x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)   

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:   

June 30, 2013

o

TRANSITION REPORT PURSUANT TO SECTION  13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:

to

Commission File Number:

001-11954

Maryland

22-1657560

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

888 Seventh Avenue, New York, New York

10019

(Address of principal executive offices)

(Zip Code)

x Large Accelerated Filer

o Accelerated Filer

o Non-Accelerated Filer (Do not check if smaller reporting company)

o Smaller Reporting Company

PART I.

Financial Information:

Page Number

Item 1.

Financial Statements:

Consolidated Balance Sheets (Unaudited) as of

June 30, 2013 and December 31, 2012

3 

Consolidated Statements of Income (Unaudited) for the

Three and Six Months Ended June 30, 2013 and 2012

4 

Consolidated Statements of Comprehensive Income (Unaudited)

for the Three and Six Months Ended June 30, 2013 and 2012

5 

Consolidated Statements of Changes in Equity (Unaudited) for the

Six Months Ended June 30, 2013 and 2012

6 

Consolidated Statements of Cash Flows (Unaudited) for the

Six Months Ended June 30, 2013 and 2012

8 

Notes to Consolidated Financial Statements (Unaudited)

10 

Report of Independent Registered Public Accounting Firm

39 

Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations

40 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

82 

Item 4.

Controls and Procedures

83 

PART II.

Other Information:

Item 1.

Legal Proceedings

84 

Item 1A.

Risk Factors

84 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

84 

Item 3.

Defaults Upon Senior Securities

84 

Item 4.

Mine Safety Disclosures

84 

Item 5.

Other Information

84 

Item 6.

Exhibits

84 

SIGNATURES

85 

EXHIBIT INDEX

86 

VORNADO REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Amounts in thousands, except share and per share amounts)

June 30,

December 31,

ASSETS

2013 

2012 

Real estate, at cost:

Land

$

4,209,969 

$

4,797,773 

Buildings and improvements

12,302,151 

12,476,372 

Development costs and construction in progress

997,381 

920,357 

Leasehold improvements and equipment

127,491 

130,077 

Total

17,636,992 

18,324,579 

Less accumulated depreciation and amortization

(3,246,837)

(3,084,700)

Real estate, net

14,390,155 

15,239,879 

Cash and cash equivalents

781,655 

960,319 

Restricted cash

312,071 

183,256 

Marketable securities

402,935 

398,188 

Tenant and other receivables, net of allowance for doubtful accounts of $25,963 and $37,674

140,938 

195,718 

Investments in partially owned entities

1,031,644 

1,226,256 

Investment in Toys "R" Us

417,764 

478,041 

Real Estate Fund investments

622,124 

600,786 

Mortgage and mezzanine loans receivable

175,699 

225,359 

Receivable arising from the straight-lining of rents, net of allowance of $4,307 and $3,165

790,358 

760,310 

Deferred leasing and financing costs, net of accumulated amortization of $251,202 and $224,453

412,695 

407,500 

Identified intangible assets, net of accumulated amortization of $365,854 and $346,664

289,110 

406,358 

Assets related to discontinued operations

63,573 

602,000 

Other assets

502,510 

381,079 

$

20,333,231 

$

22,065,049 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Mortgages payable

$

8,582,573 

$

8,663,326 

Senior unsecured notes

1,358,182 

1,358,008 

Revolving credit facility debt

83,982 

1,170,000 

Accounts payable and accrued expenses

393,362 

484,746 

Deferred revenue

486,901 

596,067 

Deferred compensation plan

111,093 

105,200 

Deferred tax liabilities

15,369 

15,305 

Liabilities related to discontinued operations

2,677 

423,163 

Other liabilities

436,877 

400,938 

Total liabilities

11,471,016 

13,216,753 

Commitments and contingencies

Redeemable noncontrolling interests:

Class A units - 11,345,667 and 11,215,682 units outstanding

939,988 

898,152 

Series D cumulative redeemable preferred units - 1 and 1,800,001 units outstanding

1,000 

46,000 

Total redeemable noncontrolling interests

940,988 

944,152 

Vornado shareholders' equity:

Preferred shares of beneficial interest: no par value per share; authorized 110,000,000

shares; issued and outstanding 52,682,807 and 51,184,609 shares

1,277,455 

1,240,278 

Common shares of beneficial interest: $.04 par value per share; authorized

250,000,000 shares; issued and outstanding 186,991,076 and 186,734,711 shares

7,450 

7,440 

Additional capital

7,190,336 

7,195,438 

Earnings less than distributions

(1,471,643)

(1,573,275)

Accumulated other comprehensive income (loss)

132,894 

(18,946)

Total Vornado shareholders' equity

7,136,492 

6,850,935 

Noncontrolling interests in consolidated subsidiaries

784,735 

1,053,209 

Total equity

7,921,227 

7,904,144 

$

20,333,231 

$

22,065,049 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

For the Three

For the Six

Months Ended June 30,

Months Ended June 30,

(Amounts in thousands, except per share amounts)

2013 

2012 

2013 

2012 

REVENUES:

Property rentals

$

545,194 

$

517,233 

$

1,079,050 

$

1,026,726 

Tenant expense reimbursements

75,659 

71,409 

152,415 

141,906 

Cleveland Medical Mart development project

16,990 

56,304 

29,133 

111,363 

Fee and other income

48,015 

33,037 

145,239 

66,315 

Total revenues

685,858 

677,983 

1,405,837 

1,346,310 

EXPENSES:

Operating

261,080 

243,485 

520,953 

489,462 

Depreciation and amortization

135,486 

128,372 

277,570 

259,767 

General and administrative

54,323 

46,832 

108,905 

102,122 

Cleveland Medical Mart development project

15,151 

53,935 

26,525 

106,696 

Acquisition related costs

3,350 

2,559 

3,951 

3,244 

Total expenses

469,390 

475,183 

937,904 

961,291 

Operating income

216,468 

202,800 

467,933 

385,019 

(Loss) income applicable to Toys "R" Us

(36,861)

(19,190)

(35,102)

97,281 

Income from partially owned entities

1,472 

12,563 

22,238 

32,223 

Income from Real Estate Fund

34,470 

20,301 

51,034 

32,063 

Interest and other investment income (loss), net

26,416 

(49,172)

(22,658)

(33,507)

Interest and debt expense

(121,762)

(124,320)

(243,650)

(254,379)

Net gain (loss) on disposition of wholly owned and

partially owned assets

1,005 

4,856 

(35,719)

4,856 

Income before income taxes

121,208 

47,838 

204,076 

263,556 

Income tax expense

(2,877)

(7,479)

(3,950)

(14,304)

Income from continuing operations

118,331 

40,359 

200,126 

249,252 

Income from discontinued operations

63,990 

17,869 

271,122 

89,240 

Net income

182,321 

58,228 

471,248 

338,492 

Less net income attributable to noncontrolling interests in:

Consolidated subsidiaries

(14,930)

(14,721)

(26,216)

(24,318)

Operating Partnership

(8,849)

(1,337)

(22,782)

(16,608)

Preferred unit distributions of the Operating Partnership

(348)

(3,873)

(1,134)

(7,747)

Net income attributable to Vornado

158,194 

38,297 

421,116 

289,819 

Preferred share dividends

(20,368)

(17,787)

(42,070)

(35,574)

Preferred unit and share redemptions

8,100 

- 

(1,130)

- 

NET INCOME attributable to common shareholders

$

145,926 

$

20,510 

$

377,916 

$

254,245 

INCOME PER COMMON SHARE - BASIC:

Income from continuing operations, net

$

0.46 

$

0.02 

$

0.65 

$

0.91 

Income from discontinued operations, net

0.32 

0.09 

1.37 

0.46 

Net income per common share

$

0.78 

$

0.11 

$

2.02 

$

1.37 

Weighted average shares outstanding

186,931 

185,673 

186,842 

185,521 

INCOME PER COMMON SHARE - DILUTED:

Income from continuing operations, net

$

0.46 

$

0.02 

$

0.65 

$

0.91 

Income from discontinued operations, net

0.32 

0.09 

1.36 

0.45 

Net income per common share

$

0.78 

$

0.11 

$

2.01 

$

1.36 

Weighted average shares outstanding

187,720 

186,342 

187,627 

186,271 

DIVIDENDS PER COMMON SHARE

$

0.73 

$

0.69 

$

1.46 

$

1.38 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

For the Three

For the Six

Months Ended June 30,

Months Ended June 30,

(Amounts in thousands)

2013 

2012 

2013 

2012 

Net income

$

182,321 

$

58,228 

$

471,248 

$

338,492 

Other comprehensive income (loss):

Change in unrealized net gain (loss) on

available-for-sale securities

20,348 

(233,218)

169,138 

(220,525)

Pro rata share of other comprehensive loss of

nonconsolidated subsidiaries

(19,707)

(4,310)

(23,354)

(26,254)

Change in value of interest rate swap

12,037 

(8,388)

14,560 

(6,002)

Other

(3)

496 

530 

373 

Comprehensive income (loss)

194,996 

(187,192)

632,122 

86,084 

Less comprehensive income attributable to noncontrolling interests

(24,862)

(4,470)

(59,166)

(32,779)

Comprehensive income (loss) attributable to Vornado

$

170,134 

$

(191,662)

$

572,956 

$

53,305 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

Non-

Accumulated

controlling

(Amounts in thousands)

Earnings

Other

Interests in

Preferred Shares

Common Shares

Additional

Less Than

Comprehensive

Consolidated

Total

Shares

Amount

Shares

Amount

Capital

Distributions

Income (Loss)

Subsidiaries

Equity

Balance, December 31, 2011

42,187 

$

1,021,660 

185,080 

$

7,373 

$

7,127,258 

$

(1,401,704)

$

73,729 

$

680,131 

$

7,508,447 

Net income

- 

- 

- 

- 

- 

289,819 

- 

24,318 

314,137 

Dividends on common shares

- 

- 

- 

- 

- 

(256,119)

- 

- 

(256,119)

Dividends on preferred shares

- 

- 

- 

- 

- 

(35,574)

- 

- 

(35,574)

Common shares issued:

Upon redemption of Class A

units, at redemption value

- 

- 

303 

12 

24,964 

- 

- 

- 

24,976 

Under employees' share

option plan

- 

- 

412 

16 

8,800 

(16,389)

- 

- 

(7,573)

Under dividend reinvestment plan

- 

- 

10 

1 

842 

- 

- 

- 

843 

Contributions:

Real Estate Fund

-