Vornado Realty Trust (VNO: Quote) on Monday reported a 31 percent decline in funds from operations for the first quarter from last year. The results reflect higher one-time gains as well as a higher gain from its stake in retailer J.C. Penney Co. Inc. (JCP) in the year-ago period.
Excluding items, the real estate income trust's adjusted funds from operations for the latest quarter increased.
Vornado holds an 11 percent stake in JC Penney and a 32.7 percent interest in toy retailer Toys "R" Us Inc.
The New York-based company's first-quarter funds from operations of FFO plus assumed conversions declined to $348.45 million or $1.82 per share from $505.93 million or $2.64 per share in the year-ago period. FFO is a key metric measure for a real estate investment trust.
FFO is GAAP net income or loss adjusted to exclude net gain from sales of depreciated real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets, and extraordinary items.
FFO for the latest quarter include gains from derivative positions in JC Penney of $1.05 million, compared to gains of $17.16 million in the same period last year. The prior-year results also include net gain on extinguishment of debt of $83.91 million and mezzanine loans loss reversal of $82.74 million.
Excluding items, adjusted FFO rose to $346.84 million or $1.81 per share from $331.17 million or $1.73 per share in the prior-year period.
Vornado's net income for the first quarter declined to $233.74 million or $1.25 per share from $399.22 million or $2.12 per share in the year ago quarter.
The latest quarter's results include net gains on sale of real estate of $56.5 million and real estate impairment losses of $8.9 million, while the year-ago period's results include net gains on sale of real estate of $51.2 million.
Adjusted net income was $187.5 million or $1.01 per share, up from $178.8 million, or $0.97 per share in the year ago quarter.
Revenues for the quarter edged up to $727.47 million from $726.88 million in the same period last year.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.77 per share for the quarter on revenues of $650.56 million. Analysts' estimates typically exclude special items.
VNO closed Monday's trading at $87.54, up $1.26 or 1.46 percent on a volume of 867,984 shares.
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by RTT Staff Writer
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