{"id":6870,"date":"2022-08-31T20:36:39","date_gmt":"2022-09-01T01:36:39","guid":{"rendered":"https:\/\/1reason.com\/re\/vornado-announces-second-quarter-2022-financial-results\/6870\/"},"modified":"2022-09-01T15:36:39","modified_gmt":"2022-09-01T20:36:39","slug":"vornado-announces-second-quarter-2022-financial-results","status":"publish","type":"post","link":"https:\/\/1reason.com\/re\/vornado-announces-second-quarter-2022-financial-results\/6870\/","title":{"rendered":"Vornado Announces Second Quarter 2022 Financial Results"},"content":{"rendered":"
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, 2022 was $37,403,000, or $0.19 per diluted share, and $26,804,000, or $0.14 per diluted share for the quarter ended June 30, 2021. <\/p>\n

FUNDS FROM OPERATIONS (“FFO”) attributable to common shareholders plus assumed conversions (non-GAAP) for the quarter ended June 30, 2022 was $154,965,000, or $0.80 per diluted share, compared to $153,364,000, 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 on the following page, FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the quarter ended June 30, 2022 was $160,059,000, or $0.83 per diluted share, and $133,161,000, or $0.69 per diluted share for the quarter ended June 30, 2021.<\/p>\n

Six Months Ended June 30, 2022 Financial Results<\/u><\/em><\/strong><\/p>\n

NET INCOME attributable to common shareholders for the six months ended June 30, 2022 was $76,896,000, or $0.40 per diluted share, compared to $52,128,000, or $0.27 per diluted share, for the six months ended June 30, 2021. 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, 2022 was $69,209,000, or $0.36 per diluted share, and $39,250,000, or $0.20 per diluted share, for the six months ended June 30, 2021.<\/p>\n

FFO attributable to common shareholders plus assumed conversions (non-GAAP) for the six months ended June 30, 2022 was $309,997,000, or $1.60 per diluted share, compared to $271,771,000, or $1.41 per diluted share, for the six months ended June 30, 2021. 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, 2022 was $312,496,000, or $1.62 per diluted share, and $257,520,000, or $1.34 per diluted share, for the six months ended June 30, 2021.<\/p>\n

The following table reconciles net income attributable to common shareholders to net income attributable to common shareholders, as adjusted (non-GAAP):<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Amounts in thousands, except per share amounts)<\/td>\nFor the Three Months Ended<\/strong>
June 30,<\/strong><\/td>\n		\nFor the Six Months Ended<\/strong>
June 30,<\/strong><\/td>\n<\/tr>\n
\n2022<\/strong><\/td>\n\n2021<\/strong><\/td>\n\n2022<\/strong><\/td>\n\n2021<\/strong><\/td>\n<\/tr>\n
Net income attributable to common shareholders<\/td>\n$<\/td>\n50,418<\/td>\n\n\n$<\/td>\n48,045<\/td>\n\n\n$<\/td>\n76,896<\/td>\n\n\n$<\/td>\n52,128<\/td>\n<\/tr>\n
Per diluted share<\/td>\n$<\/td>\n0.26<\/td>\n\n\n$<\/td>\n0.25<\/td>\n\n\n$<\/td>\n0.40<\/td>\n\n\n$<\/td>\n0.27<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
Certain (income) expense items that impact net income attributable to common shareholders:<\/td>\n\n\n\n\n\n\n<\/tr>\n
Net gain on sale of the Center Building (33-00 Northern Boulevard, Long Island City, NY)<\/td>\n$<\/td>\n(15,213<\/td>\n)<\/td>\n\n$<\/td>\n\u2014<\/td>\n\n\n$<\/td>\n(15,213<\/td>\n)<\/td>\n\n$<\/td>\n\u2014<\/td>\n<\/tr>\n
Refund of New York City transfer taxes related to the April 2019 transfer to Fifth Avenue and Times Square JV<\/td>\n\n(13,613<\/td>\n)<\/td>\n\n\n\u2014<\/td>\n\n\n\n(13,613<\/td>\n)<\/td>\n\n\n\u2014<\/td>\n<\/tr>\n
Hotel Pennsylvania loss<\/td>\n\n8,931<\/td>\n\n\n\n4,992<\/td>\n\n\n\n17,860<\/td>\n\n\n\n13,982<\/td>\n<\/tr>\n
Deferred tax liability on our investment in Farley Office and Retail (held through a taxable REIT subsidiary)<\/td>\n\n3,234<\/td>\n\n\n\n\u2014<\/td>\n\n\n\n6,407<\/td>\n\n\n\n\u2014<\/td>\n<\/tr>\n
After-tax net gain on sale of 220 Central Park South (“220 CPS”) condominium unit(s) and ancillary amenities<\/td>\n\n(673<\/td>\n)<\/td>\n\n\n(22,208<\/td>\n)<\/td>\n\n\n(6,085<\/td>\n)<\/td>\n\n\n(22,208<\/td>\n)<\/td>\n<\/tr>\n
Other<\/td>\n\n3,760<\/td>\n\n\n\n(5,508<\/td>\n)<\/td>\n\n\n2,660<\/td>\n\n\n\n(5,574<\/td>\n)<\/td>\n<\/tr>\n
\n\n(13,574<\/td>\n)<\/td>\n\n\n(22,724<\/td>\n)<\/td>\n\n\n(7,984<\/td>\n)<\/td>\n\n\n(13,800<\/td>\n)<\/td>\n<\/tr>\n
Noncontrolling interests’ share of above adjustments<\/td>\n\n559<\/td>\n\n\n\n1,483<\/td>\n\n\n\n297<\/td>\n\n\n\n922<\/td>\n<\/tr>\n
Total of certain (income) expense items that impact net income attributable to common shareholders<\/td>\n$<\/td>\n(13,015<\/td>\n)<\/td>\n\n$<\/td>\n(21,241<\/td>\n)<\/td>\n\n$<\/td>\n(7,687<\/td>\n)<\/td>\n\n$<\/td>\n(12,878<\/td>\n)<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n(0.07<\/td>\n)<\/td>\n\n$<\/td>\n(0.11<\/td>\n)<\/td>\n\n$<\/td>\n(0.04<\/td>\n)<\/td>\n\n$<\/td>\n(0.07<\/td>\n)<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
Net income attributable to common shareholders, as adjusted (non-GAAP)<\/td>\n$<\/td>\n37,403<\/td>\n\n\n$<\/td>\n26,804<\/td>\n\n\n$<\/td>\n69,209<\/td>\n\n\n$<\/td>\n39,250<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.19<\/td>\n\n\n$<\/td>\n0.14<\/td>\n\n\n$<\/td>\n0.36<\/td>\n\n\n$<\/td>\n0.20<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/tr>\n<\/table>\n

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):<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Amounts in thousands, except per share amounts)<\/td>\nFor the Three Months Ended<\/strong>
June 30,<\/strong><\/td>\n		\nFor the Six Months Ended<\/strong>
June 30,<\/strong><\/td>\n<\/tr>\n
\n2022<\/strong><\/td>\n\n2021<\/strong><\/td>\n\n2022<\/strong><\/td>\n\n2021<\/strong><\/td>\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions (non-GAAP)(1)<\/strong><\/sup><\/td>\n$<\/td>\n154,965<\/td>\n\n\n$<\/td>\n153,364<\/td>\n\n\n$<\/td>\n309,997<\/td>\n\n\n$<\/td>\n271,771<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.80<\/td>\n\n\n$<\/td>\n0.80<\/td>\n\n\n$<\/td>\n1.60<\/td>\n\n\n$<\/td>\n1.41<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
Certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions:<\/td>\n\n\n\n\n\n\n<\/tr>\n
Deferred tax liability on our investment in Farley Office and Retail (held through a taxable REIT subsidiary)<\/td>\n$<\/td>\n3,234<\/td>\n\n\n$<\/td>\n\u2014<\/td>\n\n\n$<\/td>\n6,407<\/td>\n\n\n$<\/td>\n\u2014<\/td>\n<\/tr>\n
After-tax net gain on sale of 220 CPS condominium unit(s) and ancillary amenities<\/td>\n\n(673<\/td>\n)<\/td>\n\n\n(22,208<\/td>\n)<\/td>\n\n\n(6,085<\/td>\n)<\/td>\n\n\n(22,208<\/td>\n)<\/td>\n<\/tr>\n
Other<\/td>\n\n2,912<\/td>\n\n\n\n953<\/td>\n\n\n\n2,363<\/td>\n\n\n\n7,304<\/td>\n<\/tr>\n
\n\n5,473<\/td>\n\n\n\n(21,255<\/td>\n)<\/td>\n\n\n2,685<\/td>\n\n\n\n(14,904<\/td>\n)<\/td>\n<\/tr>\n
Noncontrolling interests’ share of above adjustments<\/td>\n\n(379<\/td>\n)<\/td>\n\n\n1,052<\/td>\n\n\n\n(186<\/td>\n)<\/td>\n\n\n653<\/td>\n<\/tr>\n
Total of certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions, net<\/td>\n$<\/td>\n5,094<\/td>\n\n\n$<\/td>\n(20,203<\/td>\n)<\/td>\n\n$<\/td>\n2,499<\/td>\n\n\n$<\/td>\n(14,251<\/td>\n)<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.03<\/td>\n\n\n$<\/td>\n(0.11<\/td>\n)<\/td>\n\n$<\/td>\n0.02<\/td>\n\n\n$<\/td>\n(0.07<\/td>\n)<\/td>\n<\/tr>\n
\n\n\n\n\n\n\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP)<\/td>\n$<\/td>\n160,059<\/td>\n\n\n$<\/td>\n133,161<\/td>\n\n\n$<\/td>\n312,496<\/td>\n\n\n$<\/td>\n257,520<\/td>\n<\/tr>\n
Per diluted share (non-GAAP)<\/td>\n$<\/td>\n0.83<\/td>\n\n\n$<\/td>\n0.69<\/td>\n\n\n$<\/td>\n1.62<\/td>\n\n\n$<\/td>\n1.34<\/td>\n<\/tr>\n<\/table>\n

____________________________________________________________<\/strong><\/p>\n

(1)<\/strong>See page 10 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, 2022 and 2021.<\/p>\n

FFO, as Adjusted Bridge – Q2 2022 vs. Q2 2021<\/u><\/em><\/strong><\/p>\n

The following table bridges our FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2021 to FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2022:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Amounts in millions, except per share amounts)<\/td>\nFFO, as Adjusted<\/strong><\/td>\n<\/tr>\n
\nAmount<\/strong><\/td>\n\nPer Share<\/strong><\/td>\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2021<\/strong><\/td>\n$<\/strong><\/td>\n133.2<\/strong><\/td>\n\n\n$<\/strong><\/td>\n0.69<\/strong><\/td>\n<\/tr>\n
\n\n\n<\/tr>\n
Increase (decrease) in FFO, as adjusted due to:<\/td>\n\n\n<\/tr>\n
Rent commencement and other tenant related items<\/td>\n\n26.0<\/td>\n\n\n<\/tr>\n
Variable businesses (primarily signage and trade shows)<\/td>\n\n8.5<\/td>\n\n\n<\/tr>\n
Acquisition of our partner’s 45% ownership interest in One Park Avenue on August 5, 2021<\/td>\n\n3.6<\/td>\n\n\n<\/tr>\n
Straight-line impact of PENN 1 2023 estimated ground rent reset<\/td>\n\n(5.8<\/td>\n)<\/td>\n\n<\/tr>\n
Other, net<\/td>\n\n(3.3<\/td>\n)<\/td>\n\n<\/tr>\n
\n\n29.0<\/td>\n\n\n<\/tr>\n
Noncontrolling interests’ share of above items<\/td>\n\n(2.1<\/td>\n)<\/td>\n\n<\/tr>\n
Net increase<\/td>\n\n26.9<\/td>\n\n\n\n0.14<\/td>\n<\/tr>\n
\n\n\n<\/tr>\n
FFO attributable to common shareholders plus assumed conversions, as adjusted (non-GAAP) for the three months ended June 30, 2022<\/strong><\/td>\n$<\/strong><\/td>\n160.1<\/strong><\/td>\n\n\n$<\/strong><\/td>\n0.83<\/strong><\/td>\n<\/tr>\n<\/table>\n

See page 10 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, 2022 and 2021. Reconciliations of FFO attributable to common shareholders plus assumed conversions to FFO attributable to common shareholders plus assumed conversions, as adjusted are provided above.<\/p>\n

Dispositions: <\/strong><\/p>\n

220 CPS<\/em><\/p>\n

During the six months ended June 30, 2022, we closed on the sale of one condominium unit and ancillary amenities at 220 CPS for net proceeds of $16,124,000 resulting in a financial statement net gain of $7,030,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income. In connection with these sales, $945,000 of income tax expense was recognized on our consolidated statements of income. From inception to June 30, 2022, we have closed on the sale of 107 units and ancillary amenities for net proceeds of $3,023,020,000 resulting in financial statement net gains of $1,124,285,000.<\/p>\n

SoHo Properties<\/em><\/p>\n

On January 13, 2022, we sold two Manhattan retail properties located at 478-482 Broadway and 155 Spring Street for $84,500,000 and realized net proceeds of $81,399,000. In connection with the sale, we recognized a net gain of $551,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income.<\/p>\n

Center Building (33-00 Northern Boulevard)<\/em><\/p>\n

On June 17, 2022, we sold the Center Building, an eight-story 498,000 square foot office building located at 33\u201100 Northern Boulevard in Long Island City, New York, for $172,750,000. We realized net proceeds of $58,946,000 after repayment of the existing $100,000,000 mortgage loan and closing costs. In connection with the sale, we recognized a net gain of $15,213,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income. The gain for tax purposes was approximately $74,000,000.<\/p>\n

Financings<\/strong>:<\/p>\n

100 West 33rd Street<\/em><\/p>\n

On June 15, 2022, we completed a $480,000,000 refinancing of 100 West 33rd Street, a 1.1 million square foot building comprised of 859,000 square feet of office space and 255,000 square feet of retail space. The interest-only loan bears a rate of SOFR plus 1.65% (3.09% as of June 30, 2022) through March 2024, increasing to SOFR plus 1.85% thereafter. The loan matures in June 2027, with two one-year extension options subject to debt service coverage ratio and loan-to-value tests. The loan replaces the previous $580,000,000 loan that bore interest at LIBOR plus 1.55% and was scheduled to mature in April 2024.<\/p>\n

770 Broadway<\/em><\/p>\n

On June 28, 2022, we completed a $700,000,000 refinancing of 770 Broadway, a 1.2 million square foot Class A Manhattan office building. The interest-only loan bears a rate of SOFR plus 2.25% (3.75% as of June 30, 2022) and matures in July 2024, with three one-year extension options (July 2027 as fully extended). Upon the achievement of certain conditions within the first 18 months of closing, the interest rate will decrease to SOFR plus 1.75% and we will have the option to draw an additional $300,000,000 of proceeds. Concurrently with the refinancing, the interest rate on $350,000,000 of the loan was swapped to a fixed rate of 5.11% and on July 22, 2022, the interest rate on the remaining $350,000,000 was swapped to a fixed rate of 4.85%. The swaps result in a blended fixed interest rate of 4.98% through July 2027. The loan replaces the previous $700,000,000 loan that bore interest at SOFR plus 1.86% and was scheduled to mature in July 2022.<\/p>\n

Unsecured Revolving Credit Facility<\/em><\/p>\n

On June 30, 2022, we amended and extended one of our two revolving credit facilities. The $1.25billion amended facility bears interest at a rate of SOFR plus 1.15% (2.68% as of June 30, 2022). The term of the facility was extended from March 2024 to December 2027, as fully extended. The facility fee is 25 basis points. Our other $1.25billion revolving credit facility matures in April 2026, as fully extended, and bears a rate of SOFR plus 1.19% with a facility fee of 25 basis points.<\/p>\n

Unsecured Term Loan<\/em><\/p>\n

On June 30, 2022, we extended our $800,000,000 unsecured term loan from February 2024 to December 2027. The extended loan bears interest at a rate of SOFR plus 1.30% (2.83% as of June 30, 2022). Under an existing swap agreement, $750,000,000 of the $800,000,000 loan has been swapped to a fixed rate of 4.05% through October 2023.<\/p>\n

Leasing Activity For the Three Months Ended June 30, 2022:<\/strong><\/p>\n