x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:   

March 31, 2015

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, 2015 and December 31, 2014

3

Consolidated Statements of Income (Unaudited) for the

Three Months Ended March 31, 2015 and 2014

4

Consolidated Statements of Comprehensive Income (Unaudited)

for the Three Months Ended March 31, 2015 and 2014

5

Consolidated Statements of Changes in Equity (Unaudited) for the

Three Months Ended March 31, 2015 and 2014

6

Consolidated Statements of Cash Flows (Unaudited) for the

Three Months Ended March 31, 2015 and 2014

8

Notes to Consolidated Financial Statements (Unaudited)

10

Report of Independent Registered Public Accounting Firm

31

Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations

32

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

59

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

2015 

2014 

Real estate, at cost:

Land

$

3,914,401 

$

3,861,913 

Buildings and improvements

11,881,228 

11,705,749 

Development costs and construction in progress

1,157,180 

1,128,037 

Leasehold improvements and equipment

127,534 

126,659 

Total

17,080,343 

16,822,358 

Less accumulated depreciation and amortization

(3,248,078)

(3,161,633)

Real estate, net

13,832,265 

13,660,725 

Cash and cash equivalents

1,067,568 

1,198,477 

Restricted cash

198,672 

176,204 

Marketable securities

184,991 

206,323 

Tenant and other receivables, net of allowance for doubtful accounts of $12,456 and $12,210

110,477 

109,998 

Investments in partially owned entities

1,408,214 

1,246,496 

Real estate fund investments

554,426 

513,973 

Receivable arising from the straight-lining of rents, net of allowance of $3,083 and $3,188

816,661 

787,271 

Deferred leasing and financing costs, net of accumulated amortization of $289,589 and $281,109

478,507 

475,158 

Identified intangible assets, net of accumulated amortization of $200,330 and $199,821

229,579 

225,155 

Assets related to discontinued operations

35,342 

2,238,474 

Other assets

344,349 

410,066 

$

19,261,051 

$

21,248,320 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Mortgages payable

$

8,316,793 

$

8,263,165 

Senior unsecured notes

847,332 

1,347,159 

Revolving credit facility debt

400,000 

-   

Accounts payable and accrued expenses

432,970 

447,745 

Deferred revenue

346,026 

358,613 

Deferred compensation plan

121,530 

117,284 

Liabilities related to discontinued operations

11,354 

1,511,362 

Other liabilities

436,608 

375,830 

Total liabilities

10,912,613 

12,421,158 

Commitments and contingencies

Redeemable noncontrolling interests:

Class A units - 11,640,982 and 11,356,550 units outstanding

1,303,790 

1,336,780 

Series D cumulative redeemable preferred unit - 1 unit outstanding

1,000 

1,000 

Total redeemable noncontrolling interests

1,304,790 

1,337,780 

Vornado shareholders' equity:

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

shares; issued and outstanding 52,678,939 shares

1,277,014 

1,277,026 

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

250,000,000 shares; issued and outstanding 188,272,702 and 187,887,498 shares

7,509 

7,493 

Additional capital

6,935,205 

6,873,025 

Earnings less than distributions

(2,006,439)

(1,505,385)

Accumulated other comprehensive income

72,609 

93,267 

Total Vornado shareholders' equity

6,285,898 

6,745,426 

Noncontrolling interests in consolidated subsidiaries

757,750 

743,956 

Total equity

7,043,648 

7,489,382 

$

19,261,051 

$

21,248,320 

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)

2015 

2014 

REVENUES:

Property rentals

$

500,274 

$

467,140 

Tenant expense reimbursements

66,921 

59,301 

Fee and other income

39,607 

35,940 

Total revenues

606,802 

562,381 

EXPENSES:

Operating

254,493 

236,561 

Depreciation and amortization

124,122 

131,792 

General and administrative

58,492 

47,502 

Acquisition and transaction related costs

1,981 

1,285 

Total expenses

439,088 

417,140 

Operating income

167,714 

145,241 

(Loss) income from partially owned entities

(2,405)

1,979 

Income from real estate fund investments

24,089 

18,148 

Interest and other investment income, net

10,792 

11,850 

Interest and debt expense

(91,674)

(96,312)

Net gain on disposition of wholly owned and partially

owned assets

1,860 

9,635 

Income before income taxes

110,376 

90,541 

Income tax expense

(971)

(851)

Income from continuing operations

109,405 

89,690 

Income from discontinued operations

15,841 

8,466 

Net income

125,246 

98,156 

Less net income attributable to noncontrolling interests in:

Consolidated subsidiaries

(15,882)

(11,579)

Operating Partnership

(5,287)

(3,860)

Net income attributable to Vornado

104,077 

82,717 

Preferred share dividends

(19,484)

(20,368)

NET INCOME attributable to common shareholders

$

84,593 

$

62,349 

INCOME PER COMMON SHARE - BASIC:

Income from continuing operations, net

$

0.37 

$

0.29 

Income from discontinued operations, net

0.08 

0.04 

Net income per common share

$

0.45 

$

0.33 

Weighted average shares outstanding

187,999 

187,307 

INCOME PER COMMON SHARE - DILUTED:

Income from continuing operations, net

$

0.37 

$

0.29 

Income from discontinued operations, net

0.08 

0.04 

Net income per common share

$

0.45 

$

0.33 

Weighted average shares outstanding

189,336 

188,240 

DIVIDENDS PER COMMON SHARE

$

0.63 

$

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)

2015 

2014 

Net income

$

125,246 

$

98,156 

Other comprehensive income (loss):

Change in unrealized net (loss) gain on available-for-sale securities

(21,332)

13,125 

Pro rata share of other comprehensive income (loss) of

nonconsolidated subsidiaries

157 

(8,286)

Change in value of interest rate swap and other

(771)

1,611 

Comprehensive income

103,300 

104,606 

Less comprehensive income attributable to noncontrolling interests

(19,881)

(15,800)

Comprehensive income attributable to Vornado

$

83,419 

$

88,806 

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, 2014

52,679 

$

1,277,026 

187,887 

$

7,493 

$

6,873,025 

$

(1,505,385)

$

93,267 

$

743,956 

$

7,489,382 

Net income attributable to Vornado

-   

-   

-   

-   

-   

104,077 

-   

-   

104,077 

Net income attributable to

noncontrolling interests in

consolidated subsidiaries

-   

-   

-   

-   

-   

-   

-   

15,882 

15,882 

Distribution of Urban Edge

Properties

-   

-   

-   

-   

-   

(464,262)

-   

(341)

(464,603)

Dividends on common shares

-   

-   

-   

-   

-   

(118,447)

-   

-   

(118,447)

Dividends on preferred shares

-   

-   

-   

-   

-   

(19,484)

-   

-   

(19,484)

Common shares issued:

Upon redemption of Class A

units, at redemption value

-   

-   

210 

8 

23,485 

-   

-   

-   

23,493 

Under employees' share

option plan

-   

-   

165 

7 

11,672 

(2,579)

-   

-   

9,100 

Under dividend reinvestment plan

-   

-   

3 

-   

338 

-   

-   

-   

338 

Contributions:

Real estate fund investments

-   

-   

-   

-   

-   

-   

-   

51,350 

51,350 

Distributions:

Real estate fund investments

-   

-   

-   

-   

-   

-   

-   

(52,882)

(52,882)

Other

-   

-   

-   

-   

-   

-   

-   

(125)

(125)

Conversion of Series A preferred

shares to common shares

-   

(12)

1 

-   

12 

-   

-   

-   

-   

Deferred compensation shares

and options

-   

-   

7 

1 

1,324 

(359)

-   

-   

966 

Change in unrealized net loss on

available-for-sale securities

-   

-   

-   

-   

-   

-   

(21,332)

-   

(21,332)

Pro rata share of other

comprehensive income of

nonconsolidated subsidiaries

-   

-   

-   

-   

-   

-   

157 

-   

157 

Change in value of interest rate swap

-   

-   

-   

-   

-   

-   

(776)

-   

(776)

Adjustments to carry redeemable