Vornado posts steep YOY decline in Q4'20 FFO on COVID-19 impact

Vornado Realty Trust disclosed fourth-quarter 2020 funds from operations attributable to common shareholders plus assumed conversions of $138.4 million, or 72 cents per share, a 55.8% fall on a per-share basis from $311.9 million, or $1.63 per share, in the prior-year period.

For the full year, the company reported a 25.1% year-over-year fall in FFO per share. Results totaled $750.5 million, or $3.93 per share, compared with $1.00 billion, or $5.25 per share, in 2019.

The S&P Capital IQ consensus FFO-per-share estimate for the quarter was 64 cents. For the full year, the consensus estimate for FFO was $3.45 per share.

The office real estate investment trust said certain items that affected FFO during the fourth quarter included after-tax net gain on sale of 220 Central Park South condominium units in New York City and severance and other reduction-in-force related expenses of about $23.4 million.

The REIT noted that the impact of the coronavirus pandemic on its financial condition and operating results has been and may remain material, including reduced rental income and potentially lower occupancy levels at its properties that will cut its cash flow available for operating costs, debt payment and shareholder distribution.

FFO as adjusted for the quarter decreased 25.8% from the year-ago period on a per-share basis to $127.2 million, or 66 cents per share, from $171 million, or 89 cents per share. FFO as adjusted for the full year amounted to $483 million, or $2.53 per share, a 27.5% per-share decrease from $666.2 million, or $3.49 per share, in 2019.

Revenues for the fourth quarter came to $376.4 million, an 18.3% decrease year over year from $461.0 million. Revenues for the 2020 full year totaled $1.53 billion, a fall of 25.97% from the prior year's $1.92 billion.

During the fourth quarter, Vornado received 97% of combined rent due and rent deferrals, comprising 99% and 89%, respectively, from its office and retail tenants.

The company wrote off approximately $1.4 million and $51.6 million of receivables from the straight-lining of rents for the fourth quarter and full year 2020, respectively. It has also written off about $1.4 million and $22.5 million of tenant receivables deemed uncollectible for the respective fourth-quarter and full-year periods.

During the fourth quarter, it completed the sale of five condominium units at 220 Central Park South, for net proceeds of about $110.1 million, yielding a net gain of roughly $42.5 million.