NEW YORK, July 31, 2023 (GLOBE NEWSWIRE) -- Vornado Realty Trust (: VNO) reported today:
Quarter Ended June 30, 2023 Financial Results
NET INCOME attributable to common shareholders for the quarter ended June 30, 2023 was $46,377,000, or $0.24 per diluted share, compared to $50,418,000, or $0.26 per diluted share, for the prior year's quarter. Adjusting for the items that impact period-to-period comparability listed in the table on the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the quarter ended June 30, 2023 was $27,454,000, or $0.14 per diluted share, and $37,403,000, or $0.19 per diluted share for the quarter ended June 30, 2022.
FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended June 30, 2023 was $144,059,000, or $0.74 per diluted share, compared to $154,965,000, or $0.80 per diluted share, for the prior year's quarter. Adjusting for the items that impact period-to-period comparability listed in the table the following page, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarter ended June 30, 2023 was $140,737,000, or $0.72 per diluted share, and $160,059,000, or $0.83 per diluted share for the quarter ended June 30, 2022.
Six Months Ended June 30, 2023 Financial Results
NET INCOME attributable to common shareholders for the six months ended June 30, 2023 was $51,545,000, or $0.27 per diluted share, compared to $76,896,000, or $0.40 per diluted share, for the six months ended June 30, 2022. Adjusting for the items that impact period-to-period comparability listed in the table on the following page, net income attributable to common shareholders, as adjusted (non-GAAP) for the six months ended June 30, 2023 was $29,827,000, or $0.15 per diluted share, and $69,209,000, or $0.36 per diluted share, for the six months ended June 30, 2022.
FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the six months ended June 30, 2023 was $263,149,000, or $1.35 per diluted share, compared to $309,997,000, or $1.60 per diluted share, for the six months ended June 30, 2022. Adjusting for the items that impact period-to-period comparability listed in the table on the following page, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the six months ended June 30, 2023 was $257,032,000, or $1.32 per diluted share, and $312,496,000, or $1.62 per diluted share, for the six months ended June 30, 2022.
The following table reconciles 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 June 30, | For the Six Months Ended June 30, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income attributable to common shareholders | $ | 46,377 | $ | 50,418 | $ | 51,545 | $ | 76,896 | |||||||
| Per diluted share | $ | 0.24 | $ | 0.26 | $ | 0.27 | $ | 0.40 | |||||||
| Certain (income) expense items that impact net income attributable to common shareholders: | |||||||||||||||
| Our share of Alexander's, Inc. ("Alexander's") gain on sale of Rego Park III land parcel | $ | (16,396 | ) | $ | — | $ | (16,396 | ) | $ | — | |||||
| Deferred tax liability on our investment in The Farley Building (held through a taxable REIT subsidiary) | 2,206 | 3,234 | 5,081 | 6,407 | |||||||||||
| Net gain on sale of the Center Building (33-00 Northern Boulevard, Long Island City, NY) | — | (15,213 | ) | — | (15,213 | ) | |||||||||
| Refund of New York City transfer taxes related to the April 2019 transfer to Fifth Avenue and Times Square JV | — | (13,613 | ) | — | (13,613 | ) | |||||||||
| After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units and ancillary amenities | — | (673 | ) | (6,173 | ) | (6,085 | ) | ||||||||
| Other | (6,194 | ) | 12,691 | (5,906 | ) | 20,520 | |||||||||
| (20,384 | ) | (13,574 | ) | (23,394 | ) | (7,984 | ) | ||||||||
| Noncontrolling interests' share of above adjustments | 1,461 | 559 | 1,676 | 297 | |||||||||||
| Total of certain (income) expense items that impact net income attributable to common shareholders | $ | (18,923 | ) | $ | (13,015 | ) | $ | (21,718 | ) | $ | (7,687 | ) | |||
| Per diluted share (non-GAAP) | $ | (0.10 | ) | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.04 | ) | |||
| Net income attributable to common shareholders, as adjusted (non-GAAP) | $ | 27,454 | $ | 37,403 | $ | 29,827 | $ | 69,209 | |||||||
| Per diluted share (non-GAAP) | $ | 0.14 | $ | 0.19 | $ | 0.15 | $ | 0.36 | |||||||
The following table reconciles 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 June 30, | For the Six Months Ended June 30, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| FFO attributable to common shareholders plus assumed conversions (non-GAAP)(1) | $ | 144,059 | $ | 154,965 | $ | 263,149 | $ | 309,997 | |||||||
| Per diluted share (non-GAAP) | $ | 0.74 | $ | 0.80 | $ | 1.35 | $ | 1.60 | |||||||
| Certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions: | |||||||||||||||
| Deferred tax liability on our investment in The Farley Building (held through a taxable REIT subsidiary) | $ | 2,206 | $ | 3,234 | $ | 5,081 | $ | 6,407 | |||||||
| After-tax net gain on sale of 220 CPS condominium units and ancillary amenities | — | (673 | ) | (6,173 | ) | (6,085 | ) | ||||||||
| Other | (5,785 | ) | 2,912 | (5,497 | ) | 2,363 | |||||||||
| (3,579 | ) | 5,473 | (6,589 | ) | 2,685 | ||||||||||
| Noncontrolling interests' share of above adjustments | 257 | (379 | ) | 472 | (186 | ) | |||||||||
| Total of certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions, net | $ | (3,322 | ) | $ | 5,094 | $ | (6,117 | ) | $ | 2,499 | |||||
| Per diluted share (non-GAAP) | $ | (0.02 | ) | $ | 0.03 | $ | (0.03 | ) | $ | 0.02 | |||||
| FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) | $ | 140,737 | $ | 160,059 | $ | 257,032 | $ | 312,496 | |||||||
| Per diluted share (non-GAAP) | $ | 0.72 | $ | 0.83 | $ | 1.32 | $ | 1.62 | |||||||
________________________________
(1) See page 11 for a reconciliation of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and six months ended June 30, 2023 and 2022.
FFO, as Adjusted Bridge - Q2 2023 vs. Q2 2022
The following table bridges our FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2022 to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2023:
| (Amounts in millions, except per share amounts) | FFO, as Adjusted | ||||||
| Amount | Per Share | ||||||
| FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2022 | $ | 160.1 | $ | 0.83 | |||
| Increase (decrease) in FFO, as adjusted due to: | |||||||
| Non-recurring items impacting current quarter earnings: | |||||||
| 345 Montgomery Street tenant settlement proceeds, net of legal expenses | 14.1 | ||||||
| Accelerated stock compensation expense on the June 2023 grant due to accelerated vesting conditions for retirement-eligible employees | (7.5 | ) | |||||
| 697-703 Fifth Avenue loan default interest in excess of rate under restructured loan(1) | (4.7 | ) | |||||
| Total non-recurring items impacting current quarter earnings | 1.9 | ||||||
| Increase in interest expense, net of increase in interest income | (21.8 | ) | |||||
| Sale of 33‐00 Northern Boulevard, 40 Fulton Street and street retail properties | (2.6 | ) | |||||
| Tenant related items | 2.2 | ||||||
| Other, net | (0.4 | ) | |||||
| (20.7 | ) | ||||||
| Noncontrolling interests' share of above items and impact of assumed conversions of convertible securities | 1.3 | ||||||
| Net decrease | (19.4 | ) | (0.11 | ) | |||
| FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2023 | $ | 140.7 | $ | 0.72 | |||
________________________________
(1) The accrued default interest was forgiven by the lender as part of the June 2023 restructuring of the loan. In accordance with GAAP, the accrued amount will be amortized over the remaining term of the restructured loan, reducing future interest expense.
See page 11 for a reconciliation of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the three and six months ended June 30, 2023 and 2022. Reconciliations of FFO attributable to common shareholders plus assumed conversions to FFO attributable to common shareholders plus assumed conversions, as adjusted are provided on the previous page.
Dividends/Share Repurchase Program:
On April 26, 2023, Vornado announced the postponement of dividends on its common shares until the end of 2023, at which time, upon finalization of its 2023 taxable income, includi
