Quarter Ended
NET INCOME attributable to common shareholders for the quarter ended
FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended
Year Ended
NET INCOME attributable to common shareholders for the year ended
FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the year ended
The decreases in "net income attributable to common shareholders, as adjusted" and "FFO attributable to common shareholders plus assumed conversions, as adjusted" were partially due to (i)
The following table reconciles our net 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 | For the Year Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income attributable to common shareholders | $ | 193,217 | $ | 100,494 | $ | 3,097,806 | $ | 384,832 | |||||||
Per diluted share | $ | 1.01 | $ | 0.53 | $ | 16.21 | $ | 2.01 | |||||||
Certain (income) expense items that impact net income attributable to common shareholders: | |||||||||||||||
After-tax net gain on sale of | $ | (173,655 | ) | $ | (67,336 | ) | $ | (502,565 | ) | $ | (67,336 | ) | |||
Our share of loss from real estate fund investments | 26,600 | 24,366 | 48,808 | 23,749 | |||||||||||
Mark-to-market decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from | 2,438 | — | 21,649 | — | |||||||||||
Non-cash impairment losses and related write-offs (primarily | 565 | 12,000 | 109,157 | 12,000 | |||||||||||
After-tax purchase price fair value adjustment related to the increase in ownership of the Farley joint venture | — | (27,289 | ) | — | (27,289 | ) | |||||||||
Mark-to-market decrease (increase) in Lexington Realty Trust ("Lexington") common shares (sold on | — | 1,662 | (16,068 | ) | 26,596 | ||||||||||
Previously capitalized internal leasing costs(1) | — | (1,655 | ) | — | (5,538 | ) | |||||||||
Net gain on transfer to | — | — | (2,559,154 | ) | — | ||||||||||
Net gains on sale of real estate (primarily our 25% interest in | — | — | (178,769 | ) | (27,786 | ) | |||||||||
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on | — | — | (62,395 | ) | — | ||||||||||
Prepayment penalty in connection with redemption of | — | — | 22,540 | — | |||||||||||
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium | — | — | — | (134,032 | ) | ||||||||||
Our share of additional | — | — | — | 23,503 | |||||||||||
Preferred share issuance costs | — | — | — | 14,486 | |||||||||||
Other | (2,034 | ) | 3,825 | (2,892 | ) | 5,886 | |||||||||
(146,086 | ) | (54,427 | ) | (3,119,689 | ) | (155,761 | ) | ||||||||
Noncontrolling interests' share of above adjustments | 9,250 | 3,369 | 198,599 | 9,629 | |||||||||||
Total of certain (income) expense items that impact net income attributable to common shareholders | $ | (136,836 | ) | $ | (51,058 | ) | $ | (2,921,090 | ) | $ | (146,132 | ) | |||
Net income attributable to common shareholders, as adjusted (non-GAAP) | $ | 56,381 | $ | 49,436 | $ | 176,716 | $ | 238,700 | |||||||
Per diluted share (non-GAAP) | $ | 0.29 | $ | 0.26 | $ | 0.92 | $ | 1.25 |
____________________________________________________________
See notes on the following page.
The following table reconciles our FFO attributable to common shareholders plus assumed conversions (non-GAAP) to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP):
(Amounts in thousands, except per share amounts) | For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(2) | $ | 311,876 | $ | 210,100 | $ | 1,003,398 | $ | 729,740 | |||||||||||||||||||||||
Per diluted share (non-GAAP) | $ | 1.63 | $ | 1.10 | $ | 5.25 | $ | 3.82 | |||||||||||||||||||||||
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: | |||||||||||||||||||||||||||||||
After-tax net gain on sale of 220 CPS condominium units | $ | (173,655 | ) | $ | (67,336 | ) | $ | (502,565 | ) | $ | (67,336 | ) | |||||||||||||||||||
Our share of loss from real estate fund investments | 26,600 | 24,366 | 48,808 | 23,749 | |||||||||||||||||||||||||||
Previously capitalized internal leasing costs(1) | — | (1,655 | ) | — | (5,538 | ) | |||||||||||||||||||||||||
Non-cash impairment loss and related write-offs on | — | — | 77,156 | — | |||||||||||||||||||||||||||
Prepayment penalty in connection with redemption of | — | — | 22,540 | — | |||||||||||||||||||||||||||
Our share of additional | — | — | — | 23,503 | |||||||||||||||||||||||||||
Preferred share issuance costs | — | — | — | 14,486 | |||||||||||||||||||||||||||
Other | (3,187 | ) | 1,745 | (6,119 | ) | (6,109 | ) | ||||||||||||||||||||||||
(150,242 | ) | (42,880 | ) | (360,180 | ) | (17,245 | ) | ||||||||||||||||||||||||
Noncontrolling interests' share of above adjustments | 9,396 | 2,654 | 22,989 | 993 | |||||||||||||||||||||||||||
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net | $ | (140,846 | ) | $ | (40,226 | ) | $ | (337,191 | ) | $ | (16,252 | ) | |||||||||||||||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 171,030 | $ | 169,874 | $ | 666,207 | $ | 713,488 | |||||||||||||||||||||||
Per diluted share (non-GAAP) | $ | 0.89 | $ | 0.89 | $ | 3.49 | $ | 3.73 |
____________________________________________________________
- "Net income attributable to common shareholders, as adjusted" and "FFO attributable to common shareholders plus assumed conversions, as adjusted" for the three months and year ended
December 31, 2018 have been reduced by$1,655 and$5,538 , or$0.01 and$0.03 per diluted share, respectively for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of theJanuary 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized. - See page 12 for a reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three months and years ended
December 31, 2019 and 2018.
Dispositions:
220 CPS
During the three months ended
Lexington
On
UE
On
On
We retained the remaining 51.5% common interest in
Net cash proceeds from the Transaction were
We continue to manage and lease the Properties. We share control with the Investors over major decisions of the joint venture, including decisions regarding leasing, operating and capital budgets, and refinancings. Accordingly, we no longer hold a controlling financial interest in the Properties which has been transferred to the joint venture. As a result, our investment in
On
Dispositions - continued:
On
On
PREIT (Subsequent Event)
On
Financings:
Senior Unsecured Notes
On
Unsecured Revolving Credit
On
Other Financings
On
On
On
On
On
Financings - continued:
On
On
On
On
On
On
Other:
On
Leasing Activity For The Three Months Ended
- 173,000 square feet of
New York Office space (117,000 square feet at share) at an initial rent of$101.67 per square foot and a weighted average lease term of 6.6 years. The GAAP and cash mark-to-market rent on the 54,000 square feet of second generation space were negative 3.5% and 5.2%, respectively. Tenant improvements and leasing commissions were$13.53 per square foot per annum, or 13.3% of initial rent. - 94,000 square feet of New York Retail space (73,000 square feet at share) at an initial rent of
$233.55 per square foot and a weighted average lease term of 9.4 years. The GAAP and cash mark-to-market rent on the 52,000 square feet of second generation space were positive 0.3% and 11.3%, respectively. Tenant improvements and leasing commissions were$10.72 per square foot per annum, or 4.6% of initial rent. - 52,000 square feet at theMART at an initial rent of
$50.26 per square foot and a weighted average lease term of 5.0 years. The GAAP and cash mark-to-market rent on the 50,000 square feet of second generation space were positive 3.1% and negative 2.3%, respectively. Tenant improvements and leasing commissions were$5.38 per square foot per annum, or 10.7% of initial rent. - 30,000 square feet at
555 California Street (21,000 square feet at share) at an initial rent of$94.00 per square foot and a weighted average lease term of 5.0 years. The GAAP and cash mark-to-market rent on the 21,000 square feet of second generation space were positive 100.5% and 72.5%, respectively. Tenant improvements and leasing commissions were$7.28 per square foot per annum, or 7.7% of initial rent.
Leasing Activity For The Year Ended
- 987,000 square feet of
New York Office space (793,000 square feet at share) at an initial rent of$82.17 per square foot and a weighted average lease term of 7.7 years. The GAAP and cash mark-to-market rent on the 553,000 square feet of second generation space were positive 5.5% and 4.6%, respectively. Tenant improvements and leasing commissions were$10.89 per square foot per annum, or 13.3% of initial rent. - 238,000 square feet of New York Retail space (207,000 square feet at share) at an initial rent of
$175.35 per square foot and a weighted average lease term of 10.9 years. The GAAP and cash mark-to-market rent on the 171,000 square feet of second generation space were positive 12.9% and 9.8%, respectively. Tenant improvements and leasing commissions were$6.29 per square foot per annum, or 3.6% of initial rent. - 286,000 square feet at theMART at an initial rent of
$49.43 per square foot and a weighted average lease term of 6.1 years. The GAAP and cash mark-to-market rent on the 280,000 square feet of second generation space were positive 10.7% and 4.6%, respectively. Tenant improvements and leasing commissions were$5.55 per square foot per annum, or 11.2% of initial rent. - 172,000 square feet at
555 California Street (120,000 square feet at share) at an initial rent of$88.70 per square foot and a weighted average lease term of 6.1 years. The GAAP and cash mark-to-market rent on the 115,000 square feet of second generation space were positive 64.9% and 38.1%, respectively. Tenant improvements and leasing commissions were$8.84 per square foot per annum, or 10.0% of initial rent.
Same Store Net Operating Income ("NOI") At Share:
The percentage increase (decrease) in same store NOI at share and same store NOI at share - cash basis of our
Total | theMART | 555 California Street | |||||||||||||||
Same store NOI at share % increase (decrease)(1): | |||||||||||||||||
Three months ended | 7.1% | 2.6% | 114.3% | (3) | 3.3% | ||||||||||||
Year ended | 2.1% | 0.5% | 15.9% | (4) | 9.7% | ||||||||||||
Three months ended | 1.7% | 3.0% | (7.4)% | (4.8)% | |||||||||||||
Same store NOI at share - cash basis % increase (decrease)(1): | |||||||||||||||||
Three months ended | 6.6% | 1.7% | 100.0% | (3) | 4.1% | ||||||||||||
Year ended | 3.6% | 1.6% | 18.6% | (4) | 12.7% | ||||||||||||
Three months ended | 2.6% | 3.9% | (4.8)% | (5.4)% |
____________________
(1 | ) | See pages 14 through 19 for same store NOI at share and same store NOI at share - cash basis reconciliations. | |||||||
(2 | ) | Excluding Hotel Pennsylvania, same store NOI at share % increase: | |||||||
Three months ended | 2.6% | ||||||||
Year ended | 0.9% | ||||||||
Three months ended | 1.7% | ||||||||
Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase: | |||||||||
Three months ended | 1.8% | ||||||||
Year ended | 2.2% | ||||||||
Three months ended | 2.6% | ||||||||
(3 | ) | The three months ended | |||||||
(4 | ) | Primarily due to |
NOI At Share:
The elements of our
(Amounts in thousands) | For the Three Months Ended | For the Year Ended | |||||||||||||||||
2019 | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Office(1) | $ | 183,925 | $ | 186,832 | $ | 177,469 | $ | 724,526 | $ | 743,001 | |||||||||
Retail(1) | 59,728 | 85,549 | 68,159 | 273,217 | 353,425 | ||||||||||||||
Residential | 5,835 | 5,834 | 5,575 | 23,363 | 23,515 | ||||||||||||||
Alexander's Inc. ("Alexander's") | 10,626 | 11,023 | 11,269 | 44,325 | 45,133 | ||||||||||||||
6,170 | 5,961 | 3,012 | 7,397 | 11,916 | |||||||||||||||
Total | 266,284 | 295,199 | 265,484 | 1,072,828 | 1,176,990 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 22,712 | 10,981 | 24,862 | 102,071 | 90,929 | ||||||||||||||
14,533 | 14,005 | 15,265 | 59,657 | 54,691 | |||||||||||||||
Other investments | 2,037 | 9,346 | 1,919 | 25,221 | 60,010 | ||||||||||||||
Total Other | 39,282 | 34,332 | 42,046 | 186,949 | 205,630 | ||||||||||||||
NOI at share | $ | 305,566 | $ | 329,531 | $ | 307,530 | $ | 1,259,777 | $ | 1,382,620 |
____________________
(1) Reflects the transfer of 45.4% of common equity in the properties contributed to the
NOI At Share - Cash Basis:
The elements of our
(Amounts in thousands) | For the Three Months Ended | For the Year Ended | |||||||||||||||||
2019 | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Office(1) | $ | 180,762 | $ | 185,624 | $ | 174,796 | $ | 718,734 | $ | 726,108 | |||||||||
Retail(1) | 54,357 | 80,515 | 65,636 | 267,655 | 324,219 | ||||||||||||||
Residential | 5,763 | 5,656 | 5,057 | 21,894 | 22,076 | ||||||||||||||
Alexander's | 10,773 | 11,129 | 11,471 | 45,093 | 47,040 | ||||||||||||||
6,052 | 6,009 | 2,964 | 7,134 | 12,120 | |||||||||||||||
Total | 257,707 | 288,933 | 259,924 | 1,060,510 | 1,131,563 | ||||||||||||||
Other: | |||||||||||||||||||
theMART | 24,646 | 12,758 | 26,588 | 108,130 | 94,070 | ||||||||||||||
14,491 | 13,784 | 15,325 | 60,156 | 53,488 | |||||||||||||||
Other investments | 2,132 | 8,524 | 1,656 | 24,921 | 58,795 | ||||||||||||||
Total Other | 41,269 | 35,066 | 43,569 | 193,207 | 206,353 | ||||||||||||||
NOI at share - cash basis | $ | 298,976 | $ | 323,999 | $ | 303,493 | $ | 1,253,717 | $ | 1,337,916 |
____________________
(1) Reflects the transfer of 45.4% of common equity in the properties contributed to the
(Amounts in thousands of dollars, except square feet) | |||||||||||||||||||||||||
Property Rentable Sq. Ft. | Projected Incremental Cash Yield | ||||||||||||||||||||||||
Active Penn District Projects | Segment | Budget(1) | Amount Expended | Remainder to be Expended | Stabilization Year | ||||||||||||||||||||
Farley (95% interest) | 844,000 | 1,030,000 | (2) | 597,600 | 432,400 | 2022 | 7.4 | % | |||||||||||||||||
PENN2 - as expanded(3) | 1,795,000 | 750,000 | 40,820 | 709,180 | 2024 | 8.4 | % | ||||||||||||||||||
PENN1(4) | 2,545,000 | 325,000 | 69,006 | 255,994 | N/A | 13.5%(4)(5) | |||||||||||||||||||
Districtwide Improvements | N/A | 100,000 | 6,314 | 93,686 | N/A | N/A | |||||||||||||||||||
Total Active Penn District Projects | 2,205,000 | 713,740 | 1,491,260 | (6) | 8.3 | % |
________________________________
- Excluding debt and equity carry.
- Net of anticipated historic tax credits.
- PENN2 (including signage) estimated impact on cash basis NOI and FFO of square feet taken out of service:
2020 | 2021 | 2022 | ||||||||||
Square feet out of service at end of year | 1,140,000 | 1,190,000 | 1,200,000 | |||||||||
Year-over-year reduction in Cash Basis NOI(i) | (25,000 | ) | (14,000 | ) | — | |||||||
Year-over-year reduction in FFO(ii) | (19,000 | ) | — | — |
________________________________
(i) After capitalization of real estate taxes and operating expenses on space out of service.
(ii) Net of capitalized interest on space out of service under redevelopment.
- Property is ground leased through 2098, as fully extended. Fair market value resets occur in 2023, 2048 and 2073. The 13.5% projected return is before the ground rent reset in 2023, which may be material.
- Achieved as existing leases roll; average remaining lease term 5.1 years.
- Expected to be funded from our balance sheet, principally from 220 CPS net sales proceeds.
There can be no assurance that the above projects will be completed, completed on schedule or within budget. In addition, there can be no assurance that the Company will be successful in leasing the properties on the expected schedule or at the assumed rental rates.
Conference Call and Audio Webcast
As previously announced, the Company will host a quarterly earnings conference call and an audio webcast on
Contact
(212) 894-7000
Supplemental Financial Information
Further details regarding results of operations, properties and tenants can be accessed at the Company’s website www.vno.com.
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
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except unit, share, and per share amounts) | As of | ||||||
ASSETS | |||||||
Real estate, at cost: | |||||||
Land | $ | 2,591,261 | $ | 3,306,280 | |||
Buildings and improvements | 7,953,163 | 10,110,992 | |||||
Development costs and construction in progress | 1,490,614 | 2,266,491 | |||||
914,960 | 445,693 | ||||||
Leasehold improvements and equipment | 124,014 | 108,427 | |||||
Total | 13,074,012 | 16,237,883 | |||||
Less accumulated depreciation and amortization | (3,015,958 | ) | (3,180,175 | ) | |||
Real estate, net | 10,058,054 | 13,057,708 | |||||
Right-of-use assets | 379,546 | — | |||||
Cash and cash equivalents | 1,515,012 | 570,916 | |||||
Restricted cash | 92,119 | 145,989 | |||||
Marketable securities | 33,313 | 152,198 | |||||
Tenant and other receivables | 95,733 | 73,322 | |||||
Investments in partially owned entities | 3,999,165 | 858,113 | |||||
Real estate fund investments | 222,649 | 318,758 | |||||
408,918 | 99,627 | ||||||
Receivable arising from the straight-lining of rents | 742,206 | 935,131 | |||||
Deferred leasing costs, net of accumulated amortization of | 353,986 | 400,313 | |||||
Identified intangible assets, net of accumulated amortization of | 30,965 | 136,781 | |||||
Other assets | 355,347 | 431,938 | |||||
$ | 18,287,013 | $ | 17,180,794 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||
Mortgages payable, net | $ | 5,639,897 | $ | 8,167,798 | |||
Senior unsecured notes, net | 445,872 | 844,002 | |||||
Unsecured term loan, net | 745,840 | 744,821 | |||||
Unsecured revolving credit facilities | 575,000 | 80,000 | |||||
Lease liabilities | 498,254 | — | |||||
914,960 | 445,693 | ||||||
Special dividend/distribution payable on | 398,292 | — | |||||
Accounts payable and accrued expenses | 440,049 | 430,976 | |||||
Deferred revenue | 59,429 | 167,730 | |||||
Deferred compensation plan | 103,773 | 96,523 | |||||
Other liabilities | 265,754 | 311,806 | |||||
Total liabilities | 10,087,120 | 11,289,349 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests: | |||||||
Class A units - 13,298,956 and 12,544,477 units outstanding | 884,380 | 778,134 | |||||
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding | 4,535 | 5,428 | |||||
Total redeemable noncontrolling interests | 888,915 | 783,562 | |||||
Shareholders' equity: | |||||||
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,795,640 and 36,798,580 shares | 891,214 | 891,294 | |||||
Common shares of beneficial interest: | 7,618 | 7,600 | |||||
Additional capital | 7,827,697 | 7,725,857 | |||||
Earnings less than distributions | (1,954,266 | ) | (4,167,184 | ) | |||
Accumulated other comprehensive (loss) income | (40,233 | ) | 7,664 | ||||
Total shareholders' equity | 6,732,030 | 4,465,231 | |||||
Noncontrolling interests in consolidated subsidiaries | 578,948 | 642,652 | |||||
Total equity | 7,310,978 | 5,107,883 | |||||
$ | 18,287,013 | $ | 17,180,794 |
OPERATING RESULTS
(Amounts in thousands, except per share amounts) | For the Three Months Ended | For the Year Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | $ | 460,968 | $ | 543,417 | $ | 1,924,700 | $ | 2,163,720 | |||||||
Income from continuing operations | $ | 160,621 | $ | 97,564 | $ | 3,334,292 | $ | 421,965 | |||||||
Income (loss) from discontinued operations | 55 | 257 | (30 | ) | 638 | ||||||||||
Net income | 160,676 | 97,821 | 3,334,262 | 422,603 | |||||||||||
Less net loss (income) attributable to noncontrolling interests in: | |||||||||||||||
Consolidated subsidiaries | 58,592 | 21,886 | 24,547 | 53,023 | |||||||||||
Operating Partnership | (13,518 | ) | (6,680 | ) | (210,872 | ) | (25,672 | ) | |||||||
Net income attributable to Vornado | 205,750 | 113,027 | 3,147,937 | 449,954 | |||||||||||
Preferred share dividends | (12,533 | ) | (12,533 | ) | (50,131 | ) | (50,636 | ) | |||||||
Preferred share issuance costs | — | — | — | (14,486 | ) | ||||||||||
Net income attributable to common shareholders | $ | 193,217 | $ | 100,494 | $ | 3,097,806 | $ | 384,832 | |||||||
Income per common share - basic: | |||||||||||||||
Net income per common share | $ | 1.01 | $ | 0.53 | $ | 16.23 | $ | 2.02 | |||||||
Weighted average shares outstanding | 190,916 | 190,348 | 190,801 | 190,219 | |||||||||||
Income per common share - diluted: | |||||||||||||||
Net income per common share | $ | 1.01 | $ | 0.53 | $ | 16.21 | $ | 2.01 | |||||||
Weighted average shares outstanding | 191,140 | 191,199 | 191,053 | 191,290 | |||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 311,876 | $ | 210,100 | $ | 1,003,398 | $ | 729,740 | |||||||
Per diluted share (non-GAAP) | $ | 1.63 | $ | 1.1 | $ | 5.25 | $ | 3.82 | |||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 171,030 | $ | 169,874 | $ | 666,207 | $ | 713,488 | |||||||
Per diluted share (non-GAAP) | $ | 0.89 | $ | 0.89 | $ | 3.49 | $ | 3.73 | |||||||
Weighted average shares used in determining FFO attributable to common shareholders plus assumed conversions per diluted share | 191,140 | 191,199 | 191,051 | 191,189 |
NON-GAAP RECONCILIATIONS
The following table reconciles net 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 | For the Year Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions: | |||||||||||||||
Net income attributable to common shareholders | $ | 193,217 | $ | 100,494 | $ | 3,097,806 | $ | 384,832 | |||||||
Per diluted share | $ | 1.01 | $ | 0.53 | $ | 16.21 | $ | 2.01 | |||||||
FFO adjustments: | |||||||||||||||
Depreciation and amortization of real property | $ | 85,609 | $ | 104,067 | $ | 389,024 | $ | 413,091 | |||||||
Net losses (gains) on sale of real estate | 58 | — | (178,711 | ) | (158,138 | ) | |||||||||
Real estate impairment losses | 565 | 12,000 | 32,001 | 12,000 | |||||||||||
Net gain on transfer to | — | — | (2,559,154 | ) | — | ||||||||||
Net gain from sale of UE common shares (sold on | — | — | (62,395 | ) | — | ||||||||||
Decrease (increase) in fair value of marketable securities: | |||||||||||||||
PREIT | 2,438 | — | 21,649 | — | |||||||||||
Lexington (sold on | — | 1,662 | (16,068 | ) | 26,596 | ||||||||||
Other | — | (10 | ) | (48 | ) | (143 | ) | ||||||||
After-tax purchase price fair value adjustment on depreciable real estate | — | (27,289 | ) | — | (27,289 | ) | |||||||||
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO: | |||||||||||||||
Depreciation and amortization of real property | 37,389 | 24,309 | 134,706 | 101,591 | |||||||||||
Net gains on sale of real estate | — | — | — | (3,998 | ) | ||||||||||
Decrease in fair value of marketable securities | 864 | 2,081 | 2,852 | 3,882 | |||||||||||
126,923 | 116,820 | (2,236,144 | ) | 367,592 | |||||||||||
Noncontrolling interests' share of above adjustments | (8,278 | ) | (7,229 | ) | 141,679 | (22,746 | ) | ||||||||
FFO adjustments, net | $ | 118,645 | $ | 109,591 | $ | (2,094,465 | ) | $ | 344,846 | ||||||
FFO attributable to common shareholders | 311,862 | 210,085 | 1,003,341 | 729,678 | |||||||||||
Convertible preferred share dividends | 14 | 15 | 57 | 62 | |||||||||||
FFO attributable to common shareholders plus assumed conversions | $ | 311,876 | $ | 210,100 | $ | 1,003,398 | $ | 729,740 | |||||||
Per diluted share | $ | 1.63 | $ | 1.1 | $ | 5.25 | $ | 3.82 | |||||||
Reconciliation of weighted average shares outstanding used in determining FFO attributable to common shareholders plus assumed conversions per diluted share: | |||||||||||||||
Weighted average common shares outstanding | 190,916 | 190,348 | 190,801 | 190,219 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock options and restricted share awards | 191 | 814 | 216 | 933 | |||||||||||
Convertible preferred shares | 33 | 37 | 34 | 37 | |||||||||||
Denominator for FFO attributable to common shareholders plus assumed conversions per diluted share | 191,140 | 191,199 | 191,051 | 191,189 |
FFO is computed in accordance with the definition adopted by the
NON-GAAP RECONCILIATIONS - CONTINUED
Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the three months and year ended
For the Three Months Ended | For the Year Ended | ||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
2019 | 2018 | 2019 | 2019 | 2018 | |||||||||||||||
Net income | $ | 160,676 | $ | 97,821 | $ | 363,849 | $ | 3,334,262 | $ | 422,603 | |||||||||
Depreciation and amortization expense | 92,926 | 112,869 | 96,437 | 419,107 | 446,570 | ||||||||||||||
General and administrative expense | 39,791 | 32,934 | 33,237 | 169,920 | 141,871 | ||||||||||||||
Transaction related costs, impairment losses and other | 3,223 | 14,637 | 1,576 | 106,538 | 31,320 | ||||||||||||||
Income from partially owned entities | (22,726 | ) | (3,090 | ) | (25,946 | ) | (78,865 | ) | (9,149 | ) | |||||||||
Loss (income) from real estate fund investments | 90,302 | 51,258 | (2,190 | ) | 104,082 | 89,231 | |||||||||||||
Interest and other investment income, net | (5,889 | ) | (7,656 | ) | (3,045 | ) | (21,819 | ) | (17,057 | ) | |||||||||
Interest and debt expense | 59,683 | 83,175 | 61,448 | 286,623 | 347,949 | ||||||||||||||
Net gain on transfer to | — | — | — | (2,571,099 | ) | — | |||||||||||||
Purchase price fair value adjustment | — | (44,060 | ) | — | — | (44,060 | ) | ||||||||||||
Net gains on disposition of wholly owned and partially owned assets | (203,835 | ) | (81,203 | ) | (309,657 | ) | (845,499 | ) | (246,031 | ) | |||||||||
Income tax expense | 22,897 | 32,669 | 23,885 | 103,439 | 37,633 | ||||||||||||||
(Income) loss from discontinued operations | (55 | ) | (257 | ) | 8 | 30 | (638 | ) | |||||||||||
NOI from partially owned entities | 85,990 | 60,205 | 86,024 | 322,390 | 253,564 | ||||||||||||||
NOI attributable to noncontrolling interests in consolidated subsidiaries | (17,417 | ) | (19,771 | ) | (18,096 | ) | (69,332 | ) | (71,186 | ) | |||||||||
NOI at share | 305,566 | 329,531 | 307,530 | 1,259,777 | 1,382,620 | ||||||||||||||
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | (6,590 | ) | (5,532 | ) | (4,037 | ) | (6,060 | ) | (44,704 | ) | |||||||||
NOI at share - cash basis | $ | 298,976 | $ | 323,999 | $ | 303,493 | $ | 1,253,717 | $ | 1,337,916 |
NOI at share represents total revenues less operating expenses including our share of partially owned entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We consider NOI at share - cash basis 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 at share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share to same store NOI at share for our
(Amounts in thousands) | Total | theMART | 555 California Street | Other | ||||||||||||||||
NOI at share for the three months ended | $ | 305,566 | $ | 266,284 | $ | 22,712 | $ | 14,533 | $ | 2,037 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Acquisitions | (122 | ) | (122 | ) | — | — | — | |||||||||||||
Dispositions | (62 | ) | (62 | ) | — | — | — | |||||||||||||
Development properties | (16,082 | ) | (16,082 | ) | — | — | — | |||||||||||||
Other non-same store (income) expense, net | (8,164 | ) | (5,969 | ) | (172 | ) | 14 | (2,037 | ) | |||||||||||
Same store NOI at share for the three months ended | $ | 281,136 | $ | 244,049 | $ | 22,540 | $ | 14,547 | $ | — | ||||||||||
NOI at share for the three months ended | $ | 329,531 | $ | 295,199 | $ | 10,981 | $ | 14,005 | $ | 9,346 | ||||||||||
Less NOI at share from: | ||||||||||||||||||||
Change in ownership interests in properties contributed to | (28,683 | ) | (28,683 | ) | — | — | — | |||||||||||||
Dispositions | (3,614 | ) | (3,614 | ) | — | — | — | |||||||||||||
Development properties | (21,797 | ) | (21,811 | ) | — | 14 | — | |||||||||||||
Other non-same store (income) expense, net | (13,041 | ) | (3,291 | ) | (463 | ) | 59 | (9,346 | ) | |||||||||||
Same store NOI at share for the three months ended | $ | 262,396 | $ | 237,800 | $ | 10,518 | $ | 14,078 | $ | — | ||||||||||
Increase in same store NOI at share for the three months ended | $ | 18,740 | $ | 6,249 | $ | 12,022 | $ | 469 | $ | — | ||||||||||
% increase in same store NOI at share | 7.1 | % | 2.6 | % | (1) | 114.3 | % | (2) | 3.3 | % | — | % |
____________________
- Excluding Hotel Pennsylvania, same store NOI remained unchanged.
- The three months ended
December 31, 2018 includes an additional$12,814 real estate tax expense accrual due to an increase in the tax-assessed value of theMART.
Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. 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 at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our
(Amounts in thousands) | Total | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended | $ | 298,976 | $ | 257,707 | $ | 24,646 | $ | 14,491 | $ | 2,132 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (54 | ) | (54 | ) | — | — | — | ||||||||||||
Dispositions | (66 | ) | (66 | ) | — | — | — | ||||||||||||
Development properties | (16,948 | ) | (16,948 | ) | — | — | — | ||||||||||||
Other non-same store income, net | (9,736 | ) | (7,373 | ) | (172 | ) | (59 | ) | (2,132 | ) | |||||||||
Same store NOI at share - cash basis for the three months ended | $ | 272,172 | $ | 233,266 | $ | 24,474 | $ | 14,432 | $ | — | |||||||||
NOI at share - cash basis for the three months ended | $ | 323,999 | $ | 288,933 | $ | 12,758 | $ | 13,784 | $ | 8,524 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Change in ownership interests in properties contributed to | (27,243 | ) | (27,243 | ) | — | — | — | ||||||||||||
Dispositions | (3,870 | ) | (3,870 | ) | — | — | — | ||||||||||||
Development properties | (24,090 | ) | (24,104 | ) | — | 14 | — | ||||||||||||
Other non-same store (income) expense, net | (13,400 | ) | (4,416 | ) | (520 | ) | 60 | (8,524 | ) | ||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 255,396 | $ | 229,300 | $ | 12,238 | $ | 13,858 | $ | — | |||||||||
Increase in same store NOI at share - cash basis for the three months ended | $ | 16,776 | $ | 3,966 | $ | 12,236 | $ | 574 | $ | — | |||||||||
% increase in same store NOI at share - cash basis | 6.6 | % | 1.7 | % | (1) | 100 | % | (2) | 4.1 | % | — | % |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 1.8%.
- The three months ended
December 31, 2018 includes an additional$12,814 real estate tax expense accrual due to an increase in the tax-assessed value of theMART.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share to same store NOI at share for our
(Amounts in thousands) | Total | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the three months ended | $ | 305,566 | $ | 266,284 | $ | 22,712 | $ | 14,533 | $ | 2,037 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (118 | ) | (118 | ) | — | — | — | ||||||||||||
Dispositions | (62 | ) | (62 | ) | — | — | — | ||||||||||||
Development properties | (16,087 | ) | (16,087 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (8,103 | ) | (5,968 | ) | (172 | ) | 74 | (2,037 | ) | ||||||||||
Same store NOI at share for the three months ended | $ | 281,196 | $ | 244,049 | $ | 22,540 | $ | 14,607 | $ | — | |||||||||
NOI at share for the three months ended | $ | 307,530 | $ | 265,484 | $ | 24,862 | $ | 15,265 | $ | 1,919 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Dispositions | (262 | ) | (262 | ) | — | — | — | ||||||||||||
Development properties | (19,429 | ) | (19,429 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (11,254 | ) | (8,877 | ) | (532 | ) | 74 | (1,919 | ) | ||||||||||
Same store NOI at share for the three months ended | $ | 276,585 | $ | 236,916 | $ | 24,330 | $ | 15,339 | $ | — | |||||||||
Increase (decrease) in same store NOI at share for the three months ended | $ | 4,611 | $ | 7,133 | $ | (1,790 | ) | $ | (732 | ) | $ | — | |||||||
% increase (decrease) in same store NOI at share | 1.7 | % | 3 | % | (1) | (7.4 | )% | (4.8 | )% | — | % |
____________________
(1) Excluding Hotel Pennsylvania, same store NOI at share increased by 1.7%.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our
(Amounts in thousands) | Total | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the three months ended | $ | 298,976 | $ | 257,707 | $ | 24,646 | $ | 14,491 | $ | 2,132 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (49 | ) | (49 | ) | — | — | — | ||||||||||||
Dispositions | (66 | ) | (66 | ) | — | — | — | ||||||||||||
Development properties | (16,952 | ) | (16,952 | ) | — | — | — | ||||||||||||
Other non-same store income, net | (9,678 | ) | (7,374 | ) | (172 | ) | — | (2,132 | ) | ||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 272,231 | $ | 233,266 | $ | 24,474 | $ | 14,491 | $ | — | |||||||||
NOI at share - cash basis for the three months ended | $ | 303,493 | $ | 259,924 | $ | 26,588 | $ | 15,325 | $ | 1,656 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Dispositions | (693 | ) | (693 | ) | — | — | — | ||||||||||||
Development properties | (24,641 | ) | (24,641 | ) | — | — | — | ||||||||||||
Other non-same store income, net | (12,701 | ) | (10,174 | ) | (871 | ) | — | (1,656 | ) | ||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 265,458 | $ | 224,416 | $ | 25,717 | $ | 15,325 | $ | — | |||||||||
Increase (decrease) in same store NOI at share - cash basis for the three months ended | $ | 6,773 | $ | 8,850 | $ | (1,243 | ) | $ | (834 | ) | $ | — | |||||||
% increase (decrease) in same store NOI at share - cash basis | 2.6 | % | 3.9 | % | (1) | (4.8 | )% | (5.4 | )% | — | % |
____________________
(1) Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.6%.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share to same store NOI at share for our
(Amounts in thousands) | Total | theMART | 555 California Street | Other | |||||||||||||||
NOI at share for the year ended | $ | 1,259,777 | $ | 1,072,828 | $ | 102,071 | $ | 59,657 | $ | 25,221 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (334 | ) | (334 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to | (5,479 | ) | (5,479 | ) | — | — | — | ||||||||||||
Dispositions | (7,420 | ) | (7,420 | ) | — | — | — | ||||||||||||
Development properties | (54,099 | ) | (54,099 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (33,028 | ) | (5,585 | ) | (2,635 | ) | 413 | (25,221 | ) | ||||||||||
Same store NOI at share for the year ended | $ | 1,159,417 | $ | 999,911 | $ | 99,436 | $ | 60,070 | $ | — | |||||||||
NOI at share for the year ended | $ | 1,382,620 | $ | 1,176,990 | $ | 90,929 | $ | 54,691 | $ | 60,010 | |||||||||
Less NOI at share from: | |||||||||||||||||||
Acquisitions | (121 | ) | (121 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to | (84,020 | ) | (84,020 | ) | — | — | — | ||||||||||||
Dispositions | (14,949 | ) | (14,949 | ) | — | — | — | ||||||||||||
Development properties | (74,720 | ) | (74,720 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (72,930 | ) | (7,825 | ) | (5,155 | ) | 60 | (60,010 | ) | ||||||||||
Same store NOI at share for the year ended | $ | 1,135,880 | $ | 995,355 | $ | 85,774 | $ | 54,751 | $ | — | |||||||||
Increase in same store NOI at share for the year ended | $ | 23,537 | $ | 4,556 | $ | 13,662 | $ | 5,319 | $ | — | |||||||||
% increase in same store NOI at share | 2.1 | % | 0.5 | % | (1) | 15.9 | % | (2) | 9.7 | % | — | % |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share increased by 0.9%.
- Primarily due to
$11,131 of tenant reimbursement revenue received in 2019 related to real estate tax expense accrued in 2018.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our
(Amounts in thousands) | Total | theMART | 555 California Street | Other | |||||||||||||||
NOI at share - cash basis for the year ended | $ | 1,253,717 | $ | 1,060,510 | $ | 108,130 | $ | 60,156 | $ | 24,921 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (266 | ) | (266 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to | (5,183 | ) | (5,183 | ) | — | — | — | ||||||||||||
Dispositions | (8,219 | ) | (8,219 | ) | — | — | — | ||||||||||||
Development properties | (64,359 | ) | (64,359 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (52,594 | ) | (24,892 | ) | (2,973 | ) | 192 | (24,921 | ) | ||||||||||
Same store NOI at share - cash basis for the year ended | $ | 1,123,096 | $ | 957,591 | $ | 105,157 | $ | 60,348 | $ | — | |||||||||
NOI at share - cash basis for the year ended | $ | 1,337,916 | $ | 1,131,563 | $ | 94,070 | $ | 53,488 | $ | 58,795 | |||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||
Acquisitions | (121 | ) | (121 | ) | — | — | — | ||||||||||||
Change in ownership interests in properties contributed to | (79,427 | ) | (79,427 | ) | — | — | — | ||||||||||||
Dispositions | (14,764 | ) | (14,764 | ) | — | — | — | ||||||||||||
Development properties | (81,137 | ) | (81,137 | ) | — | — | — | ||||||||||||
Other non-same store (income) expense, net | (78,119 | ) | (14,011 | ) | (5,373 | ) | 60 | (58,795 | ) | ||||||||||
Same store NOI at share - cash basis for the year ended | $ | 1,084,348 | $ | 942,103 | $ | 88,697 | $ | 53,548 | $ | — | |||||||||
Increase in same store NOI at share - cash basis for the year ended | $ | 38,748 | $ | 15,488 | $ | 16,460 | $ | 6,800 | $ | — | |||||||||
% increase in same store NOI at share - cash basis | 3.6 | % | 1.6 | % | (1) | 18.6 | % | (2) | 12.7 | % | — | % |
____________________
- Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.2%.
- Primarily due to
$11,131 of tenant reimbursement revenue received in 2019 related to real estate tax expense accrued in 2018.
Source:
2020 GlobeNewswire, Inc., source