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Exhibit 99.3
VORNADO REALTY L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information presents (i) the Pro Forma Condensed Consolidated Balance Sheet of Vornado Realty L.P. (the "Company") as of June 30, 2005, as if the acquisition of Toys "R" Us, Inc. ("Toys") had occurred on June 30, 2005, and (ii) the Pro Forma Condensed Consolidated Statements of Income of the Company for the Six Months Ended June 30, 2005 and for the Year Ended December 31, 2004, as if the acquisition, including acquisition debt and purchase price accounting, had occurred on January 1, 2004.
The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and are not necessarily indicative of what the Company's actual results of operations or financial position would have been had this acquisition been consummated on the dates indicated, nor does it purport to represent the Company's results of operations or financial position for any future period. The pro forma adjustments are based on available information and upon assumptions that management believes are reasonable.
The unaudited pro forma condensed consolidated financial information should be read in conjunction with (i) the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K/A for the Year Ended December 31, 2004, filed with the Securities and Exchange Commission ("SEC") on June 10, 2005, (ii) the unaudited consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed with the SEC on August 4, 2005, (iii) the Company's consolidated financial statements and notes thereto for the year ended December 31, 2004, included in the Company's Current Report on Form 8-K, filed with the SEC on August 19, 2005, (iv) the consolidated financial statements and notes thereto of Toys as of and for the Year Ended January 29, 2005 which were filed by Toys with the SEC on April 29, 2005 under Part I, Item 8 of its Annual Report on Form 10-K for its fiscal year ended January 29, 2005, and which are filed as Exhibit 99.1 to this Current Report on this Form 8-K/A; and (v) the unaudited condensed consolidated financial statements and notes thereto of Toys as of and for the 26 weeks ended July 30, 2005, which were filed by Toys with the SEC on September 14, 2005 under Part I, Item 1 of its Quarterly Report on Form 10-Q for the quarterly period ended July 30, 2005, and which are filed as Exhibit 99.2 to this Current Report on Form-8K/A.
1
Vornado Realty L.P.
Pro Forma Condensed Consolidated Balance Sheet
June 30, 2005 (unaudited)
(Amounts in Thousands)
| | Consolidated
Historical
| | Pro Forma
Adjustments
| | Consolidated
Pro Forma Adjusted
|
|---|
| | (a)
| |
| |
|
|---|
| ASSETS | | | | | | | | | |
| Real estate, net | | $ | 8,617,498 | | $ | — | | $ | 8,617,498 |
| Cash and cash equivalents | | | 842,098 | | | (381,690 | )(b) | | 460,408 |
| Escrow deposits and restricted cash | | | 193,938 | | | — | | | 193,938 |
| Marketable securities | | | 347,977 | | | (20,991 | )(c) | | 326,986 |
| Investments and advances to partially owned entities | | | 817,891 | | | 395,838 | (e) | | 1,213,729 |
| Accounts receivable | | | 181,145 | | | — | | | 181,145 |
| Notes and mortgage loans receivable | | | 356,175 | | | — | | | 356,175 |
| Other assets | | | 1,082,983 | | | — | | | 1,082,983 |
| | |
| |
| |
|
| | | Total assets | | $ | 12,439,705 | | $ | (6,843 | ) | $ | 12,432,862 |
| | |
| |
| |
|
| LIABILITIES AND PARTNERS' CAPITAL | | | | | | | | | |
| Liabilities: | | | | | | | | | |
| | Notes and mortgages payable | | $ | 4,188,565 | | $ | — | | $ | 4,188,565 |
| | Senior unsecured notes | | | 956,316 | | | — | | | 956,316 |
| | Exchangable senior debentures | | | 490,250 | | | — | | | 490,250 |
| | Accounts payable and accrued expenses | | | 397,478 | | | — | | | 397,478 |
| | Other liabilities | | | 284,267 | | | — | | | 284,267 |
| | |
| |
| |
|
| | | Total liabilities | | | 6,316,876 | | | — | | | 6,316,876 |
| Minority interest | | | 279,648 | | | — | | | 279,648 |
| Partners' capital | | | 5,843,181 | | | (6,843 | )(d) | | 5,836,338 |
| | |
| |
| |
|
| Total liabilities and partners' capital | | $ | 12,439,705 | | $ | (6,843 | ) | $ | 12,432,862 |
| | |
| |
| |
|
- Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2005:
- (a)
- Reflects the Unaudited Consolidated Balance Sheet of the Company as of June 30, 2005.
- (b)
- Reflects the cash consideration paid in the acquisition, net of (i) $25.0 million paid to the Company by Toys for an origination fee which was treated as a reduction of the purchase price and (ii) $0.7 million paid to the Company by Toys for an expense reimbursement.
- (c)
- Reflects the fair value of Toys stock the Company relinquished in the acquisition.
- (d)
- Reflects the elimination of unrealized gains classified within other comprehensive income on the shares of Toys stock owned by the Company and relinquished in the acquisition.
- (e)
- Reflects the carrying value of the Company's investment in Toys as a result of the acquisition.
2
Vornado Realty L.P.
Pro Forma Condensed Consolidated Statement of Income
For the Six Months Ended June 30, 2005 (unaudited)
| | Consolidated
Historical
| | Pro Forma
Adjustments
| | Consolidated
Pro Forma Adjusted
| |
|---|
| | (a)
| |
| |
| |
|---|
(Amounts in Thousands, except per share data)
| |
| |
| |
|---|
| Revenues | | $ | 1,193,454 | | $ | — | | $ | 1,193,454 | |
| | |
| |
| |
| |
| Expenses: | | | | | | | | | | |
| | Operating | | | 581,146 | | | — | | | 581,146 | |
| | Depreciation and amortization | | | 161,804 | | | — | | | 161,804 | |
| | General and administrative | | | 86,507 | | | — | | | 86,507 | |
| | |
| |
| |
| |
| | | Total expenses | | | 829,457 | | | — | | | 829,457 | |
| | |
| |
| |
| |
Operating income |
|
|
363,997 |
|
|
— |
|
|
363,997 |
|
| Income applicable to Alexander's | | | 38,416 | | | — | | | 38,416 | |
| Income (loss) from partially-owned entities | | | 15,820 | | | (80,727) | (c) | | | |
| | | | | | | 3,465 | (e) | | (61,442 | ) |
| Interest and other investment income | | | 171,121 | | | (4,262) | (d) | | 166,859 | |
| Interest and debt expense | | | (161,314 | ) | | — | | | (161,314 | ) |
| Net gain on disposition of wholly-owned and partially-owned assets other than depreciable real estate | | | 3,488 | | | — | | | 3,488 | |
| Minority interest of partially-owned entities | | | 1,730 | | | — | | | 1,730 | |
| | |
| |
| |
| |
| Income (loss) from continuing operations | | | 433,258 | | | (81,524 | ) | | 351,734 | |
| Income from discontinued operations | | | 32,506 | | | — | | | 32,506 | |
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| |
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| |
| Net income (loss) | | | 465,764 | | | (81,524 | ) | | 384,240 | |
| Preferred unit distributions | | | (54,805 | ) | | — | | | (54,805 | ) |
| | |
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| |
| Net income (loss) applicable to Class A units | | $ | 410,959 | | $ | (81,524 | ) | $ | 329,435 | |
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| |
Net income (loss) per Class A unit—basic |
|
$ |
2.81 |
|
$ |
(0.56 |
) |
$ |
2.25 |
|
| | |
| |
| |
| |
Net income (loss) per Class A unit—diluted |
|
$ |
2.66 |
|
$ |
(0.52 |
) |
$ |
2.14 |
|
| | |
| |
| |
| |
| Reconciliation of Net income (loss) to EBITDA(b): | | | | | | | | | | |
| Net income (loss) | | $ | 465,764 | | $ | (81,524 | ) | $ | 384,240 | |
| Interest and debt expense | | | 174,966 | | | 84,553 | | | 259,519 | |
| Depreciation and amortization | | | 155,752 | | | 57,575 | | | 213,327 | |
| Income tax expense (benefit) | | | 1,929 | | | (22,372 | ) | | (20,443 | ) |
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| |
| EBITDA | | $ | 798,411 | | $ | 38,232 | | $ | 836,643 | |
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| |
- Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income for the Six Months Ended June 30, 2005:
- (a)
- Reflects the Unaudited Condensed Consolidated Statement of Income of the Company for the Six Months Ended June 30, 2005.
- (b)
- 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. As properties are bought and sold based on a multiple of EBITDA, management utilizes this measure to make investment decisions as well as to compare the performance of its assets to that of its peers. EBITDA may not be comparable to similarly titled measures employed by other companies.
- (c)
- Reflects the Company's 32.9% interest of Toys' Net income (loss) for the Quarters Ended April 30, 2005 and July 30, 2005 accounted for under the equity method. The Company's fiscal year ends on December 31 whereas Toys fiscal year ends on the Saturday nearest January 31, therefore the Company will record its pro rata share of Toys' Net income (loss) on a one-quarter lag basis. Accordingly, had the Company owned its portion of Toys on January 1, 2005 the Company would have recorded its pro-rata share of Toys' financial results for their Quarters Ended January 29, 2005 and April 30, 2005 in the Company's Consolidated Statements of Income for the Quarters Ended March 31, 2005 and June 30, 2005 and the results would have been significantly different because of Toys' seasonality for the Quarter Ended January 29, 2005 which includes the holiday selling season.
- (d)
- Reflects the reduction of interest income on the cash consideration provided in connection with the acquisition.
- (e)
- Represents the elimination of the Company's 32.9% share of Toys' management fees.
3
Vornado Realty L.P.
Pro Forma Condensed Consolidated Statement of Income
For the Year Ended December 31, 2004
| | Consolidated
Historical
| | Pro Forma
Adjustments
| | Consolidated
Pro Forma Adjusted
| |
|---|
| | (a)
| |
| |
| |
|---|
(Amounts in Thousands, except per share data)
| |
|---|
| Revenues | | $ | 1,712,713 | | $ | — | | $ | 1,712,713 | |
| | |
| |
| |
| |
| Expenses: | | | | | | | | | | |
| | Operating | | | 681,556 | | | — | | | 681,556 | |
| | Depreciation and amortization | | | 244,020 | | | — | | | 244,020 | |
| | General and administrative | | | 145,229 | | | — | | | 145,229 | |
| | Costs of acquisitions and development not consummated | | | 1,475 | | | — | | | 1,475 | |
| | |
| |
| |
| |
| | | Total expenses | | | 1,072,280 | | | — | | | 1,072,280 | |
| | |
| |
| |
| |
| Operating income | | | 640,433 | | | — | | | 640,433 | |
| Income applicable to Alexander's | | | 8,580 | | | — | | | 8,580 | |
| Income from partially-owned entities | | | 43,381 | | | (2,636 | )(c) | | | |
| | | | | | | 6,930 | (e) | | 47,675 | |
| Interest and other investment income | | | 203,998 | | | (3,715 | )(d) | | 200,283 | |
| Interest and debt expense | | | (242,955 | ) | | — | | | (242,955 | ) |
| Net gain on disposition of wholly-owned and partially-owned assets other than depreciable real estate | | | 19,775 | | | — | | | 19,775 | |
| Minority interest of partially-owned entities | | | (109 | ) | | — | | | (109 | ) |
| | |
| |
| |
| |
| Income (loss) from continuing operations | | | 673,103 | | | 579 | | | 673,682 | |
| Income from discontinued operations | | | 77,013 | | | — | | | 77,013 | |
| | |
| |
| |
| |
| Net income (loss) | | | 750,116 | | | 579 | | | 750,695 | |
| Preferred unit distributions | | | (94,070 | ) | | — | | | (94,070 | ) |
| | |
| |
| |
| |
| Net income (loss) applicable to Class A units | | $ | 656,046 | | $ | 579 | | $ | 656,625 | |
| | |
| |
| |
| |
| Net income (loss) per Class A unit—basic | | $ | 4.56 | | $ | 0.00 | | $ | 4.56 | |
| | |
| |
| |
| |
| Net income (loss) per Class A unit—diluted | | $ | 4.36 | | $ | 0.00 | | $ | 4.36 | |
| | |
| |
| |
| |
| Reconciliation of Net income (loss) to EBITDA(b): | | | | | | | | | | |
| Net income (loss) | | $ | 750,116 | | $ | 579 | | $ | 750,695 | |
| Interest and debt expense | | | 313,289 | | | 175,357 | | | 488,646 | |
| Depreciation and amortization | | | 296,980 | | | 115,150 | | | 412,130 | |
| Income tax expense (benefit) | | | 1,664 | | | (76,670 | ) | | (75,006 | ) |
| | |
| |
| |
| |
| EBITDA | | $ | 1,362,049 | | $ | 214,416 | | $ | 1,576,465 | |
| | |
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| |
| |
- Notes
- to Pro Forma Condensed Consolidated Statement of Income for the Year Ended December 31, 2004:
- (a)
- Reflects the consolidated Statement of Income of the Company for the Year Ended December 31, 2004.
- (b)
- EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization". See page 3 of this Exhibit 99.3 to this Current Report on Form 8-K/A for further information.
- (c)
- Reflects the Company's 32.9% interest of Toys' Net income (loss) for the Year Ended January 29, 2004, accounted for under the equity method. The Company's fiscal year ends on December 31 whereas Toys' fiscal year ends on the Saturday nearest January 31, therefore the Company will record its pro rata share of Toys' Net income (loss) on a one-quarter lag basis.
- (d)
- Reflects the reduction of interest income on the cash consideration provided in connection with the acquisition.
- (e)
- Represents the elimination of the Company's 32.9% share of Toys' management fees.
4
QuickLinks
VORNADO REALTY L.P. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATIONVornado Realty L.P. Pro Forma Condensed Consolidated Balance Sheet June 30, 2005 (unaudited)Vornado Realty L.P. Pro Forma Condensed Consolidated Statement of Income For the Six Months Ended June 30, 2005 (unaudited)Vornado Realty L.P. Pro Forma Condensed Consolidated Statement of Income For the Year Ended December 31, 2004
