x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:   

June 30, 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

June 30, 2015 and December 31, 2014

3

Consolidated Statements of Income (Unaudited) for the

Three and Six Months Ended June 30, 2015 and 2014

4

Consolidated Statements of Comprehensive Income (Unaudited)

for the Three and Six Months Ended June 30, 2015 and 2014

5

Consolidated Statements of Changes in Equity (Unaudited) for the

Six Months Ended June 30, 2015 and 2014

6

Consolidated Statements of Cash Flows (Unaudited) for the

Six Months Ended June 30, 2015 and 2014

8

Notes to Consolidated Financial Statements (Unaudited)

10

Report of Independent Registered Public Accounting Firm

34

Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations

35

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

74

Item 4.

Controls and Procedures

74

PART II.

Other Information:

Item 1.

Legal Proceedings

75

Item 1A.

Risk Factors

75

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

75

Item 3.

Defaults Upon Senior Securities

75

Item 4.

Mine Safety Disclosures

75

Item 5.

Other Information

75

Item 6.

Exhibits

75

SIGNATURES

76

EXHIBIT INDEX

77

VORNADO REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

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

June 30, 2015

December 31, 2014

ASSETS

Real estate, at cost:

Land

$

4,036,944 

$

3,861,913 

Buildings and improvements

12,188,912 

11,705,749 

Development costs and construction in progress

1,273,897 

1,128,037 

Leasehold improvements and equipment

129,930 

126,659 

Total

17,629,683 

16,822,358 

Less accumulated depreciation and amortization

(3,303,014)

(3,161,633)

Real estate, net

14,326,669 

13,660,725 

Cash and cash equivalents

516,337 

1,198,477 

Restricted cash

127,857 

176,204 

Marketable securities

159,991 

206,323 

Tenant and other receivables, net of allowance for doubtful accounts of $10,944 and $12,210

115,049 

109,998 

Investments in partially owned entities

1,477,090 

1,246,496 

Real estate fund investments

565,976 

513,973 

Receivable arising from the straight-lining of rents, net of allowance of $3,229 and $3,190

851,894 

787,271 

Deferred leasing and financing costs, net of accumulated amortization of $280,286 and $281,109

528,179 

475,158 

Identified intangible assets, net of accumulated amortization of $207,744 and $199,821

245,846 

225,155 

Assets related to discontinued operations

34,891 

2,238,474 

Other assets

636,128 

410,066 

$

19,585,907 

$

21,248,320 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Mortgages payable

$

8,562,314 

$

8,263,165 

Senior unsecured notes

847,463 

1,347,159 

Revolving credit facility debt

400,000 

-   

Accounts payable and accrued expenses

437,813 

447,745 

Deferred revenue

390,636 

358,613 

Deferred compensation plan

118,931 

117,284 

Liabilities related to discontinued operations

12,611 

1,511,362 

Other liabilities

417,935 

375,830 

Total liabilities

11,187,703 

12,421,158 

Commitments and contingencies

Redeemable noncontrolling interests:

Class A units - 11,455,453 and 11,356,550 units outstanding

1,087,466 

1,336,780 

Series D cumulative redeemable preferred units - 177,101 and 1 units outstanding

5,428 

1,000 

Total redeemable noncontrolling interests

1,092,894 

1,337,780 

Vornado shareholders' equity:

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

shares; issued and outstanding 52,678,429 and 52,678,939 shares

1,277,010 

1,277,026 

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

250,000,000 shares; issued and outstanding 188,496,525 and 187,887,498 shares

7,517 

7,493 

Additional capital

7,161,150 

6,873,025 

Earnings less than distributions

(1,958,546)

(1,505,385)

Accumulated other comprehensive income

50,613 

93,267 

Total Vornado shareholders' equity

6,537,744 

6,745,426 

Noncontrolling interests in consolidated subsidiaries

767,566 

743,956 

Total equity

7,305,310 

7,489,382 

$

19,585,907 

$

21,248,320 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(Amounts in thousands, except per share amounts)

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

2015 

2014 

2015 

2014 

REVENUES:

Property rentals

$

514,843 

$

478,490 

$

1,015,117 

$

945,630 

Tenant expense reimbursements

62,215 

55,110 

129,136 

114,411 

Fee and other income

39,230 

40,811 

78,837 

76,751 

Total revenues

616,288 

574,411 

1,223,090 

1,136,792 

EXPENSES:

Operating

242,690 

230,398 

497,183 

466,959 

Depreciation and amortization

136,957 

113,200 

261,079 

244,992 

General and administrative

39,189 

40,478 

97,681 

87,980 

Acquisition and transaction related costs

4,061 

1,067 

6,042 

2,352 

Total expenses

422,897 

385,143 

861,985 

802,283 

Operating income

193,391 

189,268 

361,105 

334,509 

Loss from partially owned entities

(5,231)

(53,742)

(7,636)

(51,763)

Income from real estate fund investments

26,368 

100,110 

50,457 

118,258 

Interest and other investment income, net

5,666 

9,396 

16,458 

21,246 

Interest and debt expense

(92,092)

(103,913)

(183,766)

(200,225)

Net gain on disposition of wholly owned and partially owned assets

- 

905 

1,860 

10,540 

Income before income taxes

128,102 

142,024 

238,478 

232,565 

Income tax benefit (expense)

88,072 

(3,280)

87,101 

(4,131)

Income from continuing operations

216,174 

138,744 

325,579 

228,434 

(Loss) income from discontinued operations

(774)

26,943 

15,067 

35,409 

Net income

215,400 

165,687 

340,646 

263,843 

Less net income attributable to noncontrolling interests in:

Consolidated subsidiaries

(19,186)

(63,975)

(35,068)

(75,554)

Operating Partnership

(10,198)

(4,704)

(15,485)

(8,564)

Net income attributable to Vornado

186,016 

97,008 

290,093 

179,725 

Preferred share dividends

(20,365)

(20,366)

(39,849)

(40,734)

NET INCOME attributable to common shareholders

$

165,651 

$

76,642 

$

250,244 

$

138,991 

INCOME PER COMMON SHARE - BASIC:

Income from continuing operations, net

$

0.88 

$

0.27 

$

1.25 

$

0.56 

Income from discontinued operations, net

- 

0.14 

0.08 

0.18 

Net income per common share

$

0.88 

$

0.41 

$

1.33 

$

0.74 

Weighted average shares outstanding

188,365 

187,527 

188,183 

187,418 

INCOME (LOSS) PER COMMON SHARE - DILUTED:

Income from continuing operations, net

$

0.88 

$

0.27 

$

1.25 

$

0.56 

(Loss) income from discontinued operations, net

(0.01)

0.14 

0.07 

0.18 

Net income per common share

$

0.87 

$

0.41 

$

1.32 

$

0.74 

Weighted average shares outstanding

189,600 

188,617 

189,775 

188,431 

DIVIDENDS PER COMMON SHARE

$

0.63 

$

0.73 

$

1.26 

$

1.46 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(Amounts in thousands)

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

2015 

2014 

2015 

2014 

Net income

$

215,400 

$

165,687 

$

340,646 

$

263,843 

Other comprehensive income (loss):

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

(25,000)

1,878 

(46,332)

15,003 

Pro rata share of other comprehensive (loss) income of

nonconsolidated subsidiaries

(1,191)

14,163 

(1,034)

5,877 

Change in value of interest rate swap and other

2,848 

(547)

2,077 

1,064 

Comprehensive income

192,057 

181,181 

295,357 

285,787 

Less comprehensive income attributable to noncontrolling interests

(28,037)

(69,578)

(47,918)

(85,378)

Comprehensive income attributable to Vornado

$

164,020 

$

111,603 

$

247,439 

$

200,409 

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

(Amounts in thousands)

Non-

Accumulated

controlling

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

-   

-   

-   

-   

-   

290,093 

-   

-   

290,093 

Net income attributable to

noncontrolling interests in

consolidated subsidiaries

-   

-   

-   

-   

-   

-   

-   

35,068 

35,068 

Distribution of Urban Edge

Properties

-   

-   

-   

-   

-   

(464,262)

-   

(341)

(464,603)

Dividends on common shares

-   

-   

-   

-   

-   

(237,160)

-   

-   

(237,160)

Dividends on preferred shares

-   

-   

-   

-   

-   

(39,849)

-   

-   

(39,849)

Common shares issued:

Upon redemption of Class A

units, at redemption value

-   

-   

400 

16 

43,262 

-   

-   

-   

43,278 

Under employees' share

option plan

-   

-   

195 

7 

12,972 

(2,579)

-   

-   

10,400 

Under dividend reinvestment plan

-   

-   

7 

-   

701 

-   

-   

-   

701 

Contributions:

Real estate fund investments

-   

-   

-   

-   

-   

-   

-   

51,725 

51,725 

Distributions:

Real estate fund investments

-   

-