1 EXHIBIT INDEX ON PAGE 25 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: MARCH 31, 2000 ---------------------------------------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to __________________________ Commission File Number: 000-22635 --------------------------------------------------------- VORNADO REALTY L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 13-3925979 - ------------------------------------------------- ---------------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification Number) PARK 80 WEST, PLAZA II, SADDLE BROOK, NEW JERSEY 07663 - ------------------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) (201) 587-1000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) N/A - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Page 1 2 INDEX PART I. FINANCIAL INFORMATION: ---------------------- Item 1. Financial Statements: Page Number ----------- Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999................................................................................. 3 Consolidated Statements of Income for the Three Months Ended March 31, 2000 and March 31, 1999.... 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2000 and March 31, 1999........................................................... 5 Notes to Consolidated Financial Statements........................................................ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................................................................... 15 Item 3. Quantitative and Qualitative Disclosures About Market Risks....................................... 22 PART II. OTHER INFORMATION: ----------------- Item 1. Legal Proceedings................................................................................. 23 Item 6. Exhibits and Reports on Form 8-K.................................................................. 23 Signatures ................................................................................................... 24 Exhibit Index ................................................................................................... 25 Page 2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VORNADO REALTY L.P. CONSOLIDATED BALANCE SHEETS (amounts in thousands except unit amounts) MARCH 31, DECEMBER 31, 2000 1999 ----------------- --------------- ASSETS Real estate, at cost: Land..................................................... $ 820,433 $ 826,477 Buildings and improvements............................... 3,104,975 3,080,174 Leasehold improvements and equipment.......................................... 16,251 14,856 ----------------- --------------- Total...................................... 3,941,659 3,921,507 Less accumulated depreciation and amortization....................................... (325,127) (308,542) ----------------- --------------- Real estate, net......................................... 3,616,532 3,612,965 Cash and cash equivalents, including U.S. government obligations under repurchase agreements of $49,205 and $43,675. ....................... 104,706 112,630 Escrow deposits and restricted cash............................ 31,626 30,571 Marketable securities.......................................... 171,966 106,503 Investments and advances to partially-owned entities, including Alexander's of $158,449 and $159,148.. 1,355,662 1,315,387 Due from officers 18,293 17,190 Accounts receivable, net of allowance for doubtful accounts of $8,311 and $7,292.................... 32,244 36,408 Notes and mortgage loans receivable............................ 55,751 49,719 Receivable arising from the straight-lining of rents 87,408 79,298 Deposits in connection with real estate acquisitions............................................. 5,583 8,128 Other assets................................................... 150,238 110,419 ----------------- --------------- TOTAL ASSETS $ 5,630,009 $ 5,479,218 ================= =============== MARCH 31, DECEMBER 31, 2000 1999 ------------------ --------------- LIABILITIES AND PARTNERS' CAPITAL Notes and mortgages payable............................................... $ 2,015,890 $ 1,681,804 Revolving credit facility................................................. 95,000 367,000 Accounts payable and accrued expenses..................................... 114,133 107,036 Officer's compensation payable............................................ 36,153 34,996 Deferred leasing fee income............................................... 8,225 8,349 Other liabilities......................................................... 2,573 2,634 ------------------ --------------- Total liabilities..................................... 2,271,974 2,201,819 ------------------ --------------- Minority interest......................................................... 13,998 14,769 ------------------ --------------- Commitments and contingencies Partners' capital: Equity............................................................ 3,408,574 3,385,857 Accumulated deficit............................................... (110,528) (116,979) ------------------ --------------- 3,298,046 3,268,878 Accumulated other comprehensive income/(loss)..................... 50,752 (1,448) Due from officers for purchase of General Partner's units of beneficial interest................. (4,761) (4,800) ------------------ --------------- Total Partners' capital.............................. 3,344,037 3,262,630 ------------------ --------------- TOTAL LIABILITIES AND PARTNERS' CAPITAL................................................. $ 5,630,009 $ 5,479,218 ================== =============== See notes to consolidated financial statements. Page 3 4 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands except per unit amounts) FOR THE THREE MONTHS ENDED MARCH 31, -------------------------------------------- 2000 1999 ---------------- ----------------- Revenues: Property rentals.............................................. $ 166,005 $ 138,159 Expense reimbursements........................................ 25,256 20,728 Other income (including fee income from related parties of $327 and $465)..................... 4,018 4,677 ---------------- ----------------- Total revenues................................................... 195,279 163,564 ---------------- ----------------- Expenses: Operating..................................................... 76,305 65,037 Depreciation and amortization................................. 23,253 19,292 General and administrative.................................... 10,197 9,628 ---------------- ----------------- Total expenses................................................... 109,755 93,957 ---------------- ----------------- Operating income................................................. 85,524 69,607 Income applicable to Alexander's................................. 3,044 1,502 Income from partially-owned entities............................. 23,613 18,600 Interest and other investment income............................. 5,759 3,458 Interest and debt expense........................................ (39,347) (35,617) Net gain on sale of real estate.................................. 2,560 -- Minority interest................................................ (490) (485) ---------------- ----------------- Income before extraordinary item................................. 80,663 57,065 Extraordinary item............................................... (1,125) -- ---------------- ----------------- Net income....................................................... 79,538 57,065 Preferred unit distributions (including accretion of issuance expenses of $719 in each period).............................. (9,673) (5,712) Preferential allocations......................................... (19,342) (7,173) ---------------- ----------------- NET INCOME applicable to Class A units........................... $ 50,523 $ 44,180 ================ ================= NET INCOME PER CLASS A UNIT - BASIC.............................. $ .55 $ .50 ================ ================= NET INCOME PER CLASS A UNIT - DILUTED............................ $ .54 $ .49 ================ ================= DIVIDENDS PER CLASS A UNIT....................................... $ .48 $ .44 ================ ================= See notes to consolidated financial statements. Page 4 5 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands) FOR THE THREE MONTHS ENDED MARCH 31, ----------------------------------------------- 2000 1999 --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income................................................................ $ 79,538 $ 57,065 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization (including debt issuance costs)...... 23,253 19,292 Straight-lining of rental income................................... (8,110) (7,056) Net gain on sale of real estate.................................... (2,560) -- Minority interest.................................................. 490 485 Extraordinary item................................................. 1,125 -- Equity in income of Alexander's (including depreciation of $150 in each period)............................................ (3,044) (282) Equity in net income of partially-owned entities................... (23,613) (18,600) Gain on sale of marketable securities.............................. -- (293) Changes in operating assets and liabilities........................ (21,830) (30,271) --------------- --------------- Net cash provided by operating activities................................. 45,249 20,340 --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of real estate and other..................................... (6,660) (45,000) Proceeds from sale of real estate......................................... 23,992 -- Investments in partially-owned entities................................... (26,564) (13,200) Distributions from partially-owned entities............................... 15,490 -- Proceeds from sale of Temperature Controlled Logistics assets............. -- 22,769 Investment in notes and mortgages receivable.............................. (6,000) (60,567) Cash restricted for tenant improvements................................... (1,055) 25,660 Additions to real estate.................................................. (20,608) (61,228) Purchases of securities available for sale................................ (7,427) (3,818) Proceeds from sale or maturity of securities available for sale........... -- 3,998 Real estate deposits and other............................................ -- (9,706) --------------- --------------- Net cash used in investing activities..................................... (28,832) (141,092) --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings.................................................. 565,000 165,000 Repayments of borrowings.................................................. (522,506) (163,963) Debt issuance costs....................................................... (17,996) (3,504) Proceeds from issuance of preferred units................................. -- 82,305 Preferential allocations.................................................. (5,470) (3,544) Distributions to Class A unitholders...................................... (44,465) (38,473) Distributions to preferred unitholders.................................... -- (4,993) Exercise of stock options................................................. 1,096 255 --------------- --------------- Net cash (used in) provided by financing activities....................... (24,341) 33,083 --------------- --------------- Net decrease in cash and cash equivalents................................. (7,924) (87,669) Cash and cash equivalents at beginning of period.......................... 112,630 167,808 --------------- --------------- Cash and cash equivalents at end of period................................ $ 104,706 $ 80,139 =============== =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash payments for interest (including capitalized interest of $2,094 in 2000 and $705 in 1999)...................................... $ 39,543 $ 35,143 NON-CASH TRANSACTIONS: Financing assumed in acquisitions......................................... $ 17,640 $ 55,000 Minority interest in connection with acquisitions......................... -- 297,800 Unrealized gain (loss) on securities available for sale................... 52,779 (1,025) See notes to consolidated financial statements. Page 5 6 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION Vornado Realty L.P. (the "Operating Partnership", including the operations of Vornado Realty Trust prior to the conversion described below) is a Delaware limited partnership. Operations commenced on April 15, 1997 when Vornado Realty Trust ("Vornado"), a fully-integrated real estate investment trust ("REIT") converted to an Umbrella Partnership REIT ("UPREIT") by transferring substantially all of its assets to the Operating Partnership. As a result, Vornado now conducts its business through the Operating Partnership. Vornado is the sole general partner of, and owned approximately 86% of the limited partnership common interest in, the Operating Partnership at May 1, 2000. All references to the "Company" refer to Vornado and its consolidated subsidiaries, including the Operating Partnership. 2. BASIS OF PRESENTATION The consolidated balance sheet as of March 31, 2000, the consolidated statements of income for the three months ended March 31, 2000 and 1999 and the consolidated statements of changes in cash flows for the three months ended March 31, 2000 and 1999 are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Operating Partnership's annual report on Form 10-K for the year ended December 31, 1999 as filed with the Securities and Exchange Commission. The results of operations for the three months ended March 31, 2000 are not necessarily indicative of the operating results for the full year. The accompanying consolidated financial statements include the accounts of Vornado Realty L.P. as well as equity interests acquired that individually (or in the aggregate with prior interests) exceed a 50% interest and the Company exercises unilateral control. All significant intercompany amounts have been eliminated. Equity interests in partially-owned entities include partnerships, joint ventures and preferred stock affiliates (corporations in which the Company owns all of the preferred stock and none of the common equity) and are accounted for under the equity method of accounting as the Company exercises significant influence. These investments are recorded initially at cost and subsequently adjusted for net equity in income (loss) and cash contributions and distributions. Ownership of the preferred stock entitles the Company to substantially all of the economic benefits in the preferred stock affiliates. The common stock of the preferred stock affiliates is owned by Officers and Trustees of Vornado. Management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Certain amounts in the prior year's financial statements have been reclassified to conform to the current year presentation. Page 6 7 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 3. ACQUISITIONS, DISPOSITIONS AND FINANCINGS ACQUISITIONS Vornado-Ceruzzi Joint Ventures In the first quarter of 2000, the Company and its joint venture partner acquired 2 fee interests containing 210,000 square feet and 6 leasehold interests containing 567,000 square feet in properties located in Pennsylvania, Virginia, Maryland and Ohio formerly occupied by Hechinger, Inc., a home improvement retailer which was liquidated. The purchase price was $21,700,000, of which the Company's share was 80%. Student Housing Complex On January 28, 2000, the Company and its joint venture partner, acquired a 252-unit student housing complex in Gainesville, Florida, for approximately $27,000,000, of which $19,600,000 was indebtedness. The Company's share of this investment is 90%. DISPOSITIONS On March 2, 2000 the Company sold its three Texas shopping center properties, containing 221,000 square feet, for $25,750,000 resulting in a gain of $2,560,000. FINANCINGS REMIC Refinancing On March 1, 2000, the Company completed a $500,000,000 private placement of 10-year, 7.93% mortgage notes, cross-collateralized by 42 shopping center properties, resulting in net proceeds of approximately $490,000,000. In connection therewith, the Company repaid $228,000,000 of existing mortgage debt scheduled to mature on December 1, 2000 and $262,000,000 outstanding under its revolving credit facility. The Company incurred an extraordinary loss of approximately $1,125,000 due to the write-off of unamortized financing costs in connection with the prepayment of the existing debt. Revolving Credit Facility On March 21, 2000, the Company renewed its $1,000,000,000 revolving credit facility for an additional three years. The covenants of the facility include, among others, maximum loan to value ratio, minimum debt service coverage and minimum capitalization requirements. Interest is at LIBOR plus .90% (7.0% at March 31, 2000). The Company paid origination fees of $6,700,000 and pays a commitment fee quarterly, over the remaining term of the facility of .15% per annum on the facility amount. Two Park Avenue Refinancing On March 1, 2000, the Company refinanced its Two Park Avenue office building for $90,000,000. On such date, the Company received proceeds of $65,000,000 and repaid the then existing debt in the same amount. The balance of the proceeds was received on April 18, 2000. The new 3-year debt matures on February 28, 2003 and bears interest at LIBOR + 1.45% (7.44% at March 31, 2000). Page 7 8 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 4. INVESTMENTS AND ADVANCES TO PARTIALLY-OWNED ENTITIES The Company's investments and advances to partially-owned entities and income recognized from such investments are as follows: Investments and Advances March 31, 2000 December 31, 1999 --------------- ----------------- (amounts in thousands) Temperature Controlled Logistics.................................. $ 490,633 $ 481,808 Charles E. Smith Commercial Realty L.P. ("CESCR")................................................... 320,102 317,812 Alexander's....................................................... 158,449 159,148 Newkirk Joint Ventures............................................ 140,536 142,670 Hotel Pennsylvania (1)............................................ 59,495 59,176 Partially-Owned Office Buildings.................................. 59,340 59,510 Other............................................................. 127,107 95,263 --------------- --------------- $ 1,355,662 $ 1,315,387 =============== =============== Income For The Three Months Ended March 31, -------------------------------------- 2000 1999 ------------ -------------- (amounts in thousands) Income applicable to Alexander's: (2) 32% share of equity in income............................... $ 307 $ 282 Interest Income............................................. 2,737 1,220 ------------ -------------- $ 3,044 $ 1,502 ============ ============== Temperature Controlled Logistics: 60% share of equity in net income........................... $ 8,075 $ 10,626 Management fee (40% of 1% per annum of Total Combined Assets, as defined)....................... 1,323 1,364 ------------ -------------- 9,398 11,990 CESCR (3)...................................................... 6,729 2,636 Newkirk Joint Ventures......................................... 4,336 2,032 Hotel Pennsylvania (1)......................................... 421 143 Partially-Owned Office Buildings (4)........................... 700 317 Other.......................................................... 2,029 1,482 ------------ -------------- $ 23,613 $ 18,600 ============ ============== - -------------------- (1) The Company owns 100% of the commercial portion of the building (retail and office space) and 98% of the hotel portion which is owned through a preferred stock affiliate. (2) Fee income is included in Other. (3) 9.6% interest from January 1999 to March 1999 and 34% interest thereafter. (4) Represents the Company's interests in 330 Madison Avenue (24.8%), and 570 Lexington Avenue (50%). Page 8 9 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) Alexander's At March 31, 2000, the Company has loans receivable from Alexander's aggregating $95,000,000, including $50,000,000 loaned to Alexander's on October 20, 1999. The loans, which were scheduled to mature on March 15, 2000, have been extended for one year to March 15, 2001. The interest rate has been reset from 14.18% to 15.72%, reflecting an increase in the underlying Treasury rate. On March 31, 2000, the Company increased its ownership in Alexander's from 32% to 32.9% by acquiring 41,500 shares of Alexander's common stock for approximately $2,740,000. On April 4, 2000, the Company acquired an additional 10,400 shares of Alexander's common stock for approximately $674,000, thereby increasing its ownership interest to 33%. Alexander's is managed by and its properties are leased by the Company, pursuant to agreements with a one-year term expiring in March of each year which are automatically renewable. Subject to the payments of rents by Alexander's tenants, the Company is due $1,151,000 under its leasing agreement with Alexander's which amount is included in Investments in and Advances to Alexander's. Included in income from Vornado Management Corp. is management fee income from Alexander's of $875,000 and $954,000 for the three months ended March 31, 2000 and 1999. 5. OTHER RELATED PARTY TRANSACTIONS The Company loaned Mr. Blum, Executive Vice President--Development, $1,000,000 on March 24, 2000 and an additional $1,000,000 on April 4, 2000 in accordance with the terms of his employment agreement. The loans have a five year term and bear interest, payable quarterly at a rate of 6.63% and 6.55%, respectively (based on the mid-term applicable federal rate provided under the Internal Revenue Code). The Company currently manages and leases the real estate assets of Interstate Properties pursuant to a management agreement. Management fees earned by the Company pursuant to the management agreement were $187,000 and $270,000 for the three months ended March 31, 2000 and 1999. The Mendik Group owns an entity, which provides cleaning and related services and security services to office properties, including the Company's Manhattan office properties. The Company was charged fees in connection with these contracts of $11,934,000 and $11,011,000 for the three months ended March 31, 2000 and 1999. Page 9 10 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 6. PARTNERS' CAPITAL The following table sets forth the details of partners' capital at March 31, 2000 and December 31, 1999. Outstanding Units at Per Unit Preferred or ----------------------------------- Liquidation Annual Conversion Rate March 31, 2000 December 31, 1999 Preference Distribution Rate Into Class A Units --------------- ---------------- ----------- ---------------- ------------------ Preferred Units: Series A............................. 5,789,239 5,789,239 $ 50.00 $ 3.25 -- Series B............................. 3,400,000 3,400,000 $ 25.00 $ 2.125 -- Series C............................. 4,600,000 4,600,000 $ 25.00 $ 2.125 -- 5.0% B-1 Convertible Preferred....... 899,566 899,566 $ 50.00 $ 2.50 .914 8.0% B-2 Convertible Preferred....... 449,783 449,783 $ 50.00 $ 4.00 .914 6.5% C-1 Convertible Preferred....... 747,912 747,912 $ 50.00 $ 3.25 1.1431 8.5% D-1 Cumulative Redeemable Preferred......................... 3,500,000 3,500,000 $ 25.00 $ 2.125 (a) 8.375% D-2 Cumulative Redeemable Preferred.............. 549,336 549,336 $ 50.00 $4.1875 (a) 8.25% D-3 Cumulative Redeemable Preferred......................... 8,000,000 8,000,000 $ 25.00 $2.0625 (a) 8.25% D-4 Cumulative Redeemable Preferred......................... 5,000,000 5,000,000 $ 25.00 $2.0625 (a) 8.25% D-5 Cumulative Redeemable Preferred......................... 7,480,000 7,480,000 $ 25.00 $2.0625 (a) 6.0% E-1 Convertible Preferred....... 4,998,000 4,998,000 $ 50.00 $ 3.125(b) 1.1364 --------------- --------------- 45,413,836 45,413,836 =============== =============== General Partnership Interest (f) Limited Partnership Units: Class A.............................. 92,792,249(c) 92,583,570 (c) -- $ 1.92 (d) Class D.............................. 876,543 876,543 -- $ 2.015 1.0 (e) --------------- --------------- 93,668,792 93,460,113 =============== =============== - ------------------- (a) Redeemable for an equivalent of the Company's preferred units. (b) Increases to $3.25 on March 3, 2001, and fixes at $3.38 on March 3, 2006. (c) Included in Class A units are 86,541,288 and 86,335,741 units owned by the general partner at March 31, 2000 and December 31, 1999, respectively. (d) Class A units are redeemable at the option of the holder for cash or, at the Company's option, one common share of beneficial interest in Vornado. (e) Mandatory conversion of Class D units into Class A units will occur after four consecutive quarters of distributions of at least $.50375 per Class A unit ($2.015 annually). (f) Vornado is the sole general partner. Page 10 11 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 7. COMMITMENTS AND CONTINGENCIES There are various legal actions against the Company in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the outcome of such matters will not have a material effect on the Company's financial condition, results of operations or cash flows. 8. INCOME PER CLASS A UNIT The following table sets forth the computation of basic and diluted earnings per Class A unit: For The Three Months Ended March 31, ------------------------------------- 2000 1999 --------------- --------------- (amounts in thousands except per unit amounts) Numerator: Income before extraordinary item...................................... $ 80,663 $ 57,065 Extraordinary item.................................................... (1,125) -- --------------- --------------- Net income............................................................ 79,538 57,065 Preferential allocations.............................................. (19,342) (7,173) Unit distributions.................................................... (9,673) (5,712) --------------- --------------- Numerator for basic and diluted income per Class A unit- net income applicable to Class A units......................................................... $ 50,523 $ 44,180 =============== =============== Denominator: Denominator for basic income per Class A unit- weighted average units............................................. 92,629 87,856 Effect of dilutive securities: Employee stock options............................................. 1,376 1,611 --------------- --------------- Denominator for diluted income per Class A unit- adjusted weighted average units and assumed conversions................................................ 94,005 89,467 =============== =============== INCOME PER CLASS A UNIT- BASIC: Income before extraordinary item................................... $ .56 $ .50 Extraordinary item................................................. (.01) -- --------------- --------------- Net income per Class A unit........................................ $ .55 $ .50 =============== =============== INCOME PER CLASS A UNIT- DILUTED: Income before extraordinary item................................... $ .55 $ .49 Extraordinary item................................................. (.01) -- --------------- --------------- Net income per Class A unit........................................ $ .54 $ .49 =============== =============== Page 11 12 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 9. COMPREHENSIVE INCOME The following table sets forth the Company's comprehensive income: For The Three Months Ended March 31, ------------------------------------- 2000 1999 --------------- --------------- (amounts in thousands) Net income applicable to Class A units................. $ 50,523 44,180 Other comprehensive income/(loss)...................... 52,200 (1,025) --------------- --------------- Comprehensive income................................... $ 102,723 $ 43,155 =============== =============== Page 12 13 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 10. SEGMENT INFORMATION The Company has four business segments: Office, Retail, Merchandise Mart Properties and Temperature Controlled Logistics. (amounts in thousands) For The Three Months Ended March 31, --------------------------------------------------------------------------------- 2000 --------------------------------------------------------------------------------- Temperature Merchandise Controlled Total Office Retail Mart Logistics Other(2) ------- ------ ------- ---------- --------- ------- Total revenues......................... $195,279 $109,574 $43,738 $37,193 $ -- $ 4,774 Total expenses......................... 109,755 62,067 18,782 20,100 -- 8,806 -------- -------- ------- ------- ------- ------- Operating income....................... 85,524 47,507 24,956 17,093 -- (4,032) Income applicable to Alexander's....... 3,044 -- -- -- -- 3,044 Income from partially- owned entities.................... 23,613 7,768 368 2,142 9,398 3,937 Interest and other investment income... 5,759 380 -- 89 -- 5,290 Interest and debt expense.............. (39,347) (14,141) (10,811) (8,347) -- (6,048) Net gain on sale of real estate....................... 2,560 -- 2,560 -- -- -- Minority interest...................... (490) (490) -- -- -- -- -------- -------- ------- ------- ------ ------- Income before extraordinary item.............................. 80,663 41,024 17,073 10,977 9,398 2,191 Extraordinary item..................... (1,125) -- (1,125) -- -- -- -------- -------- ------- ------- ------ ------- Net Income............................. 79,538 41,024 15,948 10,977 9,398 2,191 Extraordinary item..................... 1,125 -- 1,125 -- -- -- Minority interest...................... 490 490 -- -- -- -- Net gain on sale of real estate....................... (2,560) -- (2,560) -- -- -- Interest and debt expense(4)........... 61,660 23,188 11,460 8,347 6,730 11,935 Depreciation and amortization(4)....... 39,377 17,956 4,302 5,027 8,329 3,763 Straight-lining of rents(4)............ (7,432) (5,301) (677) (1,279) (527) 352 Other.................................. 1,274 -- -- -- 515 759 -------- -------- ------- ------- ------- ------- EBITDA(1).............................. $173,472 $ 77,357 $29,598 $23,072 $24,445 $19,000 ======== ======== ======= ======= ======= ======= March 31, 2000 ----------------------------------------------------------------------------------- Balance sheet data: Real estate, net.................. $ 3,616,532 $ 2,210,192 $ 552,099 $ 753,590 $ -- $ 100,651 Investments and advances to partially-owned entities....................... 1,355,662 384,951 3,014 37,125 490,633 439,939 For The Three Months Ended March 31, --------------------------------------------------------------------------------- 1999 --------------------------------------------------------------------------------- Temperature Merchandise Controlled Total Office Retail Mart Logistics Other(2) ---------- ---------- -------- ---------- ---------- --------- Total revenues......................... $ 163,564 $ 87,276 $ 41,357 $ 32,988 $ -- 1,943 Total expenses......................... 93,957 51,484 17,157 18,502 -- 6,814 ---------- ---------- -------- -------- -------- -------- Operating income....................... 69,607 35,792 24,200 14,486 -- (4,871) Income applicable to Alexander's....... 1,502 -- -- -- -- 1,502 Income from partially- owned entities.................... 18,600 2,914 200 1,176 11,990 2,320 Interest and other investment income... 3,458 538 -- 298 -- 2,622 Interest and debt expense.............. (35,617) (10,481) (8,032) (6,296) -- (10,808) Net gain on sale of real estate....................... -- -- -- -- -- -- Minority interest...................... (485) (485) -- -- -- -- ---------- ---------- -------- -------- -------- -------- Income before extraordinary item.............................. 57,065 28,278 16,368 9,664 11,990 (9,235) Extraordinary item..................... -- -- -- -- -- -- ---------- ---------- -------- -------- -------- -------- Net Income............................. 57,065 28,278 16,368 9,664 11,990 (9,235) Extraordinary item..................... -- -- -- -- -- -- Minority interest...................... 485 485 -- -- -- -- Net gain on sale of real estate....................... -- -- -- -- -- -- Interest and debt expense(4)........... 49,699 14,605 8,689 6,296 6,665 13,444 Depreciation and amortization(4)....... 32,211 13,777 4,132 4,073 8,397 1,832 Straight-lining of rents(4)............ (4,877) (3,713) (635) (1,108) -- 579 Other.................................. (2,654) -- -- -- (4,123)(3) 1,469 ---------- ---------- -------- -------- -------- -------- EBITDA(1).............................. $ 131,929 $ 53,432 $ 28,554 $ 18,925 $ 22,929 $ 8,089 ========== ========== ======== ======== ======== ======== December 31, 1999 --------------------------------------------------------------------------------- Balance sheet data: Real estate, net.................. $3,612,965 $2,208,510 $575,633 $753,416 -- $ 75,406 Investments and advances to partially-owned entities....................... 1,315,387 382,417 3,057 32,524 481,808 415,581 - -------------------------------------- See footnotes 1-4 on the next page. Page 13 14 VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) Notes to segment information: (1) EBITDA represents income before interest, taxes, depreciation and amortization, extraordinary or non-recurring items, gains or losses on sales of real estate, the effect of straight-lining of property rentals for rent escalations and minority interest. Management considers EBITDA a supplemental measure for making decisions and assessing the performance of its segments. EBITDA may not be comparable to similarly titled measures employed by other companies. (2) Other includes primarily (i) the operations of the Company's warehouse and industrial properties, (ii) investments in the Hotel Pennsylvania, Alexander's, and Newkirk Joint Ventures, (iii) corporate general and administrative expenses and (iv) unallocated investment income and interest and debt expense. (3) Includes the reversal of income taxes (benefit for the three months ended March 31, 1999) which are considered non-recurring because of the expected conversion of the Temperature Controlled Logistics Companies to REITs. (4) Interest and debt expense, depreciation and amortization and straight-lining of rents included in the reconciliation of net income to EBITDA reflects amounts which are netted in income from partially-owned entities. Page 14 15 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (All of the amounts presented are in thousands, except unit amounts and percentages) Certain statements contained herein 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. Certain factors could cause actual results to differ materially from those in the forward-looking statements. Factors that might cause such a material difference include, but are not limited to, (a) changes in the general economic climate, (b) local conditions such as an oversupply of space or a reduction in demand for real estate in the area, (c) conditions of tenants, (d) competition from other available space, (e) increased operating costs and interest expense, (f) the timing of and costs associated with property improvements, (g) changes in taxation or zoning laws, (h) government regulations, (i) failure of Vornado to continue to qualify as a REIT, (j) availability of financing on acceptable terms, (k) potential liability under environmental or other laws or regulations, (l) general competitive factors. OVERVIEW Below is a summary of net income and EBITDA by segment for the three months ended March 31, 2000 and 1999: March 31, 2000 ---------------------------------------------------------------------------------- Temperature Merchandise Controlled Total Office Retail Mart Logistics Other(2) -------- -------- -------- ----------- ----------- ------- Total revenues............................. $195,279 $109,574 $ 43,738 $37,193 $ -- $ 4,774 Total expenses............................. 109,755 62,067 18,782 20,100 -- 8,806 -------- -------- -------- ------- ------- ------- Operating income........................... 85,524 47,507 24,956 17,093 -- (4,032) Income applicable to Alexander's........... 3,044 -- -- -- -- 3,044 Income from partially-owned entities....... 23,613 7,768 368 2,142 9,398 3,937 Interest and other investment income....... 5,759 380 -- 89 -- 5,290 Interest and debt expense.................. (39,347) (14,141) (10,811) (8,347) -- (6,048) Net gain on sale of real estate............ 2,560 -- 2,560 -- -- -- Minority interest.......................... (490) (490) -- -- -- -- -------- -------- -------- ------- ------- ------- Income before extraordinary item........... 80,663 41,024 17,073 10,977 9,398 2,191 Extraordinary item......................... (1,125) -- (1,125) -- -- -- -------- -------- -------- ------- ------- ------- Net Income................................. 79,538 41,024 15,948 10,977 9,398 2,191 Extraordinary item......................... 1,125 -- 1,125 -- -- -- Minority interest.......................... 490 490 -- -- -- -- Net gain on sale of real estate............ (2,560) -- (2,560) -- -- -- Interest and debt expense(3)............... 61,660 23,188 11,460 8,347 6,730 11,935 Depreciation and amortization(3)........... 39,377 17,956 4,302 5,027 8,329 3,763 Straight-lining of rents(3)................ (7,432) (5,301) (677) (1,279) (527) 352 Other...................................... 1,274 -- -- -- 515 759 -------- -------- -------- ------- ------- ------- EBITDA(1).................................. $173,472 $ 77,357 $ 29,598 $23,072 $24,445 $19,000 ======== ======== ======== ======= ======= ======= Footnotes 1-4 are explained on the following page. Page 15 16 March 31, 1999 ------------------------------------------------------------------------------- Temperature Merchandise Controlled Total Office Retail Mart Logistics Other(2) ---------- ---------- --------- ----------- ------------ ----------- Total revenues........................ $163,564 $ 87,276 $41,357 $32,988 $ -- $ 1,943 Total expenses........................ 93,957 51,484 17,157 18,502 -- 6,814 -------- -------- ------- ------- -------- -------- Operating income...................... 69,607 35,792 24,200 14,486 -- (4,871) Income applicable to Alexander's ..... 1,502 -- -- -- -- 1,502 Income from partially-owned entities.. 18,600 2,914 200 1,176 11,990 2,320 Interest and other investment income.. 3,458 538 -- 298 -- 2,622 Interest and debt expense............. (35,617) (10,481) (8,032) (6,296) -- (10,808) Minority interest..................... (485) (485) -- -- -- -- -------- -------- ------- ------- -------- -------- Net income............................ 57,065 28,278 16,368 9,664 11,990 (9,235) Minority interest..................... 485 485 -- -- -- -- Interest and debt expense (3)......... 49,699 14,605 8,689 6,296 6,665 13,444 Depreciation and amortization (3)..... 32,211 13,777 4,132 4,073 8,397 1,832 Straight-lining of rents (3).......... (4,877) (3,713) (635) (1,108) -- 579 Other (2,654) -- -- -- (4,123)(4) 1,469 -------- -------- ------- ------- -------- -------- EBITDA(1)............................. $131,929 $ 53,432 $28,554 $18,925 $ 22,929 $ 8,089 ======== ======== ======= ======= ======== ======== (1) EBITDA represents income before interest, taxes, depreciation and amortization, extraordinary or non-recurring items, gains or losses on sales of real estate and the effect of straight-lining of property rentals for rent escalations. Management considers EBITDA a supplemental measure for making decisions and assessing the performance of its segments. EBITDA may not be comparable to similarly titled measures employed by other companies. (2) Other includes primarily (i) the operations of the Company's warehouse and industrial properties, (ii) investments in the Hotel Pennsylvania, Alexander's, and Newkirk Joint Ventures, (iii) corporate general and administrative expenses and (iv) unallocated investment income and interest and debt expense. (3) Interest and debt expense, depreciation and amortization and straight-lining of rents included in the reconciliation of net income to EBITDA reflects amounts which are netted in income from partially-owned entities. (4) Includes adjustment for income taxes which are considered non-recurring because of the expected conversion of the Temperature Controlled Logistics Companies to REITs. Page 16 17 RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000 AND 1999 Below are the details of the changes by segment in EBITDA. Temperature Merchandise Controlled Total Office Retail Mart Logistics Other -------- -------- -------- -------- -------- -------- Three months ended March 31, 1999............. $131,929 $ 53,432 $ 28,554 $ 18,925 $ 22,929 $ 8,089 2000 Operations: Same store operations(1)... 12,913 7,116 1,044 4,147 N/A(2) 606 Acquisitions and other..... 28,630 16,809 -- -- 1,516 10,305 -------- -------- -------- -------- -------- -------- Three months ended March 31, 2000............. $173,472 $ 77,357 $ 29,598 $ 23,072 $ 24,445 $ 19,000 ======== ======== ======== ======== ======== ======== % increase in same store operations...... 11.8% 13.3% 3.7% 21.9% N/A(2) 7.5% (1) Represents operations which were owned for the same period in each year. (2) EBITDA for the periods noted above is not comparable because prior to March 12, 1999 (date the operations of the Temperature Controlled Logistics Companies were sold), the Company reflected its equity in the operations of the Temperature Controlled Logistics Companies. Subsequent thereto, the Company reflects its equity in the rent it receives from the Temperature Controlled Logistics Companies. If the Company had not sold its interest in the operations of the Temperature Controlled Logistics Companies and continued to reflect its equity in such operations, EBITDA for the three months ended March 31, 2000 would have decreased by approximately $2,000. Management of the Temperature Controlled Logistics Companies, the Company's tenant, believes that the results for the quarter ended March 31, 2000, are not necessarily indicative of the operating results expected for the full year, due to the seasonality of the business. In addition, they have advised us that historically, revenue from certain portions of the business are substantially lower in the first quarter than the average of the quarters for the remainder of the year. Revenues The Company's revenues, which consist of property rentals, tenant expense reimbursements and other income were $195,279 in the three months ended March 31, 2000, compared to $163,564 in the prior year's quarter, an increase of $31,715. This increase by segment resulted from: Date of Merchandise Acquisition Total Office Retail Mart Other ----------- ----- ------------ ------------ -------------- ------------ Property Rentals: Acquisitions: 888 Seventh Avenue......... January 1999 $ 2,296 $ 2,296 $ -- $ -- $ -- 909 Third Avenue........... July 1999 6,456 6,456 -- -- -- 595 Madison Avenue......... September 1999 3,529 3,529 -- -- -- Hotel Pennsylvania......... August 1999 1,525 -- -- -- 1,525 Student Housing Complex................. January 2000 748 -- -- -- 748 ------ -------------- ------------ --------------- ------------ 14,554 12,281 -- -- 2,273 Leasing activity................. 13,292 8,487 1,613 2,966 226 ------ -------------- ------------ --------------- ------------ Total increase in property rentals.................... 27,846 20,768 1,613 2,966 2,499 ------ -------------- ------------ --------------- ------------ Tenant expense reimbursements: Increase in tenant expense reimbursements due to acquisitions............... 1,493 1,266 -- -- 227 Other............................ 3,035 955 923 1,039 118 ------ -------------- ------------ --------------- ------------ Total increase in tenant expense reimbursements..... 4,528 2,221 923 1,039 345 ------ -------------- ------------ --------------- ------------ Other income..................... (659) (691) (155) 200 (13) ------ -------------- ------------ --------------- ------------ Total increase in revenues....... $ 31,715 $ 22,298 $ 2,381 $ 4,205 $ 2,831 ====== ============== ============ =============== ============ Page 17 18 Expenses The Company's expenses were $109,755 in the three months ended March 31, 2000, compared to $93,957 in the prior year's quarter, an increase of $15,798. This increase by segment resulted from: Merchandise Total Office Retail Mart Other ------- ------- ------- ----------- ------- Operating: Acquisitions................. $ 7,600 $ 6,470 $ -- $ -- $ 1,130 Same store operations........ 3,668 1,526 1,463 842 (163) ------- ------- ------- ------- ------- 11,268 7,996 1,463 842 967 ------- ------- ------- ------- ------- Depreciation and amortization: Acquisitions................. 2,112 1,629 -- -- 483 Same store operations........ 1,849 770 129 954 (4) ------- ------- ------- ------- ------- 3,961 2,399 129 954 479 ------- ------- ------- ------- ------- General and administrative: 569(2) 188 33(1) (198) 546(1) ------- ------- ------- ------- ------- $15,798 $10,583 $ 1,625 $ 1,598 $ 1,992 ======= ======= ======= ======= ======= (1) Retail general and administrative expenses are included in corporate expenses which are not allocated. (2) Of this increase: (i) $110 is attributable to acquisitions, (ii) $299 resulted from payroll, primarily for additional employees and corporate office expenses, and (iii) $160 resulted from professional fees. Income applicable to Alexander's (loan interest income, equity in income and depreciation) was $3,044 in the three months ended March 31, 2000, compared to $1,502 in the prior year's quarter, an increase of $1,542. This increase resulted primarily from interest income on the additional $50,000,000 the Company lent to Alexander's in October 1999. Income from partially-owned entities was $23,613 in the three months ended March 31, 2000, compared to $18,600 in the prior year's quarter, an increase of $5,013. This increase by segment resulted from: Temperature Date of Merchandise Controlled Acquisition Total Office Retail Mart Logistics Other ----------- ------- ------- ------ ----------- --------- ------- Acquisitions: Newkirk Joint Ventures......... March 1999 $ 2,304 $ -- $ -- $ -- $ -- $ 2,304 Other.......................... various (911) -- -- -- -- (911) ------- ------- ------- ------- ------- ------- 1,393 -- -- -- -- 1,393 Increase (decrease) in equity in income: Temperature Controlled Logistics................. (2,592)(1) -- -- -- (2,592)(1) -- Charles E. Smith Commercial Realty L.P. 4,093 4,093 -- -- -- -- Hotel Pennsylvania............... 278(2) -- -- -- -- 278(2) Partially-owned office buildings............ 383 383 -- -- -- -- Other............................ 1,458 378 168 966 -- (54) ------- ------- ------- ------- ------- ------- $ 5,013 $ 4,854 $ 168 $ 966 $(2,592) $ 1,617 ======= ======= ======= ======= ======= ======= - ----------------- (1) This decrease resulted from an income tax benefit of $4,324 in the prior year's quarter, partially offset by an increase in the current year's income before taxes of $1,732. (2) Reflects the elimination of the Company's equity in income of the commercial portion of the Hotel Pennsylvania which was wholly-owned as of August 5, 1999 and accordingly consolidated. Page 18 19 Interest and other investment income (interest income on mortgage loans receivable, other interest income, dividend income and net gains on sale of marketable securities) was $5,759 for the three months ended March 31, 2000, compared to $3,458 in the prior year's quarter, an increase of $2,301. This increase resulted primarily from higher average investments this quarter. Interest and debt expense was $39,347 for the three months ended March 31, 2000, compared to $35,617 in the prior year's quarter, an increase of $3,730. This increase resulted primarily from higher average interest rates. Minority interest was $490 for the three months ended March 31, 2000, compared to $485 in the prior year's quarter, an increase of $5. This increase is primarily due to higher income. Preferential allocations to unitholders were $19,342 for the three months ended March 31, 2000, compared to $7,173 for the prior period, an increase of $12,169. This increase is primarily due to the issuance of perpetual preferred units in connection with acquisitions. The Company incurred an extraordinary loss of $1,125 due to the write-off of unamortized financing costs in connection with the prepayment of debt. Preferred unit distributions were $9,673 for the three months ended March 31, 2000 compared to $5,712 in the prior year's quarter, an increase of $3,961. This increase resulted from the issuance of the Company's Series B Cumulative Redeemable Preferred shares in March 1999 and the issuance of the Company's Series C Cumulative Redeemable Preferred Shares in May 1999. LIQUIDITY AND CAPITAL RESOURCES Three Months Ended March 31, 2000 Cash flows provided by operating activities of $45,249 was primarily comprised of (i) income of $79,538 offset by (ii) adjustments for non-cash items of $9,899, and (iii) the net change in operating assets and liabilities of $21,830. The adjustments for non-cash items are primarily comprised of (i) depreciation and amortization of $23,253 and (ii) minority interest of $490, offset by (iii) the effect of straight-lining of rental income of $8,110 and (iv) equity in net income of partially-owned entities of $26,657. The net change in operating assets and liabilities primarily reflects an increase in prepaid expenses of $11,673. Net cash used in investing activities of $28,832 was primarily comprised of (i) capital expenditures of $20,608 (see detail below), (ii) investment in notes and mortgages receivable of $6,000 (loan to Vornado Operating Company), (iii) acquisitions of real estate of $6,660 (see detail below), (iv) investments in partially-owned entities of $26,564 (see detail below), (v) investments in securities of $7,427, partially offset by (vi) proceeds from the sale of real estate $23,992 and distributions from partially-owned entities of $15,490. Acquisitions of real estate and investments in partially-owned entities are comprised of: Debt Value of Units Cash Assumed Issued Investment ------------- -------------- --------------- ----------------- Real Estate: Student Housing Complex (90% interest)........... $ 6,660 $ 17,640 $ -- $ 24,300 ============= ============== =============== ================= Investments in Partially Owned Entities: Vornado-Ceruzzi Joint Venture (80% interest)..... $ 15,696 $ -- $ -- $ 15,696 Funding of Development Expenditures.............. 9,878 -- -- 9,878 Other 990 -- -- 990 ------------- -------------- --------------- ----------------- $ 26,564 $ -- $ -- $ 26,564 ============= ============== =============== ================= Capital expenditures were comprised of: New York Merchandise Total City Office Retail Mart Other ------- ----------- ------- ----------- ------- Expenditures to maintain the assets. $ 5,881 $ 3,165 $ 35 $ 559 $ 2,122 Tenant allowances................... 4,499 3,699 512 288 -- Redevelopment expenditures.......... 10,228 6,038 -- 4,190 -- ------- ------- ------- ------- ------- $20,608 $12,902 $ 547 $ 5,037 $ 2,122 ======= ======= ======= ======= ======= Net cash used in financing activities of $24,341 was primarily comprised of (i) repayment of borrowings of $522,506, (ii) distributions paid on Class A units of $44,465, (iii) debt issuance costs of $17,996, (iv) distributions to minority partners of $5,470, partially offset by (v) proceeds from borrowings of $565,000. Page 19 20 Three Months Ended March 31, 1999 Cash flows provided by operating activities of $20,340 was primarily comprised of (i) income of $57,065 and (ii) adjustments for non-cash items of $6,161, offset by (iii) the net change in operating assets and liabilities of $30,271. The adjustments for non-cash items are primarily comprised of (i) depreciation and amortization of $19,292 and (ii) minority interest of $485, partially offset by (iii) the effect of straight-lining of rental income of $7,056 and (iv) equity in net income of partially-owned entities of $18,882. The net change in operating assets and liabilities primarily reflects an increase in prepaid expenses of $16,295. Net cash used in investing activities of $141,092 was primarily comprised of (i) capital expenditures of $61,228 (see detail below), (ii) investment in notes and mortgages receivable of $60,567 (including $41,200 loan to CAPI and $18,587 loan to Vornado Operating Company), (iii) acquisitions of real estate of $45,000 (see detail below), (iv) investments in partially-owned entities of $13,200 (see detail below), (v) real estate deposits of $9,706 and (vi) investments in securities of $3,818, partially offset by (vii) the use of cash restricted for tenant improvements of $25,660, (viii) proceeds from sale of Cold Storage assets of $22,769 and (ix) proceeds from sale or maturity of securities available for sale of $3,998. Acquisitions of real estate and investments in partially-owned entities are comprised of: Debt Value of Units Cash Assumed Issued Assets Acquired ------------- -------------- --------------- ----------------- Real Estate: 888 Seventh Avenue............................... $ 45,000 $ 55,000 $ -- $ 100,000 ============= ============== =============== ================= Investments in Partially Owned Entities: Charles E. Smith Commercial Realty L.P.: Additional investment......................... $ -- $ -- $ 242,000 $ 242,000 Reacquired units from Vornado Operating Company.................................... 13,200 -- -- 13,200 Crystal City hotel land....................... -- -- 8,000 8,000 Additional investment in Newkirk Joint Ventures.. -- -- 47,800 47,800 ------------- -------------- --------------- ----------------- $ 13,200 $ -- $ 297,800 $ 311,000 ============= ============== =============== ================= Capital expenditures were comprised of: New York Merchandise City Office Retail Mart Other Total ----------- ------- ------- ------- ------- Expenditures to maintain the assets... $ 1,258 $ 271 $ 1,428 $ 1,712 $ 4,669 Tenant allowances..................... 3,464 231 4,464 -- 8,159 Redevelopment expenditures............ 36,392 12,008 -- -- 48,400 ------- ------- ------- ------- ------- $41,114 $12,510 $ 5,892 $ 1,712 $61,228 ======= ======= ======= ======= ======= Net cash provided by financing activities of $33,083 was primarily comprised of (i) proceeds from borrowings of $165,000, and (ii) proceeds from the issuance of Series B Cumulative Redeemable Preferred units of $82,305, partially offset by (iii) repayment of borrowings of $163,963, (iv) distributions paid on Class A units of $38,473, (v) distributions paid on preferred units of $4,993 and (vi) distributions to minority partners of $3,544. Page 20 21 SUPPLEMENTAL INFORMATION The following table sets forth certain information for the properties the Company owns directly or indirectly: Office Merchandise Mart Temperature ------------------------- ----------------------------- Controlled New York City CESCR Retail Office(1) Showroom(1) Logistics ------------- -------- ------ --------- ----------- --------- (square feet and cubic feet in thousands) As of March 31, 2000 Square feet................................ 14,267 3,782 11,960 2,640(3) 4,317 17,770 Cubic feet................................. -- -- -- -- -- 445,000 Number of properties....................... 22 40 56 7 7 90 Occupancy rate............................. 95% 95%(2) 93% 88%(3) 99% 95% As of December 31, 1999 Square feet................................ 14,028 3,623 11,960 2,414 4,174 16,998 Cubic feet................................. -- -- -- -- -- 428,300 Number of properties....................... 22 39 56 7 7 89 Occupancy rate............................. 95% 99% 92% 93% 98% 95% As of March 31, 1999: Square feet................................ 12,455 3,623 12,131 2,598 3,979 16,632 Cubic feet................................. -- -- -- -- -- 416,200 Number of properties....................... 21 39 59 7 7 86 Occupancy rate............................. 92% 98% 93% 91% 97% 94% - ------------- (1) The office and showroom space is contained in the same mixed-use properties. (2) Excluding 1750 Pennsylvania Avenue which was acquired in the first quarter of 2000, the occupancy rate was 97% at March 31, 2000. (3) The decrease in occupancy resulted from the conversion in March of this year of existing vacant showroom space to office space in Chicago. Page 21 22 Financings On March 1, 2000, the Company completed a $500 million private placement of 10-year, 7.93% mortgage notes, cross-collateralized by 42 shopping center properties, resulting in net proceeds of approximately $490 million. In connection therewith, the Company repaid $228 million of existing mortgage debt scheduled to mature on December 1, 2000 and $262 million outstanding under its revolving credit facility. On March 1, 2000, the Company refinanced its Two Park Avenue office building for $90 million. On such date, the Company received proceeds of $65 million and repaid the then existing debt in the same amount. The balance of the proceeds was received on April 18, 2000. The new 3-year debt matures on February 28, 2003 and bears interest at LIBOR + 1.45% (7.44% at March 31, 2000). On March 21, 2000, the Company renewed its $1 billion revolving credit facility for an additional three years. The covenants of the facility include, among others, maximum loan to value ratio, minimum debt service coverage and minimum capitalization requirements. Interest is at LIBOR plus .90% (7.0% at March 31, 2000). The Company paid origination fees of $6.7 million and pays a commitment fee quarterly, over the remaining term of the facility of .15% per annum on the facility amount. The Company anticipates that cash from continuing operations will be adequate to fund business operations and the payment of dividends and distributions on an on-going basis for more than the next twelve months; however, capital outlays for significant acquisitions would require funding from borrowings or equity offerings. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS At March 31, 2000 the Company's exposure to a change in interest rates on its wholly-owned and partially-owned debt is as follows: (amounts in thousands except per unit amounts) Weighted Effect of 1% Average Increase In Balance Interest Rate Base Rates ------------- ------------- ----------- Wholly-owned debt: Variable rate...... $ 999,660 7.40% $ 9,997 Fixed rate......... 1,111,230 7.58% -- ------------- ----------- $ 2,110,890 9,997 ============= ----------- Partially-owned debt: Variable rate...... $ 65,482 7.60% 655 Fixed rate......... 1,146,263 7.74% -- ------------- ----------- $ 1,211,745 655 ============= ----------- Preferential allocations......... (1,530) ----------- Total decrease in the Company's annual net income. $ 9,122 =========== Per Class A unit-diluted $ .10 =========== Page 22 23 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is from time to time involved in legal actions arising in the ordinary course of its business. In the opinion of management, after consultation with legal counsel, the outcome of such matters will not have a material adverse effect on the Company's financial condition, results of operations or cash flows. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits required by Item 601 of Regulation S-K are incorporated herein by reference and are listed in the attached Exhibit Index. (b) Reports on Form 8-K During the quarter ended March 31, 2000, Vornado Realty L.P. filed no reports on Form 8-K. Page 23 24 SIGNATURES 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 thereunto duly authorized. VORNADO REALTY L.P. ------------------------------------------- (Registrant) Date: By: /s/ Irwin Goldberg ------------------------------------------- IRWIN GOLDBERG Vice President, Chief Financial Officer Page 24 25 EXHIBIT INDEX EXHIBIT NO. ------- 3.1 -- Amended and Restated Declaration of Trust of Vornado, amended April 3, 1997--Incorporated by reference to Exhibit 3.1 of Vornado's Registration Statement on Form S-8 (File No. 333-29011), filed on June 12, 1997......................................................................... * 3.2 -- Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on October 14, 1997 - Incorporated by reference to Exhibit 3.2 of Vornado's Registration Statement on Form S-3 (File No. 333-36080), filed on May 2, 2000........................................................................................ * 3.3 -- Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on April 22, 1998 - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated April 22, 1998 (File No. 001-11954), filed on April 28, 1998.............................................................................. * 3.4 -- Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on November 24, 1999 - Incorporated by reference to Exhibit 3.4 of Vornado's Registration Statement on Form S-3 (File No. 333-36080), filed on May 2, 2000........................................................................................ * 3.5 -- Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on April 20, 2000 - Incorporated by reference to Exhibit 3.5 of Vornado's Registration Statement on Form S-3 (File No. 333-36080), filed on May 2, 2000. * 3.6 -- Articles Supplementary Classifying Vornado's $3.25 Series A Preferred Shares of Beneficial Interest, liquidation preference $50.00 per share - Incorporated by reference to Exhibit 4.1 of Vornado's Current Report on Form 8-K, dated April 3, 1997 (File No. 001-11954), filed on April 8, 1997.................................................................................. * 3.7 -- Articles Supplementary Classifying Vornado's Series D-1 8.5% Cumulative Redeemable Preferred Shares of Beneficial Interest, no par value (the "Series D-1 Preferred Shares") - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated November 12, 1998 (File No. 001-11954), filed on November 30, 1998............................................... * 3.8 -- Articles Supplementary Classifying Additional Series D-1 Preferred Shares - Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K/A, dated November 12, 1998 (File No. 001-11954), filed on February 9, 1999................................................ * 3.9 -- Articles Supplementary Classifying 8.5% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.3 of Vornado's Current Report on Form 8-K, dated March 3, 1999 (File No. 001-11954), filed on March 17, 1999........................................................ * 3.10 -- Articles Supplementary Classifying Vornado's Series C Preferred Shares - Incorporated by reference to Exhibit 3.7 of Vornado's Registration Statement on Form 8-A (File No. 001-11954), filed on May 19, 1999.......................................................................... * 3.11 -- Articles Supplementary Classifying Vornado Realty Trust's Series D-2 Preferred Shares, dated as of May 27, 1999, as filed with the State Department of Assessments and Taxation of Maryland on May 27, 1999 - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999............................ * - ---------------------------------- * Incorporated by reference Page 25 26 EXHIBIT NO. ------- 3.12 -- Articles Supplementary Classifying Vornado's Series D-3 Preferred Shares, dated September 3, 1999, as filed with the State Department of Assessments and Taxation of Maryland on September 3, 1999 - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999........................ * 3.13 -- Articles Supplementary Classifying Vornado's Series D-4 Preferred Shares, dated September 3, 1999, as filed with the State Department of Assessments and Taxation of Maryland on September 3, 1999 - Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999........................ * 3.14 -- Articles Supplementary Classifying Vornado's Series D-5 Preferred Shares - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated November 24, 1999 (File No. 001-11954), filed on December 23, 1999............................................... * 3.15 -- Amended and Restated Bylaws of Vornado, as amended on March 2, 2000 - Incorporated by reference to Exhibit 3.12 of Vornado's Annual Report on Form 10-K for the period ended December 31, 1999 (File No. 1-11954), filed on March 9, 2000..................................................... * 3.16 -- Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of October 20, 1997 - Incorporated by reference to Exhibit 3.4 of Vornado's Annual Report on Form 10-K for the year ended December 31, 1997 filed on March 31, 1998 (the "1997 10-K").... * 3.17 -- Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of December 16, 1997--Incorporated by reference to Exhibit 3.5 of the 1997 10-K. * 3.18 -- Second Amendment to Second Amendment and Restated Agreement of Limited Partnership of the Operating Partnership of the Operating Partnership, dated as of April 1, 1998 - Incorporated by reference to Exhibit 3.5 of Vornado's Registration Statement on Form S-3 (File No. 333-50095), filed on April 14, 1998............................................................ * 3.19 -- Third Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of November 12, 1998 - Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K, dated November 12, 1998 (File No. 001-11954), filed on November 30, 1998.............................................................................. * 3.20 -- Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of November 30, 1998 - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated December 1, 1998 (File No. 001-11954), filed on February 9, 1999...................................................................... * 3.21 -- Exhibit A, dated as of December 22, 1998, to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership - Incorporated by reference to Exhibit 3.4 of Vornado's Current Report on Form 8-K/A, dated November 12, 1998 (File No. 001-11954), filed on February 9, 1999............................................................................... * 3.22 -- Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of March 3, 1999 - Incorporated by reference to Exhibit 3.1 of Vornado's Current Report on Form 8-K, dated March 3, 1999 (File No. 001-11954), filed on March 17, 1999... * - ---------------------------------- * Incorporated by reference Page 26 27 EXHIBIT NO. ------- 3.23 -- Exhibit A to Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of March 11, 1999 - Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K, dated March 3, 1999 (File No. 001-11954), filed on March 17, 1999....................................................................................... * 3.24 -- Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of March 17, 1999 - Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999....... * 3.25 -- Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of May 20, 1999 - Incorporated by reference to Exhibit 3.3 of Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999....... * 3.26 -- Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of May 20, 1999 - Incorporated by reference to Exhibit 3.4 of Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999....... * 3.27 -- Ninth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of September 3, 1999 - Incorporated by reference to Exhibit 3.3 of Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999................................................................................. * 3.28 -- Tenth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of September 3, 1999 - Incorporated by reference to Exhibit 3.4 of Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999................................................................................. * 3.29 -- Eleventh Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of November 24, 1999 - Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K, dated November 24, 1999 (File No. 001-11954), filed on December 23, 1999................................................................................ * 4.1 -- Instruments defining the rights of security holders (see Exhibits 3.1 through 3.29 of this Quarterly Report on Form 10-Q) 4.2 -- Indenture dated as of November 24, 1993 between Vornado Finance Corp. and Bankers Trust Company, as Trustee - Incorporated by reference to Vornado's current Report on Form 8-K dated November 24, 1993 (File No. 001-11954), filed December 1, 1993.......................................... * 4.3 -- Specimen certificate representing Vornado's Common Shares of Beneficial Interest, par value $0.04 per share - Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to Registration Statement on Form S-3 (File No. 33-62395), filed on October 26, 1995........................... * 4.4 -- Specimen certificate representing Vornado's $3.25 Series A Preferred Shares of Beneficial Interest, liquidation preference $50.00 per share - Incorporated by reference to Exhibit 4.2 of Vornado's Current Report on Form 8-K, dated April 3, 1997 (File No. 001-11954), filed on April 8, 1997.................................................................................. * 4.5 -- Specimen certificate evidencing Vornado's Series B 8.5% Cumulative Redeemable Preferred Shares of Beneficial Interest - Incorporated by reference to Exhibit 4.2 of Vornado's Registration Statement on Form 8-A (File No. 001-11954), filed on March 15, 1999.............................. * - ---------------------------------- * Incorporated by reference Page 27 28 EXHIBIT NO. ------- 4.6 -- Specimen certificate evidencing Vornado's 8.5% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preferences $25.00 per share, no par value - Incorporated by reference to Exhibit 4.2 of Vornado's Registration Statement on Form 8-A (File No. 001-11954), filed May 19, 1999............................................................................... * 10.1 -- Second Amendment, dated as of June 12, 1997, to Vornado's 1993 Omnibus Share Plan, as amended - Incorporated by reference to Vornado's Registration Statement on Form S-8 (File No. 333-29011) filed on June 12, 1997......................................................................... * 10.2 -- Master Agreement and Guaranty, between Vornado, Inc. and Bradlees New Jersey, Inc. dated as of May 1, 1992 - Incorporated by reference to Vornado's Quarterly Report on Form 10-Q for quarter ended March 31, 1992 (File No. 001-11954), filed May 8, 1992................................... * 10.3** -- Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing dated as of November 24, 1993 made by each of the entities listed therein, as mortgagors to Vornado Finance Corp., as mortgagee - Incorporated by reference to Vornado's Current Report on Form 8-K dated November 24, 1993 (File No. 001-11954), filed December 1, 1993....................... * 10.4** -- 1985 Stock Option Plan as amended - Incorporated by reference to Vornado's Quarterly Report on Form 10-Q for quarter ended May 2, 1987 (File No. 001-11954), filed June 9, 1987............... * 10.5** -- Form of Stock Option Agreement for use in connection with incentive stock options issued pursuant to Vornado, Inc. 1985 Stock Option Plan - Incorporated by reference to Vornado's Quarterly Report on Form 10-Q for quarter ended October 26, 1985 (File No. 001-11954), filed December 9, 1985............................................................................... * 10.6** -- Form of Stock Option Agreement for use in connection with incentive stock options issued pursuant to Vornado, Inc. 1985 Stock Option Plan--Incorporated by reference to Vornado's Quarterly Report on Form 10-Q for quarter ended May 2, 1987 (File No. 001-11954), filed June 9, 1987........................................................................................ * 10.7** -- Form of Stock Option Agreement for use in connection with incentive stock options issued pursuant to Vornado, Inc. 1985 Stock Option Plan--Incorporated by reference to Vornado's Quarterly Report on Form 10-Q for quarter ended October 26, 1985 (File No. 001-11954), filed December 9, 1985............................................................................... * 10.8** -- Employment Agreement between Vornado Realty Trust and Joseph Macnow dated January 1, 1998 - Incorporated by reference to Exhibit 10.7 of Vornado's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 001-11954), filed November 12, 1998................. * 10.9** -- Employment Agreement between Vornado Realty Trust and Richard Rowan dated January 1, 1998 - Incorporated by reference to Exhibit 10.8 of Vornado's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 001-11954), filed November 12, 1998................. * 10.10** -- Employment Agreement between Vornado Realty Trust and Irwin Goldberg, dated December 11, 1997 - Incorporated by reference to Exhibit 10.10 of Vornado's Annual Report on Form 10-K/A for the year ended December 31, 1997 (File No. 001-11954), filed on April 14, 1998..................... * 10.11** -- Employment Agreement between Vornado Realty Trust and Michael D. Fascitelli dated December 2, 1996 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 001-11954), filed March 13, 1997.................................. * - ---------------------------------- * Incorporated by reference ** Management contract or compensatory plan Page 28 29 EXHIBIT NO. ------- 10.12 -- Promissory Notes from Steven Roth to Vornado, Inc. dated December 29, 1992 and January 15, 1993 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993................................ * 10.13 -- Registration Rights Agreement between Vornado, Inc. and Steven Roth Dated December 29, 1992 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993......................................... * 10.14 -- Stock Pledge Agreement between Vornado, Inc. and Steven Roth dated December 29, 1992 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993......................................... * 10.15 -- Promissory Note from Steven Roth to Vornado Realty Trust dated April 15, 1993 and June 17, 1993 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 001-11954), filed March 24, 1994................................... * 10.16 -- Promissory Note from Richard Rowan to Vornado Realty Trust - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 001-11954), filed March 24, 1994............................................................... * 10.17 -- Promissory Note from Joseph Macnow to Vornado Realty Trust - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 001-11954), filed March 24, 1994............................................................... * 10.18 -- Management Agreement between Interstate Properties and Vornado, Inc. dated July 13, 1992 -Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993......................................... * 10.19 -- Real Estate Retention Agreement between Vornado, Inc., Keen Realty Consultants, Inc. and Alexander's, Inc., dated as of July 20, 1992 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993....................................................................................... * 10.20 -- Amendment to Real Estate Retention Agreement dated February 6, 1995 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 001-11954), filed March 23, 1995............................................................... * 10.21 -- Stipulation between Keen Realty Consultants Inc. and Vornado Realty Trust re: Alexander's Retention Agreement - Incorporated by reference to Vornado's annual Report on Form 10-K for the year ended December 31, 1993 (File No. 001-11954), filed March 24, 1994.................... * 10.22 -- Stock Purchase Agreement, dated February 6, 1995, among Vornado Realty Trust and Citibank, N.A. Incorporated by reference to Vornado's Current Report on Form 8-K dated February 6, 1995 (File No. 001-11954), filed February 21, 1995........................................................ * 10.23 -- Management and Development Agreement, dated as of February 6, 1995 - Incorporated by reference to Vornado's Current Report on Form 8-K dated February 6, 1995 (File No. 001-11954), filed February 21, 1995............................................................................... * 10.24 -- Standstill and Corporate Governance Agreement, dated as of February 6, 1995 - Incorporated by reference to Vornado's Current Report on Form 8-K dated February 6, 1995 (File No. 001-11954), filed February 21, 1995........................................................................ * - ---------------------------------- * Incorporated by reference Page 29 30 EXHIBIT NO. ------- 10.25 -- Credit Agreement, dated as of March 15, 1995, among Alexander's Inc., as borrower, and Vornado Lending Corp., as lender - Incorporated by reference from Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 001 - 11954), filed March 23, 1995...................... * 10.26 -- Subordination and Intercreditor Agreement, dated as of March 15, 1995 among Vornado Lending Corp., Vornado Realty Trust and First Fidelity Bank, National Association - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 001-11954), filed March 23, 1995........................................................... * 10.28 -- Form of Intercompany Agreement between Vornado Realty L.P. and Vornado Operating, Inc. -Incorporated by reference to Exhibit 10.1 of Amendment No. 1 to Vornado Operating, Inc.'s Registration Statement on Form S-11 (File No. 333-40701), filed on January 23, 1998............ * 10.29 -- Form of Revolving Credit Agreement between Vornado Realty L.P. and Vornado Operating, Inc., together with related form of Note - Incorporated by reference to Exhibit 10.2 of Amendment No. 1 to Vornado Operating, Inc.'s Registration Statement on Form S-11 (File No.333-40701)..... * 10.31 -- Registration Rights Agreement, dated as of April 15, 1997, between Vornado Realty Trust and the holders of Units listed on Schedule A thereto - Incorporated by reference to Exhibit 10.2 of Vornado's Current Report on Form 8-K (File No. 001-11954), filed on April 30, 1997............. * 10.32 -- Noncompetition Agreement, dated as of April 15, 1997, by and among Vornado Realty Trust, the Mendik Company, L.P., and Bernard H. Mendik - Incorporated by reference to Exhibit 10.3 of Vornado's Current Report on Form 8-K (File No. 001-11954), filed on April 30, 1997............. * 10.33 -- Employment Agreement, dated as of April 15, 1997, by and among Vornado Realty Trust, The Mendik Company, L.P. and David R. Greenbaum - Incorporated by reference to Exhibit 10.4 of Vornado's Current Report on Form 8-K (File No. 001-11954), filed on April 30, 1997....................... * 10.34 -- Agreement, dated September 28, 1997, between Atlanta Parent Incorporated, Portland Parent Incorporated and Crescent Real Estate Equities, Limited Partnership - Incorporated by reference to Exhibit 99.6 of Vornado's Current Report on Form 8-K (File No. 001-11954), filed on October 8, 1997............................................................................. * 10.35 -- Contribution Agreement between Vornado Realty Trust, Vornado Realty L.P. and The Contributors Signatory - thereto - Merchandise Mart Properties, Inc. (DE) and Merchandise Mart Enterprises, Inc. Incorporated by reference to Exhibit 10.34 of Vornado's Annual Report on Form 10-K/A for the year ended December 31, 1997 (File No. 001-11954), filed on April 8, 1998.................. * 10.36 -- Sale Agreement executed November 18, 1997, and effective December 19, 1997, between MidCity Associates, a New York partnership, as Seller, and One Penn Plaza LLC, a New York Limited liability company; as purchaser. Incorporated by reference to Exhibit 10.35 of Vornado's Annual Report on Form 10-K/A for the year ended December 31, 1997 (File No. 001-11954), filed on April 8, 1998............................................................................... * 10.37 -- Promissory Notes from Michael D. Fascitelli to Vornado Realty Trust dated March 2, 1998 and April 30, 1998. Incorporated by reference to Exhibit 10.37 of Vornado's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 (File No. 001-11954), filed May 13, 1998........ * - ---------------------------------- * Incorporated by reference Page 30 31 EXHIBIT NO. ------- 10.38 -- Credit Agreement dated as of June 22, 1998 among One Penn Plaza, LLC, as Borrower, The Lenders Party Hereto, The Chase Manhattan Bank, as Administrative Agent Incorporated by reference to Exhibit 10 of Vornado's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (File No. 001-11954), filed August 13, 1998.................................................... * 10.39 -- Registration Rights Agreement, dated as of April 1, 1998 between Vornado and the Unit Holders named herein - Incorporated by reference to Exhibit 10.2 of Amendment No. 1 to Vornado's Registration Statement on Form S-3 (File No. 333-50095), filed on May 6, 1998.................. * 10.40 -- Underwriting Agreement, dated April 9, 1998, among Vornado, Vornado Realty L.P. and Goldman, Sachs & Co. - Incorporated by reference to Exhibit 1.1 of Vornado's Current Report on Form 8-K, dated April 9, 1998 (File No. 001-11954), filed on April 16, 1998......................... * 10.41 -- Pricing Agreement, dated April 9, 1998, between Vornado and Goldman, Sachs & Co. - Incorporated by reference to Exhibit 1.2 of Vornado's Current Report on Form 8-K, dated April 9, 1998 (File No. 001-11954), filed on April 16, 1998........................................................ * 10.42 -- Underwriting Agreement, dated April 23, 1998, among Vornado, Vornado Realty L.P. and Merrill Lynch, Pierce, Fenner & Smith Incorporated - Incorporated by reference to Exhibit 1.1 of Vornado's Current Report on Form 8-K, dated April 22, 1998 (File No. 001-11954), filed on April 28, 1998................................................................................. * 10.43 -- Registration Rights Agreement, dated as of August 5, 1998 between Vornado and the Unit Holders named therein - Incorporated by reference to Exhibit 10.1 of Vornado's Registration Statement on Form S-3 (File No. 333-89667), filed on October 25, 1999.................................... * 10.44 -- Registration Rights Agreement, dated as of July 23, 1998 between Vornado and the Unit Holders named therein - Incorporated by reference to Exhibit 10.2 of Vornado's Registration Statement on Form S-3 (File No. 333-89667), filed on October 25, 1999.................................... * 10.45 -- Underwriting Agreement, dated March 12, 1999, among Vornado, Vornado Realty L.P., Merrill Lynch, Pierce, Fenner & Smith Incorporated - Incorporated by reference to Exhibit 1.1 of Vornado's Current Report on Form 8-K, dated March 3, 1999 (File No. 001-11954), filed on March 17, 1999.. * 10.46 -- Underwriting Agreement, dated May 17, 1999, among Vornado Realty Trust, Vornado Realty L.P., Salomon Smith Barney Inc. and the other underwriters named therein - Incorporated by reference to Exhibit 1.1 of Vornado's Current Report on Form 8-K, dated May 17, 1999 (File No. 001-11954), filed on May 26, 1999.............................................................. * 10.47 -- Consolidated and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing, dated as of March 1, 2000, between Entities named therein (as Mortgagors) and Vornado (as Mortgagee) - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000.................. * 10.48 -- Indenture and Servicing Agreement, dated as of March 1, 2000, among Vornado, Lasalle Bank National Association, ABN Amro Bank N.V. and Midland Loan Services, Inc. - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000......................................................... * 10.49 -- Employment Agreement, dated January 22, 2000, between Vornado Realty Trust and Melvyn Blum - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000.......................................... * - ---------------------------------- * Incorporated by reference Page 31 32 EXHIBIT NO. ------- 10.50 -- First Amended and Restated Promissory Note of Steven Roth, dated November 16, 1999 - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000.......................................... * 10.51 -- Letter agreement, dated November 16, 1999, between Steven Roth and Vornado Realty Trust - Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000.......................................... * 10.52 -- Promissory Note of Melvyn Blum, dated March 24, 2000 10.53 -- Promissory Note of Melvyn Blum, dated April 4, 2000 10.54 -- Revolving Credit Agreement dated as of March 21, 2000 among Vornado Realty L.P., as borrower, Vornado Realty Trust, as general partner, and UBS AG, as Bank 27 -- Financial Data Schedule Page 32