Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Merger or Acquisition (April 2014)
25 slides from Vornado Realty Trust's merger presentation, Apr 11, 2014
Slide 1: Shopping Center Business Spin-Off
VORNADO REALTY TRUST wn <% ( LOWE'S BEDBATHS E °> | Walmart eee ae) ail wae 71s 25 =!=-9g if | TU PS te SHOPPING CENTER BUSINESS SPIN-OFF APRIL 11, 2014
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements contained in this investor presentation constitute 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
Slide 3: Introduction
Introduction • Vornado has announced its intention to spin-off its shopping center business in a tax-free transaction • Vornado will retain 20 small / non-strategic retail assets worth approximately $100MM, which will be disposed of near-term Transaction • These actions, coupled with previous and pe
Slide 4: Transaction Rationale and Investor Benefits
Transaction Rationale and Investor Benefits We believe the spin-off will enhance shareholder value by creating two focused companies executing two distinct business strategies Benefits to Vornado Mutual Benefits Benefits to SpinCo • Continues simplification • Improves transparency and better • Creat
Slide 5: Pro Forma Vornado
Pro Forma Vornado Following the spin-off, Vornado will be predominantly Vornado: Status Quo 2013 Comparable EBITDA ($1.6Bn) Composition focused on NYC and Washington, D.C. with ~91% of Non-NYC Retail EBITDA generated by its irreplaceable portfolios in these markets Other 13% NYC Office(1) • Vornado
Slide 6: SpinCo Overview
SpinCo Overview WII EEKS WHOLESALE CLUI re
Slide 7: Investment Highlights
Investment Highlights Exceptionally high quality portfolio of 85 shopping centers concentrated in high barrier-to-entry markets throughout the Northeast Premier New York metropolitan area market locations represent more than 70% of portfolio value Majority of the sites would be nearly impossible to
Slide 8: Portfolio Snapshot
SpinCo Portfolio Snapshot Irreplaceable portfolio of shopping centers concentrated in dense, high barrier-to-entry markets with attractive demographics Portfolio Summary Number of Assets 85 Total Square Footage (MM) 16.1 Total Owned Square Footage (MM)(1) 14.6 Number of States (Incl. PR) 11 Occupanc
Slide 9: Demographics
SpinCo Demographics Well positioned in densely populated and high barrier-to-entry markets Non-Power Center Average 3 mile Population (in 000s)(1) Non-Power Center Median 3 mile Household Income (in $000s)(1) 407 $93 149 135 $76 $76 $72 $71 120 119 $70 111 $65 98 $62 90 $61 $61 77 73 $55 68 AKR Spin
Slide 10: Relative to Peer Universe
SpinCo Relative to Peer Universe Strong demographic profile and high barrier-to-entry market presence validated by rents 2013 Average Base Rent PSF $24.54 $21.08 $18.75 $18.02 $17.76 $16.16 $15.66 $14.90 $14.18 $12.99 $11.93 FRT AKR SpinCo ROIC REG EQY WRI RPAI DDR KIM BRX Source: Comparable data pe
Slide 11: Tenant Profile
SpinCo Tenant Profile Diverse, high quality retailer base Top Tenants (% of 2013 Rental Revenue) 994K SF • 58% of SpinCo’s top 25 tenants by rental revenue have Investment Grade ratings. Compares to peer average of 52%(1) • 61% of rental revenue generated from anchor(2) tenants. Compares to peer ave
Slide 12: Tenant Profile: Select Tenants
SpinCo Tenant Profile Select Tenants 12
Slide 13: Historical Operating Performance
SpinCo Historical Operating Performance SpinCo’s portfolio has delivered consistent, stable performance over the past five years Historical Occupancy(1) 95.6% 94.8% 95.0% 95.0% 94.6% 2009 2010 2011 2012 2013 Historical Average Base Rent PSF(1) $18.61 $18.75 $18.19 $17.62 $17.18 2009 2010 2011 2012 2
Slide 14: Historical Mark-to-Market
SpinCo Historical Mark-to-Market Strong Historical Mark-to-Market on Expiring Leases Three Year Average Cash Leasing Spreads(1) 14.0% 12.2% 9.5% 7.4% 7.3% 7.0% 4.6% 4.6% 3.4% 3.1% FRT EQY SpinCo ROIC DDR KIM REG RPAI WRI AKR Source: Comparable data per company SEC filings and earnings call transcrip
Slide 15: Lease Expiration Schedule
SpinCo Lease Expiration Schedule Low Level of Near-term Lease Expirations SF Expiring by Year(1) 38.0% 9.4% 8.6% 8.2% 7.0% 6.9% 5.0% 4.5% 4.7% 4.3% 3.6% 2014(2) 2015 2016 2017 2018 2019 2020 2021 2022 2023 Thereafter Expiring SF 614K 595K 646K 493K 1,293K 1,130K 967K 683K 948K 1,183K 5,238K Notes (1
Slide 16: Management and Board
SpinCo Management and Board Industry veteran Jeff Olson will join as Chairman and CEO • Chief Executive Officer of Equity One (EQY) since 2006 • Previously served as President of Kimco Realty Corp’s (KIM) Eastern and Western Divisions • “Mr. Olson’s eight-year tenure at Equity One yielded above-aver
Slide 17: Anticipated Process and Timing
Anticipated Process and Timing SpinCo REIT Status / Transaction Timing Distribution Process Conditions Precedent Tax Considerations • Intend to file initial Form 10 • The distribution is expected to • Declaration by the SEC that • In August 2013, Vornado registration statement with be made on a pro
Slide 18: Appendix I
VORNADO Appendix | ORNS 18
Slide 19: Property List
SpinCo Property List Weighted Total % Average Rent Own. % Square No. Property Name State City Ownership Per Center(1) Type Occupancy Feet(2) Retail Anchors and Major Tenants New Jersey Dick’s Sporting Goods, Kohl’s, P.C. Richard & Son, TJ Maxx, LA 1 East Brunswick NJ East Brunswick 100% $8.90 Fee 10
Slide 20: Property List (cont'd)
SpinCo Property List (cont’d) Weighted Total % Average Rent Own. % Square No. Property Name State City Ownership Per Center(1) Type Occupancy Feet(2) Retail Anchors and Major Tenants 28 Carlstadt NJ Carlstadt 100% $21.80 Ground 95.2% 78,000 Burger King, Stop & Shop 29 Paramus NJ Paramus 100% $42.23
Slide 21: Property List (cont'd)
SpinCo Property List (cont’d) Weighted Total % Average Rent Own. % Square No. Property Name State City Ownership Per Center(1) Type Occupancy Feet(2) Retail Anchors and Major Tenants Pennsylvania A.C. Moore, Burlington Coat Factory, Dick’s Sporting Goods, 52 Allentown PA Allentown 100% $15.24 Fee 90
Slide 22: Property List (cont'd)
SpinCo Property List (cont’d) Weighted Total % Average Rent Own. % Square No. Property Name State City Ownership Per Center(1) Type Occupancy Feet(2) Retail Anchors and Major Tenants Maryland Corner Bakery, DXL, HH Gregg, Home Goods, Shoppers Food, 71 Baltimore MD Towson 100% $16.21 Fee 100.0% 155,0
Slide 23: Property List (cont'd)
SpinCo Property List (cont’d) Weighted Total % Average Rent Own. % Square No. Property Name State City Ownership Per Center(1) Type Occupancy Feet(2) Retail Anchors and Major Tenants Malls Boscov’s, Macy’s, JCPenney, Lord & Taylor, Loews Theatre, 82 Monmouth Mall NJ Eatontown 50% $35.23(3) Fee 93.9%
Slide 24: Appendix II
Appendix II This investor presentation contains Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), a non-GAAP measure. EBITDA is presented before non-controlling interests, discontinued operations, gains on sale or real estate and non-recurring items. We consider EBITDA a sup
Slide 25: Appendix II (cont'd)
Appendix II (cont’d) Reconciliation of Net Income to EBITDA, Comparable EBITDA and Pro Forma Comparable EBITDA For the Year Ended December 31, 2013 $ in thousands Retail Total Properties Net Income 475,971 415,644 Interest and debt expense 758,781 50,901 Depreciation and amortization 732,757 72,161
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