By Dow Jones Business News,
February 24, 2014, 05:46:00 PM EDT
By Anna Prior
Vornado Realty Trust swung to a fourth-quarter loss as the latest quarter was hit by negative funds from operations
from the commercial property owner's stake in Toys "R" Us.
However, adjusted funds from operations exceeded Wall Street's expectations.
The real-estate investment trust manages and owns commercial properties around the District of Columbia and New
York. It has been buying more in its strongest markets, while unloading properties in noncore areas.
Vornado also holds major stakes in companies such as Toys "R" Us Inc., though it sold its stake in retailer J.C.
Penney Co. last year.
Earlier this month, Vornado disclosed that fourth-quarter results would include a $162.2 million noncash impairment
from the company's stake in Toys "R" Us that would hurt the bottom line by 82 cents a share. In December, Vornado said
its fourth-quarter results would include a net loss of $130.9 million, or 66 cents a share, from Toys "R" Us's fiscal
third-quarter results, wider than the net loss of $73.8 million, or 37 cents a share, recorded a year earlier. The toy
retailer, which is also owned by Bain Capital and Kohlberg Kravis Roberts & Co. in December reported a sharply wider
fiscal third-quarter loss amid lower sales in the U.S. and abroad, and an income tax expense in the latest period.
On Monday, Vornado reported a loss of $68.9 million, or 37 cents a share, compared with a year-earlier profit of $
62.6 million, or 33 cents a share. The latest quarter included $127.5 million of gains related to the sale of real
estate, compared with $281.5 million in asset-sale-related gains for the year-ago period. The latest quarter also
included $32.9 million of real-estate impairment losses, compared with $117.9 million of real estate impairment losses a
year earlier. Excluding net asset-sales gains, impairment losses and other items, adjusted earnings rose to 57 cents a
share from 41 cents.
Negative funds from operations--a key measure of performance in the real-estate sector--was four cents a share in
the latest period, compared with funds from operations of 30 cents a share a year earlier. On an adjusted basis, FFO
rose to $1.33 from $1.11 a share.
Revenue slipped 1.9% to $673.3 million.
Analysts polled by Thomson Reuters expected adjusted FFO of $1.17 a share on revenue of $665.7 million.
Shares ended Monday at $94.64 and were flat in recent after-hours trading. Through the close, the stock has risen
11% in the last 12 months.
Write to Anna Prior at firstname.lastname@example.org
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