Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Credit Suisse (April 2006)
30 slides from Vornado Realty Trust's conference presentation, Apr 5, 2006
Slide 1: Credit Suisse April 5, 2006
VORNADO REALTY TRUST Credit Suisse April 5, 2006
Slide 2: Joseph Macnow, Chief Financial Officer
JOSEPH ~ MIAGNOUW - CHIEF FINANCIAL OFFICER ~ VORNADO
Slide 3: Wendy Silverstein, Capital Markets
| SIVERSTEIN = CAPITAL MARKETS — LUENDY > EXECUTIVE VICE PRESIDENT VORNADO ABALTY WAU Su
Slide 4: Forward-looking Statements
Forward-looking Statements These slides and the related discussion may contain forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantee
Slide 5: Who We Are
Who We Are One of the largest REITs with total market capitalization of approximately $26 billion Total real estate owned or managed, including pro rata share of partially owned entities and joint ventures, is approximately 104 million sq ft, including Vornado’s 18 million sq ft of Toys “R” Us real
Slide 6: Who We Are
Who We Are Other Real Estate Investments 47.6% interest in AmeriCold Realty Trust 33% interest in Alexander’s [NYSE: ALX] 33% interest in Toys “R” Us Hotel Pennsylvania in New York City 15.8% interest in Newkirk Realty Trust [NYSE: NKT] through operating partnership units 11.3% interest in GMH Commu
Slide 7: Operating and Investment Strategies
Operating and Investment Strategies Operating platforms that have size and scale Markets with high barriers to entry Buy below market rent and below replacement cost Redevelop properties to highest use Focus on increasing NAV per share Focus on FFO per share growth Focus on total return to sharehold
Slide 8: Management Team
Management Team Steven Roth Chairman of the Board and Chief Executive Officer Michael D. Fascitelli President and Trustee Michelle Felman Executive Vice President – Acquisitions David R. Greenbaum President – New York Office Christopher Kennedy President – Merchandise Mart Joseph Macnow Executive Vi
Slide 9: 2005 Accomplishments
2005 Accomplishments Vornado added to Standard & Poor’s 500 Index Raised $490 million through the issuance of 3.875% exchangeable senior debentures with an initial conversion rate of $91.25/share Raised $780 million of common equity at $86.75 Sold $482.5 million of perpetual preferred with a 6.68% a
Slide 10: EBITDA
EBITDA (1) ($ in billions) $1.256 $1.150 $1.047 2003 2004 2005 (1) Results exclude discontinued operations, gains on sale of real estate, other gains or losses that affect comparability and the operations of Toys “R” Us from July 21, 2005, the date of acquisition.
Slide 11: Funds From Operations (FFO) per share
Funds From Operations (FFO) per share (1) $4.80 $4.75 $4.56 2003 2004 2005 (1) Results exclude discontinued operations, gains on sale of real estate, other gains or losses that affect comparability and the operations of Toys “R” Us from July 21, 2005, the date of acquisition.
Slide 12: EBITDA by Operating Segment
EBITDA by Operating Segment (1) Year ended December 31, 2005 New York Office AmeriCold 32% Realty 7% 14% 27% Merchandise Mart 20% Washington, DC Office Retail (1) Excluding discontinued operations, gains on sale of real estate and other gains or losses that affect comparability.
Slide 13: Portfolio Statistics
Portfolio Statistics % Change Same-Store EBITDA Year ended Dec. 31, 2005 / Dec. 31, 2004 New York Office 4.3% Washington, DC Office (4.7%) Retail 3.2% Merchandise Mart 4.7%
Slide 14: Portfolio Statistics
Portfolio Statistics Occupancy December 31, 2005 New York Office 96.0% Washington, DC Office 91.2% Retail 95.6% Merchandise Mart 95.5%
Slide 15: Capital Expenditures
Capital Expenditures ($ in millions) Tenant Improvements and Leasing Commissions Maintenance CapEx $194 $141 $143 $143 $96 $90 $45 $51 $53 2003 2004 2005
Slide 16: Tenant Improvements and Leasing Commissions Per SF Per Annum by Division
Tenant Improvements and Leasing Commissions Per SF Per Annum by Division 2003 2004 2005 New York Office $4.17 $4.10 $4.01 Washington, DC Office $2.85 $3.28 $1.64 Retail $0.35 $0.61 $0.88 Merchandise $2.00 $2.59 $2.42 Mart Average $2.43 $2.91 $2.20
Slide 17: Funds Available for Distribution (FAD) Payout Ratio
Funds Available for Distribution (FAD) Payout Ratio (1) Common Dividend / FAD 85.8% 85.1% 77.2% 2003 2004 2005 (1) FAD is defined as FFO less (i) tenant improvements, leasing commissions and capital expenditures, (ii) straight-line rents and amortization of acquired below market leases, net, and (ii
Slide 18: Enterprise Value
Enterprise Value (1) ($ in billions) Debt (includes pro-rata share of JV debt) Preferred Equity Common Equity 25.8 23.2 9.0 17.9 8.4 1.1 14.1 5.2 1.1 5.1 1.5 15.7 1.1 13.7 11.1 7.9 2003 2004 2005 March 31, 2006 (2) (1) Debt and Preferred Equity are at book value and Common Equity is based on closing
Slide 19: Vornado Well-laddered Debt Maturities
Vornado Well-laddered Debt Maturities As Of 12/31/2005 Does not include Vornado’s pro rata share of JV debt Floating ($ in millions) Fixed $2,581 $1,021 $816 $838 $601 $398 2006 2007 2008 2009 2010 Thereafter % Total Debt 7% 13% 13% 10% 16% 41% Fixed Rate Amount 76 254 829 356 1,008 2,581 Rate 7.34%
Slide 20: Debt Composition (Without JVs)
Debt Composition (Without JVs) As of December 31, 2005 ($ in billions) Floating Fixed $5.9 $4.9 $1.0 $4.2 $1.1 $1.3 $3.8 $4.9 $2.9 2003 2004 2005 Floating Mix % Floating Rate / Total Debt 31.0% 22.4% 17.2% % Net Floating Rate(1) / Total Debt 27.5% 19.7% 15.6% Wtd. Avg. Interest Rates Floating 2.2% 3
Slide 21: Unencumbered EBITDA by Division
Unencumbered EBITDA by Division 4Q 2005 Annualized ($ in thousands) New York Office $ 208,724 DC Office 72,616 Retail 63,788 Merchandise Mart 102,992 Other 53,008 Total 501,128 Toys “R” Us 196,217 Total $ 697,345
Slide 22: Unsecured Debt Covenant Modifications
Unsecured Debt Covenant Modifications Modifications – Decrease cap rate for Total Assets from 9% to 7.5% – Change EBITDA from combined EBITDA to property EBITDA (pre-G&A) for Total Assets – Exclude debt from partially-owned entities Rationale – More accurately reflects market value of Vornado assets
Slide 23: Appendix
Appendix VORNADO REALTY TRUST
Slide 24: Net Income to EBITDA Reconciliation 2005
Appendix Net Income to EBITDA Reconciliation (Amounts in thousands, except per share amounts) Year Ended December 31, 2005 Temperature New York Washington, D.C. Merchandise Controlled Total Office Office Retail Mart Logistics Toys “R” Us Other Net Income $ 539,604 $ 191,936 $ 118,289 $ 106,472 $ 94,
Slide 25: Net Income to EBITDA Reconciliation 2004
Appendix Net Income to EBITDA Reconciliation (Amounts in thousands, except per share amounts) Year Ended December 31, 2004 Temperature New York CESCR Merchandise Controlled Toys "R" Total Office Office Retail Mart Logistics Us Other Net income $ 592,917 $ 206,859 $ 131,047 $ 85,387 $ 85,334 $ 6,531
Slide 26: Net Income to EBITDA Reconciliation 2003
Appendix Net Income to EBITDA Reconciliation (Amounts in thousands, except per share amounts) Year Ended December 31, 2003 Temperature New York CESCR Merchandise Controlled Toys "R" Total Office Office Retail Mart Logistics Us Other Net income $ 460,703 $ 359,503 $ 117,592 $ 62,331 $ 78,293 $ 18,416
Slide 27: Changes by Segment in EBITDA
Appendix Changes by Segment in EBITDA (Amounts in thousands) Year ended December 31, 2005 and December 30, 2004 Temperature Merchandise Controlled Total Office Retail Mart Logistics Toys Other Year ended December 31, 2004 EBITDA $ 1,204,850 $ 634,889 $ 177,826 $ 134,930 $ 71,514 $ - $ 185,691 2005 O
Slide 28: Reconciliation of Net Income to FFO
Appendix Reconciliation of Net Income to FFO(1) (Amounts in thousands, except per share amounts) (Page 1 of 2) Year Ended December 31, 2005 2004 2003 Net income $ 539,604 $ 592,917 $ 460,703 Cumulative effect of a change in accounting principal - - - Depreciation and amortization of real property 27
Slide 29: Reconciliation of Net Income to FFO (Continued)
Appendix (Continued) Reconciliation of Net Income to FFO(1) (Amounts in thousands, except per share amounts) (Page 2 of 2) Year Ended December 31, 2005 2004 2003 Items that affect comparability (income)/expense: Sears and Sears Canada: Net gain on conversion of Sears common shares owned to Sears Hol
Slide 30: Reconciliation of FFO to FAD
Appendix Reconciliation of FFO to FAD(1) (Amounts in thousands, except per share amounts) Year Ended December 31, 2005 2004 2003 FFO applicable to common shares plus assumed conversion $ 757,219 $ 750,043 $ 518,242 Add (Deduct): Recurring tenant improvements, lease commissions and other capital expe