x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)   

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:   

March 31, 2014

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

March 31, 2014 and December 31, 2013

3

Consolidated Statements of Income (Unaudited) for the

Three Months Ended March 31, 2014 and 2013

4

Consolidated Statements of Comprehensive Income (Unaudited)

for the Three Months Ended March 31, 2014 and 2013

5

Consolidated Statements of Changes in Equity (Unaudited) for the

Three Months Ended March 31, 2014 and 2013

6

Consolidated Statements of Cash Flows (Unaudited) for the

Three Months Ended March 31, 2014 and 2013

8

Notes to Consolidated Financial Statements (Unaudited)

10

Report of Independent Registered Public Accounting Firm

30

Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations

31

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

58

Item 4.

Controls and Procedures

59

PART II.

Other Information:

Item 1.

Legal Proceedings

60

Item 1A.

Risk Factors

60

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

60

Item 3.

Defaults Upon Senior Securities

60

Item 4.

Mine Safety Disclosures

60

Item 5.

Other Information

60

Item 6.

Exhibits

60

SIGNATURES

61

EXHIBIT INDEX

62

VORNADO REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

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

March 31,

December 31,

ASSETS

2014 

2013 

Real estate, at cost:

Land

$

4,058,317 

$

4,068,306 

Buildings and improvements

12,477,661 

12,475,556 

Development costs and construction in progress

1,410,465 

1,353,121 

Leasehold improvements and equipment

133,699 

132,483 

Total

18,080,142 

18,029,466 

Less accumulated depreciation and amortization

(3,441,223)

(3,381,457)

Real estate, net

14,638,919 

14,648,009 

Cash and cash equivalents

1,156,727 

583,290 

Restricted cash

210,184 

262,440 

Marketable securities

205,042 

191,917 

Tenant and other receivables, net of allowance for doubtful accounts of $20,233 and $21,869

123,486 

115,862 

Investments in partially owned entities

1,168,996 

1,166,443 

Investment in Toys "R" Us

75,932 

83,224 

Real Estate Fund investments

682,002 

667,710 

Mortgage and mezzanine loans receivable, net of allowance of $5,824 and $5,845

42,749 

170,972 

Receivable arising from the straight-lining of rents, net of allowance of $3,979 and $4,355

830,381 

817,357 

Deferred leasing and financing costs, net of accumulated amortization of $277,257 and $264,451

437,056 

411,927 

Identified intangible assets, net of accumulated amortization of $290,214 and $277,998

299,759 

311,963 

Assets related to discontinued operations

207,575 

314,622 

Other assets

290,544 

351,488 

$

20,369,352 

$

20,097,224 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Mortgages payable

$

8,913,358 

$

8,331,993 

Senior unsecured notes

1,343,442 

1,350,855 

Revolving credit facility debt

88,138 

295,870 

Accounts payable and accrued expenses

457,858 

422,276 

Deferred revenue

514,605 

529,048 

Deferred compensation plan

121,970 

116,515 

Deferred tax liabilities

1,272 

1,280 

Liabilities related to discontinued operations

-   

13,950 

Other liabilities

378,551 

437,073 

Total liabilities

11,819,194 

11,498,860 

Commitments and contingencies

Redeemable noncontrolling interests:

Class A units - 11,564,839 and 11,292,038 units outstanding

1,139,831 

1,002,620 

Series D cumulative redeemable preferred unit - 1 unit outstanding

1,000 

1,000 

Total redeemable noncontrolling interests

1,140,831 

1,003,620 

Vornado shareholders' equity:

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

shares; issued and outstanding 52,682,807 shares

1,277,225 

1,277,225 

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

250,000,000 shares; issued and outstanding 187,411,596 and 187,284,688 shares

7,474 

7,469 

Additional capital

7,017,611 

7,143,840 

Earnings less than distributions

(1,809,609)

(1,734,839)

Accumulated other comprehensive income

77,626 

71,537 

Total Vornado shareholders' equity

6,570,327 

6,765,232 

Noncontrolling interests in consolidated subsidiaries

839,000 

829,512 

Total equity

7,409,327 

7,594,744 

$

20,369,352 

$

20,097,224 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

For the Three

Months Ended March 31,

(Amounts in thousands, except per share amounts)

2014 

2013 

REVENUES:

Property rentals

$

528,100 

$

533,793 

Tenant expense reimbursements

86,590 

75,964 

Cleveland Medical Mart development project

- 

12,143 

Fee and other income

45,928 

96,813 

Total revenues

660,618 

718,713 

EXPENSES:

Operating

273,391 

265,747 

Depreciation and amortization

147,651 

139,317 

General and administrative

52,158 

51,380 

Cleveland Medical Mart development project

- 

11,374 

Impairment losses and acquisition related costs

21,784 

601 

Total expenses

494,984 

468,419 

Operating income

165,634 

250,294 

Income applicable to Toys "R" Us

1,847 

1,759 

Income from partially owned entities

132 

20,766 

Income from Real Estate Fund

18,148 

16,564 

Interest and other investment income (loss), net

11,893 

(49,075)

Interest and debt expense

(109,442)

(120,346)

Net gain (loss) on disposition of wholly owned and partially owned assets

9,635 

(36,724)

Income before income taxes

97,847 

83,238 

Income tax expense

(1,582)

(1,073)

Income from continuing operations

96,265 

82,165 

Income from discontinued operations

1,891 

206,762 

Net income

98,156 

288,927 

Less net income attributable to noncontrolling interests in:

Consolidated subsidiaries

(11,579)

(11,286)

Operating Partnership

(3,848)

(13,933)

Preferred unit distributions of the Operating Partnership

(12)

(786)

Net income attributable to Vornado

82,717 

262,922 

Preferred share dividends

(20,368)

(21,702)

Preferred share redemptions

- 

(9,230)

NET INCOME attributable to common shareholders

$

62,349 

$

231,990 

INCOME PER COMMON SHARE - BASIC:

Income from continuing operations, net

$

0.32 

$

0.20 

Income from discontinued operations, net

0.01 

1.04 

Net income per common share

$

0.33 

$

1.24 

Weighted average shares outstanding

187,307 

186,752 

INCOME PER COMMON SHARE - DILUTED:

Income from continuing operations, net

$

0.32 

$

0.20 

Income from discontinued operations, net

0.01 

1.04 

Net income per common share

$

0.33 

$

1.24 

Weighted average shares outstanding

188,240 

187,529 

DIVIDENDS PER COMMON SHARE

$

0.73 

$

0.73 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

For the Three

Months Ended March 31,

(Amounts in thousands)

2014 

2013 

Net income

$

98,156 

$

288,927 

Other comprehensive income:

Change in unrealized net gain on available-for-sale securities

13,125 

148,789 

Pro rata share of other comprehensive loss of nonconsolidated subsidiaries

(8,286)

(3,647)

Change in value of interest rate swap

1,610 

2,523 

Other

1 

533 

Comprehensive income

104,606 

437,125 

Less comprehensive income attributable to noncontrolling interests

(15,800)

(34,304)

Comprehensive income attributable to Vornado

$

88,806 

$

402,821 

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, 2012

51,185 

$

1,240,278 

186,735 

$

7,440 

$

7,195,438 

$

(1,573,275)

$

(18,946)

$

1,053,209 

$

7,904,144 

Net income attributable to Vornado

-   

-   

-   

-   

-   

262,922 

-   

-   

262,922 

Net income attributable to

noncontrolling interests in

consolidated subsidiaries

-   

-   

-   

-   

-   

-   

-   

11,286 

11,286 

Dividends on common shares

-   

-   

-   

-   

-   

(136,342)

-   

-   

(136,342)

Dividends on preferred shares

-   

-   

-   

-   

-   

(21,702)

-   

-   

(21,702)

Issuance of Series L preferred shares

12,000 

290,710 

-   

-   

-   

-   

-   

-   

290,710 

Redemption of Series F and Series H

preferred shares

(10,500)

(253,269)

-   

-   

-   

-   

-   

-   

(253,269)

Common shares issued:

Upon redemption of Class A

units, at redemption value

-   

-   

162 

5 

13,399 

-   

-   

-   

13,404 

Under employees' share

option plan

-   

-   

27 

1 

1,175 

-   

-   

-   

1,176 

Under dividend reinvestment plan

-   

-   

5 

-   

433 

-   

-   

-   

433 

Contributions:

Real Estate Fund

-   

-   

-   

-   

-   

-   

-   

10,251 

10,251 

Other

-   

-   

-   

-   

-   

-   

-   

14,316 

14,316 

Distributions:

Real Estate Fund

-   

-   

-   

-   

-   

-   

-   

(43,145)

(43,145)

Other

-   

-   

-   

-   

-   

-   

-   

(120,051)

(120,051)

Deferred compensation shares

and options

-   

-   

6 

1 

2,512 

(305)

-   

-   

2,208 

Change in unrealized net gain

on available-for-sale securities

-   

-   

-   

-   

-   

-   

148,789 

-   

148,789 

Pro rata share of other

comprehensive loss of

nonconsolidated subsidiaries

-   

-   

-   

-   

-   

-   

(3,647)

-   

(3,647)

Change in value of interest rate swap

-   

-   

-   

-   

-   

-   

2,523 

-   

2,523 

Adjustments to carry redeemable

Class A units at redemption value

-   

-