UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended:

~~September 30, 2014~~March 31, 2015

o	TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:

Commission File Number:

001-34482

VORNADO REALTY L.P.

(Exact name of registrant as specified in its charter)

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

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted 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). Yesx Noo

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

	¨o Large Accelerated Filer		o Accelerated Filer
	x Non-Accelerated Filer (Do not check if smaller reporting company)		o Smaller Reporting Company

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


PART I.		Financial Information:	Page Number

	Item 1.	Financial Statements:

		Consolidated Balance Sheets (Unaudited) as of
		~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014	3

		Consolidated Statements of Income (Unaudited) for the
		Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	4

		Consolidated Statements of Comprehensive Income (Unaudited)
		for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	5

		Consolidated Statements of Changes in Equity (Unaudited) for the
		~~Nine~~Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	6

		Consolidated Statements of Cash Flows (Unaudited) for the
		~~Nine~~Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	8

		Notes to Consolidated Financial Statements (Unaudited)	10

		Report of Independent Registered Public Accounting Firm	31
		~~Report of Independent Registered Public Accounting Firm~~
	Item 2.	34Management's Discussion and Analysis of Financial Condition
		and Results of Operations	32

	Item 3.
Quantitative and Qualitative Disclosures About Market Risk	~~Item 2.~~	~~Management's Discussion and Analysis of Financial Condition~~	58
		~~and Results of Operations~~
	Item 4.	35Controls and Procedures	58

	~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	74

	~~Item 4.~~	~~Controls and Procedures~~	75


PART II.		Other Information:

	Item 1.	Legal Proceedings	59

	Item 1A.
Risk Factors	~~Item 1.~~	~~Legal Proceedings~~	7659

	Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds	~~Item 1A.~~	~~Risk Factors~~	7659

	Item 3.
Defaults Upon Senior Securities	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	7659

	Item 4.
Mine Safety Disclosures	~~Item 3.~~	~~Defaults Upon Senior Securities~~	7659

	Item 5.
Other Information	~~Item 4.~~	~~Mine Safety Disclosures~~	7659

	Item 6.
Exhibits	~~Item 5.~~	~~Other Information~~	7659

SIGNATURES
	~~Item 6.~~	~~Exhibits~~	7660

~~SIGNATURES~~EXHIBIT INDEX			7761

~~EXHIBIT INDEX~~			78

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY L.P.	VORNADO REALTY L.P.						VORNADO REALTY L.P.
CONSOLIDATED BALANCE SHEETS	CONSOLIDATED BALANCE SHEETS						CONSOLIDATED BALANCE SHEETS
(UNAUDITED)	(UNAUDITED)						(UNAUDITED)

(Amounts in thousands, except unit amounts)	(Amounts in thousands, except unit amounts)		September 30,		December 31,		(Amounts in thousands, except unit amounts)		March 31,		December 31,
ASSETS	ASSETS		2014		2013		ASSETS		2015		2014
Real estate, at cost:	Real estate, at cost:						Real estate, at cost:
	Land		$	4,137,278	$	4,066,837	Land		$	3,914,401	$	3,861,913
	Buildings and improvements			12,609,463		12,466,244	Buildings and improvements			11,881,228		11,705,749
	Development costs and construction in progress			1,680,202		1,353,103	Development costs and construction in progress			1,157,180		1,128,037
	Leasehold improvements and equipment			128,982		132,483	Leasehold improvements and equipment			127,534		126,659
		Total		18,555,925		18,018,667		Total		17,080,343		16,822,358
	Less accumulated depreciation and amortization			(3,613,098)		(3,372,207)	Less accumulated depreciation and amortization			(3,248,078)		(3,161,633)
Real estate, net	Real estate, net			14,942,827		14,646,460	Real estate, net			13,832,265		13,660,725
Cash and cash equivalents	Cash and cash equivalents			1,683,142		583,290	Cash and cash equivalents			1,067,568		1,198,477
Restricted cash	Restricted cash			160,848		262,440	Restricted cash			198,672		176,204
Marketable securities	Marketable securities			184,154		191,917	Marketable securities			184,991		206,323
Tenant and other receivables, net of allowance for doubtful accounts of $18,307 and $21,869				118,636		115,862
Tenant and other receivables, net of allowance for doubtful accounts of $12,456 and $12,210							Tenant and other receivables, net of allowance for doubtful accounts of $12,456 and $12,210			110,477		109,998
Investments in partially owned entities	Investments in partially owned entities			1,268,066		1,166,443	Investments in partially owned entities			1,408,214		1,246,496
Investment in Toys "R" Us				-		83,224
Real Estate Fund investments				495,392		667,710
Mortgage and mezzanine loans receivable, net of allowance of $5,811 and $5,845				17,085		170,972
Receivable arising from the straight-lining of rents, net of allowance of $3,396 and $4,355				873,901		817,314
Deferred leasing and financing costs, net of accumulated amortization of $299,542 and $264,421				483,902		411,922
Identified intangible assets, net of accumulated amortization of $223,786 and $277,998				280,207		311,963
Real estate fund investments							Real estate fund investments			554,426		513,973
Receivable arising from the straight-lining of rents, net of allowance of $3,083 and $3,188							Receivable arising from the straight-lining of rents, net of allowance of $3,083 and $3,188			816,661		787,271
Deferred leasing and financing costs, net of accumulated amortization of $289,589 and $281,109							Deferred leasing and financing costs, net of accumulated amortization of $289,589 and $281,109			478,507		475,158
Identified intangible assets, net of accumulated amortization of $200,330 and $199,821							Identified intangible assets, net of accumulated amortization of $200,330 and $199,821			229,579		225,155
Assets related to discontinued operations	Assets related to discontinued operations			-		316,219	Assets related to discontinued operations			35,342		2,238,474
Other assets	Other assets			492,355		351,488	Other assets			344,349		410,066
			$	21,000,515	$	20,097,224			$	19,261,051	$	21,248,320

LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY	LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY						LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY
Mortgages payable	Mortgages payable		$	9,273,212	$	8,331,993	Mortgages payable		$	8,316,793	$	8,263,165
Senior unsecured notes	Senior unsecured notes			1,791,987		1,350,855	Senior unsecured notes			847,332		1,347,159
Revolving credit facility debt	Revolving credit facility debt			88,138		295,870	Revolving credit facility debt			400,000		-
Accounts payable and accrued expenses	Accounts payable and accrued expenses			498,565		422,276	Accounts payable and accrued expenses			432,970		447,745
Deferred revenue	Deferred revenue			489,250		529,048	Deferred revenue			346,026		358,613
Deferred compensation plan	Deferred compensation plan			113,549		116,515	Deferred compensation plan			121,530		117,284
Liabilities related to discontinued operations	Liabilities related to discontinued operations			-		13,950	Liabilities related to discontinued operations			11,354		1,511,362
Other liabilities	Other liabilities			380,843		438,353	Other liabilities			436,608		375,830
	Total liabilities			12,635,544		11,498,860	Total liabilities			10,912,613		12,421,158
Commitments and contingencies	Commitments and contingencies						Commitments and contingencies
Redeemable partnership units:	Redeemable partnership units:						Redeemable partnership units:
	Class A units - 11,395,068 and 11,292,038 units outstanding			1,139,052		1,002,620	Class A units - 11,640,982 and 11,356,550 units outstanding			1,303,790		1,336,780
	Series D cumulative redeemable preferred unit - 1 unit outstanding			1,000		1,000	Series D cumulative redeemable preferred unit - 1 unit outstanding			1,000		1,000
		Total redeemable partnership units		1,140,052		1,003,620		Total redeemable partnership units		1,304,790		1,337,780
Equity:	Equity:						Equity:
	Partners' capital			8,325,051		8,428,534	Partners' capital			8,219,728		8,157,544
	Earnings less than distributions			(1,878,125)		(1,734,839)	Earnings less than distributions			(2,006,439)		(1,505,385)
	Accumulated other comprehensive income			69,580		71,537	Accumulated other comprehensive income			72,609		93,267
		Total Vornado Realty L.P. equity		6,516,506		6,765,232		Total Vornado Realty L.P. equity		6,285,898		6,745,426
Noncontrolling interests in consolidated subsidiaries	Noncontrolling interests in consolidated subsidiaries			708,413		829,512	Noncontrolling interests in consolidated subsidiaries			757,750		743,956
	Total equity			7,224,919		7,594,744	Total equity			7,043,648		7,489,382
			$	21,000,515	$	20,097,224			$	19,261,051	$	21,248,320

See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).						See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.	VORNADO REALTY L.P.									VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF INCOME	CONSOLIDATED STATEMENTS OF INCOME									CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)	(UNAUDITED)									(UNAUDITED)

		For the Three				For the Nine					For the Three
		Months Ended September 30,				Months Ended September 30,					Months Ended March 31,
(Amounts in thousands, except per unit amounts)	(Amounts in thousands, except per unit amounts)	2014		2013		2014		2013		(Amounts in thousands, except per unit amounts)	2015		2014

REVENUES:	REVENUES:									REVENUES:
	Property rentals	$	538,168	$	521,433	$	1,606,120	$	1,589,038	Property rentals	$	500,274	$	467,140
	Tenant expense reimbursements		86,330		81,814		248,964		229,938	Tenant expense reimbursements		66,921		59,301
	Cleveland Medical Mart development project		-		4,893		-		34,026	Fee and other income		39,607		35,940
	Fee and other income		46,411		60,849		142,618		205,523
Total revenues	Total revenues		670,909		668,989		1,997,702		2,058,525	Total revenues		606,802		562,381
EXPENSES:	EXPENSES:									EXPENSES:
	Operating		268,450		261,776		802,505		785,992	Operating		254,493		236,561
	Depreciation and amortization		130,208		122,119		406,868		394,579	Depreciation and amortization		124,122		131,792
	General and administrative		44,547		44,186		141,273		145,871	General and administrative		58,492		47,502
	Cleveland Medical Mart development project		-		3,239		-		29,764	Acquisition and transaction related costs		1,981		1,285
	Impairment losses, acquisition and transaction related costs		7,105		2,818		32,972		6,769
Total expenses	Total expenses		450,310		434,138		1,383,618		1,362,975	Total expenses		439,088		417,140
Operating income	Operating income		220,599		234,851		614,084		695,550	Operating income		167,714		145,241
(Loss) applicable to Toys "R" Us			(18,418)		(34,209)		(74,162)		(69,311)
(Loss) income from partially owned entities	(Loss) income from partially owned entities		(7,245)		1,453		(3,264)		23,691	(Loss) income from partially owned entities		(2,405)		1,979
Income from Real Estate Fund			24,160		22,913		142,418		73,947
Interest and other investment income (loss), net			7,602		(10,275)		28,930		(32,935)
Income from real estate fund investments										Income from real estate fund investments		24,089		18,148
Interest and other investment income, net										Interest and other investment income, net		10,792		11,850
Interest and debt expense	Interest and debt expense		(115,120)		(119,676)		(341,613)		(360,679)	Interest and debt expense		(91,674)		(96,312)
Net gain (loss) on disposition of wholly owned and partially
Net gain on disposition of wholly owned and partially										Net gain on disposition of wholly owned and partially
	owned assets		2,665		15,138		13,205		(20,581)	owned assets		1,860		9,635
Income before income taxes	Income before income taxes		114,243		110,195		379,598		309,682	Income before income taxes		110,376		90,541
Income tax expense	Income tax expense		(3,177)		(2,222)		(8,358)		(6,172)	Income tax expense		(971)		(851)
Income from continuing operations	Income from continuing operations		111,066		107,973		371,240		303,510	Income from continuing operations		109,405		89,690
Income from discontinued operations	Income from discontinued operations		58,131		24,278		61,800		299,989	Income from discontinued operations		15,841		8,466
Net income	Net income		169,197		132,251		433,040		603,499	Net income		125,246		98,156
Less net income attributable to noncontrolling interests in
	consolidated subsidiaries		(9,685)		(23,833)		(85,239)		(50,049)
Less net income attributable to noncontrolling interests in consolidated subsidiaries										Less net income attributable to noncontrolling interests in consolidated subsidiaries		(15,882)		(11,579)
Net income attributable to Vornado Realty L.P.	Net income attributable to Vornado Realty L.P.		159,512		108,418		347,801		553,450	Net income attributable to Vornado Realty L.P.		109,364		86,577
Preferred unit distributions	Preferred unit distributions		(20,378)		(20,381)		(61,137)		(63,585)	Preferred unit distributions		(19,496)		(20,380)
Preferred unit redemptions			-		-		-		(1,130)
NET INCOME attributable to Class A unitholders	NET INCOME attributable to Class A unitholders	$	139,134	$	88,037	$	286,664	$	488,735	NET INCOME attributable to Class A unitholders	$	89,868	$	66,197

INCOME PER CLASS A UNIT - BASIC:	INCOME PER CLASS A UNIT - BASIC:									INCOME PER CLASS A UNIT - BASIC:
	Income from continuing operations, net	$	0.41	$	0.33	$	1.12	$	0.96	Income from continuing operations, net	$	0.37	$	0.29
	Income from discontinued operations, net		0.29		0.11		0.31		1.50	Income from discontinued operations, net		0.08		0.04
	Net income per Class A unit	$	0.70	$	0.44	$	1.43	$	2.46	Net income per Class A unit	$	0.45	$	0.33
	Weighted average units outstanding		198,322		197,599		198,158		197,510	Weighted average units outstanding		198,675		197,917

INCOME PER CLASS A UNIT - DILUTED:	INCOME PER CLASS A UNIT - DILUTED:									INCOME PER CLASS A UNIT - DILUTED:
	Income from continuing operations, net	$	0.40	$	0.33	$	1.11	$	0.96	Income from continuing operations, net	$	0.36	$	0.29
	Income from discontinued operations, net		0.29		0.11		0.31		1.49	Income from discontinued operations, net		0.08		0.04
	Net income per Class A unit	$	0.69	$	0.44	$	1.42	$	2.45	Net income per Class A unit	$	0.44	$	0.33
	Weighted average units outstanding		199,940		198,717		199,668		198,607	Weighted average units outstanding		200,749		199,354

DISTRIBUTIONS PER CLASS A UNIT	DISTRIBUTIONS PER CLASS A UNIT	$	0.73	$	0.73	$	2.19	$	2.19	DISTRIBUTIONS PER CLASS A UNIT	$	0.63	$	0.73


See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).									See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.	VORNADO REALTY L.P.										VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME										CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)	(UNAUDITED)										(UNAUDITED)


			For the Three				For the Nine						For the Three
			Months Ended September 30,				Months Ended September 30,						Months Ended March 31,
(Amounts in thousands)	(Amounts in thousands)		2014		2013		2014		2013		(Amounts in thousands)		2015		2014

Net income	Net income		$	169,197	$	132,251	$	433,040	$	603,499	Net income		$	125,246	$	98,156
Other comprehensive income (loss):	Other comprehensive income (loss):										Other comprehensive income (loss):
	Change in unrealized net (loss) gain on available-for-sale securities			(22,764)		(8,252)		(7,761)		160,886	Change in unrealized net (loss) gain on available-for-sale securities			(21,332)		13,125
	Amounts reclassified from accumulated other comprehensive										Pro rata share of other comprehensive income (loss) of
		income related to sale of available-for-sale securities		-		(42,404)		-		(42,404)		nonconsolidated subsidiaries		157		(8,286)
	Pro rata share of other comprehensive loss of										Change in value of interest rate swap and other			(771)		1,611
		nonconsolidated subsidiaries		(6,028)		(1,669)		(151)		(25,023)
	Change in value of interest rate swap			4,781		(295)		5,846		14,265
	Other			1		1		-		531
Comprehensive income	Comprehensive income			145,187		79,632		430,974		711,754	Comprehensive income			103,300		104,606
Less comprehensive income attributable to noncontrolling interests
Less comprehensive income attributable to noncontrolling interests in consolidated											Less comprehensive income attributable to noncontrolling interests in consolidated
	in consolidated subsidiaries			(9,685)		(23,833)		(85,239)		(50,049)	subsidiaries			(15,882)		(11,579)
Comprehensive income attributable to Vornado Realty L.P.	Comprehensive income attributable to Vornado Realty L.P.		$	135,502	$	55,799	$	345,735	$	661,705	Comprehensive income attributable to Vornado Realty L.P.		$	87,418	$	93,027


See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).										See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.	VORNADO REALTY L.P.																		VORNADO REALTY L.P.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY																			CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)	(UNAUDITED)																		(UNAUDITED)


															Non-																		Non-
													Accumulated		controlling																Accumulated		controlling
(Amounts in thousands)	(Amounts in thousands)						Class A Units				Earnings		Other		Interests in				(Amounts in thousands)						Class A Units				Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total				Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity				Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2013				52,683	$	1,277,225		187,285	$	7,151,309	$	(1,734,839)	$	71,537	$	829,512	$	7,594,744
Balance, December 31, 2014																			Balance, December 31, 2014			52,679	$	1,277,026		187,887	$	6,880,518	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382
Net income attributable to Vornado Realty L.P.	Net income attributable to Vornado Realty L.P.			-		-		-		-		347,801		-		-		347,801	Net income attributable to Vornado Realty L.P.			-		-		-		-		109,364		-		-		109,364
Net income attributable to noncontrolling																			Net income attributable to noncontrolling
																			interests in consolidated subsidiaries			-		-		-		-		-		-		15,882		15,882
Net income attributable to redeemable	Net income attributable to redeemable																		Net income attributable to redeemable
	partnership units			-		-		-		-		(16,552)		-		-		(16,552)	partnership units			-		-		-		-		(5,287)		-		-		(5,287)
Net income attributable to noncontrolling interests
	in consolidated subsidiaries			-		-		-		-		-		-		85,239		85,239
Distribution of Urban Edge Properties																			Distribution of Urban Edge Properties			-		-		-		-		(464,262)		-		(341)		(464,603)
Distributions to Vornado	Distributions to Vornado			-		-		-		-		(410,724)		-		-		(410,724)	Distributions to Vornado			-		-		-		-		(118,447)		-		-		(118,447)
Distributions to preferred unitholders	Distributions to preferred unitholders			-		-		-		-		(61,099)		-		-		(61,099)	Distributions to preferred unitholders			-		-		-		-		(19,484)		-		-		(19,484)
Class A units issued to Vornado:	Class A units issued to Vornado:																		Class A units issued to Vornado:
	Upon redemption of redeemable Class A																		Upon redemption of Class A
		units, at redemption value		-		-		227		22,668		-		-		-		22,668		units, at redemption value		-		-		210		23,493		-		-		-		23,493
	Under Vornado's Omnibus share plan			-		-		199		12,350		-		-		-		12,350	Under Vornado's employees' share option plan			-		-		165		11,679		(2,579)		-		-		9,100
	Under Vornado's dividend reinvestment plan			-		-		13		1,387		-		-		-		1,387	Under Vornado's dividend reinvestment plan			-		-		3		338		-		-		-		338
Contributions:	Contributions:																		Contributions:
	Real Estate Fund			-		-		-		-		-		-		5,297		5,297	Real estate fund investments			-		-		-		-		-		-		51,350		51,350
	Other			-		-		-		-		-		-		5,000		5,000
Distributions:	Distributions:																		Distributions:
	Real Estate Fund			-		-		-		-		-		-		(182,964)		(182,964)	Real estate fund investments			-		-		-		-		-		-		(52,882)		(52,882)
	Other			-		-		-		-		-		-		(643)		(643)
Transfer of noncontrolling interest
	in Real Estate Fund			-		-		-		-		-		-		(33,028)		(33,028)	Other			-		-		-		-		-		-		(125)		(125)
Conversion of Series A preferred units to	Conversion of Series A preferred units to																		Conversion of Series A preferred units to
	Class A units			(4)		(193)		6		193		-		-		-		-	Class A units			-		(12)		1		12		-		-		-		-
Deferred compensation units and options	Deferred compensation units and options			-		-		5		4,646		(340)		-		-		4,306	Deferred compensation units and options			-		-		7		1,325		(359)		-		-		966
Change in unrealized net loss on	Change in unrealized net loss on																		Change in unrealized net loss on
	available-for-sale securities			-		-		-		-		-		(7,761)		-		(7,761)	available-for-sale securities			-		-		-		-		-		(21,332)		-		(21,332)
Pro rata share of other comprehensive loss of
Pro rata share of other comprehensive income of																			Pro rata share of other comprehensive income of
	nonconsolidated subsidiaries			-		-		-		-		-		(151)		-		(151)	nonconsolidated subsidiaries			-		-		-		-		-		157		-		157
Change in value of interest rate swap	Change in value of interest rate swap			-		-		-		-		-		5,846		-		5,846	Change in value of interest rate swap			-		-		-		-		-		(776)		-		(776)
Adjustments to carry redeemable Class A units
Adjustments to carry redeemable																			Adjustments to carry redeemable
	at redemption value			-		-		-		(144,231)		-		-		-		(144,231)	Class A units at redemption value			-		-		-		25,349		-		-		-		25,349
Redeemable partnership units' share of	Redeemable partnership units' share of																		Redeemable partnership units' share of
	above adjustments			-		-		-		-		-		109		-		109	above adjustments			-		-		-		-		-		1,288		-		1,288
Other	Other			-		(6)		-		(297)		(2,372)		-		-		(2,675)	Other			-		-		-		-		-		5		(90)		(85)
Balance, September 30, 2014				52,679	$	1,277,026		187,735	$	7,048,025	$	(1,878,125)	$	69,580	$	708,413	$	7,224,919
Balance, March 31, 2015																			Balance, March 31, 2015			52,679	$	1,277,014		188,273	$	6,942,714	$	(2,006,439)	$	72,609	$	757,750	$	7,043,648



See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).																		See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.	VORNADO REALTY L.P.																		VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED																		CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED
(UNAUDITED)	(UNAUDITED)																		(UNAUDITED)


															Non-																		Non-
													Accumulated		controlling																Accumulated		controlling
(Amounts in thousands)	(Amounts in thousands)						Class A Units				Earnings		Other		Interests in				(Amounts in thousands)							Class A Units			Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total				Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity				Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2012				51,185	$	1,240,278		186,735	$	7,202,878	$	(1,573,275)	$	(18,946)	$	1,053,209	$	7,904,144
Balance, December 31, 2013																			Balance, December 31, 2013			52,683	$	1,277,225		187,285	$	7,151,309	$	(1,734,839)	$	71,537	$	829,512	$	7,594,744
Net income attributable to Vornado Realty L.P.	Net income attributable to Vornado Realty L.P.			-		-		-		-		553,450		-		-		553,450	Net income attributable to Vornado Realty L.P.			-		-		-		-		86,577		-		-		86,577
Net income attributable to noncontrolling																			Net income attributable to noncontrolling
																			interests in consolidated subsidiaries			-		-		-		-		-		-		11,579		11,579
Net income attributable to redeemable	Net income attributable to redeemable																		Net income attributable to redeemable
	partnership units			-		-		-		-		(28,960)		-		-		(28,960)
Net income attributable to noncontrolling interests
	in consolidated subsidiaries			-		-		-		-		-		-		50,049		50,049	partnership units			-		-		-		-		(3,860)		-		-		(3,860)
Distributions to Vornado	Distributions to Vornado			-		-		-		-		(409,332)		-		-		(409,332)	Distributions to Vornado			-		-		-		-		(136,761)		-		-		(136,761)
Distributions to preferred unitholders	Distributions to preferred unitholders			-		-		-		-		(62,439)		-		-		(62,439)	Distributions to preferred unitholders			-		-		-		-		(20,368)		-		-		(20,368)
Issuance of Series L preferred units				12,000		290,536		-		-		-		-		-		290,536
Redemption of Series F and Series H
	preferred units			(10,500)		(253,269)		-		-		-		-		-		(253,269)
Class A units issued to Vornado:	Class A units issued to Vornado:																		Class A units issued to Vornado:
	Upon redemption of redeemable Class A																		Upon redemption of Class A
		units, at redemption value		-		-		234		19,627		-		-		-		19,627		units, at redemption value		-		-		55		5,156		-		-		-		5,156
	Under Vornado's Omnibus share plan			-		-		66		3,681		-		-		-		3,681	Under Vornado's employees' share option plan			-		-		60		3,230		-		-		-		3,230
	Under Vornado's dividend reinvestment plan			-		-		16		1,376		-		-		-		1,376	Under Vornado's dividend reinvestment plan			-		-		5		446		-		-		-		446
Contributions:
	Real Estate Fund			-		-		-		-		-		-		24,328		24,328
	Other			-		-		-		-		-		-		15,687		15,687
Distributions:	Distributions:																		Distributions:
	Real Estate Fund			-		-		-		-		-		-		(47,268)		(47,268)	Real estate fund investments			-		-		-		-		-		-		(1,950)		(1,950)
	Other			-		-		-		-		-		-		(126,799)		(126,799)	Other			-		-		-		-		-		-		(142)		(142)
Conversion of Series A preferred units to
	Class A units			(2)		(90)		3		90		-		-		-		-
Deferred compensation units and options	Deferred compensation units and options			-		-		(6)		7,182		(305)		-		-		6,877	Deferred compensation units and options			-		-		7		2,119		(340)		-		-		1,779
Change in unrealized net gain
	on available-for-sale securities			-		-		-		-		-		160,886		-		160,886
Amounts reclassified related to sale
Change in unrealized net gain on																			Change in unrealized net gain on
	of available-for-sale securities			-		-		-		-		-		(42,404)		-		(42,404)	available-for-sale securities			-		-		-		-		-		13,125		-		13,125
Pro rata share of other comprehensive loss of	Pro rata share of other comprehensive loss of																		Pro rata share of other comprehensive loss of
	nonconsolidated subsidiaries			-		-		-		-		-		(25,023)		-		(25,023)	nonconsolidated subsidiaries			-		-		-		-		-		(8,286)		-		(8,286)
Change in value of interest rate swap	Change in value of interest rate swap			-		-		-		-		-		14,265		-		14,265	Change in value of interest rate swap			-		-		-		-		-		1,610		-		1,610
Adjustments to carry redeemable Class A units
Adjustments to carry redeemable																			Adjustments to carry redeemable
	at redemption value			-		-		-		(43,709)		-		-		-		(43,709)	Class A units at redemption value			-		-		-		(136,937)		-		-		-		(136,937)
Redeemable partnership units' share of above	Redeemable partnership units' share of above																		Redeemable partnership units' share of above
	adjustments			-		-		-		-		-		(5,982)		-		(5,982)	adjustments			-		-		-		-		-		(361)		-		(361)
Preferred unit redemptions				-		-		-		-		(1,130)		-		-		(1,130)
Deconsolidation of partially owned entity				-		-		-		-		-		-		(165,427)		(165,427)
Other	Other			-		-		-		(25)		(5,672)		531		(164)		(5,330)	Other			-		-		-		(238)		(18)		1		1		(254)
Balance, September 30, 2013				52,683	$	1,277,455		187,048	$	7,191,100	$	(1,527,663)	$	83,327	$	803,615	$	7,827,834
Balance, March 31, 2014																			Balance, March 31, 2014			52,683	$	1,277,225		187,412	$	7,025,085	$	(1,809,609)	$	77,626	$	839,000	$	7,409,327


See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).																		See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.	VORNADO REALTY L.P.						VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS	CONSOLIDATED STATEMENTS OF CASH FLOWS						CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)	(UNAUDITED)						(UNAUDITED)

			For the Nine Months Ended						For the Three Months Ended
			September 30,						March 31,
			2014		2013				2015		2014
(Amounts in thousands)	(Amounts in thousands)						(Amounts in thousands)
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:						Cash Flows from Operating Activities:
Net income	Net income		$	433,040	$	603,499	Net income		$	125,246	$	98,156
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization (including amortization of deferred financing costs)			423,959		419,249	Depreciation and amortization (including amortization of deferred financing costs)			131,112		153,869
	Proceeds from Real Estate Fund investments			215,676		56,664	Return of capital from real estate fund investments			72,208		-
	Net realized and unrealized gains on Real Estate Fund investments			(131,558)		(59,476)	Net gains on sale of real estate and other			(32,243)		-
	Equity in net loss of partially owned entities, including Toys “R” Us			77,426		45,620	Straight-lining of rental income			(29,474)		(13,236)
	Net gains on sale of real estate			(57,796)		(286,990)	Net realized and unrealized gains on real estate fund investments			(17,639)		(14,169)
	Straight-lining of rental income			(56,983)		(48,561)	Distributions of income from partially owned entities			15,874		12,966
	Distributions of income from partially owned entities			42,164		34,350	Other non-cash adjustments			15,865		11,885
	Amortization of below-market leases, net			(32,663)		(40,341)	Amortization of below-market leases, net			(12,754)		(12,144)
	Other non-cash adjustments			28,691		60,957	Loss (income) from partially owned entities			2,405		(1,979)
	Impairment losses			20,842		4,727	Net gain on disposition of wholly owned and partially owned assets			(1,860)		(9,635)
	Net (gain) loss on disposition of wholly owned and partially owned assets			(13,205)		20,581	Impairment losses			256		20,842
	Defeasance cost in connection with the refinancing of mortgage notes payable			5,589		-	Changes in operating assets and liabilities:
	Non-cash impairment loss on J.C. Penney common shares			-		39,487		Real estate fund investments		(95,022)		(123)
	Loss from the mark-to-market of J.C. Penney derivative position			-		33,487		Accounts receivable, net		975		(7,624)
	Changes in operating assets and liabilities:							Prepaid assets		62,658		53,841
		Real Estate Fund investments		(3,392)		(32,392)		Other assets		(13,093)		(18,297)
		Accounts receivable, net		(2,775)		63,280		Accounts payable and accrued expenses		(12,691)		31,554
		Prepaid assets		(85,372)		(60,388)		Other liabilities		(17,307)		3,225
		Other assets		(68,833)		(25,854)
		Accounts payable and accrued expenses		36,949		(38,904)
		Other liabilities		(3,190)		597
Net cash provided by operating activities	Net cash provided by operating activities			828,569		789,592	Net cash provided by operating activities			194,516		309,131

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:						Cash Flows from Investing Activities:
	Development costs and construction in progress			(368,571)		(149,010)	Proceeds from sales of real estate and related investments			334,725		120,270
	Proceeds from sales of real estate and related investments			335,489		734,427	Development costs and construction in progress			(88,052)		(90,653)
	Additions to real estate			(171,660)		(170,424)	Additions to real estate			(54,466)		(53,103)
	Restricted cash			101,592		21,883	Acquisitions of real estate and other			(49,878)		-
	Acquisitions of real estate and other			(95,546)		(75,079)	Investments in partially owned entities			(23,912)		(16,633)
	Proceeds from repayments of mortgage and mezzanine loans receivable and other			96,504		49,452	Proceeds from repayments of mortgage and mezzanine loans receivable and other			16,763		69,347
	Investments in partially owned entities			(91,697)		(212,624)	Distributions of capital from partially owned entities			13,409		1,277
	Investment in mortgage and mezzanine loans receivable and other			(11,380)		(390)	Restricted cash			1,282		52,256
	Distributions of capital from partially owned entities			8,130		287,944
	Proceeds from sales of marketable securities			-		378,676
	Proceeds from the sale of LNR			-		240,474
	Funding of J.C. Penney derivative collateral and settlement of derivative			-		(186,079)
	Return of J.C. Penney derivative collateral			-		101,150
Net cash (used in) provided by investing activities				(197,139)		1,020,400
Net cash provided by investing activities							Net cash provided by investing activities			149,871		82,761

See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).						See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.	VORNADO REALTY L.P.							VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED	CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED							CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)	(UNAUDITED)							(UNAUDITED)

				For the Nine Months Ended							For the Three Months Ended
				September 30,							March 31,
				2014		2013					2015		2014
(Amounts in thousands)	(Amounts in thousands)							(Amounts in thousands)
Cash Flows from Financing Activities:	Cash Flows from Financing Activities:							Cash Flows from Financing Activities:
	Proceeds from borrowings			$	1,713,285	$	1,600,357	Repayments of borrowings			$	(907,431)	$	(233,198)
	Distributions to Vornado				(410,724)		(409,332)	Proceeds from borrowings				800,000		600,000
	Repayments of borrowings				(343,354)		(2,851,420)	Cash included in the spin-off of Urban Edge Properties				(225,000)		-
	Distributions to redeemable security holders and noncontrolling interests				(208,773)		(200,667)	Distributions to Vornado				(118,447)		(136,761)
	Purchase of marketable securities in connection with the defeasance of mortgage							Distributions to redeemable security holders and noncontrolling interests				(60,287)		(10,474)
		notes payable			(198,884)		-	Contributions from noncontrolling interests in consolidated subsidiaries				51,350		-
	Distributions to preferred unitholders				(61,102)		(62,820)	Distributions to preferred unitholders				(19,484)		(20,368)
	Debt issuance costs				(40,424)		(9,982)	Proceeds received from exercise of Vornado stock options				12,018		3,676
	Proceeds received from exercise of Vornado stock options				13,738		5,057	Debt issuance costs				(5,076)		(20,752)
	Contributions from noncontrolling interests in consolidated subsidiaries				5,297		40,015	Repurchase of Class A units related to stock compensation agreements and/or related
	Repurchase of Class A units related to stock compensation agreements and/or related								tax withholdings			(2,939)		(578)
		tax withholdings			(637)		(332)
	Purchases of outstanding preferred units				-		(299,400)
	Proceeds from the issuance of preferred units				-		290,536
Net cash provided by (used in) financing activities					468,422		(1,897,988)
Net increase (decrease) in cash and cash equivalents					1,099,852		(87,996)
Net cash (used in) provided by financing activities								Net cash (used in) provided by financing activities				(475,296)		181,545
Net (decrease) increase in cash and cash equivalents								Net (decrease) increase in cash and cash equivalents				(130,909)		573,437
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period				583,290		960,319	Cash and cash equivalents at beginning of period				1,198,477		583,290
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period			$	1,683,142	$	872,323	Cash and cash equivalents at end of period			$	1,067,568	$	1,156,727


Supplemental Disclosure of Cash Flow Information:	Supplemental Disclosure of Cash Flow Information:							Supplemental Disclosure of Cash Flow Information:
	Cash payments for interest, excluding capitalized interest of $46,517 and $28,024			$	317,162	$	350,899	Cash payments for interest, excluding capitalized interest of $8,479 and $13,622			$	91,702	$	100,209
	Cash payments for income taxes			$	9,407	$	7,529	Cash payments for income taxes			$	2,175	$	1,214


Non-Cash Investing and Financing Activities:	Non-Cash Investing and Financing Activities:							Non-Cash Investing and Financing Activities:
	Marketable securities transferred in connection with the defeasance of mortgage							Non-cash distribution of Urban Edge Properties:
		notes payable		$	198,884	$	-			Assets	$	1,722,263	$	-
	Defeasance of mortgage notes payable				(193,406)		-			Liabilities		(1,482,660)		-
	Adjustments to carry redeemable Class A units at redemption value				(144,231)		(43,709)			Equity		(239,603)		-
	Write-off of fully depreciated assets				(103,184)		(54,377)	Transfer of interest in real estate to Pennsylvania Real Estate Investment Trust				(145,313)		-
	Elimination of a mortgage and mezzanine loan asset and liability				59,375		-	Accrued capital expenditures included in accounts payable and accrued expenses				87,232		74,424
	Transfer of interest in Real Estate Fund to an unconsolidated joint venture				(58,564)		-	Financing assumed in acquisitions				62,000		-
	Like-kind exchange of real estate:							Like-kind exchange of real estate:
			Acquisitions		50,159		7,663			Acquisitions		57,722		-
			Dispositions		(50,159)		(163,468)			Dispositions		(38,822)		-
	Transfer of noncontrolling interest in Real Estate Fund				(33,028)		-	Adjustments to carry redeemable Class A units at redemption value				25,349		(136,937)
	Beverly Connection seller financing				13,620		-	Receipt of security deposits included in restricted cash and other liabilities				42,346		-
	Decrease in assets and liabilities resulting from the deconsolidation of Independence Plaza:							Write-off of fully depreciated assets				(18,790)		(67,204)
			Real estate, net		-		(852,166)	Elimination of a mortgage and mezzanine loan asset and liability				-		59,375
			Notes and mortgages payable		-		(322,903)



See notes to consolidated financial statements (unaudited).	See notes to consolidated financial statements (unaudited).							See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization

Vornado Realty L.P. (the “Operating Partnership” and/or the “Company”) is a Delaware limited partnership. Vornado Realty Trust (“Vornado”) is the sole general partner of, and owned approximately ~~94.0%~~93.9% of the common limited partnership interest in, the Operating Partnership at ~~September 30, 2014.~~March 31, 2015. All references to “we,” “us,” “our,” the “Company” and ~~the “Operating~~“the Operating Partnership” refer to Vornado Realty L.P. and its consolidated subsidiaries.

On ~~April 11, 2014,~~January 15, 2015, we ~~announced a plan to spin off~~completed the spin-off of substantially all of our retail segment comprised of 79 strip shopping ~~center business, consisting of 80 strip~~ centers, ~~four~~three malls, ~~and~~ a warehouse park ~~adjacent~~and $225,000,000 of cash to ~~our East Hanover strip center, into a new publicly traded REIT,~~ Urban Edge Properties (“UE”) (NYSE: UE). As part of this transaction, we retained 5,717,184 UE operating partnership units (5.4% ownership interest). We are providing transition services to UE for an initial period of up to two years, including information technology, human resources, tax and financial reporting. UE is providing us with leasing and property management services for (i) the Monmouth Mall, (ii) certain small retail properties that we plan to sell, and (iii) our affiliate, Alexander’s, Inc. (NYSE: ALX), ~~formerly Vornado Spinco. The spin-off is expected to be effectuated through a pro rata distribution~~Rego Park retail assets. Steven Roth, Chairman of UE’s common shares to Vornado common shareholders and Vornado Realty L.P. common unitholders, and is intended to be treated as tax-free for U.S. federal income tax purposes. We expect the spin-off to be completed by the end of 2014, subject to certain conditions, including the Securities and Exchange Commission (“SEC”) declaring UE’s Form 10 registration statement effective, filing and approval of UE’s listing application with the NYSE, receipt of third party consents, and formal approval and declaration of the distribution by Vornado’s Board of ~~Trustees.~~Trustees and its Chief Executive Officer is a member of the Board of Trustees of UE. The spin-off distribution was effected by Vornado ~~may, at any time and~~distributing one UE common share for ~~any reason until the proposed transaction is complete, abandon the separation or modify or change its terms.~~every two Vornado ~~will retain, for disposition~~common shares. Beginning in the ~~near term, 20 small retail assets which do not fit UE’s strategy, and~~first quarter of 2015, the ~~Springfield Town Center, which is under contract~~historical financial results of UE are reflected in our consolidated financial statements as discontinued operations for ~~disposition (see Note 9~~ ~~– Dispositions~~). all periods presented.

2. Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Vornado Realty L.P. and its consolidated subsidiaries. All intercompany amounts have been eliminated. In our opinion, 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 SEC and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2013,~~2014, 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~~ months ended ~~September 30, 2014~~March 31, 2015 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~~period presentation. Beginning in the three months ended March 31, 2015, the Company classified signage revenue within “property rentals”. For the three months ended March 31, 2014, $9,300,000 related to signage revenue has been reclassified from “fee and other income” to “property rentals” to conform to the current period presentation.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

3. Recently Issued Accounting Literature

In ~~June 2013,~~April 2014, the Financial Accounting Standards Board (“FASB”) ~~issued an update (“ASU 2013-08”) to Accounting Standards Codification (“ASC”) Topic 946,~~ ~~Financial Services - Investment Companies~~ (“Topic 946”). ASU 2013-08 amends the guidance in Topic 946 for determining whether an entity qualifies as an investment company and requires certain additional disclosures. ASU 2013-08 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2013. The adoption of this update as of January 1, 2014, did not have any impact on our real estate fund or our consolidated financial statements.

~~In April 2014, the FASB~~ issued an update (“ASU 2014-08”) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entityto ASC Topic 205, Presentation of Financial Statementsand ASC Topic 360, Property Plant and Equipment. Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. In addition, ASU 2014-08 expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. ASU 2014-08 is effective for interim and annual reporting periods in fiscal years that ~~begin~~began after December 15, 2014. WeUpon adoption of this standard on January 1, 2015, individual properties sold in the ordinary course of business are ~~currently evaluating the impact~~not expected to qualify as discontinued operations. The financial results of ~~ASU 2014-08 on~~UE and certain other retail assets are reflected in our consolidated financial ~~statements.~~statements as discontinued operations for all periods presented (see Note 8 –

10Dispositions

~~VORNADO REALTY L.P.~~).

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

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

In May 2014, the FASB issued an update ("ASU 2014-09") establishing ASC Topic 606, Revenue from Contracts with ~~Customers.~~ Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2016. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements.

In June 2014, the FASB issued an update (“ASU 2014-12”) to ASC Topic 718, Compensation – Stock Compensation. ASU 2014-12 requires an entity to treat performance targets that can be met after the requisite service period of a share based award has ended, as a performance condition that affects vesting. ASU 2014-12 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2015. We are currently evaluating the impact of the adoption of ASU 2014-12 on our consolidated financial statements.

In February 2015, the FASB issued an update (“ASU 2015-02”) Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation. ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidated analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact of the adoption of ASU 2015-02 on our consolidated financial statements.

In April 2015, the FASB issued an update (“ASU 2015-03”) Simplifying the Presentation of Debt Issuance Costs to ASC Topic 835, Interest. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability to which they relate, consistent with debt discounts, as opposed to being presented as assets. ASU 2015-03 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2015. The adoption of this update on January 1, 2016 will not have a material impact on our consolidated financial statements.

4. Acquisitions

On ~~August 1, 2014,~~January 20, 2015, we and one of the Fund’s limited partners co-invested with the Fund to buy out the Fund’s joint venture partner’s 57% interest in the Crowne Plaza Times Square Hotel (see Note 5 – Vornado Capital Partners Real Estate Fund).

On March 18, 2015, we acquired the ~~land under our 715 Lexington Avenue retail~~Center Building, a 437,000 square foot office building, located at 33-00 Northern Boulevard in Long Island City, New York, for $142,000,000, including the assumption of an existing $62,000,000, 4.43% mortgage maturing in October 2018.

As of March 31, 2015, we have made a $25,000,000 non-refundable deposit related to an agreement to acquire a property in the Penn Plaza submarket in Manhattan for $355,000,000.

On April 8, 2015, we made an $11,000,000 refundable contribution to a joint venture, in which we will have a 55% interest. The joint venture plans to develop a 173,000 square foot Class-A office building, located on the ~~Southeast corner of 58~~^th ~~Street and Lexington Avenue in Manhattan, for $63,000,000.~~

~~On October 28, 2014, we completed the purchase~~western side of the St. Regis Fifth Avenue retail for $700,000,000. We own approximately 75% of the joint venture which owns the property. The acquisition will be used in a like-kind exchange for income tax purposes for the sale of 1740 Broadway (see Note 22 – ~~Subsequent Events~~). We consolidate the accounts of the venture into our consolidated financial statements from the date of acquisition. As of September 30, 2014, the venture’s $50,000,000 non-refundable deposit was included in “other assets” on our consolidated balance sheet.

High Line at 510 West 22nd Street.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

5. Vornado Capital Partners Real Estate Fund (the “Fund”)

We are the general partner and investment manager of the ~~Fund.~~Fund, which has an eight-year term and a three-year investment period that ended in July 2013. During the investment period, the Fund was our exclusive investment vehicle for all investments that fit within its investment parameters, as defined. The Fund is accounted for under ~~the AICPA~~ASC 946,Financial Services – Investment ~~Company Guide~~Companies 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.

~~On June 26, 2014, the Fund sold its 64.7% interest in One Park Avenue to a newly formed joint venture that we and an institutional investor own 55% and 45%, respectively (see Note 8 -~~~~Investments in Partially Owned Entities - One Park Avenue)~~~~. This transaction was based on a property value of $560,000,000. From the inception of this investment through its disposition, the Fund realized a $75,529,000 net gain.~~

On ~~August 21, 2014,~~January 20, 2015, we and one of the Fund’s limited partners co-invested with the Fund ~~and its 50%~~to buy out the Fund’s joint venture ~~partner~~partner’s 57% interest in the Crowne Plaza Times Square Hotel (the “Co-Investment”). The purchase price for the 57% interest was approximately $95,000,000 (our share $39,000,000) which valued the property at approximately $480,000,000. The property is encumbered by a newly placed $310,000,000 mortgage loan bearing interest at LIBOR plus 2.80% which matures in December 2018 with a one-year extension option. Our aggregate ownership interest in the property increased to 33% from 11%. The Co-Investment is included as a component of “real estate fund investments” on our consolidated balance sheets.

On March 25, 2015, the Fund completed the sale of ~~The Shops at Georgetown Park, a 305,000 square foot retail property,~~520 Broadway in Santa Monica, CA for ~~$272,500,000. From the inception of this investment through its disposition, the~~$91,650,000. The Fund realized a ~~$51,124,000~~$24,705,000 net ~~gain.~~gain over the holding period.

At ~~September 30, 2014, the Fund~~March 31, 2015, we had ~~seven~~six investments with an aggregate fair value of ~~$495,392,000,~~$554,426,000, or ~~$158,317,000~~$169,832,000 in excess of cost, and had remaining unfunded commitments of ~~$144,123,000,~~$102,324,000, of which our share was ~~$36,031,000.~~$25,581,000. Below is a summary of income from the Fund for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~2014.

			For the Three Months				For the Nine Months					For the Three Months
(Amounts in thousands)	(Amounts in thousands)		Ended September 30,				Ended September 30,				(Amounts in thousands)	Ended March 31,
			2014		2013		2014		2013			2015		2014
Net investment income	Net investment income		$	3,829	$	2,362	$	10,860	$	6,287	Net investment income	$	6,450	$	3,979
Net realized gains on exited investments	Net realized gains on exited investments			51,584		8,184		126,653		8,184	Net realized gains on exited investments		24,705		-
Previously recorded unrealized gains on exited investments	Previously recorded unrealized gains on exited investments			(49,586)		-		(50,316)		-	Previously recorded unrealized gains on exited investments		(23,279)		-
Net unrealized gains on held investments	Net unrealized gains on held investments			18,333		12,367		55,221		59,476	Net unrealized gains on held investments		16,213		14,169
Income from Real Estate Fund				24,160		22,913		142,418		73,947
Income from real estate fund investments											Income from real estate fund investments		24,089		18,148
Less income attributable to noncontrolling interests	Less income attributable to noncontrolling interests			(8,588)		(15,422)		(81,217)		(39,321)	Less income attributable to noncontrolling interests		(13,539)		(10,849)
Income from Real Estate Fund attributable to Vornado Realty L.P.⁽¹⁾				15,572	$	7,491	$	61,201	$	34,626
Income from real estate fund investments attributable to Vornado Realty L.P.⁽¹⁾											Income from real estate fund investments attributable to Vornado Realty L.P.⁽¹⁾	$	10,550	$	7,299


(1)		Excludes management, leasing and development fees of $759 and $770 for the three months ended September 30, 2014 and 2013, respectively, and $2,208 and $2,446 for the nine months ended September 30, 2014 and 2013, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.
(1) Excludes property management, leasing and development fees of $704 and $618 for the three months ended March 31, 2015 and 2014, respectively,which are included as a component of "fee and other income" on our consolidated statements of income.											(1) Excludes property management, leasing and development fees of $704 and $618 for the three months ended March 31, 2015 and 2014, respectively,which are included as a component of "fee and other income" on our consolidated statements of income.

6. Marketable Securities

Below is a summary of our marketable securities portfolio as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013.~~2014.

(Amounts in thousands)	(Amounts in thousands)	As of September 30, 2014						As of December 31, 2013						(Amounts in thousands)	As of March 31, 2015						As of December 31, 2014
				GAAP		Unrealized				GAAP		Unrealized					GAAP		Unrealized				GAAP		Unrealized
		Fair Value		Cost		Gain		Fair Value		Cost		Gain			Fair Value		Cost		Gain		Fair Value		Cost		Gain
Equity securities:	Equity securities:													Equity securities:
	Lexington Realty Trust	$	180,811	$	72,549	$	108,262	$	188,567	$	72,549	$	116,018	Lexington Realty Trust	$	181,550	$	72,549	$	109,001	$	202,789	$	72,549	$	130,240
	Other		3,343		57		3,286		3,350		59		3,291	Other		3,441		-		3,441		3,534		-		3,534
		$	184,154	$	72,606	$	111,548	$	191,917	$	72,608	$	119,309		$	184,991	$	72,549	$	112,442	$	206,323	$	72,549	$	133,774

In the first quarter of 2013, we wrote down 8,584,010 J.C. Penney common shares we owned to fair value, based on J.C. Penney’s March 31, 2013 closing share price of $15.11 per share, and recorded a $39,487,000 impairment loss. In the third quarter of 2013, we settled a forward contract and received 4,815,990 J.C. Penney common shares. In connection therewith, we recognized a $20,012,000 loss from the mark-to-market of the derivative position through its settlement date. These losses are included in “interest and other investment income (loss), net” on our consolidated statements of income.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~6. Marketable Securities – continued~~

In March 2013 and September 2013, we sold an aggregate of 23,400,000 J.C. Penney common shares at a price of $14.29 per share, or $334,500,000, resulting in a net loss of $54,914,000, of which $36,800,000 and $18,114,000 was recognized during the first and third quarter of 2013, respectively. In addition, in the third quarter of 2013, we sold another marketable security for $44,176,000, resulting in a net gain of $31,741,000. The net gains and losses resulting from these sales are included in “net gain (loss) on disposition of wholly owned and partially owned assets” on our consolidated statements of income.

7. ~~Mortgage and Mezzanine Loans Receivable~~

In October 2012, we acquired a 25.0% participation in a mortgage and mezzanine loan on 701 Seventh Avenue. In March 2013, we transferred at par, the 25.0% participation in the mortgage loan to a third party, for $59,375,000 in cash. The transfer did not qualify for sale accounting given our continuing interest in the mezzanine loan. Accordingly, we continued to include the 25.0% participation in the mortgage loan in “mortgage and mezzanine loans receivable” and recorded a $59,375,000 liability in “other liabilities” on our consolidated balance sheet. In January 2014, the mortgage and mezzanine loans were repaid; accordingly, the $59,375,000 asset and liability were eliminated.

~~In March 2014, a $30,000,000 mezzanine loan that was scheduled to mature in January 2015 was repaid. In May 2014, a $25,000,000 mezzanine loan that was scheduled to mature in November 2014 was repaid.~~

As of September 30, 2014 and December 31, 2013, the carrying amount of mortgage and mezzanine loans receivable was $17,085,000 and $170,972,000, respectively. These loans have a weighted average interest rate of 9.1% and 11.0% at September 30, 2014 and December 31, 2013, respectively, and have maturities ranging from April 2015 to May 2016.

8. Investments in Partially Owned Entities

Toys “R” Us (“Toys”)

As of ~~September 30, 2014,~~March 31, 2015, we own ~~32.7%~~32.6% of Toys. We account for our investment in Toys under the equity method and record our share of Toys’ net income or loss on a one-quarter lag basis because Toys’ fiscal year ends on the Saturday nearest January 31, and our fiscal year ends on December 31. The business of Toys is highly seasonal and substantially all of Toys’ net income is generated in its fourth quarter.

We have not guaranteed any of Toys’ obligations and are not committed to provide any support to Toys. Pursuant to ASC 323-10-35-20, we discontinued applying the equity method ~~of accounting~~ for our Toys’ investment when the carrying amount was reduced to ~~zero.~~zero in the third quarter of 2014. We will resume application of the equity method if, during the period the equity method has been suspended, our share of unrecognized net income exceeds our share of unrecognized net ~~losses during~~losses.

In the ~~period~~first quarter of 2014, we recognized our share of Toys’ fourth quarter net income of $75,196,000 and a corresponding non-cash impairment loss of the ~~equity method was suspended.~~same amount.

Below is a summary of Toys’ latest available financial information on a purchase accounting basis:

(Amounts in thousands)
Balance as of
Balance Sheet:
August 2, 2014
November 2, 2013
Assets
$
10,213,000
$
11,756,000
Liabilities
9,139,000
10,437,000
Noncontrolling interests
83,000
75,000
Toys “R” Us, Inc. equity⁽¹⁾
991,000
1,244,000
For the Three Months Ended
For the Nine Months Ended
Income Statement:
August 2, 2014
August 3, 2013
August 2, 2014
August 3, 2013
Total revenues
$
2,440,000
$
2,377,000
$
10,186,000
$
10,555,000
Net (loss) income attributable to Toys
(133,000)
(111,000)
(244,000)
11,000
(1)
At September 30, 2014, the carrying amount of our investment in Toys is less than our share of Toys' equity by approximately $323,497. This basis difference results primarily from non-cash impairment losses aggregating $355,953 that we have recognized through September 30, 2014. We have allocated the basis difference primarily to Toys' real estate, which is being amortized over its remaining estimated useful life.

(Amounts in thousands)			Balance as of
Balance Sheet:			January 31, 2015		November 1, 2014
	Assets		$	9,958,000	$	11,267,000
	Liabilities			9,014,000		10,377,000
	Noncontrolling interests			85,000		82,000
	Toys “R” Us, Inc. equity⁽¹⁾			859,000		808,000

			For the Three Months Ended
Income Statement:			January 31, 2015		February 1, 2014
	Total revenues		$	4,983,000	$	5,267,000
	Net income attributable to Toys			193,700		82,500


(1)		At March 31, 2015, the carrying amount of our investment in Toys is less than our share of Toys' equity by approximately $279,936. This basis difference results primarily from non-cash impairment losses aggregating $355,953 that we have recognized through March 31, 2015. We have allocated the basis difference primarily to Toys' real estate, which is being amortized over its remaining estimated useful life.

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~8. Investments in Partially Owned Entities – continued~~

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

As of ~~September 30, 2014,~~March 31, 2015, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common equity. We manage, lease and develop Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable. ~~As of September 30, 2014, we have a $44,179,000receivable from Alexander’s for fees under these agreements.~~

As of ~~September 30, 2014,~~March 31, 2015, the market value (“fair value” pursuant to ASC 820) of our investment in Alexander’s, based on Alexander’s ~~September 30, 2014~~March 31, 2015 closing share price of ~~$373.91,~~$456.58, was ~~$618,473,000,~~$755,214,000, or ~~$451,750,000~~$623,071,000 in excess of the carrying amount on our consolidated balance sheet. As of ~~September 30, 2014,~~March 31, 2015, 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 ~~$41,394,000.~~$41,048,000. 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.

~~Below is a summary of Alexander’s latest available financial information:~~

(Amounts in thousands)
Balance as of
Balance Sheet:
September 30, 2014
December 31, 2013
Assets
$
1,465,400
$
1,457,700
Liabilities
1,129,000
1,124,100
Stockholders' equity
336,400
333,600
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
Income Statement:
2014
2013
2014
2013
Total revenues
$
50,100
$
49,900
$
149,500
$
146,000
Net income attributable to Alexander’s
17,700
13,800
49,800
41,100

~~LNR Property LLC (“LNR”)~~

In January 2013, we and the other equity holders of LNR entered into a definitive agreement to sell LNR for $1.053 billion, of which our share of the net proceeds was $240,474,000. The definitive agreement provided that LNR would not (i) make any cash distributions to the equity holders, including us, through the completion of the sale, which occurred on April 19, 2013, and (ii) take any of the following actions (among others) without the purchaser’s approval, the lending or advancing of any money, the acquisition of assets in excess of specified amounts, or the issuance of equity interests. Notwithstanding the terms of the definitive agreement, in accordance with GAAP, we recorded our pro rata share of LNR’s earnings on a one-quarter lag basis through the date of sale, which increased the carrying amount of our investment in LNR above our share of the net sales proceeds and resulted in us recognizing a $27,231,000 “other-than-temporary” impairment loss on our investment in the three months ended March 31, 2013.

~~One Park Avenue~~

On June 26, 2014, we invested an additional $22,700,000 to increase our ownership in One Park Avenue to 55.0% from 46.5% through a joint venture with an institutional investor, who increased his ownership interest to 45.0% (see Note 5 – ~~Vornado Capital Partners Real Estate Fund)~~. The transaction was based on a property value of $560,000,000. The property is encumbered by a $250,000,000 interest-only mortgage loan that bears interest at 4.995% and matures in March 2016. We account for our investment in the joint venture under the equity method because we share control over major decisions with our joint venture partner.

~~61 Ninth Avenue~~

~~On July 23, 2014, a joint venture in which we are a 50.1% partner entered into a 99-year ground lease for 61 Ninth Avenue located on the Southwest corner of Ninth Avenue and 15~~^th Street in Manhattan. The venture’s current plans are to construct an office building, with retail at the base, of approximately 130,000 square feet. Total development costs are currently estimated to be approximately $125,000,000. We account for our investment in the joint venture under the equity method because we share control over major decisions with our joint venture partner.

1413

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

8.7. Investments in Partially Owned Entities - continued

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

Below is a summary of Alexander’s latest available financial information:

(Amounts in thousands)		Balance as of
Balance Sheet:		March 31, 2015		December 31, 2014
	Assets	$	1,433,000	$	1,423,000
	Liabilities		1,084,000		1,075,000
	Stockholders' equity		349,000		348,000

		For the Three Months Ended March 31,
Income Statement:		2015		2014
	Total revenues	$	52,000	$	49,000
	Net income attributable to Alexander’s		18,000		15,000

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

As part of our spin-off of substantially all of our retail segment to UE on January 15, 2015 (see Note 1 – Organization), we retained 5,717,184 UE operating partnership units, representing a 5.4% ownership interest in UE. We account for our investment in UE under the equity method and will recognize our share of UE’s earnings on a one-quarter lag basis. We are providing transition services to UE for an initial period of up to two years, including information technology, human resources, tax and financial reporting. UE is providing us with leasing and property management services for (i) the Monmouth Mall, (ii) certain small retail properties that we plan to sell, and (iii) our affiliate, Alexander’s, Rego Park retail assets.

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

On March 31, 2015, we transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT Associates, L.P., which is the operating partnership of PREIT, in exchange for $485,313,000; comprised of $340,000,000 of cash and 6,250,000 PREIT operating partnership units (valued at $145,313,000 or $23.25 per PREIT unit) (See Note 8 – Dispositions). $19,000,000 of tenant improvements and allowances was credited to PREIT as a closing adjustment. As a result of this transaction, we own an 8.1% interest in PREIT. We account for our investment in PREIT under the equity method and will recognize our share of PREIT’s earnings on a one-quarter lag basis.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

7. Investments in Partially Owned Entities – continued

Below are schedules summarizing our investments in, and (loss) income from, partially owned entities.

			Percentage								Percentage
(Amounts in thousands)	(Amounts in thousands)		Ownership at		Balance as of				(Amounts in thousands)		Ownership at		Balance as of
Investments:	Investments:		September 30, 2014		September 30, 2014		December 31, 2013		Investments:		March 31, 2015		March 31, 2015		December 31, 2014
	Toys			32.7%	$	-	$	83,224	Partially owned office buildings⁽¹⁾			Various	$	766,074	$	760,749
									PREIT Associates			8.1%		144,681		-
	Alexander’s			32.4%	$	166,723	$	167,785	Alexander’s			32.4%		132,143		131,616
	India real estate ventures			4.1%-36.5%		82,588		88,467	India real estate ventures			4.1%-36.5%		67,159		76,752
	Partially owned office buildings⁽¹⁾			Various		733,904		621,294	Urban Edge			5.4%		25,206		-
	Other investments⁽²⁾			Various		284,851		288,897	Toys			32.6%		-		-
					$	1,268,066	$	1,166,443	Other investments⁽²⁾			Various		272,951		277,379
													$	1,408,214	$	1,246,496

~~(1)~~		Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
~~(2)~~(1)		Includes interests in Independence Plaza, Monmouth Mall, 85 10th Avenue, Fashion Center Mall, 50-70 West 93rd Street and others.								Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)										Includes interests in Independence Plaza, Monmouth Mall, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street and others.

				Percentage		For the Three Months				For the Nine Months							Percentage		For the Three Months
(Amounts in thousands)	(Amounts in thousands)			Ownership at		Ended September 30,				Ended September 30,				(Amounts in thousands)			Ownership at		Ended March 31,
Our Share of Net (Loss) Income:	Our Share of Net (Loss) Income:			September 30, 2014		2014		2013		2014		2013		Our Share of Net (Loss) Income:			March 31, 2015		2015		2014
	Toys:				32.7%									Partially owned office buildings⁽¹⁾				Various	$	(9,296)	$	(2,395)
		Equity in net (loss) earnings				$	(20,357)	$	(36,056)	$	(4,691)	$	3,778
		Non-cash impairment losses					-		-		(75,196)		(78,542)	Alexander's:
		Management fees					1,939		1,847		5,725		5,453		Equity in net income			32.4%		5,594		4,759
						$	(18,418)	$	(34,209)	$	(74,162)	$	(69,311)		Management, leasing and development fees					2,097		1,626
																				7,691		6,385
	Alexander's:				32.4%
		Equity in net income				$	5,552	$	4,299	$	15,583	$	12,785	Toys:
		Management, leasing and development fees					1,640		1,676		4,888		5,017		Equity in net income			32.6%		-		75,196
							7,192		5,975		20,471		17,802		Non-cash impairment losses					-		(75,196)
															Management fees					1,454		1,847
	India real estate ventures				4.1%-36.5%		(262)		(1,449)		(2,440)		(2,630)							1,454		1,847

	Partially owned office buildings⁽¹⁾				Various		18		38		(1,387)		(1,586)	Urban Edge⁽²⁾				5.4%		584		-

	Other investments⁽²⁾				Various		(14,193)		(3,111)		(19,908)		(8,626)	India real estate ventures				4.1%-36.5%		(109)		(137)

	LNR (see page 14 for details):				n/a									Other investments⁽³⁾				Various		(2,729)		(3,721)
		Equity in net income					-		-		-		45,962
		Impairment loss					-		-		-		(27,231)						$	(2,405)	$	1,979
							-		-		-		18,731

						$	(7,245)	$	1,453	$	(3,264)	$	23,691
(1)																Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)	(2)													(2)				Represents fees earned pursuant to our transition services agreement with UE.
(3)																Includes interests in Independence Plaza, Monmouth Mall, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street and others.
(1)			Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)			Includes interests in Independence Plaza, Monmouth Mall, 85 10th Avenue, Fashion Center Mall, 50-70 West 93rd Street and others. In the third quarter of 2014, we recognized a $10,263 non-cash charge, comprised of a $5,959 impairment loss and a $4,304 loan loss reserve, on our equity and debt investments in Suffolk Downs.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

8. ~~Investments in Partially Owned Entities – continued~~

~~Below is a summary of the debt of our partially owned entities as of September 30, 2014 and December 31, 2013, none of which is recourse to us.~~

Percentage
Interest
100% of
Ownership at
Rate at
Partially Owned Entities’ Debt at
(Amounts in thousands)
September 30,
September 30,
September 30,
December 31,
2014
Maturity
2014
2014
2013
Toys:
Notes, loans and mortgages payable
32.7%
2014-2021
6.72%
$
5,385,461
$
5,702,247
Alexander's:
Mortgages payable
32.4%
2015-2021
2.58%
$
1,033,541
$
1,049,959
India real estate ventures:
TCG Urban Infrastructure Holdings mortgages
payable
25.0%
2014-2026
13.24%
$
190,453
$
199,021
Partially owned office buildings⁽¹⁾
Various
2014-2023
5.71%
$
3,657,837
$
3,622,759
Other⁽²⁾
Various
2014-2025
4.56%
$
1,696,974
$
1,709,509
(1)
Includes 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)
Includes Independence Plaza, Monmouth Mall, Fashion Center Mall, 50-70 West 93rd Street and others.

~~Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned entities was $4,156,658,000and $4,189,403,000 at September 30, 2014 and December 31, 2013, respectively.~~

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

9. Dispositions

Discontinued Operations

On ~~February 24, 2014,~~January 15, 2015, we completed the ~~sale~~spin-off of ~~Broadway Mall in Hicksville, Long Island, New York, for $94,000,000. The sale resulted in net proceeds~~substantially all of ~~$92,174,000 after closing costs.~~

~~On July 8, 2014, we completed the sale~~our retail segment comprised of Beverly Connection, a 335,000 square foot power shopping center in Los Angeles, California, for $260,000,000, of which $239,000,000 was cash and $21,000,000 was 10-year mezzanine seller financing. The sale resulted in a net gain of $44,155,000, which was recognized in the third quarter of 2014.

~~During the third quarter of 2014, we sold two of the 20~~79 strip shopping centers, ~~which do not fit UE’s strategy~~three malls, a warehouse park and $225,000,000 of cash to UE (NYSE: UE) (see Note 1 – Organization),.

On March 13, 2015, we sold our lease position in Geary Street, CA for $34,189,000, which resulted in a net gain of $21,376,000.

On March 31, 2015, we transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT (see Note 7 – Investments in Partially Owned Entities). The financial statement gain was $7,823,000, of which $7,192,000 was recognized in the first quarter of 2015 and the remaining $631,000 was deferred based on our ownership interest in PREIT. On March 31, 2018, we will be entitled to additional consideration of 50% of the increase in the value of Springfield Town Center, if any, over $465,000,000, calculated utilizing a 5.5% capitalization rate. In the first quarter of 2014, we recorded a non-cash impairment loss of $20,000,000 on Springfield Town Center which is included in “income from discontinued operations” on our consolidated statements of income.

During the first quarter of 2015, we sold five residual retail properties, in separate transactions, for an aggregate of ~~$15,000,000 in cash, which~~$10,731,000, which resulted in a net ~~gain aggregating $13,641,000.~~ gains of $3,675,000.

We have reclassified the revenues and expenses of the properties discussed above to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all of the periods presented in the accompanying consolidated financial statements. The net gains resulting from the sale of these properties are included in “income from discontinued operations” on our consolidated statements of income. The tables below set forth the assets and liabilities related to discontinued operations at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 and their combined results of operations and cash flows for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~2014.

Assets Related to
Liabilities Related to
(Amounts in thousands)
Discontinued Operations as of
Discontinued Operations as of
September 30,
December 31,
September 30,
December 31,
2014
2013
2014
2013
Beverly Connection
$
-
$
208,458
$
-
$
-
Broadway Mall
-
106,164
-
13,950
Other
-
1,597
-
-
Total
$
-
$
316,219
$
-
$
13,950
For the Three Months
For the Nine Months
(Amounts in thousands)
Ended September 30,
Ended September 30,
2014
2013
2014
2013
Total revenues
$
836
$
17,354
$
13,473
$
63,048
Total expenses
501
11,352
8,627
45,322
335
6,002
4,846
17,726
Net gain on sale of Beverly Connection
44,155
-
44,155
-
Net gain on sale of Green Acres Mall
-
-
-
202,275
Net gains on sales of other real estate
13,641
18,996
13,641
84,715
Impairment losses
-
(720)
(842)
(4,727)
Income from discontinued operations
$
58,131
$
24,278
$
61,800
$
299,989

		Balance as of

(Amounts in thousands)		March 31,		December 31,
		2015		2014
Assets related to discontinued operations:

	Real estate, net	$	27,199	$	2,028,677
	Other assets		8,143		209,797
		$	35,342	$	2,238,474

Liabilities related to discontinued operations:

	Mortgages payable		-		1,288,535
	Other liabilities (primarily deferred revenue in 2014)		11,354		222,827
		$	11,354	$	1,511,362


		For the Three Months
(Amounts in thousands)		Ended March 31,
		2015		2014
Income from discontinued operations

	Total revenues	$	19,958	$	106,563
	Total expenses		13,373		76,025
			6,585		30,538
	Net gain on sale of lease position in Geary Street, CA		21,376		-
	Net gains on sale of real estate		10,867		-
	Transaction related costs		(22,645)		(499)
	Impairment losses		(256)		(20,842)
	Pretax income from discontinued operations		15,927		9,197
	Income tax expense		(86)		(731)
	Income from discontinued operations	$	15,841	$	8,466

Cash flows related to discontinued operations:

	Cash flows from operating activities	$	(36,672)	$	15,535
	Cash flows from investing activities		310,069		(30,397)

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

9. Identified Intangible Assets and Liabilities

The following summarizes our identified intangible assets (primarily acquired in-place and above-market leases) and liabilities (primarily acquired below-market leases) as of March 31, 2015 and December 31, 2014.

	Balance as of
	March 31,		December 31,
(Amounts in thousands)	2015		2014
Identified intangible assets:
Gross amount	$	429,909	$	424,976
Accumulated amortization		(200,330)		(199,821)
Net	$	229,579	$	225,155
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	620,891	$	657,976
Accumulated amortization		(304,929)		(329,775)
Net	$	315,962	$	328,201

~~Other~~

~~On March 2, 2014, we entered into~~Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an ~~agreement~~increase to ~~transfer upon completion,~~rental income of $12,450,000 and $9,712,000 for the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to Pennsylvania Real Estate Investment Trust (NYSE: PEI) (“PREIT”) in exchange for $465,000,000 comprised of $340,000,000 of cash and $125,000,000 of PREIT operating partnership units. In connection therewith, we recorded a non-cash impairment loss of $20,000,000 in the first quarter of 2014, which is included in “impairment losses, acquisition and transaction related costs” on our consolidated statements of income. The redevelopment was completed in October 2014 and the closing will be no later thanthree months ended March 31, ~~2015.~~2015 and 2014, 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, 2016 is as follows:

(Amounts in thousands)
2016	$	36,804
2017		34,829
2018		33,546
2019		23,514
2020		21,505

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $6,185,000 and $8,891,000 for the three months ended March 31, 2015 and 2014, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases, customer relationships, and third party contracts for each of the five succeeding years commencing January 1, 2016 is as follows:

(Amounts in thousands)
2016	$	22,523
2017		17,692
2018		13,373
2019		11,425
2020		10,651

We are a tenant under ground leases for certain properties. Amortization of these acquired below-market leases, net of above-market leases resulted in an increase to rent expense of $458,000 for the three months ended March 31, 2015 and 2014. Estimated annual amortization of these below-market leases, net of above-market leases for each of the five succeeding years commencing January 1, 2016 is as follows:

(Amounts in thousands)
2016	$	1,832
2017		1,832
2018		1,832
2019		1,832
2020		1,832

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

10. ~~Identified Intangible Assets and Liabilities~~Debt

On January 1, 2015, we redeemed all of the $500,000,000 principal amount of our outstanding 4.25% senior unsecured notes, which were scheduled to mature on April 1, 2015, at a redemption price of 100% of the principal amount plus accrued interest through December 31, 2014.

On April 1, 2015, we completed a $308,000,000 refinancing of RiverHouse Apartments, a three building, 1,670 unit rental complex located in Arlington, VA. The loan is interest-only at LIBOR plus 1.28% and matures in 2025. We realized net proceeds of approximately $43,000,000. The property was previously encumbered by a 5.43%, $195,000,000 mortgage maturing in April 2015 and a $64,000,000 mortgage at LIBOR plus 1.53% maturing in 2018.

The following ~~summarizes~~is a summary of our ~~identified intangible assets (primarily acquired in-place and above-market leases) and liabilities (primarily acquired below-market leases) as of September 30, 2014 and December 31, 2013.~~

debt:

Balance as of
September 30,
December 31,
(Amounts in thousands)
2014
2013
Identified intangible assets:
Gross amount
$
503,993
$
589,961
Accumulated amortization
(223,786)
(277,998)
Net
$
280,207
$
311,963
Identified intangible liabilities (included in deferred revenue):
Gross amount
$
843,941
$
856,933
Accumulated amortization
(385,824)
(360,398)
Net
$
458,117
$
496,535

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental income of $10,039,000 and $11,145,000 for the three months ended September 30, 2014 and 2013, respectively, and $32,201,000 and $38,322,000 for the nine months ended September 30, 2014 and 2013, 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, 2015 is as follows:

(Amounts in thousands)
2015
$
40,071
2016
38,455
2017
34,890
2018
33,381
2019
30,105

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $6,296,000 and $10,686,000 for the three months ended September 30, 2014 and 2013, respectively, and $22,996,000 and $52,997,000 for the nine months ended September 30, 2014 and 2013, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases, customer relationships, and third party contracts for each of the five succeeding years commencing January 1, 2015 is as follows:

(Amounts in thousands)
2015
$
23,160
2016
20,195
2017
16,813
2018
12,446
2019
11,539

We are a tenant under ground leases for certain properties. Amortization of these acquired below-market leases, net of above-market leases resulted in an increase to rent expense of $858,000 and $981,000 for the three months ended September 30, 2014 and 2013, respectively, and $2,572,000 and $3,704,000 for the nine months ended September 30, 2014 and 2013, respectively. Estimated annual amortization of these below-market leases, net of above-market leases for each of the five succeeding years commencing January 1, 2015 is as follows:

(Amounts in thousands)
2015
$
3,430
2016
3,430
2017
3,430
2018
3,430
2019
3,430

		Interest Rate at		Balance at
(Amounts in thousands)		March 31, 2015		March 31, 2015		December 31, 2014
Mortgages Payable:
	Fixed rate		4.46%	$	6,553,924	$	6,499,396
	Variable rate		2.21%		1,762,869		1,763,769
			3.99%	$	8,316,793	$	8,263,165

Unsecured Debt:
	Senior unsecured notes		3.68%	$	847,332	$	1,347,159
	Revolving credit facility debt		1.23%		400,000		-
			3.39%	$	1,247,332	$	1,347,159

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

11. ~~Debt~~

On January 31, 2014, we completed a $600,000,000 loan secured by our 220 Central Park South development site. The loan bears interest at LIBOR plus 2.75% (2.90% at September 30, 2014) and matures in January 2016, with three one-year extension options.

~~On April 16,~~2014, we completed a $350,000,000 refinancing of 909 Third Avenue, a 1.3 million square foot Manhattan office building. The seven-year interest only loan bears interest at 3.91% and matures in May 2021. We realized net proceeds of approximately $145,000,000 after defeasing the existing 5.64%, $193,000,000 mortgage, defeasance cost and other closing costs.

~~On June 16, 2014, we completed a green bond public offering of $450,000,000 2.50% senior unsecured notes due June 30, 2019. The notes were sold at 99.619% of their face amount to yield 2.581%.~~

On July 16, 2014, we completed a $130,000,000 financing of Las Catalinas, a 494,000 square foot mall located in the San Juan area of Puerto Rico. The 10-year fixed rate loan bears interest at 4.43% and matures in August 2024. The loan amortizes based on a 30-year schedule beginning in year six.

On August 12, 2014, we completed a $185,000,000 financing of the Universal buildings, a 690,000 square foot, two-building office complex located in Washington, DC. The loan bears interest at LIBOR plus 1.90% (2.06% at September 30, 2014) and matures in August 2019 with two one-year extension options. The loan amortizes based on a 30-year schedule beginning in the fourth year.

~~On August 26, 2014, we obtained a standby commitment for up to $500,000,000 of five-year mezzanine loan financing to fund a portion of the development expenditures at 220 Central Park South.~~

On September 30, 2014, we extended one of our two $1.25 billion unsecured revolving credit facilities from November 2015 to November 2018 with two six-month extension options. The interest rate on the extended facility was lowered from LIBOR plus 125 basis points to LIBOR plus 105 basis points and the facility fee was reduced from 25 to 20 basis points.

On October 1, 2014, we redeemed all of the $445,000,000 principal amount of our outstanding 7.875% senior unsecured notes, which were scheduled to mature on October 1, 2039, at a redemption price of 100% of the principal amount plus accrued interest through the redemption date. In the fourth quarter of 2014, we will write off $12,532,000 of unamortized deferred financing costs, which will be included as a component of “interest and debt expense” on our consolidated statements of income.

~~The following is a summary of our debt:~~

Interest Rate at
Balance at
(Amounts in thousands)
September 30, 2014
September 30, 2014
December 31, 2013
Mortgages Payable:
Fixed rate
4.47%
$
7,723,956
$
7,563,133
Variable rate
2.29%
1,549,256
768,860
4.11%
$
9,273,212
$
8,331,993
Unsecured Debt:
Senior unsecured notes
4.88%
$
1,791,987
$
1,350,855
Revolving credit facility debt
1.30%
88,138
295,870
4.71%
$
1,880,125
$
1,646,725

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~12.~~ Redeemable Partnership Units

Redeemable partnership units on our consolidated balance sheets are comprised primarily of Class A units that are 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 “partners’ capital” on our consolidated balance sheets. Below is a table summarizing the activity of redeemable partnership units.

(Amounts in thousands)
Balance at December 31, ~~2012~~2013	$	~~944,152~~1,003,620
Net income		~~28,960~~3,860
Other comprehensive income		~~5,982~~361
Distributions		~~(25,827)~~(8,383)
Redemption of Class A units, at redemption value		~~(19,627)~~(5,156)
Adjustments to carry redeemable Class A units at redemption value		~~43,709~~
~~Redemption of Series D-15 redeemable units~~		~~(36,900)~~136,937
Other, net		~~10,649~~9,592
Balance at ~~September 30, 2013~~March 31, 2014	$	~~951,098~~1,140,831

Balance at December 31, ~~2013~~2014	$	~~1,003,620~~1,337,780
Net income		~~16,552~~5,287
Other comprehensive loss		~~(109)~~(1,288)
Distributions		~~(25,166)~~(7,280)
Redemption of Class A units, at redemption value		~~(22,668)~~(23,493)
Adjustments to carry redeemable Class A units at redemption value		~~144,231~~ (25,349)
Other, net		~~23,592~~19,133
Balance at ~~September 30, 2014~~March 31, 2015	$	~~1,140,052~~1,304,790

As of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013,~~2014, the aggregate redemption value of redeemable Class A units, which are those units held by third parties, was ~~$1,139,052,000~~$1,303,790,000 and ~~$1,002,620,000,~~$1,336,780,000, respectively.

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 480, ~~Distinguishing Liabilities and Equity~~Investments in Partially Owned Entities~~, because~~). The financial statement gain was $7,823,000, of ~~their possible settlement by issuing a variable number~~which $7,192,000 was recognized in the first quarter of ~~Vornado common shares. Accordingly,~~2015 and the ~~fair~~remaining $631,000 was deferred based on our ownership interest in PREIT. On March 31, 2018, we will be entitled to additional consideration of 50% of the increase in the value of ~~these units~~Springfield Town Center, if any, over $465,000,000, calculated utilizing a 5.5% capitalization rate. In the first quarter of 2014, we recorded a non-cash impairment loss of $20,000,000 on Springfield Town Center which is included ~~as a component of “other liabilities”~~in “income from discontinued operations” on our consolidated ~~balance sheets~~statements of income.

During the first quarter of 2015, we sold five residual retail properties, in separate transactions, for an aggregate of $10,731,000, which resulted in net gains of $3,675,000.

We have reclassified the revenues and ~~aggregated $55,097,000 as~~expenses of ~~September 30, 2014~~the properties discussed above to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all of the periods presented in the accompanying consolidated financial statements. The net gains resulting from the sale of these properties are included in “income from discontinued operations” on our consolidated statements of income. The tables below set forth the assets and liabilities related to discontinued operations at March 31, 2015 and December 31, ~~2013.~~ 2014 and their combined results of operations and cash flows for the three months ended March 31, 2015 and 2014.

		Balance as of

(Amounts in thousands)		March 31,		December 31,
		2015		2014
Assets related to discontinued operations:

	Real estate, net	$	27,199	$	2,028,677
	Other assets		8,143		209,797
		$	35,342	$	2,238,474

Liabilities related to discontinued operations:

	Mortgages payable		-		1,288,535
	Other liabilities (primarily deferred revenue in 2014)		11,354		222,827
		$	11,354	$	1,511,362


		For the Three Months
(Amounts in thousands)		Ended March 31,
		2015		2014
Income from discontinued operations

	Total revenues	$	19,958	$	106,563
	Total expenses		13,373		76,025
			6,585		30,538
	Net gain on sale of lease position in Geary Street, CA		21,376		-
	Net gains on sale of real estate		10,867		-
	Transaction related costs		(22,645)		(499)
	Impairment losses		(256)		(20,842)
	Pretax income from discontinued operations		15,927		9,197
	Income tax expense		(86)		(731)
	Income from discontinued operations	$	15,841	$	8,466

Cash flows related to discontinued operations:

	Cash flows from operating activities	$	(36,672)	$	15,535
	Cash flows from investing activities		310,069		(30,397)

2016

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~13. Accumulated Other Comprehensive Income (“AOCI”)~~9. Identified Intangible Assets and Liabilities

The following ~~tables set forth the changes in accumulated other comprehensive income (loss) by component.~~summarizes our identified intangible assets (primarily acquired in-place and above-market leases) and liabilities (primarily acquired below-market leases) as of March 31, 2015 and December 31, 2014.

For the Three Months Ended September 30, 2014
Securities
Pro rata share of
Interest
available-
nonconsolidated
rate
(Amounts in thousands)
Total
for-sale
subsidiaries' OCI
swap
Other
Balance as of June 30, 2014
$
92,221
$
134,312
$
(5,624)
$
(30,817)
$
(5,650)
OCI before reclassifications
(22,641)
(22,764)
(6,028)
4,781
1,370
Amounts reclassified from AOCI
-
-
-
-
-
Net current period OCI
(22,641)
(22,764)
(6,028)
4,781
1,370
Balance as of September 30, 2014
$
69,580
$
111,548
$
(11,652)
$
(26,036)
$
(4,280)
For the Three Months Ended September 30, 2013
Securities
Pro rata share of
Interest
available-
nonconsolidated
rate
(Amounts in thousands)
Total
for-sale
subsidiaries' OCI
swap
Other
Balance as of June 30, 2013
$
132,894
$
188,570
$
(12,041)
$
(35,505)
$
(8,130)
OCI before reclassifications
(7,163)
(8,252)
(1,669)
(295)
3,053
Amounts reclassified from AOCI
(42,404)
(42,404)
⁽¹⁾
-
-
-
Net current period OCI
(49,567)
(50,656)
(1,669)
(295)
3,053
Balance as of September 30, 2013
$
83,327
$
137,914
$
(13,710)
$
(35,800)
$
(5,077)
(1)
Reclassified to "net gain (loss) on disposition of wholly owned and partially owned assets" on our consolidated statements of income.
For the Nine Months Ended September 30, 2014
Securities
Pro rata share of
Interest
available-
nonconsolidated
rate
(Amounts in thousands)
Total
for-sale
subsidiaries' OCI
swap
Other
Balance as of December 31, 2013
$
71,537
$
119,309
$
(11,501)
$
(31,882)
$
(4,389)
OCI before reclassifications
(1,957)
(7,761)
(151)
5,846
109
Amounts reclassified from AOCI
-
-
-
-
-
Net current period OCI
(1,957)
(7,761)
(151)
5,846
109
Balance as of September 30, 2014
$
69,580
$
111,548
$
(11,652)
$
(26,036)
$
(4,280)
For the Nine Months Ended September 30, 2013
Securities
Pro rata share of
Interest
available-
nonconsolidated
rate
(Amounts in thousands)
Total
for-sale
subsidiaries' OCI
swap
Other
Balance as of December 31, 2012
$
(18,946)
$
19,432
$
11,313
$
(50,065)
$
374
OCI before reclassifications
144,677
160,886
(25,023)
14,265
(5,451)
Amounts reclassified from AOCI
(42,404)
(42,404)
⁽¹⁾
-
-
-
Net current period OCI
102,273
118,482
(25,023)
14,265
(5,451)
Balance as of September 30, 2013
$
83,327
$
137,914
$
(13,710)
$
(35,800)
$
(5,077)
(1)
Reclassified to "net gain (loss) on disposition of wholly owned and partially owned assets" on our consolidated statements of income.

	Balance as of
	March 31,		December 31,
(Amounts in thousands)	2015		2014
Identified intangible assets:
Gross amount	$	429,909	$	424,976
Accumulated amortization		(200,330)		(199,821)
Net	$	229,579	$	225,155
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	620,891	$	657,976
Accumulated amortization		(304,929)		(329,775)
Net	$	315,962	$	328,201

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental income of $12,450,000 and $9,712,000 for the three months ended March 31, 2015 and 2014, 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, 2016 is as follows:

(Amounts in thousands)
2016	$	36,804
2017		34,829
2018		33,546
2019		23,514
2020		21,505

(Amounts in thousands)
2016	$	22,523
2017		17,692
2018		13,373
2019		11,425
2020		10,651

(Amounts in thousands)
2016	$	1,832
2017		1,832
2018		1,832
2019		1,832
2020		1,832

2117

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~14. Variable Interest Entities (“VIEs”)~~10. Debt

~~At September 30, 2014,~~On April 1, 2015, we ~~have unconsolidated VIEs comprised~~completed a $308,000,000 refinancing of RiverHouse Apartments, a three building, 1,670 unit rental complex located in Arlington, VA. The loan is interest-only at LIBOR plus 1.28% and matures in 2025. We realized net proceeds of approximately $43,000,000. The property was previously encumbered by a 5.43%, $195,000,000 mortgage maturing in April 2015 and a $64,000,000 mortgage at LIBOR plus 1.53% maturing in 2018.

The following is a summary of our investments in the entities that own One Park Avenue, Independence Plaza and the Warner Building, and at December 31, 2013, our unconsolidated VIEs comprised of our investments in the entities that own Independence Plaza and the Warner Building. 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. As of September 30, 2014 and December 31, 2013, the net carrying amounts of our investment in these entities were $284,440,000 and $152,929,000, respectively, and our maximum exposure to loss in these entities is limited to our investment. We did not have any consolidated VIEs as of September 30, 2014 and December 31, 2013.

~~15. Fair Value Measurements~~

~~ASC 820,~~ ~~Fair Value Measurement and Disclosures~~ 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 sheet), (iv) interest rate swaps and (v) 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 at September 30, 2014 and December 31, 2013, respectively.

debt:

As of September 30, 2014
(Amounts in thousands)
Total
Level 1
Level 2
Level 3
Marketable securities
$
184,154
$
184,154
$
-
$
-
Real Estate Fund investments (75% of which is attributable to
noncontrolling interests)
495,392
-
-
495,392
Deferred compensation plan assets (included in other assets)
113,549
50,366
-
63,183
Total assets
$
793,095
$
234,520
$
-
$
558,575
Mandatorily redeemable instruments (included in other liabilities)
$
55,096
$
55,096
$
-
$
-
Interest rate swap (included in other liabilities)
26,036
-
26,036
-
Total liabilities
$
81,132
$
55,096
$
26,036
$
-
As of December 31, 2013
(Amounts in thousands)
Total
Level 1
Level 2
Level 3
Marketable securities
$
191,917
$
191,917
$
-
$
-
Real Estate Fund investments (75% of which is attributable to
noncontrolling interests)
667,710
-
-
667,710
Deferred compensation plan assets (included in other assets)
116,515
47,733
-
68,782
Total assets
$
976,142
$
239,650
$
-
$
736,492
Mandatorily redeemable instruments (included in other liabilities)
$
55,097
$
55,097
$
-
$
-
Interest rate swap (included in other liabilities)
31,882
-
31,882
-
Total liabilities
$
86,979
$
55,097
$
31,882
$
-

		Interest Rate at		Balance at
(Amounts in thousands)		March 31, 2015		March 31, 2015		December 31, 2014
Mortgages Payable:
	Fixed rate		4.46%	$	6,553,924	$	6,499,396
	Variable rate		2.21%		1,762,869		1,763,769
			3.99%	$	8,316,793	$	8,263,165

Unsecured Debt:
	Senior unsecured notes		3.68%	$	847,332	$	1,347,159
	Revolving credit facility debt		1.23%		400,000		-
			3.39%	$	1,247,332	$	1,347,159

2218

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~15. Fair Value Measurements – continued~~11. Redeemable Partnership Units

~~Financial Assets~~Redeemable partnership units on our consolidated balance sheets are comprised primarily of Class A units that are held by third parties and ~~Liabilities Measured~~are recorded at ~~Fair Value on a Recurring Basis - continued~~

~~Real Estate Fund Investments~~

~~At September 30, 2014, our Real Estate Fund had seven investments with an aggregate fair~~the greater of their carrying amount or redemption value of $495,392,000, or $158,317,000 in excess of cost. These investments are classified as Level 3. We use a discounted cash flow valuation technique to estimate the fair value of each of these investments, which is updated quarterly by personnel responsible for the management of each investment and reviewed by senior management at each reporting period. The discounted cash flow valuation technique requires us to estimate cash flows for each investment over the anticipated holding period, which currently ranges from 0.5 to 5.8 years. Cash flows are derived from property rental revenue (base rents plus reimbursements) less operating expenses, real estate taxes and capital and other costs, plus projected sales proceeds in the year of exit. Property rental revenue is based on leases currently in place and our estimates for future leasing activity, which are based on current market rents for similar space plus a projected growth factor. Similarly, estimated operating expenses and real estate taxes are based on amounts incurred in the current period plus a projected growth factor for future periods. Anticipated sales proceeds at the end of ~~an investment’s expected holding~~each reporting period. Changes in the value from period to period are ~~determined based~~charged to “partners’ capital” on our consolidated balance sheets. Below is a table summarizing the ~~net cash flow~~activity of ~~the investment in the year of exit, divided by a terminal capitalization rate, less estimated selling costs.~~

The fair value of each property is calculated by discounting the future cash flows (including the projected sales proceeds), using an appropriate discount rate and then reduced by the property’s outstanding debt, if any, to determine the fair value of the equity in each investment. 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, and current and anticipated market conditions, which are derived from original underwriting assumptions, 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 Fund investments at September 30, 2014.redeemable partnership units.

(Amounts in thousands)
Balance at December 31, 2013	$	1,003,620
Net income		3,860
Other comprehensive income		~~Weighted Average~~361
Distributions		(8,383)
Redemption of Class A units, at redemption value		(5,156)
Adjustments to carry redeemable Class A units at redemption value		136,937
Other, net		9,592
Balance at March 31, 2014	$	1,140,831

Balance at December 31, 2014	$	~~(based on fair~~1,337,780
~~Unobservable Quantitative Input~~Net income		~~Range~~	~~value of investments)~~5,287
	~~Discount rates~~Other comprehensive loss		~~12.0% to 17.5%~~	~~13.7%~~(1,288)
	~~Terminal capitalization rates~~Distributions		~~5.0% to 6.3%~~	~~5.8%~~(7,280)
Redemption of Class A units, at redemption value		(23,493)
Adjustments to carry redeemable Class A units at redemption value		(25,349)
Other, net		19,133
Balance at March 31, 2015	$	1,304,790

~~The above inputs are subject to change based on changes in economic and market conditions and/or changes in use or timing~~As 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 Fund investments that are classified as Level 3, for the three and nine months ended September 30, 2014 and 2013.~~

Real Estate Fund Investments
Real Estate Fund Investments
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
2014
2013
Beginning balance
$
549,091
$
622,124
$
667,710
$
600,786
Purchases
725
7,406
3,392
38,299
Dispositions / Distributions
(74,755)
(14,184)
(307,268)
(70,848)
Net unrealized gains
18,333
12,367
55,221
59,476
Net realized gains
51,584
8,184
126,653
8,184
Previously recorded unrealized gains
(49,586)
-
(50,316)
-
Other, net
-
93
-
93
Ending balance
$
495,392
$
635,990
$
495,392
$
635,990

~~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 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, 2014 and 2013.~~

Deferred Compensation Plan Assets
Deferred Compensation Plan Assets
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
2014
2013
Beginning balance
$
64,609
$
66,502
$
68,782
$
62,631
Purchases
1,377
880
10,936
4,027
Sales
(4,917)
(873)
(21,296)
(5,318)
Realized and unrealized gain (loss)
927
(42)
2,901
4,094
Other, net
1,187
58
1,860
1,091
Ending balance
$
63,183
$
66,525
$
63,183
$
66,525

~~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, our investment in Suffolk Downs and our investment in Toys that were written-down to estimated fair value at September 30, 2014 or at DecemberMarch 31, 2013. The fair value of our real estate assets and our investment in Suffolk Downs was determined using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity. In determining the fair value of our investment in Toys, we considered, among other inputs, a December 31, 2013 third-party valuation of Toys and Toys’ historical results, financial forecasts and business outlook. Our determination of the fair value of our investment in Toys included consideration of the following widely-used valuation methodologies: (i) market multiple methodology, that considered comparable publicly traded retail companies and a range of EBITDA multiples from 5.75x to 6.5x, (ii) comparable sales transactions methodology, that considered sales of retailers ranging in size from $150 million to $3 billion, (iii) a discounted cash flow methodology, that utilized five-year financial projections and assumed a terminal EBITDA multiple of 5.75x, a 10% discount rate and a 38% tax rate, and (iv) a Black-Scholes valuation analysis, that assumed one, two and three year time-to-expiration periods and 24% to 29% volatility factors. Generally, we consider a number of valuation techniques when measuring fair values but in certain circumstances, a single valuation technique may be appropriate. The tables below aggregate the fair values of these assets by their levels in the fair value hierarchy.

As of September 30, 2014
(Amounts in thousands)
Total
Level 1
Level 2
Level 3
Investment in Suffolk Downs
$
1,328
$
-
$
-
$
1,328
As of December 31, 2013
(Amounts in thousands)
Total
Level 1
Level 2
Level 3
Real estate assets
$
354,351
$
-
$
-
$
354,351
Investment in Toys "R" Us
83,224
-
-
83,224
Total assets
$
437,575
$
-
$
-
$
437,575

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~15. Fair Value Measurements – continued~~

~~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), mortgage and mezzanine loans receivable 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 value of cash equivalents and borrowings under our revolving credit facility is classified as Level 1, and the fair value of our mortgage and mezzanine loans receivable is classified as Level 3. The fair value of our secured 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, 20142015 and December 31, ~~2013.~~2014, the aggregate redemption value of redeemable Class A units, which are those units held by third parties, was $1,303,790,000 and $1,336,780,000, respectively.

As of September 30, 2014
As of December 31, 2013
Carrying
Fair
Carrying
Fair
(Amounts in thousands)
Amount
Value
Amount
Value
Cash equivalents
$
1,361,305
$
1,361,000
$
295,000
$
295,000
Mortgage and mezzanine loans receivable
17,085
17,000
170,972
171,000
$
1,378,390
$
1,378,000
$
465,972
$
466,000
Debt:
Mortgages payable
$
9,273,212
$
9,192,000
$
8,331,993
$
8,104,000
Senior unsecured notes
1,791,987
1,840,000
1,350,855
1,402,000
Revolving credit facility debt
88,138
88,000
295,870
296,000
$
11,153,337
$
11,120,000
$
9,978,718
$
9,802,000

~~16. Incentive Compensation~~

~~Vornado’s 2010 Omnibus Share Plan (the “Plan”) provides for grants of incentive and non-qualified Vornado stock options, Vornado restricted stock, restricted~~Redeemable partnership units exclude our Series G-1 through G-4 convertible preferred units and ~~out-performance plan awards to certain of Vornado’s employees and officers. We account~~Series D-13 cumulative redeemable preferred units, as they are accounted for ~~all stock-based compensation~~as liabilities in accordance with ASC ~~718,~~480, ~~Compensation – Stock Compensation~~~~. Stock-based compensation expense was $8,315,000and $9,201,000 in the three months ended September 30, 2014 and 2013, respectively and $28,389,000 and $25,796,000 in the nine months ended September 30, 2014 and 2013, respectively.~~

On January 10, 2014, the Compensation Committee of Vornado’s Board of Trustees approved the 2014 Outperformance Plan, a multi-year, performance-based equity compensation plan and related form of award agreement (the “2014 OPP”). Under the 2014 OPP, participants have the opportunity to earn compensation payable in the form of units during a three-year performance measurement period, if and only if Vornado outperforms a predetermined total shareholder return (“TSR”) and/or outperforms the market with respect to relative TSR. Awards under the 2014 OPP may be earned if Vornado (i) achieves a TSR level greater than 7% per annum, or 21% over the three-year performance measurement period (the “Absolute Component”), and/or (ii) achieves a TSR above that of the SNL US REIT Index (the “Index”) over a three-year performance measurement period (the “Relative Component”). To the extent awards would be earned under the Absolute Component but Vornado underperforms the Index, such awards earned under the Absolute Component would be reduced (and potentially fully negated) based on the degree to which Vornado underperforms the Index. In certain circumstances, in the event Vornado outperforms the Index but awards would not otherwise be earned under the Absolute Component, awards may be increased under the Relative Component. To the extent awards would otherwise be earned under the Relative Component but Vornado fails to achieve at least a 6% per annum absolute TSR, such awards earned under the Relative Component would be reduced based on Vornado’s absolute TSR, with no awards being earned in the event Vornado’s TSR during the applicable measurement period is 0% or negative, irrespective of the degree to which Vornado may outperform the Index. If the designated performance objectives are achieved, OPP Units are also subject to time-based vesting requirements. Awards earned under the 2014 OPP vest 33% in year three, 33% in year four and 34% in year five. Distributions on awards earned accrue during the performance measurement period. In addition, Vornado’s executive officers (for the purposes of Section 16 of the Exchange Act) are required to hold any earned OPP awards (or related equity) for at least one year following vesting.

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~17. Fee and Other Income~~

~~The following table sets forth the details of fee and other income:~~

For the Three Months
For the Nine Months
(Amounts in thousands)
Ended September 30,
Ended September 30,
2014
2013
2014
2013
BMS cleaning fees
$
22,467
$
15,898
$
63,618
$
49,071
Signage revenue
7,698
8,738
25,889
23,566
Management and leasing fees
4,662
7,977
17,027
19,661
Lease termination fees⁽¹⁾
3,764
20,344
12,102
87,353
Other income
7,820
7,892
23,982
25,872
$
46,411
$
60,849
$
142,618
$
205,523
(1)
The three and nine months ended September 30, 2013 includes a $19,500 termination fee income from a tenant at 1290 Avenue of the Americas. The nine months ended September 30, 2013 also includes $59,599 of income pursuant to a settlement agreement with Stop & Shop.

Management and leasing fees include management fees from Interstate Properties, a related party, of $132,000 and $134,000 for the three months ended September 30, 2014 and 2013, respectively, and $397,000 and $467,000 for the nine months ended September 30, 2014 and 2013, respectively. The above table excludes fee income from partially owned entities, which is typically included in “(loss) income from partially owned entities” (see Note 8 – Investments in Partially Owned Entities). The financial statement gain was $7,823,000, of which $7,192,000 was recognized in the first quarter of 2015 and the remaining $631,000 was deferred based on our ownership interest in PREIT. On March 31, 2018, we will be entitled to additional consideration of 50% of the increase in the value of Springfield Town Center, if any, over $465,000,000, calculated utilizing a 5.5% capitalization rate. In the first quarter of 2014, we recorded a non-cash impairment loss of $20,000,000 on Springfield Town Center which is included in “income from discontinued operations” on our consolidated statements of income.

During the first quarter of 2015, we sold~~18. Interest~~ five residual retail properties, in separate transactions, for an aggregate of $10,731,000, which resulted in net gains of $3,675,000.

We have reclassified the revenues and ~~Other Investment Income (Loss), Net~~

expenses of the properties discussed above to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all of the periods presented in the accompanying consolidated financial statements. The ~~following table sets~~net gains resulting from the sale of these properties are included in “income from discontinued operations” on our consolidated statements of income. The tables below set forth the ~~details~~assets and liabilities related to discontinued operations at March 31, 2015 and December 31, 2014 and their combined results of ~~interest~~operations and ~~other investment income (loss):~~cash flows for the three months ended March 31, 2015 and 2014.

For the Three Months
For the Nine Months
(Amounts in thousands)
Ended September 30,
Ended September 30,
2014
2013
2014
2013
Dividends and interest on marketable securities
$
3,200
$
2,804
$
9,504
$
8,344
Mark-to-market of investments in our deferred compensation plan⁽¹⁾
1,352
269
8,132
6,207
Interest on mezzanine loans receivable
404
4,766
3,524
14,783
Loss from the mark-to-market of J.C. Penney
derivative position
-
(20,012)
-
(33,487)
Non-cash impairment loss on J.C. Penney common shares
-
-
-
(39,487)
Income from prepayment penalties in connection with the
repayment of a mezzanine loan receivable
-
-
-
5,267
Other, net
2,646
1,898
7,770
5,438
$
7,602
$
(10,275)
$
28,930
$
(32,935)
(1)
This income is entirely offset by the expense resulting from the mark-to-market of the deferred compensation plan liability, which is included in "general and administrative" expense.

~~19. Interest and Debt Expense~~

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

For the Three Months
For the Nine Months
(Amounts in thousands)
Ended September 30,
Ended September 30,
2014
2013
2014
2013
Interest expense
$
124,163
125,256
$
367,899
$
373,619
Amortization of deferred financing costs
7,292
4,952
20,231
15,084
Capitalized interest
(16,335)
(10,532)
(46,517)
(28,024)
$
115,120
$
119,676
$
341,613
$
360,679

		Balance as of

(Amounts in thousands)		March 31,		December 31,
		2015		2014
Assets related to discontinued operations:

	Real estate, net	$	27,199	$	2,028,677
	Other assets		8,143		209,797
		$	35,342	$	2,238,474

Liabilities related to discontinued operations:

	Mortgages payable		-		1,288,535
	Other liabilities (primarily deferred revenue in 2014)		11,354		222,827
		$	11,354	$	1,511,362


		For the Three Months
(Amounts in thousands)		Ended March 31,
		2015		2014
Income from discontinued operations

	Total revenues	$	19,958	$	106,563
	Total expenses		13,373		76,025
			6,585		30,538
	Net gain on sale of lease position in Geary Street, CA		21,376		-
	Net gains on sale of real estate		10,867		-
	Transaction related costs		(22,645)		(499)
	Impairment losses		(256)		(20,842)
	Pretax income from discontinued operations		15,927		9,197
	Income tax expense		(86)		(731)
	Income from discontinued operations	$	15,841	$	8,466

Cash flows related to discontinued operations:

	Cash flows from operating activities	$	(36,672)	$	15,535
	Cash flows from investing activities		310,069		(30,397)

2616

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~20.~~9. Identified Intangible Assets and Liabilities

	Balance as of
	March 31,		December 31,
(Amounts in thousands)	2015		2014
Identified intangible assets:
Gross amount	$	429,909	$	424,976
Accumulated amortization		(200,330)		(199,821)
Net	$	229,579	$	225,155
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	620,891	$	657,976
Accumulated amortization		(304,929)		(329,775)
Net	$	315,962	$	328,201

(Amounts in thousands)
2016	$	36,804
2017		34,829
2018		33,546
2019		23,514
2020		21,505

(Amounts in thousands)
2016	$	22,523
2017		17,692
2018		13,373
2019		11,425
2020		10,651

(Amounts in thousands)
2016	$	1,832
2017		1,832
2018		1,832
2019		1,832
2020		1,832

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

10. Debt

The following is a summary of our debt:

		Interest Rate at		Balance at
(Amounts in thousands)		March 31, 2015		March 31, 2015		December 31, 2014
Mortgages Payable:
	Fixed rate		4.46%	$	6,553,924	$	6,499,396
	Variable rate		2.21%		1,762,869		1,763,769
			3.99%	$	8,316,793	$	8,263,165

Unsecured Debt:
	Senior unsecured notes		3.68%	$	847,332	$	1,347,159
	Revolving credit facility debt		1.23%		400,000		-
			3.39%	$	1,247,332	$	1,347,159

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

11. Redeemable Partnership Units

(Amounts in thousands)
Balance at December 31, 2013	$	1,003,620
Net income		3,860
Other comprehensive income		361
Distributions		(8,383)
Redemption of Class A units, at redemption value		(5,156)
Adjustments to carry redeemable Class A units at redemption value		136,937
Other, net		9,592
Balance at March 31, 2014	$	1,140,831

Balance at December 31, 2014	$	1,337,780
Net income		5,287
Other comprehensive loss		(1,288)
Distributions		(7,280)
Redemption of Class A units, at redemption value		(23,493)
Adjustments to carry redeemable Class A units at redemption value		(25,349)
Other, net		19,133
Balance at March 31, 2015	$	1,304,790

As of March 31, 2015 and December 31, 2014, the aggregate redemption value of redeemable Class A units, which are those units held by third parties, was $1,303,790,000 and $1,336,780,000, respectively.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

12. Accumulated Other Comprehensive Income (“AOCI”)

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

		For the Three Months Ended March 31, 2014
				Securities		Pro rata share of		Interest
				available-		nonconsolidated		rate
(Amounts in thousands)		Total		for-sale		subsidiaries' OCI		swap		Other
Balance as of December 31, 2013		$	71,537	$	119,309	$	(11,501)	$	(31,882)	$	(4,389)
	OCI before reclassifications		6,089		13,125		(8,286)		1,610		(360)
	Amounts reclassified from AOCI		-		-		-		-		-
Net current period OCI			6,089		13,125		(8,286)		1,610		(360)
Balance as of March 31, 2014		$	77,626	$	132,434	$	(19,787)	$	(30,272)	$	(4,749)


		For the Three Months Ended March 31, 2015
				Securities		Pro rata share of		Interest
				available-		nonconsolidated		rate
(Amounts in thousands)		Total		for-sale		subsidiaries' OCI		swap		Other
Balance as of December 31, 2014		$	93,267	$	133,774	$	(8,992)	$	(25,803)	$	(5,712)
	OCI before reclassifications		(20,658)		(21,332)		157		(776)		1,293
	Amounts reclassified from AOCI		-		-		-		-		-
Net current period OCI			(20,658)		(21,332)		157		(776)		1,293
Balance as of March 31, 2015		$	72,609	$	112,442	$	(8,835)	$	(26,579)	$	(4,419)

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

13. Variable Interest Entities (“VIEs”)

At March 31, 2015 and December 31, 2014, we have unconsolidated VIEs comprised of our investments in the entities that own One Park Avenue, Independence Plaza and the Warner Building. 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. As of March 31, 2015 and December 31, 2014, the net carrying amounts of our investment in these entities were $286,876,000 and $286,783,000, respectively, and our maximum exposure to loss in these entities is limited to our investment. We did not have any consolidated VIEs as of March 31, 2015 and December 31, 2014.

14. Fair Value Measurements

ASC 820, Fair Value Measurement and Disclosures 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 sheet), (iv) mandatorily redeemable instruments (Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units), and (v) an interest rate swap. The tables below aggregate the fair values of these financial assets and liabilities by their levels in the fair value hierarchy at March 31, 2015 and December 31, 2014, respectively.

		As of March 31, 2015
(Amounts in thousands)		Total		Level 1		Level 2		Level 3
Marketable securities		$	184,991	$	184,991	$	-	$	-
Real estate fund investments (75% of which is attributable to
	noncontrolling interests)		554,426		-		-		554,426
Deferred compensation plan assets (included in other assets)			121,530		56,694		-		64,836
	Total assets	$	860,947	$	241,685	$	-	$	619,262

Mandatorily redeemable instruments (included in other liabilities)		$	55,097	$	55,097	$	-	$	-
Interest rate swap (included in other liabilities)			26,574		-		26,574		-
	Total liabilities	$	81,671	$	55,097	$	26,574	$	-

		As of December 31, 2014
(Amounts in thousands)		Total		Level 1		Level 2		Level 3
Marketable securities		$	206,323	$	206,323	$	-	$	-
Real estate fund investments (75% of which is attributable to
	noncontrolling interests)		513,973		-		-		513,973
Deferred compensation plan assets (included in other assets)			117,284		53,969		-		63,315
	Total assets	$	837,580	$	260,292	$	-	$	577,288

Mandatorily redeemable instruments (included in other liabilities)		$	55,097	$	55,097	$	-	$	-
Interest rate swap (included in other liabilities)			25,797		-		25,797		-
	Total liabilities	$	80,894	$	55,097	$	25,797	$	-

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

14. Fair Value Measurements – continued

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

Real Estate Fund Investments

At March 31, 2015, we had six investments with an aggregate fair value of $554,426,000, or $169,832,000 in excess of cost. These investments are classified as Level 3. We use a discounted cash flow valuation technique to estimate the fair value of each of these investments, which is updated quarterly by personnel responsible for the management of each investment and reviewed by senior management at each reporting period. The discounted cash flow valuation technique requires us to estimate cash flows for each investment over the anticipated holding period, which currently ranges from 0.8 to 5.8 years. Cash flows are derived from property rental revenue (base rents plus reimbursements) less operating expenses, real estate taxes and capital and other costs, plus projected sales proceeds in the year of exit. Property rental revenue is based on leases currently in place and our estimates for future leasing activity, which are based on current market rents for similar space plus a projected growth factor. Similarly, estimated operating expenses and real estate taxes are based on amounts incurred in the current period plus a projected growth factor for future periods. Anticipated sales proceeds at the end of an investment’s expected holding period are determined based on the net cash flow of the investment in the year of exit, divided by a terminal capitalization rate, less estimated selling costs.

The fair value of each property is calculated by discounting the future cash flows (including the projected sales proceeds), using an appropriate discount rate and then reduced by the property’s outstanding debt, if any, to determine the fair value of the equity in each investment. 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, and current and anticipated market conditions, which are derived from original underwriting assumptions, 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 at March 31, 2015 and December 31, 2014.

Weighted Average

Range

(based on fair value of investments)

Unobservable Quantitative Input

March 31, 2015

December 31, 2014

March 31, 2015

December 31, 2014

Discount rates

12.0% to 14.5%

12.0% to 17.5%

13.4%

13.7%

Terminal capitalization rates

4.8% to 6.5%

4.7% to 6.5%

5.5%

5.3%

The 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 months ended March 31, 2015 and 2014.

	Real Estate Fund Investments
	For the Three Months Ended March 31,
(Amounts in thousands)	2015		2014
Beginning balance	$	513,973	$	667,710
Purchases		95,000		123
Dispositions / Distributions		(72,186)		-
Net unrealized gains		16,213		14,169
Net realized gains		1,426		-
Ending balance	$	554,426	$	682,002

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

14. Fair Value Measurements – continued

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

Deferred Compensation Plan Assets

The table below summarizes the changes in the fair value of deferred compensation plan assets that are classified as Level 3, for the three months ended March 31, 2015 and 2014.

	Deferred Compensation Plan Assets
	For the Three Months Ended March 31,
(Amounts in thousands)	2015		2014
Beginning balance	$	63,315	$	68,782
Purchases		624		1,644
Sales		(438)		(5,124)
Realized and unrealized gain		1,335		2,172
Other, net		-		153
Ending balance	$	64,836	$	67,627

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 at December 31, 2014. The fair value of our real estate assets was determined using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity.

		As of December 31, 2014
(Amounts in thousands)		Total		Level 1		Level 2		Level 3
	Real estate assets	$	4,848	$	-	$	-	$	4,848

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

14. Fair Value Measurements – continued

Financial Assets and Liabilities not Measured at Fair Value

			As of March 31, 2015				As of December 31, 2014
			Carrying		Fair		Carrying		Fair
(Amounts in thousands)			Amount		Value		Amount		Value
	Cash equivalents		$	526,218	$	526,000	$	749,418	$	749,000
	Mortgage and mezzanine loans receivable			-		-		16,748		17,000
			$	526,218	$	526,000	$	766,166	$	766,000
	Debt:
		Mortgages payable	$	8,316,793	$	8,334,000	$	8,263,165	$	8,224,000
		Senior unsecured notes		847,332		898,000		1,347,159		1,385,000
		Revolving credit facility debt		400,000		400,000		-		-
			$	9,564,125	$	9,632,000	$	9,610,324	$	9,609,000

15. Incentive Compensation

Vornado’s 2010 Omnibus Share Plan (the “Plan”) provides for grants of incentive and non-qualified Vornado stock options, Vornado restricted stock, restricted units and Out-Performance Plan awards to certain of Vornado’s employees and officers. We account for all stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Stock-based compensation expense was $20,142,000 and $11,024,000 in the three months ended March 31, 2015 and 2014, respectively.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

16. Fee and Other Income

The following table sets forth the details of fee and other income:

	For the Three Months
(Amounts in thousands)	Ended March 31,
	2015		2014
BMS cleaning fees	$	22,633	$	18,956
Management and leasing fees		4,192		5,828
Lease termination fees		3,747		3,577
Other income		9,035		7,579
	$	39,607	$	35,940

Management and leasing fees include management fees from Interstate Properties, a related party, of $139,000and $134,000 for the three months ended March 31, 2015 and 2014, respectively. The above table excludes fee income from partially owned entities, which is typically included in “(loss) income from partially owned entities” (see Note 7 – Investments in Partially Owned Entities).

17. Interest and Other Investment Income, Net

The following table sets forth the details of interest and other investment income:

		For the Three Months
(Amounts in thousands)		Ended March 31,
		2015		2014
Dividends and interest on marketable securities		$	3,203	$	3,106
Mark-to-market of investments in our deferred compensation plan⁽¹⁾			2,859		4,400
Interest on mezzanine loans receivable			1,674		2,384
Other, net			3,056		1,960
		$	10,792	$	11,850


(1)	This income is entirely offset by the expense resulting from the mark-to-market of the deferred compensation plan liability, which is included in "general and administrative" expense.

18. Interest and Debt Expense

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

	For the Three Months
(Amounts in thousands)	Ended March 31,
	2015		2014
Interest expense	$	95,328	$	105,512
Amortization of deferred financing costs		7,456		4,422
Capitalized interest and debt expense		(11,110)		(13,622)
	$	91,674	$	96,312

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

19. Income Per Class A Unit

The following table provides a reconciliation of both net income and the number of Class A units used in the computation 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 units and dilutive unit equivalents. Dilutive unit equivalents may include our Series A convertible preferred units, Vornado stock options and restricted unit awards.

			For the Three Months				For the Nine Months						For the Three Months
(Amounts in thousands, except per unit amounts)			Ended September 30,				Ended September 30,
(Amounts in thousands, except per units amounts)											(Amounts in thousands, except per units amounts)		Ended March 31,
			2014		2013		2014		2013				2015		2014
Numerator:	Numerator:										Numerator:
	Income from continuing operations, net of income attributable										Income from continuing operations, net of income attributable to noncontrolling interests		$	93,523	$	78,111
		to noncontrolling interests in consolidated subsidiaries	$	101,381	$	87,100	$	286,001	$	256,525	Income from discontinued operations, net of income attributable to noncontrolling interests			15,841		8,466
	Income from discontinued operations, net of income attributable										Net income attributable to Vornado Realty L.P.			109,364		86,577
		to noncontrolling interests in consolidated subsidiaries		58,131		21,318		61,800		296,925	Preferred unit distributions			(19,496)		(20,380)
	Net income attributable to Vornado Realty L.P.			159,512		108,418		347,801		553,450	Net income attributable to Class A unitholders			89,868		66,197
	Preferred unit distributions			(20,378)		(20,381)		(61,137)		(63,585)	Earnings allocated to unvested participating securities			(749)		(899)
	Preferred unit redemptions			-		-		-		(1,130)	Numerator for diluted income per Class A unit		$	89,119	$	65,298
	Net income attributable to Class A unitholders			139,134		88,037		286,664		488,735
	Earnings allocated to unvested participating securities			(769)		(699)		(2,436)		(2,203)
	Numerator for basic income per Class A unit			138,365		87,338		284,228		486,532
	Impact of assumed conversions:
		Convertible preferred unit distributions		24		-		-		82
	Numerator for diluted income per Class A unit		$	138,389	$	87,338	$	284,228	$	486,614

Denominator:	Denominator:										Denominator:
	Denominator for basic income per Class A unit – weighted
		average units		198,322		197,599		198,158		197,510
	Effect of dilutive securities⁽¹⁾:										Denominator for basic income per Class A unit – weighted average units			198,675		197,917
		Vornado stock options and restricted unit awards		1,577		1,118		1,510		1,049	Effect of dilutive securities⁽¹⁾:
		Convertible preferred units		41		-		-		48		Vornado stock options and restricted unit awards		2,074		1,437
	Denominator for diluted income per Class A unit – weighted average										Denominator for diluted income per Class A unit – weighted average units
		units and assumed conversions		199,940		198,717		199,668		198,607		and assumed conversions		200,749		199,354

INCOME PER CLASS A UNIT – BASIC:	INCOME PER CLASS A UNIT – BASIC:										INCOME PER CLASS A UNIT – BASIC:
	Income from continuing operations, net		$	0.41	$	0.33	$	1.12	$	0.96	Income from continuing operations, net		$	0.37	$	0.29
	Income from discontinued operations, net			0.29		0.11		0.31		1.50	Income from discontinued operations, net			0.08		0.04
	Net income per Class A unit		$	0.70	$	0.44	$	1.43	$	2.46	Net income per Class A unit		$	0.45	$	0.33

INCOME PER CLASS A UNIT – DILUTED:	INCOME PER CLASS A UNIT – DILUTED:										INCOME PER CLASS A UNIT – DILUTED:
	Income from continuing operations, net		$	0.40	$	0.33	$	1.11	$	0.96	Income from continuing operations, net		$	0.36	$	0.29
	Income from discontinued operations, net			0.29		0.11		0.31		1.49	Income from discontinued operations, net			0.08		0.04
	Net income per Class A unit		$	0.69	$	0.44	$	1.42	$	2.45	Net income per Class A unit		$	0.44	$	0.33


(1)		The effect of dilutive securities in the three months ended September 30, 2014 and 2013 excludes an aggregate of 117 and 1,009 weighted average Class A unit equivalents, respectively, and 182 and 962 weighted average Class A unit equivalents in the nine months ended September 30, 2014 and 2013, respectively, as their effect was anti-dilutive.									(1)	The effect of dilutive securities in the three months ended March 31, 2015 and 2014 excludes an aggregate of 76 and 213 weighted average Class A unit equivalents, respectively, as their effect was anti-dilutive.

2726

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~21.~~20. Commitments and Contingencies

Insurance

We maintain general liability insurance with limits of $300,000,000 per occurrence and all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as floods. Our California properties have earthquake insurance with coverage of $180,000,000 per occurrence, subject to a deductible in the amount of 5% of the value of the affected property, up to a $180,000,000 annual aggregate. We maintain coverage for terrorism acts with limits of $4.0 billion per occurrence and in the aggregate, ~~including~~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, which expires in December ~~2014.~~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 NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the ~~federal~~Federal government with no ~~direct~~ exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of ~~$2,150,000~~$2,480,000 and 15% of the balance of a covered loss (16% effective January 1, 2016) and the ~~federal~~Federal government is responsible for the remaining 85% of a covered ~~loss.~~loss (84% effective January 1, 2016). We are ultimately responsible for any loss incurred by PPIC.

We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Our debt instruments, consisting of mortgage loans secured by our properties which are non-recourse to us, 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 our properties and expand our portfolio.

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 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 costs to us.

Our mortgage loans are non-recourse to us. However, 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, 2014,~~March 31, 2015, the aggregate dollar amount of these guarantees and master leases is approximately ~~$360,000,000.~~$349,000,000.

At ~~September 30, 2014, $39,947,000~~March 31, 2015, $39,632,000 of letters of credit were outstanding under one of our revolving credit facilities. Our 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 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 of ~~September 30, 2014,~~March 31, 2015, we expect to fund additional capital to certain of our partially owned entities aggregating approximately ~~$111,000,000.~~$78,000,000.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

21. Segment Information

As a result of the spin-off of substantially all of our Retail Properties segment (see Note 8 - Dispositions), the remaining retail properties no longer meet the criteria to be a separate reportable segment. In addition, as a result of our investment in Toys being reduced to zero, we suspended equity method accounting for our investment in Toys (see Note 7 - Investments in Partially Owned Entities) and the Toys segment no longer meets the criteria to be a separate reportable segment. Accordingly, effective January 1, 2015, the Retail Properties segment and Toys have been reclassified to the Other segment. We have also reclassified the prior period segment financial results to conform to the current period presentation. Below is a summary of net income and a reconciliation of net income to EBITDA⁽¹⁾ by segment for the three months ended March 31, 2015 and 2014.


(Amounts in thousands)		For the Three Months Ended March 31, 2015
			Total		New York			Washington, DC			Other
Total revenues			$	606,802	$	399,513		$	133,968		$	73,321
Total expenses				439,088		252,760			92,997			93,331
Operating income (loss)				167,714		146,753			40,971			(20,010)
(Loss) income from partially owned entities				(2,405)		(5,663)			131			3,127
Income from real estate fund investments				24,089		-			-			24,089
Interest and other investment income, net				10,792		1,862			13			8,917
Interest and debt expense				(91,674)		(45,351)			(18,160)			(28,163)
Net gain on disposition of wholly owned and partially
	owned assets			1,860		-			-			1,860
Income (loss) before income taxes				110,376		97,601			22,955			(10,180)
Income tax (expense) benefit				(971)		(943)			674			(702)
Income (loss) from continuing operations				109,405		96,658			23,629			(10,882)
Income from discontinued operations				15,841		-			-			15,841
Net income				125,246		96,658			23,629			4,959
Less net income attributable to noncontrolling interests in
	consolidated subsidiaries			(15,882)		(1,506)			-			(14,376)
Net income (loss) attributable to Vornado Realty L.P.				109,364		95,152			23,629			(9,417)
Interest and debt expense⁽²⁾				114,675		58,667			21,512			34,496
Depreciation and amortization⁽²⁾				156,450		94,124			40,752			21,574
Income tax (benefit) expense ⁽²⁾				(739)		1,002			(2,636)			895
EBITDA⁽¹⁾			$	379,750	$	248,945	⁽³⁾	$	83,257	⁽⁴⁾	$	47,548	⁽⁵⁾

(Amounts in thousands)		For the Three Months Ended March 31, 2014
		Total		New York			Washington, DC			Other
Total revenues		$	562,381	$	361,184		$	135,278		$	65,919
Total expenses			417,140		237,734			89,572			89,834
Operating income (loss)			145,241		123,450			45,706			(23,915)
Income (loss) from partially owned entities			1,979		1,566			(1,266)			1,679
Income from real estate fund investments			18,148		-			-			18,148
Interest and other investment income, net			11,850		1,441			36			10,373
Interest and debt expense			(96,312)		(42,839)			(19,347)			(34,126)
Net gain on disposition of wholly owned and partially
	owned assets		9,635		-			-			9,635
Income (loss) before income taxes			90,541		83,618			25,129			(18,206)
Income tax (expense) benefit			(851)		(969)			199			(81)
Income (loss) from continuing operations			89,690		82,649			25,328			(18,287)
Income from discontinued operations			8,466		5,867			-			2,599
Net income (loss)			98,156		88,516			25,328			(15,688)
Less net income attributable to noncontrolling interests in
	consolidated subsidiaries		(11,579)		(1,405)			-			(10,174)
Net income (loss) attributable to Vornado Realty L.P.			86,577		87,111			25,328			(25,862)
Interest and debt expense⁽²⁾			170,952		58,068			22,798			90,086
Depreciation and amortization⁽²⁾			196,339		87,587			36,150			72,602
Income tax expense (benefit)⁽²⁾			19,831		1,032			(189)			18,988
EBITDA⁽¹⁾		$	473,699	$	233,798	⁽³⁾	$	84,087	⁽⁴⁾	$	155,814	⁽⁵⁾


See notes on the following page.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~22. Subsequent Events~~21. Segment Information – continued


	Notes to preceding tabular information:


(1)	EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a supplemental 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 a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.


(2)	Interest and debt expense, depreciation and amortization and income tax expense (benefit) in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.


(3)	The elements of "New York" EBITDA are summarized below.

			For the Three Months
			Ended March 31,
	(Amounts in thousands)		2015		2014
	Office		$	159,359	$	157,879
	Retail			81,305		66,195
	Alexander's			10,407		10,430
	Hotel Pennsylvania			(2,126)		(706)
		Total New York	$	248,945	$	233,798



(4)	The elements of "Washington, DC" EBITDA are summarized below.

			For the Three Months
			Ended March 31,
	(Amounts in thousands)		2015		2014
	Office, excluding the Skyline Properties		$	67,385	$	67,257
	Skyline properties			6,055		6,499
		Total Office		73,440		73,756
	Residential			9,817		10,331
		Total Washington, DC	$	83,257	$	84,087

On October 27, 2014, we completed a $140,000,000 financing of 655 Fifth Avenue, a 57,500 square foot retail and office property. The loan is interest only at LIBOR plus 1.40% and matures in October 2019 with two one-year extension options.

On October 31, 2014, we entered into an agreement to sell 1740 Broadway, a 601,000 square foot office building in Manhattan for approximately $605,000,000. The sale will result in net proceeds of approximately $585,000,000, after closing costs, and result in a financial statement gain of approximately $443,000,000. The tax gain will be approximately $483,000,000, which will be deferred in like-kind exchanges, primarily for the St. Regis Fifth Avenue retail (see Note 4 – ~~Acquisitions~~~~). The sale is subject to customary closing conditions and is expected to be completed in the fourth quarter of 2014.~~

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

~~23. Segment Information~~

~~Below is a summary of net income and a reconciliation of net income to EBITDA~~⁽¹⁾ ~~by segment for the three and nine months ended September 30, 2014 and 2013.~~

(Amounts in thousands)
For the Three Months Ended September 30, 2014
Retail
Total
New York
Washington, DC
Properties
Toys
Other
Total revenues
$
670,909
$
394,579
$
133,541
$
82,442
$
-
$
60,347
Total expenses
450,310
243,314
88,375
44,466
-
74,155
Operating income (loss)
220,599
151,265
45,166
37,976
-
(13,808)
(Loss) income from partially owned
entities, including Toys
(25,663)
5,810
(1,411)
371
(18,418)
(12,015)
Income from Real Estate Fund
24,160
-
-
-
-
24,160
Interest and other investment income, net
7,602
1,859
15
9
-
5,719
Interest and debt expense
(115,120)
(43,061)
(18,685)
(10,056)
-
(43,318)
Net gain on disposition of wholly owned and
partially owned assets
2,665
-
-
-
-
2,665
Income (loss) before income taxes
114,243
115,873
25,085
28,300
(18,418)
(36,597)
Income tax expense
(3,177)
(802)
(130)
(525)
-
(1,720)
Income (loss) from continuing operations
111,066
115,071
24,955
27,775
(18,418)
(38,317)
Income from discontinued operations
58,131
-
-
57,499
-
632
Net income (loss)
169,197
115,071
24,955
85,274
(18,418)
(37,685)
Less net income attributable to noncontrolling
interests in consolidated subsidiaries
(9,685)
(2,690)
-
(76)
-
(6,919)
Net income (loss) attributable to
Vornado Realty L.P.
159,512
112,381
24,955
85,198
(18,418)
(44,604)
Interest and debt expense⁽²⁾
160,252
58,010
22,208
11,205
22,471
46,358
Depreciation and amortization⁽²⁾
160,270
79,446
36,411
15,256
9,923
19,234
Income tax expense (benefit) ⁽²⁾
2,232
746
145
525
(1,536)
2,352
EBITDA⁽¹⁾
$
482,266
$
250,583
⁽³⁾
$
83,719
⁽⁴⁾
$
112,184
⁽⁵⁾
$
12,440
$
23,340
⁽⁶⁾

(Amounts in thousands)
For the Three Months Ended September 30, 2013
Retail
Total
New York
Washington, DC
Properties
Toys
Other
Total revenues
$
668,989
$
388,747
$
137,604
$
81,439
$
-
$
61,199
Total expenses
434,138
223,992
87,612
45,461
-
77,073
Operating income (loss)
234,851
164,755
49,992
35,978
-
(15,874)
(Loss) income from partially owned
entities, including Toys
(32,756)
4,189
(2,003)
188
(34,209)
(921)
Income from Real Estate Fund
22,913
-
-
-
-
22,913
Interest and other investment (loss) income, net
(10,275)
1,468
17
1
-
(11,761)
Interest and debt expense
(119,676)
(42,349)
(27,246)
(10,834)
-
(39,247)
Net gain on disposition of wholly owned and
partially owned assets
15,138
-
-
1,377
-
13,761
Income (loss) before income taxes
110,195
128,063
20,760
26,710
(34,209)
(31,129)
Income tax expense
(2,222)
(65)
(766)
(731)
-
(660)
Income (loss) from continuing operations
107,973
127,998
19,994
25,979
(34,209)
(31,789)
Income from discontinued operations
24,278
2,883
-
21,149
-
246
Net income (loss)
132,251
130,881
19,994
47,128
(34,209)
(31,543)
Less net income attributable to noncontrolling
interests in consolidated subsidiaries
(23,833)
(6,556)
-
(2,970)
-
(14,307)
Net income (loss) attributable to
Vornado Realty L.P.
108,418
124,325
19,994
44,158
(34,209)
(45,850)
Interest and debt expense⁽²⁾
183,116
59,344
30,717
12,119
38,435
42,501
Depreciation and amortization⁽²⁾
172,756
67,294
35,403
17,573
32,176
20,310
Income tax (benefit) expense ⁽²⁾
(20,292)
67
828
731
(22,690)
772
EBITDA⁽¹⁾
$
443,998
$
251,030
⁽³⁾
$
86,942
⁽⁴⁾
$
74,581
⁽⁵⁾
$
13,712
$
17,733
⁽⁶⁾
See notes on page 32.

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~23.~~21. Segment Information – continued

(Amounts in thousands)
For the Nine Months Ended September 30, 2014
Retail
Total
New York
Washington, DC
Properties
Toys
Other
Total revenues
$
1,997,702
$
1,151,395
$
403,645
$
253,623
$
-
$
189,039
Total expenses
1,383,618
716,125
265,299
173,945
-
228,249
Operating income (loss)
614,084
435,270
138,346
79,678
-
(39,210)
(Loss) income from partially owned
entities, including Toys
(77,426)
16,372
(4,925)
1,250
(74,162)
(15,961)
Income from Real Estate Fund
142,418
-
-
-
-
142,418
Interest and other investment income, net
28,930
4,979
93
26
-
23,832
Interest and debt expense
(341,613)
(134,970)
(56,692)
(28,565)
-
(121,386)
Net gain on disposition of wholly
owned and partially owned assets
13,205
-
-
-
-
13,205
Income (loss) before income taxes
379,598
321,651
76,822
52,389
(74,162)
2,898
Income tax expense
(8,358)
(2,997)
(46)
(1,575)
-
(3,740)
Income (loss) from continuing operations
371,240
318,654
76,776
50,814
(74,162)
(842)
Income from discontinued operations
61,800
-
-
60,993
-
807
Net income (loss)
433,040
318,654
76,776
111,807
(74,162)
(35)
Less net income attributable to noncontrolling
interests in consolidated subsidiaries
(85,239)
(7,203)
-
(114)
-
(77,922)
Net income (loss) attributable to
Vornado Realty L.P.
347,801
311,451
76,776
111,693
(74,162)
(77,957)
Interest and debt expense⁽²⁾
510,724
180,150
67,469
31,989
100,549
130,567
Depreciation and amortization⁽²⁾
530,052
241,040
108,367
56,387
64,533
59,725
Income tax expense ⁽²⁾
21,489
3,069
88
1,575
12,106
4,651
EBITDA⁽¹⁾
$
1,410,066
$
735,710
⁽³⁾
$
252,700
⁽⁴⁾
$
201,644
⁽⁵⁾
$
103,026
$
116,986
⁽⁶⁾

(Amounts in thousands)
For the Nine Months Ended September 30, 2013
Retail
Total
New York
Washington, DC
Properties
Toys
Other
Total revenues
$
2,058,525
$
1,129,248
$
406,652
$
303,704
$
-
$
218,921
Total expenses
1,362,975
700,652
258,591
140,343
-
263,389
Operating income (loss)
695,550
428,596
148,061
163,361
-
(44,468)
(Loss) income from partially owned
entities, including Toys
(45,620)
14,020
(6,545)
1,512
(69,311)
14,704
Income from Real Estate Fund
73,947
-
-
-
-
73,947
Interest and other investment (loss) income, net
(32,935)
4,076
99
3
-
(37,113)
Interest and debt expense
(360,679)
(125,428)
(83,350)
(32,637)
-
(119,264)
Net (loss) gain on disposition of wholly
owned and partially owned assets
(20,581)
-
-
1,377
-
(21,958)
Income (loss) before income taxes
309,682
321,264
58,265
133,616
(69,311)
(134,152)
Income tax expense
(6,172)
(1,298)
(1,949)
(1,480)
-
(1,445)
Income (loss) from continuing operations
303,510
319,966
56,316
132,136
(69,311)
(135,597)
Income (loss) from discontinued operations
299,989
8,539
-
292,279
-
(829)
Net income (loss)
603,499
328,505
56,316
424,415
(69,311)
(136,426)
Less net income attributable to noncontrolling
interests in consolidated subsidiaries
(50,049)
(9,518)
-
(3,079)
-
(37,452)
Net income (loss) attributable to
Vornado Realty L.P.
553,450
318,987
56,316
421,336
(69,311)
(173,878)
Interest and debt expense⁽²⁾
551,357
163,579
93,715
40,057
119,347
134,659
Depreciation and amortization⁽²⁾
549,072
220,280
105,799
52,440
103,732
66,821
Income tax expense⁽²⁾
18,101
1,444
2,134
1,480
10,959
2,084
EBITDA⁽¹⁾
$
1,671,980
$
704,290
⁽³⁾
$
257,964
⁽⁴⁾
$
515,313
⁽⁵⁾
$
164,727
$
29,686
⁽⁶⁾
See notes on the following page.

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~23. Segment Information – continued~~

Notes to preceding tabular information:
(1)
EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a supplemental 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 a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.
(2)
Interest and debt expense, depreciation and amortization and income tax expense (benefit) in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.
(3)
The elements of "New York" EBITDA are summarized below.
For the Three Months
For the Nine Months
Ended September 30,
Ended September 30,
(Amounts in thousands)
2014
2013
2014
2013
Office^(a)
$
159,568
$
172,367
$
480,280
$
476,849
Retail
71,327
59,782
205,469
177,394
Alexander's
10,387
10,387
31,088
31,141
Hotel Pennsylvania
9,301
8,494
18,873
18,906
Total New York
$
250,583
$
251,030
$
735,710
$
704,290
(a)
The three months ended September 30, 2014 and 2013, includes $2,140 and $12,029, respectively, of lease termination income, net. The nine months ended September 30, 2014 and 2013, includes $4,543 and $17,373, respectively, of lease termination income, net.
(4)
The elements of "Washington, DC" EBITDA are summarized below.
For the Three Months
For the Nine Months
Ended September 30,
Ended September 30,
(Amounts in thousands)
2014
2013
2014
2013
Office, excluding the Skyline Properties
$
65,904
$
69,220
$
200,218
$
202,463
Skyline properties
7,698
6,841
21,270
22,546
Total Office
73,602
76,061
221,488
225,009
Residential
10,117
10,881
31,212
32,955
Total Washington, DC
$
83,719
$
86,942
$
252,700
$
257,964
(5)
The elements of "Retail Properties" EBITDA are summarized below.
For the Three Months
For the Nine Months
Ended September 30,
Ended September 30,
(Amounts in thousands)
2014
2013
2014
2013
Strip shopping centers^(a)
$
97,122
$
59,175
$
178,499
$
264,065
Regional malls^(b)
15,062
15,406
23,145
251,248
Total Retail properties
$
112,184
$
74,581
$
201,644
$
515,313
(a)
The three months ended September 30, 2014 and 2013, includes $57,796 and $16,087, respectively, of net gains on sale of real estate. The nine months ended September 30, 2014 and 2013, includes $57,796 and $81,806, respectively, of net gains on sale of real estate and the nine months ended September 30, 2013 also includes $59,599 of income pursuant to a settlement agreement with Stop & Shop.
(b)
The nine months ended September 30, 2014, includes a $20,000 non-cash impairment loss on Springfield Town Center. The nine months ended September 30, 2013, includes a $202,275 net gain on sale of the Green Acres Mall.

~~VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~

~~23. Segment Information – continued~~

Notes to preceding tabular information - continued:
(6)
The elements of "other" EBITDA are summarized below.
For the Three Months
For the Nine Months
Ended September 30,
Ended September 30,
(Amounts in thousands)
2014
2013
2014
2013
Our share of Real Estate Fund:
Income before net realized/unrealized gains
$
2,059
$
2,086
$
6,676
$
5,737
Net realized gains on exited investments
12,896
2,046
31,663
2,046
Previously recorded unrealized gains on exited investments
(12,397)
-
(12,579)
-
Net unrealized gains on held investments
4,583
3,092
13,805
14,869
Carried interest
8,431
267
21,636
11,974
Total
15,572
7,491
61,201
34,626
The Mart and trade shows
19,497
14,925
61,038
54,232
555 California Street
11,994
10,720
35,566
32,371
India real estate ventures
2,651
695
4,574
4,708
LNR^(a)
-
-
-
20,443
Other investments
4,618
5,330
13,825
21,138
54,332
39,161
176,204
167,518
Corporate general and administrative expenses^(b)
(22,948)
(23,467)
(71,952)
(71,054)
Investment income and other, net^(b)
6,659
11,108
22,764
39,153
Suffolk Downs impairment loss and loan loss reserve
(10,263)
-
(10,263)
-
Acquisition and transaction related costs^(c)
(7,105)
(2,818)
(12,972)
(6,769)
Net gain on sale of residential condominiums and a land parcel
2,665
134
13,205
1,139
Net gain on sale of marketable securities
-
31,741
-
31,741
Loss from the mark-to-market of J.C. Penney
derivative position
-
(20,012)
-
(33,487)
Loss on sale of J.C. Penney common shares
-
(18,114)
-
(54,914)
Non-cash impairment loss on J.C. Penney common shares
-
-
-
(39,487)
Severance costs (primarily reduction-in-force at the Mart)
-
-
-
(4,154)
$
23,340
$
17,733
$
116,986
$
29,686
(a)
On April 19, 2013, LNR was sold for $1.053 billion.
(b)
The amounts in these captions (for this table only) exclude income/expense from the mark-to-market of our deferred compensation plan of $1,352 and $269 for the three months ended September 30, 2014 and 2013, respectively, and $8,132 and $6,207 for the nine months ended September 30, 2014 and 2013, respectively.
(c)
The three and nine months ended September 30, 2014, includes $5,828 and $9,343, respectively, of transaction costs related to the spin-off of our strip shopping centers and malls (see Note 1 - Organization).


	Notes to preceding tabular information - continued:


(5)	The elements of "other" EBITDA are summarized below.

				For the Three Months
				Ended March 31,
	(Amounts in thousands)			2015		2014
	Our share of Real Estate Fund:
		Income before net realized/unrealized gains		$	1,614	$	1,982
		Net realized/unrealized gains on investments			5,548		3,542
		Carried interest			3,388		1,775
	Total				10,550		7,299
	The Mart and trade shows				21,041		19,087
	555 California Street				12,401		12,066
	India real estate ventures				1,841		1,824
	Our share of Toys "R" Us^(a)				-		83,550
	Other investments				9,109		9,447
					54,942		133,273
	Corporate general and administrative expenses^(b)				(35,942)		(25,982)
	Investment income and other, net^(b)				8,762		8,073
	Urban Edge Properties and residual retail properties discontinued operations^(c)				19,907		32,100
	Acquisition and transaction related costs				(1,981)		(1,285)
	Net gain on sale of residential condominiums and a land parcel				1,860		9,635
				$	47,548	$	155,814


	(a)		As a result of our investment being reduced to zero, we suspended equity method accounting in the third quarter of 2014 (see Note 7 - Investments in Partially Owned Entities). The three months ended March 31, 2014 includes an impairment loss of $75,196.

	(b)		The amounts in these captions (for this table only) exclude income/expense from the mark-to-market of our deferred compensation plan of $2,859 and $4,400 for the three months ended March 31, 2015 and 2014, respectively. The three months ended March 31, 2015 include $8,817 from the acceleration of the recognition of compensation expense related to 2013-2015 Out-Performance Plans due to the modification of the vesting criteria of awards such that they will fully vest at age 65. The accelerated expense will result in lower general and administrative expense for the remainder of 2015 of $2,600 and $6,217 thereafter.

	(c)		The three months ended March 31, 2015 and 2014, include $22,645 and $499, respectively, of transaction costs related to the spin-off of our strip shopping centers and malls (see Note 1 - Organization).

3330

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Partners

Vornado Realty L.P.

New York, New York

We have reviewed the accompanying consolidated balance sheet of Vornado Realty L.P. (the “Company”) as of ~~September 30, 2014,~~March 31, 2015, and the related consolidated statements of income, ~~and~~ comprehensive income, ~~for the three-month and nine-month periods ended September 30, 2014 and 2013 and~~ changes in equity, and cash flows for the ~~nine-month~~three-month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~2014. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 Public Company Accounting Oversight Board (United States), 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.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them 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), the consolidated balance sheet of Vornado Realty L.P. as of December 31, ~~2013,~~2014, 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 ~~March 3, 2014,~~February 23, 2015, 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, ~~2013~~2014 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

~~November 7, 2014~~May 8, 2015

3431

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, 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 our Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2013.~~2014. 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, 2014.~~March 31, 2015. 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, 2014~~March 31, 2015 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified in order to conform to current year presentation.

3532

Overview

Business Objective and Operating Strategy

Our business objective is to maximize Vornado shareholder value, which we measure by the total return provided to Vornado’s shareholders. Below is a table comparing Vornado’s performance to the FTSE NAREIT Office REIT Index (“Office REIT”) and the Morgan Stanley REIT Index (“RMS”) for the following periods ended ~~September 30, 2014.~~March 31, 2015.

Total Return⁽¹⁾
Vornado
Office REIT
RMS
Three-month
(5.7%)
(5.2%)
(3.1%)
Nine-month
15.1%
11.7%
14.0%
One-year
22.5%
12.4%
13.3%
Three-year
49.7%
47.9%
58.6%
Five-year
85.6%
69.6%
109.7%
Ten-year
139.4%
89.1%
124.1%
(1) Past performance is not necessarily indicative of future performance.

		Total Return⁽¹⁾
		Vornado	Office REIT	RMS
	Three-month	5.6%	6.7%	4.7%
	One-year	28.8%	20.8%	24.2%
	Three-year	63.3%	46.2%	48.8%
	Five-year	93.8%	74.8%	109.0%
	Ten-year	165.2%	109.2%	151.5%


(1) Past performance is not necessarily indicative of future performance.

We intend to achieve our business objective by continuing to pursue our investment philosophy and executing our operating strategies through:

· Maintaining a superior team of operating and investment professionals and an entrepreneurial ~~spirit;~~spirit

· Investing in properties in select markets, such as New York City and Washington, DC, where we believe there is a high likelihood of capital ~~appreciation;~~appreciation

· Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher ~~rents;~~rents

· Investing in retail properties in select under-stored locations such as the New York City metropolitan ~~area;~~area

· Developing and redeveloping existing properties to increase returns and maximize ~~value; and~~value

· Investing in operating companies that have a significant real estate ~~component.~~component

We expect to finance our growth, acquisitions and investments using internally generated funds, proceeds from asset sales and by accessing the public and private capital markets. We may also offer partnership units in exchange for property and may repurchase or otherwise reacquire these units or any other securities in the future.

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 ~~population~~employment trends. See “Item 1A. Risk Factors” in our Annual Report on Form 10-K, as amended, for additional information regarding these factors.

On April 11, 2014, we announced a plan to spin off our shopping center business, consisting of 80 strip centers, four malls and a warehouse park adjacent to our East Hanover strip center, into a new publicly traded REIT, Urban Edge Properties (“UE”), formerly Vornado Spinco. The spin-off is expected to be effectuated through a pro rata distribution of UE’s common shares to Vornado common shareholders and Vornado Realty L.P. common unitholders, and is intended to be treated as tax-free for U.S. federal income tax purposes. We expect the spin-off to be completed by the end of 2014, subject to certain conditions, including the Securities and Exchange Commission (“SEC”) declaring UE’s Form 10 registration statement effective, filing and approval of UE’s listing application with the NYSE, receipt of third party consents, and formal approval and declaration of the distribution by Vornado’s Board of Trustees. Vornado may, at any time and for any reason until the proposed transaction is complete, abandon the separation or modify or change its terms. Vornado will retain, for disposition in the near term, 20 small retail assets which do not fit UE’s strategy, and the Springfield Town Center, which is under contract for disposition (see Note 9 ~~– Dispositions~~ ~~of the notes to our consolidated financial statements in Part I of this quarterly report on Form 10-Q).~~

3633

Overview – continued

Quarter Ended ~~September 30, 2014~~March 31, 2015 Financial Results Summary

Net income attributable to Class A unitholders for the quarter ended ~~September 30, 2014~~March 31, 2015 was ~~$139,134,000,~~$89,868,000, or ~~$0.69~~$0.44 per diluted unit, compared to ~~$88,037,000,~~$66,197,000, or ~~$0.44~~$0.33 per diluted unit for the quarter ended ~~September 30, 2013.~~March 31, 2014. Net income for the quarters ended ~~September 30,~~March 31, 2015 and 2014 include $256,000 and ~~2013 include $57,796,000 and $16,087,000, respectively,~~$20,842,000 of real estate impairment losses, respectively. Net income for the quarter ended March 31, 2015 also includes $10,867,000 of net gains on sale of real ~~estate and $2,546,000 of real estate impairment losses in the quarter ended September 30, 2013.~~estate. In addition, the quarters ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~ include certain other items that affect comparability, which are listed in the table below. The aggregate of net gains on sale of real estate, real estate impairment losses and the items in the table below increased net income attributable to Class A unitholders for the quarter ended ~~September 30, 2014~~March 31, 2015 by ~~$24,686,000,~~$19,895,000, or ~~$0.12~~$0.10 per diluted unit, and ~~decreased net income attributable to Class A unitholders~~by $17,488,000 or $0.09 per diluted unit for the quarter ended ~~September 30, 2013 by $21,840,000 or $0.11 per diluted unit.~~March 31, 2014.


		For the Three Months Ended September 30,						For the Three Months Ended March 31,
(Amounts in thousands)	(Amounts in thousands)	2014		2013		(Amounts in thousands)		2015		2014
Items that affect comparability income (expense):	Items that affect comparability income (expense):					Items that affect comparability income (expense):
	Toys "R" Us net loss	$	(18,418)	$	(34,209)	Income from discontinued operations (including Urban Edge spin-off related
	Impairment loss and loan loss reserve on investment in Suffolk Downs		(10,263)		-		costs of $22,645 in 2015)	$	5,230	$	28,133
	Acquisition and transaction related costs		(7,105)		(2,818)	Net gain on sale of residential condominiums and a land parcel			1,860		9,635
	Net gain on sale of residential condominiums		2,665		134	Toys "R" Us net income			1,454		1,847
	Income from discontinued operations		335		4,694	Other, net			740		(1,285)
	Losses from the disposition of investment in J.C. Penney		-		(38,126)
	Net gain on sale of marketable securities		-		31,741
	Other, net		(324)		3,203
Items that affect comparability	Items that affect comparability	$	(33,110)	$	(35,381)	Items that affect comparability		$	9,284	$	38,330

The percentage increase (decrease) in same store Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and ~~Cash~~cash basis same store EBITDA of our operating segments for the quarter ended ~~September 30, 2014~~March 31, 2015 over the quarter ended ~~September 30, 2013~~March 31, 2014 and the trailing quarter ended ~~June 30,~~December 31, 2014 are summarized below.

Same Store EBITDA:
Retail Properties
New York
Washington, DC
UE
Total
September 30, 2014 vs. September 30, 2013
Same store EBITDA
4.6
%
(2.7
%)
1.3
%
1.1
%
Cash basis same store EBITDA
5.2
%
(4.1
%)
2.9
%
1.8
%
September 30, 2014 vs. June 30, 2014
Same store EBITDA
(0.9
%)
(0.6
%)
0.6
%
0.3
%
Cash basis same store EBITDA
(1.2
%)
(0.9
%)
0.3
%
(0.2
%)

~~Overview – continued~~

~~Nine Months Ended September 30, 2014 Financial Results Summary~~

Net income attributable to Class A unitholders for the nine months ended September 30, 2014 was $286,664,000, or $1.42 per diluted unit, compared to $488,735,000, or $2.45 per diluted unit for the nine months ended September 30, 2013. Net income for the nine months ended September 30, 2014 and 2013 include $57,796,000 and $284,546,000, respectively, of net gains on sale of real estate, and $20,842,000 and $10,823,000, respectively, of real estate impairment losses. In addition, the nine months ended September 30, 2014 and 2013 include certain items that affect comparability, which are listed in the table below. The aggregate of real estate impairment losses, net gains on sale of real estate and the items in the table below decreased net income attributable to Class A unitholders for the nine months ended September 30, 2014 by $48,305,000, or $0.24 per diluted unit, and increased net income attributable to Class A unitholders for the nine months ended September 30, 2013 by $189,566,000, or $0.95 per diluted unit.

For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
Items that affect comparability income (expense):
Toys "R" Us net loss (including impairment losses of $75,196 and $78,542,
respectively)
$
(74,162)
$
(69,311)
Net gain on sale of residential condominiums and a land parcel in 2014
13,205
1,139
Acquisition and transaction related costs
(12,972)
(6,769)
Impairment loss and loan loss reserve on investment in Suffolk Downs
(10,263)
-
Income from discontinued operations, including LNR in 2013
4,846
28,970
Defeasance cost in connection with the refinancing of 909 Third Avenue
(5,589)
-
Losses from the disposition of investment in J.C. Penney
-
(127,888)
Stop & Shop litigation settlement income
-
59,599
Net gain on sale of marketable securities
-
31,741
The Mart reduction-in-force and severance costs
-
(4,154)
Preferred unit redemptions
-
(1,130)
Other, net
(324)
3,646
Items that affect comparability
$
(85,259)
$
(84,157)

The percentage increase (decrease) in same store EBITDA and Cash basis same store EBITDA of our operating segments for the nine months ended September 30, 2014 over the nine months ended September 30, 2013 is summarized below.

Same Store EBITDA:
Retail Properties
New York
Washington, DC
UE
Total
September 30, 2014 vs. September 30, 2013
Same store EBITDA
5.3
%
(2.4
%)
1.7
%
1.4
%
Cash basis same store EBITDA
7.4
%
(1.8
%)
2.5
%
2.1
%


Same Store EBITDA:
			New York			Washington, DC
	March 31, 2015 vs. March 31, 2014
		Same store EBITDA	3.2	%	⁽¹⁾	(0.2	%)
		Cash basis same store EBITDA	5.5	%	⁽¹⁾	(5.5	%)
	March 31, 2015 vs. December 31, 2014
		Same store EBITDA	(4.3	%)	⁽²⁾	2.4	%
		Cash basis same store EBITDA	(3.9	%)	⁽²⁾	(0.8	%)


(1)		Excluding Hotel Pennsylvania, same store EBITDA increased by 3.8% and by 6.1% on a cash basis.

(2)		Excluding Hotel Pennsylvania, same store EBITDA increased by 1.5% and by 2.6% on a cash basis.

Calculations of same store EBITDA, reconciliations of our net income to EBITDA 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.

3834

Overview – continued

~~2014~~2015 Acquisitions

On ~~June 26, 2014,~~January 20, 2015, we ~~invested an additional $22,700,000~~and one of the Fund’s limited partners co-invested with the Fund to ~~increase our ownership in One Park Avenue to 55.0% from 46.5% through a~~buy out the Fund’s joint venture ~~with an institutional investor, who increased his ownership~~partner’s 57% interest ~~to 45.0%.~~in the Crowne Plaza Times Square Hotel. The ~~transaction~~purchase price for the 57% interest was ~~based on a~~approximately $95,000,000 (our share $39,000,000) which valued the property ~~value of $560,000,000.~~at approximately $480,000,000. The property is encumbered by a ~~$250,000,000 interest-only~~newly placed $310,000,000 mortgage loan ~~that bears~~bearing interest at ~~4.995% and~~LIBOR plus 2.80% which matures in ~~March 2016.~~ December 2018 with a one-year extension option. Our aggregate ownership interest in the property increased to 33% from 11%.

On ~~July 23, 2014,~~March 18, 2015, we acquired the Center Building, a 437,000 square foot office building, located at 33-00 Northern Boulevard in Long Island City, New York, for $142,000,000, including the assumption of an existing $62,000,000, 4.43% mortgage maturing in October 2018.

As of March 31, 2015, we have made a $25,000,000 non-refundable deposit related to an agreement to acquire a property in the Penn Plaza submarket in Manhattan for $355,000,000.

On April 8, 2015, we made an $11,000,000 refundable contribution to a joint venture, in which we ~~are~~will have a ~~50.1% partner entered into~~55% interest. The joint venture plans to develop a ~~99-year ground lease for 61 Ninth Avenue~~173,000 square foot Class-A office building, located on the ~~Southwest corner of Ninth Avenue and 15~~^th Street in Manhattan. The venture’s current plans are to construct an office building, with retail at the base, of approximately 130,000 square feet. Total development costs are currently estimated to be approximately $125,000,000.

~~On August 1, 2014, we acquired the land under our 715 Lexington Avenue retail property located on the Southeast corner of 58~~^th ~~Street and Lexington Avenue in Manhattan, for $63,000,000.~~

~~On October 28, 2014, we completed the purchase~~western side of the St. Regis Fifth Avenue retail for $700,000,000. We own approximately 75% of the joint venture which owns the property. The acquisition will be used in a like-kind exchange for income tax purposes for the sale of 1740 Broadway (see Note 22 – ~~Subsequent Events~~ of the notes to our consolidated financial statements in Part I of this quarterly report on Form 10-Q). We consolidate the accounts of the venture into our consolidated financial statements from the date of acquisition. As of September 30, 2014, the venture’s $50,000,000 non-refundable deposit was included in “other assets” on our consolidated balance sheet. High Line at 510 West 22nd Street.

~~2014~~2015 Dispositions

On ~~February 24, 2014,~~January 15, 2015, we completed the spin-off of substantially all of our retail segment comprised of 79 strip shopping centers, three malls, a warehouse park and $225,000,000 of cash to Urban Edge Properties (“UE”) (NYSE: UE). As part of this transaction, we retained 5,717,184 UE operating partnership units (5.4% ownership interest). We are providing transition services to UE for an initial period of up to two years, including information technology, human resources, tax and financial reporting. UE is providing us with leasing and property management services for (i) the Monmouth Mall, (ii) certain small retail properties that we plan to sell, and (iii) our affiliate, Alexander’s, Inc. (NYSE: ALX), Rego Park retail assets. Steven Roth, Chairman of Vornado’s Board of Trustees and its Chief Executive Officer is a member of the Board of Trustees of UE. The spin-off distribution was effected by Vornado distributing one UE common share for every two Vornado common shares.

On March 13, 2015, we sold our lease position in Geary Street, CA for $34,189,000, which resulted in a net gain of $21,376,000.

On March 25, 2015, the Fund completed the sale of 520 Broadway ~~Mall~~ in ~~Hicksville, Long Island, New York~~Santa Monica, CA for ~~$94,000,000.~~$91,650,000. The ~~sale resulted in~~Fund realized a $24,705,000 net ~~proceeds of $92,174,000 after closing costs.~~gain over the holding period.

On March ~~2, 2014,~~31, 2015, we ~~entered into an agreement to transfer upon completion,~~transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT Associates, L.P., which is the operating partnership of Pennsylvania Real Estate Investment Trust (NYSE: PEI) ~~(“PREIT”~~(collectively, “PREIT”). The financial statement gain was $7,823,000, of which $7,192,000 was recognized in ~~exchange for $465,000,000 comprised~~the first quarter of ~~$340,000,000~~2015 and the remaining $631,000 was deferred based on our ownership interest in PREIT. In the first quarter of ~~cash and $125,000,000 of PREIT operating partnership units. In connection therewith,~~2014, we recorded a non-cash impairment loss of $20,000,000 ~~in the first quarter of 2014,~~on Springfield Town Center which is included in ~~“impairment losses, acquisition and transaction related costs”~~“income from discontinued operations” on our consolidated statements of income. ~~The redevelopment was completed in October 2014 and the closing will be no later than March 31, 2015.~~

On July 8, 2014, we completed the sale of Beverly Connection, a 335,000 square foot power shopping center in Los Angeles, California, for $260,000,000, of which $239,000,000 was cash and $21,000,000 was 10-year mezzanine seller financing. The sale resulted in a net gain of approximately $44,155,000, which was recognized in the third quarter of 2014.

During the ~~third~~first quarter of ~~2014,~~2015, we sold ~~two of the 20 strip shopping centers which do not fit UE’s strategy (see Note 1 –~~ ~~Organization~~ ~~of the notes to our consolidated financial statements in Part I of this quarterly report on Form 10-Q),~~five residual retail properties, in separate transactions, for an aggregate of ~~$15,000,000 in cash, which~~$10,731,000, which resulted in a net ~~gain aggregating $13,641,000.~~gains of $3,675,000.

On October 31, 2014, we entered into an agreement to sell 1740 Broadway, a 601,000 square foot office building in Manhattan for approximately $605,000,000. The sale will result in net proceeds of approximately $585,000,000, after closing costs, and result in a financial statement gain of approximately $443,000,000. The tax gain will be approximately $483,000,000, which will be deferred in like-kind exchanges, primarily for the St. Regis Fifth Avenue retail (see Note 4 – ~~Acquisitions~~ of the notes to our consolidated financial statements in Part I of this quarterly report on Form 10-Q). The sale is subject to customary closing conditions and is expected to be completed in the fourth quarter of 2014.

3935

Overview – continued

~~2014~~2015 Financings

~~On June 16, 2014, we completed a green bond public offering of $450,000,000 2.50% senior unsecured notes due June 30, 2019. The notes were sold at 99.619% of their face amount to yield 2.581%.~~

~~On August 26, 2014, we obtained a standby commitment for up to $500,000,000 of five-year mezzanine loan financing to fund a portion of the development expenditures at 220 Central Park South.~~

~~On September 30, 2014, we extended one of our two $1.25 billion unsecured revolving credit facilities from November~~1, 2015, to November 2018 with two six-month extension options. The interest rate on the extended facility was lowered from LIBOR plus 125 basis points to LIBOR plus 105 basis points and the facility fee was reduced from 25 to 20 points.

~~On October 1, 2014,~~ we redeemed all of the ~~$445,000,000~~$500,000,000 principal amount of our outstanding ~~7.875%~~4.25% senior unsecured notes, which were scheduled to mature on ~~October~~April 1, ~~2039,~~2015, at a redemption price of 100% of the principal amount plus accrued interest through the redemption date. In the fourth quarter of 2014, we will write off $12,532,000 of unamortized deferred financing costs, which will be included as a component of “interest and debt expense” on our consolidated statements of income.December 31, 2014.

On ~~October 27, 2014,~~April 1, 2015, we completed a ~~$140,000,000 financing~~$308,000,000 refinancing of ~~655 Fifth Avenue,~~RiverHouse Apartments, a ~~57,500 square foot retail and office property.~~three building, 1,670 unit rental complex located in Arlington, VA. The loan is ~~interest only~~interest-only at LIBOR plus ~~1.40%~~1.28% and matures in ~~October 2019 with two one-year extension options.~~

~~Vornado Capital Partners Real Estate Fund (the “Fund”)~~

~~On June 26, 2014, the Fund sold its 64.7% interest~~2025. We realized net proceeds of approximately $43,000,000. The property was previously encumbered by a 5.43%, $195,000,000 mortgage maturing in ~~One Park Avenue to~~April 2015 and a newly formed joint venture that we and an institutional investor own 55% and 45%, respectively. This transaction was based on a property value of $560,000,000. From the inception of this investment through its disposition, the Fund realized a $75,529,000 net gain.

~~On August 21, 2014, the Fund and its 50% joint venture partner completed the sale of The Shops~~$64,000,000 mortgage at ~~Georgetown Park, a 305,000 square foot retail property, for $272,500,000. From the inception of this investment through its disposition, the Fund realized a $51,124,000 net gain.~~

~~Overview – continued~~LIBOR plus 1.53% maturing in 2018.

Recently Issued Accounting Literature

~~In April 2014, the FASB~~ issued an update (“ASU 2014-08”) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entityto ASC Topic 205, Presentation of Financial Statementsand ASC Topic 360, Property Plant and Equipment. Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. In addition, ASU 2014-08 expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. ASU 2014-08 is effective for interim and annual reporting periods in fiscal years that ~~begin~~began after December 15, 2014. WeUpon adoption of this standard on January 1, 2015, individual properties sold in the ordinary course of business are ~~currently evaluating the impact~~not expected to qualify as discontinued operations. The financial results of ~~ASU 2014-08 on~~UE and certain other retail assets are reflected in our consolidated financial ~~statements.~~ statements as discontinued operations for all periods presented.

In May 2014, the FASB issued an update ("ASU 2014-09") establishing ASC Topic 606, Revenue from Contracts with ~~Customers.~~ Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2016. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2013~~2014 in Management’s Discussion and Analysis of Financial Condition. There have been no significant changes to our policies during ~~2014.~~2015.

4136

Overview - continued

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.

New York
Washington, DC
Retail Properties

(Square feet in thousands)
Office
Retail
Office
Strips
Malls

Quarter Ended September 30, 2014

Total square feet leased
556
33
450
243
25

Our share of square feet leased:
483
29
377
243
19

Initial rent⁽¹⁾
$
68.44
$
168.22
$
38.32
$
17.66
$
42.03

Weighted average lease term (years)
9.7
11.2
7.1
9.0
5.7

Second generation relet space:

Square feet
243
15
193
31
2

Cash basis:

Initial rent⁽¹⁾
$
70.88
$
238.45
$
39.30
$
27.19
$
86.42

Prior escalated rent
$
60.13
$
168.14
$
42.41
$
25.22
$
70.11

Percentage increase (decrease)
17.9%
41.8%
(7.3%)
7.8%
23.3%

GAAP basis:

Straight-line rent⁽²⁾
$
69.12
$
247.02
$
39.07
$
27.89
$
86.77

Prior straight-line rent
$
61.40
$
161.01
$
40.15
$
24.74
$
65.89

Percentage increase (decrease)
12.6%
53.4%
(2.7%)
12.7%
31.7%

Tenant improvements and leasing

commissions:

Per square foot
$
82.95
$
18.90
$
34.33
$
28.31⁽³⁾
$
31.04⁽⁴⁾

Per square foot per annum
$
8.55
$
1.69
$
4.84
$
3.15⁽³⁾
$
5.45⁽⁴⁾

Percentage of initial rent
12.5%
1.0%
12.6%
17.8%⁽³⁾
13.0%⁽⁴⁾

Nine Months Ended September 30, 2014:

Total square feet leased
2,726
68
1,159
⁽⁵⁾
707
104

Our share of square feet leased:
2,321
63
1,055
⁽⁵⁾
707
91

Initial rent⁽¹⁾
$
66.78
$
259.92
$
39.57
$
18.86
$
28.70

Weighted average lease term (years)
10.9
10.9
7.5
7.0
5.2

Second generation relet space:

Square feet
1,817
47
660
366
55

Cash basis:

Initial rent⁽¹⁾
$
68.14
$
318.17
$
39.93
$
21.38
$
24.30

Prior escalated rent
$
60.47
$
236.71
$
42.56
$
20.19
$
22.66

Percentage increase (decrease)
12.7%
34.4%
(6.2%)
5.9%
7.2%

GAAP basis:

Straight-line rent⁽²⁾
$
67.29
$
353.95
$
38.76
$
21.75
$
24.71

Prior straight-line rent
$
57.12
$
233.53
$
39.20
$
19.50
$
22.46

Percentage increase (decrease)
17.8%
51.6%
(1.1%)
11.5%
10.0%

Tenant improvements and leasing

commissions:

Per square foot
$
74.65
$
56.44
$
38.14
$
11.53
$
9.32

Per square foot per annum
$
6.85
$
5.18
$
5.09
$
1.65
$
1.79

Percentage of initial rent
10.3%
2.0%
12.9%
8.7%
6.2%

(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)
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.
(3)
Excluding tenant improvements and leasing commissions for a 59 square foot lease at our Kearny strip shopping center, the tenant improvements and leasing commissions per square foot were $3.12 instead of $28.31, $0.45 per square foot per annum instead of $3.15 per square foot per annum and 2.5% of initial rent instead of 17.8% of initial rent.
(4)
Represents tenant improvements and leasing commissions for a 7 square foot lease at our Las Catalinas shopping mall. There were no other tenant improvements and leasing commissions during the quarter ended September 30, 2014.
(5)
Excludes (i) 165 square feet leased to WeWork that will be redeveloped into rental residential apartments (see page 69), and (ii) 71 square feet of retail space that was leased at an initial rent of $47.06 per square foot.

					New York				Washington, DC
(Square feet in thousands)					Office		Retail		Office

Quarter Ended March 31, 2015
	Total square feet leased					553		7		754
	Our share of square feet leased:					417		7		696
		Initial rent⁽¹⁾			$	77.85	$	362.96	$	35.06
		Weighted average lease term (years)				8.7		12.2		11.1
		Second generation relet space:
			Square feet			263		3		505
			Cash basis:
				Initial rent⁽¹⁾	$	74.67	$	302.30	$	33.30	⁽³⁾
				Prior escalated rent	$	63.78	$	258.75	$	40.39	⁽³⁾
				Percentage increase (decrease)		17.1%		16.8%		(17.6%)	⁽³⁾
			GAAP basis:
				Straight-line rent⁽²⁾	$	71.14	$	330.95	$	31.13	⁽³⁾
				Prior straight-line rent	$	60.16	$	241.36	$	37.51	⁽³⁾
				Percentage increase (decrease)		18.2%		37.1%		(17.0%)	⁽³⁾
		Tenant improvements and leasing commissions:
				Per square foot	$	74.72	$	296.70	$	84.37
				Per square foot per annum	$	8.59	$	24.32	$	7.60
				Percentage of initial rent		11.0%		6.7%		21.7%



(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)			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.
(3)			Excluding 371 square feet of leasing activity with the U.S. Marshals Service (of which 293 square feet are second generation relet space), our initial rent and prior escalated rent on a cash basis was $35.11 and $35.26 per square foot, respectively (0.4% decrease), and our initial rent and prior escalated rent on a GAAP basis was $32.72 and $33.77 per square foot, respectively (3.1% decrease).

4237

Overview –- continued

Square footage (in service) and Occupancy as of September 30, 2014:
Square Feet (in service)
Number of
Total
Our
(Square feet in thousands)
Properties
Portfolio
Share
Occupancy %
New York:
Office
32
19,922
16,660
96.6%
Retail
56
2,370
2,186
96.9%
Alexander's
6
2,178
706
99.7%
Hotel Pennsylvania
1
1,400
1,400
Residential - 1,655 units
4
1,523
762
94.7%
27,393
21,714
96.7%
Washington, DC:
Office, excluding the Skyline Properties
51
13,340
11,021
87.1%
Skyline Properties
8
2,648
2,648
53.2%
Total Office
59
15,988
13,669
80.5%
Residential - 2,414 units
7
2,597
2,455
97.0%
Other
6
381
381
100.0%
18,966
16,505
83.4%
Retail Properties:
Strip Shopping Centers
100
14,439
14,013
94.5%
Regional Malls
5
4,132
2,644
95.5%
18,571
16,657
94.6%
Other:
The Mart
1
3,586
3,577
96.7%
555 California Street
3
1,799
1,259
96.8%
Primarily Warehouses
5
971
971
45.6%
6,356
5,807
Total square feet at September 30, 2014
71,286
60,683

Square footage (in service) and Occupancy as of March 31, 2015:

				Square Feet (in service)
			Number of	Total	Our
(Square feet in thousands)			Properties	Portfolio	Share	Occupancy %
New York:
	Office		32	20,695	17,363	97.3%
	Retail		57	2,474	2,201	96.0%
	Alexander's		6	2,178	706	99.7%
	Hotel Pennsylvania		1	1,400	1,400
	Residential - 1,654 units		2	1,521	761	96.1%
				28,268	22,431	97.3%

Washington, DC:
	Office, excluding the Skyline Properties		51	13,457	11,083	88.2%
	Skyline Properties		8	2,648	2,648	53.4%
	Total Office		59	16,105	13,731	81.5%
	Residential - 2,414 units		7	2,597	2,455	97.1%
	Other		6	384	384	100.0%
				19,086	16,570	84.2%

Other:
	The Mart		1	3,587	3,578	94.5%
	555 California Street		3	1,802	1,261	97.5%
	85 Tenth Avenue⁽¹⁾		1	614	306	100.0%
	Other Properties		3	2,135	1,174	96.6%
				8,138	6,319

Total square feet at March 31, 2015				55,492	45,320


(1)		As of March 31, 2015, we own junior and senior mezzanine loans of 85 Tenth Avenue with an accreted balance of $151.4 million. The junior and senior mezzanine loans bear paid-in-kind interest of 12% and 9%, respectively and mature in May 2017. We account for our investment in 85 Tenth Avenue using the equity method of accounting because we will receive a 49.9% interest in the property after repayment of the junior mezzanine loan. As a result of recording our share of the GAAP losses of the property, the net carrying amount of these loans is $26.2 million on our consolidated balance sheets.

4338

Overview - continued
Square footage (in service) and Occupancy as of December 31, 2013:
Square Feet (in service)
Number of
Total
Our
(Square feet in thousands)
properties
Portfolio
Share
Occupancy %
New York:
Office
31
19,799
16,358
96.6%
Retail
55
2,389
2,166
97.4%
Alexander's
6
2,178
706
99.4%
Hotel Pennsylvania
1
1,400
1,400
Residential - 1,655 units
4
1,523
762
94.8%
27,289
21,392
96.8%
Washington, DC:
Office, excluding the Skyline Properties
51
13,581
11,151
85.4%
Skyline Properties
8
2,652
2,652
60.8%
Total Office
59
16,233
13,803
80.7%
Residential - 2,405 units
7
2,588
2,446
96.3%
Other
5
379
379
100.0%
19,200
16,628
83.4%
Retail Properties:
Strip Shopping Centers
101
14,490
14,111
94.7%
Regional Malls
5
4,135
2,646
95.9%
18,625
16,757
94.9%
Other:
The Mart
2
3,703
3,694
96.3%
555 California Street
3
1,795
1,257
94.5%
Primarily Warehouses
5
971
971
45.6%
6,469
5,922
Total square feet at December 31, 2013
71,583
60,699

Overview - continued

	Square footage (in service) and Occupancy as of December 31, 2014:

					Square Feet (in service)
				Number of	Total	Our
	(Square feet in thousands)			properties	Portfolio	Share	Occupancy %
	New York:
		Office		31	20,052	16,808	96.9%
		Retail		56	2,450	2,179	96.4%
		Alexander's		6	2,178	706	99.7%
		Hotel Pennsylvania		1	1,400	1,400
		Residential - 1,654 units		2	1,524	763	95.2%
					27,604	21,856	96.9%

	Washington, DC:
		Office, excluding the Skyline Properties		51	13,461	11,083	87.5%
		Skyline Properties		8	2,648	2,648	53.5%
		Total Office		59	16,109	13,731	80.9%
		Residential - 2,414 units		7	2,597	2,455	97.4%
		Other		6	384	384	100.0%
					19,090	16,570	83.8%

	Other:
		The Mart		2	3,587	3,578	94.7%
		555 California Street		3	1,801	1,261	97.6%
		85 Tenth Avenue⁽¹⁾		1	613	306	100.0%
		Other Properties		3	2,135	1,174	96.8%
					8,136	6,319

	Total square feet at December 31, 2014				54,830	44,745


	(1)		As of December 31, 2014, we own junior and senior mezzanine loans of 85 Tenth Avenue with an accreted balance of $147.6 million. The junior and senior mezzanine loans bear paid-in-kind interest of 12% and 9%, respectively and mature in May 2017. We account for our investment in 85 Tenth Avenue using the equity method of accounting because we will receive a 49.9% interest in the property after repayment of the junior mezzanine loan. As a result of recording our share of the GAAP losses of the property, the net carrying amount of these loans is $28.2 million on our consolidated balance sheets.

4439

Overview - continued

Washington, DC Segment

We ~~estimate that 2014~~expect 2015 EBITDA from continuing operations will be ~~between $5,000,000 and $10,000,000 lower than 2013 EBITDA, due~~flat to the effects of Base Realignment and Closure (“BRAC”) related move-outs and the sluggish leasing environment in the Washington, DC / Northern Virginia area. EBITDA from continuing operations for the nine months ended September 30, 2014 was lower than the prior year’s nine months by $5,264,000, which was offset by an interest expense reduction of $18,318,000 from the restructuring of the Skyline properties mortgage loan in October 2013. As a result of this and other items, the overall earnings in the nine months ended September 30, 2014 were higher than the prior year’s nine months.

EBITDA. Of the 2,395,000 square feet subject to the effects of the ~~BRAC~~Base Realignment and Closure (“BRAC”) statute, 393,000 square feet has been taken out of service for redevelopment and ~~952,000~~1,260,000 square feet has been ~~leased.~~leased or is pending. The table below ~~summarizes~~summarizes the status of the BRAC space as of ~~September 30, 2014.~~March 31, 2015.

			Rent Per		Square Feet					Rent Per		Square Feet
			Square Foot		Total	Crystal City	Skyline	Rosslyn		Square Foot		Total	Crystal City	Skyline	Rosslyn

Resolved:	Resolved:								Resolved:
									Relet as of March 31, 2015	$	37.14	1,133,000	671,000	381,000	81,000
	Relet as of September 30, 2014		$	37.97	952,000	591,000	281,000	80,000	Leases pending		43.02	127,000	124,000	-	3,000
	Taken out of service for redevelopment				393,000	393,000	-	-	Taken out of service for redevelopment			393,000	393,000	-	-
					1,345,000	984,000	281,000	80,000				1,653,000	1,188,000	381,000	84,000

To Be Resolved:	To Be Resolved:								To Be Resolved:
	Vacated as of September 30, 2014			36.41	835,000	367,000	402,000	66,000	Vacated as of March 31, 2015		35.42	693,000	204,000	425,000	64,000
	Expiring in:								Expiring in 2015		42.98	49,000	44,000	5,000	-
		2014		39.54	26,000	-	26,000	-				742,000	248,000	430,000	64,000
		2015		36.76	189,000	88,000	101,000	-
					1,050,000	455,000	529,000	66,000

Total square feet subject to BRAC	Total square feet subject to BRAC				2,395,000	1,439,000	810,000	146,000	Total square feet subject to BRAC			2,395,000	1,436,000	811,000	148,000

4540

Net Income and EBITDA by Segment for the Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~

Below is a summary of net income and a reconciliation of net income to EBITDA⁽¹⁾ by segment for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~2014.


(Amounts in thousands)	(Amounts in thousands)	For the Three Months Ended September 30, 2014																	(Amounts in thousands)	For the Three Months Ended March 31, 2015
											Retail
			Total		New York			Washington, DC			Properties			Toys		Other					Total		New York			Washington, DC			Other
Total revenues	Total revenues		$	670,909	$	394,579		$	133,541		$	82,442		$	-	$	60,347		Total revenues		$	606,802	$	399,513		$	133,968		$	73,321
Total expenses	Total expenses			450,310		243,314			88,375			44,466			-		74,155		Total expenses			439,088		252,760			92,997			93,331
Operating income (loss)	Operating income (loss)			220,599		151,265			45,166			37,976			-		(13,808)		Operating income (loss)			167,714		146,753			40,971			(20,010)
(Loss) income from partially owned
	entities, including Toys			(25,663)		5,810			(1,411)			371			(18,418)		(12,015)
Income from Real Estate Fund				24,160		-			-			-			-		24,160
(Loss) income from partially owned entities																			(Loss) income from partially owned entities			(2,405)		(5,663)			131			3,127
Income from real estate fund investments																			Income from real estate fund investments			24,089		-			-			24,089
Interest and other investment income, net	Interest and other investment income, net			7,602		1,859			15			9			-		5,719		Interest and other investment income, net			10,792		1,862			13			8,917
Interest and debt expense	Interest and debt expense			(115,120)		(43,061)			(18,685)			(10,056)			-		(43,318)		Interest and debt expense			(91,674)		(45,351)			(18,160)			(28,163)
Net gain on disposition of wholly owned and
Net gain on disposition of wholly owned and partially																			Net gain on disposition of wholly owned and partially
	partially owned assets			2,665		-			-			-			-		2,665		owned assets			1,860		-			-			1,860
Income (loss) before income taxes	Income (loss) before income taxes			114,243		115,873			25,085			28,300			(18,418)		(36,597)		Income (loss) before income taxes			110,376		97,601			22,955			(10,180)
Income tax expense				(3,177)		(802)			(130)			(525)			-		(1,720)
Income tax (expense) benefit																			Income tax (expense) benefit			(971)		(943)			674			(702)
Income (loss) from continuing operations	Income (loss) from continuing operations			111,066		115,071			24,955			27,775			(18,418)		(38,317)		Income (loss) from continuing operations			109,405		96,658			23,629			(10,882)
Income from discontinued operations	Income from discontinued operations			58,131		-			-			57,499			-		632		Income from discontinued operations			15,841		-			-			15,841
Net income (loss)				169,197		115,071			24,955			85,274			(18,418)		(37,685)
Less net income attributable to noncontrolling
Net income																			Net income			125,246		96,658			23,629			4,959
Less net income attributable to noncontrolling interests in																			Less net income attributable to noncontrolling interests in
	interests in consolidated subsidiaries			(9,685)		(2,690)			-			(76)			-		(6,919)		consolidated subsidiaries			(15,882)		(1,506)			-			(14,376)
Net income (loss) attributable to
	Vornado Realty L.P.			159,512		112,381			24,955			85,198			(18,418)		(44,604)
Net income (loss) attributable to Vornado Realty L.P.																			Net income (loss) attributable to Vornado Realty L.P.			109,364		95,152			23,629			(9,417)
Interest and debt expense⁽²⁾	Interest and debt expense⁽²⁾			160,252		58,010			22,208			11,205			22,471		46,358		Interest and debt expense⁽²⁾			114,675		58,667			21,512			34,496
Depreciation and amortization⁽²⁾	Depreciation and amortization⁽²⁾			160,270		79,446			36,411			15,256			9,923		19,234		Depreciation and amortization⁽²⁾			156,450		94,124			40,752			21,574
Income tax expense (benefit) ⁽²⁾				2,232		746			145			525			(1,536)		2,352
Income tax (benefit) expense ⁽²⁾																			Income tax (benefit) expense ⁽²⁾			(739)		1,002			(2,636)			895
EBITDA⁽¹⁾	EBITDA⁽¹⁾		$	482,266	$	250,583	⁽³⁾	$	83,719	⁽⁴⁾	$	112,184	⁽⁵⁾	$	12,440	$	23,340	⁽⁶⁾	EBITDA⁽¹⁾		$	379,750	$	248,945	⁽³⁾	$	83,257	⁽⁴⁾	$	47,548	⁽⁵⁾


(Amounts in thousands)	(Amounts in thousands)	For the Three Months Ended September 30, 2013																	(Amounts in thousands)	For the Three Months Ended March 31, 2014
											Retail
			Total		New York			Washington, DC			Properties			Toys		Other				Total		New York			Washington, DC			Other
Total revenues	Total revenues		$	668,989	$	388,747		$	137,604		$	81,439		$	-	$	61,199		Total revenues	$	562,381	$	361,184		$	135,278		$	65,919
Total expenses	Total expenses			434,138		223,992			87,612			45,461			-		77,073		Total expenses		417,140		237,734			89,572			89,834
Operating income (loss)	Operating income (loss)			234,851		164,755			49,992			35,978			-		(15,874)		Operating income (loss)		145,241		123,450			45,706			(23,915)
(Loss) income from partially owned
	entities, including Toys			(32,756)		4,189			(2,003)			188			(34,209)		(921)
Income from Real Estate Fund				22,913		-			-			-			-		22,913
Interest and other investment (loss) income, net				(10,275)		1,468			17			1			-		(11,761)
Income (loss) from partially owned entities																			Income (loss) from partially owned entities		1,979		1,566			(1,266)			1,679
Income from real estate fund investments																			Income from real estate fund investments		18,148		-			-			18,148
Interest and other investment income, net																			Interest and other investment income, net		11,850		1,441			36			10,373
Interest and debt expense	Interest and debt expense			(119,676)		(42,349)			(27,246)			(10,834)			-		(39,247)		Interest and debt expense		(96,312)		(42,839)			(19,347)			(34,126)
Net gain on disposition of wholly owned and
Net gain on disposition of wholly owned and partially																			Net gain on disposition of wholly owned and partially
	partially owned assets			15,138		-			-			1,377			-		13,761		owned assets		9,635		-			-			9,635
Income (loss) before income taxes	Income (loss) before income taxes			110,195		128,063			20,760			26,710			(34,209)		(31,129)		Income (loss) before income taxes		90,541		83,618			25,129			(18,206)
Income tax expense				(2,222)		(65)			(766)			(731)			-		(660)
Income tax (expense) benefit																			Income tax (expense) benefit		(851)		(969)			199			(81)
Income (loss) from continuing operations	Income (loss) from continuing operations			107,973		127,998			19,994			25,979			(34,209)		(31,789)		Income (loss) from continuing operations		89,690		82,649			25,328			(18,287)
Income from discontinued operations	Income from discontinued operations			24,278		2,883			-			21,149			-		246		Income from discontinued operations		8,466		5,867			-			2,599
Net income (loss)	Net income (loss)			132,251		130,881			19,994			47,128			(34,209)		(31,543)		Net income (loss)		98,156		88,516			25,328			(15,688)
Less net income attributable to noncontrolling
Less net income attributable to noncontrolling interests in																			Less net income attributable to noncontrolling interests in
	interests in consolidated subsidiaries			(23,833)		(6,556)			-			(2,970)			-		(14,307)		consolidated subsidiaries		(11,579)		(1,405)			-			(10,174)
Net income (loss) attributable to
	Vornado Realty L.P.			108,418		124,325			19,994			44,158			(34,209)		(45,850)
Net income (loss) attributable to Vornado Realty L.P.																			Net income (loss) attributable to Vornado Realty L.P.		86,577		87,111			25,328			(25,862)
Interest and debt expense⁽²⁾	Interest and debt expense⁽²⁾			183,116		59,344			30,717			12,119			38,435		42,501		Interest and debt expense⁽²⁾		170,952		58,068			22,798			90,086
Depreciation and amortization⁽²⁾	Depreciation and amortization⁽²⁾			172,756		67,294			35,403			17,573			32,176		20,310		Depreciation and amortization⁽²⁾		196,339		87,587			36,150			72,602
Income tax (benefit) expense ⁽²⁾				(20,292)		67			828			731			(22,690)		772
Income tax expense (benefit)⁽²⁾																			Income tax expense (benefit)⁽²⁾		19,831		1,032			(189)			18,988
EBITDA⁽¹⁾	EBITDA⁽¹⁾		$	443,998	$	251,030	⁽³⁾	$	86,942	⁽⁴⁾	$	74,581	⁽⁵⁾	$	13,712	$	17,733	⁽⁶⁾	EBITDA⁽¹⁾	$	473,699	$	233,798	⁽³⁾	$	84,087	⁽⁴⁾	$	155,814	⁽⁵⁾

_____________________________

See notes on the following page.

4641

Net Income and EBITDA by Segment for the Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~ - continued


								Notes to preceding tabular information:

	Notes to preceding tabular information:


(1)	EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a supplemental 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 a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.							EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a supplemental 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 a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.




(2)	Interest and debt expense, depreciation and amortization and income tax expense (benefit) in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.							Interest and debt expense, depreciation and amortization and income tax expense (benefit) in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.




(3)	The elements of "New York" EBITDA are summarized below.							The elements of "New York" EBITDA are summarized below.

				For the Three Months Ended September 30,						For the Three Months Ended March 31,
	(Amounts in thousands)			2014		2013		(Amounts in thousands)		2015		2014
	Office^(a)			$	159,568	$	172,367	Office		$	159,359	$	157,879
	Retail				71,327		59,782	Retail			81,305		66,195
	Alexander's				10,387		10,387	Alexander's			10,407		10,430
	Hotel Pennsylvania				9,301		8,494	Hotel Pennsylvania			(2,126)		(706)
		Total New York		$	250,583	$	251,030		Total New York	$	248,945	$	233,798


	(a)		Includes $12,121 of termination fee income, net, from a tenant at 1290 Avenue of the Americas and $2,368 from discontinued operations in the three months ended September 30, 2013. Excluding these items, EBITDA for the three months ended September 30, 2013 was $157,878.


(4)	The elements of "Washington, DC" EBITDA are summarized below.							The elements of "Washington, DC" EBITDA are summarized below.

				For the Three Months Ended September 30,						For the Three Months Ended March 31,
	(Amounts in thousands)			2014		2013		(Amounts in thousands)		2015		2014
	Office, excluding the Skyline Properties			$	65,904	$	69,220	Office, excluding the Skyline Properties		$	67,385	$	67,257
	Skyline properties				7,698		6,841	Skyline properties			6,055		6,499
		Total Office			73,602		76,061		Total Office		73,440		73,756
	Residential				10,117		10,881	Residential			9,817		10,331
		Total Washington, DC		$	83,719	$	86,942		Total Washington, DC	$	83,257	$	84,087


(5)	The elements of "Retail Properties" EBITDA are summarized below.

				For the Three Months Ended September 30,
	(Amounts in thousands)			2014		2013
	Strip shopping centers^(a)			$	97,122	$	59,175
	Regional malls^(b)				15,062		15,406
		Total Retail properties		$	112,184	$	74,581


	(a)		Includes discontinued operations and other gains and losses that affect comparability, aggregating $57,676 and $19,352 for the three months ended September 30, 2014 and 2013, respectively. Excluding these items, EBITDA was $39,446 and $39,823, respectively.

	(b)		Includes discontinued operations and other gains and losses that affect comparability, aggregating to a loss of $177 and income of $2,140 for the three months ended September 30, 2014 and 2013, respectively. Excluding these items, EBITDA was $15,239 and $13,266, respectively.

4742

Net Income and EBITDA by Segment for the Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~ - continued

Notes to preceding tabular information - continued:
(6)
The elements of "other" EBITDA are summarized below.
For the Three Months Ended September 30,
(Amounts in thousands)
2014
2013
Our share of Real Estate Fund:
Income before net realized/unrealized gains
$
2,059
$
2,086
Net realized gains on exited investments
12,896
2,046
Previously recorded unrealized gains on exited investments
(12,397)
-
Net unrealized gains on held investments
4,583
3,092
Carried interest
8,431
267
Total
15,572
7,491
The Mart and trade shows
19,497
14,925
555 California Street
11,994
10,720
India real estate ventures
2,651
695
Other investments
4,618
5,330
54,332
39,161
Corporate general and administrative expenses^(a)
(22,948)
(23,467)
Investment income and other, net^(a)
6,659
11,108
Impairment loss and loan loss reserve on investment in Suffolk Downs
(10,263)
-
Acquisition and transaction related costs^(b)
(7,105)
(2,818)
Net gain on sale of residential condominiums and a land parcel
2,665
134
Net gain on sale of marketable securities
-
31,741
Loss from the mark-to-market of J.C. Penney derivative position
-
(20,012)
Loss on sale of J.C. Penney common shares
-
(18,114)
$
23,340
$
17,733
(a)
The amounts in these captions (for this table only) exclude income/expense from the mark-to-market of our deferred compensation plan of $1,352 and $269 for the three months ended September 30, 2014 and 2013, respectively.
(b)
The three months ended September 30, 2014, includes $5,828 of transaction costs related to the spin-off of our strip shopping centers and malls.



	Notes to preceding tabular information - continued:


(5)	The elements of "other" EBITDA are summarized below.

				For the Three Months Ended March 31,
	(Amounts in thousands)			2015		2014
	Our share of Real Estate Fund:
		Income before net realized/unrealized gains		$	1,614	$	1,982
		Net realized/unrealized gains on investments			5,548		3,542
		Carried interest			3,388		1,775
	Total				10,550		7,299
	The Mart and trade shows				21,041		19,087
	555 California Street				12,401		12,066
	India real estate ventures				1,841		1,824
	Our share of Toys "R" Us^(a)				-		83,550
	Other investments				9,109		9,447
					54,942		133,273
	Corporate general and administrative expenses^(b)				(35,942)		(25,982)
	Investment income and other, net^(b)				8,762		8,073
	Urban Edge Properties and residual retail properties discontinued operations^(c)				19,907		32,100
	Acquisition and transaction related costs				(1,981)		(1,285)
	Net gain on sale of residential condominiums and a land parcel				1,860		9,635
				$	47,548	$	155,814


	(a)		As a result of our investment being reduced to zero, we suspended equity method accounting in the third quarter of 2014. The three months ended March 31, 2014 includes an impairment loss of $75,196.

	(b)		The amounts in these captions (for this table only) exclude income/expense from the mark-to-market of our deferred compensation plan of $2,859 and $4,400 for the three months ended March 31, 2015 and 2014, respectively. The three months ended March 31, 2015 include $8,817 from the acceleration of the recognition of compensation expense related to 2013-2015 Out-Performance Plans due to the modification of the vesting criteria of awards such that they will fully vest at age 65. The accelerated expense will result in lower general and administrative expense for the remainder of 2015 of $2,600 and $6,217 thereafter.

	(c)		The three months ended March 31, 2015 and 2014, include $22,645 and $499, respectively, of transaction costs related to the spin-off of our strip shopping centers and malls.

EBITDA by Region

Below is a summary of the percentages of EBITDA by geographic region, ~~(excluding~~excluding discontinued operations and other ~~gains and losses~~items that affect ~~comparability and our Toys and Other Segments).~~comparability.

For the Three Months
Ended September 30,
2014
2013
Region:
New York City metropolitan area
75%
74%
Washington, DC / Northern Virginia metropolitan area
22%
23%
Puerto Rico
1%
1%
Other geographies
2%
2%
100%
100%

		For the Three Months
		Ended March 31,
		2015	2014
Region:
	New York City metropolitan area	68%	66%
	Washington, DC / Northern Virginia metropolitan area	23%	25%
	Chicago, IL	6%	5%
	San Francisco, CA	3%	4%
		100%	100%

4843

Results of Operations – Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013~~March 31, 2014

Revenues

Our revenues, which consist primarily of property rentals (including hotel and trade show revenues), tenant expense reimbursements, and fee and other income, were ~~$670,909,000 in~~$606,802,000 for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$668,989,000~~$562,381,000 in the prior year’s ~~quarter,~~three months, an increase of ~~$1,920,000.~~$44,421,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)	(Amounts in thousands)															(Amounts in thousands)

											Retail
Increase (decrease) due to:	Increase (decrease) due to:		Total			New York			Washington, DC		Properties		Other			Increase (decrease) due to:		Total		New York		Washington, DC		Other
Property rentals:	Property rentals:															Property rentals:
	Acquisitions and other		$	3,565		$	4,822		$	(1,388)	$	(65)	$	196		Acquisitions and other		$	8,031	$	7,145	$	886	$	-
	Properties taken out of / placed into															Properties placed into (taken out of) service
		service for redevelopment		(3,366)			(1,221)			(497)		426		(2,074)			for redevelopment		10,441		10,543		(679)		577
	Hotel Pennsylvania			1,009			1,009			-		-		-		Hotel Pennsylvania			(1,126)		(1,126)		-		-
	Trade Shows			1,714			-			-		-		1,714		Trade Shows			2,945		-		-		2,945
	Same store operations			13,813			8,473			1,485		988		2,867		Same store operations			12,843		10,110		815		1,918
				16,735			13,083			(400)		1,349		2,703					33,134		26,672		1,022		5,440

Tenant expense reimbursements:	Tenant expense reimbursements:															Tenant expense reimbursements:
	Acquisitions and other			624			311			286		(4)		31		Acquisitions and other			206		206		-		-
	Properties placed into / taken out of															Properties placed into (taken out of) service
		service for redevelopment		(814)			(530)			43		(165)		(162)			for redevelopment		828		795		38		(5)
	Same store operations			4,706			5,287			(890)		(446)		755		Same store operations			6,586		4,607		(104)		2,083
				4,516			5,068			(561)		(615)		624					7,620		5,608		(66)		2,078

Cleveland Medical Mart development
	project			(4,893)	⁽¹⁾		-			-		-		(4,893)	⁽¹⁾

Fee and other income:	Fee and other income:															Fee and other income:
	BMS cleaning fees			6,569			6,075			-		-		494	⁽²⁾
	Signage revenue			(1,040)			(1,040)			-		-		-		BMS cleaning fees			3,677		3,345		-		332	⁽¹⁾
	Management and leasing fees			(3,315)			(1,203)			(2,199)		25		62		Management and leasing fees			(1,636)		(1,617)		60		(79)
	Lease termination fees			(16,579)			(16,387)	⁽³⁾		(659)		464		3		Lease termination fees			170		2,704		(2,367)		(167)
	Other income			(73)			236			(244)		(220)		155		Other income (loss)			1,456		1,617		41		(202)
				(14,438)			(12,319)			(3,102)		269		714					3,667		6,049		(2,266)		(116)

Total increase (decrease) in revenues	Total increase (decrease) in revenues		$	1,920		$	5,832		$	(4,063)	$	1,003	$	(852)		Total increase (decrease) in revenues		$	44,421	$	38,329	$	(1,310)	$	7,402



(1)	(1)	Due to completion of the project. This decrease in revenue is substantially offset by a decrease in development costs expensed in the period. See note (3) on page 50.															Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 45.

(2)		Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 50.

(3)		Primarily due to a $19,500 termination fee from a tenant at 1290 Avenue of the Americas recognized during the third quarter of 2013.

4944

Results of Operations – Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013~~March 31, 2014 - continued

Expenses

Our expenses, which consist primarily of operating (including hotel and trade show expenses), depreciation and amortization and general and administrative expenses, were ~~$450,310,000 in~~$439,088,000 for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$434,138,000~~$417,140,000 in the prior year’s ~~quarter,~~three months, an increase of ~~$16,172,000.~~$21,948,000. Below are the details of the increase by segment:

(Amounts in thousands)	(Amounts in thousands)														(Amounts in thousands)

										Retail
Increase (decrease) due to:	Increase (decrease) due to:		Total			New York		Washington, DC		Properties		Other			Increase (decrease) due to:		Total			New York		Washington, DC		Other
Operating:	Operating:														Operating:
	Acquisitions and other		$	(928)		$	(897)	$	45	$	(22)	$	(54)
	Properties taken out of / placed into														Acquisitions and other		$	689		$	698	$	(9)	$	-
		service for redevelopment		(3,234)			(1,545)		(200)		199		(1,688)		Properties placed into (taken out of) service
	Non-reimbursable expenses, including															for redevelopment		4,519			3,430		(23)		1,112
		bad debt reserves		1,734			2,049		-		-		(315)		Non-reimbursable expenses, including bad debt reserves			555			-		-		555
	Hotel Pennsylvania			250			250		-		-		-		Hotel Pennsylvania			375			375		-		-
	Trade Shows			339			-		-		-		339		Trade Shows			1,202			-		-		1,202
	BMS expenses			4,605			3,847		-		-		758	⁽²⁾	BMS expenses			3,474			3,091		-		383	⁽²⁾
	Same store operations			3,908			7,105		(352)		(613)		(2,232)		Same store operations			7,118			5,481		571		1,066
				6,674			10,809		(507)		(436)		(3,192)					17,932			13,075		539		4,318

Depreciation and amortization:	Depreciation and amortization:														Depreciation and amortization:
	Acquisitions and other			1,960			1,961		-		(1)		-		Acquisitions and other			5,202			5,202		-		-
	Properties placed into / taken out of														Properties taken out of service
		service for redevelopment		1,767			3,464		(215)		(790)		(692)			for redevelopment		(19,077)			(11,313)		(206)		(7,558)
	Same store operations			4,362			1,933		1,718		309		402		Same store operations			6,205			3,810		4,835		(2,440)
				8,089			7,358		1,503		(482)		(290)					(7,670)			(2,301)		4,629		(9,998)

General and administrative:	General and administrative:														General and administrative:
	Mark-to-market of deferred														Mark-to-market of deferred compensation plan liability⁽¹⁾			(1,541)			-		-		(1,541)
		compensation plan liability⁽¹⁾		1,143			-		-		-		1,143		Severance costs (primarily reduction in force at the Mart)			(120)			-		-		(120)
	Same store operations			(782)			1,155		(233)		(77)		(1,627)		Same store operations			12,651	⁽³⁾		4,252		(1,743)		10,142
				361			1,155		(233)		(77)		(484)					10,990			4,252		(1,743)		8,481

Cleveland Medical Mart development
Acquisition and transaction related costs															Acquisition and transaction related costs			696			-		-		696

Total increase in expenses															Total increase in expenses		$	21,948		$	15,026	$	3,425	$	3,497
	project			(3,239)	⁽³⁾		-		-		-		(3,239)	⁽³⁾

Acquisition and transaction related costs				4,287			-		-		-		4,287

Total increase (decrease) in expenses			$	16,172		$	19,322	$	763	$	(995)	$	(2,918)
(1)															(1)	This increase in expense is entirely offset by a corresponding increase in income from the mark-to-market of the deferred compensation plan assets, a component of “interest and other investment income, net” on our consolidated statements of income.

(2)															Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (1) on page 44.

~~(1)~~(3)	~~(1)~~(3)	This decrease in expense is entirely offset by a corresponding decrease in income from the mark-to-market of the deferred compensation plan assets, a component of “interest and other investment income (loss), net” on our consolidated statements of income.													~~(1)~~(3)	Results primarily from the acceleration of the recognition of compensation expense of $11,065 related to 2013-2015 Out-Performance Plans due to the modification of the vesting criteria of awards such that they fully vest at age 65. The accelerated expense will result in lower general and administrative expense during the remainder of 2015 of $3,231 and $7,834 thereafter.

(2)		Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 49.

(3)		Due to the completion of the project. This decrease in expense is offset by the decrease in development revenue in the period. See note (1) on page 49.

5045

Results of Operations – Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013~~March 31, 2014 - continued

~~(Loss) Applicable to Toys~~

~~In the three months ended September 30, 2014, we recognized a net loss of $18,418,000 from our investment in Toys, comprised of$20,357,000for our share of Toys’ net loss, partially offset by$1,939,000of management fees earned and received.~~

In the three months ended September 30, 2013, we recognized a net loss of $34,209,000 from our investment in Toys, comprised of $36,056,000 for our share of Toys’ net loss, partially offset by $1,847,000 of management fees earned and received.

(Loss) Income from Partially Owned Entities

Summarized below are the components of (loss) income from partially owned entities for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~

2014.

Percentage
For the Three Months Ended
Ownership at
September 30,
(Amounts in thousands)
September 30, 2014
2014
2013
Equity in Net (Loss) Income:
Alexander's
32.4%
$
7,192
$
5,975
India real estate ventures
4.1%-36.5%
(262)
(1,449)
Partially owned office buildings⁽¹⁾
Various
18
38
Other investments⁽²⁾
Various
(14,193)
(3,111)
$
(7,245)
$
1,453
(1)
Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)
Includes interests in Independence Plaza, Monmouth Mall, 85 10th Avenue, Fashion Center Mall, 50-70 West 93rd Street and others. The three months ended September 30, 2014 includes a $10,263 non-cash impairment loss and loan loss reserve on our equity and debt investments in Suffolk Downs race track and adjacent land.

		Percentage	For the Three Months Ended
		Ownership at	March 31,
(Amounts in thousands)		March 31, 2015	2015		2014
Equity in Net (Loss) Income:
Partially owned office buildings⁽¹⁾		Various	$	(9,296)	$	(2,395)
Alexander's		32.4%		7,691		6,385
Toys⁽²⁾		32.6%		1,454		1,847
Urban Edge⁽³⁾		5.4%		584		-
India real estate ventures		4.1%-36.5%		(109)		(137)
Other investments⁽⁴⁾		Various		(2,729)		(3,721)
			$	(2,405)	$	1,979


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.

(2)	In the three months ended March 31, 2015, we recognized net income of $1,454 from our investment in Toys, representing management fees earned and received, compared to $1,847 for the three months ended March 31, 2014. In the three months ended March 31, 2014, we recognized our share of the equity in earnings of Toys’ fourth quarter totaling $75,196 and a corresponding non-cash impairment loss of the same amount.

(3)	Represents fees earned pursuant to our transition services agreement with UE.

(4)	Includes interests in Independence Plaza, Monmouth Mall, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street and others.

Income from Real Estate Fund Investments

Below are the components of the income from our ~~Real Estate Fund~~real estate fund investments for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~

2014.

(Amounts in thousands)
For the Three Months Ended September 30,
2014
2013
Net investment income
$
3,829
$
2,362
Net realized gains on exited investments
51,584
8,184
Previously recorded unrealized gains on exited investments
(49,586)
-
Net unrealized gains on held investments
18,333
12,367
Income from Real Estate Fund
24,160
22,913
Less income attributable to noncontrolling interests
(8,588)
(15,422)
Income from Real Estate Fund attributable to Vornado Realty L.P. ⁽¹⁾
$
15,572
$
7,491
(1)
Excludes management, leasing and development fees of $759and $770 for the three months ended September 30, 2014 and 2013, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.


(Amounts in thousands)		For the Three Months Ended March 31,
		2015		2014
Net investment income		$	6,450	$	3,979
Net realized gains on exited investments			24,705		-
Previously recorded unrealized gains on exited investments			(23,279)		-
Net unrealized gains on held investments			16,213		14,169
Income from real estate fund investments			24,089		18,148
Less income attributable to noncontrolling interests			(13,539)		(10,849)
Income from real estate fund investments attributable to Vornado Realty L.P.⁽¹⁾		$	10,550	$	7,299
___________________________________
___________________________________
(1)	Excludes property management, leasing and development fees of $704 and $618 for the three months ended March 31, 2015 and 2014, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

5146

Results of Operations – Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013~~March 31, 2014 - continued

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

Interest and other investment income, ~~(loss),~~ net was ~~income of $7,602,000~~ $10,792,000 in the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~a loss of $10,275,000~~$11,850,000 in the prior year’s ~~quarter, an~~three months, a decrease of $1,058,000. This decrease resulted primarily from a lower increase in ~~income~~the value of ~~$17,877,000. This~~investments in our deferred compensation plan (offset by a corresponding increase ~~resulted from:~~


~~(Amounts in thousands)~~
~~J.C. Penney derivative position mark-to-market loss in 2013~~		$	~~20,012~~
~~Lower interest on mezzanine loans receivable in the current year~~			~~(4,362)~~
~~Increase in the value of investments in our deferred compensation plan (offset by a corresponding~~
	~~increase in the liability for plan assets in general and administrative expenses)~~		~~1,083~~
~~Other, net~~			~~1,144~~
		$	~~17,877~~

in the liability for plan assets in general and administrative expenses).

Interest and Debt Expense

Interest and debt expense was ~~$115,120,000~~$91,674,000 in the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$119,676,000~~$96,312,000 in the prior year’s ~~quarter,~~three months, a decrease of ~~$4,556,000.~~$4,638,000. This decrease was primarily due to (i~~) $5,803,000 of~~ ~~higher capitalized interest in the current year’s quarter and (ii)~~ ~~$6,314,000~~ (i) $9,130,000 of interest savings from the ~~restructuring~~redemption of the ~~Skyline properties mortgage loan in October 2013,~~$445,000,000 principal amount of the outstanding 7.875% senior unsecured notes during the fourth quarter of 2014, (ii) $5,313,000 of interest savings from the redemption of the $500,000,000 principal amount of the outstanding 4.25% senior unsecured notes on January 1, 2015, partially offset by (iii) ~~$3,522,000of interest expense from the $600,000,000 financing of our 220 Central Park South development site in January 2014 and (iv) $2,899,000~~$2,898,000 of interest expense from the issuance of $450,000,000 of senior unsecured notes in June ~~2014.~~2014, and (iv) $6,907,000 of higher deferred financing costs amortization and other.

Net Gain ~~(Loss)~~ on Disposition of Wholly Owned and Partially Owned Assets

In the three months ended ~~September 30, 2014, we recognized net gains of~~ ~~$2,665,000~~ ~~from the sale of residential condominiums. In the three months ended September 30, 2013,~~March 31, 2015, we recognized a ~~$15,138,000~~$1,860,000 net gain on disposition of wholly owned and partially owned assets, primarily from ~~a $31,741,000 net gain on~~the sale of residential condominiums, compared to $9,635,000 in the prior year’s three months composed of the sale of a ~~marketable security, partially offset by an $18,114,000 net loss on sale of the remaining 13,400,000 J.C. Penney common shares.~~land parcel and residential condominiums.

Income Tax Expense

Income tax expense related to our taxable REIT subsidiaries was ~~$3,177,000~~$971,000 in the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$2,222,000~~$851,000 in the prior year’s ~~quarter,~~three months, an increase of ~~$955,000. This increase was primarily attributable to higher income from our taxable REIT subsidiaries.~~$120,000.

~~Income from Discontinued Operations~~

We have reclassified the revenues and expenses of the properties that were sold or are currently held for sale to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all the periods presented in the accompanying financial statements. ~~The table below sets forth the combined results of assets related to discontinued operations for the three months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013.~~

For the Three Months Ended September 30,
(Amounts in thousands)
2014
2013
Total revenues
$
836
$
17,354
Total expenses
501
11,352
335
6,002
Net gain on sale of Beverly Connection
44,155
-
Net gains on sale of other real estate
13,641
18,996
Impairment losses
-
(720)
Income from discontinued operations
$
58,131
$
24,278

5247

Results of Operations – Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013~~March 31, 2014 - continued

Income from Discontinued Operations

The table below sets forth the combined results of assets related to discontinued operations for the three months ended March 31, 2015 and 2014.


	For the Three Months Ended March 31,
(Amounts in thousands)	2015		2014
Total revenues	$	19,958	$	106,563
Total expenses		13,373		76,025
		6,585		30,538
Net gain on sale of lease position in Geary Street, CA		21,376		-
Net gains on sale of real estate		10,867		-
Transaction related costs		(22,645)		(499)
Impairment losses		(256)		(20,842)
Pretax income from discontinued operations		15,927		9,197
Income tax expense		(86)		(731)
Income from discontinued operations	$	15,841	$	8,466

Net Income Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net income attributable to noncontrolling interests in consolidated subsidiaries was ~~$9,685,000~~$15,882,000 in the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$23,833,000~~$11,579,000 in the prior year’s ~~quarter, a decrease~~three months, an increase of ~~$14,148,000.~~$4,303,000. This ~~decrease~~increase resulted primarily from ~~lower~~higher net income allocated to the noncontrolling interests, including noncontrolling interests of our Real Estate Fund.

Preferred Unit Distributions

Preferred unit distributions were ~~$20,378,000~~$19,496,000 in the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$20,381,000~~$20,380,000 in the prior year’s ~~quarter,~~three months, a decrease of ~~$3,000~~$884,000. .

~~Results of Operations – Three Months Ended September 30, 2014 Compared to September 30, 2013 - continued~~

~~Same Store EBITDA~~

Same store EBITDA represents EBITDA from property level operations which are owned by us in both the current and prior year reporting periods. Same store EBITDA excludes segment-level overhead expenses, which are expenses that we do not consider to be property-level expenses, as well as other non-operating items. We also present same store EBITDA on a cash basis which excludes income from the straight-lining of rents, amortization of below-market leases, net of above-market leases 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 EBITDA 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 EBITDA to same store EBITDA for each of our segments for the three months ended September 30, 2014, compared to the three months ended September 30, 2013.~~

(Amounts in thousands)
New York
Washington, DC
Retail Properties
EBITDA for the three months ended September 30, 2014
$
250,583
$
83,719
$
112,184
Add-back:
Non-property level overhead expenses included above
7,986
6,454
4,163
Less EBITDA from:
Acquisitions
(8,640)
-
-
Dispositions, including net gains on sale
-
(73)
(57,501)
Properties taken out-of-service for redevelopment
(5,897)
(994)
(1,638)
Other non-operating income
(3,078)
(421)
(4,217)
Same store EBITDA for the three months ended September 30, 2014
$
240,954
$
88,685
$
52,991
EBITDA for the three months ended September 30, 2013
$
251,030
$
86,942
$
74,581
Add-back:
Non-property level overhead expenses included above
6,831
6,687
4,240
Less EBITDA from:
Acquisitions
(11)
-
-
Dispositions, including net gains on sale
(2,481)
-
(21,543)
Properties taken out-of-service for redevelopment
(5,412)
(1,592)
(1,512)
Other non-operating income
(19,543)
(914)
(3,342)
Same store EBITDA for the three months ended September 30, 2013
$
230,414
$
91,123
$
52,424
Increase (decrease) in same store EBITDA -
Three months ended September 30, 2014 vs. September 30, 2013⁽¹⁾
$
10,540
$
(2,438)
$
567
% increase (decrease) in same store EBITDA
4.6%
(2.7%)
1.1%
(1)
See notes on following page

~~Results of Operations – Three Months Ended September 30, 2014 Compared to September 30, 2013 - continued~~

~~Notes to preceding tabular information~~

~~New York:~~

The $10,540,000 increase in New York same store EBITDA resulted primarily from increases in Retail and Office of $5,064,000 and $4,698,000, respectively. The Retail and Office increases resulted primarily from higher average rent per square foot, partially offset by higher operating expenses, net of reimbursements, of $1,818,000.

~~Washington, DC:~~

~~The $2,438,000 decrease in Washington, DC same store EBITDA resulted primarily from a lower leasing fee in 2014.~~

~~Retail Properties:~~

The $567,000 increase in Retail Properties same store EBITDA resulted primarily from an increase in rental revenue of $988,000, primarily due to an increase in average annual rents per square foot and same store occupancy, partially offset by an increase in operating expenses, net of reimbursements.

~~Reconciliation of Same Store EBITDA to Cash basis Same Store EBITDA~~

(Amounts in thousands)
New York
Washington, DC
Retail Properties
Same store EBITDA for the three months ended September 30, 2014
$
240,954
$
88,685
$
52,991
Less: Adjustments for straight line rents, amortization of acquired
below-market leases, net, and other non-cash adjustments
(28,363)
(2,771)
(2,019)
Cash basis same store EBITDA for the three months ended
September 30, 2014
$
212,591
$
85,914
$
50,972
Same store EBITDA for the three months ended September 30, 2013
$
230,414
$
91,123
$
52,424
Less: Adjustments for straight line rents, amortization of acquired
below-market leases, net, and other non-cash adjustments
(28,345)
(1,514)
(2,329)
Cash basis same store EBITDA for the three months ended
September 30, 2013
$
202,069
$
89,609
$
50,095
Increase (decrease) in Cash basis same store EBITDA -
Three months ended September 30, 2014 vs. September 30, 2013
$
10,522
$
(3,695)
$
877
% increase (decrease) in Cash basis same store EBITDA
5.2%
(4.1%)
1.8%

~~Net Income and EBITDA by Segment for the Nine Months Ended September 30, 2014 and 2013~~

~~Below is a summary of net income and a reconciliation of net income to EBITDA~~⁽¹⁾ ~~by segment for the nine months ended September 30, 2014 and 2013.~~

~~_____________________________~~

~~See notes on the following page.~~

~~Net Income and EBITDA by Segment for the Nine Months Ended September 30, 2014 and 2013 - continued~~

Notes to preceding tabular information:
(1)
EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a supplemental 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 a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.
(2)
Interest and debt expense, depreciation and amortization and income tax expense in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.
(3)
The elements of "New York" EBITDA are summarized below.
For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
Office^(a)
$
480,280
$
476,849
Retail
205,469
177,394
Alexander's
31,088
31,141
Hotel Pennsylvania
18,873
18,906
Total New York
$
735,710
$
704,290
(a)
Includes $12,121 of termination fee income, net, from a tenant at 1290 Avenue of the Americas and $7,207 from discontinued operations in the nine months ended September 30, 2013. Excluding these items, EBITDA for the nine months ended September 30, 2013 was $457,521.
(4)
The elements of "Washington, DC" EBITDA are summarized below.
For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
Office, excluding the Skyline Properties
$
200,218
$
202,463
Skyline properties
21,270
22,546
Total Office
221,488
225,009
Residential
31,212
32,955
Total Washington, DC
$
252,700
$
257,964
(5)
The elements of "Retail Properties" EBITDA are summarized below.
For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
Strip shopping centers^(a)
$
178,499
$
264,065
Regional malls^(b)
23,145
251,248
Total Retail properties
$
201,644
$
515,313

(a)
Includes discontinued operations and other gains and losses that affect comparability, aggregating $62,479 and $152,522 for the nine months ended September 30, 2014 and 2013, respectively. Excluding these items, EBITDA was $116,020 and $111,543, respectively.

(b)
Includes discontinued operations and other gains and losses that affect comparability, aggregating to a loss of $20,016 and income of $209,332 for the nine months ended September 30, 2014 and 2013, respectively. Excluding these items, EBITDA was $43,161 and $41,916, respectively.

~~Net Income and EBITDA by Segment for the Nine Months Ended September 30, 2014 and 2013 - continued~~

Notes to preceding tabular information - continued:
(6)
The elements of "other" EBITDA are summarized below.
For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
Our share of Real Estate Fund:
Income before net realized/unrealized gains
$
6,676
$
5,737
Net realized gains on exited investments
31,663
2,046
Previously recorded unrealized gains on exited investments
(12,579)
-
Net unrealized gains on held investments
13,805
14,869
Carried interest
21,636
11,974
Total
61,201
34,626
The Mart and trade shows
61,038
54,232
555 California Street
35,566
32,371
India real estate ventures
4,574
4,708
LNR^(a)
-
20,443
Other investments
13,825
21,138
176,204
167,518
Corporate general and administrative expenses^(b)
(71,952)
(71,054)
Investment income and other, net^(b)
22,764
39,153
Net gain on sale of residential condominiums and a land parcel
13,205
1,139
Acquisition and transaction related costs^(c)
(12,972)
(6,769)
Impairment loss and loan loss reserve on investment in Suffolk Downs
(10,263)
-
Loss on sale of J.C. Penney common shares
-
(54,914)
Non-cash impairment loss on J.C. Penney common shares
-
(39,487)
Loss from the mark-to-market of J.C. Penney derivative position
-
(33,487)
Net gain on sale of marketable securities
-
31,741
Severance costs (primarily reduction-in-force at the Mart)
-
(4,154)
$
116,986
$
29,686
(a)
On April 19, 2013, LNR was sold for $1.053 billion.
(b)
The amounts in these captions (for this table only) exclude income/expense from the mark-to-market of our deferred compensation plan of $8,132 and $6,207 for the nine months ended September 30, 2014 and 2013, respectively.
(c)
The nine months ended September 30, 2014, includes $9,343 of transaction costs related to the spin-off of our strip shopping centers and malls.

~~EBITDA by Region~~

~~Below is a summary of the percentages of EBITDA by geographic region (excluding discontinued operations, other gains and losses that affect comparability and our Toys and Other Segments).~~

For the Nine Months
Ended September 30,
2014
2013
Region:
New York City metropolitan area
74%
73%
Washington, DC / Northern Virginia metropolitan area
23%
24%
Puerto Rico
2%
2%
Other geographies
1%
1%
100%
100%

~~Results of Operations – Nine Months Ended September 30, 2014 Compared to September 30, 2013~~

~~Revenues~~

Our revenues, which consist primarily of property rentals (including hotel and trade show revenues), tenant expense reimbursements, and fee and other income, were $1,997,702,000 for the nine months ended September 30, 2014, compared to $2,058,525,000 in the prior year’s nine months, a decrease of $60,823,000. This decrease was primarily attributable to income in the prior year of $59,599,000 pursuant to a settlement agreement with Stop & Shop, $34,026,000 related to the Cleveland Medical Mart development project and $23,992,000 from the deconsolidation of Independence Plaza. Excluding these items, revenues increased by $56,794,000 from the prior year’s nine months. Below are the details of the (decrease) increase by segment:

(Amounts in thousands)
Retail
(Decrease) increase due to:
Total
New York
Washington, DC
Properties
Other
Property rentals:
Acquisitions and other
$
11,916
$
15,152
$
(844)
$
(1,113)
$
(1,279)
Deconsolidation of Independence Plaza
(23,992)
(23,992)
-
-
-
Properties taken out of / placed into
service for redevelopment
(10,017)
(3,156)
(1,163)
676
(6,374)
Hotel Pennsylvania
1,220
1,220
-
-
-
Trade Shows
2,525
-
-
-
2,525
Same store operations
35,430
25,528
(2,567)
3,248
9,221
17,082
14,752
(4,574)
2,811
4,093
Tenant expense reimbursements:
Acquisitions and other
(55)
(29)
204
(36)
(194)
Properties placed into / taken out of
service for redevelopment
(2,103)
(1,603)
86
(69)
(517)
Same store operations
21,184
12,197
(125)
6,614
2,498
19,026
10,565
165
6,509
1,787
Cleveland Medical Mart development
project
(34,026)
⁽¹⁾
-
-
-
(34,026)
⁽¹⁾
Fee and other income:
BMS cleaning fees
14,547
14,956
-
-
(409)
⁽²⁾
Signage revenue
2,323
2,323
-
-
-
Management and leasing fees
(2,634)
(236)
(2,450)
(2)
54
Lease termination fees
(75,250)
(18,312)
⁽³⁾
2,536
(59,117)
⁽⁴⁾
(357)
Other income
(1,891)
(1,901)
1,316
(282)
(1,024)
(62,905)
(3,170)
1,402
(59,401)
(1,736)
Total (decrease) increase in revenues
$
(60,823)
$
22,147
$
(3,007)
$
(50,081)
$
(29,882)
(1)
Due to the completion of the project. This decrease in revenue is substantially offset by a decrease in development costs expensed in the period. See note (3) on page 60.
(2)
Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 60.
(3)
Primarily due to a $19,500 termination fee from a tenant at 1290 Avenue of the Americas recognized in the third quarter of 2013.
(4)
Results primarily from $59,599 of income recognized in the first quarter of 2013 pursuant to a settlement agreement with Stop & Shop.

~~Results of Operations – Nine Months Ended September 30, 2014 Compared to September 30, 2013 - continued~~

~~Expenses~~

Our expenses, which consist primarily of operating (including hotel and trade show expenses), depreciation and amortization and general and administrative expenses, were $1,383,618,000 for the nine months ended September 30, 2014, compared to $1,362,975,000 in the prior year’s nine months, an increase of $20,643,000. Excluding expenses of $20,000,000 for a non-cash impairment loss on the Springfield Town Center in 2014, $29,764,000 related to the Cleveland Medical Mart development project in 2013 and $25,899,000 from the deconsolidation of Independence Plaza, expenses increased by $56,306,000 from the prior year’s nine months. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)
Retail
Increase (decrease) due to:
Total
New York
Washington, DC
Properties
Other
Operating:
Acquisitions and other
$
(2,156)
$
(572)
$
8
$
(155)
$
(1,437)
Deconsolidation of Independence Plaza
(9,592)
(9,592)
-
-
-
Properties taken out of / placed into
service for redevelopment
(10,892)
(5,007)
(380)
(422)
(5,083)
Non-reimbursable expenses, including
bad debt reserves
(813)
1,300
-
(825)
(1,288)
Hotel Pennsylvania
1,458
1,458
-
-
-
Trade Shows
554
-
-
-
554
BMS expenses
8,566
8,975
-
-
(409)
⁽²⁾
Same store operations
29,388
18,090
3,278
7,241
779
16,513
14,652
2,906
5,839
(6,884)
Depreciation and amortization:
Acquisitions and other
6,368
6,489
-
(110)
(11)
Deconsolidation of Independence Plaza
(16,307)
(16,307)
-
-
-
Properties placed into / taken out of
service for redevelopment
25,806
20,856
(366)
7,544
(2,228)
Same store operations
(3,578)
(10,753)
3,907
2,224
1,044
12,289
285
3,541
9,658
(1,195)
General and administrative:
Mark-to-market of deferred
compensation plan liability⁽¹⁾
1,985
-
-
-
1,985
Severance costs (primarily reduction
in force at the Mart)
(4,154)
-
-
-
(4,154)
Same store operations
(2,429)
536
261
(1,895)
(1,331)
(4,598)
536
261
(1,895)
(3,500)
Cleveland Medical Mart development
project
(29,764)
⁽³⁾
-
-
-
(29,764)
⁽³⁾
Impairment losses, acquisition and
transaction related costs
26,203
-
-
20,000
⁽⁴⁾
6,203
Total increase (decrease) in expenses
$
20,643
$
15,473
$
6,708
$
33,602
$
(35,140)
(1)
This increase in expense is entirely offset by a corresponding increase in income from the mark-to-market of the deferred compensation plan assets, a component of “interest and other investment income (loss), net” on our consolidated statements of income.
(2)
Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 59.
(3)
Due to the completion of the project. This decrease in expense is offset by the decrease in development revenue in the period. See note (1) on page 59.
(4)
Represents a non-cash impairment loss on the Springfield Town Center in the first quarter of 2014.

~~Results of Operations – Nine Months Ended September 30, 2014 Compared to September 30, 2013 - continued~~

~~(Loss) Applicable to Toys~~

In the nine months ended September 30, 2014, we recognized a net loss of $74,162,000 from our investment in Toys, comprised of (i) $4,691,000 for our share of Toys’ net loss and a (ii) $75,196,000 non-cash impairment loss, partially offset by (iii) $5,725,000 of management fees earned and received.

In the nine months ended September 30, 2013, we recognized a net loss of $69,311,000 from our investment in Toys, comprised of (i) $3,778,000 for our share of Toys’ equity in earnings and (ii) $5,453,000 of management fees earned and received, partially offset by (iii) a $78,542,000 non-cash impairment loss.

~~(Loss) Income from Partially Owned Entities~~

~~Summarized below are the components of (loss) income from partially owned entities for the nine months ended September 30, 2014 and 2013.~~

Percentage
For the Nine Months Ended
Ownership at
September 30,
(Amounts in thousands)
September 30, 2014
2014
2013
Equity in Net (Loss) Income:
Alexander's
32.4%
$
20,471
$
17,802
India real estate ventures
4.1%-36.5%
(2,440)
(2,630)
Partially owned office buildings⁽¹⁾
Various
(1,387)
(1,586)
Other investments⁽²⁾
Various
(19,908)
(8,626)
LNR⁽³⁾
n/a
-
18,731
$
(3,264)
$
23,691
(1)
Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)
Includes interests in Independence Plaza, Monmouth Mall, 85 10th Avenue, Fashion Center Mall, 50-70 West 93rd Street and others. In the third quarter of 2014, we recognized a $10,263 non-cash impairment loss and loan loss reserve on our equity and debt investments in Suffolk Downs race track and adjacent land.
(3)
On April 19, 2013, LNR was sold for $1.053 billion.

6148

Results of Operations – ~~Nine~~Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013 - continued~~

~~Income from Real Estate Fund~~

~~Below are the components of the income from our Real Estate Fund for the nine months ended September 30,~~March 31, 2014 ~~and 2013.~~

(Amounts in thousands)
For the Nine Months Ended September 30,
2014
2013
Net investment income
$
10,860
$
6,287
Net realized gains on exited investments
126,653
8,184
Previously recorded unrealized gains on exited investments
(50,316)
-
Net unrealized gains on held investments
55,221
59,476
Income from Real Estate Fund
142,418
73,947
Less income attributable to noncontrolling interests
(81,217)
(39,321)
Income from Real Estate Fund attributable to Vornado Realty L.P. ⁽¹⁾
$
61,201
$
34,626
(1)
Excludes management, leasing and development fees of $2,208 and $2,446 for the nine months ended September 30, 2014 and 2013, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

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

~~Interest and other investment income (loss), net was incomeof $28,930,000in the nine months ended September 30, 2014, compared to a loss of $32,935,000 in the prior year’s nine months, an increase in income of $61,865,000. This increase resulted from:~~


~~(Amounts in thousands)~~
~~J.C. Penney derivative position mark-to-market loss in 2013~~		$	~~72,974~~
~~Lower interest on mezzanine loans receivable in the current year~~			~~(11,259)~~
~~Income from prepayment penalties in connection with the repayment of a mezzanine loan in 2013~~			~~(5,267)~~
~~Increase in the value of investments in our deferred compensation plan (offset by a corresponding~~
	~~increase in the liability for plan assets in general and administrative expenses)~~		~~1,925~~
~~Higher dividends and interest on marketable securities~~			~~1,160~~
~~Other, net~~			~~2,332~~
		$	~~61,865~~

~~Interest and Debt Expense~~

Interest and debt expense was $341,613,000 in the nine months ended September 30, 2014, compared to $360,679,000 in the prior year’s nine months, a decrease of $19,066,000. This decrease was primarily due to~~(i) $18,493,000of higher capitalized interest in the current year’s nine months and(ii) $18,318,000of interest savings from the restructuring of the Skyline properties mortgage loan in October 2013, partially offset by (iii)~~ ~~$5,589,000of defeasance cost in connection with the refinancing of 909 Third Avenue, (iv)~~ ~~$8,945,000 o~~f interest expense from the $600,000,000 financing of our 220 Central Park South development site in January 2014 and (v) $3,367,000 of interest expense from the issuance of $450,000,000 of senior unsecured notes in June 2014.

~~Net Gain (Loss) on Disposition of Wholly Owned and Partially Owned Assets~~

In the nine months ended September 30, 2014, we recognized a $13,205,000 net gain on disposition of wholly owned and partially owned assets, primarily from the sale of residential condominiums and a land parcel, compared to a $20,581,000 net loss in the prior year’s nine months, primarily from a $54,914,000 net loss on the sale of the J.C. Penney common shares, partially offset by a $31,741,000 net gain on the sale of a marketable security.

~~Income Tax Expense~~

Income tax expense was $8,358,000 in the nine months ended September 30, 2014, compared to $6,172,000 in the prior year’s nine months, an increase of $2,186,000. This increase was primarily attributable to higher income from our taxable REIT subsidiaries.

~~Results of Operations – Nine Months Ended September 30, 2014 Compared to September 30, 2013 - continued~~

~~Income from Discontinued Operations~~

We have reclassified the revenues and expenses of the properties that were sold or are currently held for sale to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all the periods presented in the accompanying financial statements. ~~The table below sets forth the combined results of assets related to discontinued operations for the~~ ~~nine months ended September 30, 2014 and 2013.~~

For the Nine Months Ended September 30,
(Amounts in thousands)
2014
2013
Total revenues
$
13,473
$
63,048
Total expenses
8,627
45,322
4,846
17,726
Net gain on sale of Beverly Connection
44,155
-
Net gain on sale of Green Acres Mall
-
202,275
Net gains on sales of other real estate
13,641
84,715
Impairment losses
(842)
(4,727)
Income from discontinued operations
$
61,800
$
299,989

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

Net income attributable to noncontrolling interests in consolidated subsidiaries was $85,239,000 in the nine months ended September 30, 2014, compared to $50,049,000 in the prior year’s nine months, an increase of $35,190,000. This increase resulted primarily from~~higher net income allocated to the noncontrolling interests, including noncontrolling interests of our Real Estate Fund.~~

~~Preferred Unit Distribution~~

Preferred unit distributions were $61,137,000 in the nine months ended September 30, 2014, compared to $63,585,000 in the prior year’s nine months, a decrease of $2,448,000. The decrease resulted from the redemption of the 6.75% Series F and Series H preferred units in February 2013 and the redemption of 6.875% Series D-15 cumulative redeemable preferred units in May 2013.

~~Preferred Unit Redemptions~~

~~In the nine months ended September 30, 2013, we~~ recognized $1,130,000 of expense in connection with preferred unit redemptions, comprised of $9,230,000 of expense from the redemption of the 6.75% Series F and Series H cumulative redeemable preferred units in February 2013, partially offset by $8,100,000 of income from ~~the redemption of all the 6.875% Series D-15 cumulative redeemable preferred units in May 2013.~~

~~Results of Operations – Nine Months Ended September 30, 2014 Compared to September 30, 2013~~ - continued

Same Store EBITDA

Same store EBITDA represents EBITDA from property level operations which are owned by us in both the current and prior year reporting periods. Same store EBITDA excludes segment-level overhead expenses, which are expenses that we do not consider to be property-level expenses, as well as other non-operating items. We also present same store EBITDA on cash basis (which excludes income from the straight-lining of rents, amortization of below-market leases, net of above-market leases 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 EBITDA 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 EBITDA to same store EBITDA for each of our segments for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~nine~~three months ended ~~September 30, 2013.~~March 31, 2014.

(Amounts in thousands)
New York
Washington, DC
Retail Properties
EBITDA for the nine months ended September 30, 2014
$
735,710
$
252,700
$
201,644
Add-back:
Non-property level overhead expenses included above
22,424
20,473
12,929
Less EBITDA from:
Acquisitions
(24,213)
-
-
Dispositions, including net gains on sale
-
(73)
(62,478)
Properties taken out-of-service for redevelopment
(17,295)
(2,872)
(3,131)
Other non-operating (income) expense
(6,378)
(4,109)
9,652
Same store EBITDA for the nine months ended September 30, 2014
$
710,248
$
266,119
$
158,616
EBITDA for the nine months ended September 30, 2013
$
704,290
$
257,964
$
515,313
Add-back:
Non-property level overhead expenses included above
21,888
20,212
14,824
Less EBITDA from:
Acquisitions
(239)
-
-
Dispositions, including net gains on sale
(7,522)
(117)
(302,266)
Properties taken out-of-service for redevelopment
(14,744)
(4,640)
(2,094)
Other non-operating income
(29,051)
(813)
(69,354)
Same store EBITDA for the nine months ended September 30, 2013
$
674,622
$
272,606
$
156,423
Increase (decrease) in same store EBITDA -
Nine months ended September 30, 2014 vs. September 30, 2013⁽¹⁾
$
35,626
$
(6,487)
$
2,193
% increase (decrease) in same store EBITDA
5.3%
(2.4%)
1.4%
(1)
See notes on following page.


(Amounts in thousands)			New York		Washington, DC

EBITDA for the three months ended March 31, 2015			$	248,945	$	83,257
	Add-back:
		Non-property level overhead expenses included above		12,044		5,704
	Less EBITDA from:
		Acquisitions		(7,930)		-
		Dispositions, including net gains on sale		35		(59)
		Properties taken out-of-service for redevelopment		(13,374)		(82)
		Other non-operating income		(4,008)		(129)
Same store EBITDA for the three months ended March 31, 2015			$	235,712	$	88,691

EBITDA for the three months ended March 31, 2014			$	233,798	$	84,087
	Add-back:
		Non-property level overhead expenses included above		7,792		7,447
	Less EBITDA from:
		Acquisitions		-		-
		Dispositions, including net gains on sale		(6,102)		2
		Properties taken out-of-service for redevelopment		(5,559)		(857)
		Other non-operating income		(1,532)		(1,804)
Same store EBITDA for the three months ended March 31, 2014			$	228,397	$	88,875

Increase (decrease) in same store EBITDA -
	Three months ended March 31, 2015 vs. March 31, 2014⁽¹⁾		$	7,315	$	(184)

% increase (decrease) in same store EBITDA				3.2%		(0.2%)

(1) See notes on following page.

6449

Results of Operations – ~~Nine~~Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~September 30, 2013~~March 31, 2014 - continued

Notes to preceding tabular information

New York:

The ~~$35,626,000~~$7,315,000 increase in New York same store EBITDA resulted primarily from increases in Office and Retail of ~~$23,755,000~~$2,261,000 and ~~$11,953,000,~~$6,470,000, respectively. The Office and Retail increases resulted primarily from higher (i) rental revenue of ~~$25,860,000~~$10,110,000 (primarily due to an increase in average ~~rent~~rents per square foot), and (ii) cleaning fees ~~and signage revenue~~ of ~~$4,000,000,~~$3,345,000, partially offset by (iii) higher operating expenses, net of reimbursements.

Washington, DC:

The ~~$6,487,000~~$184,000 decrease in Washington, DC same store EBITDA resulted primarily from ~~lower management and leasing fee income of $2,450,000 and~~(i) higher operating expenses ~~net~~ of ~~reimbursements.~~

~~Retail Properties:~~

~~The $2,193,000 increase~~$571,000, and (ii) lower EBITDA from investments in ~~Retail Properties same store EBITDA resulted primarily from an increase in~~partially owned entities of $585,000, partially offset by (iii) higher rental revenue of ~~$3,248,000, primarily due to an increase in average same store occupancy, partially offset by higher operating expenses, net of reimbursements.~~$815,000.

Reconciliation of Same Store EBITDA to Cash ~~basis~~Basis Same Store EBITDA

(Amounts in thousands)
New York
Washington, DC
Retail Properties
Same store EBITDA for the nine months ended September 30, 2014
$
710,248
$
266,119
$
158,616
Less: Adjustments for straight line rents, amortization of acquired
below-market leases, net, and other non-cash adjustments
(79,715)
(6,435)
(5,425)
Cash basis same store EBITDA for the nine months ended
September 30, 2014
$
630,533
$
259,684
$
153,191
Same store EBITDA for the nine months ended September 30, 2013
$
674,622
$
272,606
$
156,423
Less: Adjustments for straight line rents, amortization of acquired
below-market leases, net, and other non-cash adjustments
(87,603)
(8,281)
(6,387)
Cash basis same store EBITDA for the nine months ended
September 30, 2013
$
587,019
$
264,325
$
150,036
Increase (decrease) in Cash basis same store EBITDA -
Nine months ended September 30, 2014 vs. September 30, 2013
$
43,514
$
(4,641)
$
3,155
% increase (decrease) in Cash basis same store EBITDA
7.4%
(1.8%)
2.1%

(Amounts in thousands)		New York		Washington, DC

Same store EBITDA for the three months ended March 31, 2015		$	235,712	$	88,691
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(24,900)		(5,876)
Cash basis same store EBITDA for the three months ended
	March 31, 2015	$	210,812	$	82,815

Same store EBITDA for the three months ended March 31, 2014		$	228,397	$	88,875
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(28,557)		(1,194)
Cash basis same store EBITDA for the three months ended
	March 31, 2014	$	199,840	$	87,681

Increase (decrease) in cash basis same store EBITDA -
	Three months ended March 31, 2015 vs. March 31, 2014	$	10,972	$	(4,866)

% increase (decrease) in cash basis same store EBITDA			5.5%		(5.5%)

6550

SUPPLEMENTAL INFORMATION

Reconciliation of Net Income to EBITDA for the Three Months Ended ~~June 30,~~December 31, 2014

(Amounts in thousands)	(Amounts in thousands)	New York		Washington, DC		Retail Properties		(Amounts in thousands)	New York		Washington, DC
Net income attributable to Vornado Realty L.P. for the three
	months ended June 30, 2014	$	111,959	$	26,493	$	27,625
Net income attributable to Vornado Realty L.P. for the three months ended December 31, 2014								Net income attributable to Vornado Realty L.P. for the three months ended December 31, 2014	$	557,145	$	23,225
Interest and debt expense	Interest and debt expense		64,072		22,463		10,433	Interest and debt expense		61,809		21,979
Depreciation and amortization	Depreciation and amortization		74,007		35,806		15,803	Depreciation and amortization		83,199		37,486
Income tax expense	Income tax expense		1,291		132		319	Income tax expense		1,326		200
EBITDA for the three months ended June 30, 2014		$	251,329	$	84,894	$	54,180
EBITDA for the three months ended December 31, 2014								EBITDA for the three months ended December 31, 2014	$	703,479	$	82,890

Reconciliation of EBITDA to Same Store EBITDA – Three Months Ended ~~September 30, 2014~~March 31, 2015 compared to ~~June 30,~~December 31, 2014

(Amounts in thousands)
New York
Washington, DC
Retail Properties
EBITDA for the three months ended September 30, 2014
$
250,583
$
83,719
$
112,184
Add-back:
Non-property level overhead expenses included above
7,986
6,454
4,163
Less EBITDA from:
Acquisitions
(1,850)
-
-
Dispositions, including net gains on sale
-
(73)
(57,501)
Properties taken out-of-service for redevelopment
(5,897)
(994)
(1,638)
Other non-operating income
(3,078)
(421)
(4,217)
Same store EBITDA for the three months ended September 30, 2014
$
247,744
$
88,685
$
52,991
EBITDA for the three months ended June 30, 2014
$
251,329
$
84,894
$
54,180
Add-back:
Non-property level overhead expenses included above
6,646
6,572
4,110
Less EBITDA from:
Acquisitions
-
-
-
Dispositions, including net gains on sale
-
(2)
(2,120)
Properties taken out-of-service for redevelopment
(6,093)
(606)
(637)
Other non-operating income
(1,862)
(1,659)
(2,684)
Same store EBITDA for the three months ended June 30, 2014
$
250,020
$
89,199
$
52,849
(Decrease) increase in same store EBITDA -
Three months ended September 30, 2014 vs. June 30, 2014
$
(2,276)
$
(514)
$
142
% (decrease) increase in same store EBITDA
(0.9%)
(0.6%)
0.3%

(Amounts in thousands)			New York		Washington, DC

EBITDA for the three months ended March 31, 2015			$	248,945	$	83,257
	Add-back:
		Non-property level overhead expenses included above		12,044		5,704
	Less EBITDA from:
		Acquisitions		(6,329)		-
		Dispositions, including net gains on sale		35		(59)
		Properties taken out-of-service for redevelopment		(13,374)		(82)
		Other non-operating income		(4,008)		(129)
Same store EBITDA for the three months ended March 31, 2015			$	237,313	$	88,691

EBITDA for the three months ended December 31, 2014			$	703,479	$	82,890
	Add-back:
		Non-property level overhead expenses included above		6,055		6,866
	Less EBITDA from:
		Acquisitions		(4,264)		-
		Dispositions, including net gains on sale		(446,020)		(1,785)
		Properties taken out-of-service for redevelopment		(8,926)		(47)
		Other non-operating income		(2,467)		(1,336)
Same store EBITDA for the three months ended December 31, 2014			$	247,857	$	86,588

(Decrease) increase in same store EBITDA -
	Three months ended March 31, 2015 vs. December 31, 2014		$	(10,544)	$	2,103

% (decrease) increase in same store EBITDA				(4.3%)		2.4%

6651

SUPPLEMENTAL INFORMATION – CONTINUED

Reconciliation of Same Store EBITDA to Cash ~~basis~~Basis Same Store EBITDA – Three Months Ended ~~September 30, 2014~~March 31, 2015 Compared to ~~June 30,~~December 31, 2014

(Amounts in thousands)	(Amounts in thousands)	New York		Washington, DC		Retail Properties		(Amounts in thousands)	New York		Washington, DC

Same store EBITDA for the three months ended September 30, 2014		$	247,744	$	88,685	$	52,991
Same store EBITDA for the three months ended March 31, 2015								Same store EBITDA for the three months ended March 31, 2015	$	237,313	$	88,691
Less: Adjustments for straight line rents, amortization of acquired	Less: Adjustments for straight line rents, amortization of acquired							Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(31,139)		(2,771)		(2,019)	below-market leases, net, and other non-cash adjustments		(25,255)		(5,876)
Cash basis same store EBITDA for the three months ended	Cash basis same store EBITDA for the three months ended							Cash basis same store EBITDA for the three months ended
	September 30, 2014	$	216,605	$	85,914	$	50,972	March 31, 2015	$	212,058	$	82,815

Same store EBITDA for the three months ended June 30, 2014		$	250,020	$	89,199	$	52,849
Same store EBITDA for the three months ended December 31, 2014								Same store EBITDA for the three months ended December 31, 2014	$	247,857	$	86,588
Less: Adjustments for straight line rents, amortization of acquired	Less: Adjustments for straight line rents, amortization of acquired							Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(30,790)		(2,462)		(1,758)	below-market leases, net, and other non-cash adjustments		(27,225)		(3,142)
Cash basis same store EBITDA for the three months ended	Cash basis same store EBITDA for the three months ended							Cash basis same store EBITDA for the three months ended
	June 30, 2014	$	219,230	$	86,737	$	51,091	December 31, 2014	$	220,632	$	83,446

Decrease in Cash basis same store EBITDA -
Decrease in cash basis same store EBITDA -								Decrease in cash basis same store EBITDA -
	Three months ended September 30, 2014 vs. June 30, 2014	$	(2,625)	$	(823)	$	(119)	Three months ended March 31, 2015 vs. December 31, 2014	$	(8,574)	$	(631)

% decrease in Cash basis same store EBITDA			(1.2%)		(0.9%)		(0.2%)
% decrease in cash basis same store EBITDA								% decrease in cash basis same store EBITDA		(3.9%)		(0.8%)

6752

Liquidity and Capital Resources

Property rental income 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, leasing commissions, distributions to unitholders, as well as acquisition and development costs. Other sources of liquidity to fund cash requirements include proceeds from debt financings, including mortgage loans, senior unsecured borrowings, and our revolving credit facilities; proceeds from the issuance of equity securities; and asset sales.

We anticipate that cash flow from continuing operations over the next twelve months will be adequate to fund our business operations, cash distributions to unitholders, debt amortization and recurring capital expenditures. Capital requirements for development expenditures and acquisitions may require funding from borrowings and/or equity offerings.

We may from time to time purchase or retire 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.

Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2014~~March 31, 2015

Our cash and cash equivalents were ~~$1,683,142,000~~$1,067,568,000 at ~~September 30, 2014,~~March 31, 2015, a ~~$1,099,852,000 increase~~$130,909,000 decrease over the balance at December 31, ~~2013.~~2014. Our consolidated outstanding debt was ~~$11,153,337,000~~$9,564,125,000 at ~~September 30, 2014,~~March 31, 2015, a ~~$1,174,619,000 increase~~$46,199,000 decrease over the balance at December 31, ~~2013.~~2014. As of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013, $88,138,000~~2014, $400,000,000 and ~~$295,870,000,~~$0, respectively, was outstanding under our revolving credit facilities. During the remainder of 2014 and 2015, $0$229,132,000 and ~~$744,248,000,~~$1,410,209,000, respectively, of our outstanding debt matures; we may refinance this maturing debt as it comes due or choose to repay it.

Cash flows provided by operating activities of ~~$828,569,000~~$194,516,000 was comprised of (i) net income of ~~$433,040,000,~~$125,246,000, (ii) ~~$264,302,000~~return of capital from real estate fund investments of $72,208,000, (iii) $55,668,000 of non-cash adjustments, which include depreciation and amortization expense, the effect of straight-lining of rental income, ~~equity in net~~ loss offrom partially owned entities and impairment losses on real estate, ~~(iii) proceeds from Real Estate Fund investments of $215,676,000~~ and (iv) distributions of income from partially owned entities of ~~$42,164,000,~~$15,874,000, partially offset by (v) the net change in operating assets and liabilities of ~~$126,613,000, including $3,392,000 related to Real Estate Fund investments.~~$74,480,000 (including the acquisition of real estate fund investments of $95,022,000).

Net cash ~~used in~~provided by investing activities of ~~$197,139,000~~$149,871,000 was comprised of (i) $368,571,000 of development costs and construction in progress, (ii) $171,660,000 of additions to real estate, (iii) $95,546,000 of acquisitions of real estate and other, (iv) $91,697,000 of investments in partially owned entities, and (v) $11,380,000 of investment in mortgage and mezzanine loans receivable and other, partially offset by (vi) $335,489,000$334,725,000 of proceeds from sales of real estate and related investments, ~~(vii) $101,592,000 of changes in restricted cash, (viii) $96,504,000~~(ii) $16,763,000 of proceeds from repayments of mortgage and mezzanine loans receivable and other, ~~and (ix) $8,130,000~~(iii) $13,409,000 of capital distributions from partially owned entities, and (iv) $1,282,000 of changes in restricted cash, partially offset by (v) $88,052,000 of development costs and construction in progress, (vi) $54,466,000 of additions to real estate, (vii) $49,878,000 of acquisitions of real estate and other, and (viii) $23,912,000 of investments in partially owned entities.

Net cash ~~provided by~~used in financing activities of ~~$468,422,000~~$475,296,000 was comprised of (i) $1,713,285,000 of proceeds from borrowings, (ii) $13,738,000 of proceeds received from the exercise of Vornado stock options, and (iii) $5,297,000 of contributions from noncontrolling interests in consolidated subsidiaries, partially offset by (iv) $410,724,000 of distributions to Vornado, (v) $343,354,000$907,431,000 for the repayments of borrowings, ~~(vi) $208,773,000~~(ii) $225,000,000 of distributions in connection with the spin-off of Urban Edge Properties, (iii) $118,447,000 of distributions to Vornado, (iv) $60,287,000 of distributions to redeemable security holders and noncontrolling interests, ~~(vii) purchase of marketable securities in connection with the defeasance of mortgage notes payable of $198,884,000, (viii) $61,102,000~~(v) $19,484,000 of distributions to preferred unitholders, ~~(ix) $40,424,000~~(vi) $5,076,000 of debt issuance ~~costs~~cost, and ~~(x) $637,000~~(vii) $2,939,000 for the repurchase of Class A units related to stock compensation agreements and/or related tax ~~withholdings.~~withholdings, partially offset by (viii) $800,000,000 of proceeds from borrowings, (ix) $51,350,000 of contributions from noncontrolling interests in consolidated subsidiaries, and (x) $12,018,000 of proceeds received from the exercise of Vornado stock options.

Capital Expenditures

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.

6853

Liquidity and Capital Resources – continued

Capital Expenditures - continued

Below is a summary of capital expenditures, leasing commissions and a reconciliation of total expenditures on an accrual basis to the cash expended in the ~~nine~~three months ended ~~September 30, 2014.~~March 31, 2015.

										Retail
(Amounts in thousands)	(Amounts in thousands)			Total		New York		Washington, DC		Properties		Other		(Amounts in thousands)		Total		New York		Washington, DC		Other
Expenditures to maintain assets	Expenditures to maintain assets			$	61,235	$	33,464	$	9,815	$	4,848	$	13,108	Expenditures to maintain assets		$	20,935	$	12,810	$	1,986	$	6,139
Tenant improvements	Tenant improvements				135,999		102,411		16,280		390		16,918	Tenant improvements			50,900		9,762		37,011		4,127
Leasing commissions	Leasing commissions				59,322		50,173		3,555		145		5,449	Leasing commissions			8,281		3,744		3,748		789
Non-recurring capital expenditures	Non-recurring capital expenditures				67,016		25,038		23,428		8,456		10,094	Non-recurring capital expenditures			35,987		19,774		16,129		84
Total capital expenditures and leasing
	commissions (accrual basis)				323,572		211,086		53,078		13,839		45,569
Total capital expenditures and leasing commissions (accrual basis)														Total capital expenditures and leasing commissions (accrual basis)			116,103		46,090		58,874		11,139
Adjustments to reconcile to cash basis:	Adjustments to reconcile to cash basis:													Adjustments to reconcile to cash basis:
		Expenditures in the current year													Expenditures in the current year applicable to prior periods		40,209		26,220		6,924		7,065
			applicable to prior periods		110,934		40,117		48,294		3,873		18,650		Expenditures to be made in future periods for the current period		(88,136)		(28,594)		(54,612)		(4,930)
		Expenditures to be made in future
			periods for the current period		(209,157)		(132,814)		(35,664)		(8,766)		(31,913)
Total capital expenditures and leasing
	commissions (cash basis)			$	225,349	$	118,389	$	65,708	$	8,946	$	32,306
Total capital expenditures and leasing commissions (cash basis)														Total capital expenditures and leasing commissions (cash basis)		$	68,176	$	43,716	$	11,186	$	13,274

Tenant improvements and leasing commissions:	Tenant improvements and leasing commissions:													Tenant improvements and leasing commissions:
	Per square foot per annum			$	5.75	$	6.80	$	5.09	$	1.66	$	n/a	Per square foot per annum		$	8.04	$	8.95	$	7.60	$	n/a
	Percentage of initial rent				10.6%		9.5%		12.9%		8.3%		n/a	Percentage of initial rent			15.2%		10.8%		21.7%		n/a

Development and Redevelopment Expenditures

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.

On March 2, 2014, we entered into an agreement to transfer upon completion, the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to Pennsylvania Real Estate Investment Trust (NYSE: PEI) (“PREIT’) in exchange for $465,000,000 comprised of $340,000,000 of cash and $125,000,000 of PREIT operating partnership units. The incremental development cost of this project was approximately $250,000,000, of which $202,000,000 has been expended as of September 30, 2014. The redevelopment was completed in October 2014 and the closing will be no later than March 31, 2015.

We are in the process of redeveloping ~~and substantially expanding~~ the ~~existing~~ retail space at the Marriott Marquis Times Square Hotel, including converting the below grade parking garage into retail, which is expected to be completed by the end of 2015. The retail space includes 20,000 square feet on grade and ~~creating~~24,000 square feet below grade. As part of the redevelopment, we have completed the construction of a six-story, 300 foot wide block front, dynamic LED sign, ~~all of~~ which ~~is expected to be completed by~~was lit for the ~~end of~~first time in November 2014. ~~Upon completion of the redevelopment, the retail space will include 20,000 square feet on grade and 20,000 square feet below grade.~~ The incremental development cost of this project is approximately ~~$210,000,000,~~$220,000,000, of which ~~$136,000,000~~$179,000,000 has been expended as of ~~September 30, 2014.~~March 31, 2015.

We are constructing a residential condominium tower containing 472,000 zoning square feet on our 220 Central Park South development site. The incremental development cost of this project is approximately $1.0 billion, of which ~~$106,000,000~~$130,000,000 has been expended as of ~~September 30, 2014.~~March 31, 2015. In January 2014, we completed a $600,000,000 loan secured by this site. On August 26, 2014, we obtained a standby commitment for up to $500,000,000 of five-year mezzanine loan financing to fund a portion of the development expenditures at 220 Central Park South.

We are developing The Bartlett, a 699-unit residential project in Pentagon City, which is expected to be completed in 2016. The project will include a 37,000 square foot Whole Foods Market at the base of the building. The incremental development cost of this project is approximately $250,000,000, of which ~~$29,000,000~~$67,000,000 has been expended as of ~~September 30, 2014.~~March 31, 2015.

We plan to redevelop an existing 165,000 square foot office building in Crystal City (2221 S. Clark Street), which we have leased to WeWork, into approximately 250 rental residential units. The incremental development cost of this project is approximately $40,000,000. The redevelopment is expected to be completed in the second half of 2015.

We have substantially completed the repositioning of 280 Park Avenue (50% owned). Our share of the incremental development costs of this project is approximately $63,000,000, of which $59,000,000 was expended as of March 31, 2015.

We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan, including the Penn Plaza District, and in Washington, including Crystal City, Rosslyn and Pentagon City.

There can be no assurance that any of our development or redevelopment projects will commence, or if commenced, be completed, or completed on schedule or within budget.

6954

Liquidity and Capital Resources – continued

Development and Redevelopment Expenditures - continued

Below is a summary of development and redevelopment expenditures incurred in the ~~nine~~three months ended ~~September 30, 2014.~~March 31, 2015. These expenditures include interest of ~~$46,517,000,~~$11,110,000, payroll of ~~$5,460,000~~$1,026,000 and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating ~~$46,799,000,~~$29,134,000, that were capitalized in connection with the development and redevelopment of these projects.

								Retail
(Amounts in thousands)	(Amounts in thousands)	Total		New York		Washington, DC		Properties		Other		(Amounts in thousands)	Total		New York		Washington, DC		Other
220 Central Park South												220 Central Park South	$	20,277	$	-	$	-	$	20,277
Springfield Town Center	Springfield Town Center	$	92,696	$	-	$	-	$	92,696	$	-	Springfield Town Center		14,478		-		-		14,478
The Bartlett												The Bartlett		13,791		-		13,791		-
330 West 34th Street												330 West 34th Street		11,902		11,902		-		-
Marriott Marquis Times Square - retail and signage	Marriott Marquis Times Square - retail and signage		71,566		71,566		-		-		-	Marriott Marquis Times Square - retail and signage		10,651		10,651		-		-
220 Central Park South			54,543		-		-		-		54,543
330 West 34th Street			32,014		32,014		-		-		-
The Bartlett			20,300		-		20,300		-		-
608 Fifth Avenue			18,127		18,127		-		-		-
90 Park Avenue												90 Park Avenue		5,173		5,173		-		-
Wayne Towne Center	Wayne Towne Center		16,109				-		16,109		-	Wayne Towne Center		2,362		-		-		2,362
7 West 34th Street			9,454		9,454		-		-		-
90 Park Avenue			6,293		6,293		-		-		-
Penn Plaza												Penn Plaza		1,163		1,163		-		-
2221 South Clark Street												2221 South Clark Street		1,127		-		1,127		-
Other	Other		47,469		13,347		23,443		5,856		4,823	Other		7,128		2,254		4,628		246
		$	368,571	$	150,801	$	43,743	$	114,661	$	59,366		$	88,052	$	31,143	$	19,546	$	37,363

In addition to the development and redevelopment projects above, we are in the process of repositioning and re-tenanting 280 Park Avenue (49.5% owned). Our share of the incremental development cost of this project is approximately $62,000,000, of which $34,700,000 was expended prior to 2014, and $16,900,000~~has been expended in 2014.~~

We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan, including the Hotel Pennsylvania and in Washington, including 1900 Crystal Drive, Rosslyn and Pentagon City.

~~There can be no assurance that any of our development or redevelopment projects will commence, or if commenced, be completed, or completed on schedule or within budget.~~

~~Liquidity and Capital Resources – continued~~

Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2013~~March 31, 2014

Our cash and cash equivalents were ~~$872,323,000~~$1,156,727,000 at ~~September 30, 2013, an $87,996,000 decrease~~March 31, 2014, a $573,437,000 increase over the balance at December 31, ~~2012. This decrease~~2013. The increase is primarily due to cash flows from operating, financing, ~~activities, partially offset by cash flows from operating~~ and investing activities, as discussed below.

Cash flows provided by operating activities of ~~$789,592,000~~$309,131,000 was comprised of (i) net income of ~~$603,499,000,~~$98,156,000, (ii) ~~$188,740,000~~$135,433,000 of non-cash adjustments, which include depreciation and amortization expense, the effect of straight-lining of rental income, ~~equity in net~~ income offrom partially owned entities and ~~net gains~~impairment losses on ~~sale of~~ real estate, (iii) ~~proceeds from Real Estate Fund~~the net change in operating assets and liabilities of $62,576,000, including $123,000 related to real estate fund investments, ~~of $56,664,000,~~ and (iv) distributions of income from partially owned entities of ~~$34,350,000, partially offset by (v) the net change in operating assets and liabilities of $93,661,000, including $32,392,000 related to Real Estate Fund investments.~~$12,966,000.

Net cash provided by investing activities of ~~$1,020,400,000~~$82,761,000 was comprised of (i) ~~$734,427,000~~$120,270,000 of proceeds from sales of real estate and related investments, (ii) $378,676,000 of proceeds from the sales of marketable securities, (iii) $287,944,000 of capital distributions from partially owned entities, (iv) $240,474,000 from the sale of LNR, (v) $101,150,000 from the return of the J.C. Penney derivative collateral, (vi) $49,452,000$69,347,000 of proceeds from repayments of mortgage and mezzanine loans receivable and other, ~~and (vii) $21,883,000~~(iii) $52,256,000 of changes in restricted cash, and (iv) $1,277,000 of capital distributions from partially owned entities, partially offset by (viii) $212,624,000 of investments in partially owned entities, (ix) $186,079,000 for the funding of the J.C. Penney derivative collateral and settlement of derivative, (x) $170,424,000 of additions to real estate, (xi) $149,010,000(v) $90,653,000 of development costs and construction in progress, ~~(xii) $75,079,000~~(vi) $53,103,000 of ~~acquisitions of~~additions to real estate, and ~~other, and (xiii) $390,000~~(vii) $16,633,000 of ~~investment~~investments in ~~mortgage and mezzanine loans receivable and other.~~partially owned entities.

Net cash ~~used in~~provided by financing activities of ~~$1,897,988,000~~$181,545,000 was comprised of (i) ~~$2,851,420,000~~$600,000,000 of proceeds from borrowings, and (ii) $3,676,000 of proceeds received from the exercise of Vornado stock options, partially offset by (iii) $233,198,000 for the repayments of borrowings, ~~(ii) $409,332,000~~(iv) $136,761,000 of distributions to Vornado, ~~(iii) $299,400,000 for purchases~~(v) $20,752,000 of ~~outstanding~~debt issuance costs, (vi) $20,368,000 of distributions to preferred ~~units, (iv) $200,667,000~~unitholders, (vii) $10,474,000 of distributions to redeemable security holders and noncontrolling interests, ~~(v) $62,820,000 of distributions to preferred unitholders, (vi) $9,982,000 of debt issuance costs,~~ and ~~(vii) $332,000~~(viii) $578,000 for the repurchase of Class A units related to stock compensation agreements and/or related tax withholdings, partially offset by (viii) $1,600,357,000 of proceeds from borrowings, (ix) $290,536,000 of proceeds from the issuance of preferred units, (x) $40,015,000 of contributions from noncontrolling interests, and (xi) $5,057,000 of proceeds received from the exercise of Vornado stock options.withholdings.

7155

Liquidity and Capital Resources – continued

Capital Expenditures in the ~~nine~~three months ended ~~September 30, 2013~~March 31, 2014

										Retail
(Amounts in thousands)	(Amounts in thousands)			Total		New York		Washington, DC		Properties		Other		(Amounts in thousands)		Total		New York		Washington, DC		Other
Expenditures to maintain assets	Expenditures to maintain assets			$	39,322	$	20,665	$	9,244	$	3,160	$	6,253	Expenditures to maintain assets		$	12,208	$	8,931	$	1,521	$	1,756
Tenant improvements	Tenant improvements				117,088		67,476		32,087		11,075		6,450	Tenant improvements			57,964		40,311		11,680		5,973
Leasing commissions	Leasing commissions				42,341		31,324		8,030		1,686		1,301	Leasing commissions			18,095		14,018		2,322		1,755
Non-recurring capital expenditures	Non-recurring capital expenditures				6,454		6,183		-		-		271	Non-recurring capital expenditures			84		84		-		-
Total capital expenditures and leasing
	commissions (accrual basis)				205,205		125,648		49,361		15,921		14,275
Total capital expenditures and leasing commissions (accrual basis)														Total capital expenditures and leasing commissions (accrual basis)			88,351		63,344		15,523		9,484
Adjustments to reconcile to cash basis:	Adjustments to reconcile to cash basis:													Adjustments to reconcile to cash basis:
		Expenditures in the current year													Expenditures in the current year applicable to prior periods		40,186		18,716		12,186		9,284
			applicable to prior periods		111,984		43,536		22,228		4,577		41,643		Expenditures to be made in future periods for the current period		(56,023)		(40,184)		(12,807)		(3,032)
		Expenditures to be made in future
			periods for the current period		(116,655)		(68,813)		(34,191)		(12,556)		(1,095)
Total capital expenditures and leasing
	commissions (cash basis)			$	200,534	$	100,371	$	37,398	$	7,942	$	54,823
Total capital expenditures and leasing commissions (cash basis)														Total capital expenditures and leasing commissions (cash basis)		$	72,514	$	41,876	$	14,902	$	15,736

Tenant improvements and leasing commissions:	Tenant improvements and leasing commissions:													Tenant improvements and leasing commissions:
	Per square foot per annum			$	4.19	$	5.54	$	4.71	$	1.52	$	n/a	Per square foot per annum		$	5.95	$	6.19	$	5.23	$	n/a
	Percentage of initial rent				9.7%		8.0%		11.8%		7.9%		n/a	Percentage of initial rent			10.4%		9.8%		12.3%		n/a

Development and Redevelopment Expenditures in the ~~nine~~three months ended ~~September 30, 2013~~March 31, 2014

Below is a summary of development and redevelopment expenditures incurred in the ~~nine~~three months ended ~~September 30, 2013.~~March 31, 2014. These expenditures include interest of ~~$28,024,000,~~$13,622,000, payroll of ~~$2,887,000~~$1,770,000 and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating ~~$18,293,000,~~$14,700,000, that were capitalized in connection with the development and redevelopment of these projects.

								Retail
(Amounts in thousands)	(Amounts in thousands)	Total		New York		Washington, DC		Properties		Other		(Amounts in thousands)	Total		New York		Washington, DC		Other
Springfield Town Center	Springfield Town Center	$	39,810	$	-	$	-	$	39,810	$	-	Springfield Town Center	$	25,172	$	-	$	-	$	25,172
Marriott Marquis Times Square - retail and signage												Marriott Marquis Times Square - retail and signage		12,822		12,822		-		-
330 West 34th Street												330 West 34th Street		9,541		9,541		-		-
220 Central Park South	220 Central Park South		23,946		-		-		-		23,946	220 Central Park South		9,034		-		-		9,034
Marriott Marquis Times Square - retail and signage			13,920		13,920		-		-		-
1290 Avenue of the Americas			11,374		11,374		-		-		-
608 Fifth Avenue												608 Fifth Avenue		7,248		7,248		-		-
The Bartlett	The Bartlett		5,054		-		5,054		-		-	The Bartlett		4,517		-		4,517		-
LED Signage			4,589		4,589		-		-		-
1540 Broadway			4,267		4,267		-		-		-
1851 South Bell Street (1900 Crystal Drive)			3,739		-		3,739		-		-
7 West 34th Street												7 West 34th Street		3,044		3,044		-		-
Wayne Towne Center												Wayne Towne Center		2,419		-		-		2,419
Other	Other		42,311		7,949		15,039		15,910		3,413	Other		16,856		6,526		7,068		3,262
		$	149,010	$	42,099	$	23,832	$	55,720	$	27,359		$	90,653	$	39,181	$	11,585	$	39,887

7256

Liquidity and Capital Resources – continued

Other Commitments and Contingencies

As of ~~September 30, 2014,~~March 31, 2015, we expect to fund additional capital to certain of our partially owned entities aggregating approximately ~~$111,000,000.~~$78,000,000.

7357

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 unit amounts)	(Amounts in thousands, except per unit amounts)		2014					2013			(Amounts in thousands, except per unit amounts)		2015					2014
					Weighted	Effect of 1%				Weighted					Weighted	Effect of 1%				Weighted
			September 30,		Average	Change In		December 31,		Average			March 31,		Average	Change In		December 31,		Average
Consolidated debt:	Consolidated debt:		Balance		Interest Rate	Base Rates		Balance		Interest Rate	Consolidated debt:		Balance		Interest Rate	Base Rates		Balance		Interest Rate
	Variable rate		$	1,637,394	2.23%	$	16,374	$	1,064,730	2.01%	Variable rate		$	2,162,869	2.32%	$	21,629	$	1,763,769	2.20%
	Fixed rate			9,515,943	4.55%		-		8,913,988	4.73%	Fixed rate			7,401,256	4.37%		-		7,846,555	4.36%
			$	11,153,337	4.21%		16,374	$	9,978,718	4.44%			$	9,564,125	3.91%		21,629	$	9,610,324	3.97%
Pro rata share of debt of non-consolidated	Pro rata share of debt of non-consolidated										Pro rata share of debt of non-consolidated
	entities (non-recourse):										entities (non-recourse):
	Variable rate – excluding Toys		$	303,145	1.75%		3,031	$	196,240	2.09%	Variable rate – excluding Toys		$	318,935	1.74%		3,189	$	319,387	1.72%
	Variable rate – Toys			1,075,239	5.56%		10,752		1,179,001	5.45%	Variable rate – Toys			892,325	8.04%		8,923		1,199,835	6.47%
	Fixed rate (including $683,616 and										Fixed rate (including $657,540 and
		$682,484 of Toys debt in 2014 and 2013)		2,778,274	6.47%		-		2,814,162	6.46%		$674,443 of Toys debt in 2015 and 2014)		2,745,890	6.47%		-		2,754,410	6.45%
			$	4,156,658	5.89%		13,783	$	4,189,403	5.97%			$	3,957,150	6.44%		12,112	$	4,273,632	6.10%
Total change in annual net income	Total change in annual net income					$	30,157				Total change in annual net income					$	33,741
Per diluted unit	Per diluted unit					$	0.15				Per diluted unit					$	0.17

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, 2014,~~March 31, 2015, we have ~~an interest rate cap with a notional amount of $60,000,000 that caps LIBOR at a rate of 5.00%. In addition, we have an~~one interest rate swap on a ~~$423,000,000~~$421,000,000 mortgage loan that swapped the rate from LIBOR plus ~~2.00% (2.15%~~1.65% (1.82% at ~~September 30, 2014)~~March 31, 2015) to a fixed rate of ~~5.13% for the remaining four-year term of the loan.~~4.78% through March 2018.

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 rate at which similar loans could be made currently to borrowers with similar credit ratings, for the remaining term of such debt. As of ~~September 30, 2014,~~March 31, 2015, the estimated fair value of our consolidated debt was ~~$11,120,000,000.~~

74$9,632,000,000.

Item 4. Controls and Procedures

Disclosure Controls and Procedures: Vornado’s management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s 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 30, 2014,~~March 31, 2015, such disclosure controls and procedures were effective.

Internal Control Over Financial Reporting: There have not been any changes in the Company’s 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, the Company’s internal control over financial reporting.

7558

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

There were no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K, as amended, for the year ended December 31, ~~2013.~~2014.

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

During the ~~third~~ quarter ~~of 2014,~~ended March 31, 2015, we issued ~~28,177~~546,351 Class A ~~units~~Units to Vornado upon conversion, surrender or exchange of equity awards issued pursuant to Vornado’s omnibus share plans and consideration received included $11,680,953 in ~~connection with Vornado’s issuance of 28,177 common shares upon the redemption of Class A units held by third parties. The Class A units~~cash proceeds. Such Units were issued in reliance on ~~the~~an exemption from registration under ~~the~~ 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.

7659

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: ~~November 7, 2014~~May 8, 2015	By:	/s/ Stephen W. Theriot
		Stephen W. Theriot, Chief Financial Officer of Vornado Realty Trust, sole General Partner of Vornado Realty L.P. (duly authorized officer and principal financial and accounting officer)

7760

	EXHIBIT INDEX

Exhibit No.


	~~10.52~~10.31	**	-	~~Employment agreement between~~Form of Vornado Realty Trust ~~and Michael J. Franco dated~~2015 Outperformance Plan Award Agreement. Incorporated	*
				~~January 10, 2014. Incorporated~~ by reference to Exhibit ~~10.52~~99.1 to Vornado Realty Trust’s Current Report on Form 8-K
				~~Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File~~(File No. 001-11954),
				filed on ~~May 5, 2014~~January 21, 2015.

	~~10.53~~10.32	**	-	Form of Vornado Realty Trust ~~2014~~ Outperformance Plan Award ~~Agreement. Incorporated~~Agreement Amendment.	*
				Incorporated by reference to Exhibit ~~10.53~~99.2 to Vornado Realty Trust’s ~~Quarterly~~Current Report on ~~Form 10-Q~~
				~~for the quarter ended March 31, 2014~~Form 8-K (File No. 001-11954), filed on ~~May 5, 2014~~January 21, 2015.

	~~10.54~~10.33	**	-	~~Amended~~Letter Agreement between Vornado Realty Trust and ~~Restated Revolving Credit Agreement~~Wendy A. Silverstein, dated ~~as of September 30, 2014, by and~~	*
				~~among~~March 6, 2015. Incorporated by reference to Exhibit 99.1 to Vornado Realty ~~L.P. as borrower, Vornado Realty Trust as General Partner, the~~Trust’s
				~~Banks listed~~Current Report on ~~the signature pages thereof, and JPMorgan Chase Bank N.A. as~~Form 8-K (File No. 001-11954), filed on March 10, 2015.
				~~Administrative Agent for the Banks.~~
	10.34	**	-	Waiver and Release between Vornado Realty Trust and Wendy A. Silverstein, dated	*
				March 6, 2015. Incorporated by reference to Exhibit ~~10.54~~99.2 to Vornado Realty Trust’s ~~Quarterly~~
				Current Report on Form ~~10-Q for the quarter ended September 30,~~ ~~2014~~8-K (File No. 001-11954), filed on ~~November 3, 2014~~March 10, 2015.

	15.1		-	Letter regarding Unaudited Interim Financial Information

	31.1		-	Rule 13a-14 (a) Certification of the Chief Executive Officer

	31.2		-	Rule 13a-14 (a) Certification of the Chief Financial Officer

	32.1		-	Section 1350 Certification of the Chief Executive Officer

	32.2		-	Section 1350 Certification of the Chief Financial Officer

	101.INS		-	XBRL Instance Document

	101.SCH		-	XBRL Taxonomy Extension Schema

	101.CAL		-	XBRL Taxonomy Extension Calculation Linkbase

	101.DEF		-	XBRL Taxonomy Extension Definition Linkbase

	101.LAB		-	XBRL Taxonomy Extension Label Linkbase

	101.PRE		-	XBRL Taxonomy Extension Presentation Linkbase



		*		Incorporated by ~~reference~~reference.
		**		Management contract or compensation ~~agreement~~agreement.

7861

			Percentage		Interest	100% of
			Ownership at		Rate at	Partially Owned Entities’ Debt at
(Amounts in thousands)			September 30,		September 30,	September 30,		December 31,
			2014	Maturity	2014	2014		2013
Toys:
	Notes, loans and mortgages payable		32.7%	2014-2021	6.72%	$	5,385,461	$	5,702,247

Alexander's:
	Mortgages payable		32.4%	2015-2021	2.58%	$	1,033,541	$	1,049,959

India real estate ventures:
	TCG Urban Infrastructure Holdings mortgages
		payable	25.0%	2014-2026	13.24%	$	190,453	$	199,021

Partially owned office buildings⁽¹⁾			Various	2014-2023	5.71%	$	3,657,837	$	3,622,759

Other⁽²⁾			Various	2014-2025	4.56%	$	1,696,974	$	1,709,509


(1)		Includes 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue and others.
(2)		Includes Independence Plaza, Monmouth Mall, Fashion Center Mall, 50-70 West 93rd Street and others.

	Assets Related to				Liabilities Related to
(Amounts in thousands)	Discontinued Operations as of				Discontinued Operations as of
	September 30,		December 31,		September 30,		December 31,
	2014		2013		2014		2013
Beverly Connection	$	-	$	208,458	$	-	$	-
Broadway Mall		-		106,164		-		13,950
Other		-		1,597		-		-
Total	$	-	$	316,219	$	-	$	13,950

	For the Three Months				For the Nine Months
(Amounts in thousands)	Ended September 30,				Ended September 30,
	2014		2013		2014		2013
Total revenues	$	836	$	17,354	$	13,473	$	63,048
Total expenses		501		11,352		8,627		45,322
		335		6,002		4,846		17,726
Net gain on sale of Beverly Connection		44,155		-		44,155		-
Net gain on sale of Green Acres Mall		-		-		-		202,275
Net gains on sales of other real estate		13,641		18,996		13,641		84,715
Impairment losses		-		(720)		(842)		(4,727)
Income from discontinued operations	$	58,131	$	24,278	$	61,800	$	299,989

(Amounts in thousands)
2015	$	40,071
2016		38,455
2017		34,890
2018		33,381
2019		30,105

(Amounts in thousands)
2015	$	23,160
2016		20,195
2017		16,813
2018		12,446
2019		11,539


	Notes to preceding tabular information - continued:


(6)	The elements of "other" EBITDA are summarized below.

				For the Three Months				For the Nine Months
				Ended September 30,				Ended September 30,
	(Amounts in thousands)			2014		2013		2014		2013
	Our share of Real Estate Fund:
		Income before net realized/unrealized gains		$	2,059	$	2,086	$	6,676	$	5,737
		Net realized gains on exited investments			12,896		2,046		31,663		2,046
		Previously recorded unrealized gains on exited investments			(12,397)		-		(12,579)		-
		Net unrealized gains on held investments			4,583		3,092		13,805		14,869
		Carried interest			8,431		267		21,636		11,974
	Total				15,572		7,491		61,201		34,626
	The Mart and trade shows				19,497		14,925		61,038		54,232
	555 California Street				11,994		10,720		35,566		32,371
	India real estate ventures				2,651		695		4,574		4,708
	LNR^(a)				-		-		-		20,443
	Other investments				4,618		5,330		13,825		21,138
					54,332		39,161		176,204		167,518
	Corporate general and administrative expenses^(b)				(22,948)		(23,467)		(71,952)		(71,054)
	Investment income and other, net^(b)				6,659		11,108		22,764		39,153
	Suffolk Downs impairment loss and loan loss reserve				(10,263)		-		(10,263)		-
	Acquisition and transaction related costs^(c)				(7,105)		(2,818)		(12,972)		(6,769)
	Net gain on sale of residential condominiums and a land parcel				2,665		134		13,205		1,139
	Net gain on sale of marketable securities				-		31,741		-		31,741
	Loss from the mark-to-market of J.C. Penney
		derivative position			-		(20,012)		-		(33,487)
	Loss on sale of J.C. Penney common shares				-		(18,114)		-		(54,914)
	Non-cash impairment loss on J.C. Penney common shares				-		-		-		(39,487)
	Severance costs (primarily reduction-in-force at the Mart)				-		-		-		(4,154)
				$	23,340	$	17,733	$	116,986	$	29,686


	(a)		On April 19, 2013, LNR was sold for $1.053 billion.

	(b)		The amounts in these captions (for this table only) exclude income/expense from the mark-to-market of our deferred compensation plan of $1,352 and $269 for the three months ended September 30, 2014 and 2013, respectively, and $8,132 and $6,207 for the nine months ended September 30, 2014 and 2013, respectively.

	(c)		The three and nine months ended September 30, 2014, includes $5,828 and $9,343, respectively, of transaction costs related to the spin-off of our strip shopping centers and malls (see Note 1 - Organization).

(Amounts in thousands)

											Retail
(Decrease) increase due to:			Total			New York			Washington, DC		Properties			Other
Property rentals:
	Acquisitions and other		$	11,916		$	15,152		$	(844)	$	(1,113)		$	(1,279)
	Deconsolidation of Independence Plaza			(23,992)			(23,992)			-		-			-
	Properties taken out of / placed into
		service for redevelopment		(10,017)			(3,156)			(1,163)		676			(6,374)
	Hotel Pennsylvania			1,220			1,220			-		-			-
	Trade Shows			2,525			-			-		-			2,525
	Same store operations			35,430			25,528			(2,567)		3,248			9,221
				17,082			14,752			(4,574)		2,811			4,093

Tenant expense reimbursements:
	Acquisitions and other			(55)			(29)			204		(36)			(194)
	Properties placed into / taken out of
		service for redevelopment		(2,103)			(1,603)			86		(69)			(517)
	Same store operations			21,184			12,197			(125)		6,614			2,498
				19,026			10,565			165		6,509			1,787

Cleveland Medical Mart development
	project			(34,026)	⁽¹⁾		-			-		-			(34,026)	⁽¹⁾

Fee and other income:
	BMS cleaning fees			14,547			14,956			-		-			(409)	⁽²⁾
	Signage revenue			2,323			2,323			-		-			-
	Management and leasing fees			(2,634)			(236)			(2,450)		(2)			54
	Lease termination fees			(75,250)			(18,312)	⁽³⁾		2,536		(59,117)	⁽⁴⁾		(357)
	Other income			(1,891)			(1,901)			1,316		(282)			(1,024)
				(62,905)			(3,170)			1,402		(59,401)			(1,736)

Total (decrease) increase in revenues			$	(60,823)		$	22,147		$	(3,007)	$	(50,081)		$	(29,882)



(1)		Due to the completion of the project. This decrease in revenue is substantially offset by a decrease in development costs expensed in the period. See note (3) on page 60.

(2)		Represents the change in the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 60.

(3)		Primarily due to a $19,500 termination fee from a tenant at 1290 Avenue of the Americas recognized in the third quarter of 2013.

(4)		Results primarily from $59,599 of income recognized in the first quarter of 2013 pursuant to a settlement agreement with Stop & Shop.