8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

April 22, 2014

VORNADO REALTY TRUST

(Exact Name of Registrant as Specified in Charter)

Maryland	No. 001-11954	No. 22-1657560
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

VORNADO REALTY L.P.
(Exact Name of Registrant as Specified in Charter)

Delaware	No. 001-34482 (Commission File Number)	No. 13-3925979 (IRS Employer Identification No.)
(State or Other Jurisdiction of Incorporation)

888 Seventh Avenue New York, New York	10019
(Address of Principal Executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 894-7000

Former name or former address, if changed since last report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

[    ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[    ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[    ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[    ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

On April 22, 2014, Vornado Realty Trust (“Vornado”) issued a press release stating in its first quarter ended March 31, 2014, it has recognized its 32.6% share of the equity in the earnings of Toys “R” Us, Inc.’s (“Toys”) fourth quarter totaling $75,196,000 and recognized an offsetting non-cash impairment loss.  A copy of that press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information and exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01   Other Events.

On April 22, 2014, Vornado reported that in its first quarter ended March 31, 2014 it has recognized net income attributable to Toys of $1,847,000, representing management fees earned.

Item 9.01.  Financial Statements, Pro Forma Financial Information and Exhibits.

(d)       Exhibit.

99.1  Press Release, dated April 22, 2014.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VORNADO REALTY TRUST
(Registrant)
By:	/s/ Stephen W. Theriot
Name:	Stephen W. Theriot
Title:	Chief Financial Officer, Vornado Realty Trust

Date:  April 22, 2014

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VORNADO REALTY L.P.
(Registrant)
By:	VORNADO REALTY TRUST,
	Sole General Partner
By:	/s/ Stephen W. Theriot
Name:	Stephen W. Theriot
Title:	Chief Financial Officer, Vornado Realty Trust

Date: April 22, 2014

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EX-99

EXHIBIT 99.1

CONTACT:          STEPHEN THERIOT

                                (201) 587-1000

 

                   210 Route 4 East

                   Paramus, NJ, 07652

FOR IMMEDIATE RELEASE – April 22, 2014

Vornado Announces its Equity in the Earnings of Toys “R” Us’ Fourth Quarter and

Offsetting Impairment Loss

         PARAMUS, NEW JERSEY,..…. Vornado announced today that in its first quarter ended March 31, 2014 it has recognized its 32.6% share of the equity in the earnings of Toys’ fourth quarter totaling $75,196,000 and a corresponding non-cash impairment loss of the same amount in order to continue to report its Toys investment at its estimated fair value of $80,062,000.  Vornado’s income applicable to Toys after the impairment loss in the quarter ended March 31, 2014 is $1,847,000, or $0.01 per diluted share, representing management fees earned and received.  Vornado’s income applicable to Toys in the quarter ended March 31, 2013 was $1,759,000, or $0.01 per diluted share. 

         Vornado’s share of Toys’ Funds From Operations (“FFO”) after the impairment loss is $9,267,000 (which represents depreciation), or $0.05 per diluted share, compared to $16,685,000, or $0.08 per diluted share in the quarter ended March 31, 2013.  Vornado’s share of Toys FFO will be treated as non-comparable in all periods presented.

         The business of Toys is highly seasonal; historically, Toys’ fourth quarter net income accounts for more than 80% of its fiscal year net income.

         Attached is a summary of Toys’ financial results and Vornado’s 32.6% share of its equity in Toys’ net income, as well as reconciliations of net income to earnings before interest, taxes, depreciation and amortization (“EBITDA”) and FFO.

         Vornado Realty Trust is a fully-integrated equity real estate investment trust. 

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.

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Toys "R" Us, Inc.
Condensed Consolidated Statements of Operations – Unaudited

	For the Quarter Ended
	February 1, 2014						February 2, 2013
(Amounts in thousands)	Results on a Historical Basis			Results on Vornado’s Purchase Price Accounting Basis			Results on Vornado’s Purchase Price Accounting Basis
Net sales	$	5,267,000		$	5,267,000		$	5,770,000
Cost of sales		3,594,000			3,594,000			3,801,000
Gross margin		1,673,000			1,673,000			1,969,000
Selling, general and administrative expenses		1,275,000			1,265,400			1,302,200
Depreciation and amortization		101,000			101,200			116,600
Intangible asset impairment		-			95,000			-
Goodwill impairment		378,000			17,500			-
Other expense (income), net		10,000			17,000			(3,100	)
Total operating expenses		1,764,000			1,496,100			1,415,700
Operating (loss) earnings		(91,000	)		176,900			553,300
Interest expense		(105,000	)		(106,800	)		(132,500	)
Interest income		1,000			1,000			4,000
(Loss) earnings before income taxes		(195,000	)		71,100			424,800
Income tax expense (benefit)		12,000			(14,400	)		182,800
Net (loss) earnings		(207,000	)		85,500			242,000
Less: Net earnings attributable to noncontrolling interest		3,000			3,000			1,000
Net (loss) earnings attributable to Toys “R” Us, Inc.	$	(210,000	)	$	82,500		$	241,000
Vornado’s 32.6% share of Toys’ net earnings				$	26,936		$	78,542
Reversal of Vornado’s 32.6% share of asset impairments and obsolete inventory write-down included in Toys’ net earnings which Vornado previously recognized in the impairment of its investment, net of tax					48,260			-
Vornado’s 32.6% share of the equity in the earnings of Toys					75,196			78,542
Impairment loss					(75,196	)		(78,542	)
Management fee from Toys					1,847			1,759
Total Vornado net income from its investment in Toys				$	1,847		$	1,759
See page 3 for a reconciliation of net income to FFO.
Reconciliation of Vornado’s net income from its investment in Toys to EBITDA (1):
Net income				$	1,847		$	1,759
Interest and debt expense					38,549			43,182
Depreciation and amortization					26,924			37,674
Income tax expense					18,077			59,346
Vornado’s share of Toys’ EBITDA (1)				$	85,397		$	141,961

_________________

(1)EBITDA represents “Earnings Before Interest, Taxes, Depreciation and Amortization.” Management considers EBITDA a supplemental measure for making decisions and assessing the unlevered performance of its segments as it relates to the total return on assets as opposed to the levered return on equity.  EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.

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Toys "R" Us, Inc.
Funds From Operations - Unaudited

(Amounts in thousands)	For the Quarter Ended
	February 1, 2014			February 2, 2013
Reconciliation of Vornado's net income from its investment in Toys to FFO (1):
Net income	$	1,847		$	1,759
Depreciation and amortization of real property		11,415			19,326
Real estate impairment losses		-			3,650
Income tax effect of above adjustments		(3,995	)		(8,050	)
Vornado's share of Toys’ FFO (1)	$	9,267		$	16,685

     _________________

(1)      FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”).  NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets, extraordinary items and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries.  FFO and FFO per diluted share are used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions.  FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flows as a liquidity measure.  FFO may not be comparable to similarly titled measures employed by other companies. 

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