Vornado Realty Trust posts break-even 4Q FFO, reversing year-ago loss, as write-downs decrease

Vornado 4Q FFO breaks even, reversing 2008 loss

PARAMUS, N.J. — Vornado Realty Trust on Tuesday posted break-even funds from operations in the final three months of 2009, in part because it didn’t have the same writedowns on depressed land values that led to a loss last year.

The real estate investment trust, which specializes in commercial properties and also owns 33 percent of the Toys R Us retail chain, said FFO was $20,000, which amounts to breaking even on each share. That compares with an FFO loss of $88.2 million, or 57 cents per share, in the 2008 fourth quarter.

FFO, a widely used gauge of real estate operating performance, adds depreciation and amortization expenses, as well as other non-operating items, back to net income.

Adjusted for a series of non-cash asset write-downs, and other items, FFO was $189.5 million, or $1.04 per share, compared with $165.4 million, or $1.07 per share, in the year-ago period.

There were 18 percent more shares outstanding used to calculate FFO on a per-share basis in the most recent quarter.

The trust reported a net income loss of $151.2 million, or 84 cents per share, narrower than its net loss of $227 million, or $1.47 per share, in the 2008 fourth quarter.

There were 16 percent more shares outstanding used to calculate the per-share results in the 2009 fourth quarter.

Revenue rose 3 percent to $719 million, from $695.2 million in the 2008 quarter. Wall Street, on average, expected revenue of $675.5 million.

Vornado said occupancy slipped slightly across its business units. The occupancy rate in its New York office properties was 95.5 percent at Dec. 31, down from 96.7 percent in the year-ago quarter. In its Washington, D.C. office segment, occupancy was 94.9 percent, virtually flat with 95 percent a year prior.

Its retail segment posted occupancy of 91.6 percent, down from 92 percent in the 2008 fourth quarter, while its Merchandise Mart segment occupancy slipped to 88.5 percent from 93.3 percent the prior year.

For the full year 2009, Vornado posted FFO of $583.6 million, or $3.36 per share, compared to $813.1 million, or $4.97 per share in 2008. Adjusted 2009 FFO came in at $868.1 million, or $5 per share, compared with adjusted FFO of $849.3 million, or $5.19 per share, for 2008.

Net income for the year was $49.1 million, or 28 cents per share, compared with $302.2 million, or $1.91 per share, in 2008.

In morning trading, Vornado shares dipped 31 cents to $65.37. The stock has traded between $27.01 and $73.96 in the past 52 weeks.