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
Nine Months Ended
NET LOSS attributable to common shareholders for the nine months ended
FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the nine months ended
The following table reconciles our net income (loss) attributable to common shareholders to net (loss) income attributable to common shareholders, as adjusted (non-GAAP):
(Amounts in thousands, except per share amounts) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 53,170 | $ | 322,906 | $ | (139,617 | ) | $ | 2,904,589 | ||||||||||
Per diluted share | $ | 0.28 | $ | 1.69 | $ | (0.73 | ) | $ | 15.20 | ||||||||||
Certain (income) expense items that impact net income (loss) attributable to common shareholders: | |||||||||||||||||||
After-tax net gain on sale of | $ | (186,909 | ) | $ | (109,035 | ) | $ | (295,825 | ) | $ | (328,910 | ) | |||||||
Non-cash impairment loss on our investment in | 103,201 | — | 409,060 | — | |||||||||||||||
Severance accrual related to | 6,101 | — | 6,101 | — | |||||||||||||||
Our share of loss (income) from real estate fund investments | 2,524 | (1,455 | ) | 64,771 | 22,207 | ||||||||||||||
Net gains on sale of real estate (primarily our 25% interest in | — | (178,769 | ) | — | (178,769 | ) | |||||||||||||
Mark-to-market decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from | — | 4,875 | 4,938 | 19,211 | |||||||||||||||
— | — | (70,260 | ) | 101,092 | |||||||||||||||
Credit losses on loans receivable resulting from a new GAAP accounting standard effective | — | — | 13,369 | — | |||||||||||||||
Net gain on transfer to | — | — | — | (2,559,154 | ) | ||||||||||||||
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on | — | — | — | (62,395 | ) | ||||||||||||||
Prepayment penalty in connection with redemption of | — | — | — | 22,540 | |||||||||||||||
Mark-to-market increase in Lexington Realty Trust ("Lexington") common shares (sold on | — | — | — | (16,068 | ) | ||||||||||||||
Real estate impairment losses | — | — | — | 7,500 | |||||||||||||||
Other | 766 | (4,811 | ) | 10,681 | (857 | ) | |||||||||||||
(74,317 | ) | (289,195 | ) | 142,835 | (2,973,603 | ) | |||||||||||||
Noncontrolling interests' share of above adjustments | 4,534 | 18,913 | (9,741 | ) | 189,386 | ||||||||||||||
Total of certain (income) expense items that impact net income (loss) attributable to common shareholders | $ | (69,783 | ) | $ | (270,282 | ) | $ | 133,094 | $ | (2,784,217 | ) | ||||||||
Net (loss) income attributable to common shareholders, as adjusted (non-GAAP) | $ | (16,613 | ) | $ | 52,624 | $ | (6,523 | ) | $ | 120,372 | |||||||||
Per diluted share (non-GAAP) | $ | (0.09 | ) | $ | 0.28 | $ | (0.03 | ) | $ | 0.63 |
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 Nine Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(1) | $ | 278,507 | $ | 279,509 | $ | 612,123 | $ | 691,522 | |||||||||||
Per diluted share (non-GAAP) | $ | 1.46 | $ | 1.46 | $ | 3.20 | $ | 3.62 | |||||||||||
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 | $ | (186,909 | ) | $ | (109,035 | ) | $ | (295,825 | ) | $ | (328,910 | ) | |||||||
Severance accrual related to | 6,101 | — | 6,101 | — | |||||||||||||||
Our share of loss (income) from real estate fund investments | 2,524 | (1,455 | ) | 64,771 | 22,207 | ||||||||||||||
— | — | (70,260 | ) | 77,156 | |||||||||||||||
Credit losses on loans receivable resulting from a new GAAP accounting standard effective | — | — | 13,369 | — | |||||||||||||||
Prepayment penalty in connection with redemption of | — | — | — | 22,540 | |||||||||||||||
Other | 381 | (5,229 | ) | 7,045 | (2,931 | ) | |||||||||||||
(177,903 | ) | (115,719 | ) | (274,799 | ) | (209,938 | ) | ||||||||||||
Noncontrolling interests' share of above adjustments | 11,991 | 7,176 | 18,741 | 13,352 | |||||||||||||||
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net | $ | (165,912 | ) | $ | (108,543 | ) | $ | (256,058 | ) | $ | (196,586 | ) | |||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 112,595 | $ | 170,966 | $ | 356,065 | $ | 494,936 | |||||||||||
Per diluted share (non-GAAP) | $ | 0.59 | $ | 0.89 | $ | 1.86 | $ | 2.59 |
____________________________________________________________
(1) See page 13 for a reconciliation of our net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and nine months ended
COVID-19 Pandemic
Our business has been adversely affected as a result of the COVID-19 pandemic and the preventive measures taken to curb the spread of the virus. Some of the effects on us include the following:
- With the exception of grocery stores and other "essential" businesses, many of our retail tenants closed their stores in
March 2020 and began reopening whenNew York City entered phase two of its state-mandated reopening plan onJune 22, 2020 . - While our buildings remain open, many of our office tenants are working remotely.
- We have closed the
Hotel Pennsylvania . In connection with the closure, we accrued$9,246,000 of severance for furloughedHotel Pennsylvania union employees and recognized a corresponding$3,145,000 income tax benefit for the three and nine months endedSeptember 30, 2020 . - We have cancelled trade shows at theMART for the remainder of 2020.
- Because certain of our development projects were deemed "non-essential," they were temporarily paused in
March 2020 due toNew York State executive orders and resumed onceNew York City entered phase one of its state mandated reopening plan onJune 8, 2020 . - As of
April 30, 2020 , we placed 1,803 employees on furlough, which included 1,293 employees ofBuilding Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning, security and engineering services primarily to ourNew York properties, 414 employees at theHotel Pennsylvania and 96 corporate staff employees. As ofOctober 31, 2020 , 40% of the furloughed employees have returned to work. - Effective
April 1, 2020 , our executive officers waived portions of their annual base salary for the remainder of 2020. - Effective
April 1, 2020 , each non-management member of ourBoard of Trustees agreed to forgo their$75,000 annual cash retainer for the remainder of 2020.
While we believe our tenants are required to pay rent under their leases, in limited circumstances, we have agreed to and may continue to agree to rent deferrals and rent abatements for certain of our tenants. We have made a policy election in accordance with the
For the quarter ended
Based on our assessment of the probability of rent collection of our lease receivables, we have written off
In light of the evolving health, social, economic, and business environment, governmental regulation or mandates, and business disruptions that have occurred and may continue to occur, the impact of the COVID-19 pandemic on our financial condition and operating results remains highly uncertain but the impact could be material. The impact on us includes lower rental income and potentially lower occupancy levels at our properties which will result in less cash flow available for operating costs, to pay our indebtedness and for distribution to our shareholders. During 2020, we have experienced a decrease in cash flow from operations due to the COVID-19 pandemic, including reduced collections of rents billed to certain of our tenants, the closure of
FFO, as
The following table bridges our FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended
FFO, as Adjusted | |||||||||
Amount | Per Share | ||||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended | $ | 171.0 | $ | 0.89 | |||||
(Decrease) increase in FFO, as adjusted due to: | |||||||||
Write-offs of straight-line rent receivables - non-cash ( | (26.3 | ) | |||||||
(10.6 | ) | ||||||||
Other tenant related items | (9.1 | ) | |||||||
theMART (primarily | (7.5 | ) | |||||||
(6.3 | ) | ||||||||
Lower revenues from Signage ( | (6.1 | ) | |||||||
Asset sales | (2.0 | ) | |||||||
Interest expense decrease (partially offset by lower capitalized interest) and other, net | 7.1 | ||||||||
(60.8 | ) | ||||||||
Noncontrolling interests' share of above items | 2.4 | ||||||||
Net decrease | (58.4 | ) | (0.30 | ) | |||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended | $ | 112.6 | $ | 0.59 |
See page 13 for reconciliations of our net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and nine months ended
Dispositions:
PREIT
On
220 CPS
During the three months ended
Financings:
On
On
On
On
On
On
Leasing Activity For The Three Months Ended
- 1,453,000 square feet of
New York Office space (1,121,000 square feet at share) at an initial rent of$92.74 per square foot and a weighted average lease term of 19.6 years. Primarily resulting from 730,000 square feet (694,000 at our share) for the new Facebook lease at Farley Office and 633,000 square feet (348,000 at our share) for theNew York University long-term renewal atOne Park Avenue . The changes in the GAAP and cash mark-to-market rent on the 419,000 square feet of second generation space were positive 26.2% and 7.7%, respectively. Tenant improvements and leasing commissions were$8.86 per square foot per annum, or 9.6% of initial rent. - 25,000 square feet of New York Retail space (22,000 square feet at share) at an initial rent of
$311.39 per square foot and a weighted average lease term of 7.1 years. The changes in the GAAP and cash mark-to-market rent on the 11,000 square feet of second generation space were negative 15.3% and 27.8%, respectively. Tenant improvements and leasing commissions were$14.49 per square foot per annum, or 4.7% of initial rent. - 44,000 square feet at theMART (all at share) at an initial rent of
$59.38 per square foot and a weighted average lease term of 5.2 years. The changes in the GAAP and cash mark-to-market rent on the 44,000 square feet of second generation space were negative 1.5% and 1.8%, respectively. Tenant improvements and leasing commissions were$3.00 per square foot per annum, or 5.1% of initial rent. - 90,000 square feet at
555 California Street (63,000 square feet at share), which resulted from a tenant's exercise of a five-year renewal option. The renewal has been excluded from the leasing activity statistics as the starting rent will be determined in 2021 based on fair market value.
Leasing Activity For The Nine Months Ended
- 2,068,000 square feet of
New York Office space (1,709,000 square feet at share) at an initial rent of$90.62 per square foot and a weighted average lease term of 14.9 years. The initial rent of$90.62 excludes the rent on 174,000 square feet as the starting rent will be determined in 2021 based on fair market value. The changes in the GAAP and cash mark-to-market rent on the 777,000 square feet of second generation space were positive 12.0% and 5.3%, respectively. Tenant improvements and leasing commissions were$8.84 per square foot per annum, or 9.8% of initial rent. - 63,000 square feet of New York Retail space (59,000 square feet at share) at an initial rent of
$265.44 per square foot and a weighted average lease term of 6.3 years. The changes in the GAAP and cash mark-to-market rent on the 42,000 square feet of second generation space were positive 18.4% and 6.7%, respectively. Tenant improvements and leasing commissions were$25.25 per square foot per annum, or 9.5% of initial rent. - 317,000 square feet at theMART (all at share) at an initial rent of
$50.12 per square foot and a weighted average lease term of 8.8 years. The changes in the GAAP and cash mark-to-market rent on the 312,000 square feet of second generation space were positive 1.5% and negative 1.6%, respectively. Tenant improvements and leasing commissions were$4.24 per square foot per annum, or 8.5% of initial rent. - 101,000 square feet at
555 California Street (71,000 square feet at share) at an initial rent of$105.66 per square foot and a weighted average lease term of 4.8 years. The initial rent of$105.66 excludes the rent on a five-year renewal option for 90,000 square feet (63,000 square feet at share) as the starting rent will be determined in 2021 based on fair market value. The changes in the GAAP and cash mark-to-market rent on the 8,000 square feet of second generation space were positive 36.7% and 23.7%, respectively. Tenant improvements and leasing commissions were$0.19 per square foot per annum, or 0.2% of initial rent.
Same Store Net Operating Income ("NOI") At Share:
The percentage (decrease) increase in same store NOI at share and same store NOI at share - cash basis of our
Total | theMART | |||||||||||
Same store NOI at share % (decrease) increase(1): | ||||||||||||
Three months ended | (16.4 | )% | (14.5 | )% | (46.3 | )% | 2.0 | % | ||||
Nine months ended | (14.7 | )% | (13.4 | )% | (34.9 | )% | 0.7 | % | ||||
Three months ended | 7.1 | % | 10.5 | % | (26.6 | )% | 6.2 | % | ||||
Same store NOI at share - cash basis % (decrease) increase(1): | ||||||||||||
Three months ended | (10.6 | )% | (9.0 | )% | (31.7 | )% | 1.3 | % | ||||
Nine months ended | (7.7 | )% | (5.4 | )% | (30.5 | )% | 0.2 | % | ||||
Three months ended | (3.0 | )% | (3.6 | )% | (1.1 | )% | 3.4 | % |
____________________
(1) See pages 15 through 20 for same store NOI at share and same store NOI at share - cash basis reconciliations.
NOI At Share:
The elements of our
(Amounts in thousands) | For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Office(1)(2) | $ | 159,981 | $ | 177,469 | $ | 161,444 | $ | 504,630 | $ | 540,601 | ||||||||||||
Retail(1)(3) | 35,294 | 68,159 | 21,841 | 109,153 | 213,489 | |||||||||||||||||
Residential | 4,536 | 5,575 | 5,868 | 16,604 | 17,528 | |||||||||||||||||
6,830 | 11,269 | 8,331 | 25,653 | 33,699 | ||||||||||||||||||
Hotel | (16,821 | ) | 3,012 | (8,516 | ) | (34,693 | ) | 1,227 | ||||||||||||||
Total | 189,820 | 265,484 | 188,968 | 621,347 | 806,544 | |||||||||||||||||
Other: | ||||||||||||||||||||||
theMART(5) | 13,171 | 24,862 | 17,803 | 52,087 | 79,359 | |||||||||||||||||
15,618 | 15,265 | 14,837 | 45,686 | 45,124 | ||||||||||||||||||
Other investments(6) | 1,924 | 1,919 | 1,032 | 4,966 | 23,184 | |||||||||||||||||
Total Other | 30,713 | 42,046 | 33,672 | 102,739 | 147,667 | |||||||||||||||||
NOI at share | $ | 220,533 | $ | 307,530 | $ | 222,640 | $ | 724,086 | $ | 954,211 |
____________________
(1) Reflects the transfer of 45.4% of common equity in the properties contributed to
(2) Includes the impact of non-cash write-offs of receivables arising from the straight-lining of rents, including the New York & Company, Inc. lease at
(3) Includes the impact of non-cash write-offs of receivables arising from the straight-lining of rents, including the JCPenney lease at
(4)
(5) The decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late
(6) 2019 includes our share of PREIT (accounted for as a marketable security from
NOI At Share - Cash Basis:
The elements of our
(Amounts in thousands) | For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Office(1)(2) | $ | 162,357 | $ | 174,796 | $ | 175,438 | $ | 524,830 | $ | 537,972 | ||||||||||||
Retail(1)(3) | 36,476 | 65,636 | 38,913 | 124,430 | 213,298 | |||||||||||||||||
Residential | 4,178 | 5,057 | 5,504 | 15,541 | 16,131 | |||||||||||||||||
9,899 | 11,471 | 10,581 | 31,574 | 34,320 | ||||||||||||||||||
Hotel | (16,829 | ) | 2,964 | (8,525 | ) | (34,718 | ) | 1,082 | ||||||||||||||
Total | 196,081 | 259,924 | 221,911 | 661,657 | 802,803 | |||||||||||||||||
Other: | ||||||||||||||||||||||
theMART(5) | 17,706 | 26,588 | 17,765 | 58,176 | 83,484 | |||||||||||||||||
15,530 | 15,325 | 15,005 | 45,970 | 45,665 | ||||||||||||||||||
Other investments(6) | 2,197 | 1,656 | 2,149 | 6,530 | 22,789 | |||||||||||||||||
Total Other | 35,433 | 43,569 | 34,919 | 110,676 | 151,938 | |||||||||||||||||
NOI at share - cash basis | $ | 231,514 | $ | 303,493 | $ | 256,830 | $ | 772,333 | $ | 954,741 |
____________________
(1) Reflects the transfer of 45.4% of common equity in the properties contributed to
(2) Includes the impact of write-offs of tenant receivables deemed uncollectible of
(3) Includes the impact of write-offs of tenant receivables deemed uncollectible of
(4)
(5) The decrease in NOI at share - cash basis is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late
(6) 2019 includes our share of PREIT (accounted for as a marketable security from
(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) | 736,155 | (3) | 293,845 | 2022 | 7.4% | ||||||||||||
PENN2 - as expanded(4) | 1,795,000 | 750,000 | 80,684 | 669,316 | 2024 | 8.4% | ||||||||||||||
PENN1(5) | 2,545,000 | 325,000 | 137,048 | 187,952 | N/A | 13.5%(5)(6) | ||||||||||||||
Districtwide Improvements | N/A | 100,000 | 15,538 | 84,462 | N/A | N/A | ||||||||||||||
Total Active Penn District Projects | 2,205,000 | 969,425 | 1,235,575 | (7 | ) | 8.3% |
________________________________
(1) Excluding debt and equity carry.
(2) Net of 135,000 of historic tax credit investor contributions, of which 88,000 has been funded to date (at our 95% share).
(3) The amount expended has been reduced by 88,000 of historic tax credit investor contributions to date.
(4) 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.
(5) 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.
(6) Achieved as existing leases roll; average remaining lease term 4.8 years.
(7) Expected to be funded from 220 CPS net sales proceeds and existing cash.
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 | $ | 2,589,452 | $ | 2,591,261 | |||||
Buildings and improvements | 8,004,206 | 7,953,163 | |||||||
Development costs and construction in progress | 1,514,941 | 1,490,614 | |||||||
1,223,600 | 914,960 | ||||||||
Leasehold improvements and equipment | 128,642 | 124,014 | |||||||
Total | 13,460,841 | 13,074,012 | |||||||
Less accumulated depreciation and amortization | (3,155,416 | ) | (3,015,958 | ) | |||||
Real estate, net | 10,305,425 | 10,058,054 | |||||||
Right-of-use assets | 374,805 | 379,546 | |||||||
Cash and cash equivalents | 1,411,047 | 1,515,012 | |||||||
Restricted cash | 79,291 | 92,119 | |||||||
Marketable securities | — | 33,313 | |||||||
Tenant and other receivables | 103,051 | 95,733 | |||||||
Investments in partially owned entities | 3,504,328 | 3,999,165 | |||||||
Real estate fund investments | 3,739 | 222,649 | |||||||
181,041 | 408,918 | ||||||||
Receivable arising from the straight-lining of rents | 678,381 | 742,206 | |||||||
Deferred leasing costs, net of accumulated amortization of | 385,089 | 353,986 | |||||||
Identified intangible assets, net of accumulated amortization of | 25,746 | 30,965 | |||||||
Other assets | 510,955 | 355,347 | |||||||
$ | 17,562,898 | $ | 18,287,013 | ||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||||
Mortgages payable, net | $ | 5,639,151 | $ | 5,639,897 | |||||
Senior unsecured notes, net | 446,482 | 445,872 | |||||||
Unsecured term loan, net | 796,499 | 745,840 | |||||||
Unsecured revolving credit facilities | 575,000 | 575,000 | |||||||
Lease liabilities | 425,646 | 498,254 | |||||||
1,223,600 | 914,960 | ||||||||
Special dividend/distribution payable | — | 398,292 | |||||||
Accounts payable and accrued expenses | 430,446 | 440,049 | |||||||
Deferred revenue | 45,473 | 59,429 | |||||||
Deferred compensation plan | 98,543 | 103,773 | |||||||
Other liabilities | 302,622 | 265,754 | |||||||
Total liabilities | 9,983,462 | 10,087,120 | |||||||
Commitments and contingencies | |||||||||
Redeemable noncontrolling interests: | |||||||||
Class A units - 13,670,466 and 13,298,956 units outstanding | 594,934 | 884,380 | |||||||
Series D cumulative redeemable preferred units - 141,401 units outstanding | 4,535 | 4,535 | |||||||
Total redeemable noncontrolling partnership units | 599,469 | 888,915 | |||||||
Redeemable noncontrolling interest in a consolidated subsidiary | 94,282 | — | |||||||
Total redeemable noncontrolling interests | 693,751 | 888,915 | |||||||
Shareholders' equity: | |||||||||
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,793,402 and 36,795,640 shares | 891,156 | 891,214 | |||||||
Common shares of beneficial interest: | 7,629 | 7,618 | |||||||
Additional capital | 8,123,524 | 7,827,697 | |||||||
Earnings less than distributions | (2,463,635 | ) | (1,954,266 | ) | |||||
Accumulated other comprehensive loss | (89,834 | ) | (40,233 | ) | |||||
Total shareholders' equity | 6,468,840 | 6,732,030 | |||||||
Noncontrolling interests in consolidated subsidiaries | 416,845 | 578,948 | |||||||
Total equity | 6,885,685 | 7,310,978 | |||||||
$ | 17,562,898 | $ | 18,287,013 |
OPERATING RESULTS
(Amounts in thousands, except per share amounts) | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Revenues | $ | 363,962 | $ | 465,961 | $ | 1,151,520 | $ | 1,463,732 | |||||||||||
Income (loss) from continuing operations | $ | 68,736 | $ | 363,857 | $ | (253,119 | ) | $ | 3,173,671 | ||||||||||
Loss from discontinued operations | — | (8 | ) | — | (85 | ) | |||||||||||||
Net income (loss) | 68,736 | 363,849 | (253,119 | ) | 3,173,586 | ||||||||||||||
Less net loss (income) attributable to noncontrolling interests in: | |||||||||||||||||||
Consolidated subsidiaries | 848 | (5,774 | ) | 141,003 | (34,045 | ) | |||||||||||||
Operating Partnership | (3,884 | ) | (22,637 | ) | 10,090 | (197,354 | ) | ||||||||||||
Net income (loss) attributable to Vornado | 65,700 | 335,438 | (102,026 | ) | 2,942,187 | ||||||||||||||
Preferred share dividends | (12,530 | ) | (12,532 | ) | (37,591 | ) | (37,598 | ) | |||||||||||
Net income (loss) attributable to common shareholders | $ | 53,170 | $ | 322,906 | $ | (139,617 | ) | $ | 2,904,589 | ||||||||||
Income (loss) per common share - basic: | |||||||||||||||||||
Net income (loss) per common share | $ | 0.28 | $ | 1.69 | $ | (0.73 | ) | $ | 15.22 | ||||||||||
Weighted average shares outstanding | 191,162 | 190,814 | 191,102 | 190,762 | |||||||||||||||
Income (loss) per common share - diluted: | |||||||||||||||||||
Net income (loss) income per common share | $ | 0.28 | $ | 1.69 | $ | (0.73 | ) | $ | 15.20 | ||||||||||
Weighted average shares outstanding | 191,162 | 191,024 | 191,102 | 191,027 | |||||||||||||||
FFO attributable to common shareholders plus assumed conversions (non-GAAP) | $ | 278,507 | $ | 279,509 | $ | 612,123 | $ | 691,522 | |||||||||||
Per diluted share (non-GAAP) | $ | 1.46 | $ | 1.46 | $ | 3.20 | $ | 3.62 | |||||||||||
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 112,595 | $ | 170,966 | $ | 356,065 | $ | 494,936 | |||||||||||
Per diluted share (non-GAAP) | $ | 0.59 | $ | 0.89 | $ | 1.86 | $ | 2.59 | |||||||||||
Weighted average shares used in determining FFO attributable to common shareholders plus assumed conversions per diluted share | 191,188 | 191,024 | 191,155 | 191,024 |
NON-GAAP RECONCILIATIONS
The following table reconciles net income (loss) 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 Nine Months Ended | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 53,170 | $ | 322,906 | $ | (139,617 | ) | $ | 2,904,589 | ||||||||||
Per diluted share | $ | 0.28 | $ | 1.69 | $ | (0.73 | ) | $ | 15.20 | ||||||||||
FFO adjustments: | |||||||||||||||||||
Depreciation and amortization of real property | $ | 99,045 | $ | 89,479 | $ | 269,360 | $ | 303,415 | |||||||||||
Net gains on sale of real estate | — | (178,769 | ) | — | (178,769 | ) | |||||||||||||
Net gain on transfer to | — | — | — | (2,559,154 | ) | ||||||||||||||
Real estate impairment losses | — | — | — | 31,436 | |||||||||||||||
Net gain from sale of UE common shares (sold on | — | — | — | (62,395 | ) | ||||||||||||||
Decrease (increase) in fair value of marketable securities: | |||||||||||||||||||
PREIT (accounted for as a marketable security from | — | 4,875 | 4,938 | 19,211 | |||||||||||||||
Lexington (sold on | — | — | — | (16,068 | ) | ||||||||||||||
Other | — | (7 | ) | — | (48 | ) | |||||||||||||
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO: | |||||||||||||||||||
Non-cash impairment loss on our investment in | 103,201 | — | 409,060 | — | |||||||||||||||
Depreciation and amortization of real property | 38,987 | 37,696 | 119,146 | 97,317 | |||||||||||||||
Decrease in fair value of marketable securities | 385 | 291 | 3,511 | 1,988 | |||||||||||||||
241,618 | (46,435 | ) | 806,015 | (2,363,067 | ) | ||||||||||||||
Noncontrolling interests' share of above adjustments | (16,292 | ) | 3,024 | (54,311 | ) | 149,957 | |||||||||||||
FFO adjustments, net | $ | 225,326 | $ | (43,411 | ) | $ | 751,704 | $ | (2,213,110 | ) | |||||||||
FFO attributable to common shareholders | 278,496 | 279,495 | 612,087 | 691,479 | |||||||||||||||
Convertible preferred share dividends | 11 | 14 | 36 | 43 | |||||||||||||||
FFO attributable to common shareholders plus assumed conversions | $ | 278,507 | $ | 279,509 | $ | 612,123 | $ | 691,522 | |||||||||||
Per diluted share | $ | 1.46 | $ | 1.46 | $ | 3.20 | $ | 3.62 | |||||||||||
Reconciliation of weighted average shares outstanding: | |||||||||||||||||||
Weighted average common shares outstanding | 191,162 | 190,814 | 191,102 | 190,762 | |||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||
Convertible preferred shares | 26 | 34 | 28 | 35 | |||||||||||||||
Employee stock options and restricted share awards | — | 176 | 25 | 227 | |||||||||||||||
Denominator for FFO per diluted share | 191,188 | 191,024 | 191,155 | 191,024 |
FFO is computed in accordance with the definition adopted by the
NON-GAAP RECONCILIATIONS - CONTINUED
Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the three and nine months ended
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||
Net income (loss) | $ | 68,736 | $ | 363,849 | $ | (217,352 | ) | $ | (253,119 | ) | $ | 3,173,586 | ||||||||||||
Depreciation and amortization expense | 107,013 | 96,437 | 92,805 | 292,611 | 326,181 | |||||||||||||||||||
General and administrative expense | 32,407 | 33,237 | 35,014 | 120,255 | 130,129 | |||||||||||||||||||
Expense from transaction related costs and impairment losses and (gain from lease liability extinguishment), net | 584 | 1,576 | (69,221 | ) | (68,566 | ) | 103,315 | |||||||||||||||||
Loss (income) from partially owned entities | 80,909 | (25,946 | ) | 291,873 | 353,679 | (56,139 | ) | |||||||||||||||||
Loss (income) from real estate fund investments | 13,823 | (2,190 | ) | 28,042 | 225,328 | 13,780 | ||||||||||||||||||
Interest and other investment (income) loss, net | (1,729 | ) | (3,045 | ) | 2,893 | 7,068 | (15,930 | ) | ||||||||||||||||
Interest and debt expense | 57,371 | 61,448 | 58,405 | 174,618 | 226,940 | |||||||||||||||||||
Net gain on transfer to | — | — | — | — | (2,571,099 | ) | ||||||||||||||||||
Net gains on disposition of wholly owned and partially owned assets | (214,578 | ) | (309,657 | ) | (55,695 | ) | (338,862 | ) | (641,664 | ) | ||||||||||||||
Income tax expense | 23,781 | 23,885 | 1,837 | 38,431 | 80,542 | |||||||||||||||||||
Loss from discontinued operations | — | 8 | — | — | 85 | |||||||||||||||||||
NOI from partially owned entities | 78,175 | 86,024 | 69,487 | 229,543 | 236,400 | |||||||||||||||||||
NOI attributable to noncontrolling interests in consolidated subsidiaries | (25,959 | ) | (18,096 | ) | (15,448 | ) | (56,900 | ) | (51,915 | ) | ||||||||||||||
NOI at share | 220,533 | 307,530 | 222,640 | 724,086 | 954,211 | |||||||||||||||||||
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other | 10,981 | (4,037 | ) | 34,190 | 48,247 | 530 | ||||||||||||||||||
NOI at share - cash basis | $ | 231,514 | $ | 303,493 | $ | 256,830 | $ | 772,333 | $ | 954,741 |
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. NOI at share - cash basis includes rent that has been deferred as a result of the COVID-19 pandemic. Rent deferrals generally require repayment in monthly installments over a period of time not to exceed twelve months.
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share to same store NOI at share for our
(Amounts in thousands) | Total | theMART | Other | ||||||||||||||||||||
NOI at share for the three months ended | $ | 220,533 | $ | 189,820 | $ | 13,171 | $ | 15,618 | $ | 1,924 | |||||||||||||
Less NOI at share from: | |||||||||||||||||||||||
Development properties | (4,284 | ) | (4,288 | ) | — | 4 | — | ||||||||||||||||
16,821 | 16,821 | — | — | — | |||||||||||||||||||
Other non-same store (income) expense, net | (3,273 | ) | (1,318 | ) | (102 | ) | 71 | (1,924 | ) | ||||||||||||||
Same store NOI at share for the three months ended | $ | 229,797 | $ | 201,035 | $ | 13,069 | $ | 15,693 | $ | — | |||||||||||||
NOI at share for the three months ended | $ | 307,530 | $ | 265,484 | $ | 24,862 | $ | 15,265 | $ | 1,919 | |||||||||||||
Less NOI at share from: | |||||||||||||||||||||||
Development properties | (18,299 | ) | (18,299 | ) | — | — | — | ||||||||||||||||
(3,012 | ) | (3,012 | ) | — | — | — | |||||||||||||||||
Other non-same store (income) expense, net | (11,446 | ) | (9,121 | ) | (524 | ) | 118 | (1,919 | ) | ||||||||||||||
Same store NOI at share for the three months ended | $ | 274,773 | $ | 235,052 | $ | 24,338 | $ | 15,383 | $ | — | |||||||||||||
(Decrease) increase in same store NOI at share for the three months ended | $ | (44,976 | ) | $ | (34,017 | ) | $ | (11,269 | ) | $ | 310 | $ | — | ||||||||||
% (decrease) increase in same store NOI at share | (16.4 | )% | (14.5 | )% | (46.3 | )% | 2.0 | % | — | % |
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 | Other | |||||||||||||||||||||
NOI at share - cash basis for the three months ended | $ | 231,514 | $ | 196,081 | $ | 17,706 | $ | 15,530 | $ | 2,197 | ||||||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||||||
Development properties | (7,729 | ) | (7,733 | ) | — | 4 | — | |||||||||||||||||
16,829 | 16,829 | — | — | — | ||||||||||||||||||||
Other non-same store (income) expense, net | (5,165 | ) | (2,865 | ) | (131 | ) | 28 | (2,197 | ) | |||||||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 235,449 | $ | 202,312 | $ | 17,575 | $ | 15,562 | $ | — | ||||||||||||||
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 | (23,839 | ) | (23,839 | ) | — | — | — | |||||||||||||||||
(2,964 | ) | (2,964 | ) | — | — | — | ||||||||||||||||||
Other non-same store (income) expense, net | (12,631 | ) | (10,156 | ) | (863 | ) | 44 | (1,656 | ) | |||||||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 263,366 | $ | 222,272 | $ | 25,725 | $ | 15,369 | $ | — | ||||||||||||||
(Decrease) increase in same store NOI at share - cash basis for the three months ended | $ | (27,917 | ) | $ | (19,960 | ) | $ | (8,150 | ) | $ | 193 | $ | — | |||||||||||
% (decrease) increase in same store NOI at share - cash basis | (10.6 | )% | (9.0 | )% | (31.7 | )% | 1.3 | % | — | % |
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share to same store NOI at share for our
(Amounts in thousands) | Total | theMART | Other | |||||||||||||||||||||
NOI at share for the nine months ended | $ | 724,086 | $ | 621,347 | $ | 52,087 | $ | 45,686 | $ | 4,966 | ||||||||||||||
Less NOI at share from: | ||||||||||||||||||||||||
Development properties | (25,935 | ) | (25,935 | ) | — | — | — | |||||||||||||||||
25,337 | 25,337 | — | — | — | ||||||||||||||||||||
Other non-same store (income) expense, net | (20,796 | ) | (15,480 | ) | (524 | ) | 174 | (4,966 | ) | |||||||||||||||
Same store NOI at share for the nine months ended | $ | 702,692 | $ | 605,269 | $ | 51,563 | $ | 45,860 | $ | — | ||||||||||||||
NOI at share for the nine months ended | $ | 954,211 | $ | 806,544 | $ | 79,359 | $ | 45,124 | $ | 23,184 | ||||||||||||||
Less NOI at share from: | ||||||||||||||||||||||||
Change in ownership interests in properties contributed to | (35,770 | ) | (35,770 | ) | — | — | — | |||||||||||||||||
Dispositions | (7,358 | ) | (7,358 | ) | — | — | — | |||||||||||||||||
Development properties | (53,439 | ) | (53,439 | ) | — | — | — | |||||||||||||||||
(7,043 | ) | (7,043 | ) | — | — | — | ||||||||||||||||||
Other non-same store (income) expense, net | (26,762 | ) | (3,795 | ) | (180 | ) | 397 | (23,184 | ) | |||||||||||||||
Same store NOI at share for the nine months ended | $ | 823,839 | $ | 699,139 | $ | 79,179 | $ | 45,521 | $ | — | ||||||||||||||
(Decrease) increase in same store NOI at share for the nine months ended | $ | (121,147 | ) | $ | (93,870 | ) | $ | (27,616 | ) | $ | 339 | $ | — | |||||||||||
% (decrease) increase in same store NOI at share | (14.7 | )% | (13.4 | )% | (34.9 | )% | 0.7 | % | — | % |
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 | Other | |||||||||||||||||||||
NOI at share - cash basis for the nine months ended | $ | 772,333 | $ | 661,657 | $ | 58,176 | $ | 45,970 | $ | 6,530 | ||||||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||||||
Development properties | (35,338 | ) | (35,338 | ) | — | — | — | |||||||||||||||||
25,354 | 25,354 | — | — | — | ||||||||||||||||||||
Other non-same store (income) expense, net | (31,287 | ) | (24,222 | ) | (553 | ) | 18 | (6,530 | ) | |||||||||||||||
Same store NOI at share - cash basis for the nine months ended | $ | 731,062 | $ | 627,451 | $ | 57,623 | $ | 45,988 | $ | — | ||||||||||||||
NOI at share - cash basis for the nine months ended | $ | 954,741 | $ | 802,803 | $ | 83,484 | $ | 45,665 | $ | 22,789 | ||||||||||||||
Less NOI at share - cash basis from: | ||||||||||||||||||||||||
Change in ownership interests in properties contributed to | (32,905 | ) | (32,905 | ) | — | — | — | |||||||||||||||||
Dispositions | (8,153 | ) | (8,153 | ) | — | — | — | |||||||||||||||||
Development properties | (71,547 | ) | (71,547 | ) | — | — | — | |||||||||||||||||
(6,947 | ) | (6,947 | ) | — | — | — | ||||||||||||||||||
Other non-same store (income) expense, net | (43,004 | ) | (19,946 | ) | (519 | ) | 250 | (22,789 | ) | |||||||||||||||
Same store NOI at share - cash basis for the nine months ended | $ | 792,185 | $ | 663,305 | $ | 82,965 | $ | 45,915 | $ | — | ||||||||||||||
(Decrease) increase in same store NOI at share - cash basis for the nine months ended | $ | (61,123 | ) | $ | (35,854 | ) | $ | (25,342 | ) | $ | 73 | $ | — | |||||||||||
% (decrease) increase in same store NOI at share - cash basis | (7.7 | )% | (5.4 | )% | (30.5 | )% | 0.2 | % | — | % |
NON-GAAP RECONCILIATIONS - CONTINUED
Below are reconciliations of NOI at share to same store NOI at share for our
(Amounts in thousands) | Total | theMART | Other | ||||||||||||||||||||||
NOI at share for the three months ended | $ | 220,533 | $ | 189,820 | $ | 13,171 | $ | 15,618 | $ | 1,924 | |||||||||||||||
Less NOI at share from: | |||||||||||||||||||||||||
Development properties | (4,284 | ) | (4,288 | ) | — | 4 | — | ||||||||||||||||||
16,821 | 16,821 | — | — | — | |||||||||||||||||||||
Other non-same store (income) expense, net | (2,958 | ) | (1,003 | ) | (102 | ) | 71 | (1,924 | ) | ||||||||||||||||
Same store NOI at share for the three months ended | $ | 230,112 | $ | 201,350 | $ | 13,069 | $ | 15,693 | $ | — | |||||||||||||||
NOI at share for the three months ended | $ | 222,640 | $ | 188,968 | $ | 17,803 | $ | 14,837 | $ | 1,032 | |||||||||||||||
Less NOI at share from: | |||||||||||||||||||||||||
Development properties | (7,380 | ) | (7,376 | ) | — | (4 | ) | — | |||||||||||||||||
8,516 | 8,516 | — | — | — | |||||||||||||||||||||
Other non-same store income, net | (9,010 | ) | (7,920 | ) | — | (58 | ) | (1,032 | ) | ||||||||||||||||
Same store NOI at share for the three months ended | $ | 214,766 | $ | 182,188 | $ | 17,803 | $ | 14,775 | $ | — | |||||||||||||||
Increase (decrease) in same store NOI at share for the three months ended | $ | 15,346 | $ | 19,162 | $ | (4,734 | ) | $ | 918 | $ | — | ||||||||||||||
% increase (decrease) in same store NOI at share | 7.1 | % | 10.5 | % | (26.6 | )% | 6.2 | % | — | % |
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 | Other | ||||||||||||||||||||||
NOI at share - cash basis for the three months ended | $ | 231,514 | $ | 196,081 | $ | 17,706 | $ | 15,530 | $ | 2,197 | |||||||||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||||||||
Development properties | (7,729 | ) | (7,733 | ) | — | 4 | — | ||||||||||||||||||
16,829 | 16,829 | — | — | — | |||||||||||||||||||||
Other non-same store (income) expense, net | (4,846 | ) | (2,546 | ) | (131 | ) | 28 | (2,197 | ) | ||||||||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 235,768 | $ | 202,631 | $ | 17,575 | $ | 15,562 | $ | — | |||||||||||||||
NOI at share - cash basis for the three months ended | $ | 256,830 | $ | 221,911 | $ | 17,765 | $ | 15,005 | $ | 2,149 | |||||||||||||||
Less NOI at share - cash basis from: | |||||||||||||||||||||||||
Development properties | (9,478 | ) | (9,474 | ) | — | (4 | ) | — | |||||||||||||||||
8,525 | 8,525 | — | — | — | |||||||||||||||||||||
Other non-same store (income) expense, net | (12,772 | ) | (10,670 | ) | — | 47 | (2,149 | ) | |||||||||||||||||
Same store NOI at share - cash basis for the three months ended | $ | 243,105 | $ | 210,292 | $ | 17,765 | $ | 15,048 | $ | — | |||||||||||||||
(Decrease) increase in same store NOI at share - cash basis for the three months ended | $ | (7,337 | ) | $ | (7,661 | ) | $ | (190 | ) | $ | 514 | $ | — | ||||||||||||
% (decrease) increase in same store NOI at share - cash basis | (3.0 | )% | (3.6 | )% | (1.1 | )% | 3.4 | % | — | % |
Source:
2020 GlobeNewswire, Inc., source