Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — Wachovia Real Estate Securities Conference 2004
29 slides from Vornado Realty Trust's conference presentation, Dec 9, 2004
Slide 1: Wachovia Real Estate Securities Conference
Wachovia Real Estate Securities Conference December 9, 2004
Slide 2: Forward-looking Statements
Forward-looking Statements These slides and the related discussion may contain forw ard-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. Forw ard-looking statements are not guarant
Slide 3: Michael Fascitelli
Michael Fascitelli President & Trustee
Slide 4: Who Are We?
Who Are We? Fifth Largest REIT with total market capitalization of $17 billion Main business platforms – New York office -13.3 million sq ft – DC Office 14.3 - million sq ft – Retail portfolio - 14.0 million sq ft – Merchandise Mart - 8.6 million sq ft
Slide 5: 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 Buy below replacement cost Redevelop properties to highest use Focus on growth per share in FFO Focus on total return for investors – 24% of Vornado stock owned
Slide 6: Management Team
Management Team • Steven Roth Chairman of the Board and Chief Executive Officer • Michael D. Fascitelli President and Trustee • Joseph Macnow Chief Financial Officer • Melvyn H. Blum Executive Vice President – Development • Michelle Felman Executive Vice President – Acquisitions • David R. Greenbaum
Slide 7: Joseph Macnow
Joseph Macnow Chief Financial Officer
Slide 8: Financial Review
Financial Review REALTY TRUST
Slide 9: Financial Review
Financial Review Recurring EBITDA – 2002 $0.991 Billion – 2003 $1.049 Billion (1) – 2004 $1.133 Billion Recurring FFO per share – 2002 $4.28 – 2003 $4.56 (2) – 2004E $4.76 (1) Annualized nine months ended 9/30/04 results (2) Represents Vornado’s FFO per share for nine months ended 9/30/04 as adjuste
Slide 10: Portfolio Statistics
Portfolio Statistics % Change Same-Store EBITDA For nine months ended 9/30/04 New York Office 3.8% DC Office 2.6% Retail Properties 5.3% Merchandise Mart 4.3%
Slide 11: Portfolio Statistics
Portfolio Statistics Occupancy at 9/30/04 New York Office 96.4% DC Office 94.1% Retail Properties 93.5% Merchandise Mart 96.6%
Slide 12: Enterprise Value
Enterprise Value ($ in billions) Debt (includes pro-rata share of JV debt) Preferred Equity Common Equity 17.0 14.1 11.4 5.3 5.1 1.1 5.1 1.1 (1) 1.1 10.6 7.9 5.2 2002 2003 2004 (1) Common Equity based on a closing stock price of $72.46 as of 12/07/04
Slide 13: Debt Composition
Debt Composition ($ in billions) 5.1 5.1 5.3 1.1 Floating 1.5 1.4 4.2 Fixed 3.6 3.7 2002 2003 9/30/04 % Floating-rate 29.4% 27.8% 20.8% % Floating-rate, net of floating-rate investments 29.4% 23.5% 15.1% Weighted Average Interest Rates Floating 2.9% 2.4% 2.8% Fixed 7.5% 7.2% 6.7% Note: Includes Vorn
Slide 14: Capital Expenditures
Capital Expenditures ($ in millions) Tenant Improvements and Leasing Commissions Maintenance CapEx 148 141 122 103 59 96 118 87 63 45 30 16 2002 2003 9/30/03 9/30/04
Slide 15: Funds Available for Distribution (FAD)
Funds Available for Distribution (FAD) (1) Payout Ratio Based on Common Dividend (Dividend/FAD) 81.6% 77.5% 76.7% 73.1% 12 mo ended 12 mo ended 9 mo ended 9 mo ended 12/31/02 12/31/03 9/30/03 9/30/04 (1) FAD is defined as FFO less (i) recurring tenant improvements, leasing commissions and capital ex
Slide 16: Question 1
Question 1 As economic expansion gathers steam, what is your investment bias (buy, sell, development)? What macro-drivers do you watch/recommend to guide your investment strategies? Provide analysis on why your property type/location/market segment are compelling investments over next 3-5 years
Slide 17: Question 2
Question 2 What are the 2-3 largest operating risks facing your industry/company over the next 2-3 years? How are you positioned to minimize these risks?
Slide 18: Question 3
Question 3 Does today’s low cap rate environment foretell a structural or cyclical shift in private market values? Comment on (a) how internal NAV estimate and asset-value philosophy may compare to “street” and (b) forward 1-2 year drivers of NAV.
Slide 19: Question 4
Question 4 Provide capital structure review and outlook. Sources and uses of capital in 2004 and expectations in 2005. What is your current position and intermediate bias towards debt vs equity and variable-rate vs fixed/hedged debt?
Slide 20: Question 5
Question 5 What is the one thing about your company that is most misunderstood or not misunderstood by sell-side and buy-side analysts?
Slide 21: Appendix
Appendix VORNADO REALTY TRUST
Slide 22: Appendix
Appendix This investor package, and the related discussion, addresses certain non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Funds from Operations ("FFO") and Funds Available for Distribution ("FAD"). EBITDA is presented before minor
Slide 23: Reconciliation of Net Income to EBITDA (9 months 2004)
Appendix Reconciliation of Net Income to EBITDA (Amounts in thousands) Nine Months Ended September 30, 2004 Temper ature New Yor k CESCR Merchandise Controlled Total Office Office Retail Mart Logistics Other Net income $ 352,963 $ 162,219 $ 102,381 $ 58,309 $ 57,629 $ 5,604 $ (33,179) Interest and d
Slide 24: Reconciliation of Net Income to EBITDA (2003)
Appendix (Continued) Reconciliation of Net Income to EBITDA (Amounts in thousands) Year Ended December 31, 2003 Temper ature New Yor k CESCR Merchandise Controlled Total Office Office Retail Mart Logistics Other Net income $ 460,703 $ 368,930 $ 117,592 $ 59,119 $ 71,438 $ 18,416 $ (174,792) Interest
Slide 25: Reconciliation of Net Income to EBITDA (2002)
Appendix (Continued) Reconciliation of Net Income to EBITDA (Amounts in thousands) Year Ended December 31, 2002 Temper ature New Yor k CESCR Merchandise Controlled Total Office Office Retail Mart Logistics Other Net income $ 232,903 $ 195,928 $ 122,174 $ 37,959 $ 57,611 $ (5,783) $ (174,986) Cumulat
Slide 26: Changes by Segment in EBITDA
Appendix (Continued) Changes by Segment in EBITDA Nine months ended September 30, 2004 and September 30, 2003 (Amounts in thousands) Temperature Merchandise Controlled Total Office Retail Mart Logistics Other Nine months ended September 30, 2003 EBITDA $ 680,014 $ 470,271 $ 105,949 $ 86,653 $ 55,872
Slide 27: Reconciliation of Net Income to FFO
Appendix (Continued) Reconciliation of Net Income Applicable to Common Shares to Funds from Operations (“FFO”) ( 1) (Amounts in thousands, except per share amounts) Year Ended December 31, Nine Months Ended, 2002 2003 9/30/2004 9/30/2003 Net income $ 232,903 $ 460,703 $ 352,963 $ 255,559 Cumulative
Slide 28: Reconciliation of Net Income to FFO (Continued)
Appendix (Continued) Reconciliation of Net Income Applicable to Common Shares to Funds from Operations (“FFO”) ( 1) (Amounts in thousands, except per share amounts) Year Ended December 31, Nine Months Ended, 2002 2003 9/30/2004 9/30/2003 Non-Comparable Items: $ $ $ $ Alexander's stock appreciation r
Slide 29: Reconciliation of FFO to FAD
Appendix (Continued) Reconciliation of Funds from Operations (“FFO”) to Funds Av ailable for Distribution (“FAD”) ( 1) (Amounts in thousands, except per share amounts) Year ended December 31, Nine Months Ended 2003 2002 9/30/2004 9/30/2003 FFO applicable to common shares $ 518,242 $ 439,775 $ 446,92
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