UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)



☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	For the quarterly period ended:	~~September~~June 30, ~~2019~~2020



☐	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:	001-11954	(Vornado Realty Trust)
Commission File Number:	001-34482	(Vornado Realty L.P.)

Vornado Realty Trust

Vornado Realty L.P.

(Exact name of registrants as specified in its charter)



Vornado Realty Trust	Maryland	22-1657560
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

Vornado Realty L.P.	Delaware	13-3925979
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)



888 Seventh Avenue,	New York,	New York	10019
(Address of principal executive offices) (Zip Code)



(212)	894-7000
(Registrants’ 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.

Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer," “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Vornado Realty Trust:
	☑	Large Accelerated Filer	☐	Accelerated Filer
	☐	Non-Accelerated Filer	☐	Smaller Reporting Company
			☐	Emerging Growth Company



Vornado Realty L.P.:
	☐	Large Accelerated Filer	☐	Accelerated Filer
	☑	Non-Accelerated Filer	☐	Smaller Reporting Company
			☐	Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Vornado Realty Trust: Yes ☐ No ☑ Vornado Realty L.P.: Yes ☐ No ☑

Securities registered pursuant to Section 12(b) of the Act:



Registrant	Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Vornado Realty Trust	Common Shares of beneficial interest, $.04 par value per share	VNO	New York Stock Exchange
	Cumulative Redeemable Preferred Shares of beneficial interest, liquidation preference $25.00 per ~~share~~share:
Vornado Realty Trust	5.70% Series K	VNO/PK	New York Stock Exchange
Vornado Realty Trust	5.40% Series L	VNO/PL	New York Stock Exchange
Vornado Realty Trust	5.25% Series M	VNO/PM	New York Stock Exchange

As of ~~September~~June 30, ~~2019, 190,850,321~~2020, 191,151,142 of Vornado Realty Trust’s common shares of beneficial interest are outstanding.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended ~~September~~June 30, ~~2019~~2020 of Vornado Realty Trust and Vornado Realty L.P. Unless stated otherwise or the context otherwise requires, references to “Vornado” refer to Vornado Realty Trust, a Maryland real estate investment trust (“REIT”), and references to the “Operating Partnership” refer to Vornado Realty L.P., a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado.

The Operating Partnership is the entity through which we conduct substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets. Vornado is the sole general partner and also a ~~93.1%~~92.7% limited partner of the Operating Partnership. As the sole general partner of the Operating Partnership, Vornado has exclusive control of the Operating Partnership’s day-to-day management.

Under the limited partnership agreement of the Operating Partnership, unitholders may present their Class A units for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time). Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unitholder is equal to the quarterly dividend paid to a Vornado common shareholder. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. Vornado generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than having the Operating Partnership pay cash. With each such exchange or redemption, Vornado’s percentage ownership in the Operating Partnership will increase. In addition, whenever Vornado issues common shares other than to acquire Class A units of the Operating Partnership, Vornado must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must issue to Vornado an equivalent number of Class A units of the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the quarterly reports on Form 10-Q of Vornado and the Operating Partnership into this single report provides the following benefits:

enhances investors’ understanding of Vornado and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the disclosure applies to both Vornado and the Operating Partnership; and

creates time and cost efficiencies in the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between Vornado and the Operating Partnership in the context of how Vornado and the Operating Partnership operate as a consolidated company. The financial results of the Operating Partnership are consolidated into the financial statements of Vornado. Vornado does not have any significant assets, liabilities or operations, other than its investment in the Operating Partnership. The Operating Partnership, not Vornado, generally executes all significant business relationships other than transactions involving the securities of Vornado. The Operating Partnership holds substantially all of the assets of Vornado. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by Vornado, which are contributed to the capital of the Operating Partnership in exchange for Class A units of partnership in the Operating Partnership, and the net proceeds of debt offerings by Vornado, which are contributed to the Operating Partnership in exchange for debt securities of the Operating Partnership, as applicable, the Operating Partnership generates all remaining capital required by the Company’s business. These sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit facility, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties.

To help investors better understand the key differences between Vornado and the Operating Partnership, certain information for Vornado and the Operating Partnership in this report has been separated, as set forth below:

Item 1. Financial Statements (unaudited), which includes the following specific disclosures for Vornado Realty Trust and Vornado Realty L.P.:


•	Note 12. Redeemable Noncontrolling ~~Interests/Redeemable Partnership Units~~Interests


•	Note 13. Shareholders' Equity/Partners' Capital


•	Note 20. (Loss) Income Per Share/(Loss) Income Per Class A Unit

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of Vornado and the Operating Partnership in order to establish that the requisite certifications have been made and that Vornado and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.



PART I.		Financial Information:	Page Number

	Item 1.	Financial Statements of Vornado Realty Trust:

		Consolidated Balance Sheets (Unaudited) as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019	6

		Consolidated Statements of Income (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	7

		Consolidated Statements of Comprehensive Income (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	8

		Consolidated Statements of Changes in Equity (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	9

		Consolidated Statements of Cash Flows (Unaudited) for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	13

		Financial Statements of Vornado Realty L.P.:

		Consolidated Balance Sheets (Unaudited) as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019	15

		Consolidated Statements of Income (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	16

		Consolidated Statements of Comprehensive Income (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	17

		Consolidated Statements of Changes in Equity (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	18

		Consolidated Statements of Cash Flows (Unaudited) for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	22

		Vornado Realty Trust and Vornado Realty L.P.:

		Notes to Consolidated Financial Statements (Unaudited)	24

		Reports of Independent Registered Public Accounting Firm	5448

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	5650

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9688

	Item 4.	Controls and Procedures	9789

PART II.		Other Information:

	Item 1.	Legal Proceedings	9889

	Item 1A.	Risk Factors	9890

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9891

	Item 3.	Defaults Upon Senior Securities	9891

	Item 4.	Mine Safety Disclosures	9891

	Item 5.	Other Information	9891

	Item 6.	Exhibits	9891

EXHIBIT INDEX			9992

SIGNATURES			~~100~~93

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(Amounts in thousands, except unit, share, and per share amounts)	September 30, 2019			December 31, 2018			As of
							June 30, 2020			December 31, 2019
ASSETS
Real estate, at cost:
Land	$	2,602,039		$	3,306,280		$	2,588,200		$	2,591,261
Buildings and improvements	7,888,950			10,110,992			7,975,871			7,953,163
Development costs and construction in progress	1,805,846			2,266,491			1,541,432			1,490,614
Moynihan Train Hall development expenditures	791,703			445,693			1,087,669			914,960
Leasehold improvements and equipment	121,164			108,427			127,685			124,014
Total	13,209,702			16,237,883			13,320,857			13,074,012
Less accumulated depreciation and amortization	(2,945,107		)	(3,180,175		)	(3,106,393		)	(3,015,958		)
Real estate, net	10,264,595			13,057,708			10,214,464			10,058,054
Right-of-use assets	370,604			—			376,958			379,546
Cash and cash equivalents	1,132,491			570,916			1,768,459			1,515,012
Restricted cash	113,065			145,989			94,882			92,119
Marketable securities	35,751			152,198			—			33,313
Tenant and other receivables	99,499			73,322			118,273			95,733
Investments in partially owned entities	4,023,820			858,113			3,648,651			3,999,165
Real estate fund investments	306,596			318,758			17,453			222,649
220 Central Park South condominium units ready for sale	288,135			99,627			426,623			408,918
Receivable arising from the straight-lining of rents	743,646			935,131			692,931			742,206
Deferred leasing costs, net of accumulated amortization of $191,299 and $207,529	360,608			400,313
Identified intangible assets, net of accumulated amortization of $99,623 and $172,114	30,773			136,781
Deferred leasing costs, net of accumulated amortization of $186,740 and $196,229							348,473			353,986
Identified intangible assets, net of accumulated amortization of $97,489 and $98,587							27,660			30,965
Other assets	446,516			431,938			307,620			355,347
	$	18,216,099		$	17,180,794		$	18,042,447		$	18,287,013
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgages payable, net	$	5,640,895		$	8,167,798		$	5,638,352		$	5,639,897
Senior unsecured notes, net	445,668			844,002			446,279			445,872
Unsecured term loan, net	745,585			744,821			796,236			745,840
Unsecured revolving credit facilities	655,000			80,000			1,075,000			575,000
Lease liabilities	490,978			—			426,059			498,254
Moynihan Train Hall obligation	791,703			445,693			1,087,669			914,960
Special dividend/distribution payable							—			398,292
Accounts payable and accrued expenses	453,331			430,976			385,956			440,049
Deferred revenue	62,583			167,730			49,386			59,429
Deferred compensation plan	99,677			96,523			94,081			103,773
Other liabilities	266,090			311,806			395,604			265,754
Total liabilities	9,651,510			11,289,349			10,394,622			10,087,120
Commitments and contingencies
Redeemable noncontrolling interests:
Class A units - 13,346,927 and 12,544,477 units outstanding	849,798			778,134
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding	4,535			5,428
Class A units - 13,773,407 and 13,298,956 units outstanding							620,269			884,380
Series D cumulative redeemable preferred units - 141,401 units outstanding							4,535			4,535
Total redeemable noncontrolling partnership units							624,804			888,915
Redeemable noncontrolling interest in a consolidated subsidiary							94,112			—
Total redeemable noncontrolling interests	854,333			783,562			718,916			888,915
Shareholders' equity:
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,797,280 and 36,798,580 shares	891,256			891,294
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 190,850,321 and 190,535,499 shares	7,613			7,600
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,793,694 and 36,795,640 shares							891,164			891,214
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 191,151,142 and 190,985,677 shares							7,625			7,618
Additional capital	7,872,597			7,725,857			8,095,774			7,827,697
Earnings less than distributions	(1,649,035		)	(4,167,184		)	(2,415,500		)	(1,954,266		)
Accumulated other comprehensive (loss) income	(47,359		)	7,664
Accumulated other comprehensive loss							(82,646		)	(40,233		)
Total shareholders' equity	7,075,072			4,465,231			6,496,417			6,732,030
Noncontrolling interests in consolidated subsidiaries	635,184			642,652			432,492			578,948
Total equity	7,710,256			5,107,883			6,928,909			7,310,978
	$	18,216,099		$	17,180,794		$	18,042,447		$	18,287,013

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)


(Amounts in thousands, except per share amounts)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
REVENUES:
Rental revenues	$	427,638		$	503,947		$	1,348,814		$	1,507,274		$	315,194		$	421,299		$	716,468		$	921,176
Fee and other income	38,323			38,101			114,918			113,029			27,832			41,804			71,090			76,595
Total revenues	465,961			542,048			1,463,732			1,620,303			343,026			463,103			787,558			997,771
EXPENSES:
Operating	(226,359		)	(235,575		)	(694,006		)	(709,158		)	(174,425		)	(220,752		)	(404,432		)	(467,647		)
Depreciation and amortization	(96,437		)	(113,169		)	(326,181		)	(333,701		)	(92,805		)	(113,035		)	(185,598		)	(229,744		)
General and administrative	(33,237		)	(31,977		)	(130,129		)	(108,937		)	(35,014		)	(38,872		)	(87,848		)	(96,892		)
Expense from deferred compensation plan liability	(974		)	(1,861		)	(7,722		)	(3,534		)
Transaction related costs, impairment losses and other	(1,576		)	(2,510		)	(103,315		)	(16,683		)
(Expense) benefit from deferred compensation plan liability													(6,356		)	(1,315		)	4,889			(6,748		)
Lease liability extinguishment gain (transaction related costs and impairment losses)													69,221			(101,590		)	69,150			(101,739		)
Total expenses	(358,583		)	(385,092		)	(1,261,353		)	(1,172,013		)	(239,379		)	(475,564		)	(603,839		)	(902,770		)

Income from partially owned entities	25,946			7,206			56,139			6,059
Income (loss) from real estate fund investments	2,190			(190		)	(13,780		)	(37,973		)
Interest and other investment income, net	3,045			2,893			15,930			9,401
Income from deferred compensation plan assets	974			1,861			7,722			3,534
(Loss) income from partially owned entities													(291,873		)	22,873			(272,770		)	30,193
Loss from real estate fund investments													(28,042		)	(15,803		)	(211,505		)	(15,970		)
Interest and other investment (loss) income, net													(2,893		)	7,840			(8,797		)	12,885
Income (loss) from deferred compensation plan assets													6,356			1,315			(4,889		)	6,748
Interest and debt expense	(61,448		)	(88,951		)	(226,940		)	(264,774		)	(58,405		)	(63,029		)	(117,247		)	(165,492		)
Net gain on transfer to Fifth Avenue and Times Square JV	—			—			2,571,099			—			—			2,571,099			—			2,571,099
Net gains on disposition of wholly owned and partially owned assets	309,657			141,269			641,664			164,828			55,695			111,713			124,284			332,007
Income before income taxes	387,742			221,044			3,254,213			329,365
(Loss) income before income taxes													(215,515		)	2,623,547			(307,205		)	2,866,471
Income tax expense	(23,885		)	(1,943		)	(80,542		)	(4,964		)	(1,837		)	(26,914		)	(14,650		)	(56,657		)
Income from continuing operations	363,857			219,101			3,173,671			324,401
(Loss) income from discontinued operations	(8		)	61			(85		)	381
Net income	363,849			219,162			3,173,586			324,782
Less net (income) loss attributable to noncontrolling interests in:
(Loss) income from continuing operations													(217,352		)	2,596,633			(321,855		)	2,809,814
Income (loss) from discontinued operations													—			60			—			(77		)
Net (loss) income													(217,352		)	2,596,693			(321,855		)	2,809,737
Less net loss (income) attributable to noncontrolling interests in:
Consolidated subsidiaries	(5,774		)	(3,312		)	(34,045		)	31,137			17,768			(21,451		)	140,155			(28,271		)
Operating Partnership	(22,637		)	(12,671		)	(197,354		)	(18,992		)	14,364			(162,515		)	13,974			(174,717		)
Net income attributable to Vornado	335,438			203,179			2,942,187			336,927
Net (loss) income attributable to Vornado													(185,220		)	2,412,727			(167,726		)	2,606,749
Preferred share dividends	(12,532		)	(12,534		)	(37,598		)	(38,103		)	(12,530		)	(12,532		)	(25,061		)	(25,066		)
Preferred share issuance costs	—			—			—			(14,486		)
NET INCOME attributable to common shareholders	$	322,906		$	190,645		$	2,904,589		$	284,338
NET (LOSS) INCOME attributable to common shareholders													$	(197,750	)	$	2,400,195		$	(192,787	)	$	2,581,683

INCOME PER COMMON SHARE – BASIC:
Net income per common share	$	1.69		$	1.00		$	15.22		$	1.50
(LOSS) INCOME PER COMMON SHARE - BASIC:
Net (loss) income per common share													$	(1.03	)	$	12.58		$	(1.01	)	$	13.53
Weighted average shares outstanding	190,814			190,245			190,762			190,176			191,104			190,781			191,071			190,735

INCOME PER COMMON SHARE – DILUTED:
Net income per common share	$	1.69		$	1.00		$	15.20		$	1.49
(LOSS) INCOME PER COMMON SHARE - DILUTED:
Net (loss) income per common share													$	(1.03	)	$	12.56		$	(1.01	)	$	13.51
Weighted average shares outstanding	191,024			191,327			191,027			191,292			191,104			191,058			191,071			191,030

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(Amounts in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Net income $ 363,849
$ 219,162
$ 3,173,586
$ 324,782
Other comprehensive income (loss):
Other comprehensive income (loss) of nonconsolidated subsidiaries 11
253
(949 ) 989
(Reduction) increase in value of interest rate swaps and other (9,954 ) 623
(55,495 ) 13,789
Amount reclassified from accumulated other comprehensive loss relating to a nonconsolidated subsidiary —
—
(2,311 ) —
Comprehensive income 353,906
220,038
3,114,831
339,560
Less comprehensive (income) loss attributable to noncontrolling interests (27,761 ) (16,037 ) (227,667 ) 11,232
Comprehensive income attributable to Vornado $ 326,145
$ 204,001
$ 2,887,164
$ 350,792



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Net (loss) income	$	(217,352	)	$	2,596,693		$	(321,855	)	$	2,809,737
Other comprehensive income (loss):
Increase (reduction) in value of interest rate swaps and other	78			(28,512		)	(45,399		)	(45,541		)
Other comprehensive income (loss) of nonconsolidated subsidiaries	—			25			8			(960		)
Amounts reclassified from accumulated other comprehensive loss relating to a nonconsolidated subsidiary	—			—			—			(2,311		)
Comprehensive (loss) income	(217,274		)	2,568,206			(367,246		)	2,760,925
Less comprehensive loss (income) attributable to noncontrolling interests	32,127			(182,160		)	157,107			(199,906		)
Comprehensive (loss) income attributable to Vornado	$	(185,147	)	$	2,386,046		$	(210,139	)	$	2,561,019

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)


(Amounts in thousands)	Preferred Shares			Common Shares			Additional Capital			Earnings Less Than Distributions				Accumulated Other Comprehensive Loss			Non-controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per share amounts)										Earnings Less Than Distributions			(Amounts in thousands, except per share amounts)							Total Equity																Accumulated Other Comprehensive Loss				Non-controlling Interests in Consolidated Subsidiaries
	Shares	Amount		Shares	Amount		Additional Capital		Additional Capital				Earnings Less Than Distributions				Non-controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Loss			Non-controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Shares						Common Shares									Additional Capital				Earnings Less Than Distributions					Total Equity
For the Three Months Ended September 30, 2019:																																												Additional Capital				Earnings Less Than Distributions					Total Equity
Balance, June 30, 2019	36,797	$	891,256	190,813	$	7,611	$	7,845,748	Additional Capital		$	(1,845,995	Earnings Less Than Distributions			)	$	(38,066	Accumulated Other Comprehensive Loss		)	Non-controlling Interests in Consolidated Subsidiaries			Total Equity			$	635,590			$	7,496,144
Net income attributable to Vornado	—	—		—	—		—			335,438				—			—			335,438
Net income attributable to noncontrolling interests in consolidated subsidiaries	—	—		—	—		—			—				—			5,774			5,774
																							Shares			Amount				Shares			Amount						Additional Capital				Earnings Less Than Distributions						Accumulated Other Comprehensive Loss		Non-controlling Interests in Consolidated Subsidiaries			Total Equity
																																											Earnings Less Than Distributions											Total Equity
Balance as of March 31, 2020																							36,796			$	891,211			191,116			$	7,624		$	8,112,523		Additional Capital		$	(2,091,612	)		$	(82,719	$	7,293,212
Net loss attributable to Vornado																							—			—				—			—			—				(185,220		)		—				—			(185,220		)
Net loss attributable to nonredeemable noncontrolling interests in consolidated subsidiaries																							—			—				—			—			—				—				—				(17,904		)	(17,904		)
Dividends on common shares ($0.66 per share)	—	—		—	—		—			(125,947		)		—			—			(125,947		)	—			—				—			—			—				(126,141		)		—				—			(126,141		)
Dividends on preferred shares (see Note 13 for dividends per share amounts)	—	—		—	—		—			(12,532		)		—			—			(12,532		)	—			—				—			—			—				(12,530		)		—				—			(12,530		)
Common shares issued:
Upon redemption of Class A units, at redemption value	—	—		31	1		1,998			—				—			—			1,999			—			—				22			1			823				—				—				—			824
Under dividend reinvestment plan	—	—		6	1		356			—				—			—			357			—			—				10			—			368				—				—				—			368
Contributions:
Other	—	—		—	—		—			—				—			908			908
Distributions:
Real estate fund investments	—	—		—	—		—			—				—			(6		)	(6		)
Other	—	—		—	—		—			—				—			(7,086		)	(7,086		)
Contributions																							—			—				—			—			—				—				—				1,082			1,082
Distributions																							—			—				—			—			—				—				—				(5,295		)	(5,295		)
Conversion of Series A preferred shares to common shares																							(2	)		(47		)		4			—			47				—				—				—			—
Deferred compensation shares and options	—	—		—	—		266			—				—			—			266			—			—				—			—			304				—				—				—			304
Other comprehensive income of nonconsolidated subsidiaries	—	—		—	—		—			—				11			—			11
Reduction in value of interest rate swaps	—	—		—	—		—			—				(9,953		)	—			(9,953		)
Increase in value of interest rate swaps																							—			—				—			—			—				—				78				—			78
Adjustments to carry redeemable Class A units at redemption value	—	—		—	—		24,228			—				—			—			24,228			—			—				—			—			(18,291		)		—				—				—			(18,291		)
Redeemable noncontrolling interests' share of above adjustments	—	—		—	—		—			—				650			—			650			—			—				—			—			—				—				(5		)		—			(5		)
Other	—	—		—	—		1			1				(1		)	4			5			—			—				(1	)		—			—				3				—				(1,576		)	(1,573		)
Balance, September 30, 2019	36,797	$	891,256	190,850	$	7,613	$	7,872,597		$	(1,649,035	)		$	(47,359	)	$	635,184		$	7,710,256
Balance as of June 30, 2020																							36,794			$	891,164			191,151			$	7,625		$	8,095,774			$	(2,415,500	)		$	(82,646	)		$	432,492		$	6,928,909

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED

(UNAUDITED)


(Amounts in thousands)	Preferred Shares					Common Shares			Additional Capital			Earnings Less Than Distributions				Accumulated Other Comprehensive Income			Non-controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per share amounts)												Earnings Less Than Distributions			(Amounts in thousands, except per share amounts)							Total Equity																Accumulated Other Comprehensive Loss				Non-controlling Interests in Consolidated Subsidiaries
	Shares		Amount			Shares	Amount		Additional Capital		Additional Capital				Earnings Less Than Distributions				Non-controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Income			Non-controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Shares						Common Shares									Additional Capital				Earnings Less Than Distributions					Total Equity
For the Three Months Ended September 30, 2018:																																														Additional Capital				Earnings Less Than Distributions					Total Equity
Balance, June 30, 2018	36,800		$	891,325		190,238	$	7,587	$	7,555,993	Additional Capital		$	(4,206,381	Earnings Less Than Distributions			)	$	33,351	Accumulated Other Comprehensive Income			Non-controlling Interests in Consolidated Subsidiaries			Total Equity			$	661,712			$	4,943,587
																									Shares			Amount				Shares			Amount						Additional Capital				Earnings Less Than Distributions						Accumulated Other Comprehensive Loss		Non-controlling Interests in Consolidated Subsidiaries			Total Equity
																																													Earnings Less Than Distributions											Total Equity
Balance as of March 31, 2019																									36,798			$	891,263			190,761			$	7,609		$	7,676,770		Additional Capital		$	(4,120,265	)		$	(11,385	$	5,090,892
Net income attributable to Vornado	—		—			—	—		—			203,179				��			—			203,179			—			—				—			—			—				2,412,727				—				—			2,412,727
Net income attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—			—				—			3,312			3,312			—			—				—			—			—				—				—				21,451			21,451
Dividends on common shares ($0.63 per share)	—		—			—	—		—			(119,862		)		—			—			(119,862		)
Dividends on common shares ($0.66 per share)																									—			—				—			—			—				(125,927		)		—				—			(125,927		)
Dividends on preferred shares (see Note 13 for dividends per share amounts)	—		—			—	—		—			(12,534		)		—			—			(12,534		)	—			—				—			—			—				(12,532		)		—				—			(12,532		)
Common shares issued:
Upon redemption of Class A units, at redemption value	—		—			25	1		1,842			—				—			—			1,843			—			—				44			2			2,946				—				—				—			2,948
Under employees' share option plan	—		—			16	—		440			—				—			—			440			—			—				3			—			174				—				—				—			174
Under dividend reinvestment plan	—		—			5	1		350			—				—			—			351			—			—				5			—			361				—				—				—			361
Contributions:
Real estate fund investments	—		—			—	—		—			—				—			1,595			1,595
Other	—		—			—	—		—			—				—			366			366
Distributions:
Real estate fund investments	—		—			—	—		—			—				—			(2,419		)	(2,419		)
Other	—		—			—	—		—			—				—			(4,972		)	(4,972		)
Contributions																									—			—				—			—			—				—				—				3,121			3,121
Distributions																									—			—				—			—			—				—				—				(24,440		)	(24,440		)
Conversion of Series A preferred shares to common shares	(1	)	(31		)	2	—		31			—				—			—			—			(1	)		(7		)		1			—			7				—				—				—			—
Deferred compensation shares and options	—		—			—	—		286			—				—			—			286			—			—				(1	)		—			266				—				—				—			266
Other comprehensive income of nonconsolidated subsidiaries	—		—			—	—		—			—				253			—			253			—			—				—			—			—				—				25				—			25
Increase in value of interest rate swaps	—		—			—	—		—			—				623			—			623
Reduction in value of interest rate swaps																									—			—				—			—			—				—				(28,515		)		—			(28,515		)
Adjustments to carry redeemable Class A units at redemption value	—		—			—	—		21,520			—				—			—			21,520			—			—				—			—			165,225				—				—				—			165,225
Redeemable noncontrolling interests' share of above adjustments	—		—			—	—		—			—				(54		)	—			(54		)	—			—				—			—			—				—				1,806				—			1,806
Deconsolidation of partially owned entity																									—			—				—			—			—				—				—				(11,441		)	(11,441		)
Other	—		—			—	—		1			(4		)		—			(2		)	(5		)	—			—				—			—			(1		)		2				3				(1		)	3
Balance, September 30, 2018	36,799		$	891,294		190,286	$	7,589	$	7,580,463		$	(4,135,602	)		$	34,173		$	659,592		$	5,037,509
Balance as of June 30, 2019																									36,797			$	891,256			190,813			$	7,611		$	7,845,748			$	(1,845,995	)		$	(38,066	)		$	635,590		$	7,496,144

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED

(UNAUDITED)


(Amounts in thousands)	Preferred Shares					Common Shares			Additional Capital			Earnings Less Than Distributions				Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per share amounts)												Earnings Less Than Distributions			(Amounts in thousands, except per share amounts)							Total Equity																Accumulated Other Comprehensive (Loss) Income				Non-controlling Interests in Consolidated Subsidiaries
	Shares		Amount			Shares	Amount		Additional Capital		Additional Capital				Earnings Less Than Distributions				Non- controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Shares						Common Shares									Additional Capital				Earnings Less Than Distributions					Total Equity
For the Nine Months Ended September 30, 2019:																																														Additional Capital				Earnings Less Than Distributions					Total Equity
Balance, December 31, 2018	36,800		$	891,294		190,535	$	7,600	$	7,725,857	Additional Capital		$	(4,167,184	Earnings Less Than Distributions			)	$	7,664	Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity			$	642,652			$	5,107,883
Net income attributable to Vornado	—		—			—	—		—			2,942,187				—			—			2,942,187
Net income attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—			—				—			34,045			34,045
Dividends on common shares ($1.98 per share)	—		—			—	—		—			(377,750		)		—			—			(377,750		)
																									Shares			Amount				Shares			Amount						Additional Capital				Earnings Less Than Distributions						Accumulated Other Comprehensive (Loss) Income		Non-controlling Interests in Consolidated Subsidiaries			Total Equity
																																													Earnings Less Than Distributions											Total Equity
Balance as of December 31, 2019																									36,796			$	891,214			190,986			$	7,618		$	7,827,697		Additional Capital		$	(1,954,266	)		$	(40,233	$	7,310,978
Cumulative effect of accounting change (see Note 4)																									—			—				—			—			—				(16,064		)		—				—			(16,064		)
Net loss attributable to Vornado																									—			—				—			—			—				(167,726		)		—				—			(167,726		)
Net loss attributable to nonredeemable noncontrolling interests in consolidated subsidiaries																									—			—				—			—			—				—				—				(140,291		)	(140,291		)
Dividends on common shares ($1.32 per share)																									—			—				—			—			—				(252,247		)		—				—			(252,247		)
Dividends on preferred shares (see Note 13 for dividends per share amounts)	—		—			—	—		—			(37,598		)		—			—			(37,598		)	—			—				—			—			—				(25,061		)		—				—			(25,061		)
Common shares issued:
Upon redemption of Class A units, at redemption value	—		—			123	5		8,123			—				—			—			8,128			—			—				49			2			2,462				—				—				—			2,464
Under employees' share option plan	—		—			165	7		1,338			(8,692		)		—			—			(7,347		)	—			—				69			3			3,514				—				—				—			3,517
Under dividend reinvestment plan	—		—			16	1		1,057			—				—			—			1,058			—			—				31			1			1,749				—				—				—			1,750
Contributions:
Real estate fund investments	—		—			—	—		—			—				—			3,384			3,384			—			—				—			—			—				—				—				3,389			3,389
Other	—		—			—	—		—			—				—			5,839			5,839			—			—				—			—			—				—				—				2,479			2,479
Distributions:
Real estate fund investments	—		—			—	—		—			—				—			(6		)	(6		)
Other	—		—			—	—		—			—				—			(39,290		)	(39,290		)
Distributions																									—			—				—			—			—				—				—				(10,530		)	(10,530		)
Conversion of Series A preferred shares to common shares	(2	)	(38		)	3	—		38			—				—			—			—			(2	)		(50		)		4			—			50				—				—				—			—
Deferred compensation shares and options	—		—			8	—		829			—				—			—			829			—			—				13			1			601				(137		)		—				—			465
Amount reclassified related to a nonconsolidated subsidiary	—		—			—	—		—			—				(2,311		)	—			(2,311		)
Other comprehensive loss of nonconsolidated subsidiaries	—		—			—	—		—			—				(949		)	—			(949		)
Other comprehensive income of nonconsolidated subsidiaries																									—			—				—			—			—				—				8				—			8
Reduction in value of interest rate swaps	—		—			—	—		—			—				(55,497		)	—			(55,497		)	—			—				—			—			—				—				(45,399		)		—			(45,399		)
Unearned 2016 Out-Performance Plan awards acceleration	—		—			—	—		11,720			—				—			—			11,720
Unearned 2017 Out-Performance Plan awards acceleration																									—			—				—			—			10,824				—				—				—			10,824
Adjustments to carry redeemable Class A units at redemption value	—		—			—	—		123,635			—				—			—			123,635			—			—				—			—			248,879				—				—				—			248,879
Redeemable noncontrolling interests' share of above adjustments	—		—			—	—		—			—				3,732			—			3,732			—			—				—			—			—				—				2,978				—			2,978
Deconsolidation of partially owned entity	—		—			—	—		—			—				—			(11,441		)	(11,441		)
Other	(1	)	—			—	—		—			2				2			1			5			—			—				(1	)		—			(2		)		1				—				(1,503		)	(1,504		)
Balance, September 30, 2019	36,797		$	891,256		190,850	$	7,613	$	7,872,597		$	(1,649,035	)		$	(47,359	)	$	635,184		$	7,710,256
Balance as of June 30, 2020																									36,794			$	891,164			191,151			$	7,625		$	8,095,774			$	(2,415,500	)		$	(82,646	)		$	432,492		$	6,928,909

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED

(UNAUDITED)


(Amounts in thousands)	Preferred Shares					Common Shares			Additional Capital			Earnings Less Than Distributions				Accumulated Other Comprehensive Income			Non-controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per share amounts)												Earnings Less Than Distributions			(Amounts in thousands, except per share amounts)							Total Equity															Accumulated Other Comprehensive Income (Loss)				Non-controlling Interests in Consolidated Subsidiaries
	Shares		Amount			Shares	Amount		Additional Capital		Additional Capital				Earnings Less Than Distributions				Non-controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Income			Non-controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Shares					Common Shares									Additional Capital				Earnings Less Than Distributions					Total Equity
For the Nine Months Ended September 30, 2018:																																													Additional Capital				Earnings Less Than Distributions					Total Equity
Balance, December 31, 2017	36,800		$	891,988		189,984	$	7,577	$	7,492,658	Additional Capital		$	(4,183,253	Earnings Less Than Distributions			)	$	128,682	Accumulated Other Comprehensive Income			Non-controlling Interests in Consolidated Subsidiaries			Total Equity			$	670,049		$	5,007,701
Cumulative effect of accounting change	—		—			—	—		—			122,893				(108,374		)	—			14,519
																									Shares			Amount				Shares		Amount						Additional Capital				Earnings Less Than Distributions						Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests in Consolidated Subsidiaries			Total Equity
																																												Earnings Less Than Distributions											Total Equity
Balance as of December 31, 2018																									36,800			$	891,294			190,535		$	7,600		$	7,725,857		Additional Capital		$	(4,167,184	)		$	7,664	$	5,107,883
Net income attributable to Vornado	—		—			—	—		—			336,927				—			—			336,927			—			—				—		—			—				2,606,749				—				—			2,606,749
Net loss attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—			—				—			(31,137		)	(31,137		)
Dividends on common shares ($1.89 per share)	—		—			—	—		—			(359,456		)		—			—			(359,456		)
Net income attributable to noncontrolling interests in consolidated subsidiaries																									—			—				—		—			—				—				—				28,271			28,271
Dividends on common shares ($1.32 per share)																									—			—				—		—			—				(251,803		)		—				—			(251,803		)
Dividends on preferred shares (see Note 13 for dividends per share amounts)	—		—			—	—		—			(38,103		)		—			—			(38,103		)	—			—				—		—			—				(25,066		)		—				—			(25,066		)
Preferred share issuance costs	—		(663		)	—	—		—			(14,486		)		—			—			(15,149		)
Common shares issued:
Upon redemption of Class A units, at redemption value	—		—			201	8		14,081			—				—			—			14,089			—			—				92		4			6,125				—				—				—			6,129
Under employees' share option plan	—		—			77	3		4,223			—				—			—			4,226			—			—				165		7			1,338				(8,692		)		—				—			(7,347		)
Under dividend reinvestment plan	—		—			15	1		1,035			—				—			—			1,036			—			—				10		—			701				—				—				—			701
Contributions:
Real estate fund investments	—		—			—	—		—			—				—			46,942			46,942			—			—				—		—			—				—				—				3,384			3,384
Other	—		—			—	—		—			—				—			14,577			14,577			—			—				—		—			—				—				—				4,931			4,931
Distributions:
Real estate fund investments	—		—			—	—		—			—				—			(12,665		)	(12,665		)
Other	—		—			—	—		—			—				—			(28,173		)	(28,173		)
Distributions																									—			—				—		—			—				—				—				(32,204		)	(32,204		)
Conversion of Series A preferred shares to common shares	(1	)	(31		)	2	—		31			—				—			—			—			(2	)		(38		)		3		—			38				—				—				—			—
Deferred compensation shares and options	—		—			7	—		871			(121		)		—			—			750			—			—				8		—			563				—				—				—			563
Pro rata share of other comprehensive income of nonconsolidated subsidiaries	—		—			—	—		—			—				989			—			989
Increase in value of interest rate swaps	—		—			—	—		—			—				13,789			—			13,789
Unearned 2015 Out-Performance Plan awards acceleration	—		—			—	—		9,046			—				—			—			9,046
Amount reclassified related to a nonconsolidated subsidiary																									—			—				—		—			—				—				(2,311		)		—			(2,311		)
Other comprehensive loss of nonconsolidated subsidiaries																									—			—				—		—			—				—				(960		)		—			(960		)
Reduction in value of interest rate swaps																									—			—				—		—			—				—				(45,544		)		—			(45,544		)
Unearned 2016 Out-Performance Plan awards acceleration																									—			—				—		—			11,720				—				—				—			11,720
Adjustments to carry redeemable Class A units at redemption value	—		—			—	—		57,970			—				—			—			57,970			—			—				—		—			99,407				—				—				—			99,407
Redeemable noncontrolling interests' share of above adjustments	—		—			—	—		—			—				(913		)	—			(913		)	—			—				—		—			—				—				3,082				—			3,082
Deconsolidation of partially owned entity																									—			—				—		—			—				—				—				(11,441		)	(11,441		)
Other	—		—			—	—		548			(3		)		—			(1		)	544			(1	)		—				—		—			(1		)		1				3				(3		)	—
Balance, September 30, 2018	36,799		$	891,294		190,286	$	7,589	$	7,580,463		$	(4,135,602	)		$	34,173		$	659,592		$	5,037,509
Balance as of June 30, 2019																									36,797			$	891,256			190,813		$	7,611		$	7,845,748			$	(1,845,995	)		$	(38,066	)		$	635,590		$	7,496,144

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


(Amounts in thousands)	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2019			2018			2020			2019
Cash Flows from Operating Activities:
Net income	$	3,173,586		$	324,782
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(321,855	)	$	2,809,737
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Equity in net loss (income) of partially owned entities							272,770			(30,193		)
Net unrealized loss on real estate fund investments							211,196			16,162
Depreciation and amortization (including amortization of deferred financing costs)							193,920			240,866
Net gains on disposition of wholly owned and partially owned assets							(124,284		)	(332,007		)
Distributions of income from partially owned entities							79,436			31,820
Non-cash (gain on extinguishment of 608 Fifth Avenue lease liability) impairment loss on 608 Fifth Avenue right-of-use asset							(70,260		)	75,220
Write-off of lease receivables deemed uncollectible							38,631			15,382
Stock-based compensation expense							33,468			42,174
Straight-lining of rents							15,856			3,733
Credit losses on loans receivable							13,369			—
Amortization of below-market leases, net							(9,406		)	(11,168		)
Decrease (increase) in fair value of marketable securities							4,938			(1,773		)
Net gain on transfer to Fifth Avenue and Times Square JV	(2,571,099		)	—			—			(2,571,099		)
Net gains on disposition of wholly owned and partially owned assets	(641,664		)	(164,828		)
Depreciation and amortization (including amortization of deferred financing costs)	341,951			353,761
Non-cash impairment loss on 608 Fifth Avenue right-of-use asset	75,220			—
Distributions of income from partially owned entities	66,252			61,782
Equity in net income of partially owned entities	(56,139		)	(6,059		)
Stock-based compensation expense	48,045			26,190
Real estate impairment losses	26,140			—			—			26,140
Prepayment penalty on redemption of senior unsecured notes due 2022	22,058			—			—			22,058
Net realized and unrealized loss on real estate fund investments	16,162			33,709
Amortization of below-market leases, net	(15,561		)	(31,480		)
Straight-lining of rents	8,446			(10,279		)
Decrease in fair value of marketable securities	3,095			24,801
Return of capital from real estate fund investments	—			20,291
Other non-cash adjustments	19,894			2,242			4,370			3,206
Changes in operating assets and liabilities:
Real estate fund investments	(4,000		)	(68,950		)	(6,000		)	(4,000		)
Tenant and other receivables, net	(28,110		)	(11,662		)	(28,864		)	(12,759		)
Prepaid assets	(74,502		)	74,322			3,078			(5,702		)
Other assets	(10,195		)	(122,925		)	(12,480		)	(8,498		)
Accounts payable and accrued expenses	1,496			(3,810		)	(26,611		)	(11,482		)
Other liabilities	(3,104		)	(13,849		)	(3,557		)	(4,965		)
Net cash provided by operating activities	397,971			488,038			267,715			292,852

Cash Flows from Investing Activities:
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash)	1,248,743			—
Proceeds from sale of condominium units at 220 Central Park South	1,039,493			—			437,188			690,734
Proceeds from redemption of 640 Fifth Avenue preferred equity	500,000			—
Development costs and construction in progress	(448,281		)	(274,147		)	(319,294		)	(289,532		)
Moynihan Train Hall expenditures	(352,211		)	—			(183,007		)	(205,783		)
Proceeds from sale of real estate and related investments	255,534			219,731
Additions to real estate	(189,579		)	(163,546		)	(85,252		)	(120,060		)
Proceeds from sales of marketable securities	168,314			—			28,375			167,852
Investments in partially owned entities							(3,157		)	(15,588		)
Distributions of capital from partially owned entities	24,880			98,609			1,090			24,880
Investments in partially owned entities	(16,480		)	(32,728		)
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash)							—			1,255,756
Proceeds from redemption of 640 Fifth Avenue preferred equity							—			500,000
Proceeds from sale of real estate and related investments							—			108,512
Acquisitions of real estate and other	(3,260		)	(500,225		)	—			(3,260		)
Proceeds from repayments of loans receivable	1,395			—
Net cash provided by (used in) investing activities	2,228,548			(652,306		)
Net cash (used in) provided by investing activities							(124,057		)	2,113,511

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(UNAUDITED)


(Amounts in thousands)	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2019			2018			2020			2019
Cash Flows from Financing Activities:
Repayments of borrowings	$	(2,635,028	)	$	(264,482	)
Dividends paid on common shares							$	(624,627	)	$	(251,803	)
Proceeds from borrowings	1,107,852			312,763			554,297			458,955
Purchase of marketable securities in connection with defeasance of mortgage payable	(407,126		)	—
Dividends paid on common shares	(377,750		)	(359,456		)
Moynihan Train Hall reimbursement from Empire State Development	352,211			—			183,007			205,783
Contributions from noncontrolling interests							98,268			8,315
Distributions to noncontrolling interests	(65,084		)	(63,110		)	(54,440		)	(49,140		)
Dividends paid on preferred shares	(37,598		)	(42,582		)	(37,593		)	(25,066		)
Repayments of borrowings							(11,347		)	(1,943,157		)
Proceeds received from exercise of employee share options and other							5,267			2,046
Debt issuance costs							(143		)	(13,522		)
Repurchase of shares related to stock compensation agreements and related tax withholdings and other							(137		)	(8,692		)
Purchase of marketable securities in connection with defeasance of mortgage payable							—			(407,126		)
Prepayment penalty on redemption of senior unsecured notes due 2022	(22,058		)	—			—			(22,058		)
Debt issuance costs	(15,328		)	(7,451		)
Contributions from noncontrolling interests	9,223			59,924
Repurchase of shares related to stock compensation agreements and related tax withholdings and other	(8,692		)	(784		)
Proceeds received from exercise of employee share options and other	2,403			5,262
Redemption of preferred shares	(893		)	(470,000		)	—			(893		)
Debt prepayment and extinguishment costs	—			(818		)
Net cash used in financing activities	(2,097,868		)	(830,734		)
Net increase (decrease) in cash and cash equivalents and restricted cash	528,651			(995,002		)
Net cash provided by (used in) financing activities							112,552			(2,046,358		)
Net increase in cash and cash equivalents and restricted cash							256,210			360,005
Cash and cash equivalents and restricted cash at beginning of period	716,905			1,914,812			1,607,131			716,905
Cash and cash equivalents and restricted cash at end of period	$	1,245,556		$	919,810		$	1,863,341		$	1,076,910

Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period	$	570,916		$	1,817,655		$	1,515,012		$	570,916
Restricted cash at beginning of period	145,989			97,157			92,119			145,989
Cash and cash equivalents and restricted cash at beginning of period	$	716,905		$	1,914,812		$	1,607,131		$	716,905

Cash and cash equivalents at end of period	$	1,132,491		$	772,524		$	1,768,459		$	922,604
Restricted cash at end of period	113,065			147,286			94,882			154,306
Cash and cash equivalents and restricted cash at end of period	$	1,245,556		$	919,810		$	1,863,341		$	1,076,910

Supplemental Disclosure of Cash Flow Information:
Cash payments for interest, excluding capitalized interest of $55,186 and $45,292	$	227,310		$	245,628
Cash payments for interest, excluding capitalized interest of $21,255 and $39,643							$	107,069		$	165,022
Cash payments for income taxes	$	47,345		$	61,047		$	9,276		$	28,697

Non-Cash Investing and Financing Activities:
Adjustments to carry redeemable Class A units at redemption value							$	248,879		$	99,407
Reclassification of condominium units from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale"							240,707			647,683
Accrued capital expenditures included in accounts payable and accrued expenses							89,036			68,900
Write-off of fully depreciated assets							(66,931		)	(93,390		)
Lease liabilities arising from the recognition of right-of-use assets							—			526,866
Amounts related to our investment in Pennsylvania Real Estate Investment Trust reclassified from "investments in partially owned entities" and "accumulated other comprehensive loss" to "marketable securities" upon conversion of operating partnership units to common shares							—			54,962
Investments received in exchange for transfer to Fifth Avenue and Times Square JV:
Preferred equity	$	2,327,750		$	—		—			2,327,750
Common equity	1,449,495			—			—			1,449,495
Reclassification of condominium units from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale"	825,520			307,552
Lease liabilities arising from the recognition of right-of-use assets	526,866			—
Marketable securities transferred in connection with the defeasance of mortgage payable	(407,126		)	—			—			(407,126		)
Defeased mortgage payable	390,000			—
Adjustments to carry redeemable Class A units at redemption value	123,635			57,970
Accrued capital expenditures included in accounts payable and accrued expenses	117,205			74,185
Write-off of fully depreciated assets	(113,261		)	(61,120		)
Amounts related to our investment in Pennsylvania Real Estate Investment Trust reclassified from "investments in partially owned entities" and "accumulated other comprehensive (loss) income" to "marketable securities" upon conversion of operating partnership units to common shares	54,962			—
Defeasance of mortgage payable							—			390,000

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(Amounts in thousands, except unit amounts)	September 30, 2019			December 31, 2018			As of
							June 30, 2020			December 31, 2019
ASSETS
Real estate, at cost:
Land	$	2,602,039		$	3,306,280		$	2,588,200		$	2,591,261
Buildings and improvements	7,888,950			10,110,992			7,975,871			7,953,163
Development costs and construction in progress	1,805,846			2,266,491			1,541,432			1,490,614
Moynihan Train Hall development expenditures	791,703			445,693			1,087,669			914,960
Leasehold improvements and equipment	121,164			108,427			127,685			124,014
Total	13,209,702			16,237,883			13,320,857			13,074,012
Less accumulated depreciation and amortization	(2,945,107		)	(3,180,175		)	(3,106,393		)	(3,015,958		)
Real estate, net	10,264,595			13,057,708			10,214,464			10,058,054
Right-of-use assets	370,604			—			376,958			379,546
Cash and cash equivalents	1,132,491			570,916			1,768,459			1,515,012
Restricted cash	113,065			145,989			94,882			92,119
Marketable securities	35,751			152,198			—			33,313
Tenant and other receivables	99,499			73,322			118,273			95,733
Investments in partially owned entities	4,023,820			858,113			3,648,651			3,999,165
Real estate fund investments	306,596			318,758			17,453			222,649
220 Central Park South condominium units ready for sale	288,135			99,627			426,623			408,918
Receivable arising from the straight-lining of rents	743,646			935,131			692,931			742,206
Deferred leasing costs, net of accumulated amortization of $191,299 and $207,529	360,608			400,313
Identified intangible assets, net of accumulated amortization of $99,623 and $172,114	30,773			136,781
Deferred leasing costs, net of accumulated amortization of $186,740 and $196,229							348,473			353,986
Identified intangible assets, net of accumulated amortization of $97,489 and $98,587							27,660			30,965
Other assets	446,516			431,938			307,620			355,347
	$	18,216,099		$	17,180,794		$	18,042,447		$	18,287,013
LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgages payable, net	$	5,640,895		$	8,167,798		$	5,638,352		$	5,639,897
Senior unsecured notes, net	445,668			844,002			446,279			445,872
Unsecured term loan, net	745,585			744,821			796,236			745,840
Unsecured revolving credit facilities	655,000			80,000			1,075,000			575,000
Lease liabilities	490,978			—			426,059			498,254
Moynihan Train Hall obligation	791,703			445,693			1,087,669			914,960
Special distribution payable							—			398,292
Accounts payable and accrued expenses	453,331			430,976			385,956			440,049
Deferred revenue	62,583			167,730			49,386			59,429
Deferred compensation plan	99,677			96,523			94,081			103,773
Other liabilities	266,090			311,806			395,604			265,754
Total liabilities	9,651,510			11,289,349			10,394,622			10,087,120
Commitments and contingencies
Redeemable partnership units:
Class A units - 13,346,927 and 12,544,477 units outstanding	849,798			778,134
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding	4,535			5,428
Total redeemable partnership units	854,333			783,562
Redeemable noncontrolling interests:
Class A units - 13,773,407 and 13,298,956 units outstanding							620,269			884,380
Series D cumulative redeemable preferred units - 141,401 units outstanding							4,535			4,535
Total redeemable noncontrolling partnership units							624,804			888,915
Redeemable noncontrolling interest in a consolidated subsidiary							94,112			—
Total redeemable noncontrolling interests							718,916			888,915
Partners' equity:
Partners' capital	8,771,466			8,624,751			8,994,563			8,726,529
Earnings less than distributions	(1,649,035		)	(4,167,184		)	(2,415,500		)	(1,954,266		)
Accumulated other comprehensive (loss) income	(47,359		)	7,664
Accumulated other comprehensive loss							(82,646		)	(40,233		)
Total partners' equity	7,075,072			4,465,231			6,496,417			6,732,030
Noncontrolling interests in consolidated subsidiaries	635,184			642,652			432,492			578,948
Total equity	7,710,256			5,107,883			6,928,909			7,310,978
	$	18,216,099		$	17,180,794		$	18,042,447		$	18,287,013

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(Amounts in thousands, except per unit amounts) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
REVENUES:
Rental revenues $ 427,638
$ 503,947
$ 1,348,814
$ 1,507,274
Fee and other income 38,323
38,101
114,918
113,029
Total revenues 465,961
542,048
1,463,732
1,620,303
EXPENSES:
Operating (226,359 ) (235,575 ) (694,006 ) (709,158 )
Depreciation and amortization (96,437 ) (113,169 ) (326,181 ) (333,701 )
General and administrative (33,237 ) (31,977 ) (130,129 ) (108,937 )
Expense from deferred compensation plan liability (974 ) (1,861 ) (7,722 ) (3,534 )
Transaction related costs, impairment losses and other (1,576 ) (2,510 ) (103,315 ) (16,683 )
Total expenses (358,583 ) (385,092 ) (1,261,353 ) (1,172,013 )

Income from partially owned entities 25,946
7,206
56,139
6,059
Income (loss) from real estate fund investments 2,190
(190 ) (13,780 ) (37,973 )
Interest and other investment income, net 3,045
2,893
15,930
9,401
Income from deferred compensation plan assets 974
1,861
7,722
3,534
Interest and debt expense (61,448 ) (88,951 ) (226,940 ) (264,774 )
Net gain on transfer to Fifth Avenue and Times Square JV —
—
2,571,099
—
Net gains on disposition of wholly owned and partially owned assets 309,657
141,269
641,664
164,828
Income before income taxes 387,742
221,044
3,254,213
329,365
Income tax expense (23,885 ) (1,943 ) (80,542 ) (4,964 )
Income from continuing operations 363,857
219,101
3,173,671
324,401
(Loss) income from discontinued operations (8 ) 61
(85 ) 381
Net income 363,849
219,162
3,173,586
324,782
Less net (income) loss attributable to noncontrolling interests in consolidated subsidiaries (5,774 ) (3,312 ) (34,045 ) 31,137
Net income attributable to Vornado Realty L.P. 358,075
215,850
3,139,541
355,919
Preferred unit distributions (12,574 ) (12,582 ) (37,722 ) (38,248 )
Preferred unit issuance costs —
—
—
(14,486 )
NET INCOME attributable to Class A unitholders $ 345,501
$ 203,268
$ 3,101,819
$ 303,185

INCOME PER CLASS A UNIT – BASIC:
Net income per Class A unit $ 1.69
$ 1.00
$ 15.21
$ 1.49
Weighted average units outstanding 203,009
202,103
202,903
202,033

INCOME PER CLASS A UNIT – DILUTED:
Net income per Class A unit $ 1.69
$ 0.99
$ 15.18
$ 1.48
Weighted average units outstanding 203,550
203,594
203,416
203,400



(Amounts in thousands, except per unit amounts)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
REVENUES:
Rental revenues	$	315,194		$	421,299		$	716,468		$	921,176
Fee and other income	27,832			41,804			71,090			76,595
Total revenues	343,026			463,103			787,558			997,771
EXPENSES:
Operating	(174,425		)	(220,752		)	(404,432		)	(467,647		)
Depreciation and amortization	(92,805		)	(113,035		)	(185,598		)	(229,744		)
General and administrative	(35,014		)	(38,872		)	(87,848		)	(96,892		)
(Expense) benefit from deferred compensation plan liability	(6,356		)	(1,315		)	4,889			(6,748		)
Lease liability extinguishment gain (transaction related costs and impairment losses)	69,221			(101,590		)	69,150			(101,739		)
Total expenses	(239,379		)	(475,564		)	(603,839		)	(902,770		)

(Loss) income from partially owned entities	(291,873		)	22,873			(272,770		)	30,193
Loss from real estate fund investments	(28,042		)	(15,803		)	(211,505		)	(15,970		)
Interest and other investment (loss) income, net	(2,893		)	7,840			(8,797		)	12,885
Income (loss) from deferred compensation plan assets	6,356			1,315			(4,889		)	6,748
Interest and debt expense	(58,405		)	(63,029		)	(117,247		)	(165,492		)
Net gain on transfer to Fifth Avenue and Times Square JV	—			2,571,099			—			2,571,099
Net gains on disposition of wholly owned and partially owned assets	55,695			111,713			124,284			332,007
(Loss) income before income taxes	(215,515		)	2,623,547			(307,205		)	2,866,471
Income tax expense	(1,837		)	(26,914		)	(14,650		)	(56,657		)
(Loss) income from continuing operations	(217,352		)	2,596,633			(321,855		)	2,809,814
Income (loss) from discontinued operations	—			60			—			(77		)
Net (loss) income	(217,352		)	2,596,693			(321,855		)	2,809,737
Less net loss (income) attributable to noncontrolling interests in consolidated subsidiaries	17,768			(21,451		)	140,155			(28,271		)
Net (loss) income attributable to Vornado Realty L.P.	(199,584		)	2,575,242			(181,700		)	2,781,466
Preferred unit distributions	(12,571		)	(12,573		)	(25,143		)	(25,148		)
NET (LOSS) INCOME attributable to Class A unitholders	$	(212,155	)	$	2,562,669		$	(206,843	)	$	2,756,318

(LOSS) INCOME PER CLASS A UNIT - BASIC:
Net (loss) income per Class A unit	$	(1.05	)	$	12.58		$	(1.05	)	$	13.53
Weighted average units outstanding	203,512			202,924			203,441			202,848

(LOSS) INCOME PER CLASS A UNIT - DILUTED:
Net (loss) income per Class A unit	$	(1.05	)	$	12.54		$	(1.05	)	$	13.50
Weighted average units outstanding	203,512			203,480			203,441			203,391

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(Amounts in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Net income $ 363,849
$ 219,162
$ 3,173,586
$ 324,782
Other comprehensive income (loss):
Other comprehensive income (loss) of nonconsolidated subsidiaries 11
253
(949 ) 989
(Reduction) increase in value of interest rate swaps and other (9,954 ) 623
(55,495 ) 13,789
Amount reclassified from accumulated other comprehensive loss relating to a nonconsolidated subsidiary —
—
(2,311 ) —
Comprehensive income 353,906
220,038
3,114,831
339,560
Less comprehensive (income) loss attributable to noncontrolling interests in consolidated subsidiaries (5,774 ) (3,312 ) (34,045 ) 31,137
Comprehensive income attributable to Vornado Realty L.P. $ 348,132
$ 216,726
$ 3,080,786
$ 370,697



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Net (loss) income	$	(217,352	)	$	2,596,693		$	(321,855	)	$	2,809,737
Other comprehensive income (loss):
Increase (reduction) in value of interest rate swaps and other	78			(28,512		)	(45,399		)	(45,541		)
Other comprehensive income (loss) of nonconsolidated subsidiaries	—			25			8			(960		)
Amounts reclassified from accumulated other comprehensive loss relating to a nonconsolidated subsidiary	—			—			—			(2,311		)
Comprehensive (loss) income	(217,274		)	2,568,206			(367,246		)	2,760,925
Less comprehensive loss (income) attributable to noncontrolling interests in consolidated subsidiaries	17,768			(21,451		)	140,155			(28,271		)
Comprehensive (loss) income attributable to Vornado Realty L.P.	$	(199,506	)	$	2,546,755		$	(227,091	)	$	2,732,654

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

(Amounts in thousands) Preferred Units
Class A Units
Owned by Vornado

Earnings
Less Than
Distributions

Accumulated
Other
Comprehensive
Loss

Non-
controlling
Interests in
Consolidated
Subsidiaries
Total Equity
Units Amount Units Amount
For the Three Months Ended September 30, 2019:
Balance, June 30, 2019 36,797
$ 891,256
190,813
$ 7,853,359
$ (1,845,995 ) $ (38,066 ) $ 635,590
$ 7,496,144
Net income attributable to Vornado Realty L.P. —
—
—
—
358,075
—
—
358,075
Net income attributable to redeemable partnership units —
—
—
—
(22,637 ) —
—
(22,637 )
Net income attributable to noncontrolling interests in consolidated subsidiaries —
—
—
—
—
—
5,774
5,774
Distributions to Vornado
($0.66 per unit)
—
—
—
—
(125,947 ) —
—
(125,947 )
Distributions to preferred unitholders (see Note 13 for distributions per unit amounts) —
—
—
—
(12,532 ) —
—
(12,532 )
Class A units issued to Vornado:
Upon redemption of redeemable Class A units, at redemption value —
—
31
1,999
—
—
—
1,999
Under Vornado's dividend reinvestment plan —
—
6
357
—
—
—
357
Contributions:

Other —
—
—
—
—
—
908
908
Distributions:

Real estate fund investments —
—
—
—
—
—
(6 ) (6 )
Other —
—
—
—
—
—
(7,086 ) (7,086 )
Conversion of Series A preferred units to Class A units —
—
—
—
—
—
—
—
Deferred compensation units and options —
—
—
266
—
—
—
266
Other comprehensive income of nonconsolidated subsidiaries —
—
—
—
—
11
—
11
Reduction in value of interest rate swaps —
—
—
—
—
(9,953 ) —
(9,953 )
Adjustments to carry redeemable Class A units at redemption value —
—
—
24,228
—
—
—
24,228
Redeemable partnership units' share of above adjustments —
—
—
—
—
650
—
650
Deconsolidation of partially owned entity —
—
—
—
—
—
—
—
Other —
—
—
1
1
(1 ) 4
5
Balance, September 30, 2019 36,797
$ 891,256
190,850
$ 7,880,210
$ (1,649,035 ) $ (47,359 ) $ 635,184
$ 7,710,256



(Amounts in thousands, except per unit amounts)														Accumulated Other Comprehensive Loss			Non- controlling Interests in Consolidated Subsidiaries
	Preferred Units					Class A Units Owned by Vornado					Earnings Less Than Distributions									Total Equity
	Units		Amount			Units		Amount			Earnings Less Than Distributions									Total Equity
For the Three Months Ended June 30, 2020:
Balance as of March 31, 2020	36,796		$	891,211		191,116		$	8,120,147		$	(2,091,612	)	$	(82,719	)	$	456,185		$	7,293,212
Net loss attributable to Vornado Realty L.P.	—		—			—		—			(199,584		)	—			—			(199,584		)
Net loss attributable to redeemable partnership units	—		—			—		—			14,364			—			—			14,364
Net loss attributable to nonredeemable noncontrolling interests in consolidated subsidiaries	—		—			—		—			—			—			(17,904		)	(17,904		)
Distributions to Vornado ($0.66 per unit)	—		—			—		—			(126,141		)	—			—			(126,141		)
Distributions to preferred unitholders (see Note 13 for distributions per unit amounts)	—		—			—		—			(12,530		)	—			—			(12,530		)
Class A units issued to Vornado:
Upon redemption of redeemable Class A units, at redemption value	—		—			22		824			—			—			—			824
Under Vornado's dividend reinvestment plan	—		—			10		368			—			—			—			368
Contributions	—		—			—		—			—			—			1,082			1,082
Distributions	—		—			—		—			—			—			(5,295		)	(5,295		)
Conversion of Series A preferred units to Class A units	(2	)	(47		)	4		47			—			—			—			—
Deferred compensation units and options	—		—			—		304			—			—			—			304
Increase in value of interest rate swaps	—		—			—		—			—			78			—			78
Adjustments to carry redeemable Class A units at redemption value	—		—			—		(18,291		)	—			—			—			(18,291		)
Redeemable partnership units' share of above adjustments	—		—			—		—			—			(5		)	—			(5		)
Other	—		—			(1	)	—			3			—			(1,576		)	(1,573		)
Balance as of June 30, 2020	36,794		$	891,164		191,151		$	8,103,399		$	(2,415,500	)	$	(82,646	)	$	432,492		$	6,928,909

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED

(UNAUDITED)


(Amounts in thousands)	Preferred Units					Class A Units Owned by Vornado			Earnings Less Than Distributions				Accumulated Other Comprehensive Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per unit amounts)												(Amounts in thousands, except per unit amounts)							Total Equity									Earnings Less Than Distributions				Accumulated Other Comprehensive Loss			Non- controlling Interests in Consolidated Subsidiaries
	Units		Amount			Units	Amount		Earnings Less Than Distributions			Earnings Less Than Distributions				Non- controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity							Preferred Units								Class A Units Owned by Vornado									Total Equity
For the Three Months Ended September 30, 2018:												Earnings Less Than Distributions																																				Total Equity
Balance, June 30, 2018	36,800		$	891,325		190,238	$	7,563,580	$	(4,206,381	)		$	33,351		$	661,712	Accumulated Other Comprehensive Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity			$			4,943,587
																						Units			Amount				Units			Amount				Earnings Less Than Distributions				Accumulated Other Comprehensive Loss				Non- controlling Interests in Consolidated Subsidiaries		Total Equity
																																														Total Equity
Balance as of March 31, 2019																						36,798			$	891,263			190,761			$	7,684,379		$				5,090,892
Net income attributable to Vornado Realty L.P.	—		—			—	—		215,850				—			—			215,850			—			—				—			—			2,575,242								—			—			2,575,242
Net income attributable to redeemable partnership units	—		—			—	—		(12,671		)		—			—			(12,671		)	—			—				—			—			(162,515		)		—				—			(162,515		)
Net loss attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—				—			3,312			3,312
Distributions to Vornado ($0.63 per unit)	—		—			—	—		(119,862		)		—			—			(119,862		)
Net income attributable to noncontrolling interests in consolidated subsidiaries																						—			—				—			—			—				—				21,451			21,451
Distributions to Vornado ($0.66 per unit)																						—			—				—			—			(125,927		)		—				—			(125,927		)
Distributions to preferred unitholders (see Note 13 for distributions per unit amounts)	—		—			—	—		(12,534		)		—			—			(12,534		)	—			—				—			—			(12,532		)		—				—			(12,532		)
Class A units issued to Vornado:
Class A Units issued to Vornado:
Upon redemption of redeemable Class A units, at redemption value	—		—			25	1,843		—				—			—			1,843			—			—				44			2,948			—				—				—			2,948
Under Vornado's employees' share option plan	—		—			16	440		—				—			—			440			—			—				3			174			—				—				—			174
Under Vornado's dividend reinvestment plan	—		—			5	351		—				—			—			351			—			—				5			361			—				—				—			361
Contributions:
Real estate fund investments	—		—			—	—		—				—			1,595			1,595
Other	—		—			—	—		—				—			366			366
Distributions:
Real estate fund investments	—		—			—	—		—				—			(2,419		)	(2,419		)
Other	—		—			—	—		—				—			(4,972		)	(4,972		)
Contributions																						—			—				—			—			—				—				3,121			3,121
Distributions																						—			—				—			—			—				—				(24,440		)	(24,440		)
Conversion of Series A preferred units to Class A units	(1	)	(31		)	2	31		—				—			—			—			(1	)		(7		)		1			7			—				—				—			—
Deferred compensation units and options	—		—			—	286		—				—			—			286			—			—				(1	)		266			—				—				—			266
Other comprehensive income of nonconsolidated subsidiaries	—		—			—	—		—				253			—			253			—			—				—			—			—				25				—			25
Increase in value of interest rate swaps	—		—			—	—		—				623			—			623
Reduction in value of interest rate swaps																						—			—				—			—			—				(28,515		)		—			(28,515		)
Adjustments to carry redeemable Class A units at redemption value	—		—			—	21,520		—				—			—			21,520			—			—				—			165,225			—				—				—			165,225
Redeemable partnership units' share of above adjustments	—		—			—	—		—				(54		)	—			(54		)	—			—				—			—			—				1,806				—			1,806
Deconsolidation of partially owned entity																						—			—				—			—			—				—				(11,441		)	(11,441		)
Other	—		—			—	1		(4		)		—			(2		)	(5		)	—			—				—			(1		)	2				3				(1		)	3
Balance, September 30, 2018	36,799		$	891,294		190,286	$	7,588,052	$	(4,135,602	)		$	34,173		$	659,592		$	5,037,509
Balance as of June 30, 2019																						36,797			$	891,256			190,813			$	7,853,359		$		(1,845,995	)		$	(38,066	)		$	635,590		$	7,496,144

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED

(UNAUDITED)


(Amounts in thousands)	Preferred Units					Class A Units Owned by Vornado			Earnings Less Than Distributions				Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per unit amounts)												(Amounts in thousands, except per unit amounts)							Total Equity												Accumulated Other Comprehensive (Loss) Income			Non- controlling Interests in Consolidated Subsidiaries
	Units		Amount			Units	Amount		Earnings Less Than Distributions			Earnings Less Than Distributions				Non- controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Units									Class A Units Owned by Vornado							Earnings Less Than Distributions					Total Equity
For the Nine Months Ended September 30, 2019:												Earnings Less Than Distributions																																Earnings Less Than Distributions					Total Equity
Balance, December 31, 2018	36,800		$	891,294		190,535	$	7,733,457	$	(4,167,184	)		$	7,664		$	642,652	Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity			$	5,107,883
Net income attributable to Vornado Realty L.P.	—		—			—	—		3,139,541				—			—			3,139,541
Net income attributable to redeemable partnership units	—		—			—	—		(197,354		)		—			—			(197,354		)
Net income attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—				—			34,045			34,045
Distributions to Vornado ($1.98 per unit)	—		—			—	—		(377,750		)		—			—			(377,750		)
																						Units			Amount				Units				Amount			Earnings Less Than Distributions						Accumulated Other Comprehensive (Loss) Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
																																																Total Equity
Balance as of December 31, 2019																						36,796			$	891,214			190,986		$	7,835,315		$	(1,954,266	Earnings Less Than Distributions	)		$	(40,233	$							7,310,978
Cumulative effect of accounting change (see Note 4)																						—			—				—		—			(16,064		)		—				—				(16,064		)
Net loss attributable to Vornado Realty L.P.																						—			—				—		—			(181,700		)		—				—				(181,700		)
Net loss attributable to redeemable partnership units																						—			—				—		—			13,974				—				—				13,974
Net loss attributable to nonredeemable noncontrolling interests in consolidated subsidiaries																						—			—				—		—			—				—				(140,291		)		(140,291		)
Distributions to Vornado ($1.32 per unit)																						—			—				—		—			(252,247		)		—				—				(252,247		)
Distributions to preferred unitholders (see Note 13 for distributions per unit amounts)	—		—			—	—		(37,598		)		—			—			(37,598		)	—			—				—		—			(25,061		)		—				—				(25,061		)
Class A units issued to Vornado:
Upon redemption of redeemable Class A units, at redemption value	—		—			123	8,128		—				—			—			8,128			—			—				49		2,464			—				—				—				2,464
Under Vornado's employees' share option plan	—		—			165	1,345		(8,692		)		—			—			(7,347		)	—			—				69		3,517			—				—				—				3,517
Under Vornado's dividend reinvestment plan	—		—			16	1,058		—				—			—			1,058			—			—				31		1,750			—				—				—				1,750
Contributions:
Real estate fund investments	—		—			—	—		—				—			3,384			3,384			—			—				—		—			—				—				3,389				3,389
Other	—		—			—	—		—				—			5,839			5,839			—			—				—		—			—				—				2,479				2,479
Distributions:
Real estate fund investments	—		—			—	—		—				—			(6		)	(6		)
Other	—		—			—	—		—				—			(39,290		)	(39,290		)
Preferred unit issuance	(2	)	(38		)	3	38		—				—			—			—
Distributions																						—			—				—		—			—				—				(10,530		)		(10,530		)
Conversion of Series A preferred units to Class A units																						(2	)		(50		)		4		50			—				—				—				—
Deferred compensation units and options	—		—			8	829		—				—			—			829			—			—				13		602			(137		)		—				—				465
Amount reclassified related to a nonconsolidated subsidiary	—		—			—	—		—				(2,311		)	—			(2,311		)
Other comprehensive loss of nonconsolidated subsidiaries	—		—			—	—		—				(949		)	—			(949		)
Other comprehensive income of nonconsolidated subsidiaries																						—			—				—		—			—				8				—				8
Reduction in value of interest rate swaps	—		—			—	—		—				(55,497		)	—			(55,497		)	—			—				—		—			—				(45,399		)		—				(45,399		)
Unearned 2016 Out-Performance Plan awards acceleration	—		—			—	11,720		—				—			—			11,720
Unearned 2017 Out-Performance Plan awards acceleration																						—			—				—		10,824			—				—				—				10,824
Adjustments to carry redeemable Class A units at redemption value	—		—			—	123,635		—				—			—			123,635			—			—				—		248,879			—				—				—				248,879
Redeemable partnership units' share of above adjustments	—		—			—	—		—				3,732			—			3,732			—			—				—		—			—				2,978				—				2,978
Deconsolidation of partially owned entity	—		—			—	—		—				—			(11,441		)	(11,441		)
Other	(1	)	—			—	—		2				2			1			5			—			—				(1	)	(2		)	1				—				(1,503		)		(1,504		)
Balance, September 30, 2019	36,797		$	891,256		190,850	$	7,880,210	$	(1,649,035	)		$	(47,359	)	$	635,184		$	7,710,256
Balance as of June 30, 2020																						36,794			$	891,164			191,151		$	8,103,399		$	(2,415,500	)		$	(82,646	)		$	432,492			$	6,928,909

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED

(UNAUDITED)


(Amounts in thousands)	Preferred Units					Class A Units Owned by Vornado			Earnings Less Than Distributions				Accumulated Other Comprehensive Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
(Amounts in thousands, except per unit amounts)												(Amounts in thousands, except per unit amounts)							Total Equity											Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries
	Units		Amount			Units	Amount		Earnings Less Than Distributions			Earnings Less Than Distributions				Non- controlling Interests in Consolidated Subsidiaries		Accumulated Other Comprehensive Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Units								Class A Units Owned by Vornado							Earnings Less Than Distributions					Total Equity
For the Nine Months Ended September 30, 2018:												Earnings Less Than Distributions																															Earnings Less Than Distributions					Total Equity
Balance, December 31, 2017	36,800		$	891,988		189,984	$	7,500,235	$	(4,183,253	)		$	128,682		$	670,049	Accumulated Other Comprehensive Income			Non- controlling Interests in Consolidated Subsidiaries			Total Equity			$	5,007,701
Cumulative effect of accounting change	—		—			—	—		122,893				(108,374		)	—			14,519
																						Units			Amount				Units			Amount			Earnings Less Than Distributions						Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
																																															Total Equity
Balance as of December 31, 2018																						36,800			$	891,294			190,535	$	7,733,457		$	(4,167,184	Earnings Less Than Distributions	)		$	7,664	$							5,107,883
Net income attributable to Vornado Realty L.P.	—		—			—	—		355,919				—			—			355,919			—			—				—	—			2,781,466				—				—				2,781,466
Net income attributable to redeemable partnership units	—		—			—	—		(18,992		)		—			—			(18,992		)	—			—				—	—			(174,717		)		—				—				(174,717		)
Net loss attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—				—			(31,137		)	(31,137		)
Distributions to Vornado ($1.89 per unit)	—		—			—	—		(359,456		)		—			—			(359,456		)
Net income attributable to noncontrolling interests in consolidated subsidiaries																						—			—				—	—			—				—				28,271				28,271
Distributions to Vornado ($1.32 per unit)																						—			—				—	—			(251,803		)		—				—				(251,803		)
Distributions to preferred unitholders (see Note 13 for distributions per unit amounts)	—		—			—	—		(38,103		)		—			—			(38,103		)	—			—				—	—			(25,066		)		—				—				(25,066		)
Preferred unit issuance costs	—		(663		)	—	—		(14,486		)		—			—			(15,149		)
Class A units issued to Vornado:
Upon redemption of redeemable Class A units, at redemption value	—		—			201	14,089		—				—			—			14,089			—			—				92	6,129			—				—				—				6,129
Under Vornado's employees' share option plan	—		—			77	4,226		—				—			—			4,226			—			—				165	1,345			(8,692		)		—				—				(7,347		)
Under Vornado's dividend reinvestment plan	—		—			15	1,036		—				—			—			1,036			—			—				10	701			—				—				—				701
Contributions:
Real estate fund investments	—		—			—	—		—				—			46,942			46,942			—			—				—	—			—				—				3,384				3,384
Other	—		—			—	—		—				—			14,577			14,577			—			—				—	—			—				—				4,931				4,931
Distributions:
Real estate fund investments	—		—			—	—		—				—			(12,665		)	(12,665		)
Other	—		—			—	—		—				—			(28,173		)	(28,173		)
Conversion of Series A preferred units to Class A units	(1	)	(31		)	2	31		—				—			—			—
Distributions																						—			—				—	—			—				—				(32,204		)		(32,204		)
Preferred unit issuance																						(2	)		(38		)		3	38			—				—				—				—
Deferred compensation units and options	—		—			7	871		(121		)		—			—			750			—			—				8	563			—				—				—				563
Pro rata share of other comprehensive income of nonconsolidated subsidiaries	—		—			—	—		—				989			—			989
Increase in value of interest rate swaps	—		—			—	—		—				13,789			—			13,789
Unearned 2015 Out-Performance Plan awards acceleration	—		—			—	9,046		—				—			—			9,046
Amount reclassified related to a nonconsolidated subsidiary																						—			—				—	—			—				(2,311		)		—				(2,311		)
Other comprehensive loss of nonconsolidated subsidiaries																						—			—				—	—			—				(960		)		—				(960		)
Reduction in value of interest rate swaps																						—			—				—	—			—				(45,544		)		—				(45,544		)
Unearned 2016 Out-Performance Plan awards acceleration																						—			—				—	11,720			—				—				—				11,720
Adjustments to carry redeemable Class A units at redemption value	—		—			—	57,970		—				—			—			57,970			—			—				—	99,407			—				—				—				99,407
Redeemable partnership units' share of above adjustments	—		—			—	—		—				(913		)	—			(913		)	—			—				—	—			—				3,082				—				3,082
Deconsolidation of partially owned entity																						—			—				—	—			—				—				(11,441		)		(11,441		)
Other	—		—			—	548		(3		)		—			(1		)	544			(1	)		—				—	(1		)	1				3				(3		)		—
Balance, September 30, 2018	36,799		$	891,294		190,286	$	7,588,052	$	(4,135,602	)		$	34,173		$	659,592		$	5,037,509
Balance as of June 30, 2019																						36,797			$	891,256			190,813	$	7,853,359		$	(1,845,995	)		$	(38,066	)		$	635,590			$	7,496,144

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


(Amounts in thousands)	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2019			2018			2020			2019
Cash Flows from Operating Activities:
Net income	$	3,173,586		$	324,782
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(321,855	)	$	2,809,737
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Equity in net loss (income) of partially owned entities							272,770			(30,193		)
Net unrealized loss on real estate fund investments							211,196			16,162
Depreciation and amortization (including amortization of deferred financing costs)							193,920			240,866
Net gains on disposition of wholly owned and partially owned assets							(124,284		)	(332,007		)
Distributions of income from partially owned entities							79,436			31,820
Non-cash (gain on extinguishment of 608 Fifth Avenue lease liability) impairment loss on 608 Fifth Avenue right-of-use asset							(70,260		)	75,220
Write-off of lease receivables deemed uncollectible							38,631			15,382
Stock-based compensation expense							33,468			42,174
Straight-lining of rents							15,856			3,733
Credit losses on loans receivable							13,369			—
Amortization of below-market leases, net							(9,406		)	(11,168		)
Decrease (increase) in fair value of marketable securities							4,938			(1,773		)
Net gain on transfer to Fifth Avenue and Times Square JV	(2,571,099		)	—			—			(2,571,099		)
Net gains on disposition of wholly owned and partially owned assets	(641,664		)	(164,828		)
Depreciation and amortization (including amortization of deferred financing costs)	341,951			353,761
Non-cash impairment loss on 608 Fifth Avenue right-of-use asset	75,220			—
Distributions of income from partially owned entities	66,252			61,782
Equity in net income of partially owned entities	(56,139		)	(6,059		)
Stock-based compensation expense	48,045			26,190
Real estate impairment losses	26,140			—			—			26,140
Prepayment penalty on redemption of senior unsecured notes due 2022	22,058			—			—			22,058
Net realized and unrealized loss on real estate fund investments	16,162			33,709
Amortization of below-market leases, net	(15,561		)	(31,480		)
Straight-lining of rents	8,446			(10,279		)
Decrease in fair value of marketable securities	3,095			24,801
Return of capital from real estate fund investments	—			20,291
Other non-cash adjustments	19,894			2,242			4,370			3,206
Changes in operating assets and liabilities:
Real estate fund investments	(4,000		)	(68,950		)	(6,000		)	(4,000		)
Tenant and other receivables, net	(28,110		)	(11,662		)	(28,864		)	(12,759		)
Prepaid assets	(74,502		)	74,322			3,078			(5,702		)
Other assets	(10,195		)	(122,925		)	(12,480		)	(8,498		)
Accounts payable and accrued expenses	1,496			(3,810		)	(26,611		)	(11,482		)
Other liabilities	(3,104		)	(13,849		)	(3,557		)	(4,965		)
Net cash provided by operating activities	397,971			488,038			267,715			292,852

Cash Flows from Investing Activities:
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash)	1,248,743			—
Proceeds from sale of condominium units at 220 Central Park South	1,039,493			—			437,188			690,734
Proceeds from redemption of 640 Fifth Avenue preferred equity	500,000			—
Development costs and construction in progress	(448,281		)	(274,147		)	(319,294		)	(289,532		)
Moynihan Train Hall expenditures	(352,211		)	—			(183,007		)	(205,783		)
Proceeds from sale of real estate and related investments	255,534			219,731
Additions to real estate	(189,579		)	(163,546		)	(85,252		)	(120,060		)
Proceeds from sales of marketable securities	168,314			—			28,375			167,852
Investments in partially owned entities							(3,157		)	(15,588		)
Distributions of capital from partially owned entities	24,880			98,609			1,090			24,880
Investments in partially owned entities	(16,480		)	(32,728		)
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash)							—			1,255,756
Proceeds from redemption of 640 Fifth Avenue preferred equity							—			500,000
Proceeds from sale of real estate and related investments							—			108,512
Acquisitions of real estate and other	(3,260		)	(500,225		)	—			(3,260		)
Proceeds from repayments of loans receivable	1,395			—
Net cash provided by (used in) investing activities	2,228,548			(652,306		)
Net cash (used in) provided by investing activities							(124,057		)	2,113,511

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(UNAUDITED)


(Amounts in thousands)	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2019			2018			2020			2019
Cash Flows from Financing Activities:
Repayments of borrowings	$	(2,635,028	)	$	(264,482	)
Distributions to Vornado							$	(624,627	)	$	(251,803	)
Proceeds from borrowings	1,107,852			312,763			554,297			458,955
Purchase of marketable securities in connection with defeasance of mortgage payable	(407,126		)	—
Distributions to Vornado	(377,750		)	(359,456		)
Moynihan Train Hall reimbursement from Empire State Development	352,211			—			183,007			205,783
Contributions from noncontrolling interests in consolidated subsidiaries							98,268			8,315
Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries	(65,084		)	(63,110		)	(54,440		)	(49,140		)
Distributions to preferred unitholders	(37,598		)	(42,582		)	(37,593		)	(25,066		)
Repayments of borrowings							(11,347		)	(1,943,157		)
Proceeds received from exercise of Vornado stock options and other							5,267			2,046
Debt issuance costs							(143		)	(13,522		)
Repurchase of Class A units related to stock compensation agreements and related tax withholdings and other							(137		)	(8,692		)
Purchase of marketable securities in connection with defeasance of mortgage payable							—			(407,126		)
Prepayment penalty on redemption of senior unsecured notes due 2022	(22,058		)	—			—			(22,058		)
Debt issuance costs	(15,328		)	(7,451		)
Contributions from noncontrolling interests in consolidated subsidiaries	9,223			59,924
Repurchase of Class A units related to stock compensation agreements and related tax withholdings and other	(8,692		)	(784		)
Proceeds received from exercise of Vornado stock options and other	2,403			5,262
Redemption of preferred units	(893		)	(470,000		)	—			(893		)
Debt prepayment and extinguishment costs	—			(818		)
Net cash used in financing activities	(2,097,868		)	(830,734		)
Net increase (decrease) in cash and cash equivalents and restricted cash	528,651			(995,002		)
Net cash provided by (used in) financing activities							112,552			(2,046,358		)
Net increase in cash and cash equivalents and restricted cash							256,210			360,005
Cash and cash equivalents and restricted cash at beginning of period	716,905			1,914,812			1,607,131			716,905
Cash and cash equivalents and restricted cash at end of period	$	1,245,556		$	919,810		$	1,863,341		$	1,076,910

Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period	$	570,916		$	1,817,655		$	1,515,012		$	570,916
Restricted cash at beginning of period	145,989			97,157			92,119			145,989
Cash and cash equivalents and restricted cash at beginning of period	$	716,905		$	1,914,812		$	1,607,131		$	716,905

Cash and cash equivalents at end of period	$	1,132,491		$	772,524		$	1,768,459		$	922,604
Restricted cash at end of period	113,065			147,286			94,882			154,306
Cash and cash equivalents and restricted cash at end of period	$	1,245,556		$	919,810		$	1,863,341		$	1,076,910

Supplemental Disclosure of Cash Flow Information:
Cash payments for interest, excluding capitalized interest of $55,186 and $45,292	$	227,310		$	245,628
Cash payments for interest, excluding capitalized interest of $21,255 and $39,643							$	107,069		$	165,022
Cash payments for income taxes	$	47,345		$	61,047		$	9,276		$	28,697

Non-Cash Investing and Financing Activities:							��
Adjustments to carry redeemable Class A units at redemption value							$	248,879		$	99,407
Reclassification of condominium units from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale"							240,707			647,683
Accrued capital expenditures included in accounts payable and accrued expenses							89,036			68,900
Write-off of fully depreciated assets							(66,931		)	(93,390		)
Lease liabilities arising from the recognition of right-of-use assets							—			526,866
Amounts related to our investment in Pennsylvania Real Estate Investment Trust reclassified from "investments in partially owned entities" and "accumulated other comprehensive loss" to "marketable securities" upon conversion of operating partnership units to common shares							—			54,962
Investments received in exchange for transfer to Fifth Avenue and Times Square JV:
Preferred equity	$	2,327,750		$	—		—			2,327,750
Common equity	1,449,495			—			—			1,449,495
Reclassification of condominium units from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale"	825,520			307,552
Lease liabilities arising from the recognition of right-of-use assets	526,866			—
Marketable securities transferred in connection with the defeasance of mortgage payable	(407,126		)	—			—			(407,126		)
Defeased mortgage payable	390,000			—
Adjustments to carry redeemable Class A units at redemption value	123,635			57,970
Accrued capital expenditures included in accounts payable and accrued expenses	117,205			74,185
Write-off of fully depreciated assets	(113,261		)	(61,120		)
Amounts related to our investment in Pennsylvania Real Estate Investment Trust reclassified from "investments in partially owned entities" and "accumulated other comprehensive (loss) income" to "marketable securities" upon conversion of operating partnership units to common shares	54,962			—
Defeasance of mortgage payable							—			390,000

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


1.	Organization

Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Vornado is the sole general partner of, and owned approximately ~~93.1%~~92.7% of the common limited partnership interest in the Operating Partnership as of ~~September~~June 30, ~~2019.~~2020. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership and those ~~entities/~~subsidiaries consolidated by Vornado.


2.	COVID-19 Pandemic

In December 2019, a novel strain of coronavirus (“COVID-19”) was identified in Wuhan, China and by March 11, 2020, the World Health Organization had declared it a global pandemic. Many states in the U.S., including New York, New Jersey, Illinois and California implemented stay-at-home orders for all "non-essential" business and activity in an aggressive effort to curb the spread of the virus. In May 2020, certain states implemented phased re-opening plans for businesses and activities that were previously ordered to close, with limitations on occupancy and certain other restrictions. It is uncertain as to how long these restrictions will continue or if additional restrictions or closures will be imposed. As a result of the COVID-19 pandemic, the U.S. economy has suffered and there has been significant volatility in the financial markets. Many U.S. industries and businesses have been negatively affected and millions of people have filed for unemployment.

Our properties, which are concentrated in New York City, and in Chicago and San Francisco, have been adversely affected as a result of the COVID-19 pandemic and the preventive measures taken to curb the spread of the virus. Some of the effects on us include the following:

With the exception of grocery stores and other "essential" businesses, many of our retail tenants closed their stores in March 2020 and began reopening when New York City entered phase two of its state-mandated reopening plan on June 22, 2020.

While our buildings remain open, many of our office tenants are working remotely.

We have temporarily closed the Hotel Pennsylvania.

We have cancelled trade shows at theMART for the remainder of 2020.

Because certain of our development projects were deemed "non-essential," they were temporarily paused in March 2020 due to New York State executive orders and resumed once New York City entered phase one of its state mandated reopening plan on June 8, 2020.

•

As of April 30, 2020, we placed 1,803 employees on temporary furlough, which included 1,293 employees of Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning, security and engineering services primarily to our New York properties, 414 employees at the Hotel Pennsylvania and 96 corporate staff employees. As of July 31, 2020, 542 employees have been taken off furlough and returned to work, which included 503 employees of BMS and 39 corporate staff employees.


•	Effective April 1, 2020, our executive officers waived portions of their annual base salary for the remainder of 2020.


•	Effective April 1, 2020, each non-management member of our Board of Trustees agreed to forgo his or her $75,000 annual cash retainer for the remainder of 2020.

While we believe our tenants are required to pay rent under their leases, in limited circumstances, we have agreed to and may continue to agree to rent deferrals and rent abatements for certain of our tenants. We have made a policy election in accordance with the Financial Accounting Standards Board (“FASB”) Staff Q&A which provides relief in accounting for leases during the COVID-19 pandemic, allowing us to continue recognizing rental revenue on a straight-line basis for rent deferrals, with no impact to revenue recognition, and to recognize rent abatements as a reduction to rental revenue in the period granted. See Note 4 - Recently Issued Accounting Literature for additional information.

For the quarter ended June 30, 2020, we collected 88% (94% including rent deferrals)of rent due from our tenants, comprised of 93% (98% including rent deferrals) from our office tenants and 72% (78% including rent deferrals) from our retail tenants. Rent deferrals generally require repayment in monthly installments over a period not to exceed twelve months.

Based on our assessment of the probability of rent collection of our lease receivables, we have written off $36,297,000 of receivables arising from the straight-lining of rents, primarily for the JCPenney lease at Manhattan Mall and the New York & Company, Inc. lease at 330 West 34th Street, both tenants have filed for Chapter 11 bankruptcy, and $8,822,000 of tenant receivables deemed uncollectible, resulting in a reduction of lease revenues and our share of income from partially owned entities for the three and six months ended June 30, 2020. Prospectively, revenue recognition for these tenants will be based on actual amounts received. See Note 5 - Revenue Recognition and Note 8 - Investment in Partially Owned Entities for additional information.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


3.	Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Vornado and the Operating Partnership and their consolidated subsidiaries. All inter-company amounts have been eliminated and 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 accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, as filed with the SEC.

We have made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 are not necessarily indicative of the operating results for the full year.

Certain prior year balances have been reclassified in order to conform to the current period presentation. For the three and nine months ended September 30, 2018, "property rentals" of $437,560,000 and $1,322,265,000, respectively, and "tenant expense reimbursements" of $66,387,000 and $185,009,000, respectively, were grouped into "rental revenues" on our consolidated statements of income in accordance with Accounting Standards Codification ("ASC") Topic 205, ~~Presentation of Financial Statements.~~


3.4.	Recently Issued Accounting Literature

In ~~February 2016, the Financial Accounting Standards Board ("FASB") issued an update (“ASU 2016-02”) establishing ASC Topic 842,~~ ~~Leases~~ ("ASC 842"), as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to apply a two-method approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use ("ROU") asset and a lease liability for all leases with a term of greater than 12 months. Lease liabilities equal the present value of future lease payments. Right-of-use assets equal the lease liabilities adjusted for accrued rent expense, initial direct costs, lease incentives and prepaid lease payments. Leases with a term of 12 months or less will be accounted for similar to the previously existing lease guidance under ASC Topic 840, ~~Leases~~ ("ASC 840"). Lease expense is recognized based on the effective interest method for finance leases or on a straight-line basis for operating leases. The accounting applied by the lessor is largely unchanged from that applied under ASC 840. We adopted this standard effective January 1, 2019. We have completed our evaluation of the overall impact of the adoption of ASU 2016-02 on our consolidated financial statements and accounting policies. In transitioning to ASC 842, we elected to use the practical expedient package available to us and did not elect to use hindsight. As of January 1, 2019, we had 12 ground leases classified as operating leases, for which we were required to record a right-of-use asset and a lease liability equal to the present value of the future lease payments. We will continue to recognize expense on a straight-line basis for these leases. We recorded an aggregate of $526,866,000 of ROU assets and a corresponding $526,866,000 of lease liabilities as a result of the adoption of this standard (see Note 21 - ~~Leases~~).

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


3.	~~Recently Issued Accounting Literature - continued~~

Under ASU 2016-02, initial direct costs for both lessees and lessors would include only those costs that are incremental to the arrangement and would not have been incurred if the lease had not been obtained. As a result, beginning January 1, 2019, we no longer capitalize internal leasing costs and instead expense these costs as incurred, as a component of "general and administrative" expense on our consolidated statements of income. For the three and nine months ended September 30, 2018, we capitalized $1,444,000 and $3,883,000, respectively, of internal leasing costs. In addition, we have made changes to our provision policy for lease receivables. Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect the future lease payments. We consider the tenant's payment history and current credit status when assessing collectability. When collectability is not deemed probable we write-off the tenant's receivables, including straight-line rent receivable, and limit lease income to cash received. Changes to the collectability of our operating leases are recorded as adjustments to "rental revenues" on our consolidated statements of income, which resulted in a decrease in income of $1,106,000 and $16,488,000 for the three and nine months ended September 30, 2019, respectively.

~~In February~~June 2016, the FASB issued an update (“ASU 2016-13”) Measurement of Credit Losses on Financial Instruments establishing ~~ASC~~Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses("ASC 326"), as amended by subsequent ASUs on the topic. ASU 2016-13 changes how entities ~~will~~ account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019. ~~We are currently evaluating~~In May 2019, the ~~impact of the~~FASB issued ASU 2019-05 Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option for financial instruments that were previously recorded at amortized cost and are within the scope of ASC Subtopic 326-20 if the instruments are eligible for the fair value option under ASC Subtopic 825-10, Financial Instruments ("ASC 825-10"). We elected to apply the fair value option on an instrument-by-instrument basis to our loans receivable. We adopted this standard effective January 1, 2020 and recorded a $16,064,000 cumulative-effect adjustment to beginning accumulated deficit to recognize credit losses on loans receivable recorded on our consolidated ~~financial statements, but do not believe~~balance sheets. For the ~~adoption~~three and six months ended June 30, 2020, we recorded $6,108,000 and $13,369,000, respectively, of ~~this standard will have a material impact~~credit losses on our loans receivable which is included in "interest and other investment (loss) income, net" on our consolidated ~~financial statements.~~statements of income.

In ~~August 2018,~~March 2020, the FASB issued an update (“ASU ~~2018-13”~~2020-04”) ~~Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement~~ toestablishing ASC Topic ~~820,~~848, ~~Fair Value Measurement~~Reference Rate Reform ~~(“ASC 820”)~~. ASU ~~2018-13 modifies~~2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the disclosure requirements for fair value measurements by removing, modifying, and/or adding certain disclosures. ASU 2018-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019. Wesix months ended June 30, 2020, we elected to ~~early adopt ASU 2018-13 effective January 1, 2019. The adoption~~apply the hedge accounting expedients related to probability and the assessments of ~~this update did not have a material~~effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact ~~on our consolidated financial statements~~of the guidance and ~~disclosures.~~may apply other elections as applicable as additional changes in the market occur.

In ~~October 2018,~~April 2020, the FASB issued ~~an update ("ASU 2018-16")~~ ~~Inclusion of~~a Staff Q&A on accounting for leases during the ~~Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes~~ ~~to ASC Topic 815,~~ ~~Derivatives and Hedging. ASU 2018-16 expands the list of U.S. benchmark interest rates permitted in~~COVID-19 pandemic, focused on the application of ~~hedge accounting by adding~~lease guidance in ASC Topic 842, Leases ("ASC 842"). The Q&A states that it would be acceptable to make a policy election regarding rent concessions resulting from COVID-19, which would not require entities to account for these rent concessions as lease modifications when total cash flows resulting from the ~~OIS rate based on SOFR~~modified contract are “substantially the same or less” than the cash flows in the original contract. During the three months ended June 30, 2020, in limited circumstances, we granted rent deferrals and rent abatements for certain of our tenants. We have made a policy election in accordance with the Staff Q&A for our portfolio allowing us to not account for the concessions as lease modifications. Accordingly, rent abatements are recognized as reductions to “rental revenues” during the period in which they were granted. Rent deferrals result in an ~~eligible benchmark interest rate. ASU 2018-16 is effective for interim~~increase to "tenant and ~~annual reporting periods in fiscal years beginning after December 15, 2018. We adopted this update effective January 1, 2019. The adoption of this update did not have an~~other receivables" during the deferral period with no impact on ~~our consolidated financial statements.~~rental revenue recognition. For any concessions that do not meet the guidance contained in the Q&A, the modification guidance in accordance with ASC 842 will be applied. See Note 2 -

COVID-19 Pandemic for further details.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


4.5.	Revenue Recognition

Our revenues primarily consist of rental revenues and fee and other income. We operate in 2 reportable segments: New York and Other, with a significant portion of our revenues included in the New York segment. We have the following revenue sources and revenue recognition policies:

~~Rental revenues include revenues from the leasing of space at our properties to tenants, lease termination income, revenues from the Hotel Pennsylvania, trade shows and tenant services.~~

◦

Revenues from the leasing of space at our properties to tenants includes (i) lease components, including fixed and variable lease payments, and nonlease components which include reimbursement of common area maintenance expenses, and (ii) reimbursement of real estate taxes and insurance expenses. As lessor, we have elected to combine the lease and nonlease components of our operating lease agreements and account for the components as a single lease component in accordance with ASC 842. Lease revenues and reimbursement of common area maintenance, real estate taxes and insurance are presented on the following page as "property rentals." Revenues derived from fixed lease payments are recognized on a straight-line basis over the non-cancelable period of the lease, together with renewal options that are reasonably certain of being exercised. We commence rental revenue recognition when the underlying asset is available for use by the lessee. Revenue derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred.


◦	~~Lease termination income is recognized immediately if a tenant vacates or is recognized on a straight-line basis over the shortened remaining lease term in accordance with ASC 842.~~


◦	Hotel revenue arising from the operation of Hotel Pennsylvania consists of room revenue, food and beverage revenue, and banquet revenue. Room revenue is recognized when the rooms are made available for the guest, in accordance with ASC 842.


◦	Trade shows revenue arising from the operation of trade shows is primarily booth rentals. This revenue is recognized upon the occurrence of the trade shows when the trade show booths are made available for use by the exhibitors, in accordance with ASC 842.


◦	Tenant services revenue arises from sub-metered electric, elevator, trash removal and other services provided to tenants at their request. This revenue is recognized as the services are transferred in accordance with ASC Topic 606, ~~Revenue from Contracts with Customers~~ ~~("ASC 606").~~

Fee and other income includes management, leasing and other revenue arising from contractual agreements with third parties or with partially owned entities and includes Building Maintenance Service (“BMS”) cleaning, engineering and security services. This revenue is recognized as the services are transferred in accordance with ASC 606.

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


4.	~~Revenue Recognition - continued~~

Below is a summary of our revenues by segment. Additional financial information related to these reportable segments for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 is set forth in Note 2322 - Segment Information.


(Amounts in thousands)	For the Three Months Ended September 30, 2019								For the Three Months Ended September 30, 2018								For the Three Months Ended June 30, 2020								For the Three Months Ended June 30, 2019
	Total		New York		Other				Total		New York		Other				Total		New York		Other				Total		New York		Other
Property rentals(1)	$	381,740	$	308,933	$	72,807			$	453,789	$	387,300	$	66,489			$	308,316	$	241,308	$	67,008			$	372,160	$	300,925	$	71,235
Hotel Pennsylvania(2)	24,499		24,499		—				26,088		26,088		—				—		—		—				25,525		25,525		—
Trade shows(3)	8,104		—		8,104				8,443		—		8,443				—		—		—				11,547		—		11,547
Lease revenues(4)	414,343		333,432		80,911				488,320		413,388		74,932				308,316		241,308		67,008				409,232		326,450		82,782
Tenant services	13,295		9,342		3,953				15,627		11,696		3,931				6,878		4,341		2,537				12,067		9,337		2,730
Rental revenues	427,638		342,774		84,864				503,947		425,084		78,863				315,194		245,649		69,545				421,299		335,787		85,512
BMS cleaning fees	30,677		32,787		(2,110		)	⁽¹⁾	28,873		31,328		(2,455		)	⁽¹⁾	21,115		22,405		(1,290		)	⁽⁵⁾	32,570		34,944		(2,374		)	⁽⁵⁾
Management and leasing fees	3,326		3,746		(420		)		4,734		4,439		295				1,837		1,701		136				4,500		4,472		28
Other income	4,320		1,261		3,059				4,494		1,595		2,899				4,880		873		4,007				4,734		1,178		3,556
Fee and other income	38,323		37,794		529				38,101		37,362		739				27,832		24,979		2,853				41,804		40,594		1,210
Total revenues	$	465,961	$	380,568	$	85,393			$	542,048	$	462,446	$	79,602			$	343,026	$	270,628	$	72,398			$	463,103	$	376,381	$	86,722

____________________

~~(1)~~ ~~Represents the elimination of theMART and 555 California Street BMS cleaning fees which are included as income in the New York segment.~~

See notes below.


(Amounts in thousands)	For the Nine Months Ended September 30, 2019								For the Nine Months Ended September 30, 2018								For the Six Months Ended June 30, 2020								For the Six Months Ended June 30, 2019
	Total		New York		Other				Total		New York		Other				Total		New York		Other				Total		New York		Other
Property rentals(1)	$	1,211,641	$	995,661	$	215,980			$	1,358,932	$	1,160,140	$	198,792			$	679,490	$	539,920	$	139,570			$	829,901	$	686,728	$	143,173
Hotel Pennsylvania(2)	62,633		62,633		—				67,842		67,842		—				8,741		8,741		—				38,134		38,134		—
Trade shows(3)	36,607		—		36,607				38,903		—		38,903				11,303		—		11,303				28,503		—		28,503
Lease revenues(4)	1,310,881		1,058,294		252,587				1,465,677		1,227,982		237,695				699,534		548,661		150,873				896,538		724,862		171,676
Tenant services	37,933		27,904		10,029				41,597		31,854		9,743				16,934		11,721		5,213				24,638		18,562		6,076
Rental revenues	1,348,814		1,086,198		262,616				1,507,274		1,259,836		247,438				716,468		560,382		156,086				921,176		743,424		177,752
BMS cleaning fees	93,032		99,488		(6,456		)	⁽¹⁾	88,095		94,888		(6,793		)	⁽¹⁾	53,581		56,834		(3,253		)	⁽⁵⁾	62,355		66,701		(4,346		)	⁽⁵⁾
Management and leasing fees	10,063		10,469		(406		)		10,205		9,384		821				4,704		4,575		129				6,737		6,723		14
Other income	11,823		4,079		7,744				14,729		5,374		9,355				12,805		4,452		8,353				7,503		2,818		4,685
Fee and other income	114,918		114,036		882				113,029		109,646		3,383				71,090		65,861		5,229				76,595		76,242		353
Total revenues	$	1,463,732	$	1,200,234	$	263,498			$	1,620,303	$	1,369,482	$	250,821			$	787,558	$	626,243	$	161,315			$	997,771	$	819,666	$	178,105

____________________


(1)	Reduced by $37,587 and $14,492 for the three months ended June 30, 2020 and 2019, respectively, and $38,631 and $15,382 for the six months ended June 30, 2020 and 2019, respectively, for the write-off of lease receivables deemed uncollectible (primarily write-offs of receivables arising from the straight-lining of rents).


(2)	Temporarily closed since April 1, 2020 as a result of the pandemic.


(3)	Cancelled trade shows at theMART from late March 2020 through the remainder of the year as a result of the pandemic.


(4)	The components of lease revenues were as follows:



	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2020			2019		2020		2019
Fixed lease revenues	$	312,285		$	377,524	$	649,331	$	807,611
Variable lease revenues	(3,969		)	31,708		50,203		88,927
Lease revenues	$	308,316		$	409,232	$	699,534	$	896,538

~~(1)~~ ~~Represents the elimination of theMART and 555 California Street BMS cleaning fees which are included as income in the New York segment.~~


(5)	Represents the elimination of theMART and 555 California Street BMS cleaning fees which are included as income in the New York segment.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


5.6.	Real Estate Fund Investments

We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”) and own a 25.0% interest in the Fund, which had an initial eight-year term ending February 2019. On January 29, 2018, the Fund's term was extended to February 2023. The Fund's three-year investment period ended in July 2013. The Fund is accounted for under ASC Topic 946, Financial Services – Investment Companies (“ASC 946”) and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting.

We are also the general partner and investment manager of the Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) and own a 57.1% interest in the joint venture which owns the 24.7% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. The Crowne Plaza Joint Venture is also accounted for under ASC 946 and we consolidate the accounts of the joint venture into our consolidated financial statements, retaining the fair value basis of accounting.

On June 9, 2020, the joint venture between the Fund and the Crowne Plaza Joint Venture defaulted on the $274,355,000 non-recourse loan on the Crowne Plaza Times Square Hotel. The interest-only loan, which bears interest at a floating rate of LIBOR plus 3.69% (3.90% as of June 30, 2020), was scheduled to mature on July 9, 2020. We are in negotiations with the lenders and there can be no assurance as to the timing and ultimate resolution of these negotiations.

As of ~~September~~June 30, ~~2019,~~2020, we ~~have~~had 4 real estate fund investments through the Fund and the Crowne Plaza Joint Venture with an aggregate fair value of ~~$306,596,000,~~$17,453,000, or ~~$22,968,000~~ $324,111,000below ~~our~~ cost, and had remaining unfunded commitments of ~~$44,194,000,~~$29,194,000, of which our share was ~~$13,969,000. As of~~$9,266,000. At December 31, ~~2018,~~2019, we had 4 real estate fund investments with an aggregate fair value of ~~$318,758,000.~~$222,649,000.

Below is a summary of ~~income (loss)~~loss from the Fund and the Crowne Plaza Joint ~~Venture for the three and nine months ended September 30, 2019 and 2018.~~Venture.



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Net investment (loss) income	$	(366	)	$	459		$	(309	)	$	192
Net unrealized loss on held investments	(27,676		)	(16,262		)	(211,196		)	(16,162		)
Loss from real estate fund investments	(28,042		)	(15,803		)	(211,505		)	(15,970		)
Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries	21,953			(4,955		)	149,258			(7,692		)
Loss from real estate fund investments net of noncontrolling interests in consolidated subsidiaries	$	(6,089	)	$	(20,758	)	$	(62,247	)	$	(23,662	)

(Amounts in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Net investment income $ 2,190
$ 3,093
$ 2,382
$ 6,366

Net unrealized loss on held investments —
(3,283 ) (16,162 ) (32,796 )
Net realized loss on exited investments —
—
—
(913 )
New York City real property transfer tax (the "Transfer Tax") —
—
—
(10,630 )
⁽¹⁾
Income (loss) from real estate fund investments 2,190
(190 ) (13,780 ) (37,973 )
Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries (735 ) (558 ) (8,427 ) 34,338

Income (loss) from real estate fund investments attributable to the Operating Partnership 1,455
(748 ) (22,207 ) (3,635 )
Less (income) loss attributable to noncontrolling interests in the Operating Partnership (95 ) 46
1,403
224

Income (loss) from real estate fund investments attributable to Vornado $ 1,360
$ (702 ) $ (20,804 ) $ (3,411 )

~~____________________~~

~~(1)~~

Due to the disputed additional Transfer Tax related to the March 2011 acquisition of One Park Avenue which was recorded as a result of the New York City Tax Appeals Tribunal (the "Tax Tribunal") decision in the first quarter of 2018. We appealed the Tax Tribunal's decision to the New York State Supreme Court, Appellate Division, First Department ("Appellate Division"). Our appeal was heard on April 2, 2019, and on April 25, 2019 the Appellate Division entered a unanimous decision and order that confirmed the decision of the Tax Tribunal and dismissed our appeal. On June 20, 2019, we filed a motion to reargue the Appellate Division's decision with the appellate court.

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

6.7. Marketable Securities

~~Lexington Realty Trust ("Lexington") (NYSE: LXP)~~

On March 1, 2019, we sold all of our 18,468,969 common shares of Lexington, realizing net proceeds of $167,698,000. We recorded a $16,068,000 mark-to-market increase in the fair value of our common shares for the period from January 1, 2019 through the date of sale, which is included in "interest and other investment income, net" on our consolidated statements of income for the nine months ended September 30, 2019.

Pennsylvania Real Estate Investment Trust (“PREIT”) (NYSE: PEI)

On ~~March 12, 2019 (the "Conversion Date"),~~January 23, 2020, we ~~converted~~sold all of our 6,250,000 ~~PREIT operating partnership units into~~ common shares ~~and began accounting~~of PREIT, realizing net proceeds of $28,375,000. We recorded a $4,938,000 loss (mark-to-market decrease) for ~~our investment as a marketable security in accordance with ASC Topic 321,~~ ~~Investments - Equity Securities~~ ~~("ASC 321"). Prior to~~ the ~~Conversion Date, we accounted for our investment under the equity method. For the three and nine~~six months ended ~~September~~June 30, 2019, we recorded a decrease of $4,875,000 and $19,211,000, respectively, in the value of our investment based on PREIT's September 30, 2019 quarter ended closing share price, which is included in "interest and other investment income, net" on our consolidated statements of income.2020.

The table below summarizes the changes toof our ~~marketable securities portfolio for the nine months ended September 30, 2019.~~investment in PREIT.

(Amounts in thousands) For the Nine Months Ended September 30, 2019
Total Lexington Realty Trust PREIT Other
Beginning balance, December 31, 2018 $ 152,198
$ 151,630
$ —
$ 568
Sale of marketable securities (168,314 ) (167,698 ) —
(616 )
Transfer of PREIT investment balance at Conversion Date 54,962
—
54,962
—
(Decrease) increase in fair value of marketable securities⁽¹⁾
(3,095 ) 16,068
(19,211 ) 48
Ending balance, September 30, 2019 $ 35,751
$ —
$ 35,751
$ —



(Amounts in thousands)	For the Six Months Ended June 30, 2020
Balance as of December 31, 2019	$	33,313
Sale of marketable securities on January 23, 2020	(28,375		)
Decrease in fair value of marketable securities⁽¹⁾	(4,938		)
Balance as of June 30, 2020	$	—

____________________


(1)	Included in “interest and other investment (loss) income, net” on our consolidated statements of income (see Note 18 - Interest and Other Investment (Loss) Income, Net).

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


7.8.	Investments in Partially Owned Entities

Fifth Avenue and Times Square JV

~~On April 18, 2019 (the “Closing Date”),~~As of June 30, 2020, we ~~entered into~~own a ~~transaction agreement (the “Transaction Agreement”~~51.5% common interest in a joint venture ("Fifth Avenue and Times Square JV") ~~with a group of institutional investors (the “Investors”). The Transaction Agreement provides for a series of transactions (collectively, the “Transaction”) pursuant to~~ which ~~(i) prior to the Closing Date, we contributed our~~owns interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the ~~“Properties”~~"Properties") ~~to subsidiaries of a newly formed joint venture (“Fifth Avenue and Times Square JV”) and (ii) on the Closing Date, transferred a~~. The remaining 48.5% common interest in ~~Fifth Avenue and Times Square JV to~~ the ~~Investors. The 48.5%~~joint venture is owned by a group of institutional investors (the "Investors"). Our 51.5% common interest in the joint venture represents an effective 51.0% interest in the Properties. The 48.5% common interest in the joint venture owned by the Investors represents an effective 47.2% interest in the Properties (of which 45.4% was transferred from Vornado). The Properties include approximately 489,000 square feet of retail space, 327,000 square feet of office space, signage associated with 1535 and 1540 Broadway, the parking garage at 1540 Broadway and the theater at 1535 Broadway.Properties.

We ~~retained the remaining 51.5% common interest in Fifth Avenue and Times Square JV which represents an effective 51.0% interest in the Properties and an aggregate~~also own $1.828 billion of preferred equity interests in certain of the properties. ~~We also provided $500,000,000 of temporary preferred equity on 640 Fifth Avenue until May 23, 2019 when mortgage financing was completed.~~ All of the preferred equity has an annual coupon of 4.25% for the first five years, increasing to 4.75% for the next five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.

Net cash proceeds from the Transaction were $1.179 billion, after (i) deductions for the defeasance of a $390,000,000 mortgage loan on 666 Fifth Avenue and the repayment of a $140,000,000 mortgage loan on 655 Fifth Avenue, (ii) proceeds from a $500,000,000 mortgage loan on 640 Fifth Avenue, described below, (iii) approximately $23,000,000 used to purchase noncontrolling investors' interests and (iv) approximately $53,000,000 of transaction costs (including $17,000,000 of costs related to the defeasance of the 666 Fifth Avenue mortgage loan).

We continue to manage and lease the Properties. We share control with the Investors over major decisions of the joint venture, including decisions regarding leasing, operating and capital budgets, and refinancings. Accordingly, we no longer hold a controlling financial interest in the Properties which has been transferred to the joint venture. As a result, our investment in Fifth Avenue and Times Square JV ~~is accounted for under~~was formed in April 2019, when we contributed our interests in the ~~equity method from~~Properties to the ~~date of transfer.~~joint venture and transferred a 48.5% common interest in the joint venture to the Investors (the “Transaction”). The Transaction valued the Properties at ~~$5,556,000,000~~$5.556 billion, resulting in a ~~financial statement~~$2.571 billion net gain, ~~of $2,571,099,000,~~ before noncontrolling ~~interest~~interests of $11,945,000, including a gain related to the ~~related step-up~~step up in our basis of the retained portion of the assets to fair value. ~~The net gain is included~~Subsequent to the Transaction, Manhattan street retail suffered negative market conditions and was further stressed by the COVID-19 pandemic. This has resulted in ~~"net gain on transfer to~~a decrease in cash flows. As of June 30, 2020, we estimated that the fair value of our investment in Fifth Avenue and Times Square ~~JV"~~JV was approximately $2,955,957,000 or $306,326,000 less than the carrying amount. In determining the fair value of our investment, we considered, among other inputs, a discounted cash flow analysis based upon market conditions and expectations of growth. As of June 30, 2020, we have concluded that the decline in the value of our investment was “other-than-temporary.” This conclusion was based on, among other factors, the significant challenges facing the retail sector and our inability to forecast a recovery in the near-term. Accordingly, we recognized a non-cash impairment loss of $306,326,000, before noncontrolling interests of $467,000, during the second quarter of 2020. The impairment loss is included in “(loss) income from partially owned entities” on our consolidated statements of income for the ~~nine~~three and six months ended ~~September~~June 30, ~~2019. The gain for tax purposes was approximately $735,000,000.~~

On May 23, 2019, we received $500,000,000 from the redemption of our temporary preferred equity in 640 Fifth Avenue. The temporary preferred equity was redeemed from the proceeds of a $500,000,000 mortgage financing that was completed on the property. The five year loan, which is guaranteed by us, is interest only at LIBOR plus 1.01%. The interest rate was swapped for four years to a fixed rate of 3.07%.

~~Related Party Transactions~~2020.

We provide various services to Fifth Avenue and Times Square JV in accordance with management, development, leasing and other ~~agreements, as described below.~~

We receive an annual fee for managing the Properties equal to 2% of the gross revenues from the Properties. In addition, we are entitled to a development fee of 5% of development costs, plus reimbursement of certain costs, for development projects performed by us. We are entitled to 1.5% of development costs, plus reimbursement of certain costs, as a supervisory fee for development projects not performed by us. We provide leasing services for fees calculated based on a percentage of rents, less any commissions paid to third-party real estate brokers, if applicable. We jointly provide leasing services for the retail space with Crown Acquisitions Inc. ("Crown"), and exclusively provide leasing services for the office space.agreements. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we recognized ~~$1,104,000~~$629,000 and ~~$1,934,000,~~$1,661,000, respectively, of property management fee income which is included in "fee and other income" on our consolidated statements of income. During the three and six months ended June 30, 2019, we recognized $830,000 of property management fee income.

BMS, our wholly-owned subsidiary, supervises cleaning, security and engineering services at certain of the Properties. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we recognized ~~$1,161,000~~$748,000 and ~~$1,952,000,~~$1,773,000, respectively, of income for these services which is included in "fee and other income" on our consolidated statements of income. During the three and six months ended June 30, 2019, we recognized $791,000 of income for these services.

~~We believe, based on comparable fees charged by other real estate companies, that~~Below is a summary of the ~~fees described above are at fair market value.~~

~~Haim Chera, Executive Vice President - Head of Retail, has an investment in Crown, a company controlled by Mr. Chera's family. Crown has a nominal minority interest in~~latest available financial information for Fifth Avenue and Times Square JV. ~~Additionally, we have other investments with Crown.~~



(Amounts in thousands)	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2020			2019		2020			2019
Income statement:
Revenues	$	66,311		$	72,888	$	146,786		$	72,888
Net income	112			21,466		10,090			21,466
Net (loss) income attributable to Fifth Avenue and Times Square JV (after allocation to our preferred equity interests)	(19,333		)	4,079		(28,404		)	4,079

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


7.	~~Investments in Partially Owned Entities - continued~~

8. Investments in Partially Owned Entities - continued

Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX)

As of ~~September~~June 30, ~~2019,~~2020, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common equity. We manage, ~~lease~~develop and ~~develop~~lease Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable.

As of ~~September~~June 30, ~~2019,~~2020, the market value ("fair value" pursuant to ASC ~~820)~~Topic 820, Fair Value Measurements ("ASC 820")) of our investment in Alexander’s, based on Alexander’s ~~September~~June 30, ~~2019 quarter ended~~2020 closing share price of ~~$348.41,~~$240.90, was ~~$576,294,000,~~ $398,465,000,or ~~$475,066,000~~$308,966,000 in excess of the carrying amount on our consolidated balance sheet. As of ~~September~~June 30, ~~2019,~~2020, the carrying amount of our investment in Alexander’s, excluding amounts owed to us, exceeds our share of the equity in the net assets of Alexander’s by approximately ~~$38,882,000.~~$38,552,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income. The basis difference related to the land will be recognized upon disposition of our investment.

~~61 Ninth Avenue~~

On January 28, 2019, a joint venture, in which we have a 45.1% interest, completed a $167,500,000 refinancing of 61 Ninth Avenue, a 166,000 square foot office and retail property in the Meatpacking district of Manhattan which is fully leased to Aetna and Starbucks. The seven-year interest only loan carries a rate of LIBOR plus 1.35% (3.40% as of September 30, 2019) and matures in January 2026. We realized net proceeds of approximately $31,000,000. The loan replaces the previous $90,000,000 construction loan that bore interest at LIBOR plus 3.05% and was scheduled to mature in 2021.

~~Urban Edge Properties (“UE”) (NYSE: UE)~~

On March 4, 2019, we converted to common shares and sold all of our 5,717,184 partnership units of UE, realizing net proceeds of $108,512,000. The sale resulted in a net gain of $62,395,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the nine months ended September 30, 2019.

~~512 West 22nd Street~~

On June 28, 2019, a joint venture, in which we have a 55% interest, completed a $145,700,000 refinancing of 512 West 22nd Street, a 173,000 square foot office building in the West Chelsea submarket of Manhattan, of which $106,425,000 was outstanding as of September 30, 2019. The four-year interest only loan carries a rate of LIBOR plus 2.00% (4.05% as of September 30, 2019) and matures in June 2023 with a one-year extension option. The loan replaces the previous $126,000,000 construction loan that bore interest at LIBOR plus 2.65% and was scheduled to mature in 2019.

~~330 Madison Avenue~~

On July 11, 2019, we sold our 25% interest in 330 Madison Avenue to our joint venture partner. We received net proceeds of approximately $100,000,000 after deducting our share of the existing $500,000,000 mortgage loan resulting in a financial statement net gain of $159,292,000. The net gain is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the three and nine months ended September 30, 2019. The gain for tax purposes was approximately $139,000,000.

~~825 Seventh Avenue~~

On July 25, 2019, a joint venture, in which we have a 50% interest, completed a $60,000,000 refinancing of 825 Seventh Avenue, a 165,000 square foot office building on the corner of 53rd Street and Seventh Avenue, of which $28,882,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.65% (3.78% as of September 30, 2019) and matures in 2022 with a one-year extension option. The loan replaces the previous $20,500,000 loan that bore interest at LIBOR plus 1.40% and was scheduled to mature in September 2019.

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


7.	~~Investments in Partially Owned Entities - continued~~

~~Toys "R" Us, Inc. ("Toys")~~

On September 18, 2017, Toys filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code. In the second quarter of 2018, Toys ceased U.S. operations. On February 1, 2019, the plan of reorganization for Toys, in which we owned a 32.5% interest, was declared effective and our stock in Toys was canceled. As of December 31, 2018, we carried our Toys investment at 0. The canceling of our stock in Toys resulted in a $420,000,000 capital loss deduction for tax purposes in 2019 (which if not offset by capital gains will result in a capital loss carry over available for five years).

Below is a schedule summarizing our investments in partially owned entities.


(Amounts in thousands)	Percentage Ownership at September 30, 2019	Balance as of						Percentage Ownership at June 30, 2020	Balance as of
	Percentage Ownership at September 30, 2019	September 30, 2019			December 31, 2018			Percentage Ownership at June 30, 2020	June 30, 2020			December 31, 2019
Investments:
Fifth Avenue and Times Square JV (see page 30 for details)	51.5%	$	3,308,363		$	—
Fifth Avenue and Times Square JV								51.5%	$	2,955,957		$	3,291,231
Partially owned office buildings/land⁽¹⁾	Various	467,787			499,005			Various	460,767			464,109
Alexander’s	32.4%	101,228			107,983			32.4%	89,499			98,543
PREIT⁽²⁾	N/A	—			59,491
UE⁽³⁾	N/A	—			45,344
Other investments⁽⁴⁾	Various	146,442			146,290
Other investments⁽²⁾								Various	142,428			145,282
		$	4,023,820		$	858,113			$	3,648,651		$	3,999,165

Investments in partially owned entities included in other liabilities⁽⁵⁾:
330 Madison Avenue⁽⁶⁾	N/A	$	—		$	(58,117	)
Investments in partially owned entities included in other liabilities⁽³⁾:
7 West 34th Street	53.0%	(52,222		)	(51,579		)	53.0%	$	(52,549	)	$	(54,004	)
85 Tenth Avenue	49.9%	(5,814		)	—			49.9%	(9,188		)	(6,186		)
		$	(58,036	)	$	(109,696	)		$	(61,737	)	$	(60,190	)

____________________


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 512 West 22nd Street, 61 Ninth Avenue and others.


(2)	~~On March 12, 2019, we converted all of our PREIT operating partnership units into common shares and began accounting for our investment as a marketable security in accordance with ASC 321 (see Note~~ 6 - ~~Marketable Securities~~).


~~(3)~~	~~Sold on March 4, 2019 (see page 31 for details).~~


~~(4)~~	Includes interests in Independence Plaza, ~~Fashion Centre Mall/Washington Tower,~~ Rosslyn Plaza ~~50-70 West 93rd Street~~ and others.


~~(5)~~(3)	Our negative basis results from distributions in excess of our investment.


~~(6)~~	~~Sold on July 11, 2019 (see page 31 for details).~~

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


7.	~~Investments in Partially Owned Entities - continued~~

8. Investments in Partially Owned Entities - continued

Below is a schedule of (loss) income from partially owned entities.

(Amounts in thousands) Percentage
Ownership at
September 30, 2019 For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Our share of net income (loss):
Fifth Avenue and Times Square JV (see page 30 for details):
Equity in net income 51.5% $ 9,891
$ —
$ 21,108
$ —
Return on preferred equity, net of our share of the expense 9,545
—
18,131
—
19,436
—
39,239
—
Alexander's (see page 31 for details):
Equity in net income⁽¹⁾
32.4% 5,393
4,278
14,707
7,215
Management, leasing and development fees 1,299
1,149
3,478
3,378
6,692
5,427
18,185
10,593

Partially owned office buildings⁽²⁾
Various (186 ) 735
(1,531 ) (1,546 )

Other investments⁽³⁾
Various 4
1,044
246
(2,988 )

$ 25,946
$ 7,206
$ 56,139
$ 6,059



(Amounts in thousands)	Percentage Ownership at June 30, 2020	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	Percentage Ownership at June 30, 2020	2020			2019			2020			2019
Our share of net (loss) income:
Fifth Avenue and Times Square JV (see page 28 for details)⁽¹⁾:
Non-cash impairment loss		$	(306,326	)	$	—		$	(306,326	)	$	—
Return on preferred equity, net of our share of the expense		9,330			8,586			18,496			8,586
Equity in net income⁽²⁾	51.5%	441			11,217			5,937			11,217
		(296,555		)	19,803			(281,893		)	19,803
Alexander's (see page 29 for details):
Equity in net income	32.4%	3,929			3,597			5,345			9,314
Management, leasing and development fees		1,222			1,122			2,482			2,179
		5,151			4,719			7,827			11,493

Partially owned office buildings⁽³⁾	Various	810			(1,451		)	2,132			(1,345		)

Other investments⁽⁴⁾	Various	(1,279		)	(198		)	(836		)	242

		$	(291,873	)	$	22,873		$	(272,770	)	$	30,193

____________________


(1)	~~The nine months endedSeptember 30, 2018includes our $7,708 share of Alexander's disputed additional Transfer Tax related to the November 2012 sale of Kings Plaza Regional Shopping Center. Alexander's recorded this expense based~~Entered into on ~~the precedent established by the Tax Tribunal's decision regarding One Park Avenue (see Note 5 -~~ ~~Real Estate Fund Investments~~). April 18, 2019.


(2)	The decrease in our share of net income for the three and six months ended June 30, 2020 compared to June 30, 2019 was primarily due to (i) $4,737 of write-offs of lease receivables deemed uncollectible during the second quarter of 2020 and (ii) a $4,360 reduction in income related to a Forever 21 lease modification at 1540 Broadway.

(3)

Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 7 West 34th Street, 330 Madison Avenue (sold on July 11, 2019), 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others. The nine months ended September 30, 2019 includes a $1,079 reduction in income from the non-cash write-off of straight-line rent receivable related to The Four Seasons Restaurant at 280 Park Avenue. The nine months ended September 30, 2018 includes our $4,978 share of disputed additional Transfer Tax related to the March 2011 acquisition of One Park Avenue (see Note 5 - ~~Real Estate Fund Investments~~).


~~(3)~~(4)	Includes interests in Independence Plaza, ~~Fashion Centre Mall/Washington Tower,~~ Rosslyn Plaza, ~~50-70 West 93rd Street, 666 Fifth Avenue Office Condominium (sold on August 3, 2018), UE~~Urban Edge Properties (sold on March 4, 2019), PREIT (accounted for as a marketable security from March 12, ~~2019)~~2019 and sold on January 23, 2020) and others.


8.9.	220 Central Park South ("220 CPS")

We are ~~constructing~~completing construction of a residential condominium tower containing 397,000 salable square feet at 220 CPS. The development cost of this project (exclusive of land cost) is estimated to be approximately ~~$1.4~~$1.450 billion, of which ~~$1.3~~$1.419 billion has been expended as of ~~September~~June 30, ~~2019.~~2020.

During the three months ended ~~September~~June 30, ~~2019,~~2020, we closed on the sale of 144 condominium units at 220 CPS for net proceeds aggregating ~~$348,759,000~~$156,972,000 resulting in a financial statement net gain of ~~$130,888,000~~$55,695,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, ~~$21,853,000~~$6,690,000 of income tax expense was recognized on our consolidated statements of income. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we closed on the sale of 37 11condominium units at 220 CPS for net proceeds ~~of $1,039,493,000~~aggregating $348,188,000 resulting in a financial statement net gain of ~~$400,500,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.~~$124,284,000. In connection with these sales, ~~$71,590,000~~$15,368,000 of income tax expense was recognized onin our consolidated statements of income. From inception to ~~September~~June 30, ~~2019,~~2020, we closed on the sale of 4876 units for aggregate net proceeds of ~~$1,254,269,000. During the third quarter~~$2,168,320,000 resulting in financial statement net gains of 2019, we repaid the remaining $48,883,000 of the $950,000,000 220 CPS loan. Of the condominium units closed, 1 was sold to a limited liability company owned by the spouse of a related party, David Mandelbaum, a Trustee of Vornado and a Director of Alexander’s, and another was sold to Mr. Mandelbaum's brother. The net proceeds were $23,357,000 and $16,099,000, respectively.


9.	~~Dispositions~~$809,901,000.

On September 18, 2019, we completed the $49,750,000 sale of 3040 M Street, a 44,000 square foot retail building in Washington, DC, which resulted in a net gain of $19,477,000 which is included in “net gains on disposition of wholly owned and partially owned assets” on our consolidated statements of income for the three and nine months ended September 30, 2019. The gain for tax purposes was approximately $19,000,000.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


10.	Identified Intangible Assets and Liabilities

The following summarizes our identified intangible assets (primarily above-market leases) and liabilities (primarily ~~acquired~~ below-market leases) ~~as of September 30, 2019 and December 31, 2018.~~.


(Amounts in thousands)	Balance as of						Balance as of
	September 30, 2019			December 31, 2018			June 30, 2020			December 31, 2019
Identified intangible assets:
Gross amount	$	130,396		$	308,895		$	125,149		$	129,552
Accumulated amortization	(99,623		)	(172,114		)	(97,489		)	(98,587		)
Total, net	$	30,773		$	136,781		$	27,660		$	30,965
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	321,838		$	503,373		$	293,008		$	316,119
Accumulated amortization	(265,388		)	(341,779		)	(249,106		)	(262,580		)
Total, net	$	56,450		$	161,594		$	43,902		$	53,539

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental revenues of ~~$4,393,000~~$5,200,000 and ~~$10,373,000~~$4,643,000 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$15,561,000~~$9,406,000 and ~~$31,480,000~~$11,168,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years commencing January 1, ~~2020~~2021 is as follows:


(Amounts in thousands)
2020	$	16,643
2021	11,934		$	10,780
2022	8,792		9,429
2023	6,261		6,900
2024	2,518		3,155
2025			1,602

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was ~~$1,597,000~~$1,354,000 and ~~$4,822,000~~$1,935,000 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$7,077,000~~$3,081,000 and ~~$14,557,000~~$5,480,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases for each of the five succeeding years commencing January 1, ~~2020~~2021 is as follows:


(Amounts in thousands)
2020	$	6,300
2021	4,763		$	4,377
2022	3,050		3,893
2023	2,964		3,807
2024	2,351		3,193
2025			2,277

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


11.	Debt

On February ~~4, 2019,~~28, 2020, we ~~completed a $95,700,000 refinancing of 435 Seventh Avenue, a 43,000 square foot Manhattan retail property. The interest-only~~increased our unsecured term loan carries a rate of LIBOR plus 1.30% (3.37% as of September 30, 2019) and matures in 2024. The recourse loan replaces the previous $95,700,000 loan that bore interest at LIBOR plus 2.25% and was scheduledbalance to ~~mature in August 2019.~~

On February 12, 2019, we completed a $580,000,000 refinancing of 100 West 33rd Street, a 1.1 million square foot Manhattan property comprised of 859,000 square feet of office space and the 256,000 square foot Manhattan Mall. The interest-only loan carries a rate of LIBOR plus 1.55% (3.62% as of September 30, 2019) and matures in April 2024, with 2 one-year extension options. The loan replaces the previous $580,000,000 loan that bore interest at LIBOR plus 1.65% and was scheduled to mature in July 2020.

On May 24, 2019, we extended our $375,000,000 mortgage loan on 888 Seventh Avenue, a 886,000 square foot Manhattan office building, from December 2020 to December 2025. The interest rate on the extended mortgage loan is LIBOR plus 1.70% (3.73% as of September 30, 2019).$800,000,000 (from $750,000,000) by exercising an accordion feature. Pursuant to an existing swap agreement, $750,000,000 of the loan bears interest at a fixed rate onof 3.87% through October 2023, and the ~~$375,000,000 mortgage loan has been swapped to 3.25% through December 2020.~~

~~On September 5, 2019, a consolidated joint venture, in which we have a 50% interest, completed a $75,000,000 refinancing~~balance of 606 Broadway, a 35,000 square foot office and retail building on the northeast corner of Broadway and Houston Street in Manhattan, of which $67,500,000 was outstanding as of September 30, 2019. The interest-only loan carries$50,000,000 floats at a rate of LIBOR plus ~~1.80% (3.85%~~1.00% (1.18% as of ~~September~~June 30, ~~2019) and matures in 2024. In connection therewith, the joint venture purchased an interest rate cap that caps LIBOR at a rate of 4.00%~~2020). The ~~loan replaces~~entire $800,000,000 will float thereafter for the ~~previous $65,000,000 construction loan. The construction loan bore interest at LIBOR plus 3.00% and was scheduled to mature in May 2021.~~

On September 27, 2019, we repaid the $575,000,000 mortgage loan on PENN2 with proceeds from our unsecured revolving credit facilities. The mortgage loan was scheduled to mature in December 2021, as fully extended. PENN2 is a 1,795,000 square foot office building located on the west side of 7th Avenue between 31st and 33rd Street currently under redevelopment.

~~Senior Unsecured Notes~~

On March 1, 2019, we called for redemption all of our $400,000,000 5.00% senior unsecured notes. The notes, which were scheduled to mature in January 2022, were redeemed on April 1, 2019 at a redemption price of 105.51%duration of the principal amount plus accrued interest. In connection therewith, we expensed $22,540,000 relating to debt prepayment costs which is included in "interest and debt expense" on our consolidated statements of income for the nine months ended September 30, 2019.

~~Unsecured Revolving Credit Facility~~

~~On March 26, 2019, we increased to $1.5 billion (from $1.25 billion) and extended to March 2024 (as fully extended) from~~loan through February ~~2022 one of our 2 unsecured revolving credit facilities. The interest rate on the extended facility was lowered from LIBOR plus 1.00% to LIBOR plus 0.90%. Thefacility fee remains unchanged at 20 basis points.~~2024.

The following is a summary of our debt:


(Amounts in thousands)	Weighted Average Interest Rate at September 30, 2019	Balance as of						Weighted Average Interest Rate at June 30, 2020	Balance as of
		September 30, 2019			December 31, 2018				June 30, 2020			December 31, 2019
Mortgages Payable:
Fixed rate	3.52%	$	4,605,475		$	5,003,465		3.52%	$	4,589,860		$	4,601,516
Variable rate	3.65%	1,068,196			3,212,382			1.76%	1,072,797			1,068,500
Total	3.55%	5,673,671			8,215,847			3.19%	5,662,657			5,670,016
Deferred financing costs, net and other		(32,776		)	(48,049		)		(24,305		)	(30,119		)
Total, net		$	5,640,895		$	8,167,798			$	5,638,352		$	5,639,897

Unsecured Debt:
Senior unsecured notes	3.50%	$	450,000		$	850,000		3.50%	$	450,000		$	450,000
Deferred financing costs, net and other		(4,332		)	(5,998		)		(3,721		)	(4,128		)
Senior unsecured notes, net		445,668			844,002				446,279			445,872

Unsecured term loan	3.87%	750,000			750,000			3.70%	800,000			750,000
Deferred financing costs, net and other		(4,415		)	(5,179		)		(3,764		)	(4,160		)
Unsecured term loan, net		745,585			744,821				796,236			745,840

Unsecured revolving credit facilities	2.96%	655,000			80,000			1.09%	1,075,000			575,000

Total, net		$	1,846,253		$	1,668,823			$	2,317,515		$	1,766,712

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


12.	Redeemable Noncontrolling ~~Interests/Redeemable Partnership Units~~ Interests

Redeemable Noncontrolling Partnership Units

Redeemable noncontrolling ~~interests on Vornado’s consolidated balance sheets and redeemable~~ partnership units ~~on the consolidated balance sheets of the Operating Partnership~~ are primarily comprised of Class A Operating Partnership units held by third parties and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership.

Below is a table summarizing the activity of redeemable noncontrolling partnership units.


(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Beginning balance	$	862,062		$	938,041		$	783,562		$	984,937		$	623,799		$	867,085		$	888,915		$	783,562
Net income	22,637			12,671			197,354			18,992
Other comprehensive (loss) income	(650		)	54			(3,732		)	913
Net (loss) income													(14,364		)	162,515			(13,974		)	174,717
Other comprehensive income (loss)													5			(1,806		)	(2,978		)	(3,082		)
Distributions	(8,852		)	(7,976		)	(25,788		)	(23,867		)	(9,100		)	(8,448		)	(17,998		)	(16,936		)
Redemption of Class A units for Vornado common shares, at redemption value	(1,999		)	(1,843		)	(8,128		)	(14,089		)	(824		)	(2,948		)	(2,464		)	(6,129		)
Adjustments to carry redeemable Class A units at redemption value	(24,228		)	(21,520		)	(123,635		)	(57,970		)	18,291			(165,225		)	(248,879		)	(99,407		)
Other, net	5,363			5,155			34,700			15,666			6,997			10,889			22,182			29,337
Ending balance	$	854,333		$	924,582		$	854,333		$	924,582		$	624,804		$	862,062		$	624,804		$	862,062

As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the aggregate redemption value of redeemable Class A units of the Operating Partnership, which are those units held by third parties, was ~~$849,798,000~~$620,269,000 and ~~$778,134,000,~~$884,380,000, respectively.

Redeemable noncontrolling ~~interests/redeemable~~ partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC Topic 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $50,058,000 and $50,561,000 as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018.~~2019, respectively. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


12.	Redeemable Noncontrolling Interests - continued

Redeemable Noncontrolling Interest in a Consolidated Subsidiary

The consolidated joint venture in which we own a 95% interest (the remaining 5% is owned by the Related Companies ("Related")) is developing Farley Office and Retail (the "Project"). During the second quarter of 2020, a historic tax credit investor ("Tax Credit Investor") funded $92,400,000 of capital contributions. The Tax Credit Investor is projected to have $142,000,000 of net capital contributed after making an estimated $185,000,000 in total contributions and receiving an estimated $43,000,000 in distributions from the joint venture, which includes amounts paid upon the potential exercise of their put option, as discussed below.

The arrangement includes a put option whereby the joint venture may be obligated to purchase the Tax Credit Investor’s ownership interest in the Project at a future date. The put price is calculated based on a pre-determined formula. As exercise of the put option is outside of the joint venture’s control, the Tax Credit Investor’s interest, together with the put option, have been recorded to “redeemable noncontrolling interest in a consolidated subsidiary” on our consolidated balance sheet as of June 30, 2020. The redeemable noncontrolling interest is recorded at the greater of the carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. There was no adjustment required for the three and six months ended June 30, 2020.

Below is a table summarizing the activity of redeemable noncontrolling interest in a consolidated subsidiary.



(Amounts in thousands)	For the Three and Six Months Ended June 30, 2020
Beginning balance	$	—
Contributions	92,400
Net income	136
Other, net	1,576
Ending balance	$	94,112

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


13.	Shareholders' Equity/Partners' Capital

Common Shares (Vornado Realty Trust)

On December 18, 2019, Vornado's Board of Trustees declared a special dividend of $1.95 per share, or $372,380,000 in the aggregate, which was paid on January 15, 2020 to common shareholders of record on December 30, 2019 (the "Record Date").

Class A Units (Vornado Realty L.P.)

On January 15, 2020, distributions of $1.95 per unit, or $398,292,000 in the aggregate, were paid to Class A unitholders of the Operating Partnership as of the Record Date, of which $372,380,000 was distributed to Vornado, in connection with the special dividend declared on December 18, 2019 by Vornado's Board of Trustees.

The following table sets forth the details of our dividends/distributions per common share/Class A unit and dividends/distributions per share/unit for each class of preferred shares/units of beneficial ~~interest for the three and nine months ended September 30, 2019 and 2018.~~interest.


(Per share/unit)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018		2020		2019		2020		2019
Shares/Units:
Common shares/Class A units held by Vornado: authorized 250,000,000 shares/units	$	0.66	$	0.63	$	1.98	$	1.89	$	0.66	$	0.66	$	1.32	$	1.32
Convertible Preferred⁽¹⁾:
6.5% Series A: authorized 83,977 shares/units⁽²⁾	0.8125		0.8125		2.4375		2.4375
6.5% Series A: authorized 13,694 and 83,977 shares/units⁽²⁾									0.8125		0.8125		1.6250		1.6250
Cumulative Redeemable Preferred⁽¹⁾:
5.70% Series K: authorized 12,000,000 shares/units⁽³⁾	0.3563		0.3563		1.0689		1.0689		0.3563		0.3563		0.7126		0.7126
5.40% Series L: authorized 12,000,000 shares/units⁽³⁾	0.3375		0.3375		1.0125		1.0125
5.25% Series M: authorized 12,780,000 shares/units⁽³⁾	0.3281		0.3281		0.9843		0.9843
5.40% Series L: authorized 13,800,000 shares/units⁽³⁾									0.3375		0.3375		0.6750		0.6750
5.25% Series M: authorized 13,800,000 shares/units⁽³⁾									0.3281		0.3281		0.6562		0.6562

____________________


(1)	Dividends on preferred shares and distributions on preferred units are cumulative and are payable quarterly in arrears.

(2)

Redeemable at the option of Vornado under certain circumstances, at a redemption price of 1.9531 common shares/Class A units per Series A ~~preferred share/unit~~Preferred Share/Unit plus accrued and unpaid dividends/distributions through the date of redemption, or convertible at any time at the option of the holder for 1.9531 common shares/ Class A units per Series A ~~preferred share/unit.~~Preferred Share/Unit.


(3)	Redeemable at Vornado's option at a redemption price of $25.00 per share/unit, plus accrued and unpaid dividends/distributions through the date of redemption.

~~Accumulated Other Comprehensive (Loss) Income~~

~~The following tables set forth the changes in accumulated other comprehensive (loss) income by component.~~

(Amounts in thousands) Total Marketable securities
Pro rata share of
nonconsolidated
subsidiaries' OCI

Interest
rate
swaps
Other
For the three months ended September 30, 2019:
Balance, June 30, 2019 $ (38,066 ) $ —
$ (18 ) $ (33,785 ) $ (4,263 )
Net current period other comprehensive (loss) income (9,293 ) —
11
(9,953 ) 649
Balance, September 30, 2019 $ (47,359 ) $ —
$ (7 ) $ (43,738 ) $ (3,614 )

For the three months ended September 30, 2018:
Balance, June 30, 2018 $ 33,351
$ —
$ 2,834
$ 39,559
$ (9,042 )
Net current period other comprehensive income (loss) 822
—
253
623
(54 )
Balance, September 30, 2018 $ 34,173
$ —
$ 3,087
$ 40,182
$ (9,096 )

For the nine months ended September 30, 2019:
Balance, December 31, 2018 $ 7,664
$ —
$ 3,253
$ 11,759
$ (7,348 )
Net current period other comprehensive (loss) income (52,712 ) —
(949 ) (55,497 ) 3,734
Amount reclassified from AOCI⁽¹⁾
(2,311 ) —
(2,311 ) —
—
Balance, September 30, 2019 $ (47,359 ) $ —
$ (7 ) $ (43,738 ) $ (3,614 )

For the nine months ended September 30, 2018:
Balance, December 31, 2017 $ 128,682
$ 109,554
$ 3,769
$ 23,542
$ (8,183 )
Cumulative effect of accounting change (108,374 ) (109,554 ) (1,671 ) 2,851
—
Net current period other comprehensive income (loss) 13,865
—
989
13,789
(913 )
Balance, September 30, 2018 $ 34,173
$ —
$ 3,087
$ 40,182
$ (9,096 )

~~____________________~~


~~(1)~~	~~Amount reclassified related to the conversion of our PREIT operating partnership units into common shares.~~

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


13.	Shareholders' Equity/Partners' Capital - continued

Accumulated Other Comprehensive Loss

The following tables set forth the changes in accumulated other comprehensive loss by component.



(Amounts in thousands)	Total			Accumulated other comprehensive income (loss) of nonconsolidated subsidiaries			Interest rate swaps			Other
For the three months ended June 30, 2020:
Balance as of March 31, 2020	$	(82,719	)	$	12		$	(81,603	)	$	(1,128	)
Other comprehensive income (loss)	73			—			78			(5		)
Balance as of June 30, 2020	$	(82,646	)	$	12		$	(81,525	)	$	(1,133	)

For the three months ended June 30, 2019:
Balance as of March 31, 2019	$	(11,385	)	$	(43	)	$	(5,270	)	$	(6,072	)
Other comprehensive (loss) income	(26,681		)	25			(28,515		)	1,809
Balance as of June 30, 2019	$	(38,066	)	$	(18	)	$	(33,785	)	$	(4,263	)

For the six months ended June 30, 2020:
Balance as of December 31, 2019	$	(40,233	)	$	4		$	(36,126	)	$	(4,111	)
Other comprehensive (loss) income	(42,413		)	8			(45,399		)	2,978
Balance as of June 30, 2020	$	(82,646	)	$	12		$	(81,525	)	$	(1,133	)

For the six months ended June 30, 2019:
Balance as of December 31, 2018	$	7,664		$	3,253		$	11,759		$	(7,348	)
Other comprehensive (loss) income	(43,419		)	(960		)	(45,544		)	3,085
Amount reclassified from accumulated other comprehensive loss	(2,311		)	(2,311		)	—			—
Balance as of June 30, 2019	$	(38,066	)	$	(18	)	$	(33,785	)	$	(4,263	)


14.	Variable Interest Entities ("VIEs")

Unconsolidated VIEs

As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we have several unconsolidated VIEs. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities does not give us power over decisions that significantly affect these entities’ economic performance. We account for our investment in these entities under the equity method (see Note 78 – Investments in Partially Owned Entities). As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the net carrying amount of our investments in these entities was ~~$216,276,000~~$217,103,000 and ~~$257,882,000, respectively. Our~~$217,451,000, respectively and our maximum exposure to loss in these entities is limited to the carrying amount of our investments.

Consolidated VIEs

Our most significant consolidated VIEs are the Operating Partnership (for Vornado), ~~the Fund and the Crowne Plaza Joint Venture,~~ the Farley joint venture and certain properties that have non-controlling interests. These entities are VIEs because the non-controlling interests do not have substantive kick-out or participating rights. We consolidate these entities because we control all significant business activities.

As of ~~September~~June 30, 2020, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, were $5,089,516,000 and $2,811,319,000, respectively. As of December 31, 2019, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, were ~~$4,898,971,000~~$4,923,656,000 and ~~$2,612,681,000,~~$2,646,623,000, respectively. ~~As of December 31, 2018, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, were $4,445,436,000 and $2,533,753,000, respectively.~~

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


15.	Fair Value Measurements

ASC 820 defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, our fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or disposition of these assets.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities that are measured at fair value on our consolidated balance sheets consist of (i) marketable securities, (ii) real estate fund investments, (iii) the assets in our deferred compensation plan (for which there is a corresponding liability on our consolidated balance sheets), (iv) loans receivable (for which we have elected the fair value option under ASC 825-10), (v) interest rate swaps and ~~(v)~~(vi) mandatorily redeemable instruments (Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units). The tables below aggregate the fair values of these financial assets and liabilities by their levels in the fair value ~~hierarchy as of September 30, 2019 and December 31, 2018, respectively.~~hierarchy.


(Amounts in thousands)	As of September 30, 2019								As of June 30, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Marketable securities	$	35,751	$	35,751	$	—	$	—
Real estate fund investments	306,596		—		—		306,596		$	17,453	$	—	$	—	$	17,453
Deferred compensation plan assets ($18,079 included in restricted cash and $81,599 in other assets)	99,678		72,501		—		27,177
Deferred compensation plan assets ($12,444 included in restricted cash and $81,637 in other assets)									94,081		57,909		—		36,172
Loans receivable ($41,340 included in investments in partially owned entities and $5,335 in other assets)									46,675		—		—		46,675
Interest rate swaps (included in other assets)	5,901		—		5,901		—		67		—		67		—
Total assets	$	447,926	$	108,252	$	5,901	$	333,773	$	158,276	$	57,909	$	67	$	100,300

Mandatorily redeemable instruments (included in other liabilities)	$	50,561	$	50,561	$	—	$	—	$	50,058	$	50,058	$	—	$	—
Interest rate swaps (included in other liabilities)	49,539		—		49,539		—		81,502		—		81,502		—
Total liabilities	$	100,100	$	50,561	$	49,539	$	—	$	131,560	$	50,058	$	81,502	$	—

(Amounts in thousands)	As of December 31, 2018								As of December 31, 2019
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Marketable securities	$	152,198	$	152,198	$	—	$	—	$	33,313	$	33,313	$	—	$	—
Real estate fund investments	318,758		—		—		318,758		222,649		—		—		222,649
Deferred compensation plan assets ($8,402 included in restricted cash and $88,122 in other assets)	96,524		58,716		—		37,808
Deferred compensation plan assets ($11,819 included in restricted cash and $91,954 in other assets)									103,773		71,338		—		32,435
Interest rate swaps (included in other assets)	27,033		—		27,033		—		4,327		—		4,327		—
Total assets	$	594,513	$	210,914	$	27,033	$	356,566	$	364,062	$	104,651	$	4,327	$	255,084

Mandatorily redeemable instruments (included in other liabilities)	$	50,561	$	50,561	$	—	$	—	$	50,561	$	50,561	$	—	$	—
Interest rate swaps (included in other liabilities)	15,236		—		15,236		—		40,354		—		40,354		—
Total liabilities	$	65,797	$	50,561	$	15,236	$	—	$	90,915	$	50,561	$	40,354	$	—

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


15.	Fair Value Measurements - continued

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

Real Estate Fund Investments

As of ~~September~~June 30, ~~2019,~~2020, we ~~have~~had 4 real estate fund investments with an aggregate fair value of ~~$306,596,000,~~$17,453,000, or ~~$22,968,000~~$324,111,000 below ~~our~~ cost. These investments are classified as Level 3.

Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and discount rates. These rates are based on the location, type and nature of each property, current and anticipated market conditions, industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable quantitative inputs in the table below were utilized in determining the fair value of these real estate fund ~~investments as of September 30, 2019 and December 31, 2018.~~investments.

Range

Weighted Average

(based on fair value of investments)

Range

Weighted Average

(based on fair value of investments)

Unobservable Quantitative Input

September 30, 2019

December 31, 2018

September 30, 2019

December 31, 2018

June 30, 2020

December 31, 2019

June 30, 2020

December 31, 2019

Discount rates

10.0% to 15.0%

13.5%

13.4%

6.8% to 15.0%

8.2% to 12.0%

13.4%

9.3%

Terminal capitalization rates

5.1% to 7.6%

5.4% to 7.7%

5.5%

5.7%

5.5% to 9.3%

4.6% to 8.2%

7.3%

5.3%

The inputs above ~~inputs~~ are subject to change based on changes in economic and market conditions and/or changes in use or timing of exit. Changes in discount rates and terminal capitalization rates result in increases or decreases in the fair values of these investments. The discount rates encompass, among other things, uncertainties in the valuation models with respect to terminal capitalization rates and the amount and timing of cash flows. Therefore, a change in the fair value of these investments resulting from a change in the terminal capitalization rate may be partially offset by a change in the discount rate. It is not possible for us to predict the effect of future economic or market conditions on our estimated fair values.

The table below summarizes the changes in the fair value of real estate fund investments that are classified as Level ~~3, for the three and nine months ended September 30, 2019 and 2018.~~3.


(Amounts in thousands)	For the Three Months Ended September 30,					For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019		2018			2019			2018			2020			2019			2020			2019
Beginning balance	$	306,596	$	373,039		$	318,758		$	354,804		$	45,129		$	322,858		$	222,649		$	318,758
Purchases/additional fundings	—		—			4,000			68,950			—			—			6,000			4,000
Net unrealized loss on held investments	—		(3,283		)	(16,162		)	(32,796		)	(27,676		)	(16,262		)	(211,196		)	(16,162		)
Dispositions	—		—			—			(20,291		)
Net realized loss on exited investments	—		—			—			(913		)
Other, net	—		11			—			13
Ending balance	$	306,596	$	369,767		$	306,596		$	369,767		$	17,453		$	306,596		$	17,453		$	306,596

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~15.~~	~~Fair Value Measurements - continued~~

~~Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued~~

Deferred Compensation Plan Assets

Deferred compensation plan assets that are classified as Level 3 consist of investments in limited partnerships and investment funds, which are managed by third parties. We receive quarterly financial reports from a third-party administrator, which are compiled from the quarterly reports provided to them from each limited partnership and investment fund. The quarterly reports provide net asset values on a fair value basis which are audited by independent public accounting firms on an annual basis. The period of time over which these underlying assets are expected to be liquidated is unknown. The third party administrator does not adjust these values in determining our share of the net assets and we do not adjust these values when reported in our consolidated financial statements.

The table below summarizes the changes in the fair value of deferred compensation plan assets that are classified as Level ~~3, for the three and nine months ended September 30, 2019 and 2018.~~3.

(Amounts in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Beginning balance $ 21,991
$ 39,870
$ 37,808
$ 40,128
Sales (652 ) (3,304 ) (20,807 ) (6,813 )
Purchases 5,437
1,576
8,314
3,209
Realized and unrealized gains 116
180
854
892
Other, net 285
466
1,008
1,372
Ending balance $ 27,177
$ 38,788
$ 27,177
$ 38,788

~~Fair Value Measurements on a Nonrecurring Basis~~

Assets measured at fair value on a nonrecurring basis on our consolidated balance sheets consist primarily of real estate assets required to be measured for impairment as of December 31, 2018. The fair value of real estate assets required to be measured for impairment were determined using comparable sales activity. There were 0 assets measured at fair value on a nonrecurring basis on our consolidated balance sheet as of September 30, 2019.


(Amounts in thousands)	As of December 31, 2018								For the Three Months Ended June 30,						For the Six Months Ended June 30,
	Total		Level 1		Level 2		Level 3		2020			2019			2020			2019
Real estate assets	$	14,971	$	—	$	—	$	14,971
Beginning balance									$	30,568		$	37,562		$	32,435		$	37,808
Purchases									5,656			1,969			6,949			2,877
Sales									(357		)	(18,041		)	(2,832		)	(20,155		)
Realized and unrealized gains (losses)									38			215			(1,191		)	738
Other, net									267			286			811			723
Ending balance									$	36,172		$	21,991		$	36,172		$	21,991

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


15.	Fair Value Measurements - continued

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

Loans Receivable

Loans receivable consist of loan investments in real estate related assets for which we have elected the fair value option under ASC 825-10 as of January 1, 2020. These investments are classified as Level 3.



	June 30, 2020
	Range	Weighted Average (based on fair value of investments)
Unobservable Quantitative Input
Discount rates	6.0% to 6.5%	6.1%
Terminal capitalization rates	5.0%	5.0%

The table below summarizes the changes in fair value of loans receivable that are classified as Level 3.



(Amounts in thousands)	For the Three Months Ended June 30, 2020			For the Six Months Ended June 30, 2020
Beginning balance	$	51,990		$	59,251
Credit losses	(6,108		)	(13,369		)
Interest accrual	793			793
Ending balance	$	46,675		$	46,675

Derivatives and Hedging

We utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. We recognize the fair values of all derivatives in "other assets" or "other liabilities" on our consolidated balance sheets. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows.

The following tables summarize our consolidated derivative instruments, all of which hedge variable rate debt, as of June 30, 2020 and December 31, 2019.



(Amounts in thousands)	As of June 30, 2020
						Variable Rate
Hedged Item (Interest rate swaps)	Fair Value		Notional Amount			Spread over LIBOR	Interest Rate	Swapped Rate	Expiration Date
Included in other assets:
Other	$	67	$	175,000

Included in other liabilities:
Unsecured term loan	$	68,709	$	750,000	⁽¹⁾	L+100	1.18%	3.87%	10/23
33-00 Northern Boulevard mortgage loan	9,592		100,000			L+180	1.99%	4.14%	1/25
888 Seventh Avenue mortgage loan	2,355		375,000			L+170	1.88%	3.25%	12/20
770 Broadway mortgage loan	846		700,000			L+175	1.93%	2.56%	9/20
	$	81,502	$	1,925,000

____________________


(1)	Remaining $50,000 balance of our unsecured term loan bears interest at a floating rate of LIBOR plus 1.00%.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

15. Fair Value Measurements - continued

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

Derivatives and Hedging - continued



(Amounts in thousands)	As of December 31, 2019
					Variable Rate
Hedged Item (Interest rate swaps)	Fair Value		Notional Amount		Spread over LIBOR	Interest Rate	Swapped Rate	Expiration Date
Included in other assets:
770 Broadway mortgage loan	$	4,045	$	700,000	L+175	3.46%	2.56%	9/20
888 Seventh Avenue mortgage loan	218		375,000		L+170	3.44%	3.25%	12/20
Other	64		175,000
	$	4,327	$	1,250,000

Included in other liabilities:
Unsecured term loan	$	36,809	$	750,000	L+100	2.80%	3.87%	10/23
33-00 Northern Boulevard mortgage loan	3,545		100,000		L+180	3.52%	4.14%	1/25
	$	40,354	$	850,000

Fair Value Measurements on a Nonrecurring Basis

As of June 30, 2020, assets measured at fair value on a nonrecurring basis (for impairment purposes) on our consolidated balance sheet consist of our investment in Fifth Avenue and Times Square JV. There were 0 assets measured at fair value on a nonrecurring basis on our consolidated balance sheet as of December 31, 2019.

Our estimate of the fair value of our investment in Fifth Avenue and Times Square JV was measured using a discounted cash flow analysis based upon market conditions and expectations of growth and utilized unobservable quantitative inputs including a capitalization rate of 4.5% and discount rate of 6.0%, resulting in a write-down during the three months ended June 30, 2020 of $306,326,000 before noncontrolling interests of $467,000 (see Note 8 - Investments in Partially Owned Entities).



(Amounts in thousands)	As of June 30, 2020
	Total		Level 1		Level 2		Level 3
Investment in Fifth Avenue and Times Square JV	$	2,955,957	$	—	$	—	$	2,955,957

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents (primarily money market funds, which invest in obligations of the United States government), and our secured and unsecured debt. Estimates of the fair value of these instruments are determined by the standard practice of modeling the contractual cash flows required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate, which is provided by a third-party specialist. For floating rate debt, we use forward rates derived from observable market yield curves to project the expected cash flows we would be required to make under the instrument. The fair ~~values~~value of cash equivalents and borrowings under our unsecured revolving credit facilities and unsecured term loan are classified as Level 1. The fair ~~values~~value of our secured debt and unsecured debt are classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial ~~instruments as of September 30, 2019 and December 31, 2018.~~instruments.


(Amounts in thousands)	(Amounts in thousands)	As of September 30, 2019					As of December 31, 2018					(Amounts in thousands)	As of June 30, 2020					As of December 31, 2019
		Carrying Amount			Fair Value		Carrying Amount			Fair Value			Carrying Amount			Fair Value		Carrying Amount			Fair Value
Cash equivalents	Cash equivalents	$	979,060		$	979,000	$	261,981		$	262,000	Cash equivalents	$	1,494,756		$	1,495,000	$	1,276,815		$	1,277,000
Debt:	Debt:											Debt:
	Mortgages payable	$	5,673,671		$	5,725,000	$	8,215,847		$	8,179,000	Mortgages payable	$	5,662,657		$	5,656,000	$	5,670,016		$	5,714,000
	Senior unsecured notes	450,000			465,000		850,000			847,000		Senior unsecured notes	450,000			450,000		450,000			468,000
	Unsecured term loan	750,000			750,000		750,000			750,000		Unsecured term loan	800,000			800,000		750,000			750,000
	Unsecured revolving credit facilities	655,000			655,000		80,000			80,000		Unsecured revolving credit facilities	1,075,000			1,075,000		575,000			575,000
	Total	$	7,528,671	⁽¹⁾	$	7,595,000	$	9,895,847	⁽¹⁾	$	9,856,000	Total	$	7,987,657	⁽¹⁾	$	7,981,000	$	7,445,016	⁽¹⁾	$	7,507,000

____________________


(1)	Excludes ~~$41,523~~$31,790 and ~~$59,226~~$38,407 of deferred financing costs, net and other as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


16.	Stock-based Compensation

On January 14, 2019, the Compensation Committee of the Board (the “Committee”) approved the issuance of performance conditioned appreciation-only long-term incentive plan units ("Performance Conditioned AO LTIP Units") pursuant to the 2010 Omnibus Share Plan to our named executive officers ("NEOs") in our 2019 proxy statement. Performance Conditioned AO LTIP Units are AO LTIP Units that require the achievement of certain performance conditions by a specified date or they are forfeited. The performance-based condition is met if Vornado common shares trade at or above 110% of the $64.48 grant price per share for any 20 consecutive days on or before the fourth anniversary following the date of grant. If the performance conditions are not met, the awards are forfeited. If the performance conditions are met, once vested, the awards may be converted into Class A Operating Partnership units in the same manner as AO LTIP Units until ten years from the date of grant. The fair value of the Performance Conditioned AO LTIP Units on the date of grant was $8,983,000, of which $7,481,000 was immediately expensed due to the acceleration of vesting for employees who are retirement eligible. The remaining $1,502,000 is being amortized into expense over a four-year period from the date of grant using a graded vesting attribution model.

On May 16, 2019, our shareholders approved the 2019 Omnibus Share Plan (the “Plan"), which replaces the 2010 Omnibus Share Plan. Under the Plan, the Committee may grant incentive and non-qualified Vornado stock options, restricted stock, restricted Operating Partnership units ("OP units"), out-performance plan awards ("OPPs"), appreciation-only long-term incentive plan units (“AO LTIP Units”) and Performance Conditioned AO LTIP Units to certain of our employees and officers. Awards may be granted up to a maximum 5,500,000 shares, if all awards granted are Full Value awards, as defined in the Plan, and up to 11,000,000 shares, if all of the awards granted are Not Full Value Awards, as defined in the Plan. Full Value Awards are awards of securities, such as restricted shares, that, if all vesting requirements are met, do not require the payment of an exercise price or strike price to acquire the securities. Not Full Value Awards are awards of securities, such as options, that do require the payment of an exercise price or strike price.

We account for all equity-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. Stock-based compensation expense, a component of "general and administrative" expense on our consolidated statements of income, was ~~$5,871,000~~$7,703,000 and ~~$5,545,000~~$10,520,000 for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$48,045,000~~$33,468,000 and~~$26,190,000~~ $42,174,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

~~Stock-based~~2020 Outperformance Plan ("2020 OPP")

On March 30, 2020, the Compensation Committee of Vornado's Board of Trustees (the "Committee") approved the 2020 OPP, a multi-year, $35,000,000 performance-based equity compensation ~~expense for~~plan of which $32,930,000 was granted to senior executives. The fair value of the ~~three months ended March 31, 2019 included $16,211,000 from the accelerated vesting~~2020 OPP granted was $11,686,000, of ~~previously issued OP units and Vornado restricted stock~~which $7,583,000 was immediately expensed due to the ~~removal~~acceleration of ~~the time-based~~ vesting ~~requirement~~ for ~~participants~~employees who ~~have~~are retirement eligible (have reached age 65 or age 60 with at least 20 years of ~~age.~~service). The ~~right to sell such awards remains subject to original terms of grant. The increase in~~remaining $4,103,000 is being amortized into expense in the first quarter of 2019 was partially offset by lower stock-based compensation expense of $2,578,000 in each of the second and third quarter of 2019; and will be completely offset by lower stock-based compensation expense of $2,578,000 in the fourth quarter of 2019 and $8,477,000 thereafter.

Stock-based compensation expense also includes $1,413,000 and $6,729,000 for the three and nine months ended September 30, 2019, respectively, for OP units granted outside of the Plan to an executive officer in connection with his employment in reliance on the employment inducement exception to shareholder approval provided under the New York Stock Exchange Listing Rule 303A.08; and $988,000 and $1,317,000 for the three and nine months ended September 30, 2019, respectively, for OP units granted under the Plan to certain executive officers asover a ~~result of promotions. The award granted outside of the Plan has a grant date fair value of $25,500,000 and vests 20% on the grant date, 40% on the three-year anniversary of~~five-year period from the date of grant using a graded vesting attribution model.

Under the 2020 OPP, participants have the opportunity to earn compensation payable in the form of equity awards if Vornado common shares outperform a predetermined total shareholder return (“TSR”) and/or outperform the market with respect to relative total TSR during the three-year performance period (the “Performance Period”) from March 30, 2020 to March 30, 2023 (the “Measurement Date”). Specifically, awards under the 2020 OPP may potentially be earned if Vornado (i) achieves a TSR above a benchmark weighted index (the “Index”) comprised 80% of the SNL US Office REIT Index and ~~40%~~20% of the SNL US Retail Index over the Performance Period (the “Relative Component”), and/or (ii) achieves a TSR greater than 21% over the Performance Period (the “Absolute Component”). The value of awards under the Relative Component and Absolute Component will be calculated separately and will each be subject to an aggregate $35,000,000 maximum award cap for all participants. The 2 components will be added together to determine the aggregate award size, which shall also be subject to the aggregate $35,000,000 maximum award cap for all participants. In the event awards are earned under the Absolute Component, but Vornado underperforms the Index by more than 200 basis points per annum over the Performance Period (600 basis points over the three years), the amount earned under the Absolute Component will be reduced based on the ~~four-year~~degree by which the Index exceeds Vornado’s TSR with the maximum payout being 50% under the Absolute Component. In the event awards are earned under the Relative Component, but Vornado fails to achieve a TSR of at least 2% per annum, awards earned under the Relative Component will be reduced on a ratable sliding scale based on Vornado’s absolute TSR performance, with awards earned under the Relative Component being reduced by a maximum of 50% in the event Vornado’s TSR during the Measurement Period is 0% or negative. If the designated performance objectives are achieved, awards earned under the 2020 OPP will vest ratably on the Measurement Date and the first and second anniversary of the ~~date~~Measurement Date. In addition, all of ~~grant. The~~Vornado’s Named Executive Officers (as defined in Vornado’s Proxy Statement filed on Schedule 14A with the Securities and Exchange Commission on April 3, 2020) are required to hold any earned and vested awards for one year following each such vesting date. Dividends on awards granted under the ~~Plan have an aggregate grant date fair value~~2020 OPP accrue during the Performance Period and are paid to participants if awards are ultimately earned based on the achievement of ~~$15,000,000 and cliff vest after four years. Compensation expense related to OP unit grants are recognized ratably over~~ the vesting period. Additional non-cash expense associated with these awards will be $2,401,000 in the fourth quarter of 2019, $9,603,000 in each of 2020 and 2021, $7,718,000 in 2022 and $2,655,000 in 2023.designated performance objectives.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


17.	~~Transaction~~ Lease Liability Extinguishment Gain (Transaction Related Costs and Impairment ~~Losses and Other~~Losses)

The following table sets forth the details of ~~transaction~~lease liability extinguishment gain (transaction related costs and impairment ~~losses and other:~~losses):



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
608 Fifth Avenue non-cash lease liability extinguishment gain (impairment loss) (see below for details)	$	70,260		$	(93,860	)	$	70,260		$	(93,860	)
Transaction related costs	(1,039		)	(230		)	(1,110		)	(379		)
Other non-cash impairment losses	—			(7,500		)	—			(7,500		)
	$	69,221		$	(101,590	)	$	69,150		$	(101,739	)

(Amounts in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Transaction related costs $ 1,576
$ 2,510
$ 1,955
$ 3,580
Non-cash impairment losses, substantially 608 Fifth Avenue (see below) —
—
101,360
—
Transfer tax⁽¹⁾
—
—
—
13,103
$ 1,576
$ 2,510
$ 103,315
$ 16,683

~~____________________~~


~~(1)~~	Disputed additional Transfer Tax recorded in the first quarter 2018 related to the December 2012 acquisition of Independence Plaza. The joint venture, in which we have a 50.1% economic interest, that owns Independence Plaza recorded this expense based on the precedent established by the Tax Tribunal's decision regarding One Park Avenue (see Note 5 - ~~Real Estate Fund Investments).~~

608 Fifth Avenue

During the second quarter of 2019, Arcadia Group US Ltd ("Arcadia Group"), the operator of Topshop, our retail tenant at 608 Fifth Avenue, filed for Chapter 15 bankruptcy protection in the United States. On June 28, 2019, Arcadia Group closed all of its stores in the United States. 608 Fifth Avenue iswas subject to a land and building lease which ~~expires~~was set to expire in 2033. ~~The non-recourse lease calls for fixed lease payments through~~During the ~~term, plus payments for real estate taxes, insurance and operating expenses. Based on current market rental rates, the cash flows~~second quarter of ~~the property would not be sufficient to cover the operating expenses, including the fixed lease payments. Consequently,~~2019, we concluded that the carrying amount of the property ~~which includes our right-of-use asset,~~ was not recoverable ~~resulting in a write-down to zero. Our estimate of fair value of the property was derived from a discounted cash flow model based upon market conditions~~ and ~~expectations of growth. We~~ recognized a $93,860,000 non-cash impairment loss on our consolidated statements of income, ~~in the second quarter of 2019,~~ of which $75,220,000 resulted from the impairment of our right-of-use asset. As

On May 20, 2020, we entered into an agreement with the land and building lessor at 608 Fifth Avenue to surrender the property. Per the terms of ~~September 30, 2019, a $72,088,000~~the agreement, we were released from our obligations under the lease and assigned all of our right, title and interest in the tenant leases of 608 Fifth Avenue to the land and building lessor. In connection therewith, we removed the lease liability ~~remains,~~from our consolidated balance sheets which ~~will be recognized as~~resulted in a $70,260,000 gain recorded on our consolidated statements of income ~~when~~during the ~~non-recourse lease is terminated. In August 2019, we delivered the required nine month notice to the ground lessor that we will terminate the lease in May~~second quarter of 2020.


18.	Interest and Other Investment (Loss) Income, Net

The following table sets forth the details of interest and other investment (loss) income, net:

(Amounts in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
(Decrease) increase in fair value of marketable securities:
PREIT (see page 29 for details) $ (4,875 ) $ —
$ (19,211 ) $ —
Lexington(see page 29 for details)
—
(7,942 ) 16,068
(24,934 )
Other 7
243
48
133
(4,868 ) (7,699 ) (3,095 ) (24,801 )
Interest on cash and cash equivalents and restricted cash 4,060
4,306
8,753
12,370
Interest on loans receivable⁽¹⁾
1,604
2,004
4,845
8,952
Dividends on marketable securities 1,312
3,354
2,625
10,060
Other, net 937
928
2,802
2,820
$ 3,045
$ 2,893
$ 15,930
$ 9,401



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Increase (decrease) in fair value of marketable securities:
PREIT⁽¹⁾	$	—		$	1,313		$	(4,938	)	$	(14,336	)
Lexington Realty Trust⁽²⁾	—			—			—			16,068
Other	—			(1		)	—			41
	—			1,312			(4,938		)	1,773
Credit losses on loans receivable⁽³⁾	(6,108		)	—			(13,369		)	—
Interest on cash and cash equivalents and restricted cash	1,498			2,626			5,464			4,693
Interest on loans receivable	810			1,635			2,236			3,241
Dividends on marketable securities	—			1,313			—			1,313
Other, net	907			954			1,810			1,865
	$	(2,893	)	$	7,840		$	(8,797	)	$	12,885

____________________


(1)	The three and nine months ended September 30, 2018 include $1,250 and $6,707, respectively, of profit participation in connection with an investment in a mezzanine loan which was previously repaid to us.Sold on January 23, 2020 (see page 27 for details).


(2)	Sold on March 1, 2019.


(3)	See Note 4 - Recently Issued Accounting Literatureand Note 15 - Fair Value Measurementsfor details.


19.	Interest and Debt Expense

The following table sets forth the details of interest and debt expense:


(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Interest expense⁽¹⁾	$	72,345		$	98,841		$	266,597		$	290,006		$	63,545		$	76,605		$	130,180		$	194,252
Capitalized interest and debt expense	(16,047		)	(18,238		)	(59,184		)	(49,718		)	(9,446		)	(19,812		)	(21,501		)	(43,137		)
Amortization of deferred financing costs	5,150			8,348			19,527			24,486			4,306			6,236			8,568			14,377
	$	61,448		$	88,951		$	226,940		$	264,774		$	58,405		$	63,029		$	117,247		$	165,492

____________________


(1)	The ~~nine~~six months ended ~~September~~June 30, 2019 includes $22,540 of debt prepayment costs in connection with the redemption of $400,000 5.00% senior unsecured notes which were scheduled to mature in January 2022.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


20.	(Loss) Income Per Share/(Loss) Income Per Class A Unit

~~Vornado Realty Trust~~

The following table presents the calculations of (i) basic income per common share which includes the weighted average number of common shares outstanding without regard to dilutive potential common shares and (ii) diluted income per common share which includes the weighted average common shares and dilutive share equivalents. Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include restricted stock awards, based on the two-class method. Other potential dilutive share equivalents such as our employee stock options, OP Units, OPPs, AO LTIP Units and Performance Conditioned AO LTIP Units are included in the computation of diluted Earnings Per Share ("EPS") using the treasury stock method, while the dilutive effect of our Series A convertible preferred shares is reflected in diluted EPS by application of the if-converted method.

(Amounts in thousands, except per share amounts) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Numerator:
Income from continuing operations, net of income attributable to noncontrolling interests $ 335,445
$ 203,122
$ 2,942,267
$ 336,570
(Loss) income from discontinued operations, net of income attributable to noncontrolling interests (7 ) 57
(80 ) 357
Net income attributable to Vornado 335,438
203,179
2,942,187
336,927
Preferred share dividends (12,532 ) (12,534 ) (37,598 ) (38,103 )
Preferred share issuance costs —
—
—
(14,486 )
Net income attributable to common shareholders 322,906
190,645
2,904,589
284,338
Earnings allocated to unvested participating securities (33 ) (17 ) (291 ) (33 )
Numerator for basic income per share 322,873
190,628
2,904,298
284,305
Impact of assumed conversions:
Convertible preferred share dividends 14
15
43
47
Earnings allocated to Out-Performance Plan units —
—
9
127
Numerator for diluted income per share $ 322,887
$ 190,643
$ 2,904,350
$ 284,479

Denominator:
Denominator for basic income per share – weighted average shares 190,814
190,245
190,762
190,176
Effect of dilutive securities⁽¹⁾:

Employee stock options and restricted stock awards 176
1,045
227
972
Convertible preferred shares 34
37
35
38
Out-Performance Plan units —
—
3
106
Denominator for diluted income per share – weighted average shares and assumed conversions 191,024
191,327
191,027
191,292

INCOME PER COMMON SHARE – BASIC:
Income from continuing operations, net $ 1.69
$ 1.00
$ 15.22
$ 1.50
Net income per common share $ 1.69
$ 1.00
$ 15.22
$ 1.50

INCOME PER COMMON SHARE – DILUTED:
Income from continuing operations, net $ 1.69
$ 1.00
$ 15.20
$ 1.49
Net income per common share $ 1.69
$ 1.00
$ 15.20
$ 1.49

~~____________________~~


~~(1)~~	The effect of dilutive securities excludes an aggregate of 13,431 and 12,372 weighted average common share equivalents, for the three months ended September 30, 2019 and 2018, respectively, and 13,067 and 12,220 weighted average common share equivalents for the nine months ended September 30, 2019 and 2018, respectively, as their effect was anti-dilutive.

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~20.~~	~~Income Per Share/Income Per Class A Unit - continued~~

~~Vornado Realty L.P.~~

The following table presents the calculations of (i) basic income per Class A unit which includes the weighted average number of Class A units outstanding without regard to dilutive potential Class A units and (ii) diluted income per Class A unit which includes the weighted average Class A unit and dilutive Class A unit equivalents. Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include Vornado restricted stock awards, OP Units and OPPs, based on the two-class method. Other potential dilutive share equivalents such as Vornado stock options, AO LTIP Units and Performance Conditioned AO LTIP Units are included in the computation of diluted income per share using the treasury stock method, while the dilutive effect of our Series A convertible preferred shares is reflected in diluted EPS by application of the if-converted method.

(Amounts in thousands, except per unit amounts) For the Three Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 2019 2018
Numerator:
Income from continuing operations, net of income attributable to noncontrolling interests in consolidated subsidiaries $ 358,083
$ 215,789
$ 3,139,626
$ 355,538
(Loss) income from discontinued operations (8 ) 61
(85 ) 381
Net income attributable to Vornado Realty L.P. 358,075
215,850
3,139,541
355,919
Preferred unit distributions (12,574 ) (12,582 ) (37,722 ) (38,248 )
Preferred unit issuance costs —
—
—
(14,486 )
Net income attributable to Class A unitholders 345,501
203,268
3,101,819
303,185
Earnings allocated to unvested participating securities (2,449 ) (997 ) (14,807 ) (2,259 )
Numerator for basic income per Class A unit 343,052
202,271
3,087,012
300,926
Impact of assumed conversions:
Convertible preferred unit distributions 14
15
43
47
Numerator for diluted income per Class A unit $ 343,066
$ 202,286
$ 3,087,055
$ 300,973

Denominator:
Denominator for basic income per Class A unit – weighted average units 203,009
202,103
202,903
202,033
Effect of dilutive securities⁽¹⁾:

Vornado stock options, Vornado restricted stock awards, OP Units and OPPs 507
1,454
478
1,329
Convertible preferred units 34
37
35
38
Denominator for diluted income per Class A unit – weighted average units and assumed conversions 203,550
203,594
203,416
203,400

INCOME PER CLASS A UNIT – BASIC:
Income from continuing operations, net $ 1.69
$ 1.00
$ 15.21
$ 1.49
Net income per Class A unit $ 1.69
$ 1.00
$ 15.21
$ 1.49

INCOME PER CLASS A UNIT – DILUTED:
Income from continuing operations, net $ 1.69
$ 0.99
$ 15.18
$ 1.48
Net income per Class A unit $ 1.69
$ 0.99
$ 15.18
$ 1.48

~~____________________~~


~~(1)~~	The effect of dilutive securities excludes an aggregate of 905 and 105 weighted average Class A unit equivalents, for the three months ended September 30, 2019 and 2018 respectively, and 678 and 112 weighted average Class A unit equivalents for the nine months ended September 30, 2019 and 2018, respectively, as their effect was anti-dilutive.

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~21.~~	~~Leases~~

~~As lessor~~

We lease space to tenants under operating leases. Most of the leases provide for the payment of fixed base rent payable monthly in advance. Office building leases generally require tenants to reimburse us for operating costs and real estate taxes above their base year costs. Certain leases provide for pass-through to tenants for their share of real estate taxes, insurance and common area maintenance. Certain leases also require additional variable rent payments based on a percentage of the tenants’ sales. None of our tenants accounted for more than 10% of total revenues for the three and nine months ended September 30, 2019 and 2018. We have elected to account for lease revenues (including base and variable rent) and the reimbursement of common area maintenance expenses as a single lease component recorded as "rental revenues" on our consolidated statements of income. As of September 30, 2019, under ASC 842, future undiscounted cash flows under non-cancelable operating leases were as follows:

(Amounts in thousands) As of September 30, 2019
For the remainder of 2019 $ 327,246
For the year ended December 31,
2020 1,263,818
2021 1,241,049
2022 1,174,436
2023 1,060,495
2024 885,891
Thereafter 4,336,649

~~As of December 31, 2018, under ASC 840, future undiscounted cash flows under non-cancelable operating leases were as follows:~~

(Amounts in thousands) As of December 31, 2018
For the year ended December 31,
2019 $ 1,547,162
2020 1,510,097
2021 1,465,024
2022 1,407,615
2023 1,269,141
Thereafter 5,832,467

~~The components of lease revenues for the three and nine months ended September 30, 2019 were as follows:~~

(Amounts in thousands) For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019
Fixed lease revenues $ 351,426
$ 1,159,037
Variable lease revenues 62,917
151,844
Lease revenues $ 414,343
$ 1,310,881

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~21. Leases - continued~~

~~As lessee~~

We have a number of ground leases which are classified as operating leases. On January 1, 2019, we recorded $526,866,000 of ROU assets and lease liabilities. Our ROU assets were reduced by $37,269,000 of accrued rent expense reclassified from “other liabilities” and $4,267,000 of acquired above-market lease liabilities, net, reclassified from “deferred revenue” and increased by $23,665,000 of acquired below-market lease assets, net, reclassified from “identified intangible assets, net of accumulated amortization” and $1,584,000 of prepaid lease payments reclassified from "other assets." As of September 30, 2019, our ROU assets and lease liabilities were $370,604,000 and $490,978,000, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on our incremental borrowing rate ("IBR"). We consider the general economic environment and our credit rating and factor in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As we did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of our ground leases offer renewal options which we assess against relevant economic factors to determine whether we are reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that we are reasonably certain will be exercised are included in the measurement of the corresponding lease liability and ROU asset.

~~The following table sets forth information related to the measurement of our lease liabilities as of September 30, 2019:~~

(Amounts in thousands) As of September 30, 2019
Weighted average remaining lease term (in years) 40.89
Weighted average discount rate 4.85 %
Cash paid for operating leases $ 20,289

We recognize rent expense as a component of "operating" expenses on our consolidated statements of income. Rent expense is comprised of fixed and variable lease payments. Variable lease payments include percentage rent and rent resets based on an index or rate. The following table sets forth the details of rent expense for the three and nine months ended September 30, 2019:

(Amounts in thousands) For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019
Fixed rent expense $ 7,237
$ 26,552
Variable rent expense 472
1,626
Rent expense $ 7,709
$ 28,178

~~As of September 30, 2019, future lease payments under operating ground leases were as follows:~~

(Amounts in thousands) As of September 30, 2019
For the remainder of 2019 $ 6,431
For the year ended December 31,
2020 28,739
2021 29,133
2022 30,033
2023 30,448
2024 30,882
Thereafter 1,046,349
Total undiscounted cash flows 1,202,015
Present value discount (711,037 )
Lease liabilities $ 490,978

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~21. Leases - continued~~

~~As lessee - continued~~

~~As of December 31, 2018, under ASC 840, future lease payments under operating ground leases were as follows:~~

(Amounts in thousands) As of December 31, 2018
For the year ended December 31,
2019 $ 46,147
2020 45,258
2021 42,600
2022 43,840
2023 44,747
Thereafter 1,612,627

Certain of our ground leases are subject to fair market rent resets based on a percentage of the appraised value of the underlying assets at specified future dates. Fair market rent resets do not give rise to remeasurement of the related right-of-use assets and lease liabilities. Fair market rent resets, which may be material, will be recognized in the periods in which they are incurred.

~~Farley Office and Retail Building~~

The future lease payments detailed previously exclude the ground and building lease at the Farley Office and Retail Building (the "Project"). We have a 95.0% ownership interest in a joint venture with the Related Companies ("Related") which was designated by Empire State Development ("ESD"), an entity of New York State, to develop the Project. The Project will include a new Moynihan Train Hall and approximately 845,000 rentable square feet of commercial space, comprised of approximately 725,000 square feet of office space and approximately 120,000 square feet of retail space. The joint venture has a 99-year triple-net lease with ESD for the commercial space at the Project. The lease has not yet commenced since construction of the Project is ongoing.

The joint venture has entered into a development agreement with ESD to build the adjacent Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture's obligations. The joint venture has entered into a design-build contract with Skanska Moynihan Train Hall Builders pursuant to which they will build the Moynihan Train Hall, thereby fulfilling all of the joint venture's obligations to ESD. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a full guaranty from Skanska AB. As a result of our involvement in the construction of the asset, we have been deemed the accounting owner of the property in accordance with ASC 842-40-55. Future undiscounted cash flows for the lease, including fixed payments in lieu of real estate taxes, as of September 30, 2019 were as follows:

(Amounts in thousands) As of September 30, 2019
For the remainder of 2019 $ —
For the year ended December 31,
2020 10,402
2021 7,229
2022 7,444
2023 7,809
2024 8,330
Thereafter 519,048

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~22.~~	~~Commitments and Contingencies~~

~~Insurance~~

For our properties except the Farley Office and Retail Building, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, and all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake. Our California properties have earthquake insurance with coverage of $350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for certified terrorism acts with limits of $4.0 billion per occurrence and in the aggregate (as limited below), $760,000,000 for non-certified acts of terrorism, and $2.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Program Reauthorization Act of 2015, which expires in December 2020.

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third-party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,456,071 and 19% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.

For the Farley Office and Retail Building, we maintain general liability insurance with limits of $100,000,000 per occurrence, and builder’s risk insurance including coverage for existing property and development activities of $2.8 billion per occurrence and in the aggregate. We maintain coverage for certified and non-certified terrorism acts with limits of $1.0 billion per occurrence and in the aggregate.

We continue to monitor the state of the insurance market and the scope and cost of coverage for acts of terrorism. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for deductibles and losses in excess of our insurance coverage, which could be material.

Our debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit agreements, contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at a reasonable cost in the future. Further, if lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties and expand our portfolio.

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~22.~~	~~Commitments and Contingencies - continued~~

~~Other Commitments and Contingencies~~

We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not currently expected to have a material adverse effect on our financial position, results of operations or cash flows.

Each of our properties has been subjected to varying degrees of environmental assessment at various times. The environmental assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us.

Our mortgage loans are non-recourse to us, except for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street and 435 Seventh Avenue, which we guaranteed and therefore are part of our tax basis. In certain cases, we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. As of September 30, 2019, the aggregate dollar amount of these guarantees and master leases is approximately $978,000,000.

As of September 30, 2019, $15,880,000 of letters of credit was outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest rate coverage and maximum debt to market capitalization ratios and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

The joint venture in which we own a 95.0% ownership interest was designated by ESD, an entity of New York State, to develop the Farley Office and Retail Building. The joint venture entered into a development agreement with ESD and a design-build contract with Skanska Moynihan Train Hall Builders. Under the development agreement with ESD, the joint venture is obligated to build the Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture’s obligations. Under the design-build agreement, Skanska Moynihan Train Hall Builders is obligated to fulfill all of the joint venture’s obligations. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a full guaranty from Skanska AB.

~~As of September 30, 2019, we expect to fund additional capital to certain of our partially owned entities aggregating approximately $15,400,000.~~

~~As of September 30, 2019, we have construction commitments aggregating approximately $746,000,000.~~

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~23.~~	~~Segment Information~~

~~We operate in the following reportable segments, New York and Other, which is based on how we manage our business.~~

Net Operating Income (“NOI”) represents total revenues less operating expenses. We consider NOI to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered a substitute for net income. NOI may not be comparable to similarly titled measures employed by other companies.

~~Below is a summary of NOI at share and NOI at share - cash basisby segment for the three and nine months ended September 30, 2019 and 2018.~~

(Amounts in thousands) For the Three Months Ended September 30, 2019
Total New York Other
Total revenues $ 465,961
$ 380,568
$ 85,393
Operating expenses 226,359
188,159
38,200
NOI - consolidated 239,602
192,409
47,193
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (18,096 ) (9,574 ) (8,522 )
Add: NOI from partially owned entities 86,024
82,649
3,375
NOI at share 307,530
265,484
42,046
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other (4,037 ) (5,560 ) 1,523
NOI at share - cash basis $ 303,493
$ 259,924
$ 43,569

(Amounts in thousands) For the Three Months Ended September 30, 2018
Total New York Other
Total revenues $ 542,048
$ 462,446
$ 79,602
Operating expenses 235,575
200,949
34,626
NOI - consolidated 306,473
261,497
44,976
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (16,943 ) (11,348 ) (5,595 )
Add: NOI from partially owned entities 60,094
47,179
12,915
NOI at share 349,624
297,328
52,296
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other (8,743 ) (9,125 ) 382
NOI at share - cash basis $ 340,881
$ 288,203
$ 52,678

(Amounts in thousands) For the Nine Months Ended September 30, 2019
Total New York Other
Total revenues $ 1,463,732
$ 1,200,234
$ 263,498
Operating expenses 694,006
574,073
119,933
NOI - consolidated 769,726
626,161
143,565
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (51,915 ) (31,011 ) (20,904 )
Add: NOI from partially owned entities 236,400
211,394
25,006
NOI at share 954,211
806,544
147,667
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other 530
(3,741 ) 4,271
NOI at share - cash basis $ 954,741
$ 802,803
$ 151,938

(Amounts in thousands) For the Nine Months Ended September 30, 2018
Total New York Other
Total revenues $ 1,620,303
$ 1,369,482
$ 250,821
Operating expenses 709,158
599,768
109,390
NOI - consolidated 911,145
769,714
141,431
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (51,415 ) (34,653 ) (16,762 )
Add: NOI from partially owned entities 193,359
146,730
46,629
NOI at share 1,053,089
881,791
171,298
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (39,172 ) (39,161 ) (11 )
NOI at share - cash basis $ 1,013,917
$ 842,630
$ 171,287

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~23.~~	~~Segment Information - continued~~

Below is a reconciliation of net income, the most directly comparable GAAP financial measure, to NOI at share and NOI at share - cash basis for the three and nine months ended September 30, 2019 and 2018.

(Amounts in thousands) For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2019 2018 2019 2018
Net income $ 363,849
$ 219,162
$ 3,173,586
$ 324,782
Depreciation and amortization expense 96,437
113,169
326,181
333,701
General and administrative expense 33,237
31,977
130,129
108,937
Transaction related costs, impairment losses and other 1,576
2,510
103,315
16,683
Income from partially owned entities (25,946 ) (7,206 ) (56,139 ) (6,059 )
(Income) loss from real estate fund investments (2,190 ) 190
13,780
37,973
Interest and other investment income, net (3,045 ) (2,893 ) (15,930 ) (9,401 )
Interest and debt expense 61,448
88,951
226,940
264,774
Net gain on transfer to Fifth Avenue and Times Square JV —
—
(2,571,099 ) —
Net gains on disposition of wholly owned and partially owned assets (309,657 ) (141,269 ) (641,664 ) (164,828 )
Income tax expense 23,885
1,943
80,542
4,964
Loss (income) from discontinued operations 8
(61 ) 85
(381 )
NOI from partially owned entities 86,024
60,094
236,400
193,359
NOI attributable to noncontrolling interests in consolidated subsidiaries (18,096 ) (16,943 ) (51,915 ) (51,415 )
NOI at share 307,530
349,624
954,211
1,053,089
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (4,037 ) (8,743 ) 530
(39,172 )
NOI at share - cash basis $ 303,493
$ 340,881
$ 954,741
$ 1,013,917

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~To the Shareholders and the Board of Trustees of Vornado Realty Trust~~

~~Results of Review of Interim Financial Information~~

We have reviewed the accompanying consolidated balance sheet of Vornado Realty Trust and subsidiaries (the "Company") as of September 30, 2019, the related consolidated statements of income, comprehensive income, and changes in equity for the three-month and nine-month periods ended September 30, 2019 and 2018, and cash flows, for the nine-month periods ended September 30, 2019 and 2018, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended; and in our report dated February 11, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

~~Basis for Review Results~~

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our review in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

~~/s/ DELOITTE & TOUCHE LLP~~

~~Parsippany, New Jersey~~

~~October 28, 2019~~

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~To the Partners of Vornado Realty L.P.~~

~~Results of Review of Interim Financial Information~~

We have reviewed the accompanying consolidated balance sheet of Vornado Realty L.P. and subsidiaries (the "Partnership") as of September 30, 2019, the related consolidated statements of income, comprehensive income, and changes in equity for the three-month and nine-month periods ended September 30, 2019 and 2018, and cash flows, for the nine-month periods ended September 30, 2019 and 2018, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Partnership as of December 31, 2018, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended; and in our report dated February 11, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

~~Basis for Review Results~~

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~/s/ DELOITTE & TOUCHE LLP~~

~~Parsippany, New Jersey~~

~~October 28, 2019~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Certain statements contained in this Quarterly Report 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. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10‑Q. We also note the following forward-looking statements: in the case of our development and redevelopment projects, the estimated completion date, estimated project cost and cost to complete; and estimates of future capital expenditures, dividends to common and preferred shareholders and operating partnership distributions. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2018. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three and nine months ended September 30, 2019. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified in order to conform to the current year presentation.

~~Overview~~

Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Vornado is the sole general partner of, and owned approximately 93.1% of the common limited partnership interest in the Operating Partnership as of September 30, 2019. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership and those entities/subsidiaries consolidated by Vornado.

We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends. See “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding these factors.

Vornado Realty Trust

The following table presents the calculations of (i) basic (loss) income per common share which includes the weighted average number of common shares outstanding without regard to dilutive potential common shares and (ii) diluted (loss) income per common share which includes the weighted average common shares and dilutive share equivalents. Unvested share-based payment awards that contain nonforfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include restricted stock awards, based on the two-class method. Other potential dilutive share equivalents such as our employee stock options, restricted Operating Partnership units ("OP Units"), out-performance plan awards ("OPPs"), appreciation-only long term incentive plan units ("AO LTIP Units") and Performance Conditioned AO LTIP Units are included in the computation of diluted Earnings Per Share ("EPS") using the treasury stock method, while the dilutive effect of our Series A convertible preferred shares is reflected in diluted EPS by application of the if-converted method.



(Amounts in thousands, except per share amounts)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
(Loss) income from continuing operations, net of (loss) income attributable to noncontrolling interests	$	(185,220	)	$	2,412,671		$	(167,726	)	$	2,606,821
Income (loss) from discontinued operations	—			56			—			(72		)
Net (loss) income attributable to Vornado	(185,220		)	2,412,727			(167,726		)	2,606,749
Preferred share dividends	(12,530		)	(12,532		)	(25,061		)	(25,066		)
Net (loss) income attributable to common shareholders	(197,750		)	2,400,195			(192,787		)	2,581,683
Earnings allocated to unvested participating securities	(18		)	(239		)	(69		)	(258		)
Numerator for basic (loss) income per share	(197,768		)	2,399,956			(192,856		)	2,581,425
Impact of assumed conversions:
Convertible preferred share dividends	—			14			—			29
Earnings allocated to Out-Performance Plan units	—			—			—			9
Numerator for diluted (loss) income per share	$	(197,768	)	$	2,399,970		$	(192,856	)	$	2,581,463

Denominator:
Denominator for basic (loss) income per share – weighted average shares	191,104			190,781			191,071			190,735
Effect of dilutive securities⁽¹⁾:
Employee stock options and restricted stock awards	—			243			—			256
Convertible preferred shares	—			34			—			35
Out-Performance Plan units	—			—			—			4
Denominator for diluted (loss) income per share – weighted average shares and assumed conversions	191,104			191,058			191,071			191,030

(LOSS) INCOME PER COMMON SHARE - BASIC:
Net (loss) income per common share	$	(1.03	)	$	12.58		$	(1.01	)	$	13.53

(LOSS) INCOME PER COMMON SHARE - DILUTED:
Net (loss) income per common share	$	(1.03	)	$	12.56		$	(1.01	)	$	13.51

____________________


(1)	The effect of dilutive securities excluded an aggregate of 14,242 and 12,609 weighted average common shares for the three months ended June 30, 2020 and 2019, respectively, and 13,992 and 12,521 weighted average common share equivalents for the six months ended June 30, 2020 and 2019, respectively, as their effect was anti-dilutive.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


20.	(Loss) Income Per Share/(Loss) Income Per Class A Unit - continued

Vornado Realty L.P.

The following table presents the calculations of (i) basic (loss) income per Class A unit which includes the weighted average number of Class A units outstanding without regard to dilutive potential Class A units and (ii) diluted (loss) income per Class A unit which includes the weighted average Class A unit and dilutive Class A unit equivalents. Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include Vornado restricted stock awards, OP Units and OPPs, based on the two-class method. Other potential dilutive unit equivalents such as Vornado stock options, AO LTIP Units and Performance Conditioned AO LTIP Units are included in the computation of diluted income per unit ("EPU") using the treasury stock method, while the dilutive effect of our Series A convertible preferred units is reflected in diluted EPU by application of the if-converted method.



(Amounts in thousands, except per unit amounts)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Numerator:
(Loss) income from continuing operations, net of (loss) income attributable to noncontrolling interests in consolidated subsidiaries	$	(199,584	)	$	2,575,182		$	(181,700	)	$	2,781,543
Income (loss) from discontinued operations	—			60			—			(77		)
Net (loss) income attributable to Vornado Realty L.P.	(199,584		)	2,575,242			(181,700		)	2,781,466
Preferred unit distributions	(12,571		)	(12,573		)	(25,143		)	(25,148		)
Net (loss) income attributable to Class A unitholders	(212,155		)	2,562,669			(206,843		)	2,756,318
Earnings allocated to unvested participating securities	(1,439		)	(10,162		)	(6,357		)	(10,860		)
Numerator for basic (loss) income per Class A unit	(213,594		)	2,552,507			(213,200		)	2,745,458
Impact of assumed conversions:
Convertible preferred unit distributions	—			14			—			29
Numerator for diluted (loss) income per Class A unit	$	(213,594	)	$	2,552,521		$	(213,200	)	$	2,745,487

Denominator:
Denominator for basic (loss) income per Class A unit – weighted average units	203,512			202,924			203,441			202,848
Effect of dilutive securities⁽¹⁾:
Vornado stock options, Vornado restricted stock awards, OP Units, AO LTIP Units and OPPs	—			522			—			508
Convertible preferred units	—			34			—			35
Denominator for diluted (loss) income per Class A unit – weighted average units and assumed conversions	203,512			203,480			203,441			203,391

(LOSS) INCOME PER CLASS A UNIT - BASIC:
Net (loss) income per Class A unit	$	(1.05	)	$	12.58		$	(1.05	)	$	13.53

(LOSS) INCOME PER CLASS A UNIT - DILUTED:
Net (loss) income per Class A unit	$	(1.05	)	$	12.54		$	(1.05	)	$	13.50

____________________


(1)	The effect of dilutive securities excluded an aggregate of 1,834 and 187 Class A unit equivalents for the three months ended June 30, 2020 and 2019, respectively, and 1,622and 160 Class A unit equivalents for the six months ended June 30, 2020 and 2019, respectively, as their effect was anti-dilutive.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


21.	Commitments and Contingencies

Insurance

For our properties except Farley Office and Retail, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $235,000,000 includes communicable disease coverage, and all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake. Our California properties have earthquake insurance with coverage of $350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2 billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027.

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third-party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,430,413 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.

For Farley Office and Retail, we maintain general liability insurance with limits of $100,000,000 per occurrence, and builder’s risk insurance including coverage for existing property and development activities of $2.8 billion per occurrence and in the aggregate. We maintain coverage for certified and non-certified terrorism acts with limits of $1.0 billion per occurrence and in the aggregate.

We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material.

Our debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance or refinance our properties and expand our portfolio.

Farley Office and Retail

The consolidated joint venture in which we own a 95% ownership interest was designated by Empire State Development ("ESD") to develop Farley Office and Retail. The joint venture entered into a development agreement with ESD and a design-build contract with Skanska Moynihan Train Hall Builders. Under the development agreement with ESD, the joint venture is obligated to build the Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture’s obligations. Under the design-build agreement, Skanska Moynihan Train Hall Builders is obligated to fulfill all of the joint venture’s obligations. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a full guaranty from Skanska AB.

In connection with the development of the property, the joint venture took in a historic tax credit investor partner. Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, require a refund or reduction of the Tax Credit Investor’s capital contributions. As of June 30, 2020, the Tax Credit Investor has made $92,400,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor.

Other Commitments and Contingencies

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


21.	Commitments and Contingencies - continued

Other Commitments and Contingencies - continued

In July 2018, we leased 78,000 square feet at 345 Montgomery Street in San Francisco, CA, to a subsidiary of Regus PLC, for an initial term of 15 years. The obligations under the lease were guaranteed by Regus PLC in an amount of up to $90,000,000. The tenant purported to terminate the lease prior to space delivery. We commenced a suit on October 23, 2019 seeking to enforce the lease and the guarantee.

In November 2011, we entered into an agreement with the New York City Economic Development Corporation ("EDC") to lease Piers 92 and 94 (the "Piers") for a 49-year term with 5 10-year renewal options. The non-recourse lease with a single-purpose entity calls for current annual rent payments of $2,000,000 with fixed rent steps through the initial term. We operate trade shows and special events at the Piers (and sublease to others for the same uses). In February 2019, an inspection revealed that the piles supporting Pier 92 were structurally unsound (an obligation of EDC to maintain) and we were issued an order by EDC to vacate the property. We continued to make the required lease payments through February 2020, with no abatement provided by EDC for the loss of our right-to-use Pier 92 or reimbursement for lost revenues. Beginning March 2020, as no resolution had been reached with EDC, we did not pay the monthly rents due under the non-recourse lease. As of June 30, 2020, we have a $46,350,000 lease liability and a $34,647,000 right-of-use asset recorded for this lease.

Our mortgage loans are non-recourse to us, except for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street and 435 Seventh Avenue, which we guaranteed and therefore are part of our tax basis. In certain cases, we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of underlying loans. In addition, we have guaranteed the rent and payments in lieu of real estate taxes due to ESD, an entity of New York State, for Farley Office and Retail. As of June 30, 2020, the aggregate dollar amount of these guarantees and master leases is approximately $1,537,000,000.

As of June 30, 2020, $17,002,000 of letters of credit were outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

As investment manager of the Fund we are entitled to an incentive allocation after the limited partners have received a preferred return on their invested capital. The incentive allocation is subject to catch-up and clawback provisions.Accordingly, based on the June 30, 2020 fair value of the Fund assets, at liquidation we would be required to make a$32,000,000 payment to the limited partners representing a clawback of previously paid incentive allocations, which would have no income statement impact as it was previously accrued.

As of June 30, 2020, we expect to fund additional capital to certain of our partially owned entities aggregating approximately $11,000,000.

As of June 30, 2020, we have construction commitments aggregating approximately $556,000,000.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


22.	Segment Information

We operate in 2 reportable segments, New York and Other, which is based on how we manage our business.

Net operating income ("NOI") at share represents total revenues less operating expenses including our share of partially owned entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We consider NOI at share - cash basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI at share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies. NOI at share - cash basis includes rent that has been deferred as a result of the COVID-19 pandemic. Rent deferrals generally require repayment in monthly installments over a period of time not to exceed twelve months.

Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the three and six months ended June 30, 2020 and 2019.



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Net (loss) income	$	(217,352	)	$	2,596,693		$	(321,855	)	$	2,809,737
Depreciation and amortization expense	92,805			113,035			185,598			229,744
General and administrative expense	35,014			38,872			87,848			96,892
(Lease liability extinguishment gain) transaction related costs and impairment losses	(69,221		)	101,590			(69,150		)	101,739
Loss (income) from partially owned entities	291,873			(22,873		)	272,770			(30,193		)
Loss from real estate fund investments	28,042			15,803			211,505			15,970
Interest and other investment loss (income), net	2,893			(7,840		)	8,797			(12,885		)
Interest and debt expense	58,405			63,029			117,247			165,492
Net gain on transfer to Fifth Avenue and Times Square JV	—			(2,571,099		)	—			(2,571,099		)
Net gains on disposition of wholly owned and partially owned assets	(55,695		)	(111,713		)	(124,284		)	(332,007		)
Income tax expense	1,837			26,914			14,650			56,657
(Income) loss from discontinued operations	—			(60		)	—			77
NOI from partially owned entities	69,487			82,974			151,368			150,376
NOI attributable to noncontrolling interests in consolidated subsidiaries	(15,448		)	(16,416		)	(30,941		)	(33,819		)
NOI at share	222,640			308,909			503,553			646,681
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	34,190			9,748			37,266			4,567
NOI at share - cash basis	$	256,830		$	318,657		$	540,819		$	651,248

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


22.	Segment Information - continued

Below is a summary of NOI at share, NOI at share - cash basisby segment for the three and six months ended June 30, 2020 and 2019.



(Amounts in thousands)	For the Three Months Ended June 30, 2020
	Total			New York			Other
Total revenues	$	343,026		$	270,628		$	72,398
Operating expenses	(174,425		)	(140,207		)	(34,218		)
NOI - consolidated	168,601			130,421			38,180
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(15,448		)	(8,504		)	(6,944		)
Add: NOI from partially owned entities	69,487			67,051			2,436
NOI at share	222,640			188,968			33,672
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	34,190			32,943			1,247
NOI at share - cash basis	$	256,830		$	221,911		$	34,919



(Amounts in thousands)	For the Three Months Ended June 30, 2019
	Total			New York			Other
Total revenues	$	463,103		$	376,381		$	86,722
Operating expenses	(220,752		)	(187,819		)	(32,933		)
NOI - consolidated	242,351			188,562			53,789
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(16,416		)	(10,030		)	(6,386		)
Add: NOI from partially owned entities	82,974			79,170			3,804
NOI at share	308,909			257,702			51,207
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	9,748			8,437			1,311
NOI at share - cash basis	$	318,657		$	266,139		$	52,518



(Amounts in thousands)	For the Six Months Ended June 30, 2020
	Total			New York			Other
Total revenues	$	787,558		$	626,243		$	161,315
Operating expenses	(404,432		)	(323,238		)	(81,194		)
NOI - consolidated	383,126			303,005			80,121
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(30,941		)	(16,937		)	(14,004		)
Add: NOI from partially owned entities	151,368			145,459			5,909
NOI at share	503,553			431,527			72,026
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	37,266			34,049			3,217
NOI at share - cash basis	$	540,819		$	465,576		$	75,243



(Amounts in thousands)	For the Six Months Ended June 30, 2019
	Total			New York			Other
Total revenues	$	997,771		$	819,666		$	178,105
Operating expenses	(467,647		)	(385,914		)	(81,733		)
NOI - consolidated	530,124			433,752			96,372
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(33,819		)	(21,437		)	(12,382		)
Add: NOI from partially owned entities	150,376			128,745			21,631
NOI at share	646,681			541,060			105,621
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	4,567			1,819			2,748
NOI at share - cash basis	$	651,248		$	542,879		$	108,369

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Trustees of Vornado Realty Trust

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Vornado Realty Trust and subsidiaries (the "Company") as of June 30, 2020, the related consolidated statements of income, comprehensive income, and changes in equity for the three-month and six-month periods ended June 30, 2020 and 2019, and of cash flows for the six-month periods ended June 30, 2020 and 2019, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2019, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 18, 2020, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ DELOITTE & TOUCHE LLP

New York, New York

August 3, 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Vornado Realty L.P.

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Vornado Realty L.P. and subsidiaries (the "Partnership") as of June 30, 2020, the related consolidated statements of income, comprehensive income, and changes in equity for the three-month and six-month periods ended June 30, 2020 and 2019, and of cash flows for the six-month periods ended June 30, 2020 and 2019, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Partnership as of December 31, 2019, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 18, 2020, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Partnership's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ DELOITTE & TOUCHE LLP

New York, New York

August 3, 2020

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Currently, one of the most significant factors is the ongoing adverse effect of the novel strain of coronavirus ("COVID-19") pandemic on our business, financial condition, results of operations, cash flows, operating performance and the effect it has had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general. The extent of the impact of the COVID-19 pandemic will depend on future developments, including the duration of the pandemic, which are highly uncertain at this time but that impact could be material. Moreover, you are cautioned that the COVID-19 pandemic will heighten many of the risks identified in "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2019, as well as the risks set forth herein.

For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2019, and "Item 1A. Risk Factors" in Part II of this Quarterly Report on Form 10-Q. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three and six months ended June 30, 2020. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified in order to conform to the current year presentation.

Overview

Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Vornado is the sole general partner of, and owned approximately 92.7% of the common limited partnership interest in the Operating Partnership as of June 30, 2020. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado.

We compete with a large number of real estate investors, property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends. See “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q for additional information regarding these factors.

In December 2019, COVID-19 was identified in Wuhan, China and by March 11, 2020, the World Health Organization had declared it a global pandemic. Many states in the U.S., including New York, New Jersey, Illinois and California implemented stay-at-home orders for all "non-essential" business and activity in an aggressive effort to curb the spread of the virus. In May 2020, certain states implemented phased re-opening plans for businesses and activities that were previously ordered to close, with limitations on occupancy and certain other restrictions. It is uncertain as to how long these restrictions will continue or if additional restrictions or closures will be imposed. As a result of the COVID-19 pandemic, the U.S. economy has suffered and there has been significant volatility in the financial markets. Many U.S. industries and businesses have been negatively affected and millions of people have filed for unemployment.


•	With the exception of grocery stores and other "essential" businesses, many of our retail tenants closed their stores in March 2020 and began reopening when New York City entered phase two of its state-mandated reopening plan on June 22, 2020.


•	While our buildings remain open, many of our office tenants are working remotely.


•	We have temporarily closed the Hotel Pennsylvania.


•	We have cancelled trade shows at theMART for the remainder of 2020.


•	Because certain of our development projects were deemed "non-essential," they were temporarily paused in March 2020 due to New York State executive orders and resumed once New York City entered phase one of its state mandated reopening plan on June 8, 2020.

•


•	Effective April 1, 2020, our executive officers waived portions of their annual base salary for the remainder of 2020.


•	Effective April 1, 2020, each non-management member of our Board of Trustees agreed to forgo his or her $75,000 annual cash retainer for the remainder of 2020.

Overview - continued

We have not experienced any material impact to our internal control over financial reporting to date as a result of most of our employees working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact to their design and operating effectiveness.

In light of the evolving health, social, economic, and business environment, governmental regulation or mandates, and business disruptions that have occurred and may continue to occur, the impact of the COVID-19 pandemic on our financial condition and operating results remains highly uncertain but the impact could be material. The impact on us includes lower rental income and potentially lower occupancy levels at our properties which will result in less cash flow available for operating costs, to pay our indebtedness and for distribution to our shareholders. During the second quarter of 2020, we experienced a decrease in cash flow from operations due to the COVID-19 pandemic, including reduced collections of rents billed to certain of our tenants, the temporary closure of Hotel Pennsylvania, the cancellation of trade shows at theMART through 2020, and lower revenues from BMS and signage. In addition, we have concluded that our investment in Fifth Avenue and Times Square JV is "other-than-temporarily" impaired and recorded a $306,326,000 non-cash impairment loss, before noncontrolling interests of $467,000, on our consolidated statements of income for the second quarter of 2020. The value of our real estate assets may continue to decline, which may result in additional non-cash impairment charges in future periods and that impact could be material.

Overview - continued

Vornado Realty Trust

Quarter Ended ~~September~~June 30, ~~2019~~2020 Financial Results Summary

Net ~~income~~loss attributable to common shareholders for the quarter ended ~~September~~June 30, ~~2019~~2020 was ~~$322,906,000,~~$197,750,000, or ~~$1.69~~$1.03 per diluted share, compared to ~~$190,645,000,~~net income attributable to common shareholders of $2,400,195,000, or ~~$1.00~~$12.56 per diluted share, for the prior year’s quarter. The quarters ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 include certain items that impact the comparability of period to period net income attributable to common shareholders, which are listed in the table on page 59. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the quarter ended September 30, 2019 by $270,282,000, or $1.41 per diluted share, and $125,839,000, or $0.66 per diluted share, for the quarter ended September 30, 2018.

Funds From Operations (“FFO”) attributable to common shareholders plus assumed conversions for the quarter ended September 30, 2019 was $279,509,000, or $1.46 per diluted share, compared to $189,987,000, or $0.99 per diluted share, for the prior year’s quarter. FFO attributable to common shareholders plus assumed conversions for the quarters ended September 30, 2019 and 2018 include certain items that impact the comparability of period to period FFO, which are listed in the table on page 60. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the quarter ended September 30, 2019 by $108,543,000, or $0.57 per diluted share, and $5,707,000, or $0.03 per diluted share, for the quarter ended September 30, 2018.

~~Overview - continued~~

~~Nine Months Ended September 30, 2019 Financial Results Summary~~

Net income attributable to common shareholders for the nine months ended September 30, 2019 was $2,904,589,000, or $15.20 per diluted share, compared to $284,338,000, or $1.49 per diluted share, for the nine months ended September 30, 2018. The nine months ended September 30, 2019 and 2018 include certain items that impact the comparability of period to period net(loss) income attributable to common shareholders, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net ~~income~~loss attributable to common shareholders for the ~~nine months~~quarter ended ~~September~~June 30, ~~2019~~2020 by ~~$2,784,217,000,~~$189,151,000, or ~~$14.57~~$0.99 per diluted share, and ~~$95,031,000, or $0.50 per diluted share for the nine months ended September 30, 2018.~~

~~The increase in~~increased net income attributable to common shareholders ~~was partially offset~~ by ~~(i) $8,986,000,~~$2,357,643,000, or ~~$0.04~~$12.34 per diluted share, ~~of our share of~~for the ~~non-cash write-off of straight-line rent receivables, (ii) $8,046,000,~~quarter ended June 30, 2019.

Funds From Operations (“FFO”) attributable to common shareholders plus assumed conversions for the quarter ended June 30, 2020 was $203,256,000, or ~~$0.04~~$1.06 per diluted share, ~~of non-cash expense~~compared to $164,329,000, or $0.86 per diluted share, for the time-based equity compensation granted in connection with the new leadership group announced in April 2019 and (iii) $11,055,000, or $0.05 per share, of non-cash expense for the accelerated vesting of previously issued OP Units and Vornado restricted stock due to the removal of the time-based vesting requirement for participants who have reached 65 years of age.

prior year’s quarter. FFO attributable to common shareholders plus assumed conversions for the ~~nine months~~quarters ended ~~September~~June 30, 2019 was $691,522,000, or $3.62 per diluted share, compared to $519,640,000, or $2.72 per diluted share, for the nine months ended September 30, 2018. FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, 20192020 and ~~2018~~2019 include certain items that impact the comparability of period to period FFO, which are listed in the table ~~page 60.~~on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the ~~nine months~~quarter ended ~~September~~June 30, ~~2019~~2020 by ~~$196,586,000,~~$97,506,000, or ~~$1.03~~$0.51 per diluted share, and decreased FFO attributable to common shareholders plus assumed conversions by $9,446,000, or $0.05 per diluted share, for the ~~nine~~quarter ended June 30, 2019.

Six Months Ended June 30, 2020 Financial Results Summary

Net loss attributable to common shareholders for the six months ended ~~September~~June 30, ~~2018 by $23,891,000,~~2020 was $192,787,000, or ~~$0.12~~$1.01 per diluted ~~share.~~share, compared to net income attributable to common shareholders of $2,581,683,000, or $13.51 per diluted share, for the six months ended June 30, 2019. The six months ended June 30, 2020 and 2019 include certain items that impact the comparability of period to period net (loss) income attributable to common shareholders, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net loss attributable to common shareholders for the six months ended June 30, 2020 by $203,491,000, or $1.07 per diluted share, and increased net income attributable to common shareholders by $2,514,217,000, or $13.16 per diluted share, for the six months ended June 30, 2019.

~~The increase in~~ FFO attributable to common shareholders plus assumed conversions for the six months ended June 30, 2020 was ~~partially offset by (i) $8,986,000,~~$333,616,000, or ~~$0.04~~$1.75 per diluted share, ~~of our share of the non-cash write-off of straight-line rent receivables, (ii) $8,046,000,~~compared to $412,013,000, or ~~$0.04~~$2.16 per diluted share, ~~of non-cash expense~~ for the ~~time-based equity compensation granted in connection with the new leadership group announced in April 2019 and (iii) $11,055,000, or $0.05 per share, of non-cash expense~~six months ended June 30, 2019. FFO attributable to common shareholders plus assumed conversions for the ~~accelerated vesting~~six months ended June 30, 2020 and 2019 include certain items that impact the comparability of ~~previously issued OP Units~~period to period FFO, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the six months ended June 30, 2020 by $90,776,000, or $0.48 per diluted share, and ~~Vornado restricted stock due~~increased FFO attributable to common shareholders plus assumed conversions for the ~~removal of the time-based vesting requirement for participants who have reached 65 years of age.~~six months ended June 30, 2019 by $88,223,000, or $0.46 per diluted share.

Overview - continued

The following table reconciles the difference between our net (loss) income attributable to common shareholders and our net (loss) income attributable to common shareholders, as adjusted:

(Amounts in thousands) For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2019 2018 2019 2018
Certain (income) expense items that impact net income attributable to common shareholders:
Net gains on sale of real estate (primarily our 25% interest in 330 Madison Avenue in 2019) $ (178,769 ) $ (3,350 ) $ (178,769 ) $ (27,786 )
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units (109,035 ) —
(328,910 ) —
Mark-to-market decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from March 12, 2019) 4,875
—
19,211
—
Our share of (income) loss from real estate fund investments (1,455 ) 748
22,207
(617 )
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium —
(134,032 ) —
(134,032 )
Mark-to-market decrease (increase) in Lexington Realty Trust ("Lexington") common shares (sold on March 1, 2019) —
7,942
(16,068 ) 24,934
Previously capitalized internal leasing costs⁽¹⁾
—
(1,444 ) —
(3,883 )
Net gain on transfer to Fifth Avenue and Times Square retail JV, net of $11,945 attributable to noncontrolling interests —
—
(2,559,154 ) —
Non-cash impairment losses and related write-offs, substantially 608 Fifth Avenue —
—
108,592
—
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on March 4, 2019) —
—
(62,395 ) —
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022 —
—
22,540
—
Our share of disputed additional New York City transfer taxes —
—
—
23,503
Preferred share issuance costs —
—
—
14,486
Other (4,811 ) (4,035 ) (857 ) 2,061
(289,195 ) (134,171 ) (2,973,603 ) (101,334 )
Noncontrolling interests' share of above adjustments 18,913
8,332
189,386
6,303
Total of certain (income) expense items that impact net income attributable to common shareholders $ (270,282 ) $ (125,839 ) $ (2,784,217 ) $ (95,031 )


~~(1)~~	The three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, respectively, for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized.



(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Certain expense (income) items that impact net (loss) income attributable to common shareholders:
Non-cash impairment loss on our investment in Fifth Avenue and Times Square JV, net of $467 attributable to noncontrolling interests	$	305,859		$	—		$	305,859		$	—
608 Fifth Avenue non-cash (lease liability extinguishment gain) impairment loss and related write-offs	(70,260		)	101,092			(70,260		)	101,092
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units	(49,005		)	(88,921		)	(108,916		)	(219,875		)
Credit losses on loans receivable resulting from a new GAAP accounting standard effective January 1, 2020	6,108			—			13,369			—
Our share of loss from real estate fund investments	6,089			20,758			62,247			23,662
Net gain on transfer to Fifth Avenue and Times Square retail JV, net of $11,945 attributable to noncontrolling interests	—			(2,559,154		)	—			(2,559,154		)
Real estate impairment losses	—			7,500			—			7,500
Mark-to-market (increase) decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from March 12, 2019 and sold on January 23, 2020)	—			(1,313		)	4,938			14,336
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on March 4, 2019)	—			—			—			(62,395		)
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022	—			—			—			22,540
Mark-to-market increase in Lexington Realty Trust ("Lexington") common shares (sold on March 1, 2019)	—			—			—			(16,068		)
Other	2,019			2,802			9,915			3,954
	200,810			(2,517,236		)	217,152			(2,684,408		)
Noncontrolling interests' share of above adjustments	(11,659		)	159,593			(13,661		)	170,191
Total of certain expense (income) items that impact net (loss) income attributable to common shareholders	$	189,151		$	(2,357,643	)	$	203,491		$	(2,514,217	)

~~Overview - continued~~

The following table reconciles the difference between our FFO attributable to common shareholders plus assumed conversions and our FFO attributable to common shareholders plus assumed conversions, as adjusted:


(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions:
608 Fifth Avenue non-cash (lease liability extinguishment gain) impairment loss and related write-offs													$	(70,260	)	$	77,156		$	(70,260	)	$	77,156
After-tax net gain on sale of 220 CPS condominium units	$	(109,035	)	$	—		$	(328,910	)	$	—		(49,005		)	(88,921		)	(108,916		)	(219,875		)
Our share of (income) loss from real estate fund investments	(1,455		)	748			22,207			(617		)
Previously capitalized internal leasing costs⁽¹⁾	—			(1,444		)	—			(3,883		)
Non-cash impairment loss and related write-offs on 608 Fifth Avenue	—			—			77,156			—
Credit losses on loans receivable resulting from a new GAAP accounting standard effective January 1, 2020													6,108			—			13,369			—
Our share of loss from real estate fund investments													6,089			20,758			62,247			23,662
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022	—			—			22,540			—			—			—			—			22,540
Our share of disputed additional New York City transfer taxes	—			—			—			23,503
Preferred share issuance costs	—			—			—			14,486
Other	(5,229		)	(5,389		)	(2,931		)	(7,854		)	2,459			1,092			6,664			2,298
	(115,719		)	(6,085		)	(209,938		)	25,635			(104,609		)	10,085			(96,896		)	(94,219		)
Noncontrolling interests' share of above adjustments	7,176			378			13,352			(1,744		)	7,103			(639		)	6,120			5,996
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net	$	(108,543	)	$	(5,707	)	$	(196,586	)	$	23,891		$	(97,506	)	$	9,446		$	(90,776	)	$	(88,223	)


~~(1)~~	The three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, respectively, for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized.

Overview - continued

Vornado Realty Trust and Vornado Realty L.P.

Same Store Net Operating Income (“NOI”) At Share

The percentage (decrease) increase ~~(decrease)~~ in same store NOI at share and same store NOI at share - cash basis of our New York segment, theMART and 555 California Street are summarized below.

Total
New York⁽¹⁾
theMART 555 California Street
Same store NOI at share % increase (decrease):
Three months ended September 30, 2019 compared to September 30, 2018 0.9 % 0.5 % (2.8 )% 13.9 %
Nine months ended September 30, 2019 compared to September 30, 2018 0.6 % (0.2 )% 2.2 % 11.9 %
Three months ended September 30, 2019 compared to June 30, 2019 (0.8 )% 1.9 % (21.2 )% (1.1 )%

Same store NOI at share - cash basis % increase (decrease):
Three months ended September 30, 2019 compared to September 30, 2018 1.0 ��% 0.3 % (1.0 )% 17.7 %
Nine months ended September 30, 2019 compared to September 30, 2018 2.7 % 1.6 % 5.5 % 15.7 %
Three months ended September 30, 2019 compared to June 30, 2019 (2.7 )% (0.4 )% (19.3 )% (2.2 )%



		Total		New York		theMART⁽¹⁾		555 California Street
Same store NOI at share % (decrease) increase:
	Three months ended June 30, 2020 compared to June 30, 2019	(24.5	)%	(23.4	)%	(42.5	)%	(5.0	)%
	Six months ended June 30, 2020 compared to June 30, 2019	(13.9	)%	(12.9	)%	(29.8	)%	0.1	%
	Three months ended June 30, 2020 compared to March 31, 2020	(20.3	)%	(22.0	)%	(14.0	)%	(4.0	)%

Same store NOI at share - cash basis % decrease:
	Three months ended June 30, 2020 compared to June 30, 2019	(10.8	)%	(6.4	)%	(44.5	)%	(4.3	)%
	Six months ended June 30, 2020 compared to June 30, 2019	(6.3	)%	(3.6	)%	(30.0	)%	(0.4	)%
	Three months ended June 30, 2020 compared to March 31, 2020	(7.8	)%	(7.0	)%	(20.3	)%	(2.1	)%

____________________



		~~Increase~~
(1)	~~Excluding Hotel Pennsylvania,~~ The decreases in same store NOI at share ~~% increase:~~
	~~Three months ended September 30, 2019 compared to September 30, 2018~~	~~1.2~~	%
	~~Nine months ended September 30, 2019 compared to September 30, 2018~~	~~0.4~~	%
	~~Three months ended September 30, 2019 compared to June 30, 2019~~	~~2.4~~	%

	~~Excluding Hotel Pennsylvania,~~and same store NOI at share - cash basis ~~% increase:~~
	~~Three months ended September 30, 2019 compared~~were primarily due to ~~September 30, 2018~~	~~1.0~~	%
	~~Nine months ended September 30, 2019 compared~~the effects of the COVID-19 pandemic, causing trade shows to ~~September 30, 2018~~	~~2.4~~	%
	~~Three months ended September 30, 2019 compared to June 30, 2019~~	~~0.1~~	%
				be cancelled from late March 2020 through the remainder of the year.

Calculations of same store NOI at share, reconciliations of our net (loss) income to NOI at share, NOI at share - cash basis and FFO and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s Discussion and Analysis of ~~the~~ Financial Condition and Results of Operations.

Overview - continued

Dispositions

PREIT

On January 23, 2020, we sold all of our 6,250,000 common shares of PREIT, realizing net proceeds of $28,375,000. We recorded a $4,938,000 loss (mark-to-market decrease) for the six months ended June 30, 2020.

220 CPS

During the three months ended ~~September~~June 30, ~~2019,~~2020, we closed on the sale of 14four condominium units at 220 CPS for net proceeds aggregating ~~$348,759,000~~$156,972,000 resulting in a financial statement net gain of ~~$130,888,000~~$55,695,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, ~~$21,853,000~~$6,690,000 of income tax expense was recognized on our consolidated statements of income. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we closed on the sale of 37 11condominium units at 220 CPS for net proceeds ~~of $1,039,493,000~~aggregating $348,188,000 resulting in a financial statement net gain of ~~$400,500,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income.~~$124,284,000. In connection with these sales, ~~$71,590,000~~$15,368,000 of income tax expense was recognized onin our consolidated statements of income. From inception to ~~September~~June 30, ~~2019,~~2020, we closed on the sale of 4876 units for aggregate net proceeds of ~~$1,254,269,000. During the third quarter of 2019, we repaid the remaining $48,883,000 of the $950,000,000 220 CPS loan.~~

~~Lexington~~

~~Fifth Avenue and Times Square JV~~

On April 18, 2019 (the “Closing Date”), we entered into a transaction agreement (the “Transaction Agreement”) with a group of institutional investors (the “Investors”). The Transaction Agreement provides for a series of transactions (collectively, the “Transaction”) pursuant to which (i) prior to the Closing Date, we contributed our interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the “Properties”) to subsidiaries of a newly formed joint venture (“Fifth Avenue and Times Square JV”) and (ii) on the Closing Date, transferred a 48.5% common interest in Fifth Avenue and Times Square JV to the Investors. The 48.5% common interest in the joint venture represents an effective 47.2% interest in the Properties (of which 45.4% was transferred from Vornado). The Properties include approximately 489,000 square feet of retail space, 327,000 square feet of office space, signage associated with 1535 and 1540 Broadway, the parking garage at 1540 Broadway and the theater at 1535 Broadway.

We retained the remaining 51.5% common interest in Fifth Avenue and Times Square JV which represents an effective 51.0% interest in the Properties and an aggregate $1.828 billion of preferred equity interests in certain of the properties. We also provided $500,000,000 of temporary preferred equity on 640 Fifth Avenue until May 23, 2019 when mortgage financing was completed. All of the preferred equity has an annual coupon of 4.25% for the first five years, increasing to 4.75% for the next five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.

Financings

~~Overview - continued~~

~~Dispositions - continued~~

~~Fifth Avenue and Times Square JV - continued~~Unsecured Term Loan

~~330 Madison Avenue~~

~~3040 M Street~~

~~Financings~~

~~On January~~February 28, ~~2019, a joint venture, in which we have a 45.1% interest, completed a $167,500,000 refinancing of 61 Ninth Avenue,~~ a 166,000 square foot office and retail property in the Meatpacking district of Manhattan which is fully leased to Aetna and Starbucks. The seven-year interest only loan carries a rate of LIBOR plus 1.35% (3.40% as of September 30, 2019) and matures in January 2026. We realized net proceeds of approximately $31,000,000. The loan replaces the previous $90,000,000 construction loan that bore interest at LIBOR plus 3.05% and was scheduled to mature in 2021.

On February 4, 2019, we completed a $95,700,000 refinancing of 435 Seventh Avenue, a 43,000 square foot Manhattan retail property. The interest-only loan carries a rate of LIBOR plus 1.30% (3.37% as of September 30, 2019) and matures in 2024. The recourse loan replaces the previous $95,700,000 loan that bore interest at LIBOR plus 2.25% and was scheduled to mature in August 2019.

On February 12, 2019, we completed a $580,000,000 refinancing of 100 West 33rd Street, a 1.1 million square foot Manhattan property comprised of 859,000 square feet of office space and the 256,000 square foot Manhattan Mall. The interest-only loan carries a rate of LIBOR plus 1.55% (3.62% as of September 30, 2019) and matures in April 2024, with two one-year extension options. The loan replaces the previous $580,000,000 loan that bore interest at LIBOR plus 1.65% and was scheduled to mature in July 2020.

On March 1, 2019, we called for redemption all of our $400,000,000 5.00% senior unsecured notes. The notes, which were scheduled to mature in January 2022, were redeemed on April 1, 2019 at a redemption price of 105.51% of the principal amount plus accrued interest. In connection therewith, we expensed $22,540,000 relating to debt prepayment costs which is included in "interest and debt expense" on our consolidated statements of income for the nine months ended September 30, 2019.

~~On March 26, 2019,~~2020, we increased our unsecured term loan balance to ~~$1.5 billion~~$800,000,000 (from $1.25 billion) and extended to March 2024 (as fully extended) from February 2022 one of our two unsecured revolving credit facilities. The interest rate on the extended facility was lowered from LIBOR plus 1.00% to LIBOR plus 0.90%~~. Thefacility fee remains unchanged at 20 basis points.~~

On May 24, 2019, we extended our $375,000,000 mortgage loan on 888 Seventh Avenue, a 886,000 square foot Manhattan office building, from December 2020 to December 2025. The interest rate on the extended mortgage loan is LIBOR plus 1.70% (3.73%~~as of September 30, 2019).~~$750,000,000) by exercising an accordion feature. Pursuant to an existing swap agreement, $750,000,000 of the loan bears interest at a fixed rate onof 3.87% through October 2023, and the ~~$375,000,000 mortgage loan has been swapped to 3.25% through December 2020.~~

~~On June 28, 2019, a joint venture, in which we have a 55% interest, completed a $145,700,000 refinancing~~balance of 512 West 22nd Street, a 173,000 square foot office building in the West Chelsea submarket of Manhattan, of which $106,425,000 was outstanding as of September 30, 2019. The four-year interest only loan carries$50,000,000 floats at a rate of LIBOR plus ~~2.00% (4.05%~~1.00% (1.18% as of ~~September~~June 30, 2019) and matures in June 2023 with a one-year extension option. The loan replaces the previous $126,000,000 construction loan that bore interest at LIBOR plus 2.65% and was scheduled to mature in 2019.

~~Overview - continued~~

~~Financings - continued~~

On September 5, 2019, a consolidated joint venture, in which we have a 50% interest, completed a $75,000,000 refinancing of 606 Broadway, a 35,000 square foot office and retail building on the northeast corner of Broadway and Houston Street in Manhattan, of which $67,500,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.80% (3.85% as of September 30, 2019) and matures in 2024. In connection therewith, the joint venture purchased an interest rate cap that caps LIBOR at a rate of 4.00%2020). The entire $800,000,000 will float thereafter for the duration of the loan ~~replaces the previous $65,000,000 construction loan. The construction loan bore interest at LIBOR plus 3.00% and was scheduled to mature in May 2021.~~

Leasing Activity

The leasing activity and related statistics in the table below are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period.


(Square feet in thousands)	(Square feet in thousands)	New York												(Square feet in thousands)	New York
		Office			Retail			theMART			555 California Street				Office				Retail			theMART			555 California Street
Three Months Ended September 30, 2019
Three Months Ended June 30, 2020														Three Months Ended June 30, 2020
	Total square feet leased	197			26			45			50			Total square feet leased	304				23			42			5
	Our share of square feet leased:	171			24			45			35			Our share of square feet leased:	291				23			42			3
	Initial rent⁽¹⁾	$	80.44		$	145.54		$	48.54		$	96.54		Initial rent⁽¹⁾	$	70.71		⁽²⁾	$	130.92		$	56.03		$	91.00
	Weighted average lease term (years)	6.5			5.4			5.5			8.5			Weighted average lease term (years)	5.2				3.8			4.1			5.0
	Second generation relet space:													Second generation relet space:
	Square feet	108			17			43			29			Square feet	82				22			40			3
	GAAP basis:													GAAP basis:
	Straight-line rent⁽²⁾	$	77.33		$	135.49		$	46.46		$	108.38		Straight-line rent⁽³⁾	$	69.04		⁽²⁾	$	115.35		$	53.62		$	93.59
	Prior straight-line rent	$	60.16		$	117.16		$	40.42		$	65.87		Prior straight-line rent	$	61.61			$	115.16		$	53.80		$	74.44
	Percentage increase	28.5		%	15.6		%	14.9		%	64.5		%	Percentage increase (decrease)	12.1		%		0.2		%	(0.3		)%	25.7		%
	Cash basis:													Cash basis:
	Initial rent⁽¹⁾	$	78.77		$	131.49		$	47.87		$	97.41		Initial rent⁽¹⁾	$	73.95		⁽²⁾	$	115.33		$	56.25		$	91.00
	Prior escalated rent	$	64.22		$	123.82		$	44.88		$	69.94		Prior escalated rent	$	64.83			$	115.25		$	58.03		$	79.12
	Percentage increase	22.7		%	6.2		%	6.7		%	39.3		%	Percentage increase (decrease)	14.1		%		0.1		%	(3.1		)%	15.0		%

	Tenant improvements and leasing commissions:													Tenant improvements and leasing commissions:
	Per square foot	$	85.35		$	44.85		$	55.67		$	84.46		Per square foot	$	25.63			$	32.67		$	13.69		$	14.38
	Per square foot per annum	$	13.13		$	8.31		$	10.12		$	9.94		Per square foot per annum	$	4.93			$	8.60		$	3.34		$	2.88
	Percentage of initial rent	16.3		%	5.7		%	20.9		%	10.3		%	Percentage of initial rent	7.0		%		6.6		%	6.0		%	3.2		%

____________________

Seenotes on the following page.

Overview - continued

Leasing Activity - continued


(Square feet in thousands)	(Square feet in thousands)	New York												(Square feet in thousands)	New York
		Office			Retail			theMART			555 California Street				Office				Retail			theMART			555 California Street
Nine Months Ended September 30, 2019
Six Months Ended June 30, 2020														Six Months Ended June 30, 2020
	Total square feet leased	814			144			234			141			Total square feet leased	615				38			273			11
	Our share of square feet leased:	676			134			234			99			Our share of square feet leased:	588				36			273			8
	Initial rent⁽¹⁾	$	78.81		$	143.61		$	49.24		$	87.56		Initial rent⁽¹⁾	$	84.88		⁽²⁾	$	236.93		$	48.64		$	105.66
	Weighted average lease term (years)	7.9			11.7			6.3			6.3			Weighted average lease term (years)	5.9				5.9			9.3			3.0
	Second generation relet space:													Second generation relet space:
	Square feet	499			119			230			93			Square feet	357				31			268			8
	GAAP basis:													GAAP basis:
	Straight-line rent⁽²⁾	$	74.22		$	149.93		$	48.22		$	92.50		Straight-line rent⁽³⁾	$	84.38		⁽²⁾	$	223.95		$	45.87		$	107.37
	Prior straight-line rent	$	69.48		$	117.94		$	42.83		$	58.57		Prior straight-line rent	$	85.00			$	143.79		$	44.95		$	78.53
	Percentage increase	6.8		%	27.1		%	12.6		%	57.9		%	Percentage (decrease) increase	(0.7		)%		55.7		%	2.0		%	36.7		%
	Cash basis:													Cash basis:
	Initial rent⁽¹⁾	$	75.62		$	137.36		$	49.08		$	87.29		Initial rent⁽¹⁾	$	85.71		⁽²⁾	$	221.86		$	48.42		$	105.66
	Prior escalated rent	$	71.28		$	126.86		$	46.18		$	66.31		Prior escalated rent	$	83.09			$	149.61		$	49.16		$	85.39
	Percentage increase	6.1		%	8.3		%	6.3		%	31.6		%	Percentage increase (decrease)	3.2		%		48.3		%	(1.5		)%	23.7		%

	Tenant improvements and leasing commissions:													Tenant improvements and leasing commissions:
	Per square foot	$	82.88		$	51.02		$	35.42		$	57.71		Per square foot	$	51.62			$	193.98		$	40.84		$	8.57
	Per square foot per annum	$	10.49		$	4.36		$	5.62		$	9.16		Per square foot per annum	$	8.75			$	32.88		$	4.39		$	2.86
	Percentage of initial rent	13.3		%	3.0		%	11.4		%	10.5		%	Percentage of initial rent	10.3		%		13.9		%	9.0		%	2.7		%

____________________


(1)	Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot.


(2)	Excludes the rent on 174,000 square feet as the starting rent will be determined in 2021 based on fair market value.


(3)	Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases and includes the effect of free rent and periodic step-ups in rent.

Overview - continued

Square Footage (in service) and Occupancy as of ~~September~~June 30, ~~2019~~2020


(Square feet in thousands)		Square Feet (in service)					Square Feet (in service)
	Number of Properties	Total Portfolio	Our Share	Occupancy %		Number of Properties	Total Portfolio	Our Share	Occupancy %
New York:
Office	35	19,060	16,192	96.8	%	35	18,572	15,624	96.4	%
Retail (includes retail properties that are in the base of our office properties)	69	2,404	1,959	95.9	%	71	2,269	1,801	83.6	%	⁽¹⁾
Residential - 1,679 units	10	1,526	793	96.8	%
Residential - 1,677 units						9	1,526	793	89.9	%
Alexander's, Inc. ("Alexander's") including 312 residential units	7	2,254	730	99.5	%	7	2,254	730	96.7	%
Hotel Pennsylvania	1	1,400	1,400
Hotel Pennsylvania (temporarily closed since April 1, 2020)						1	—	—
		26,644	21,074	96.8	%		24,621	18,948	95.2	%
Other:
theMART	3	3,693	3,684	95.0	%	4	3,825	3,816	91.4	%
555 California Street	3	1,741	1,218	100.0	%	3	1,741	1,218	99.0	%
Other	10	2,527	1,192	92.9	%	10	2,490	1,155	93.1	%
		7,961	6,094				8,056	6,189

Total square feet as of September 30, 2019		34,605	27,168
Total square feet as of June 30, 2020							32,677	25,137

___________________________


(1)	Excludes the JCPenney lease at Manhattan Mall for 154,000 square feet which was rejected effective July 31, 2020 as part of its Chapter 11 bankruptcy filing.

Square Footage (in service) and Occupancy as of December 31, ~~2018~~2019

(Square feet in thousands) Square Feet (in service)

Number of
properties

Total
Portfolio

Our
Share
Occupancy %
New York:
Office 36
19,858
16,632
97.2 %
Retail (includes retail properties that are in the base of our office properties) 71
2,648
2,419
97.3 %
Residential - 1,687 units 10
1,533
800
96.6 %
Alexander's, including 312 residential units 7
2,437
790
91.4 %
Hotel Pennsylvania 1
1,400
1,400

27,876
22,041
97.0 %
Other:
theMART 3
3,694
3,685
94.7 %
555 California Street 3
1,743
1,220
99.4 %
Other 10
2,522
1,187
92.8 %
7,959
6,092

Total square feet as of December 31, 2018 35,835
28,133



(Square feet in thousands)		Square Feet (in service)
	Number of properties	Total Portfolio	Our Share	Occupancy %
New York:
Office	35	19,070	16,195	96.9	%
Retail (includes retail properties that are in the base of our office properties)	70	2,300	1,842	94.5	%
Residential - 1,679 units	9	1,526	793	97.0	%
Alexander's, including 312 residential units	7	2,230	723	96.5	%
Hotel Pennsylvania	1	1,400	1,400
		26,526	20,953	96.7	%
Other:
theMART	4	3,826	3,817	94.6	%
555 California Street	3	1,741	1,218	99.8	%
Other	10	2,533	1,198	92.7	%
		8,100	6,233

Total square feet as of December 31, 2019		34,626	27,186

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. For the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, there were no material changes to these ~~policies, other than the adoption of Accounting Standards Codification Topic 842,~~ ~~Leases, described in Note 3 -~~ ~~Recently Issued Accounting Literature~~ ~~and Note21 -~~ ~~Leases~~ ~~to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Reporton Form 10-Q.~~policies.

Recently Issued Accounting Literature

Refer to Note 34 - Recently Issued Accounting Literature to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements that may affect us.

~~Net Operating Income~~NOI At Share by Segment for the Three Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019

NOI at share represents total revenues less operating ~~expenses.~~expenses including our share of partially owned entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We consider NOI at share - cash basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI at share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered ~~a substitute for~~alternatives to net ~~income. NOI~~income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies. NOI at share - cash basis includes rent that has been deferred as a result of the COVID-19 pandemic. Rent deferrals generally require repayment in monthly installments over a period of time not to exceed twelve months.

Below is a summary of NOI at share and NOI at share - cash basisby segment for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019.

(Amounts in thousands) For the Three Months Ended September 30, 2019
Total
New York ⁽¹⁾
Other
Total revenues $ 465,961
$ 380,568
$ 85,393
Operating expenses 226,359
188,159
38,200
NOI - consolidated 239,602
192,409
47,193
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (18,096 ) (9,574 ) (8,522 )
Add: NOI from partially owned entities 86,024
82,649
3,375
NOI at share 307,530
265,484
42,046
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other (4,037 ) (5,560 ) 1,523
NOI at share - cash basis $ 303,493
$ 259,924
$ 43,569

~~___________________~~


~~(1)~~	~~Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.~~



(Amounts in thousands)	For the Three Months Ended June 30, 2020
	Total			New York			Other
Total revenues	$	343,026		$	270,628		$	72,398
Operating expenses	(174,425		)	(140,207		)	(34,218		)
NOI - consolidated	168,601			130,421			38,180
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(15,448		)	(8,504		)	(6,944		)
Add: NOI from partially owned entities	69,487			67,051			2,436
NOI at share	222,640			188,968			33,672
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	34,190			32,943			1,247
NOI at share - cash basis	$	256,830		$	221,911		$	34,919



(Amounts in thousands)	For the Three Months Ended June 30, 2019
	Total			New York			Other
Total revenues	$	463,103		$	376,381		$	86,722
Operating expenses	(220,752		)	(187,819		)	(32,933		)
NOI - consolidated	242,351			188,562			53,789
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(16,416		)	(10,030		)	(6,386		)
Add: NOI from partially owned entities	82,974			79,170			3,804
NOI at share	308,909			257,702			51,207
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	9,748			8,437			1,311
NOI at share - cash basis	$	318,657		$	266,139		$	52,518

~~Net Operating Income~~NOI At Share by Segment for the Three Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 - continued

The elements of our New York and Other NOI at share for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 are summarized below.


(Amounts in thousands)	For the Three Months Ended September 30,				For the Three Months Ended June 30,
	2019		2018		2020			2019
New York:
Office⁽¹⁾	$	177,469	$	184,146	$	161,444		$	179,592
Retail⁽¹⁾⁽²⁾	68,159		92,858		21,841			57,063
Residential	5,575		5,202		5,868			5,908
Alexander's	11,269		10,626		8,331			11,108
Hotel Pennsylvania(3)	3,012		4,496		(8,516		)	4,031
Total New York	265,484		297,328		188,968			257,702

Other:
theMART(4)	24,862		25,257		17,803			30,974
555 California Street	15,265		13,515		14,837			15,358
Other investments⁽²⁾	1,919		13,524		1,032			4,875
Total Other	42,046		52,296		33,672			51,207

NOI at share	$	307,530	$	349,624	$	222,640		$	308,909

___________________


(1)	~~Reflects~~ 2020 includes $13,220 of non-cash write-offs of receivables arising from the ~~transfer~~straight-lining of ~~45.4%~~rents, primarily for the New York & Company, Inc. lease at 330 West 34th Street and $940 of ~~common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.~~write-offs of tenant receivables deemed uncollectible.


(2)	2020 includes $20,436 of non-cash write-offs of receivables arising from the straight-lining of rents, primarily for the JCPenney lease at Manhattan Mall and $6,731 of write-offs of tenant receivables deemed uncollectible. 2019 includes $13,199 of non-cash write-offs of receivables arising from the straight-lining of rents.


(3)	The ~~three months ended September 30, 2018 includes $1,737 from 666 Fifth Avenue Office Condominium (sold on August 3, 2018), $5,119 from PREIT (accounted for~~decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic. The Hotel Pennsylvania has been temporarily closed since April 1, 2020 as a ~~marketable security beginning~~result of the pandemic.


(4)	The decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March ~~12, 2019) and $2,859 from UE (sold on March 4, 2019).~~2020 through the remainder of the year.

The elements of our New York and Other NOI at share - cash basis for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 are summarized below.


(Amounts in thousands)	For the Three Months Ended September 30,				For the Three Months Ended June 30,
	2019		2018		2020			2019
New York:
Office⁽¹⁾	$	174,796	$	181,575	$	175,438		$	178,806
Retail⁽¹⁾⁽²⁾	65,636		84,976		38,913			66,726
Residential	5,057		5,358		5,504			5,303
Alexander's	11,471		11,774		10,581			11,322
Hotel Pennsylvania(3)	2,964		4,520		(8,525		)	3,982
Total New York	259,924		288,203		221,911			266,139

Other:
theMART(4)	26,588		26,234		17,765			31,984
555 California Street	15,325		13,070		15,005			15,595
Other investments⁽²⁾	1,656		13,374		2,149			4,939
Total Other	43,569		52,678		34,919			52,518

NOI at share - cash basis	$	303,493	$	340,881	$	256,830		$	318,657

___________________


(1)	~~Reflects the transfer~~ 2020 includes $940 of ~~45.4%~~write-offs of ~~common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.~~tenant receivables deemed uncollectible.


(2)	2020 includes $6,731 of write-offs of tenant receivables deemed uncollectible.


(3)	The ~~three months ended September 30, 2018 includes $1,704 from 666 Fifth Avenue Office Condominium (sold on August 3, 2018), $5,157 from PREIT (accounted for~~decrease in NOI at share - cash basis is primarily due to the effects of the COVID-19 pandemic. The Hotel Pennsylvania has been temporarily closed since April 1, 2020 as a ~~marketable security beginning~~result of the pandemic.


(4)	The decrease in NOI at share - cash basis is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March ~~12, 2019) and $2,553 from UE (sold on March 4, 2019).~~2020 through the remainder of the year.

Reconciliation of Net (Loss) Income to ~~Net Operating Income~~NOI At Share and NOI At Share - Cash Basis for the Three Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019

Below is a reconciliation of net (loss) income to NOI at share and NOI at share - cash basis for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019.


(Amounts in thousands)	For the Three Months Ended September 30,						For the Three Months Ended June 30,
	2019			2018			2020			2019
Net income	$	363,849		$	219,162
Net (loss) income							$	(217,352	)	$	2,596,693
Depreciation and amortization expense	96,437			113,169			92,805			113,035
General and administrative expense	33,237			31,977			35,014			38,872
Transaction related costs, impairment losses and other	1,576			2,510
Income from partially owned entities	(25,946		)	(7,206		)
(Income) loss from real estate fund investments	(2,190		)	190
Interest and other investment income, net	(3,045		)	(2,893		)
(Lease liability extinguishment gain) transaction related costs and impairment losses							(69,221		)	101,590
Loss (income) from partially owned entities							291,873			(22,873		)
Loss from real estate fund investments							28,042			15,803
Interest and other investment loss (income), net							2,893			(7,840		)
Interest and debt expense	61,448			88,951			58,405			63,029
Net gain on transfer to Fifth Avenue and Times Square JV							—			(2,571,099		)
Net gains on disposition of wholly owned and partially owned assets	(309,657		)	(141,269		)	(55,695		)	(111,713		)
Income tax expense	23,885			1,943			1,837			26,914
Loss (income) from discontinued operations	8			(61		)
Income from discontinued operations							—			(60		)
NOI from partially owned entities	86,024			60,094			69,487			82,974
NOI attributable to noncontrolling interests in consolidated subsidiaries	(18,096		)	(16,943		)	(15,448		)	(16,416		)
NOI at share	307,530			349,624			222,640			308,909
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	(4,037		)	(8,743		)	34,190			9,748
NOI at share - cash basis	$	303,493		$	340,881		$	256,830		$	318,657

NOI At Share by Region

~~Below is a summary of the percentages of NOI at share by geographic region for the three months ended September 30, 2019 and 2018.~~


	For the Three Months Ended September 30,				For the Three Months Ended June 30,
	2019		2018		2020		2019
Region:
New York City metropolitan area	87	%	88	%	85	%	85	%
Chicago, IL	8	%	8	%	8	%	10	%
San Francisco, CA	5	%	4	%	7	%	5	%
	100	%	100	%	100	%	100	%

Results of Operations – Three Months Ended ~~September~~June 30, ~~2019~~2020 Compared to ~~September~~June 30, ~~2018~~2019

Revenues

Our revenues ~~which consist of rental revenues and fee and other income,~~ were ~~$465,961,000~~$343,026,000 for the three months ended ~~September~~June 30, ~~2019~~2020 compared to ~~$542,048,000~~$463,103,000 for the prior year’s quarter, a decrease of ~~$76,087,000.~~$120,077,000. Below are the details of the decrease by segment:



(Amounts in thousands)	Total				New York				Other
Increase (decrease) due to:
Rental revenues:
Acquisitions, dispositions and other	$	11,522			$	11,266			$	256
Development and redevelopment	(17,840		)		(17,637		)		(203		)
Hotel Pennsylvania⁽¹⁾	(25,977		)		(25,977		)		—
Trade shows⁽²⁾	(11,816		)		—				(11,816		)
Properties transferred to Fifth Avenue and Times Square JV	(16,163		)		(16,163		)		—
Same store operations	(45,831		)	⁽³⁾	(41,627		)		(4,204		)
	(106,105		)		(90,138		)		(15,967		)
Fee and other income:
BMS cleaning fees	(11,455		)		(12,539		)	⁽⁴⁾	1,084
Management and leasing fees	(2,662		)		(2,771		)		109
Properties transferred to Fifth Avenue and Times Square JV	(65		)		(65		)		—
Other income	210				(240		)		450
	(13,972		)		(15,615		)		1,643

Total decrease in revenues	$	(120,077	)		$	(105,753	)		$	(14,324	)

______________________

See notes below.

Expenses

Our expenses were $239,379,000 for the three months ended June 30, 2020, compared to $475,564,000 for the prior year’s quarter, a decrease of $236,185,000. Below are the details of the (decrease) increase by segment:

(Amounts in thousands) Total New York Other
(Decrease) increase due to:
Rental revenues:
Acquisitions, dispositions and other $ 5,453
$ 5,750
$ (297 )
Development and redevelopment (8,108 ) (8,197 ) 89
Hotel Pennsylvania (1,371 ) (1,371 ) —
Trade shows (246 ) —
(246 )
Properties transferred to Fifth Avenue and Times Square JV (76,383 ) (76,383 ) —
Same store operations 4,346
(2,109 ) 6,455
(76,309 ) (82,310 ) 6,001
Fee and other income:
BMS cleaning fees 1,804
1,459
345
Management and leasing fees (1,408 ) (693 ) (715 )
Properties transferred to Fifth Avenue and Times Square JV (300 ) (300 ) —
Other income 126
(34 ) 160
222
432
(210 )

Total (decrease) increase in revenues $ (76,087 ) $ (81,878 ) $ 5,791



(Amounts in thousands)		Total			New York				Other
(Decrease) increase due to:
Operating:
	Acquisitions, dispositions and other	$	(3,472	)	$	(2,938	)		$	(534	)
	Development and redevelopment	(11,223		)	(11,227		)		4
	Non-reimbursable expenses	(403		)	(662		)		259
	Hotel Pennsylvania⁽¹⁾	(13,434		)	(13,434		)		—
	Trade shows⁽²⁾	(3,594		)	—				(3,594		)
	BMS expenses	(7,468		)	(8,552		)	⁽⁴⁾	1,084
	Properties transferred to Fifth Avenue and Times Square JV	(3,824		)	(3,824		)		—
	Same store operations	(2,909		)	(6,975		)		4,066
		(46,327		)	(47,612		)		1,285
Depreciation and amortization:
	Acquisitions, dispositions and other	(2,557		)	(2,557		)		—
	Development and redevelopment	219			(526		)		745
	Properties transferred to Fifth Avenue and Times Square JV	(3,981		)	(3,981		)		—
	Same store operations	(13,911		)	(12,621		)		(1,290		)
		(20,230		)	(19,685		)		(545		)

General and administrative		(3,858		)	(4,498		)		640

Expense from deferred compensation plan liability		5,041			—				5,041

(Lease liability extinguishment gain) transaction related costs and impairment losses		(170,811		)	(171,620		)	⁽⁵⁾	809

Total (decrease) increase in expenses		$	(236,185	)	$	(243,415	)		$	7,230

____________________


(1)	Temporarily closed since April 1, 2020 as a result of the pandemic.


(2)	Cancelled trade shows at theMART from late March 2020 through the remainder of the year as a result of the pandemic.


(3)	2020 includes $33,731 for the non-cash write-off of receivables arising from the straight-lining of rents, primarily for the JCPenney lease at Manhattan Mall and the New York & Company, Inc. lease at 330 West 34th Street, and $3,856 for the write-off of tenant receivables deemed uncollectible.


(4)	Primarily due to a decrease in third party cleaning services provided to retail and office tenants as a result of the pandemic.


(5)	Due to $101,360 of non-cash impairment losses, substantially 608 Fifth Avenue, recognized in the second quarter of 2019 and $70,260 of lease liability extinguishment gain in May 2020 related to 608 Fifth Avenue.

~~Expenses~~

Our expenses, which consist of operating, depreciation and amortization, general and administrative, expense from deferred compensation plan liability, and transaction related costs, impairment losses and other, were $358,583,000 for the three months ended September 30, 2019, compared to $385,092,000 for the prior year’s quarter, a decrease of $26,509,000. Below are the details of the (decrease) increase by segment:

(Amounts in thousands) Total New York Other
(Decrease) increase due to:
Operating:
Acquisitions, dispositions and other $ 270
$ (455 ) $ 725
Development and redevelopment (2,011 ) (2,079 ) 68
Non-reimbursable expenses (1,536 ) (1,417 ) (119 )
Hotel Pennsylvania 112
112
—
Trade shows 55
—
55
BMS expenses 1,443
1,443
—
Properties transferred to Fifth Avenue and Times Square JV (11,741 ) (11,741 ) —
Same store operations 4,192
1,347
2,845
(9,216 ) (12,790 ) 3,574
Depreciation and amortization:
Acquisitions, dispositions and other (671 ) (671 ) —
Development and redevelopment (918 ) (978 ) 60
Properties transferred to Fifth Avenue and Times Square JV (21,044 ) (21,044 ) —
Same store operations 5,901
5,708
193
(16,732 ) (16,985 ) 253

General and administrative 1,260
3,129
(1,869 )

Expense from deferred compensation plan liability (887 ) —
(887 )

Transaction related costs, impairment losses and other (934 ) —
(934 )

Total (decrease) increase in expenses $ (26,509 ) $ (26,646 ) $ 137

Results of Operations – Three Months Ended ~~September~~June 30, 2020 Compared to June 30, 2019 ~~Compared to September 30, 2018~~ - continued

(Loss) Income from Partially Owned Entities

Below are the components of (loss) income from partially owned entities for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019.


(Amounts in thousands)	Ownership Percentage at September 30, 2019	For the Three Months Ended September 30,					Ownership Percentage at June 30, 2020	For the Three Months Ended June 30,
		2019			2018			2020			2019
Our share of net income (loss):
Our share of net (loss) income:
Fifth Avenue and Times Square JV⁽¹⁾:
Equity in net income	51.5%	$	9,891		$	—
Non-cash impairment loss⁽²⁾								$	(306,326	)	$	—
Return on preferred equity, net of our share of the expense		9,545			—			9,330			8,586
Equity in net income⁽³⁾							51.5%	441			11,217
		19,436			—			(296,555		)	19,803
Alexander's	32.4%	6,692			5,427		32.4%	5,151			4,719
Partially owned office buildings⁽²⁾	Various	(186		)	735
Other investments⁽³⁾	Various	4			1,044
Partially owned office buildings⁽⁴⁾							Various	810			(1,451		)
Other investments⁽⁵⁾							Various	(1,279		)	(198		)
		$	25,946		$	7,206		$	(291,873	)	$	22,873

____________________


(1)	Entered into on April 18, 2019.


(2)	~~The three months ended September 30, 2019 includes our 51.5% ownership in the Fifth Avenue and Times Square JV.~~ See Note 78 -Investments in Partially Owned Entities to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information.


~~(2)~~(3)	The decrease in our share of net income was primarily due to (i) $4,737 of write-offs of lease receivables deemed uncollectible during the second quarter of 2020 and (ii) a $4,360 reduction in income related to a Forever 21 lease modification at 1540 Broadway.


(4)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 7 West 34th Street, 330 Madison Avenue (sold on July 11, 2019), 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.


~~(3)~~(5)	Includes interests in Independence Plaza, ~~Fashion Centre Mall/Washington Tower,~~ Rosslyn Plaza ~~50-70 West 93rd Street, 666 Fifth Avenue Office Condominium (sold on August 3, 2018), UE (sold on March 4, 2019), PREIT (accounted as a marketable security from March 12, 2019)~~ and others.

~~Income (loss)~~

Loss from Real Estate Fund Investments

Below are the components of the ~~income (loss)~~loss from our real estate fund investments for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019.

(Amounts in thousands) For the Three Months Ended September 30,
2019 2018
Net investment income $ 2,190
$ 3,093
Net unrealized loss on held investments —
(3,283 )
Income (loss) from real estate fund investments 2,190
(190 )
Less income attributable to noncontrolling interests in consolidated subsidiaries (735 ) (558 )
Income (loss) from real estate fund investments attributable to the Operating Partnership 1,455
(748 )
Less (income) loss attributable to noncontrolling interests in the Operating Partnership (95 ) 46
Income (loss) from real estate fund investments attributable to Vornado $ 1,360
$ (702 )



(Amounts in thousands)	For the Three Months Ended June 30,
	2020			2019
Net investment (loss) income	$	(366	)	$	459
Net unrealized loss on held investments	(27,676		)	(16,262		)
Loss from real estate fund investments	(28,042		)	(15,803		)
Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries	21,953			(4,955		)
Loss from real estate fund investments net of noncontrolling interests in consolidated subsidiaries	$	(6,089	)	$	(20,758	)

Interest and Other Investment (Loss) Income, ~~net~~Net

Below are the components of interest and other investment (loss) income, net for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019.


(Amounts in thousands)	For the Three Months Ended September 30,						For the Three Months Ended June 30,
	2019			2018			2020			2019
Decrease in fair value of marketable securities	$	(4,868	)	$	(7,699	)
Credit losses on loans receivable⁽¹⁾							$	(6,108	)	$	—
Interest on cash and cash equivalents and restricted cash	4,060			4,306			1,498			2,626
Interest on loans receivable⁽¹⁾	1,604			2,004			810			1,635
Dividends on marketable securities	1,312			3,354			—			1,313
Increase in fair value of marketable securities							—			1,312
Other, net	937			928			907			954
	$	3,045		$	2,893
Total							$	(2,893	)	$	7,840

____________________


(1)	~~2018 includes $1,250~~ See Note 4 - Recently Issued Accounting Literature to the unaudited consolidated financial statements in Part I, Item I of ~~profit participation in connection with an investment in a mezzanine loan which was previously repaid to us.~~this Quarterly Report on Form 10-Q for additional information.

Results of Operations – Three Months Ended ~~September~~June 30, ~~2019~~2020 Compared to ~~September~~June 30, ~~2018~~2019 - continued

Interest and Debt Expense

Interest and debt expense for the three months ended ~~September~~June 30, ~~2019~~2020 was ~~$61,448,000~~$58,405,000 compared to ~~$88,951,000~~$63,029,000 for the prior year’s quarter, a decrease of ~~$27,503,000.~~$4,624,000. This decrease was primarily due to (i) ~~$9,906,000~~$6,218,000 of lower interest expense resulting from lower average interest rates on our variable rate loans (ii) $5,998,000 of lower interest expense resulting from the repayment of the mortgage payable of PENN2, (iii) $2,276,000 of lower interest expense resulting from paydowns of the 220 CPS loan, ~~(ii) $9,867,000~~and (iv) $1,615,000 of lower interest expense resulting from the deconsolidation of mortgages payable onof the properties contributed to Fifth Avenue and Times Square JV, ~~(iii) $5,045,000 of lower interest from the redemption of our $400,000,000 5.00% senior unsecured notes, and (iv) $4,135,000 of lower capital lease interest,~~ partially offset by ~~(v) $2,191,000~~$10,366,000 of lower capitalized interest and debt ~~expense,~~expense.

Net Gain on Transfer to Fifth Avenue and ~~(vi) $1,237,000~~Times Square JV

During the three months ended June 30, 2019, we recognized a $2,571,099,000 net gain from the transfer of ~~higher interest attributable~~common equity in the properties contributed to Fifth Avenue and Times Square JV, including the ~~interest rate swap on~~related step-up in our ~~$750,000,000 unsecured term loan.~~basis of the retained portion of the assets to fair value.

Net Gains on Disposition of Wholly Owned and Partially Owned Assets

Net gains on disposition of wholly owned and partially owned assets of ~~$309,657,000~~$55,695,000 for the three months ended ~~September~~June 30, ~~2019 consist~~2020 consisted of ~~(i) a $159,292,000 net gain on sale of our 25% interest in 330 Madison Avenue, (ii) $130,888,000 of~~net gains on the sale of ~~220 CPS~~four condominium units ~~and (iii) a $19,477,000 net gain on sale of 3040 M Street.~~at 220 CPS. Net gains on disposition of ~~$141,269,000~~wholly owned and partially owned assets of $111,713,000 for the three months ended ~~September~~June 30, ~~2018 primarily consist~~2019 consisted of ~~(i) a $134,032,000~~ net ~~gain~~gains on the sale of ~~our 49.5% interests in 666 Fifth Avenue Office Condominium and (ii) a $7,308,000 net gain from the repayment of our interest in the mortgage loan held by us on 666 Fifth Avenue Office Condominium.~~11 condominium units at 220 CPS.

~~Income Tax Expense~~

Income tax expense for the three months ended September 30, 2019 was $23,885,000 compared to $1,943,000 for the prior year’s quarter, an increase of $21,942,000. This increase resulted primarily from $21,853,000 of income tax expense on the sale of 220 CPS condominium units in the three months ended September 30, 2019.

~~(Loss) Income from Discontinued Operations~~

~~Loss from discontinued operations for the three months ended September 30, 2019 was $8,000 compared to income of $61,000 for the prior year’s quarter, a decrease in income of $69,000.~~

~~Net Income Attributable to Noncontrolling Interests in Consolidated Subsidiaries~~

Net income attributable to noncontrolling interests in consolidated subsidiaries was $5,774,000 for the three months ended September 30, 2019, compared to $3,312,000 for the prior year’s quarter, an increase of $2,462,000. The increase resulted primarily from income allocated to the noncontrolling interest in the Farley Office and Retail Building for its share of the development fee income.

~~Net Income Attributable to Noncontrolling Interests in the Operating Partnership (Vornado Realty Trust)~~

Net income attributable to noncontrolling interests in the Operating Partnership was $22,637,000 for the three months ended September 30, 2019, compared to $12,671,000 for the prior year’s quarter, an increase of $9,966,000. This increase resulted primarily from higher net income subject to allocation to unitholders.

~~Preferred Share Dividends of Vornado Realty Trust~~

~~Preferred share dividends were $12,532,000 for the three months ended September 30, 2019, compared to $12,534,000 for the prior year’s quarter, a decrease of $2,000.~~

~~Preferred Unit Distributions of Vornado Realty L.P.~~

~~Preferred unit distributions were $12,574,000 for the three months ended September 30, 2019, compared to $12,582,000 for the prior year’s quarter, a decrease of $8,000.~~

~~Results of Operations – Three Months Ended September 30, 2019 Compared to September 30, 2018 - continued~~

~~Same Store Net Operating Income At Share~~

Same store NOI at share represents NOI at share from property operations which are owned by us and in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is NOI at share from operations before straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments which are owned by us and in service in both the current and prior year reporting periods. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered as an alternative to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the three months ended September 30, 2019 compared to September 30, 2018.

(Amounts in thousands) Total New York theMART 555 California Street Other
NOI at share for the three months ended September 30, 2019 $ 307,530
$ 265,484
$ 24,862
$ 15,265
$ 1,919
Less NOI at share from:
Acquisitions (5 ) (5 ) —
—
—
Dispositions (650 ) (650 ) —
—
—
Development properties (14,704 ) (14,704 ) —
—
—
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net (627 ) (107 ) (520 ) —
—
Other non-same store (income) expense, net (10,222 ) (8,410 ) (12 ) 119
(1,919 )
Same store NOI at share for the three months ended September 30, 2019 $ 281,322
$ 241,608
$ 24,330
$ 15,384
$ —

NOI at share for the three months ended September 30, 2018 $ 349,624
$ 297,328
$ 25,257
$ 13,515
$ 13,524
Less NOI at share from:
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (28,972 ) (28,972 ) —
—
—
Dispositions (3,317 ) (3,317 ) —
—
—
Development properties (23,256 ) (23,242 ) —
(14 ) —
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net 1,578
1,797
(219 ) —
—
Other non-same store (income) expense, net (16,767 ) (3,248 ) 5
—
(13,524 )
Same store NOI at share for the three months ended September 30, 2018 $ 278,890
$ 240,346
$ 25,043
$ 13,501
$ —

Increase (decrease) in same store NOI at share for the three months ended September 30, 2019 compared to September 30, 2018 $ 2,432
$ 1,262
$ (713 ) $ 1,883
$ —

% increase (decrease) in same store NOI at share 0.9 % 0.5 %
⁽¹⁾
(2.8 )% 13.9 % — %

~~____________________~~


~~(1)~~	~~Excluding Hotel Pennsylvania, same store NOI at share increased by 1.2%.~~

~~Results of Operations – Three Months Ended September 30, 2019 Compared to September 30, 2018 - continued~~

~~Same Store Net Operating Income At Share - continued~~

Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, theMART, 555 California Street and other investments for the three months ended September 30, 2019 compared to September 30, 2018.

(Amounts in thousands) Total New York theMART 555 California Street Other
NOI at share - cash basis for the three months ended September 30, 2019 $ 303,493
$ 259,924
$ 26,588
$ 15,325
$ 1,656
Less NOI at share - cash basis from:
Acquisitions (5 ) (5 ) —
—
—
Dispositions (690 ) (690 ) —
—
—
Development properties (20,306 ) (20,306 ) —
—
—
Lease termination income (1,016 ) (157 ) (859 ) —
—
Other non-same store (income) expense, net (11,280 ) (9,658 ) (12 ) 46
(1,656 )
Same store NOI at share - cash basis for the three months ended September 30, 2019 $ 270,196
$ 229,108
$ 25,717
$ 15,371
$ —

NOI at share - cash basis for the three months ended September 30, 2018 $ 340,881
$ 288,203
$ 26,234
$ 13,070
$ 13,374
Less NOI at share - cash basis from:
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (27,452 ) (27,452 ) —
—
—
Dispositions (3,370 ) (3,370 ) —
—
—
Development properties (25,061 ) (25,047 ) —
(14 ) —
Lease termination income (268 ) (8 ) (260 ) —
—
Other non-same store (income) expense, net (17,319 ) (3,950 ) 5
—
(13,374 )
Same store NOI at share - cash basis for the three months ended September 30, 2018 $ 267,411
$ 228,376
$ 25,979
$ 13,056
$ —

Increase (decrease) in same store NOI at share - cash basis for the three months ended September 30, 2019 compared to September 30, 2018 $ 2,785
$ 732
$ (262 ) $ 2,315
$ —

% increase (decrease) in same store NOI at share - cash basis 1.0 % 0.3 %
⁽¹⁾
(1.0 )% 17.7 % — %

~~____________________~~


~~(1)~~	~~Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 1.0%.~~

~~Net Operating Income At Share by Segment for the Nine Months Ended September 30, 2019 and 2018~~

NOI represents total revenues less operating expenses. We consider NOI to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered a substitute for net income. NOI may not be comparable to similarly titled measures employed by other companies.

~~Below is a summary of NOI at share and NOI at share - cash basisby segment for the nine months ended September 30, 2019 and 2018.~~

(Amounts in thousands) For the Nine Months Ended September 30, 2019
Total
New York⁽¹⁾
Other
Total revenues $ 1,463,732
$ 1,200,234
$ 263,498
Operating expenses 694,006
574,073
119,933
NOI - consolidated 769,726
626,161
143,565
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (51,915 ) (31,011 ) (20,904 )
Add: NOI from partially owned entities 236,400
211,394
25,006
NOI at share 954,211
806,544
147,667
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other 530
(3,741 ) 4,271
NOI at share - cash basis $ 954,741
$ 802,803
$ 151,938

~~___________________~~


~~(1)~~	~~Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.~~

~~Net Operating Income At Share by Segment for the Nine Months Ended September 30, 2019 and 2018- continued~~

~~The elements of our New York and Other NOI at share for the nine months ended September 30, 2019 and 2018 are summarized below.~~

(Amounts in thousands) For the Nine Months Ended September 30,
2019 2018
New York:
Office⁽¹⁾
$ 540,601
$ 556,169
Retail ⁽¹⁾
213,489
267,876
Residential 17,528
17,681
Alexander's 33,699
34,110
Hotel Pennsylvania 1,227
5,955
Total New York 806,544
881,791

Other:
theMART 79,359
79,948
555 California Street 45,124
40,686
Other investments⁽²⁾
23,184
50,664
Total Other 147,667
171,298

NOI at share $ 954,211
$ 1,053,089

~~___________________~~


~~(1)~~	~~Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.~~


~~(2)~~	The nine months ended September 30, 2018 includes $12,145 from 666 Fifth Avenue Office Condominium (sold on August 3, 2018), $15,349 from PREIT (accounted for as a marketable security beginning March 12, 2019) and $8,624 from UE (sold on March 4, 2019).

~~The elements of our New York and Other NOI at share - cash basis for the nine months ended September 30, 2019 and 2018 are summarized below.~~

(Amounts in thousands) For the Nine Months Ended September 30,
2019 2018
New York:
Office⁽¹⁾
$ 537,972
$ 540,484
Retail⁽¹⁾
213,298
243,704
Residential 16,131
16,420
Alexander's 34,320
35,911
Hotel Pennsylvania 1,082
6,111
Total New York 802,803
842,630

Other:
theMART 83,484
81,312
555 California Street 45,665
39,704
Other investments⁽²⁾
22,789
50,271
Total Other 151,938
171,287

NOI at share - cash basis $ 954,741
$ 1,013,917

~~___________________~~


~~(1)~~	~~Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019.~~


~~(2)~~	The nine months ended September 30, 2018 includes $12,025 from 666 Fifth Avenue Office Condominium (sold on August 3, 2018), $15,155 from PREIT (accounted for as a marketable security beginning March 12, 2019) and $8,108 from UE (sold on March 4, 2019).

~~Reconciliation of Net Income to Net Operating Income At Share for the Nine Months Ended September 30, 2019 and 2018~~

~~Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the nine months ended September 30, 2019 and 2018.~~

(Amounts in thousands) For the Nine Months Ended September 30,
2019 2018
Net income $ 3,173,586
$ 324,782
Depreciation and amortization expense 326,181
333,701
General and administrative expense 130,129
108,937
Transaction related costs, impairment losses and other 103,315
16,683
Income from partially owned entities (56,139 ) (6,059 )
Loss from real estate fund investments 13,780
37,973
Interest and other investment income, net (15,930 ) (9,401 )
Interest and debt expense 226,940
264,774
Net gain on transfer to Fifth Avenue and Times Square JV (2,571,099 ) —
Net gains on disposition of wholly owned and partially owned assets (641,664 ) (164,828 )
Income tax expense 80,542
4,964
Loss (income) from discontinued operations 85
(381 )
NOI from partially owned entities 236,400
193,359
NOI attributable to noncontrolling interests in consolidated subsidiaries (51,915 ) (51,415 )
NOI at share 954,211
1,053,089
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other 530
(39,172 )
NOI at share - cash basis $ 954,741
$ 1,013,917

~~NOI At Share by Region~~

~~Below is a summary of the percentages of NOI at share by geographic region for the nine months ended September 30, 2019 and 2018.~~

For the Nine Months Ended September 30,
2019 2018
Region:
New York City metropolitan area 86 % 88 %
Chicago, IL 9 % 8 %
San Francisco, CA 5 % 4 %
100 % 100 %

~~Results of Operations – Nine Months Ended September 30, 2019 Compared to September 30, 2018~~

~~Revenues~~

Our revenues, which consist of rental revenues and fee and other income, were $1,463,732,000 for the nine months ended September 30, 2019, compared to $1,620,303,000 for the prior year’s nine months, a decrease of $156,571,000. Below are the details of the (decrease) increase by segment:

(Amounts in thousands) Total New York Other
(Decrease) increase due to:
Rental revenues:
Acquisitions, dispositions and other $ (5,015 ) $ (4,671 ) $ (344 )
Development and redevelopment (12,879 ) (13,128 ) 249
Hotel Pennsylvania (4,733 ) (4,733 ) —
Trade shows (1,965 ) —
(1,965 )
Properties transferred to Fifth Avenue and Times Square JV (139,013 ) (139,013 ) —
Same store operations 5,145
(12,093 )
⁽¹⁾
17,238
(158,460 ) (173,638 ) 15,178
Fee and other income:
BMS cleaning fees 4,937
4,600
337
Management and leasing fees (142 ) 1,085
(1,227 )
Properties transferred to Fifth Avenue and Times Square JV (532 ) (532 ) —
Other income (2,374 ) (763 ) (1,611 )
1,889
4,390
(2,501 )

Total (decrease) increase in revenues $ (156,571 ) $ (169,248 ) $ 12,677

~~___________________~~


~~(1)~~	~~Includes a $5,967 reduction in income from the non-cash write-off of straight-line rent receivables related to Topshop at 478-486 Broadway in the second quarter of 2019.~~

~~Results of Operations – Nine Months Ended September 30, 2019 Compared to September 30, 2018- continued~~

~~Expenses~~

Our expenses, which consist of operating, depreciation and amortization, general and administrative, expense from deferred compensation plan liability, and transaction related costs, impairment losses and other, were $1,261,353,000 for the nine months ended September 30, 2019, compared to $1,172,013,000 for the prior year’s nine months, an increase of $89,340,000. Below are the details of the increase by segment:

(Amounts in thousands) Total New York Other
Increase (decrease) due to:
Operating:
Acquisitions, dispositions and other $ 1,980
$ 386
$ 1,594
Development and redevelopment (2,655 ) (3,091 ) 436
Non-reimbursable expenses (10,522 ) (9,487 ) (1,035 )
Hotel Pennsylvania 5
5
—
Trade shows 548
—
548
BMS expenses 4,073
4,073
—
Properties transferred to Fifth Avenue and Times Square JV (27,458 ) (27,458 ) —
Same store operations 18,877
9,877
9,000
(15,152 ) (25,695 ) 10,543
Depreciation and amortization:
Acquisitions, dispositions and other 1,452
1,444
8
Development and redevelopment (5,523 ) (5,640 ) 117
Properties transferred to Fifth Avenue and Times Square JV (37,094 ) (37,094 ) —
Same store operations 33,645
31,835
1,810
(7,520 ) (9,455 ) 1,935

General and administrative 21,192
⁽¹⁾
15,116
6,076

Expense from deferred compensation plan liability 4,188
—
4,188

Transaction related costs, impairment losses and other 86,632
88,257
⁽²⁾
(1,625 )

Total increase in expenses $ 89,340
$ 68,223
$ 21,117

~~___________________~~

~~(1)~~

2019 includes (i) $11,055 of non-cash stock-based compensation expense for the accelerated vesting of previously issued OP Units and Vornado restricted stock due to the removal of the time-based vesting requirement for participants who have reached 65 years of age, and (ii) $8,046 of non-cash stock-based compensation expense for the time-based equity compensation granted in connection with the new leadership group announced in April 2019 (additional non-cash expense associated with these awards will be $2,401 in the fourth quarter of 2019, $9,603 in each of 2020 and 2021, $7,718 in 2022 and $2,655 in 2023).

~~(2)~~

2019 includes $101,360 of non-cash impairment losses, substantially 608 Fifth Avenue, partially offset by $13,103 disputed additional New York City real property transfer tax ("Transfer Tax") recorded in the first quarter of 2018 related to the December 2012 acquisition of Independence Plaza. The joint venture, in which we have a 50.1% economic interest, that owns Independence Plaza recorded this expense based on the precedent established by the New York City Tax Appeals Tribunal (the "Tax Tribunal") decision regarding One Park Avenue. See Note 5 - ~~Real Estate Fund Investments~~ ~~to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information regarding this matter.~~

~~Results of Operations – Nine Months Ended September 30, 2019 Compared to September 30, 2018- continued~~

~~Income from Partially Owned Entities~~

~~Below are the components of income from partially owned entities for the nine months ended September 30, 2019 and 2018.~~

(Amounts in thousands) Percentage
Ownership at
September 30, 2019 For the Nine Months Ended September 30,
2019 2018
Our share of net income (loss):
Fifth Avenue and Times Square JV⁽¹⁾:

Equity in net income 51.5% $ 21,108
$ —
Return on preferred equity, net of our share of the expense 18,131
—
39,239
—
Alexander's⁽²⁾
32.4% 18,185
10,593
Partially owned office buildings⁽³⁾
Various (1,531 ) (1,546 )
Other investments⁽⁴⁾
Various 246
(2,988 )
$ 56,139
$ 6,059

~~____________________~~


~~(1)~~	~~The nine months ended September 30, 2019 includes our 51.5% ownership in the Fifth Avenue and Times Square JV. See Note 7 -~~ ~~Investments in Partially Owned Entities~~ ~~to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information.~~

~~(2)~~

2018 includes our $7,708 share of Alexander’s disputed additional Transfer Tax related to the November 2012 sale of Kings Plaza Regional Shopping Center. Alexander's recorded this expense based on the precedent established by the Tax Tribunal's decision regarding One Park Avenue. See Note 5 - ~~Real Estate Fund Investments~~ ~~to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information regarding this matter.~~

~~(3)~~

Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 7 West 34th Street, 330 Madison Avenue (sold on July 11, 2019), 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others. 2019 includes a $1,079 reduction in income from the non-cash write-off of straight-line rent receivable related to The Four Seasons Restaurant at 280 Park Avenue. 2018 includes our $4,978 share of disputed additional Transfer Tax related to the March 2011 acquisition of One Park Avenue. See Note 5 - ~~Real Estate Fund Investments~~ ~~to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information regarding this matter.~~


~~(4)~~	Includes interests in Independence Plaza, Fashion Centre Mall/Washington Tower, Rosslyn Plaza, 50-70 West 93rd Street, 666 Fifth Avenue Office Condominium (sold on August 3, 2018), UE (sold on March 4, 2019), PREIT (accounted as a marketable security from March 12, 2019) and others.

~~Loss from Real Estate Fund Investments~~

~~Below are the components of the loss from our real estate fund investments for the nine months ended September 30, 2019 and 2018.~~

(Amounts in thousands) For the Nine Months Ended September 30,
2019 2018
Net investment income $ 2,382
$ 6,366
Net unrealized loss on held investments (16,162 ) (32,796 )
Net realized loss on exited investments —
(913 )
Transfer tax —
(10,630 )
Loss from real estate fund investments (13,780 ) (37,973 )
Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries (8,427 ) 34,338
Loss from real estate fund investments attributable to the Operating Partnership (22,207 ) (3,635 )
Less loss attributable to noncontrolling interests in the Operating Partnership 1,403
224
Loss from real estate fund investments attributable to Vornado $ (20,804 ) $ (3,411 )

~~Results of Operations – Nine Months Ended September 30, 2019 Compared to September 30, 2018- continued~~

~~Interest and Other Investment Income, net~~

~~Below are the components of interest and other investment income, net for the nine months ended September 30, 2019 and 2018.~~

(Amounts in thousands) For the Nine Months Ended September 30,
2019 2018
Interest on cash and cash equivalents and restricted cash $ 8,753
$ 12,370
Interest on loans receivable⁽¹⁾
4,845
8,952
Decrease in fair value of marketable securities⁽²⁾
(3,095 ) (24,801 )
Dividends on marketable securities 2,625
10,060
Other, net 2,802
2,820
$ 15,930
$ 9,401

~~____________________~~


~~(1)~~	~~2018 includes $6,707 of of profit participation in connection with an investment in a mezzanine loan which was previously repaid to us.~~


~~(2)~~	2019 includes a $19,211 decrease in the value of our investment in PREIT, partially offset by a $16,068 mark-to-market increase in fair value of our Lexington common shares through March 1, 2019, the date of sale of our investment.

~~Interest and Debt Expense~~

Interest and debt expense was $226,940,000 for the nine months ended September 30, 2019, compared to $264,774,000 for the prior year’s nine months, a decrease of $37,834,000. This decrease was primarily due to (i) $20,956,000 of lower interest expense resulting from paydowns of the 220 CPS loan, (ii) $19,253,000 of lower interest expense resulting from the deconsolidation of mortgages payable on the properties contributed to Fifth Avenue and Times Square JV, (iii) $13,040,000 of lower capital lease interest, (iv) $10,091,000 of lower interest from the redemption of our $400,000,000 5.00% senior unsecured notes, and (v) $9,466,000 of higher capitalized interest and debt expense, partially offset by (vi) $22,540,000 of debt prepayment costs relating to redemption of our $400,000,000 5.00% senior unsecured notes, (vii) $6,811,000 of higher interest expense resulting from higher average interest rates on our variable rate loans, (viii) $4,795,000 of higher interest attributable to the interest rate swap on our $750,000,000 unsecured term loan, and (ix) $2,599,000 of higher interest expense for revolver borrowings.

~~Net Gain on Transfer to Fifth Avenue and Times Square JV~~

During the nine months ended September 30, 2019, we recognized a $2,571,099,000 net gain from the transfer of common equity in the properties contributed to Fifth Avenue and Times Square JV, including the related step-up in our basis of the retained portion of the assets to fair value.

~~Net Gains on Disposition of Wholly Owned and Partially Owned Assets~~

Net gains on disposition of wholly owned and partially owned assets of $641,664,000 for the nine months ended September 30, 2019 consist of (i) $400,500,000 of net gains on sale of 220 CPS condominium units, (ii) a $159,292,000 net gain on sale of our 25% interest in 330 Madison Avenue, (iii) a $62,395,000 net gain from the sale of all our UE partnership units, and (iv) a $19,477,000 net gain on sale of 3040 M Street. Net gains of $164,828,000 for the nine months ended September 30, 2018 primarily consist of (i) a $134,032,000 net gain on the sale of our 49.5% interests in 666 Fifth Avenue Office Condominium, (ii) a $23,559,000 net gain on sale of 27 Washington Square North, and (iii) a $7,308,000 net gain from the repayment of our interest on the mortgage loan held by us on 666 Fifth Avenue Office Condominium.

Income Tax Expense

Income tax expense for the ~~nine~~three months ended ~~September~~June 30, ~~2019~~2020 was ~~$80,542,000~~$1,837,000 compared to ~~$4,964,000~~$26,914,000 for the prior year’s ~~nine months, an increase~~quarter, a decrease of ~~$75,578,000.~~$25,077,000. This ~~increase resulted~~decrease was primarily ~~from$71,590,000 of~~due to lower income tax expense onfrom the sale of 220 CPS condominium units.

~~Loss (Income) from Discontinued Operations~~

~~Loss from discontinued operations for the nine months ended September 30, 2019 was $85,000 compared to income of $381,000 for the prior year’s nine months, a decrease in income of $466,000.~~

~~Results of Operations – Nine Months Ended September 30, 2019 Compared to September 30, 2018- continued~~

Net Loss (Income) ~~Loss~~ Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net ~~income~~loss attributable to noncontrolling interests in consolidated subsidiaries was ~~$34,045,000~~$17,768,000 for the ~~nine~~three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~a loss~~income of ~~$31,137,000~~$21,451,000 for the prior year’s ~~nine months, an increase~~quarter, a decrease in income of ~~$65,182,000.~~$39,219,000. This ~~increase~~decrease resulted primarily from ~~(i) $42,765,000 increase from~~ the ~~lower~~allocation of net loss ~~subject to allocation~~ to the noncontrolling ~~interest~~interests of our real estate fund ~~(ii)~~investments, partially offset by a $11,945,000 ~~resulting from the~~ net gain on transfer to Fifth Avenue and Times Square JV ~~attributable to noncontrolling interests for~~during the ~~nine months ended September 30, 2019, and (iii) $6,538,000~~second quarter of ~~disputed additional Transfer Tax allocated to noncontrolling interests related to the December 2012 acquisition of Independence Plaza for the nine months ended September 30, 2018.~~2019.

Net ~~Income~~Loss (Income) Attributable to Noncontrolling Interests in the Operating Partnership (Vornado Realty Trust)

Net ~~income~~loss attributable to noncontrolling interests in the Operating Partnership was ~~$197,354,000~~$14,364,000 for the ~~nine~~three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$18,992,000~~net income of $162,515,000 for the prior year’s ~~nine months, an increase~~quarter, a decrease in income of ~~$178,362,000.~~$176,879,000. ~~The increase~~This decrease resulted primarily from~~higher~~ lower net income subject to allocation to ~~Class A unitholders due to the net gain on transfer to Fifth Avenue and Times Square JV.~~unitholders.

Preferred Share Dividends of Vornado Realty Trust

Preferred share dividends were ~~$37,598,000~~$12,530,000 for the ~~nine~~three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$38,103,000~~$12,532,000 for the prior year’s ~~nine months,~~quarter, a decrease of ~~$505,000.~~ $2,000.

Preferred Unit Distributions of Vornado Realty L.P.

Preferred unit distributions were ~~$37,722,000~~$12,571,000 for the ~~nine~~three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$38,248,000~~$12,573,000 for the prior year’s ~~nine months,~~quarter, a decrease of ~~$526,000.~~ $2,000.

~~Preferred Share/Unit Issuance Costs~~

Preferred share/unit issuance cost for the nine months ended September 30, 2018 were $14,486,000 representing the write-off of issuance cost upon redemption of all the outstanding Series G and Series I cumulative redeemable preferred shares/units in January 2018.

~~Results of Operations – Nine Months Ended September 30, 2019 Compared to September 30, 2018- continued~~

~~Same Store Net Operating Income At Share~~

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the nine months ended September 30, 2019 compared to September 30, 2018.

(Amounts in thousands) Total New York theMART 555 California Street Other
NOI at share for the nine months ended September 30, 2019 $ 954,211
$ 806,544
$ 79,359
$ 45,124
$ 23,184
Less NOI at share from:
Acquisitions (225 ) (225 ) —
—
—
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (5,479 ) (5,479 ) —
—
—
Dispositions (7,277 ) (7,277 ) —
—
—
Development properties (37,806 ) (37,806 ) —
—
—
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net 4,362
4,882
(520 ) —
—
Other non-same store (income) expense, net (28,711 ) (3,983 ) (1,943 ) 399
(23,184 )
Same store NOI at share for the nine months ended September 30, 2019 $ 879,075
$ 756,656
$ 76,896
$ 45,523
$ —

NOI at share for the nine months ended September 30, 2018 $ 1,053,089
$ 881,791
$ 79,948
$ 40,686
$ 50,664
Less NOI at share from:
Acquisitions (124 ) (124 ) —
—
—
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (55,337 ) (55,337 ) —
—
—
Dispositions (10,288 ) (10,288 ) —
—
—
Development properties (53,394 ) (53,380 ) —
(14 ) —
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net 2,394
2,655
(261 ) —
—
Other non-same store income, net (62,284 ) (7,188 ) (4,432 ) —
(50,664 )
Same store NOI at share for the nine months ended September 30, 2018 $ 874,056
$ 758,129
$ 75,255
$ 40,672
$ —

Increase (decrease) in same store NOI at share for the nine months ended September 30, 2019 compared to September 30, 2018 $ 5,019
$ (1,473 ) $ 1,641
$ 4,851
$ —

% increase (decrease) in same store NOI at share 0.6 % (0.2 )%
⁽¹⁾
2.2 % 11.9 % — %

~~____________________~~


~~(1)~~	~~Excluding Hotel Pennsylvania, same store NOI at share increased by 0.4%.~~

Results of Operations – ~~Nine~~Three Months Ended ~~September~~June 30, ~~2019~~2020 Compared to ~~September~~June 30, ~~2018~~2019 - continued

Same Store Net Operating Income At Share ~~- continued~~

~~Below~~Same store NOI at share represents NOI at share from operations which are ~~reconciliations of~~in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis ~~for our New York segment, theMART, 555 California Street and other investments for the nine months ended September 30, 2019 compared to September 30, 2018.~~

(Amounts in thousands) Total New York theMART 555 California Street Other
NOI at share - cash basis for the nine months ended September 30, 2019 $ 954,741
$ 802,803
$ 83,484
$ 45,665
$ 22,789
Less NOI at share - cash basis from:
Acquisitions (226 ) (226 ) —
—
—
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (5,183 ) (5,183 ) —
—
—
Dispositions (7,716 ) (7,716 ) —
—
—
Development properties (47,597 ) (47,597 ) —
—
—
Lease termination income (2,943 ) (2,084 ) (859 ) —
—
Other non-same store (income) expense, net (39,399 ) (14,919 ) (1,942 ) 251
(22,789 )
Same store NOI at share - cash basis for the nine months ended September 30, 2019 $ 851,677
$ 725,078
$ 80,683
$ 45,916
$ —

NOI at share - cash basis for the nine months ended September 30, 2018 $ 1,013,917
$ 842,630
$ 81,312
$ 39,704
$ 50,271
Less NOI at share - cash basis from:
Acquisitions (124 ) (124 ) —
—
—
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (52,184 ) (52,184 ) —
—
—
Dispositions (9,933 ) (9,933 ) —
—
—
Development properties (57,495 ) (57,481 ) —
(14 ) —
Lease termination income (1,491 ) (1,069 ) (422 ) —
—
Other non-same store income, net (63,227 ) (8,524 ) (4,432 ) —
(50,271 )
Same store NOI at share - cash basis for the nine months ended September 30, 2018 $ 829,463
$ 713,315
$ 76,458
$ 39,690
$ —

Increase in same store NOI at share - cash basis for the nine months ended September 30, 2019 compared to September 30, 2018 $ 22,214
$ 11,763
$ 4,225
$ 6,226
$ —

% increase in same store NOI at share - cash basis 2.7 % 1.6 %
⁽¹⁾
5.5 % 15.7 % — %

~~____________________~~


~~(1)~~	~~Excluding Hotel Pennsylvania, same store NOI at share - cash basis increased by 2.4%.~~

~~SUPPLEMENTAL INFORMATION~~

~~Net Operating Income At Share by Segment for the Three Months Ended September 30, 2019 and June 30, 2019~~

NOI represents total revenues less operating expenses. We consider NOI to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered ~~a substitute for~~alternatives to net ~~income. NOI~~income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.

~~Below is a summary of NOIat share and NOI at share - cash basis by segment for the three months ended September 30, 2019 and June 30, 2019.~~

(Amounts in thousands) For the Three Months Ended June 30, 2019
Total New York Other
Total revenues $ 463,103
$ 376,381
$ 86,722
Operating expenses 220,752
187,819
32,933
NOI - consolidated 242,351
188,562
53,789
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (16,416 ) (10,030 ) (6,386 )
Add: NOI from partially owned entities 82,974
79,170
3,804
NOI at share 308,909
257,702
51,207
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other 9,748
8,437
1,311
NOI at share - cash basis $ 318,657
$ 266,139
$ 52,518

~~SUPPLEMENTAL INFORMATION - CONTINUED~~

~~Net Operating Income At Share by Segment for the Three Months Ended September 30, 2019 and June 30, 2019 - continued~~

~~The elements of our New York and Other NOI at share for the three months ended September 30, 2019 and June 30, 2019 are summarized below.~~

(Amounts in thousands) For the Three Months Ended
September 30, 2019 June 30, 2019
New York:
Office $ 177,469
$ 179,592
Retail 68,159
57,063
Residential 5,575
5,908
Alexander's 11,269
11,108
Hotel Pennsylvania 3,012
4,031
Total New York 265,484
257,702

Other:
theMART 24,862
30,974
555 California Street 15,265
15,358
Other investments 1,919
4,875
Total Other 42,046
51,207

NOI at share $ 307,530
$ 308,909

~~The elements of our New York and Other NOI at share - cash basis for the three months ended September 30, 2019 and June 30, 2019 are summarized below.~~

(Amounts in thousands) For the Three Months Ended
September 30, 2019 June 30, 2019
New York:
Office $ 174,796
$ 178,806
Retail 65,636
66,726
Residential 5,057
5,303
Alexander's 11,471
11,322
Hotel Pennsylvania 2,964
3,982
Total New York 259,924
266,139

Other:
theMART 26,588
31,984
555 California Street 15,325
15,595
Other investments 1,656
4,939
Total Other 43,569
52,518

NOI at share - cash basis $ 303,493
$ 318,657

~~SUPPLEMENTAL INFORMATION - CONTINUED~~

~~Reconciliation of Net Income to Net Operating Income At Share for the Three Months Ended September 30, 2019 and June 30, 2019~~

(Amounts in thousands) For the Three Months Ended
September 30, 2019 June 30, 2019
Net income $ 363,849
$ 2,596,693
Depreciation and amortization expense 96,437
113,035
General and administrative expense 33,237
38,872
Transaction related costs, impairment losses and other 1,576
101,590
Income from partially owned entities (25,946 ) (22,873 )
(Income) loss from real estate fund investments (2,190 ) 15,803
Interest and other investment income, net (3,045 ) (7,840 )
Interest and debt expense 61,448
63,029
Net gain on transfer to Fifth Avenue and Times Square JV —
(2,571,099 )
Net gains on disposition of wholly owned and partially owned assets (309,657 ) (111,713 )
Income tax expense 23,885
26,914
Loss (income) from discontinued operations 8
(60 )
NOI from partially owned entities 86,024
82,974
NOI attributable to noncontrolling interests in consolidated subsidiaries (18,096 ) (16,416 )
NOI at share 307,530
308,909
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (4,037 ) 9,748
NOI at share - cash basis $ 303,493
$ 318,657

~~SUPPLEMENTAL INFORMATION - CONTINUED~~

~~Three Months Ended September 30, 2019 Compared to June 30, 2019~~

~~Same Store Net Operating Income At Share~~

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the three months ended ~~September~~June 30, ~~2019~~2020 compared to June 30, 2019.

(Amounts in thousands) Total New York theMART 555 California Street Other
NOI at share for the three months ended September 30, 2019 $ 307,530
$ 265,484
$ 24,862
$ 15,265
$ 1,919
Less NOI at share from:
Acquisitions (5 ) (5 ) —
—
—
Dispositions (650 ) (650 ) —
—
—
Development properties (14,704 ) (14,704 ) —
—
—
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net (627 ) (107 ) (520 ) —
—
Other non-same store (income) expense, net (10,220 ) (8,408 ) (12 ) 119
(1,919 )
Same store NOI at share for the three months ended September 30, 2019 $ 281,324
$ 241,610
$ 24,330
$ 15,384
$ —

NOI at share for the three months ended June 30, 2019 $ 308,909
$ 257,702
$ 30,974
$ 15,358
$ 4,875
Less NOI at share from:
Acquisitions (5 ) (5 ) —
—
—
Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV (5,479 ) (5,479 ) —
—
—
Dispositions (3,401 ) (3,401 ) —
—
—
Development properties (19,698 ) (19,698 ) —
—
—
Lease termination income, net of write-offs of straight-line receivables and acquired below-market leases, net 2,933
2,933
—
—
—
Other non-same store expense (income), net 214
4,983
(98 ) 204
(4,875 )
Same store NOI at share for the three months ended June 30, 2019 $ 283,473
$ 237,035
$ 30,876
$ 15,562
$ —

(Decrease) increase in same store NOI at share for the three months ended September 30, 2019 compared to June 30, 2019 $ (2,149 ) $ 4,575
$ (6,546 ) $ (178 ) $ —

% (decrease) increase in same store NOI at share (0.8 )% 1.9 %
⁽¹⁾
(21.2 )% (1.1 )% — %



(Amounts in thousands)		Total			New York			theMART				555 California Street			Other
NOI at share for the three months ended June 30, 2020		$	222,640		$	188,968		$	17,803			$	14,837		$	1,032
	Less NOI at share from:
	Development properties	(7,376		)	(7,372		)	—				(4		)	—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	8,516			8,516			—				—			—
	Other non-same store income, net	(9,373		)	(8,283		)	—				(58		)	(1,032		)
Same store NOI at share for the three months ended June 30, 2020		$	214,407		$	181,829		$	17,803			$	14,775		$	—

NOI at share for the three months ended June 30, 2019		$	308,909		$	257,702		$	30,974			$	15,358		$	4,875
	Less NOI at share from:
	Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV	(5,479		)	(5,479		)	—				—			—
	Dispositions	(3,696		)	(3,696		)	—				—			—
	Development properties	(14,538		)	(14,538		)	—				—			—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	(4,031		)	(4,031		)	—				—			—
	Other non-same store expense (income), net	2,792			7,459			6				202			(4,875		)
Same store NOI at share for the three months ended June 30, 2019		$	283,957		$	237,417		$	30,980			$	15,560		$	—

Decrease in same store NOI at share for the three months ended June 30, 2020 compared to June 30, 2019		$	(69,550	)	$	(55,588	)	$	(13,177	)		$	(785	)	$	—

% decrease in same store NOI at share		(24.5		)%	(23.4		)%	(42.5		)%	⁽¹⁾	(5.0		)%	—		%

____________________


(1)	~~Excluding Hotel Pennsylvania, same store NOI at share increased by 2.4%.~~The decrease is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

~~SUPPLEMENTAL INFORMATION - CONTINUED~~

Results of Operations – Three Months Ended ~~September~~June 30, ~~2019~~2020 Compared to June 30, 2019 - continued

Same Store Net Operating Income At Share - continued


(Amounts in thousands)	(Amounts in thousands)	Total			New York				theMART			555 California Street			Other			(Amounts in thousands)	Total			New York			theMART				555 California Street			Other
NOI at share - cash basis for the three months ended September 30, 2019		$	303,493		$	259,924			$	26,588		$	15,325		$	1,656
NOI at share - cash basis for the three months ended June 30, 2020																		NOI at share - cash basis for the three months ended June 30, 2020	$	256,830		$	221,911		$	17,765			$	15,005		$	2,149
	Less NOI at share - cash basis from:																	Less NOI at share - cash basis from:
	Acquisitions	(5		)	(5		)		—			—			—			Development properties	(9,475		)	(9,471		)	—				(4		)	—
	Dispositions	(690		)	(690		)		—			—			—			Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	8,525			8,525			—				—			—
	Development properties	(20,306		)	(20,306		)		—			—			—			Other non-same store (income) expense, net	(13,174		)	(11,072		)	—				47			(2,149		)
	Lease termination income	(1,016		)	(157		)		(859		)	—			—
	Other non-same store (income) expense, net	(11,280		)	(9,658		)		(12		)	46			(1,656		)
Same store NOI at share - cash basis for the three months ended September 30, 2019		$	270,196		$	229,108			$	25,717		$	15,371		$	—
Same store NOI at share - cash basis for the three months ended June 30, 2020																		Same store NOI at share - cash basis for the three months ended June 30, 2020	$	242,706		$	209,893		$	17,765			$	15,048		$	—

NOI at share - cash basis for the three months ended June 30, 2019	NOI at share - cash basis for the three months ended June 30, 2019	$	318,657		$	266,139			$	31,984		$	15,595		$	4,939		NOI at share - cash basis for the three months ended June 30, 2019	$	318,657		$	266,139		$	31,984			$	15,595		$	4,939
	Less NOI at share - cash basis from:																	Less NOI at share - cash basis from:
	Acquisitions	(5		)	(5		)		—			—			—			Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV	(5,183		)	(5,183		)	—				—			—
	Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV	(5,183		)	(5,183		)		—			—			—			Dispositions	(3,879		)	(3,879		)	—				—			—
	Dispositions	(3,600		)	(3,600		)		—			—			—			Development properties	(23,364		)	(23,364		)	—				—			—
	Development properties	(22,438		)	(22,438		)		—			—			—			Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	(3,982		)	(3,982		)	—				—			—
	Lease termination income	(247		)	(247		)		—			—			—			Other non-same store (income) expense, net	(10,214		)	(5,409		)	6				128			(4,939		)
	Other non-same store (income) expense, net	(9,613		)	(4,705		)		(98		)	129			(4,939		)
Same store NOI at share - cash basis for the three months ended June 30, 2019	Same store NOI at share - cash basis for the three months ended June 30, 2019	$	277,571		$	229,961			$	31,886		$	15,724		$	—		Same store NOI at share - cash basis for the three months ended June 30, 2019	$	272,035		$	224,322		$	31,990			$	15,723		$	—

Decrease in same store NOI at share - cash basis for the three months ended September 30, 2019 compared to June 30, 2019		$	(7,375	)	$	(853	)		$	(6,169	)	$	(353	)	$	—
Decrease in same store NOI at share - cash basis for the three months ended June 30, 2020 compared to June 30, 2019																		Decrease in same store NOI at share - cash basis for the three months ended June 30, 2020 compared to June 30, 2019	$	(29,329	)	$	(14,429	)	$	(14,225	)		$	(675	)	$	—

% decrease in same store NOI at share - cash basis	% decrease in same store NOI at share - cash basis	(2.7		)%	(0.4		)%	⁽¹⁾	(19.3		)%	(2.2		)%	—		%	% decrease in same store NOI at share - cash basis	(10.8		)%	(6.4		)%	(44.5		)%	⁽¹⁾	(4.3		)%	—		%

____________________


(1)	~~Excluding~~The decrease is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

NOI At Share by Segment for the Six Months Ended June 30, 2020 and 2019

Below is a summary of NOI at share and NOI at share - cash basisby segment for the six months ended June 30, 2020 and 2019.



(Amounts in thousands)	For the Six Months Ended June 30, 2020
	Total			New York			Other
Total revenues	$	787,558		$	626,243		$	161,315
Operating expenses	(404,432		)	(323,238		)	(81,194		)
NOI - consolidated	383,126			303,005			80,121
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(30,941		)	(16,937		)	(14,004		)
Add: NOI from partially owned entities	151,368			145,459			5,909
NOI at share	503,553			431,527			72,026
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	37,266			34,049			3,217
NOI at share - cash basis	$	540,819		$	465,576		$	75,243



(Amounts in thousands)	For the Six Months Ended June 30, 2019
	Total			New York			Other
Total revenues	$	997,771		$	819,666		$	178,105
Operating expenses	(467,647		)	(385,914		)	(81,733		)
NOI - consolidated	530,124			433,752			96,372
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(33,819		)	(21,437		)	(12,382		)
Add: NOI from partially owned entities	150,376			128,745			21,631
NOI at share	646,681			541,060			105,621
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	4,567			1,819			2,748
NOI at share - cash basis	$	651,248		$	542,879		$	108,369

NOI At Share by Segment for the Six Months Ended June 30, 2020 and 2019- continued

The elements of our New York and Other NOI at share for the six months ended June 30, 2020 and 2019 are summarized below.



(Amounts in thousands)	For the Six Months Ended June 30,
	2020			2019
New York:
Office⁽¹⁾⁽²⁾	$	344,649		$	363,132
Retail⁽¹⁾⁽³⁾	73,859			145,330
Residential	12,068			11,953
Alexander's	18,823			22,430
Hotel Pennsylvania⁽⁴⁾	(17,872		)	(1,785		)
Total New York	431,527			541,060

Other:
theMART⁽⁵⁾	38,916			54,497
555 California Street	30,068			29,859
Other investments⁽⁶⁾	3,042			21,265
Total Other	72,026			105,621

NOI at share	$	503,553		$	646,681

___________________


(1)	Reflects the transfer of 45.4% of common equity in the properties contributed to Fifth Avenue and Times Square JV on April 18, 2019.


(2)	2020 includes $13,220 of non-cash write-offs of receivables arising from the straight-lining of rents, primarily for the New York & Company, Inc. lease at 330 West 34th Street and $940 of write-offs of tenant receivables deemed uncollectible.


(3)	2020 includes $20,436 of non-cash write-offs of receivables arising from the straight-lining of rents, primarily for the JCPenney lease at Manhattan Mall and $6,731 of write-offs of tenant receivables deemed uncollectible. 2019 includes $13,199 of non-cash write-offs of receivables arising from the straight-lining of rents.


(4)	The decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic. The Hotel Pennsylvania ~~same store~~has been temporarily closed since April 1, 2020 as a result of the pandemic.


(5)	The decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.


(6)	2019 includes our share of PREIT (accounted for as a marketable security from March 12, 2019 and sold on January 23, 2020) and UE (sold on March 4, 2019).

The elements of our New York and Other NOI at share - cash basis for the six months ended June 30, 2020 and 2019 are summarized below.



(Amounts in thousands)	For the Six Months Ended June 30,
	2020			2019
New York:
Office⁽¹⁾⁽²⁾	$	362,473		$	363,176
Retail⁽¹⁾⁽³⁾	87,954			147,662
Residential	11,363			11,074
Alexander's	21,675			22,849
Hotel Pennsylvania⁽⁴⁾	(17,889		)	(1,882		)
Total New York	465,576			542,879

Other:
theMART⁽⁵⁾	40,470			56,896
555 California Street	30,440			30,340
Other investments⁽⁶⁾	4,333			21,133
Total Other	75,243			108,369

NOI at share - cash basis	$	540,819		$	651,248

___________________


(1)	Reflects the transfer of 45.4% of common equity in the properties contributed to Fifth Avenue and Times Square JV on April 18, 2019.


(2)	2020 includes $940 of write-offs of tenant receivables deemed uncollectible.


(3)	2020 includes $6,731 of write-offs of tenant receivables deemed uncollectible.


(4)	The decrease in NOI at share - cash basis ~~increased~~is primarily due to the effects of the COVID-19 pandemic. The Hotel Pennsylvania has been temporarily closed since April 1, 2020 as a result of the pandemic.


(5)	The decrease in NOI at share - cash basis is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.


(6)	2019 includes our share of PREIT (accounted for as a marketable security from March 12, 2019 and sold on January 23, 2020) and UE (sold on March 4, 2019).

Reconciliation of Net (Loss) Income to NOI At Share for the Six Months Ended June 30, 2020 and 2019

Below is a reconciliation of net (loss) income to NOI at share and NOI at share - cash basis for the six months ended June 30, 2020 and 2019.



(Amounts in thousands)	For the Six Months Ended June 30,
	2020			2019
Net (loss) income	$	(321,855	)	$	2,809,737
Depreciation and amortization expense	185,598			229,744
General and administrative expense	87,848			96,892
(Lease liability extinguishment gain) transaction related costs and impairment losses	(69,150		)	101,739
Loss (income) from partially owned entities	272,770			(30,193		)
Loss from real estate fund investments	211,505			15,970
Interest and other investment loss (income), net	8,797			(12,885		)
Interest and debt expense	117,247			165,492
Net gain on transfer to Fifth Avenue and Times Square JV	—			(2,571,099		)
Net gains on disposition of wholly owned and partially owned assets	(124,284		)	(332,007		)
Income tax expense	14,650			56,657
Loss from discontinued operations	—			77
NOI from partially owned entities	151,368			150,376
NOI attributable to noncontrolling interests in consolidated subsidiaries	(30,941		)	(33,819		)
NOI at share	503,553			646,681
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	37,266			4,567
NOI at share - cash basis	$	540,819		$	651,248

NOI At Share by Region



	For the Six Months Ended June 30,
	2020		2019
Region:
New York City metropolitan area	86	%	86	%
Chicago, IL	8	%	9	%
San Francisco, CA	6	%	5	%
	100	%	100	%

Results of Operations – Six Months Ended June 30, 2020 Compared to June 30, 2019

Revenues

Our revenues were $787,558,000 for the six months ended June 30, 2020, compared to $997,771,000 for the prior year’s six months, a decrease of $210,213,000. Below are the details of the decrease by segment:



(Amounts in thousands)		Total				New York				Other
Increase (decrease) due to:
Rental revenues:
	Acquisitions, dispositions and other	$	12,675			$	12,584			$	91
	Development and redevelopment	(30,578		)		(30,280		)		(298		)
	Hotel Pennsylvania⁽¹⁾	(29,633		)		(29,633		)		—
	Trade shows⁽²⁾	(17,061		)		—				(17,061		)
	Properties transferred to Fifth Avenue and Times Square JV	(100,554		)		(100,554		)		—
	Same store operations	(39,557		)	⁽³⁾	(35,159		)		(4,398		)
		(204,708		)		(183,042		)		(21,666		)
Fee and other income:
	BMS cleaning fees	(8,774		)		(9,867		)	⁽⁴⁾	1,093
	Management and leasing fees	(1,968		)		(2,148		)		180
	Properties transferred to Fifth Avenue and Times Square JV	(389		)		(389		)		—
	Other income	5,626				2,023				3,603
		(5,505		)		(10,381		)		4,876

Total decrease in revenues		$	(210,213	)		$	(193,423	)		$	(16,790	)

_____________

See notes on the following page.

Results of Operations – Six Months Ended June 30, 2020 Compared to June 30, 2019- continued

Expenses

Our expenses were $603,839,000 for the six months ended June 30, 2020, compared to $902,770,000 for the prior year’s six months, a decrease of $298,931,000. Below are the details of the decrease by segment:



(Amounts in thousands)		Total				New York				Other
(Decrease) increase due to:
Operating:
	Acquisitions, dispositions and other	$	(4,770	)		$	(4,718	)		$	(52	)
	Development and redevelopment	(16,353		)		(16,207		)		(146		)
	Non-reimbursable expenses	1,256				1,115				141
	Hotel Pennsylvania⁽¹⁾	(13,557		)		(13,557		)		—
	Trade shows⁽²⁾	(6,162		)		—				(6,162		)
	BMS expenses	(4,916		)		(6,009		)	⁽⁴⁾	1,093
	Properties transferred to Fifth Avenue and Times Square JV	(21,614		)		(21,614		)		—
	Same store operations	2,901				(1,686		)		4,587
		(63,215		)		(62,676		)		(539		)
Depreciation and amortization:
	Acquisitions, dispositions and other	(3,781		)		(3,787		)		6
	Development and redevelopment	1,128				340				788
	Properties transferred to Fifth Avenue and Times Square JV	(25,119		)		(25,119		)		—
	Same store operations	(16,374		)		(16,032		)		(342		)
		(44,146		)		(44,598		)		452

General and administrative		(9,044		)	⁽⁵⁾	(3,605		)		(5,439		)

Benefit from deferred compensation plan liability		(11,637		)		—				(11,637		)

(Lease liability extinguishment gain) transaction related costs and impairment losses		(170,889		)		(171,620		)	⁽⁶⁾	731

Total decrease in expenses		$	(298,931	)		$	(282,499	)		$	(16,432	)

___________________


(1)	Temporarily closed since April 1, 2020 as a result of the pandemic.


(2)	Cancelled trade shows at theMART from late March 2020 through the remainder of the year as a result of the pandemic.


(3)	2020 includes $34,010 for the non-cash write-off of receivables arising from the straight-lining of rents, primarily for the JCPenney lease at Manhattan Mall and the New York & Company, Inc. lease at 330 West 34th Street, and $4,621 for the write-off of tenant receivables deemed uncollectible.


(4)	Primarily due to a decrease in third party cleaning services provided to retail and office tenants as a result of the pandemic.

(5)

Primarily due to $8,444 non-cash stock-based compensation expense for the accelerated vesting of previously issued Operating Partnership units and Vornado restricted stock in 2019 due to the removal of the time-based vesting requirements for participants who have reached 65 years of age and $844 of lower non-cash stock-based compensation expense for the time-based compensation granted in connection with the new leadership group announced in April 2019.


(6)	Due to $101,360 of non-cash impairment losses, substantially 608 Fifth Avenue, recognized in the second quarter of 2019 and $70,260 of lease liability extinguishment gain in May 2020 related to 608 Fifth Avenue.

Results of Operations – Six Months Ended June 30, 2020 Compared to June 30, 2019- continued

(Loss) Income from Partially Owned Entities

Below are the components of (loss) income from partially owned entities for the six months ended June 30, 2020 and 2019.



(Amounts in thousands)	Percentage Ownership at June 30, 2020	For the Six Months Ended June 30,
	Percentage Ownership at June 30, 2020	2020			2019
Our share of net (loss) income:
Fifth Avenue and Times Square JV⁽¹⁾:
Non-cash impairment loss⁽²⁾		$	(306,326	)	$	—
Return on preferred equity, net of our share of the expense		18,496			8,586
Equity in net income⁽³⁾	51.5%	5,937			11,217
		(281,893		)	19,803
Alexander's	32.4%	7,827			11,493
Partially owned office buildings⁽⁴⁾	Various	2,132			(1,345		)
Other investments⁽⁵⁾	Various	(836		)	242
		$	(272,770	)	$	30,193

____________________


(1)	Entered into on April 18, 2019.


(2)	See Note 8 - Investments in Partially Owned Entities to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information.


(3)	The decrease in our share of net income was primarily due to (i) $4,737 of write-offs of lease receivables deemed uncollectible during the second quarter of 2020 and (ii) a $4,360 reduction in income related to a Forever 21 lease modification at 1540 Broadway.


(4)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 7 West 34th Street, 330 Madison Avenue (sold on July 11, 2019), 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.


(5)	Includes interests in Independence Plaza, Rosslyn Plaza, UE (sold on March 4, 2019), PREIT (accounted as a marketable security from March 12, 2019 and sold on January 23, 2020) and others.

Loss from Real Estate Fund Investments

Below are the components of the loss from our real estate fund investments for the six months ended June 30, 2020 and 2019.



(Amounts in thousands)	For the Six Months Ended June 30,
	2020			2019
Net investment (loss) income	$	(309	)	$	192
Net unrealized loss on held investments	(211,196		)	(16,162		)
Loss from real estate fund investments	(211,505		)	(15,970		)
Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries	149,258			(7,692		)
Loss from real estate fund investments net of noncontrolling interests in consolidated subsidiaries	$	(62,247	)	$	(23,662	)

Interest and Other Investment (Loss) Income, net

Below are the components of interest and other investment (loss) income, net for the six months ended June 30, 2020 and 2019.



(Amounts in thousands)	For the Six Months Ended June 30,
	2020			2019
Credit losses on loans receivable⁽¹⁾	$	(13,369	)	$	—
Interest on cash and cash equivalents and restricted cash	5,464			4,693
(Decrease) increase in fair value of marketable securities⁽²⁾	(4,938		)	1,773
Interest on loans receivable	2,236			3,241
Dividends on marketable securities	—			1,313
Other, net	1,810			1,865
	$	(8,797	)	$	12,885

____________________


(1)	See Note 4 - Recently Issued Accounting Literature to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for additional information.

(2)

The six months ended June 30, 2020 includes a $4,938 mark-to-market decrease in the fair value of our PREIT common shares (sold on January 23, 2020). The six months ended June 30, 2019 primarily includes (i) a $16,068 mark-to-market increase in the fair value of our Lexington common shares (sold on March 1, 2019) partially offset by ~~0.1%~~(ii) a $14,336 mark-to-market decrease in the fair value of our PREIT common shares (accounted for as marketable securities from March 12, 2019 and sold on January 23, 2020).

Results of Operations – Six Months Ended June 30, 2020 Compared to June 30, 2019- continued

Interest and Debt Expense

Interest and debt expense was $117,247,000 for the six months ended June 30, 2020, compared to $165,492,000 for the prior year’s six months, a decrease of $48,245,000. This decrease was primarily due to (i) $22,540,000 of lower interest expense relating to debt prepayment costs relating to the redemption of our $400,000,000 5.00% senior unsecured notes in 2019, (ii) $12,530,000 of lower interest expense resulting from the deconsolidation of mortgages payable of the properties contributed to Fifth Avenue and Times Square JV, (iii) $11,970,000 of lower interest expense resulting from the repayment of the mortgage payable of PENN2, (iv) $9,482,000 of lower interest expense resulting from lower average interest rates on our variable rate loans, (v) $7,584,000 of lower interest expense resulting from paydowns of the 220 CPS loan, and (vi) $5,045,000 of lower interest from the redemption of the $400,000,000 5.00% senior unsecured notes in 2019, partially offset by $21,636,000 of lower capitalized interest and debt expense.

Net Gain on Transfer to Fifth Avenue and Times Square JV

During the six months ended June 30, 2019, we recognized a $2,571,099,000 net gain from the transfer of common equity in the properties contributed to Fifth Avenue and Times Square JV, including the related step-up in our basis of the retained portion of the assets to fair value.

Net Gains on Disposition of Wholly Owned and Partially Owned Assets

Net gains on disposition of wholly owned and partially owned assets of $124,284,000 for the six months ended June 30, 2020 consisted of net gains on the sale of 11 condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of $332,007,000 for the six months ended June 30, 2019 consisted of (i) $269,612,000 of net gains on the sale of 23 condominium units at 220 CPS and (ii) a $62,395,000 net gain from the sale of all our UE partnership units in the first quarter of 2019.

Income Tax Expense

Income tax expense for the six months ended June 30, 2020 was $14,650,000 compared to $56,657,000 for the prior year’s six months, a decrease of $42,007,000. This decrease was primarily due to lower income tax expense from the sale of 220 CPS condominium units.

Net Loss (Income) Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net loss attributable to noncontrolling interests in consolidated subsidiaries was $140,155,000 for the six months ended June 30, 2020, compared to income of $28,271,000 for the prior year’s six months, a decrease in income of $168,426,000. This decrease resulted primarily from the allocation of net loss to the noncontrolling interests in our real estate fund investments.

Net (Loss) Income Attributable to Noncontrolling Interests in the Operating Partnership (Vornado Realty Trust)

Net loss attributable to noncontrolling interests in the Operating Partnership was $13,974,000 for the six months ended June 30, 2020, compared to net income of $174,717,000 for the prior year’s six months, a decrease in income of $188,691,000.This decrease resulted primarily from lower net income subject to allocation to Class A unitholders.

Results of Operations – Six Months Ended June 30, 2020 Compared to June 30, 2019- continued

Preferred Share Dividends of Vornado Realty Trust

Preferred share dividends were $25,061,000 for the six months ended June 30, 2020, compared to $25,066,000 for the prior year’s six months, a decrease of $5,000.

Preferred Unit Distributions of Vornado Realty L.P.

Preferred unit distributions were $25,143,000 for the six months ended June 30, 2020, compared to $25,148,000 for the prior year’s six months, a decrease of $5,000.

Same Store Net Operating Income At Share

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the six months ended June 30, 2020 compared to June 30, 2019.



(Amounts in thousands)		Total			New York			theMART				555 California Street			Other
NOI at share for the six months ended June 30, 2020		$	503,553		$	431,527		$	38,916			$	30,068		$	3,042
	Less NOI at share from:
	Development properties	(21,642		)	(21,638		)	—				(4		)	—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	8,516			8,516			—				—			—
	Other non-same store (income) expense, net	(17,533		)	(14,172		)	(422		)		103			(3,042		)
Same store NOI at share for the six months ended June 30, 2020		$	472,894		$	404,233		$	38,494			$	30,167		$	—

NOI at share for the six months ended June 30, 2019		$	646,681		$	541,060		$	54,497			$	29,859		$	21,265
	Less NOI at share from:
	Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV	(35,770		)	(35,770		)	—				—			—
	Dispositions	(7,096		)	(7,096		)	—				—			—
	Development properties	(35,131		)	(35,131		)	—				—			—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	(4,031		)	(4,031		)								—
	Other non-same store (income) expense, net	(15,586		)	5,054			345				280			(21,265		)
Same store NOI at share for the six months ended June 30, 2019		$	549,067		$	464,086		$	54,842			$	30,139		$	—

(Decrease) increase in same store NOI at share for the six months ended June 30, 2020 compared to June 30, 2019		$	(76,173	)	$	(59,853	)	$	(16,348	)		$	28		$	—

% (decrease) increase in same store NOI at share		(13.9		)%	(12.9		)%	(29.8		)%	⁽¹⁾	0.1		%	—		%

____________________


(1)	The decrease is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

Results of Operations – Six Months Ended June 30, 2020 Compared to June 30, 2019 - continued

Same Store Net Operating Income At Share - continued

Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, theMART, 555 California Street and other investments for the six months ended June 30, 2020 compared to June 30, 2019.



(Amounts in thousands)		Total			New York			theMART				555 California Street			Other
NOI at share - cash basis for the six months ended June 30, 2020		$	540,819		$	465,576		$	40,470			$	30,440		$	4,333
	Less NOI at share - cash basis from:
	Development properties	(27,591		)	(27,587		)	—				(4		)	—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	8,525			8,525			—				—			—
	Other non-same store income, net	(26,130		)	(21,366		)	(422		)		(9		)	(4,333		)
Same store NOI at share - cash basis for the six months ended June 30, 2020		$	495,623		$	425,148		$	40,048			$	30,427		$	—

NOI at share - cash basis for the six months ended June 30, 2019		$	651,248		$	542,879		$	56,896			$	30,340		$	21,133
	Less NOI at share - cash basis from:
	Change in ownership interests in properties contributed to Fifth Avenue and Times Square JV	(32,905		)	(32,905		)	—				—			—
	Dispositions	(7,460		)	(7,460		)	—				—			—
	Development properties	(47,703		)	(47,703		)	—				—			—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	(3,982		)	(3,982		)	—				—			—
	Other non-same store (income) expense, net	(30,379		)	(9,797		)	345				206			(21,133		)
Same store NOI at share - cash basis for the six months ended June 30, 2019		$	528,819		$	441,032		$	57,241			$	30,546		$	—

Decrease in same store NOI at share - cash basis for the six months ended June 30, 2020 compared to June 30, 2019		$	(33,196	)	$	(15,884	)	$	(17,193	)		$	(119	)	$	—

% decrease in same store NOI at share - cash basis		(6.3		)%	(3.6		)%	(30.0		)%	⁽¹⁾	(0.4		)%	—		%

____________________


(1)	The decrease is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

SUPPLEMENTAL INFORMATION

NOI At Share by Segment for the Three Months Ended June 30, 2020 and March 31, 2020

Below is a summary of NOIat share and NOI at share - cash basis for the three months ended June 30, 2020 and March 31, 2020 by segment.



(Amounts in thousands)	For the Three Months Ended June 30, 2020
	Total			New York			Other
Total revenues	$	343,026		$	270,628		$	72,398
Operating expenses	(174,425		)	(140,207		)	(34,218		)
NOI - consolidated	168,601			130,421			38,180
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(15,448		)	(8,504		)	(6,944		)
Add: NOI from partially owned entities	69,487			67,051			2,436
NOI at share	222,640			188,968			33,672
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	34,190			32,943			1,247
NOI at share - cash basis	$	256,830		$	221,911		$	34,919



(Amounts in thousands)	For the Three Months Ended March 31, 2020
	Total			New York			Other
Total revenues	$	444,532		$	355,615		$	88,917
Operating expenses	(230,007		)	(183,031		)	(46,976		)
NOI - consolidated	214,525			172,584			41,941
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(15,493		)	(8,433		)	(7,060		)
Add: NOI from partially owned entities	81,881			78,408			3,473
NOI at share	280,913			242,559			38,354
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	3,076			1,106			1,970
NOI at share - cash basis	$	283,989		$	243,665		$	40,324

SUPPLEMENTAL INFORMATION - CONTINUED

NOI At Share by Segment for the Three Months Ended June 30, 2020 and March 31, 2020 - continued

The elements of our New York and Other NOI at share for the three months ended June 30, 2020 and March 31, 2020 are summarized below.



(Amounts in thousands)	For the Three Months Ended
	June 30, 2020			March 31, 2020
New York:
Office⁽¹⁾	$	161,444		$	183,205
Retail⁽²⁾	21,841			52,018
Residential	5,868			6,200
Alexander's	8,331			10,492
Hotel Pennsylvania⁽³⁾	(8,516		)	(9,356		)
Total New York	188,968			242,559

Other:
theMART⁽⁴⁾	17,803			21,113
555 California Street	14,837			15,231
Other investments	1,032			2,010
Total Other	33,672			38,354

NOI at share	$	222,640		$	280,913

___________________


(1)	The three months ended June 30, 2020 includes $13,220 of non-cash write-offs of receivables arising from the straight-lining of rents, primarily for the New York & Company, Inc. lease at 330 West 34th Street and $940 of write-offs of tenant receivables deemed uncollectible.


(2)	The three months ended June 30, 2020 includes $20,436 of non-cash write-offs of receivables arising from the straight-lining of rents, primarily for the JCPenney lease at Manhattan Mall and $6,731 of write-offs of tenant receivables deemed uncollectible.


(3)	The decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic. The Hotel Pennsylvania has been temporarily closed since April 1, 2020 as a result of the pandemic.


(4)	The decrease in NOI at share is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

The elements of our New York and Other NOI at share - cash basis for the three months ended June 30, 2020 and March 31, 2020 are summarized below.



(Amounts in thousands)	For the Three Months Ended
	June 30, 2020			March 31, 2020
New York:
Office⁽¹⁾	$	175,438		$	187,035
Retail⁽²⁾	38,913			49,041
Residential	5,504			5,859
Alexander's	10,581			11,094
Hotel Pennsylvania⁽³⁾	(8,525		)	(9,364		)
Total New York	221,911			243,665

Other:
theMART⁽⁴⁾	17,765			22,705
555 California Street	15,005			15,435
Other investments	2,149			2,184
Total Other	34,919			40,324

NOI at share - cash basis	$	256,830		$	283,989

___________________


(1)	The three months ended June 30, 2020 includes $940 of write-offs of tenant receivables deemed uncollectible.


(2)	The three months ended June 30, 2020 includes $6,731 of write-offs of tenant receivables deemed uncollectible.


(3)	The decrease in NOI at share - cash basis is primarily due to the effects of the COVID-19 pandemic. The Hotel Pennsylvania has been temporarily closed since April 1, 2020 as a result of the pandemic.


(4)	The decrease in NOI at share - cash basis is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

SUPPLEMENTAL INFORMATION - CONTINUED

Reconciliation of Net Income to NOI At Share and NOI At Share - Cash Basis for the Three Months Ended June 30, 2020 and March 31, 2020



(Amounts in thousands)	For the Three Months Ended
	June 30, 2020			March 31, 2020
Net loss	$	(217,352	)	$	(104,503	)
Depreciation and amortization expense	92,805			92,793
General and administrative expense	35,014			52,834
(Lease liability extinguishment gain) transaction related costs and impairment losses	(69,221		)	71
Loss (income) from partially owned entities	291,873			(19,103		)
Loss from real estate fund investments	28,042			183,463
Interest and other investment loss, net	2,893			5,904
Interest and debt expense	58,405			58,842
Net gains on disposition of wholly owned and partially owned assets	(55,695		)	(68,589		)
Income tax expense	1,837			12,813
NOI from partially owned entities	69,487			81,881
NOI attributable to noncontrolling interests in consolidated subsidiaries	(15,448		)	(15,493		)
NOI at share	222,640			280,913
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	34,190			3,076
NOI at share - cash basis	$	256,830		$	283,989

SUPPLEMENTAL INFORMATION - CONTINUED

Three Months Ended June 30, 2020 Compared to March 31, 2020

Same Store Net Operating Income At Share

Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the three months ended June 30, 2020 compared to March 31, 2020.



(Amounts in thousands)		Total			New York			theMART				555 California Street			Other
NOI at share for the three months ended June 30, 2020		$	222,640		$	188,968		$	17,803			$	14,837		$	1,032
	Less NOI at share from:
	Development properties	(7,380		)	(7,376		)	—				(4		)	—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	8,516			8,516			—				—			—
	Other non-same store income, net	(9,010		)	(7,920		)	—				(58		)	(1,032		)
Same store NOI at share for the three months ended June 30, 2020		$	214,766		$	182,188		$	17,803			$	14,775		$	—

NOI at share for the three months ended March 31, 2020		$	280,913		$	242,559		$	21,113			$	15,231		$	2,010
	Less NOI at share from:
	Development properties	(12,996		)	(12,996		)	—				—			—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	9,356			9,356			—				—			—
	Other non-same store (income) expense, net	(7,705		)	(5,434		)	(422		)		161			(2,010		)
Same store NOI at share for the three months ended March 31, 2020		$	269,568		$	233,485		$	20,691			$	15,392		$	—

Decrease in same store NOI at share for the three months ended June 30, 2020 compared to March 31, 2020		$	(54,802	)	$	(51,297	)	$	(2,888	)		$	(617	)	$	—

% decrease in same store NOI at share		(20.3		)%	(22.0		)%	(14.0		)%	⁽¹⁾	(4.0		)%	—		%

____________________


(1)	The decrease is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

SUPPLEMENTAL INFORMATION - CONTINUED

Three Months Ended June 30, 2020 Compared to March 31, 2020 - continued

Same Store Net Operating Income At Share - continued



(Amounts in thousands)		Total			New York			theMART				555 California Street			Other
NOI at share - cash basis for the three months ended June 30, 2020		$	256,830		$	221,911		$	17,765			$	15,005		$	2,149
	Less NOI at share - cash basis from:
	Development properties	(9,478		)	(9,474		)	—				(4		)	—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	8,525			8,525			—				—			—
	Other non-same store (income) expense, net	(12,772		)	(10,670		)	—				47			(2,149		)
Same store NOI at share - cash basis for the three months ended June 30, 2020		$	243,105		$	210,292		$	17,765			$	15,048		$	—

NOI at share - cash basis for the three months ended March 31, 2020		$	283,989		$	243,665		$	22,705			$	15,435		$	2,184
	Less NOI at share - cash basis from:
	Development properties	(17,024		)	(17,024		)	—				—			—
	Hotel Pennsylvania (temporarily closed beginning April 1, 2020)	9,364			9,364			—				—			—
	Other non-same store income, net	(12,521		)	(9,858		)	(422		)		(57		)	(2,184		)
Same store NOI at share - cash basis for the three months ended March 31, 2020		$	263,808		$	226,147		$	22,283			$	15,378		$	—

Decrease in same store NOI at share - cash basis for the three months ended June 30, 2020 compared to March 31, 2020		$	(20,703	)	$	(15,855	)	$	(4,518	)		$	(330	)	$	—

% decrease in same store NOI at share - cash basis		(7.8		)%	(7.0		)%	(20.3		)%	⁽¹⁾	(2.1		)%	—		%

____________________


(1)	The decrease is primarily due to the effects of the COVID-19 pandemic, causing trade shows to be cancelled from late March 2020 through the remainder of the year.

Liquidity and Capital Resources

Rental revenue is our primary source of cash flow and is dependent upon the occupancy and rental rates of our properties. Our cash requirements include property operating expenses, capital improvements, tenant improvements, debt service, leasing commissions, dividends to shareholders and distributions to unitholders of the Operating Partnership, as well as acquisition and development costs. During the second quarter of 2020, we experienced a decrease in cash flow from operations due to the COVID-19 pandemic, including reduced collections of rents billed to certain of our tenants, the temporary closure of Hotel Pennsylvania, the cancellation of trade shows at theMART through 2020, and lower revenues from BMS and signage. For the quarter ended June 30, 2020, we collected 88% (94% including rent deferrals)of rent due from our tenants, comprised of 93% (98% including rent deferrals) from our office tenants and 72% (78% including rent deferrals) from our retail tenants. While we believe that our tenants are required to pay rent under their leases, we have implemented and will continue to consider rent deferrals on a case-by-case basis. Other sources of liquidity to fund cash requirements include proceeds from debt financings, including mortgage loans, senior unsecured borrowings, unsecured term loans and unsecured revolving credit facilities; proceeds from the issuance of common and preferred equity; and asset sales.

WeAs of June 30, 2020, we have $3.6 billion of liquidity comprised of $1.9 billion of cash and cash equivalents and restricted cash and $1.7 billion available on our $2.75 billion revolving credit facilities. The challenges posed by COVID-19 could adversely impact our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to shareholders, debt amortization and recurring capital expenditures. Capital requirements for development expenditures and acquisitions may require funding from borrowings and/or equity offerings. Consequently, the Company will continue to evaluate its liquidity and financial position on an ongoing basis.

We continue closings on the sale of condominium units at 220 CPS. During the second quarter of 2020, we closed on the sale of four condominium units for net proceeds aggregating $156,972,000 and in July 2020, we closed on the sale of seven condominium units for net proceeds aggregating $250,116,000. We expect to generate additional net cash proceeds from the sale of condominium units of approximately $2$500,000,000 for the remainder of 2020. In the aggregate, we will have recognized over $1.0 billion ~~resulting from the sales of 100% of the 220 CPS condominium units, including $1 billion of~~ after-tax net gain, of which ~~$396,246,000 was~~$678,817,000 has already been recognized in our consolidated statements of income from inception to ~~September~~June 30, ~~2019.~~2020.

We may from time to time purchase, retire or ~~retire~~redeem our outstanding debt securities or ~~redeem~~ our equity securities. Such purchases, if any, will depend on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements.

Liquidity and Capital Resources - continued

Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019

Our cash flow activities ~~for the nine months ended September 30, 2019 and 2018~~ are summarized as follows:


(Amounts in thousands)	For the Nine Months Ended September 30,						(Decrease) Increase in Cash Flow			For the Six Months Ended June 30,						(Decrease) Increase in Cash Flow
	2019			2018						2020			2019
Net cash provided by operating activities	$	397,971		$	488,038		$	(90,067	)	$	267,715		$	292,852		$	(25,137	)
Net cash provided by (used in) investing activities	2,228,548			(652,306		)	2,880,854
Net cash used in financing activities	(2,097,868		)	(830,734		)	(1,267,134		)
Net cash (used in) provided by investing activities										(124,057		)	2,113,511			(2,237,568		)
Net cash provided by (used in) financing activities										112,552			(2,046,358		)	2,158,910

Cash and cash equivalents and restricted cash was ~~$1,245,556,000~~$1,863,341,000 as of ~~September~~June 30, ~~2019,~~2020, a ~~$528,651,000~~$256,210,000 increase from the balance as of December 31, ~~2018.~~2019.

Net cash provided by operating activities of ~~$397,971,000~~$267,715,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 was comprised of ~~$516,386,000~~$342,149,000 of cash from operations, including distributions of income from partially owned entities of ~~$66,252,000,~~$79,436,000, and a net decrease of ~~$118,415,000~~$74,434,000 in cash due to the timing of cash receipts and payments related to changes in operating assets and liabilities.

The following table details the net cash (used in) provided by investing activities:



(Amounts in thousands)	For the Six Months Ended June 30,						(Decrease) Increase in Cash Flow
	2020			2019			(Decrease) Increase in Cash Flow
Proceeds from sale of condominium units at 220 Central Park South	$	437,188		$	690,734		$	(253,546	)
Development costs and construction in progress	(319,294		)	(289,532		)	(29,762		)
Moynihan Train Hall expenditures	(183,007		)	(205,783		)	22,776
Additions to real estate	(85,252		)	(120,060		)	34,808
Proceeds from sales of marketable securities	28,375			167,852			(139,477		)
Investments in partially owned entities	(3,157		)	(15,588		)	12,431
Distributions of capital from partially owned entities	1,090			24,880			(23,790		)
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash)	—			1,255,756			(1,255,756		)
Proceeds from redemption of 640 Fifth Avenue preferred equity	—			500,000			(500,000		)
Proceeds from sale of real estate and related investments	—			108,512			(108,512		)
Acquisitions of real estate and other	—			(3,260		)	3,260
Net cash (used in) provided by investing activities	$	(124,057	)	$	2,113,511		$	(2,237,568	)

The following table details the net cash provided by (used in) ~~investing activities for the nine months ended September 30, 2019 and 2018:~~financing activities:

(Amounts in thousands) For the Nine Months Ended September 30, Increase (Decrease) in Cash Flow
2019 2018
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash) $ 1,248,743
$ —
$ 1,248,743
Proceeds from sale of condominium units at 220 Central Park South 1,039,493
—
1,039,493
Proceeds from redemption of 640 Fifth Avenue preferred equity 500,000
—
500,000
Development costs and construction in progress (448,281 ) (274,147 ) (174,134 )
Moynihan Train Hall expenditures (352,211 ) —
(352,211 )
Proceeds from sale of real estate and related investments 255,534
219,731
35,803
Additions to real estate (189,579 ) (163,546 ) (26,033 )
Proceeds from sales of marketable securities 168,314
—
168,314
Distributions of capital from partially owned entities 24,880
98,609
(73,729 )
Investments in partially owned entities (16,480 ) (32,728 ) 16,248
Acquisitions of real estate and other (3,260 ) (500,225 ) 496,965
Proceeds from repayments of loans receivable 1,395
—
1,395
Net cash provided by (used in) investing activities $ 2,228,548
$ (652,306 ) $ 2,880,854



(Amounts in thousands)	For the Six Months Ended June 30,						(Decrease) Increase in Cash Flow
	2020			2019			(Decrease) Increase in Cash Flow
Dividends paid on common shares/Distributions to Vornado	$	(624,627	)	$	(251,803	)	$	(372,824	)
Proceeds from borrowings	554,297			458,955			95,342
Moynihan Train Hall reimbursement from Empire State Development	183,007			205,783			(22,776		)
Contributions from noncontrolling interests in consolidated subsidiaries	98,268			8,315			89,953
Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries	(54,440		)	(49,140		)	(5,300		)
Dividends paid on preferred shares/Distributions to preferred unitholders	(37,593		)	(25,066		)	(12,527		)
Repayments of borrowings	(11,347		)	(1,943,157		)	1,931,810
Proceeds received from exercise of Vornado stock options and other	5,267			2,046			3,221
Debt issuance costs	(143		)	(13,522		)	13,379
Repurchase of shares/Class A units related to stock compensation agreements and related tax withholdings and other	(137		)	(8,692		)	8,555
Purchase of marketable securities in connection with defeasance of mortgage payable	—			(407,126		)	407,126
Prepayment penalty on redemption of senior unsecured notes due 2022	—			(22,058		)	22,058
Redemption of preferred shares/units	—			(893		)	893
Net cash provided by (used in) financing activities	$	112,552		$	(2,046,358	)	$	2,158,910

Liquidity and Capital Resources - continued

~~Cash Flows for the Nine Months Ended September 30, 2019 and 2018 - continued~~

~~The following table details the cash used in financing activities for the nine months ended September 30, 2019 and 2018:~~

(Amounts in thousands) For the Nine Months Ended September 30, (Decrease) Increase in Cash Flow
2019 2018
Repayments of borrowings $ (2,635,028 ) $ (264,482 ) $ (2,370,546 )
Proceeds from borrowings 1,107,852
312,763
795,089
Purchase of marketable securities in connection with defeasance of mortgage payable (407,126 ) —
(407,126 )
Dividends paid on common shares/Distributions to Vornado (377,750 ) (359,456 ) (18,294 )
Moynihan Train Hall reimbursement from Empire State Development 352,211
—
352,211
Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries (65,084 ) (63,110 ) (1,974 )
Dividends paid on preferred shares/Distributions to preferred unitholders (37,598 ) (42,582 ) 4,984
Prepayment penalty on redemption of senior unsecured notes due 2022 (22,058 ) —
(22,058 )
Debt issuance costs (15,328 ) (7,451 ) (7,877 )
Contributions from noncontrolling interests in consolidated subsidiaries 9,223
59,924
(50,701 )
Repurchase of shares/Class A units related to stock compensation agreements and related tax withholdings and other (8,692 ) (784 ) (7,908 )
Proceeds received from exercise of Vornado stock options and other 2,403
5,262
(2,859 )
Redemption of preferred shares/units (893 ) (470,000 ) 469,107
Debt prepayment and extinguishment costs —
(818 ) 818
Net cash used in financing activities $ (2,097,868 ) $ (830,734 ) $ (1,267,134 )

Capital Expenditures for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Capital expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring capital expenditures include expenditures to maintain a property’s competitive position within the market and tenant improvements and leasing commissions necessary to re-lease expiring leases or renew or extend existing leases. Non-recurring capital improvements include expenditures to lease space that has been vacant for more than nine months and expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition, as well as tenant improvements and leasing commissions for space that was vacant at the time of acquisition of a property.

Below is a summary of amounts paid for capital expenditures and leasing commissions for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.


(Amounts in thousands)	Total		New York		theMART		555 California Street		Total		New York		theMART		555 California Street
Expenditures to maintain assets	$	75,190	$	66,061	$	6,720	$	2,409	$	34,335	$	28,900	$	4,443	$	992
Tenant improvements	78,738		67,503		8,021		3,214		35,756		30,001		3,624		2,131
Leasing commissions	17,051		15,251		714		1,086		15,360		11,415		3,173		772
Recurring tenant improvements, leasing commissions and other capital expenditures	170,979		148,815		15,455		6,709		85,451		70,316		11,240		3,895
Non-recurring capital expenditures	26,393		24,588		166		1,639		11,772		11,767		5		—
Total capital expenditures and leasing commissions	$	197,372	$	173,403	$	15,621	$	8,348	$	97,223	$	82,083	$	11,245	$	3,895

~~Liquidity and Capital Resources - continued~~

Development and Redevelopment Expenditures for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Development and redevelopment expenditures consist of all hard and soft costs associated with the development or redevelopment of a property, including capitalized interest, debt and operating costs until the property is substantially completed and ready for its intended use. Our development project estimates below include initial leasing costs, which are reflected as non-recurring capital expenditures in the table ~~on the previous page~~above.

220 CPS

We are ~~constructing~~completing construction of a residential condominium tower containing 397,000 salable square feet at 220 CPS. The development cost of this project (exclusive of land ~~cost of $515.4 million)~~cost) is estimated to be approximately ~~$1.4~~$1.450 billion, of which~~$1.3~~ $1.419 billion has been expended as of ~~September~~June 30, ~~2019~~.2020.

We are redeveloping a 78,000 square foot Class A office building at 345 Montgomery Street, a part of our 555 California Street complex in San Francisco (70.0% interest) located at the corner of California and Pine Street. The development cost of this project is estimated to be approximately $46,000,000, of which our share is $32,200,000. As of September 30, 2019, $39,760,000 has been expended, of which our share is $27,832,000.

We are redeveloping a 165,000 square foot office building at 825 Seventh Avenue, located at the corner of 53rd Street and Seventh Avenue (50.0% interest). The redevelopment cost of this project is estimated to be approximately $30,000,000, of which our share is $15,000,000. As of September 30, 2019, $22,623,000 has been expended, of which our share is $11,311,000.PENN District

We are redeveloping PENN1, a ~~2,544,000~~2,545,000 square foot office building located on 34th Street between Seventh and Eighth Avenue. The development cost of this project is estimated to be $325,000,000,of which ~~$57,355,000~~$112,089,000 has been expended as of ~~September~~June 30, ~~2019~~2020.

We are redeveloping PENN2, a 1,795,000 square foot (as expanded) office building located on the west side of ~~7th~~Seventh Avenue between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which ~~$34,372,000~~$69,686,000 has been expended as of ~~September~~June 30, ~~2019.~~2020.

We ~~recently entered into a~~are also making districtwide improvements within the Penn District. The development ~~agreement with Metropolitan Transportation Authority~~cost of these improvements is estimated to ~~oversee the development~~be $100,000,000, of ~~the Long Island Rail Road 33rd Street entrance at Penn Station,~~ which ~~Skanska USA Civil Northeast, Inc. will construct under a fixed price contract for $120,805,000.~~$8,735,000 has been expended as of June 30, 2020.

Our 95% joint venture is developing Farley Office and Retail ~~Building and Moynihan Train Hall~~

~~Our 95.0% joint venture (the remaining 5.0% is owned by the Related Companies ("Related")) is developing the Farley Office and Retail Building~~ (the "Project"), which will include approximately ~~845,000~~844,000 rentable square feet of commercial space, comprised of approximately ~~725,000~~730,000 square feet of office space and approximately ~~120,000~~114,000 square feet of retail space. The total development cost of the Project is estimated to be approximately $1,030,000,000. As of ~~September~~June 30, ~~2019, $528,080,000~~2020, $622,844,000 has been ~~expended.~~expended, which has been reduced by $88,000,000 of historic tax credit investor contributions (at our share).

The joint venture has entered into a development agreement with Empire State Development (“ESD”), an entity of New York State, to build the adjacent Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture's obligations. The joint venture has entered into a design-build contract with Skanska Moynihan Train Hall Builders pursuant to which they will build the Moynihan Train Hall, thereby fulfilling all of the joint venture's obligations to ESD. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a full guaranty from Skanska AB. The development expenditures for the Moynihan Train Hall are estimated to be approximately $1.6 billion, which will be funded by governmental agencies. ~~Pursuant~~

On December 19, 2019, we paid Kmart Corporation $34,000,000, of which $10,000,000 is expected to ~~Accounting Standards Codification 842-40-55,~~be reimbursed, to early terminate their 141,000 square foot retail space lease at PENN1 which was scheduled to expire in January 2036.

We recently entered into a development agreement with the ~~joint venture,~~Metropolitan Transportation Authority to oversee the development of the Long Island Rail Road 33rd Street entrance at Penn Station which ~~we consolidate on our consolidated balance sheets, is required to recognize all development expenditures~~Skanska USA Civil Northeast, Inc. will construct under a fixed price contract for $124,639,000.

Liquidity and Capital Resources - continued

Development and Redevelopment Expenditures for the ~~Moynihan Train Hall. Accordingly,~~Six Months Ended June 30, 2020 - continued

Other

We are redeveloping a 78,000 square foot Class A office building at 345 Montgomery Street, a part of our 555 California Street complex in San Francisco (70.0% interest) located at the corner of California and Pine Street. The development ~~expenditures paid for by governmental agencies through September~~cost of this project is estimated to be approximately $66,000,000, of which our share is $46,000,000. As of June 30, ~~2019 and December 31, 2018~~2020, $54,242,000 has been expended, of which our share is $37,969,000of $791,703,000 and $445,693,000, respectively, are shown as “Moynihan Train Hall development expenditures” with a corresponding obligation recorded in “Moynihan Train Hall obligation” on our consolidated balance sheets. Upon completion of the development, the "Moynihan Train Hall development expenditures" and the offsetting “Moynihan Train Hall obligation” will be removed from our consolidated balance sheets..

We are redeveloping a 165,000 square foot office building at 825 Seventh Avenue, located at the corner of 53rd Street and Seventh Avenue (50.0% interest). The redevelopment cost of this project is estimated to be approximately $30,000,000, of which our share is $15,000,000. As of June 30, 2020, $25,204,000 has been expended, of which our share is $12,602,000.

We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan, including, in particular, the Penn ~~District.~~District.

There can be no assurance that the above projects will be completed, completed on schedule or within budget.

Below is a summary of amounts paid for development and redevelopment expenditures for the six months ended June 30, 2020. These expenditures include interest and debt expense of $21,501,000, payroll of $8,876,000and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating$53,313,000, which were capitalized in connection with the development and redevelopment of these projects.



(Amounts in thousands)	Total		New York		theMART		555 California Street		Other
Farley Office and Retail	$	127,998	$	127,998	$	—	$	—	$	—
220 CPS	62,450		—		—		—		62,450
PENN1	48,565		48,565		—		—		—
PENN2	44,810		44,810		—		—		—
345 Montgomery Street	9,775		—		—		9,775		—
Other	25,696		23,877		1,808		—		11
	$	319,294	$	245,250	$	1,808	$	9,775	$	62,461

Capital Expenditures for the Six Months Ended June 30, 2019

Below is a summary of amounts paid for capital expenditures and leasing commissions for the six months ended June 30, 2019.



(Amounts in thousands)	Total		New York		theMART		555 California Street
Expenditures to maintain assets	$	53,457	$	46,850	$	4,822	$	1,785
Tenant improvements	36,080		31,068		1,806		3,206
Leasing commissions	13,009		12,289		376		344
Recurring tenant improvements, leasing commissions and other capital expenditures	102,546		90,207		7,004		5,335
Non-recurring capital expenditures	21,505		19,780		86		1,639
Total capital expenditures and leasing commissions	$	124,051	$	109,987	$	7,090	$	6,974

Liquidity and Capital Resources - continued

Development and Redevelopment Expenditures for the ~~Nine~~Six Months Ended ~~September~~June 30, 2019 ~~- continued~~

Below is a summary of amounts paid for development and redevelopment expenditures for the ~~nine~~six months ended ~~September~~June 30, 2019. These expenditures include interest and debt expense of ~~$59,184,000,~~$43,138,000, payroll of ~~$12,673,000~~$10,515,000 and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating ~~$51,587,000,~~$32,535,000, which were capitalized in connection with the development and redevelopment of these projects.


(Amounts in thousands)	Total		New York		theMART		555 California Street		Other		Total		New York		theMART		555 California Street		Other
Farley Office and Retail Building	$	190,991	$	190,991	$	—	$	—	$	—
Farley Office and Retail											$	106,980	$	106,980	$	—	$	—	$	—
220 CPS	142,439		—		—		—		142,439		102,926		—		—		—		102,926
PENN1	34,476		34,476		—		—		—		24,584		24,584		—		—		—
345 Montgomery Street	18,844		—		—		18,844		—		9,736		—		—		9,736		—
PENN2	17,404		17,404		—		—		—
606 Broadway	7,181		7,181		—		—		—		7,464		7,464		—		—		—
1535 Broadway	1,031		1,031		—		—		—		1,031		1,031		—		—		—
Other	35,915		30,488		1,610		3,817		—		36,811		32,387		1,231		3,193		—
	$	448,281	$	281,571	$	1,610	$	22,661	$	142,439	$	289,532	$	172,446	$	1,231	$	12,929	$	102,926

Commitments and Contingencies

~~Capital Expenditures for the Nine Months Ended September 30, 2018~~Farley Office and Retail

~~Below~~The consolidated joint venture in which we own a 95% ownership interest was designated by Empire State Development ("ESD") to develop Farley Office and Retail. The joint venture entered into a development agreement with ESD and a design-build contract with Skanska Moynihan Train Hall Builders. Under the development agreement with ESD, the joint venture is obligated to build the Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture’s obligations. Under the design-build agreement, Skanska Moynihan Train Hall Builders is obligated to fulfill all of the joint venture’s obligations. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a ~~summary of amounts paid for capital expenditures and leasing commissions for the nine months ended September 30, 2018.~~

(Amounts in thousands) Total New York theMART
555 California
Street
Expenditures to maintain assets $ 66,167
$ 48,227
$ 10,232
$ 7,708
Tenant improvements 67,972
49,423
10,855
7,694
Leasing commissions 27,389
24,683
413
2,293
Recurring tenant improvements, leasing commissions and other capital expenditures 161,528
122,333
21,500
17,695
Non-recurring capital expenditures 28,882
20,579
82
8,221
Total capital expenditures and leasing commissions $ 190,410
$ 142,912
$ 21,582
$ 25,916

~~Development and Redevelopment Expenditures for the Nine Months Ended September 30, 2018~~full guaranty from Skanska AB.

Below is a summary of amounts paid for development and redevelopment expenditures for the nine months ended September 30, 2018. These expenditures include interest and debt expense of $49,718,000, payroll of $7,996,000, and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating $32,969,000, which were capitalized inIn connection with the development of the property, the joint venture took in a historic tax credit investor partner. Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and ~~redevelopment~~contractual provisions. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, require a refund or reduction of ~~these projects.~~

(Amounts in thousands) Total New York theMART
555 California
Street
Other
220 CPS $ 204,727
$ —
$ —
$ —
$ 204,727
606 Broadway 13,141
13,141
—
—
—
345 Montgomery Street 10,497
—
—
10,497
—
1535 Broadway 7,558
7,558
—
—
—
PENN2 4,793
4,793
—
—
—
PENN1 3,901
3,901
—
—
—
Other 29,530
18,439
8,421
430
2,240
$ 274,147
$ 47,832
$ 8,421
$ 10,927
$ 206,967

~~Liquidity~~the Tax Credit Investor’s capital contributions. As of June 30, 2020, the Tax Credit Investor has made $92,400,000 in capital contributions. Vornado and ~~Capital Resources - continued~~Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor.

Other Commitments and Contingencies

In November 2011, we entered into an agreement with the New York City Economic Development Corporation ("EDC") to lease Piers 92 and 94 (the "Piers") for a 49-year term with five 10-year renewal options. The non-recourse lease with a single-purpose entity calls for current annual rent payments of $2,000,000 with fixed rent steps through the initial term. We operate trade shows and special events at the Piers (and sublease to others for the same uses). In February 2019, an inspection revealed that the piles supporting Pier 92 were structurally unsound (an obligation of EDC to maintain) and we were issued an order by EDC to vacate the property. We continued to make the required lease payments through February 2020, with no abatement provided by EDC for the loss of our right-to-use Pier 92 or reimbursement for lost revenues. Beginning March 2020, as no resolution had been reached with EDC, we did not pay the monthly rents due under the non-recourse lease. As of June 30, 2020, we have a $46,350,000 lease liability and a $34,647,000 right-of-use asset recorded for this lease.

Liquidity and Capital Resources - continued

Other Commitments and Contingencies - continued

Our mortgage loans are non-recourse to us, except for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street and 435 Seventh Avenue, which we guaranteed and therefore are part of our tax basis. In certain cases, we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of ~~the~~ underlying loans. In addition, we have guaranteed the rent and payments in lieu of real estate taxes due to ESD, an entity of New York State, for Farley Office and Retail. As of ~~September~~June 30, ~~2019,~~2020, the aggregate dollar amount of these guarantees and master leases is approximately ~~$978,000,000.~~$1,537,000,000.

As of ~~September~~June 30, ~~2019, $15,880,000~~2020, $17,002,000 of letters of credit ~~was~~were outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest ~~rate~~ coverage and maximum debt to market capitalization ratios and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

As investment manager of Vornado Capital Partners Real Estate Fund (the "Fund") we are entitled to an incentive allocation after the limited partners have received a preferred return on their invested capital. The ~~joint venture in which we own a 95.0% ownership interest was designated by ESD, an entity of New York State,~~incentive allocation is subject to ~~develop~~catch-up and clawback provisions. Accordingly, based on the Farley Office and Retail Building. The joint venture entered into a development agreement with ESD and a design-build contract with Skanska Moynihan Train Hall Builders. Under the development agreement with ESD, the joint venture is obligated to build the Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture’s obligations. Under the design-build agreement, Skanska Moynihan Train Hall Builders is obligated to fulfill allJune 30, 2020 fair value of the ~~joint venture’s obligations. The obligations~~Fund assets, at liquidation we would be required to make a $32,000,000 payment to the limited partners representing a clawback of ~~Skanska Moynihan Train Hall Builders~~previously paid incentive allocations, which would have ~~been bonded by Skanska USA and bear a full guaranty from Skanska AB.~~no income statement impact as it was previously accrued.

As of ~~September~~June 30, ~~2019,~~2020, we expect to fund additional capital to certain of our partially owned entities aggregating approximately ~~$15,400,000.~~$11,000,000.

As of ~~September~~June 30, ~~2019,~~2020, we have construction commitments aggregating approximately ~~$746,000,000.~~

$556,000,000.

Funds From Operations (“FFO”)

Vornado Realty Trust

FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciable real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. The calculations of both the numerator and denominator used in the computation of (loss) income per share are disclosed in Note 20 – (Loss) Income Per Share/(Loss) Income Per Class A Unit, in our consolidated financial statements on page 4542 of this Quarterly Report on Form 10-Q.

In accordance with the NAREIT December 2018 restated definition of FFO, we have elected to exclude the mark-to-market adjustments of marketable equity securities from the calculation of FFO. FFO for the three months ended September 30, 2018 has been adjusted to exclude the $7,966,000, or $0.04 per share, decrease in fair value of marketable equity securities previously reported. FFO for the nine months ended September 30, 2018 has been adjusted to exclude the $26,602,000, or $0.13 per share, decrease in fair value of marketable equity securities previously reported.

FFO attributable to common shareholders plus assumed conversions was ~~$279,509,000,~~$203,256,000, or ~~$1.46~~$1.06 per diluted share for the three months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$189,987,000,~~$164,329,000, or ~~$0.99~~$0.86 per diluted share, for the prior year’s three months. FFO attributable to common shareholders plus assumed conversions was ~~$691,522,000,~~$333,616,000, or ~~$3.62~~$1.75 per diluted share for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, compared to ~~$519,640,000,~~$412,013,000, or ~~$2.72~~$2.16 per diluted share, for the prior year’s ~~nine~~six months. Details of certain adjustments to FFO are discussed in the financial results summary of our “Overview”.

~~Funds From Operations (“FFO”) - continued~~

Below is a reconciliation of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions for the three and nine months ended September 30, 2019 and 2018.


(Amounts in thousands, except per share amounts)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Reconciliation of our net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions:
Net income attributable to common shareholders	$	322,906		$	190,645		$	2,904,589		$	284,338
Reconciliation of our net (loss) income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions:
Net (loss) income attributable to common shareholders													$	(197,750	)	$	2,400,195		$	(192,787	)	$	2,581,683
Per diluted share	$	1.69		$	1.00		$	15.20		$	1.49		$	(1.03	)	$	12.56		$	(1.01	)	$	13.51

FFO adjustments:
Depreciation and amortization of real property	$	89,479		$	105,015		$	303,415		$	309,024		$	85,179		$	105,453		$	170,315		$	213,936
Net gains on sale of real estate	(178,769		)	(133,961		)	(178,769		)	(158,138		)
Net gain on transfer to Fifth Avenue and Times Square JV on April 18, 2019, net of $11,945 attributable to noncontrolling interests													—			(2,559,154		)	—			(2,559,154		)
Real estate impairment losses	—			—			31,436			—			—			31,436			—			31,436
Net gain on transfer to Fifth Avenue and Times Square JV, net of $11,945 attributable to noncontrolling interests	—			—			(2,559,154		)	—
Net gain from sale of UE common shares (sold on March 4, 2019)	—			—			(62,395		)	—			—			—			—			(62,395		)
Decrease (increase) in fair value of marketable securities:
PREIT	4,875			—			19,211			—
(Increase) decrease in fair value of marketable securities:
PREIT (accounted for as a marketable security from March 12, 2019 and sold on January 23, 2020)													—			(1,313		)	4,938			14,336
Lexington (sold on March 1, 2019)	—			7,942			(16,068		)	24,934			—			—			—			(16,068		)
Other	(7		)	(243		)	(48		)	(133		)	—			1			—			(41		)
Proportionate share of adjustments to equity in net income of partially owned entities to arrive at FFO:
Non-cash impairment loss on our investment in Fifth Avenue and Times Square JV, net of $467 of noncontrolling interests													305,859			—			305,859			—
Depreciation and amortization of real property	37,696			23,688			97,317			77,282			39,736			34,631			80,159			59,621
Net gains on sale of real estate	—			(3,421		)	—			(3,998		)
Decrease in fair value of marketable securities	291			267			1,988			1,801
(Increase) decrease in fair value of marketable securities													(565		)	1,709			3,126			1,697
	(46,435		)	(713		)	(2,363,067		)	250,772			430,209			(2,387,237		)	564,397			(2,316,632		)
Noncontrolling interests' share of above adjustments	3,024			40			149,957			(15,517		)	(29,215		)	151,357			(38,019		)	146,933
FFO adjustments, net	$	(43,411	)	$	(673	)	$	(2,213,110	)	$	235,255		$	400,994		$	(2,235,880	)	$	526,378		$	(2,169,699	)

FFO attributable to common shareholders	$	279,495		$	189,972		$	691,479		$	519,593		$	203,244		$	164,315		$	333,591		$	411,984
Convertible preferred share dividends	14			15			43			47			12			14			25			29
FFO attributable to common shareholders plus assumed conversions	$	279,509		$	189,987		$	691,522		$	519,640		$	203,256		$	164,329		$	333,616		$	412,013
Per diluted share	$	1.46		$	0.99		$	3.62		$	2.72		$	1.06		$	0.86		$	1.75		$	2.16

Reconciliation of Weighted Average Shares
Reconciliation of weighted average shares outstanding:
Weighted average common shares outstanding	190,814			190,245			190,762			190,176			191,104			190,781			191,071			190,735
Effect of dilutive securities:
Convertible preferred shares													28			34			29			35
Employee stock options and restricted share awards	176			1,045			227			972			—			243			2			256
Convertible preferred shares	34			37			35			38
AO LTIPs													—			—			5			—
Denominator for FFO per diluted share	191,024			191,327			191,024			191,186			191,132			191,058			191,107			191,026

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have exposure to fluctuations in market interest rates. Market interest rates are sensitive to many factors that are beyond our control. Our exposure to a change in interest rates on our consolidated and non-consolidated debt (all of which arises out of non-trading activity) is as follows:


(Amounts in thousands, except per share and per unit amounts)	2019						2018			2020						2019
	September 30, Balance		Weighted Average Interest Rate	Effect of 1% Change In Base Rates			December 31, Balance		Weighted Average Interest Rate	June 30, Balance		Weighted Average Interest Rate	Effect of 1% Change in Base Rates			December 31, Balance		Weighted Average Interest Rate
Consolidated debt:
Variable rate	$	1,723,196	3.39%	$	17,232		$	3,292,382	4.31%	$	2,197,797	1.42%	$	21,978		$	1,643,500	3.09%
Fixed rate	5,805,475		3.57%	—			6,603,465		3.65%	5,789,860		3.56%	—			5,801,516		3.57%
	$	7,528,671	3.53%	17,232			$	9,895,847	3.87%	$	7,987,657	2.97%	21,978			$	7,445,016	3.46%
Pro rata share of debt of non-consolidated entities⁽¹⁾⁽²⁾:
Pro rata share of debt of non-consolidated entities⁽¹⁾:
Variable rate	$	1,479,819	3.68%	14,798			$	1,237,388	4.06%	$	1,493,887	1.80%	14,939			$	1,441,690	3.34%
Fixed rate	1,327,368		4.08%	—			1,382,068		4.19%	1,360,980		3.93%	—			1,361,169		3.93%
	$	2,807,187	3.87%	14,798			$	2,619,456	4.13%	$	2,854,867	2.81%	14,939			$	2,802,859	3.62%
Noncontrolling interests' share of consolidated subsidiaries				(338		)							(361		)
Total change in annual net income attributable to the Operating Partnership				31,692									36,556
Noncontrolling interests’ share of the Operating Partnership				(2,073		)							(2,482		)
Total change in annual net income attributable to Vornado				$	29,619								$	34,074
Total change in annual net income attributable to the Operating Partnership per diluted Class A unit				$	0.16								$	0.18
Total change in annual net income attributable to Vornado per diluted share				$	0.16								$	0.18

____________________

~~(1)~~ As a result of Toys “R” Us (“Toys”) filing a voluntary petition under chapter 11 of the United States Bankruptcy Code, we determined the Company no longer has the ability to exercise significant influence over Toys. Accordingly, we have excluded our share of Toys debt in 2018. The voluntary petition was declared effective in 2019 and our stock was canceled. As a result, we no longer hold an investment in Toys.


~~(2)~~(1)	Our pro rata share of debt of non-consolidated entities as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019 is net of $16,200 and $63,409, respectively, of our ~~$63,409~~ share of Alexander's participation in its Rego Park II shopping center mortgage loan which is considered partially extinguished as the participation interest is a reacquisition of debt.

We may utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. As of September 30, 2019, we have an interest rate swap on a $375,000,000 mortgage loan on 888 Seventh Avenue that swapped the rate from LIBOR plus 1.70% (3.73% as of September 30, 2019) to a fixed rate of 3.25% through December 2020; an interest rate swap on a $700,000,000 mortgage loan on 770 Broadway that swapped the rate from LIBOR plus 1.75% (3.79% as of September 30, 2019) to a fixed rate of 2.56% through September 2020; an interest rate swap on a $100,000,000 mortgage loan on 33-00 Northern Boulevard that swapped the rate from LIBOR plus 1.80% (3.85% as of September 30, 2019) to a fixed rate of 4.14% through January 2025; and an interest rate swap on our $750,000,000 unsecured term loan that swapped the rate from ~~LIBOR plus 1.00% (3.04% as of~~ ~~September 30, 2019) to a fixed rate of 3.87% through October 2023.~~

Fair Value of Debt

The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt. As of ~~September~~June 30, ~~2019~~2020, the estimated fair value of our consolidated debt was ~~$7,595,000,000.~~$7,981,000,000.

Derivatives and Hedging



(Amounts in thousands)	As of June 30, 2020
						Variable Rate
Hedged Item (Interest rate swaps)	Fair Value		Notional Amount			Spread over LIBOR	Interest Rate	Swapped Rate	Expiration Date
Included in other assets:
Other	$	67	$	175,000

Included in other liabilities:
Unsecured term loan	$	68,709	$	750,000	⁽¹⁾	L+100	1.18%	3.87%	10/23
33-00 Northern Boulevard mortgage loan	9,592		100,000			L+180	1.99%	4.14%	1/25
888 Seventh Avenue mortgage loan	2,355		375,000			L+170	1.88%	3.25%	12/20
770 Broadway mortgage loan	846		700,000			L+175	1.93%	2.56%	9/20
	$	81,502	$	1,925,000

____________________


(1)	Remaining $50,000 balance of our unsecured term loan bears interest at a floating rate of LIBOR plus 1.00%.

Item 3. Quantitative and Qualitative Disclosures About Market Risk - continued

Derivatives and Hedging - continued



(Amounts in thousands)	As of December 31, 2019
					Variable Rate
Hedged Item (Interest rate swaps)	Fair Value		Notional Amount		Spread over LIBOR	Interest Rate	Swapped Rate	Expiration Date
Included in other assets:
770 Broadway mortgage loan	$	4,045	$	700,000	L+175	3.46%	2.56%	9/20
888 Seventh Avenue mortgage loan	218		375,000		L+170	3.44%	3.25%	12/20
Other	64		175,000
	$	4,327	$	1,250,000

Included in other liabilities:
Unsecured term loan	$	36,809	$	750,000	L+100	2.80%	3.87%	10/23
33-00 Northern Boulevard mortgage loan	3,545		100,000		L+180	3.52%	4.14%	1/25
	$	40,354	$	850,000

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures (Vornado Realty Trust)

Disclosure Controls and Procedures: Our management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a‑15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, Vornado’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~September~~June 30, ~~2019~~2020, such disclosure controls and procedures were effective.

Internal Control Over Financial Reporting: There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities ~~and~~ Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures (Vornado Realty L.P.)

Disclosure Controls and Procedures: Vornado Realty L.P.’s management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a‑15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, Vornado’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~September~~June 30, ~~2019~~2020, such disclosure controls and procedures were effective.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

~~There~~Except as set forth below, there were no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

Our business, financial condition, results of operations and cash flows have been and are expected to continue to be adversely affected by the recent COVID-19 pandemic and the impact could be material to us.

While our buildings remain open, many of our office tenants are working remotely.

We have temporarily closed the Hotel Pennsylvania.

We have cancelled trade shows at theMART for the remainder of 2020.

•


•	Effective April 1, 2020, our executive officers waived portions of their annual base salary for the remainder of 2020.


•	Effective April 1, 2020, each non-management member of our Board of Trustees agreed to forgo his or her $75,000 annual cash retainer for the remainder of 2020.

Numerous Federal, state, local and industry-initiated efforts may also affect our ability to collect rent or enforce remedies for the failure to pay rent. Certain of our tenants have incurred and may continue to incur significant costs or losses as a result of the COVID-19 pandemic and/or incur other liabilities related to shelter-in-place orders, quarantines, infection or other related factors that may adversely impact their ability to pay us timely or at all.

Item 1A. Risk Factors - continued

The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market or other disruptions worldwide. Conditions in the bank lending, capital and other financial markets may deteriorate as a result of the pandemic, our access to capital and other sources of funding may become constrained and the ratios of our debt to asset values may deteriorate, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. In addition, the deterioration of global, national, regional and local economic conditions as a result of the pandemic may ultimately decrease occupancy levels and/or rent levels across our portfolio as tenants reduce or defer their spending, which may result in less cash flow available for operating costs, to pay our indebtedness and for distribution to our shareholders and the impact could be material. In addition, we have concluded that our investment in Fifth Avenue and Times Square JV is "other-than-temporarily" impaired and recorded a $306,326,000 non-cash impairment loss on our consolidated statements of income for the three and six months ended June 30, 2020. The value of our real estate assets may continue to decline, which may result in additional non-cash impairment charges in future periods and that impact could be material. The extent of the COVID-19 pandemic's effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak and governmental responses thereto, all of which are uncertain and difficult to predict. Due to the speed with which the situation is developing, we are not able at this time to estimate the ultimate effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material. The potential effects of COVID-19 also could impact many of our risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2019 and give rise to additional risks and uncertainties currently not known to us or that we currently deem to be immaterial. However, the potential impact remains uncertain but that impact could be material to us.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Vornado Realty Trust

None.

Vornado Realty L.P.

During the quarter ended ~~September~~June 30, ~~2019,~~2020, we issued ~~5,876~~63,990 Class A units in connection with equity awards issued pursuant to Vornado’s omnibus share plan, including with respect to grants of restricted Vornado common shares and restricted units of the Operating Partnership and upon conversion, surrender or exchange of the Operating Partnership’s units or Vornado stock options, and consideration received included ~~$356,820~~$368,479 in cash proceeds. Such units were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index.



EXHIBIT INDEX
Exhibit No.
10.38	—	Amended Form of Vornado Realty Trust 2019 Omnibus Share Plan - Incorporated by reference to Annex B
		to Vornado Realty Trust’s Proxy Statement dated April 3, 2020 (File No. 001-11954), filed on April 3, 2020	*
15.1	—	Letter regarding Unaudited Interim Financial Information of Vornado Realty Trust
15.2	—	Letter regarding Unaudited Interim Financial Information of Vornado Realty L.P.
31.1	—	Rule 13a-14 (a) Certification of the Chief Executive Officer of Vornado Realty Trust
31.2	—	Rule 13a-14 (a) Certification of the Chief Financial Officer of Vornado Realty Trust
31.3	—	Rule 13a-14 (a) Certification of the Chief Executive Officer of Vornado Realty L.P.
31.4	—	Rule 13a-14 (a) Certification of the Chief Financial Officer of Vornado Realty L.P.
32.1	—	Section 1350 Certification of the Chief Executive Officer of Vornado Realty Trust
32.2	—	Section 1350 Certification of the Chief Financial Officer of Vornado Realty Trust
32.3	—	Section 1350 Certification of the Chief Executive Officer of Vornado Realty L.P.
32.4	—	Section 1350 Certification of the Chief Financial Officer of Vornado Realty L.P.
~~101.INS~~101	—	~~XBRL Instance Document of~~The following financial information from Vornado Realty Trust and Vornado Realty L.P. ~~- the instance document does~~ ~~not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL~~ ~~document.~~ Quarterly Report
~~101.SCH~~		on Form 10-Q for the quarter ended June 30, 2020 formatted in Inline Extensible Business Reporting
		Language (iXBRL) includes: (i) consolidated balance sheets, (ii) consolidated statements of income,
		(iii) consolidated statements of comprehensive income, (iv) consolidated statements of changes in equity,
		(v) consolidated statements of cash flows, and (vi) the notes to consolidated financial statements.
104	—	~~XBRL Taxonomy Extension Schema of~~The cover page from the Vornado Realty Trust and Vornado Realty L.P. Quarterly Report on Form 10-Q for
~~101.CAL~~	—	~~XBRL Taxonomy Extension Calculation Linkbase of Vornado Realty Trust~~the quarter ended June 30, 2020, formatted as iXBRL and ~~Vornado Realty L.P.~~contained in Exhibit 101
~~101.DEF~~	—	~~XBRL Taxonomy Extension Definition Linkbase of Vornado Realty Trust and Vornado Realty L.P.~~
~~101.LAB~~	—	~~XBRL Taxonomy Extension Label Linkbase of Vornado Realty Trust and Vornado Realty L.P.~~_________________________
~~101.PRE~~	—*	~~XBRL Taxonomy Extension Presentation Linkbase of Vornado Realty Trust and Vornado Realty L.P.~~Incorporated by reference

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 TRUST
		(Registrant)


Date: ~~October 28, 2019~~August 3, 2020	By:	/s/ Matthew Iocco
		Matthew Iocco, Chief Accounting Officer (duly authorized officer and principal accounting officer)

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: ~~October 28, 2019~~August 3, 2020	By:	/s/ Matthew Iocco
		Matthew Iocco, Chief Accounting Officer of Vornado Realty Trust, sole General Partner of Vornado Realty L.P. (duly authorized officer and principal accounting officer)

~~101~~94



(Amounts in thousands)	Percentage Ownership at September 30, 2019	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	Percentage Ownership at September 30, 2019	2019			2018		2019			2018
Our share of net income (loss):
Fifth Avenue and Times Square JV (see page 30 for details):
Equity in net income	51.5%	$	9,891		$	—	$	21,108		$	—
Return on preferred equity, net of our share of the expense		9,545			—		18,131			—
		19,436			—		39,239			—
Alexander's (see page 31 for details):
Equity in net income⁽¹⁾	32.4%	5,393			4,278		14,707			7,215
Management, leasing and development fees		1,299			1,149		3,478			3,378
		6,692			5,427		18,185			10,593

Partially owned office buildings⁽²⁾	Various	(186		)	735		(1,531		)	(1,546		)

Other investments⁽³⁾	Various	4			1,044		246			(2,988		)

		$	25,946		$	7,206	$	56,139		$	6,059



(Amounts in thousands)	As of September 30, 2019
For the remainder of 2019	$	327,246
For the year ended December 31,
2020	1,263,818
2021	1,241,049
2022	1,174,436
2023	1,060,495
2024	885,891
Thereafter	4,336,649



(Amounts in thousands)	As of September 30, 2019
Weighted average remaining lease term (in years)	40.89
Weighted average discount rate	4.85		%
Cash paid for operating leases	$	20,289



		Total		New York⁽¹⁾		theMART		555 California Street
Same store NOI at share % increase (decrease):
	Three months ended September 30, 2019 compared to September 30, 2018	0.9	%	0.5	%	(2.8	)%	13.9	%
	Nine months ended September 30, 2019 compared to September 30, 2018	0.6	%	(0.2	)%	2.2	%	11.9	%
	Three months ended September 30, 2019 compared to June 30, 2019	(0.8	)%	1.9	%	(21.2	)%	(1.1	)%

Same store NOI at share - cash basis % increase (decrease):
	Three months ended September 30, 2019 compared to September 30, 2018	1.0	��%	0.3	%	(1.0	)%	17.7	%
	Nine months ended September 30, 2019 compared to September 30, 2018	2.7	%	1.6	%	5.5	%	15.7	%
	Three months ended September 30, 2019 compared to June 30, 2019	(2.7	)%	(0.4	)%	(19.3	)%	(2.2	)%



(Amounts in thousands)	For the Nine Months Ended September 30,						Increase (Decrease) in Cash Flow
	2019			2018			Increase (Decrease) in Cash Flow
Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash)	$	1,248,743		$	—		$	1,248,743
Proceeds from sale of condominium units at 220 Central Park South	1,039,493			—			1,039,493
Proceeds from redemption of 640 Fifth Avenue preferred equity	500,000			—			500,000
Development costs and construction in progress	(448,281		)	(274,147		)	(174,134		)
Moynihan Train Hall expenditures	(352,211		)	—			(352,211		)
Proceeds from sale of real estate and related investments	255,534			219,731			35,803
Additions to real estate	(189,579		)	(163,546		)	(26,033		)
Proceeds from sales of marketable securities	168,314			—			168,314
Distributions of capital from partially owned entities	24,880			98,609			(73,729		)
Investments in partially owned entities	(16,480		)	(32,728		)	16,248
Acquisitions of real estate and other	(3,260		)	(500,225		)	496,965
Proceeds from repayments of loans receivable	1,395			—			1,395
Net cash provided by (used in) investing activities	$	2,228,548		$	(652,306	)	$	2,880,854