (67,135 ) unit distributions Net income attributable to Vornado 140,617 37,007 243,092 571,977 Preferred share dividends (14,269 ) (14,271 ) (42,807 ) (42,820 ) Net income attributable to common shareholders $ 126,348 $ 22,736 $ 200,285 $ 529,157 Net income per common share: Basic $ 0.70 $ 0.14 $ 1.17 $ 3.32 Diluted $ 0.69 $ 0.14 $ 1.16 $ 3.22 Weighted average number of common shares and share equivalents outstanding: Basic 179,422 159,761 171,620 159,405 Diluted 181,710 164,424 173,178 164,099 FFO attributable to common shareholders plus assumed conversions $ 234,246 $ 159,838 $ 602,825 $ 894,829 FFO per diluted share $ 1.25 $ 0.97 $ 3.37 $ 5.27 Weighted average number of common shares and share equivalents 187,474 164,505 179,018 169,863 outstanding used in determining FFO per diluted share The following table reconciles our net income to FFO: ForTheThreeMonths For The Nine Months EndedSeptember30, Ended September 30, (Amounts in thousands) 2009 2008 2009 2008 Net income attributable to Vornado $ 140,617 $ 37,007 $ 243,092 $ 571,977 Depreciation and amortization of real property 122,760 127,975 375,549 380,062 Net gains on sale of real estate (42,653 ) (112 ) (42,653 ) (57,523 ) Proportionate share of adjustments to equity in net income of partially owned entities, excluding Toys, to arrive at FFO: Depreciation and amortization of real property 18,552 12,524 52,508 35,778 Net gains on sale of real estate (512 ) (1,037 ) (1,185 ) (8,231 ) Proportionate share of adjustments equity in net income of Toys to arrive at FFO: Depreciation and amortization of real property 17,685 17,892 49,831 50,902 Net gains on sale of real estate (164 ) (164 ) (164 ) (164 ) Income tax effect of above adjustments (6,133 ) (6,205 ) (17,384 ) (17,981 ) Noncontrolling interests' share of above adjustments (8,146 ) (13,816 ) (33,358 ) (36,232 ) FFO 242,006 174,064 626,236 918,588 Preferred share dividends (14,269 ) (14,271 ) (42,807 ) (42,820 ) FFO attributable to common shareholders 227,737 159,793 583,429 875,768 Interest on 3.875% exchangeable senior debentures 6,466 - 19,268 18,916 Series A convertible preferred share dividends 43 45 128 145 FFO attributable to common shareholders plus assumed conversions $ 234,246 $ 159,838 $ 602,825 $ 894,829 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 and GAAP extraordinary items, and to include 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 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 pages 1 and 2 of this press release.

SOURCE: Vornado Realty Trust CONTACT: Vornado Realty Trust Joseph Macnow, 201-587-1000 Copyright Business Wire 2009 -0- KEYWORD: United States

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Residential Building & Real Estate SUBJECT CODE: Earnings