Vornado Realty Trust
Annual Report 2021

Plain-text annual report

2 0 2 1   A N N U A L   R E P O R T THE PENN DISTRICT – Construction Progress Photo – 31st to 34th Street/Seventh Avenue This Annual Report is printed on recycled paper and is recyclable.  T H I S P A G E I N T E N T I O N A L L Y L E F T B L A N K V O R N A D O C O M P A N Y P R O F I L E Vornado Realty Trust is a fully-integrated real estate operating company. Our business is 88% New York-centric and 79% office-centric. We currently own all or portions of:  67 Manhattan properties consisting of:  20.6 million square feet of office space in 32 of the properties;  2.7 million square feet of street retail space in 60 of the properties;  1,674 residential units in eight Manhattan properties;  Multiple development sites, including the Hotel Pennsylvania which is on Seventh Avenue at 33rd Street in the heart of THE PENN DISTRICT THE PENN DISTRICT is our premier interconnected campus-like development currently consisting of 9 million square feet in over a dozen buildings and land sites surrounding New York’s Pennsylvania Station, the busiest transportation hub in North America;  A 32.4% interest in Alexander’s, Inc. (NYSE:ALX) which owns six properties in the New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg L.P. headquarters building;  Signage throughout THE PENN DISTRICT and Times Square;  BMS, our wholly owned subsidiary, which provides cleaning and security services for our buildings and third parties, currently employing 2,710 associates;  The 3.7 million square foot MART in Chicago;  A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet;  A 25% interest in Vornado Capital Partners, our real estate fund. We are the general partner and investment manager of the fund. The fund is in wind down; and  220 Central Park South, our 950-foot super-tall luxury residential condominium tower containing 400,000 salable square feet, which is over 95% sold. Vornado’s common shares are listed on the New York Stock Exchange and are traded under the symbol: VNO. 1 T H I S P A G E I N T E N T I O N A L L Y L E F T B L A N K 2 Financial Highlights As Reported Revenues Net income/(loss) Net income/(loss) per share - basic Net income/(loss) per share - diluted Total assets Total equity Net operating income Funds from operations Funds from operations per share % decrease in funds from operations per share As Adjusted Net income Net income per share Funds from operations Funds from operations per share % increase/(decrease) in funds from operations per share $ $ $ $ $ $ $ $ $ $ $ $ $ Year Ended December 31, 2021 1,589,210,000 101,086,000 0.53 0.53 17,266,588,000 6,515,238,000 1,033,368,000 571,074,000 2.97 (24.4)% $ $ $ $ $ $ $ $ $ 2020 1,527,951,000 (348,744,000) (1.83) (1.83) 16,221,822,000 6,948,155,000 972,579,000 750,522,000 3.93 (25.1)% Year Ended December 31, 2021 88,153,000 0.46 549,863,000 2.86 9.2 % $ $ $ $ 2020 23,893,000 0.12 501,015,000 2.62 (24.3)% These financial highlights and the letter to shareholders present certain non-GAAP measures, including revenues, net income/(loss), total assets, Net Operating Income (“NOI”) and Funds from Operations, all as adjusted, as well as Funds from Operations and NOI. We have provided reconciliations of these non-GAAP measures to the applicable GAAP measures in the appendix section of this letter to shareholders and in the Company’s Annual Report on Form 10-K under “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which accompanies this letter or can be viewed at www.vno.com. 3 To Our Shareholders Together with the entire free world, we mourn the loss of life and destruction in the senseless war in Europe. Net Income/(Loss) attributable to common shares for the year ended December 31, 2021 was $101.1 million, $0.53 per diluted share, compared to ($348.7) million, ($1.83) per diluted share, for the previous year. Funds from Operations, as Adjusted (an apples-to-apples comparison of our continuing business, eliminating certain one-timers) for the year ended December 31, 2021 was $549.9 million, $2.86 per diluted share, compared to $501.0 million, $2.62 per diluted share, for the previous year, an increase of $0.24 per share. This increase is detailed on page 5. Funds from Operations, as Reported (apples-to-oranges including one-timers) for the year ended December 31, 2021 was $571.1 million, $2.97 per diluted share, compared to $750.5 million, $3.93 per diluted share, for the previous year. See page 5 for a reconciliation of Funds from Operations, as Reported, to Funds from Operations, as Adjusted. Here are our financial results (presented in Net Operating Income format) by business unit: ($ IN MILLIONS) New York: Office Retail Residential Alexander’s Hotel Pennsylvania Total New York theMART 555 California Street Other Total Net Operating Income 2021 Same Store % Increase/ (Decrease) 2.7 % 13.2 % (14.1) % 0.7 % N/A 4.0 % (14.2) % 7.9 % 2.9 % Net Operating Income % of 2021 2021 66.6 % 17.0 % 1.7 % 3.7 % (1.2) % 87.8 % 5.8 % 6.4 % 677.2 173.4 17.8 37.3 (12.7) 893.0 58.9 64.8 100.0 % 1,016.7 16.7 1,033.4 2020 672.5 147.3 20.7 35.9 (42.5) 833.9 69.2 60.3 963.4 9.2 972.6 2019 724.5 273.2 23.4 44.3 7.4 1,072.8 102.1 59.7 1,234.6 25.2 1,259.8 This letter and Annual Report contain 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. The Company’s future results, financial condition and business may differ materially from those expressed in these forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Currently, one of the most significant factors is the ongoing adverse effect of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows, operating performance and the effect it has had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general. The extent of the impact of the COVID-19 pandemic will continue to depend on future developments, including vaccination rates among the population, the efficacy and durability of vaccines against emerging variants, and the governmental and tenant responses thereto, all of which are uncertain at this time but the impact could be material. Moreover, you are cautioned that the COVID-19 pandemic will heighten many of the risks identified in "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the year ended December 31, 2021, a copy of which accompanies this letter or can be viewed at www.vno.com. 4 The following chart reconciles Funds from Operations, as Reported, to Funds from Operations, as Adjusted: ($ IN MILLIONS, EXCEPT PER SHARE) Funds from Operations, as Reported Less adjustments for certain items that impact FFO: After-tax gain on sale of 220 Central Park South units Tax benefit from taxable REIT subsidiaries Defeasance cost - 1290 Avenue of the Americas refinancing Hotel Pennsylvania Deferred tax liability - Farley Series K preferred shares issuance costs Real Estate Fund(1) Lease liability extinguishment gain - 608 Fifth Avenue Severance and other reduction in force-related expenses Credit losses on loans receivable Other, including noncontrolling interests’ share of above adjustments Total adjustments Funds from Operations, as Adjusted Funds from Operations, as Adjusted per share 2021 571.1 44.6 27.9 (17.9) (12.3) (10.9) (9.0) 3.8 — — — (5.0) 21.2 549.9 2.86 2020 750.5 332.1 — — (26.9) — — (63.1) (1) 70.3 (23.4) (13.4) (26.1) 249.5 501.0 2.62 Funds from Operations, as Adjusted increased in 2021 by $48.9 million, or $0.24 per share, a 9.2% increase. Here is the detail: ($ IN MILLIONS, EXCEPT PER SHARE) Acquisitions Variable Businesses Tenant Related Interest expense Real estate tax expenses - theMART Preferred dividends General and Administrative expenses THE PENN DISTRICT out of service Other Increase in FFO, as Adjusted Per Share Increase/(Decrease) Amount 16.5 15.4 13.4 30.8 (18.5) (14.0) 21.6 (6.8) (9.5) 48.9 0.08 0.08 0.07 0.16 (0.10) (0.07) 0.11 (0.04) (0.05) 0.24 1 Our $800 million Real Estate Fund was formed in 2010. All invested capital has been returned. We account for the Fund on a fair value, mark-to-market basis and, as such, the Fund’s performance has caused volatility in our numbers. The Fund is in final stages of wind down. The Fund’s 2020 number shown in the table above represents the final non- cash markdowns to zero of the three remaining assets. This should be the end of it. 5 Report Card Since I have run Vornado from 1980, total shareholder returns have been 13% per annum, but subpar lately. Dividends have represented 3.9 percentage points of Vornado’s annual return. Here is a table that shows Vornado’s total return to shareholders compared to our New York-centric peers and two REIT indices for various periods ending December 31, 2021: One-year Three-year Five-year Ten-year Twenty-year(3) Vornado 17.7 % (19.4)% (36.6)% 11.6 % 232.7 % NY REIT Peers (2) 12.9 % (8.3)% (25.9)% — % — % Office REIT Index 22.0 % 30.8 % 17.7 % 102.6 % 291.9 % MSCI Index 43.1 % 66.4 % 66.8 % 192.3 % 669.2 % Our stock price for the last seven years has been disappointing and, in my mind, chronically disconnected from the value of our assets. The graph below demonstrates that case. Over the last ten years, our NAV(4) (a surrogate for private market values) has compounded at 4.8%, but our stock price has compounded at negative 2.2%. Over the last years, I and others have made the point that public shareholders price CBD office buildings at a significant discount to private value. Something is obviously wrong. Vornado NAV(4)(5) Per Share vs. Stock Price $110.00 $100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 UE spin-off JBGS spin-off $85.31 $45.32 To complete the story here, both our spin-offs trade at a tighter NAV discount than the parent which was expected and, to my mind, further validates the separations. NAV Stock Price 2 Comprised of New York City-centric peers: SL Green, Empire State Realty Trust and Paramount Group. 3 Long-term returns have been negatively affected by COVID. Had we done this table on December 31, 2019, pre-COVID, the numbers on the “twenty-year” line would have been, reading across, 569.9%, 468.9%, and 732.4%. 4 Per Green Street Advisors. 5 NAV has been reduced by $10 for the Urban Edge spin-off and $23 for the JBG SMITH spin-off. 6 Ten-Year Earnings Record As is our custom, we present the table below that traces our ten-year record, both in absolute dollars and per share amounts: ($ AND SHARES IN MILLIONS, EXCEPT PER SHARE DATA) 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 NOI(6) FFO, As Adjusted Amount % Change Amount % Change Per Share 1,047.6 1,027.5 1,184.6 1,180.4 1,182.0 1,144.1 1,106.7 1,009.5 953.5 842.4 2.0 % (13.3) % 0.4 % (0.1) % 3.3 % 3.4 % 9.6 % 5.9 % 13.2 % 0.8 % 549.9 501.0 660.5 702.8 701.0 672.3 629.7 507.3 468.0 357.5 9.8 % (24.1) % (6.0) % 0.3 % 4.3 % 6.8 % 24.1 % 8.4 % 30.9 % 3.5 % 2.86 2.62 3.46 3.68 3.66 3.53 3.32 2.69 2.49 1.92 Shares Outstanding 205.7 203.7 203.1 202.3 201.6 200.5 199.9 198.5 197.8 197.3 As shown on the following page, in the last ten years we have been a net seller to the tune of $13.7 billion, notably including $2.7 billion in the Retail Joint Venture transaction and $9.7 billion of tax-free spin-offs. This activity has enriched shareholders but has punished our earnings. The table below compares our published FFO per share period-by-period to what our FFO per share would have been had we not sold or spun assets: FFO, As Adjusted Per Share 2021 2020 2019 2018 2017 As Published 2.86 2.62 3.46 3.68 3.66 Pro Forma To Include Sold Properties 5.76 5.23 6.76 6.86 6.80 6 All years include only the properties owned at the end of 2021 excluding the Hotel Pennsylvania. 7 Acquisitions/Dispositions Here is a ten-year schedule of acquisitions and dispositions. ($ IN MILLIONS) 2022 to date 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Number of Transactions 1 6 Net Acquisitions/ (Dispositions) (84.5) 262.6 3 7 9 9 11 25 17 26 33 3.7 (2,818.6) 336.0 (5,901.9) (875.1) (3,717.1) (412.3) (616.5) 142.9 147 (13,680.8) 3.7 67.1 573.5 — 397.0 Acquisitions Dispositions 84.5 134.4 — 2,885.7 237.5 6,047.6 1,022.5 4,672.9 1,060.4 1,429.8 1,222.3 18,797.6 1,365.2 145.7 813.3 147.4 648.1 955.8 5,116.8 Gain 0.9 7.9 — 1,384.1 170.4 5.1 664.4 316.7 523.4 434.1 454.0 3,961.0 2019 Dispositions include $2.665 billion for the Retail Joint Venture at a 4.5% cap rate resulting in a gain of $1.205 billion.(7) 2017 Dispositions include $5.997 billion for the JBG SMITH spin-off and 2015 Dispositions include $3.700 billion for the Urban Edge Properties spin-off. No gain was recognized on the spin-offs. Over the ten-year period, our dispositions totaled $18.8 billion and we were a net seller of $13.7 billion. Other than the Retail Joint Venture, since 2018 we have been uncharacteristically inactive. Our stock price being in the penalty box was the limiting factor. Green Street would say we should have been selling and shrinking… maybe so. The action here takes place on the 45th floor where our acquisitions/dispositions team resides. Thanks to Michael Franco and to EVP Michael Schnitt, SVPs Cliff Broser, Brian Cantrell, Adam Green and Jared Toothman, and to VPs Brian Feldman and Tatiana Melamed. 7 The gain reported in our published financial statements was $2.571 billion, the difference being the gain recognized on the step up in basis to fair value of the retained portion of the assets. 8 Lease…Lease…Lease The mission of our business is to create value for shareholders by growing our asset base through the addition of carefully selected properties and by adding value through intensive and efficient management. Our operating platform is where the rubber meets the road. In our business, leasing is the main event. In New York, theMART and 555 California Street, we leased 2.9 million square feet in 2021. As is our practice, we present below leasing and occupancy statistics for our businesses. (SQUARE FEET IN THOUSANDS) 2021 Square feet leased Initial Rent GAAP Mark-to-Market Cash Mark-to-Market Number of transactions 2020 Square feet leased Initial Rent GAAP Mark-to-Market Cash Mark-to-Market Number of transactions Occupancy rate: 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 New York Office Street Retail theMART 555 California Street 2,252 83.26 15.9 % 10.8 % 98 2,231 89.33 11.0 % 4.6 % 54 92.2 % 93.4 % 96.9 % 97.2 % 97.1 % 96.3 % 96.3 % 96.9 % 96.6 % 95.8 % 229 145.44 37.1 % 13.2 % 36 238 136.29 1.3 % (5.9)% 35 80.7 % 78.8 % 94.5 % 97.3 % 96.9 % 97.1 % 96.2 % 96.5 % 97.4 % 96.8 % 330 51.18 (0.5)% 0.0 % 60 379 49.74 1.5 % (1.9)% 52 88.9 % 89.5 % 94.6 % 94.7 % 98.6 % 98.9 % 98.6 % 94.7 % 96.4 % 95.2 % 74 114.70 29.5 % 25.4 % 4 371 108.92(8) 54.7 % 39.7 % 6 93.8 % 98.4 % 99.8 % 99.4 % 94.2 % 92.4 % 93.3 % 97.6 % 94.5 % 93.1 % It is worth underscoring our significant leasing accomplishments during the past 12 and 24 pandemic months – our square footage leased, starting rents, and mark-to-markets were industry leading and are detailed in the table above, all of which speaks to both the talent of our leasing teams and the quality of our assets. Notable leases of size and importance were: NYU at One Park Avenue - 633,000 square feet; Interpublic Group at 100 West 33rd Street - 513,000 square feet;  Meta at Farley - 730,000 square feet;    Madison Square Garden at PENN 2 - 428,000 square feet;    Wegmans at 770 Broadway - 82,000 square feet. Bank of America at 555 California Street - 247,000 square feet Clear Secure at 85 Tenth Avenue - 119,000 square feet Kudos and special mention to our leasing team for signing 831,000 square feet of leases this year in New York, with $100 plus per square foot starting rents, a 25% market share of all triple digit rents signed this year. Thanks to our leasing captains: Glen Weiss and Haim Chera. Also thanks to the New York leasing machine: Ed Hogan, Josh Glick, Jared Solomon, Jared Silverman, Edward Riguardi, Ryan Levy, Jason Morrison, Anthony Cugini, and to Paul Heinen who runs leasing at theMART and 555 California Street. Our thanks also to our in-house legal teams and their leaders, EVPs Pam Caruso and Elana Butler. 8 2020 initial rent and GAAP and cash mark-to-markets exclude a 247,000 square foot lease, as the starting rent for this space will be determined in 2024 based on fair market value. 9 Capital Markets At year-end, we had $4.1 billion of immediate liquidity consisting of $1.9 billion of cash and restricted cash and $2.2 billion available on our $2.75 billion revolving credit facilities. Today, we have $3.9 billion of immediate liquidity. We also have over $10 billion of unencumbered assets. Since January 1, 2021, we have executed eight capital markets transactions totaling $5.8 billion. Our capital markets team had another strong year. Thank you to EVP – Head of Capital Markets Jan LaChapelle and VP Tatiana Melamed. In February, a joint venture in which we had a 55% interest, completed a $525 million refinancing of One Park Avenue, a 944,000 square foot Manhattan office building. The interest-only loan bears a rate of LIBOR plus 1.11% (1.50% as of March 31, 2022) and matures in March 2023, with three one-year extension options (March 2026, as fully extended). The loan replaced the previous $300 million loan that bore interest at LIBOR plus 1.75% and was scheduled to mature in March 2021. We realized our $105 million share of net proceeds. In March, we entered into an interest rate swap for our $500 million PENN 11 mortgage loan from LIBOR plus 2.75% to a fixed rate of 3.03% through March 2024. In December, we completed a loan modification which reduced the interest rate to LIBOR plus 1.95% (2.24% as of March 31, 2022), resulting in a fixed rate of 2.23% pursuant to the interest rate swap. In March, we completed a $350 million refinancing of 909 Third Avenue, a 1.4 million square foot Manhattan office building. The interest-only loan bears a fixed rate of 3.23% and matures in April 2031. The loan replaced the previous $350 million loan that bore interest at a fixed rate of 3.91% and was scheduled to mature in May 2021. In April, we extended our $1.25 billion unsecured revolving credit facility from January 2023 (as fully extended) to April 2026 (as fully extended). The interest rate on the extended facility was lowered to LIBOR plus 0.90% from LIBOR plus 1.00%. The facility fee remains at 20 basis points. Our separate $1.50 billion unsecured revolving credit facility matures in March 2024 (as fully extended) and has an interest rate of LIBOR plus 0.90% and a facility fee of 20 basis points. In May, we completed a $1.2 billion refinancing of 555 California Street, a three-building 1.8 million square foot office campus in San Francisco, in which we own a 70% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.93% (2.33% as of March 31, 2022) in years one through five, LIBOR plus 2.18% in year six and LIBOR plus 2.43% in year seven. The loan matures in May 2023, with five one-year extension options (May 2028 as fully extended). We swapped the interest rate on our $840 million share of the loan to a fixed rate of 2.26% through May 2024. The loan replaced the previous $533 million loan that bore interest at a fixed rate of 5.10% and was scheduled to mature in September 2021. We realized our $457 million share of net proceeds. In May, we completed a green bond public offering of $400 million of 2.15% senior unsecured notes due June 1, 2026 ("2026 Notes") and $350 million of 3.40% senior unsecured notes due June 1, 2031 ("2031 Notes"). Interest on the senior unsecured notes is payable semi-annually on June 1 and December 1. The 2026 Notes were sold at 99.86% of their face amount to yield 2.18% and the 2031 Notes were sold at 99.59% of their face amount to yield 3.45%. In May, we repaid the $675 million mortgage loan on theMART (i.e. unencumbering the asset), a 3.7 million square foot commercial building in Chicago. The loan bore interest at 2.70% and was scheduled to mature in September 2021. In September, we issued $300 million of 4.45% Series O cumulative redeemable preferred shares at a price of $25.00 per share, pursuant to an effective registration statement. We received aggregate net proceeds of $291.2 million after underwriters' discount and issuance costs. In October, we redeemed all of the outstanding 5.70% Series K preferred shares/units at their redemption price of $25.00 per share or $300 million in the aggregate, plus accrued and unpaid dividends through the date of redemption. In November, we completed a $950 million refinancing of 1290 Avenue of the Americas, a 2.1 million square foot Manhattan office building, in which we own a 70% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.51% (1.90% as of March 31, 2022) in years one to five, increasing 0.25% in each of years six and seven. The loan matures in November 2023 with five one-year extension options (November 2028 as fully extended). We defeased the existing $950 million loan that bore interest at a fixed rate of 3.34% and was scheduled to mature in November 2022. 10 Below is the right-hand side of our balance sheet at December 31, 2021, 2020 and 2019. ($ IN MILLIONS) Secured debt Unsecured debt Share of non-consolidated debt Noncontrolling interests’ share of consolidated debt Total debt Cash and restricted cash Projected cash proceeds from 220 Central Park South in excess of debt Net debt EBITDA as adjusted Net debt/EBITDA as adjusted 2021 6,099 2,575 2,700 (682) 10,692 (2,035) (148) 8,509 949 9.0 x 2020 5,608 1,825 2,873 (483) 9,823 (1,835) (275) 7,713 2019 5,670 1,775 2,803 (483) 9,765 (1,347) (1,200) 7,218 910 1,136 8.5 x 6.4 x The decline in our credit statistics is largely the result of COVID-related reductions in our income of $187 million.(9) This resulted in downgrades by S&P to BBB- and by Moody’s to Baa3.(10) We expect to earn our rating back and then some as our income reverts and improves, as our variable businesses continue to recover, as our occupancy climbs back to our historical 97% and as our PENN DISTRICT projects come online. Fixed-rate debt accounted for 52% of debt with a weighted average interest rate of 3.2% and a weighted average term of 4.8 years; floating-rate debt accounted for 48% of debt with a weighted average interest rate of 1.6% and a weighted average term of 3.0 years.(11) 76% of our debt is recourse solely to individual assets. The fair value of the assets pledged is $13.5 billion, resulting in a loan-to-value of 60.1%. We have over $10 billion of unencumbered assets. Vornado remains committed to maintaining our investment grade rating. 9 Please see page 25 for detail. 10 All of our New York peers and most of the CBD office REITs are in the same boat. 11 We have a higher percentage of floating-rate debt than most, which is intentional. We also have larger cash balances than most as a natural hedge. 11 T H I S P A G E I N T E N T I O N A L L Y L E F T B L A N K 12  THE PENN DISTRICT 13 We are the largest owner in THE PENN DISTRICT with 9 million square feet. THE PENN DISTRICT’s time has come, the district being validated by the neighboring Hudson Yards and Manhattan West. Our assets sit literally on top of Penn Station, the region’s major transportation hub, adjacent to Macy’s and Madison Square Garden. Day and night, THE PENN DISTRICT is teeming with activity. Here’s where we stand: THE PENN DISTRICT is different from our other office assets…it is a large multi-building complex, it is long-term and it is development focused (development and long-term are two of the dirtiest words in REITland). THE PENN DISTRICT is the highest growth opportunity in our portfolio. My excitement and conviction about our PENN DISTRICT grows quarter by quarter. I still believe that a winning strategy is to allow investors to choose between the high growth, development-oriented PENN DISTRICT or our other, pretty terrific in their own right, Class A traditional core assets… or both and that the most efficient way to do so is initially by tracker.(12) Nonetheless, we have decided to pause. This is purely an internal transaction with no counterparty or deadline and I believe it wise to delay until COVID is resolved, workers return en masse to the office, construction is further along, etc. No rush, let’s get it right. Our development plans for Farley, PENN 1 and PENN 2 were outlined in my letters to shareholders over the last years. Images, budgets, returns and delivery dates are on our website. Each of these three large, exciting projects is now under construction and when completed will constitute the debut of our vision for THE PENN DISTRICT. I have read some commentary that this year we did not update the development statistics on page 19 of our supplemental. In fact, we did and since both our capital budget and rent projections are on course, no change was required (the numbers actually have improved). Our budget is to take $55/$60 rents to $90/$100 and that plan has now been validated by actual signed leases. Over time, we hope to grow our interconnected campus by as much as 10 million square feet of new-builds. And over time, our PENN DISTRICT campus will almost certainly command premium pricing. We have begun with 5 million square feet in three existing buildings – Farley, PENN 1 and PENN 2 – all interconnected either above or below ground. Here we are investing $2.4 billion(13) to create a unique environment for work, to bring to 22nd century standards, and to totally transform. In the middle of everything are PENN 1 and PENN 2, where we are creating a two-building, 4.3 million square foot campus directly on top of Penn Station. It will feature a three-block plaza along Seventh Avenue covered by a giant new bustle across the entire 430-foot frontage of PENN 2. This bustle will extend out 70 feet from the face of the building and will be 45 feet above the street. It will be striking, extraordinary and unique, creating a monumental covered plaza in front of our PENN 2 and the main entrance to Penn Station. At PENN 2, we are also removing the skin of the entire building and replacing it with new, exciting, 22nd century curtainwall featuring triple-glazed floor- to-ceiling windows. This architecture (designed by Dan Shannon, MdeAS Architects) will bring the neighborhood into the modern age. The bustle and penthouse conversion will create 150,000 square feet of valuable new, high ceilinged, best-in-class creative space, growing the new PENN 2 to 1.8 million square feet. Images of these designs are posted on our website at www.vno.com. Essential to our strategy here is interconnectivity and scale which will allow us to provide our tenants with an unparalleled amenity package, even a giant leap forward from what we created at theMART a few years ago. Our 4.3 million square foot PENN 1 and PENN 2 campus is programmed to have over 180,000 square feet of amenity space, about 4%. Think about this – 4% of even a large million square footer would be only a noncompetitive 40,000 square foot amenity package, so scale really matters. But, there’s more – the scale of this campus will allow us to provide our tenants with flexibility for their growth and expansion. A 300,000 square foot tenant in a 500,000 square foot building is boxed in. But we could almost certainly provide this same 300,000 square foot tenant in this 4.3 million square foot campus multiple expansion availabilities and unrivaled flexibility. So, scale really matters. 12 By the way, I am perplexed that there is not universal agreement here. And a second “by the way”, the enormous advantage to the tracker structure is that it allows investors economic choice but unlike a full spin-off allows both the tracker and parent to benefit from one management team and infrastructure. 13 $1.4 billion spent to date, with $1.0 billion left to go. Rate of spend will be about $650 million in 2022, $250 million in 2023, and $100 million in 2024. 14 Here’s an update on THE PENN DISTRICT:          The acclaimed Moynihan Train Hall is now open to the public, as is our Moynihan Food Hall. Our retail leasing in the Train Hall is well along, with 26 leases executed at or above underwriting. In the western half of Farley, we are developing 90,000 square feet of retail which will serve as the connecting link between Manhattan West and Hudson Yards, our neighbors to the west, and the Moynihan/Penn Station complex to the east. This retail is organized around the 32nd Street corridor (read mall) that will act as a funnel that we expect will collect thousands of office workers heading to and from Penn Station. The doubling in width and doubling in height of the Long Island Rail Road concourse is scheduled to be completed by year end. We own the retail on both sides of the LIRR concourse, all of which space was vacated to accommodate the construction. We are now in discussions with over 30 retailers for that space, most of them prior tenants, many of them food-oriented, at rents that are better than pre-COVID levels. Vornado was honored to be a major principal in both the Moynihan Train Hall and LIRR concourse public/private partnerships. At Farley, we have turned over to Meta (formerly Facebook) their 730,000 square feet for tenant fit out. At PENN 11, our major tenant has expanded to 400,000 square feet. At PENN 1, our grand new lobby and multi-floor amenity offerings are largely completed and open. Our amenities here are extensive (we believe the largest amenity package in the City, by far) and unique, tailored to the demographic of our tenants’ workforce and is receiving rave reviews from tenants and brokers. On the 7th floor of PENN 1, our experience and leasing center is open and busy. This 14,000 square foot facility, complete with multiple scale models and floor-to-ceiling, wall-to-wall videos, vividly illustrates and brings to life our vision and plans for the buildings, restaurants, retail, amenities, and lifestyle and workstyle that THE PENN DISTRICT will become. THE PENN DISTRICT Experience Center At PENN 2, we are, give or take, 25% into construction. At Hotel Penn, interior demolition and abatement is advanced, and building demolition will begin shortly. Our construction operations in THE PENN DISTRICT span three full blocks (31st to 34th Streets) along the west side of Seventh Avenue (see cover photo). In a few short months, everything in THE PENN DISTRICT will begin to come to life as shiny, modern curtainwall continues to be erected on the PENN 2 façades, and steel is erected giving shape to the massive two-block long bustle, an architectural statement in scale and substance that will announce the entrance to Pennsylvania Station, Madison Square Garden, and our office building lobby. It has long been a goal of government to improve the capacity and user experience of Penn Station.(14) It has long been a precept of urban planning that density belongs at transit hubs. Recognizing these two important objectives which complement each other, Empire State Development Corporation is working to establish a General Project Plan (“GPP”), the purpose of which is to revitalize Penn Station and the surrounding area, significantly enhance the public realm, make subway improvements, add new entrances to Penn, and generate funds from the new density to help finance the station transformation. The GPP process was supported by the Governor in a November press release that can be accessed here. 14 In normal, non-COVID times, Penn Station struggles mightily to handle three times the traffic it was originally designed for. 15 What I said in last year’s letter bears repeating. In our business, the deals are the drama… buying, selling, leasing. But in the end, we are a customer-centric business… in a manner of speaking, we are in the hospitality business. Talent is our New Client. We are in a service business. We put our best foot forward when we take a page out of the hospitality industry. Our tenants appreciate and deserve to be treated like guests. Coffee and welcoming greetings go a long way. In keeping with that spirit, our PENN DISTRICT marketing campaign features the slogan, “Talent is our New Client,” the point being that everything we do, in every phase of our business, must be geared to pleasing, even delighting, our clients, defined as the talented employees of our tenants. After all, we recognize that real estate is a recruiting tool for our tenants. Further, we are pushing the envelope of design. There is a place for Park Avenue-style financial services buildings and a place for West Side creative-type buildings. In THE PENN DISTRICT, we are creating a 22nd century work environment featuring lobbies with areas to sit, congregate, surf or just hang and chill, a warm palette, welcoming libraries, conference centers, gyms, an auditorium, food service, happy hour, outdoor space and gardens and more. In a word, we will create a hospitality-rich communal workplace for our PENN DISTRICT tenants. The images below (actual pictures, not renderings) are a tiny sampling – additional images are posted at www.vno.com. At Vornado, our small dedicated staff of technologists is continuously working to improve our customers’ experience and make their lives more efficient. For further information, please see www.vno.com/technology-innovation. The Live.Work.Do. app is Vornado’s proprietary digital platform that provides tenants across our portfolio mobile access, visitor management, back-of-house operations requests, local retailer deals, access to curated events, transit updates, security features, Dock parking, Revel moped access and more. In THE PENN DISTRICT, we provide online and in-seat ordering from our in-building restaurants, scheduling and booking resources at our co-working suites and conference facility, membership and class booking at our fitness center, and doctor and physical therapy appointments at our health center by Columbia Doctors. In 2022, a robust offering of events and educational programming will also commence. Our PENN DISTRICT development team is led by Barry Langer with David Bellman, Judy Kessler, Alan Reagan, Sandy Reis, and Brian Thompson. Special shout out and kudos to Glen Weiss, Barry Langer, Josh Glick and Brad Zizmor who have been the guiding lights in the creation of PENN 1’s unique food, gathering and social spaces. 16 Retail Retail has bottomed. Tenant activity is picking up from no interest and no tours in 2018/2019 to now a fairly active market, but still at bottom-fishing pricing. We expect activity and pricing to accelerate from here. We are making more than our fair share of deals – a sampling is Fendi, Berluti, Sephora, Whole Foods, Wegmans, Canada Goose, Chase, Duane Reade, Bond Street Sushi, Stefano Ricci, Five Below… Individually, and collectively, we own great assets… a portfolio of 60 properties, 2.7 million square feet of flagship street retail concentrated on the best high streets – Fifth Avenue, Times Square, THE PENN DISTRICT and SoHo. Please see www.vno.com for portfolio details and images. Here is the math for our retail business: ($ IN MILLIONS, EXCEPT PROPERTIES) Number of Properties NOI GAAP Basis Cash Basis 2022 2021 2020 2019 2018 2017 2016 58 60 63 62 63 63 62 173.4 147.3 273.2 353.4 359.9 363.7 160.8 158.7 267.7 324.2 324.3 292.0 Cash Basis Guidance 175.0 135.0 Here is the math that allows for comparable analysis of the above table. The top-tick 2018 income of $324.2 million should be adjusted for the Retail Joint Venture, other sales and out-of-service assets totaling $146.3 million, bringing 2018, as adjusted, to $178 million. Other reductions are tenant-related issues. We were pleased to “beat” our 2021 Retail guidance by $25 million and to “raise” our 2022 Retail guidance by $15 million. Here are our 2021 results by submarket: ($ IN MILLIONS, EXCEPT %) Fifth Avenue Times Square THE PENN DISTRICT SoHo Other Total GAAP Basis Amount 78.9 25.5 14.0 8.7 46.3 173.4 NOI % 45.5 14.7 8.1 5.0 26.7 100.0 Cash Basis Amount 68.0 27.2 12.8 8.3 44.5 160.8 % 42.3 16.9 8.0 5.2 27.6 100.0 We sold Madison Avenue. Why? Madison Avenue has changed. A generation ago, luxury shoppers, by and large, all lived on the Upper East Side, and Madison Avenue was the unique and renowned Manhattan shopping mecca. Over the years, those shoppers have moved to the four corners of Manhattan. And Madison Avenue’s retailers have followed their customers by opening three, four or five stores in different submarkets. The uniqueness of Madison Avenue has been diluted… and so we sold. Here’s the math: we sold for $100 million and recognized a non-cash loss of $7.9 million. The properties were 70% vacant and generated $4.7 million of negative FFO in 2020. The buyer is a substantial offshore family office whom we know well, who got a good price and is prepared to invest more capital and wait longer than we were. 17 Some Thoughts, 2021 Version     I begin with a shoutout and thank you to our amazing and talented Vornado people in New York, Paramus, Chicago and San Francisco, in leasing, development, the 45th floor, Paramus and operations all of whom are A+, head of the class, and we say thank you. It sort of feels like there may be some trouble ahead – inflation, interest rates, overheating, what have you. This is a time for caution. Our balance sheet and liquidity provide a sufficient level of safety. Importantly, our development spend in THE PENN DISTRICT is fully funded from cash on our balance sheet – and remember, Farley, PENN 1 and PENN 2 are unencumbered and debt-free. Our portfolio is populated with the highest quality assets in all of REITland: 770 Broadway; Farley; 1290 Avenue of the Americas; 555 California Street; theMART; our Fifth Avenue and Times Square retail assets to name a few; and, the most exciting development opportunity in all of REITland, THE PENN DISTRICT; and the two best development sites in town, 350 Park Avenue and PENN 15. In 2021, Vornado delivered outstanding, industry-leading performance: FFO, as adjusted per share increased by 9.2% and we leased 2.9 million square feet overall including 230,000 square feet of New York retail and 2.3 million square feet of New York office at starting rents of $83 and mark-to-markets of 10.8% (see page 9). Michael has mentioned on recent earnings calls, and I agree, that we expect Vornado’s future growth to be outsized and industry leading. We expect double digit FFO growth in 2022.  We believe in New York, our hometown. New York wins in infrastructure. It is the economic and cultural capital of the United States (there is a reason the Statue of Liberty is in New York Harbor); it is the finance center of the world; it attracts the best and the brightest; it has a large and growing highly educated and diverse workforce, eight professional sports teams, Lincoln Center and Carnegie Hall, Broadway, great museums, great restaurants and nightlife, the best hospitals and universities, and, of course, the largest concentration of Fortune 500 headquarters and is now a large and growing tech center… you get the message. And think about this, just the space that tech companies have recently leased in New York will require 20,000 new talented employees. There is maybe only one other city in the country with the scale to satisfy that requirement.  We believe the future of work will continue to be in the form of people gathering in the office. Work from home alone at the kitchen table enabled by Zoom (a.k.a. Hollywood Squares) will have a place in a hybrid work schedule but the creative, teamwork, social and collegial interaction of talented people in the office and in the central business district will continue to be essential. Does anybody think a nine hour, four day workweek with three days off has legs? Does anybody think law school should be two years and that business school should be one year and a summer?  With inflation the topic du jour, it should be noted that replacement cost for New York office buildings is rising aggressively. I submit that replacement cost has always been a leading indicator, foretelling that our existing stock of office buildings will be increasing in value. In the same vein, the Manhattan residential rental market is, I believe, also a leading indicator. It went from 100% occupancy pre-COVID, down to 70% at the height of COVID, and is now back to 100% (at higher than pre- COVID rents) as New Yorkers have returned. Restaurants are full and standing room only. So… the City is full… but office buildings not so much. The last domino will be when employees and employers resolve hybrid work schedules and the office districts are again teeming with activity… And that will come sooner than you think. I have said it’s kind of silly to hang on every COVID return mandate and subsequent delay. Normalcy will return for sure – neither I nor really anyone, can predict exactly when.  We listen to our tenants and, so, I am convinced that the way they want to work is rapidly changing from the rigid, closed office door Uptown model to the less formal, creative West Side model. Of New York’s 400 million square feet, I’m guessing only about half of that space really qualifies for the workplace of the future. 18  We have entered into a partnership to pursue soundstages with a West Coast specialist at one of our Manhattan assets.   After many years of proudly commanding a full page and hero picture in this letter, 220 Central Park South, basically completed, now gets this short paragraph. Sales to date have totaled $3.133 billion. We are over 95% sold with, I guesstimate, $150 million still to come from future sales. As we look through our portfolio of assets, we have more than a half dozen outstanding residential development opportunities in Manhattan, Queens, and one in Northern Virginia. The apartment business is on fire and a dollar of income from a residential project has always been valued rich to a dollar from office. We have the expertise, as proven by our success at 220 and The Alexander in Rego Park, and will pursue these opportunities, all of which involve development and patience. We have brought on an experienced residential developer to focus here.  We are in conversation with multiple operators for multiple sites to bid for a gaming license in Manhattan when the time comes. Last year, I wrote the following about Manhattan gaming which is doubly valid today: Gaming is now all around us. There are as many as 30 gaming venues within an easy drive of Manhattan. Internet gaming is the next big thing, predicted to have a much larger audience than even brick-and-mortar casinos (I understand one can even bet on the coin toss or each down or each free throw). New York State has authorized seven casino licenses, four of which have already been issued Upstate (I understand they are not doing well) with a seven-year head start on three Downstate licenses. There is a rising level of chatter that the issuance of the Downstate licenses will be accelerated and that Manhattan will be in play. There are two Downstate racetrack licenses (slot machines only) at Yonkers Raceway and Aqueduct Raceway that are performing well. My guess is that these two will win two of the three full Downstate casino licenses and then where will the third go? To my mind, it makes little sense for the third license to go to another venue in either Long Island or Westchester which would split revenue with the existing Yonkers or Aqueduct. It makes perfect sense for the third and final license to go to Manhattan. Being the center of everything, Manhattan will generate by far the highest revenue for our education system; after all, aren’t we in it to maximize the tax revenue? And Manhattan has, by far, the largest number of hotel rooms, restaurants, museums, tourist attractions, and the region’s transportation network was designed with Manhattan as its hub. As a sign of market potential, it should be noted that New York generated 25% of this year’s Super Bowl online sports betting.  The competition between high-tax, densely populated urban centers and low-tax/no-tax, generally warm weather, business welcoming states is the topic du jour. In the “this will never happen… but it should department”, the first governor of a northern, densely populated, urban state who recognizes all this and reduces taxes will be lionized. I will resist questioning the wisdom of raising taxes in the face of a New York economy that is in the early innings of reopening and recovering, especially when Washington has balanced the city and state budgets. But I will, for the fourth year in a row, question the wisdom of the New York State estate tax. I repeat here what I have said before: There is one vulnerability I would like to point out. In New York State, the top 2% pay a full 50% of personal income taxes so it is critical that they remain tax-paying residents. The vulnerability comes with the 1%-ers, who are at the end of their careers. Most of the folks I know are willing to pay higher income taxes for the privilege of living in New York, but hate the prospect of a 16% toll for the privilege of dying in New York. New York State’s estate tax brings in only about 1/150th of the state’s annual budget. The estate tax should be repealed. Keeping our highest taxpayers through the end of their lives is both good economic policy and good politics. By the way, high-tax California has no estate tax, New Jersey repealed its estate tax in 2018.    A year ago, I was on four public company boards – Vornado, Alexander’s, Urban Edge and JBG SMITH. Am I overboarded? UE and JBGS were born out of Vornado; Vornado’s shareholders initially owned 100% of UE and 73% of JBGS. I sat on both boards, with decades of experience and as a proud overseer, sort of representing Vornado’s shareholders. Last year, ISS, the proxy god, recommended “withhold” and I was essentially fired from the JBGS board, a company that I founded and where I was Chairman. It doesn’t seem right to me. I find it interesting and predictive that during COVID, companies continued to rent space in New York and elsewhere, especially the tech giants. This, while many of those same companies reevaluated their work policies, even permitting full- time WFH. Fasano, the famed operator of the best restaurants and hotels in Brazil, has opened their first restaurant in New York at 280 Park Avenue, 49th Street between Park and Madison. The food, service, ambiance and buzz are outstanding. I highly recommend it. And, by the way, we own 280 Park and so are the proud landlord. Theatre in New York is a huge part of our cultural landscape and economy. My wife and son, my theatre family, predict that the coming season will see wonderful plays and musicals and fill Broadway theatres once again.  The Principles by Which We Run Our Business are reprinted as Appendix A. 19 Environmental, Social and Governance (“ESG”) Our Board and senior management hold ESG among our top priorities… and we are a clear leader in the industry. In 2019, we published our commitment to making our buildings carbon neutral by 2030. Our six-point plan, known as Vision 2030, is outlined in our ESG Report, found at esg.vno.com. Key sustainability achievements this past year include:      Advanced our commitment to locally-sourced renewable energy and the environment through the procurement of Renewable Energy Credits, sourced from hydro energy facilities located in the State of New York, which assigns zero carbon to 100% of our directly procured electricity. With an annualized balance of over 215,000 megawatt hours, we are one of the largest customers of home-grown renewable energy. We support the transmission projects that will alleviate bottlenecks and bring clean energy downstate into New York City. Aligned our carbon reductions and targets with the Science-Based Target Initiative, and have committed to a 64% reduction by 2030 using a 2019 base year to ensure our ongoing emissions reduction contributes to a 1.5-degree climate scenario. Achieved a 2.6% reduction in our overall location-based emissions, and a 37.8% drop in our market-based scope 2 emissions. Below is an inventory of carbon emissions from our buildings in 2021, according to the Financial Control method,(15) measured in metric tons: Scope 1 Scope 2 Scope 1+2 Total Scope 3 Grand Total Location-Based Market-Based 2021 29,864 131,405 161,269 39,633 200,902 % Change 2020-2021 2.3 % (1.9)% (1.2)% (7.8)% (2.6)% 2021 29,864 83,295 113,159 39,633 152,792 % Change 2020-2021 2.3 % (37.8)% (30.7)% (7.8)% (25.9)% Received multiple awards recognizing our continued industry leadership in sustainability including the NAREIT Leader in the Light Leadership Personified Award; ENERGY STAR Partner of the Year with Sustained Excellence (7th time with this distinction); and Global Real Estate Sustainability Benchmark “Green Star” Ranking (9th year in a row; ranking #2 out of 94 publicly traded companies in the Americas, with an “A” grade for our public disclosure). Expanded our climate scenario analysis as recommended by the Taskforce on Climate-Related Financial Disclosures and have updated our disclosures (which are paired with third party assurance) according to the Sustainability Accounting Standards Board and the Global Reporting Initiative. Altogether, we own and operate more than 27 million square feet of LEED certified buildings, representing 95% of our office portfolio, with over 23 million square feet at LEED Gold or Platinum. Thanks to our sustainability and energy management captains Gaston Silva, Karen Oh, Robert Phinney, and Michael Lipitz. In addition, we have provided our employees with the resources, support, and flexibility needed through the pandemic. We enhance our human capital by sponsoring continuing education and career development. We have actively engaged with our workforce and solicit their feedback through our divisional leaders and employee surveys. Our Board, and particularly our Corporate Governance and Nominating Committee, is assigned with oversight of ESG, which includes climate change risk. Our 2022 Long Term Performance Plan incorporates ESG performance metrics as part of our Senior Management compensation program. A discussion regarding our corporate governance is included in our proxy statement, which can be viewed at www.vno.com/proxy and the governance section of our website at www.vno.com/governance. 15 We have chosen to report our emissions according to the financial control method, as discussed in the World Resource Institute’s Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard: Revised Edition. Location-Based reflects emissions for our properties based on the grid average emission factor, while Market-Based reflects emissions that we are responsible for due to our purchasing decisions. Our Scope 1 emissions include onsite combustion from oil and natural gas; Scope 2 emissions include our district steam consumption and electricity consumption, including electricity consumed by our submetered tenants; Scope 3 emissions include other utility consumption within the direct control of our tenants. 20 21 Thank You, Dick West… Welcome Ray McGuire Richard R. West is a pro’s pro. He is the most practical academic I’ve ever met. He is a graduate business school dean (Amos Tuck at Dartmouth and Leonard N. Stern at NYU). Dick has been on the Vornado board for 40 years, since 1982, and has been a very active and engaged counselor and Audit Committee Chair. His judgment and leadership, understanding of processes and people, balance sheet issues, and risk vs. reward are at the head of the class. His good humor, always with perfect timing, was most welcome. Vornado owes Dick a huge debt of gratitude. Dick, I and your colleagues on the Board wish you well. While Dick may be irreplaceable, he was succeeded as Audit Chair last year (a transition year) by Mandy Puri, who is surely up to the task. Could it be we have two irreplaceables? Raymond J. McGuire was elected to the Board on March 31, 2022 and will stand for election with all Trustees at our annual meeting in May. Ray’s bio is on our website at www.vno.com, please take a look. His education, work experience, and life experiences are truly extraordinary. And it takes extraordinary to rise to the very top of Morgan Stanley and then Citigroup. We are excited to have Ray as a friend and counselor; we will benefit enormously from his judgment and experience. Last year, Ray decided it was time to give back and commit to public service in the form of a courageous, albeit longshot, race to be elected mayor of the City of New York. We are delighted to welcome Ray McGuire to the Vornado board. 22 We continually broaden our leadership team through promotions from within our Company. Please join me in congratulating this year’s class; they deserve it. Our new Executive Vice Presidents and Corporate Officers: David Bellman Executive Vice President Design & Construction Elana Butler Executive Vice President Leasing Counsel Pamela Caruso Executive Vice President Leasing Counsel Richard Famularo Executive Vice President Controller Joshua Glick Executive Vice President Director of PENN DISTRICT Leasing Jan LaChapelle Executive Vice President Head of Capital Markets Frank Maiorano Executive Vice President Head of Tax & Compliance Michael Schnitt Executive Vice President Acquisitions & Capital Markets Gary Hansen Chief Financial Officer Alexander’s, Inc. Deirdre Maddock Chief Accounting Officer Vornado Realty Trust In addition: Samantha Benvenuto was promoted to Senior Vice President, Human Resources Brian Cantrell was promoted to Senior Vice President, Acquisitions & Capital Markets Robert Larson was promoted to Senior Vice President, Operations Carlos Lopez was promoted to Senior Vice President, Field Operations Blaise Lucas was promoted to Senior Vice President & Controller – Alexander’s & VCP Fund Alan Reagan was promoted to Senior Vice President, Development Michael Sadowski was promoted to Senior Vice President, Application Development Fabiola Cabrera was promoted to Vice President, Controller – theMART Dalia Elachi was promoted to Vice President, Tax and Compliance Monique Kielar was promoted to Vice President, Apparel Marketing Yan Yan Ma was promoted to Vice President, Tax and Compliance Matthew McAvoy was promoted to Vice President, Operations Jose Meneses was promoted to Vice President, Financial Reporting and Technical Accounting Kyle Nyhuis was promoted to Vice President, Development Accounting Karen Oh was promoted to Vice President, Utilities & Innovation Daniel Ruanova was promoted to Vice President, Senior Property Manager Penny Willimann was promoted to Vice President, Marketing and Sales Welcome to Fred Harris, Executive Vice President, Development; David Barattin, Senior Vice President, Finance - New York Division; Robert Phinney, Vice President, Sustainability; Henri Chalouh, Vice President, Leasing Counsel and Natasha Torres, Vice President, FP&A. Thank you and congratulations to Matt Iocco, who has retired after 22 years of service. We will miss him and wish him well. Our operating platform heads are the best in the business. I pay my respects to my partners, Michael Franco, Glen Weiss, Barry Langer, Haim Chera and Tom Sanelli; and to David Greenbaum and Joe Macnow, my long-time partners who are now part-timers. Our exceptional 15 Division Executive Vice Presidents deserve special recognition and our thanks. Thank you as well to our very talented and hardworking 24 Senior Vice Presidents and 58 Vice Presidents who make the trains run on time, every day. Our Vornado Family has grown with 7 marriages and 17 births this year, 7 girls and 10 boys. On behalf of Vornado’s Board, senior management and 3,224 associates, we thank our shareholders, analysts and other stakeholders for their continued support. Steven Roth Chairman and CEO April 4, 2022 23 Appendix A - Here Are The Principles By Which We Run Our Business: We are a fully-integrated real estate operating company. We have the best leasing, operating and development teams in the business. We are laser focused. We invest in the best buildings in the best locations. We seek to acquire value-add assets where our unique skills will create shareholder value. We believe vacancy at the right price is an opportunity and that buildings, even in rundown condition (that we can reimagine) in great locations are also an opportunity. We invest in our buildings to maintain, modernize and transform. The front of the house and the back of the house of our assets are as good as new (and are in locations where new could not be created). Our transformations have increased rents over $20 per square foot, yielding attractive double-digit returns. We also measure our success here by the quality of tenants we have been able to attract. We have transformed almost all of our fleet; THE PENN DISTRICT is in process. We are disciplined and patient and prepared to let flat 4% cap rate deals pass by, while we wait for the fat pitch. While we have many million plus square foot buildings, we shy away from 500,000 square foot tenants who seem to always get the better of the deal, in strong markets or in weak. Our sweet spot is the 50,000 to 200,000 square foot tenant. A few years ago, I coined the phrase, “The island of Manhattan is tilting to the West and to the South.” Today, the hottest submarkets in town run from Hudson Yards to THE PENN DISTRICT and extend South through Chelsea and Meatpacking. Anticipating these trends, we have structured our office portfolio so that half of our square footage is in this district. We have a hospitality approach, treating our tenants as the valued customers that they are. This attitude begins at the leasing table (although that process can at times be contentious), through tenant fit up, to greeting at the front door. We believe this approach yields the highest renewal rate in the business; renewing tenants enhances our bottom line. We treat the real estate brokerage community as if they are our customers, because they are. Brokers prefer dealing with us, we know what it takes to make a deal, we treat their clients well and we deliver every time. We are in the amenity business. Our amenity poster child is now the new PENN 1, where we have dominant, state of the art, dining, workout, socializing and meeting spaces, etc. Tenant mix is really important; companies and their employees care who they co-tenant with. The design and location of each of our buildings has a target market in mind. For example our new-builds in Chelsea are targeting the creative class and boutique financials (an interesting combination). We maintain a fortress balance sheet with industry-leading liquidity. All of this in the relentless pursuit of shareholder value. 24 Below is a reconciliation of net income (loss) to NOI, as adjusted (properties owned at the end of 2021): ($ IN MILLIONS) Net income (loss) Our share of (income) loss from partially owned entities Our share of (income) loss from real estate fund Interest and other investment (income) loss, net Net gains on disposition of assets Net gain on transfer to Fifth Ave. and Times Square JV Purchase price fair value adjustment (Income) loss from discontinued operations NOI attributable to noncontrolling interests Depreciation, amortization expense and income taxes General and administrative expense Acquisition and transaction related costs Our share of NOI from partially owned entities Interest and debt expense NOI Certain items that impact NOI 2020 2019 (461.8) 3,334.3 329.1 226.3 5.5 (78.9) 104.1 (21.8) 2018 422.6 (9.1) 89.2 (17.1) (381.3) (845.5) (246.0) 2021 207.5 (130.5) (11.1) (4.6) (50.8) — — — — (2,571.1) — — — — (69.4) (72.8) (69.3) 401.9 134.6 13.8 310.9 231.1 1,033.4 14.2 436.3 181.5 174.0 306.5 229.3 972.6 54.9 522.6 169.9 106.5 322.4 286.6 1,259.8 1,382.6 1,401.3 (75.2) (202.2) (219.3) NOI, as adjusted (properties owned at the end of 2021) 1,047.6 1,027.5 1,184.6 1,180.4 1,182.0 Below is a reconciliation of net income (loss) to FFO and FFO, as adjusted: 2020 2019 (297.0) 3,147.9 (51.7) (50.1) (348.7) 3,097.8 368.6 389.0 2018 449.9 (65.1) 384.8 413.1 — (178.7) (158.1) ($ IN MILLIONS) Net income (loss) attributable to Vornado Preferred share dividends and issuance costs Net income (loss) applicable to common shares Depreciation and amortization of real property Net gains on sale of real estate Real estate impairment losses Decrease in fair value of marketable securities Net gain on transfer to Fifth Avenue and Times Square JV, net Net gain from sale of Urban Edge shares After tax purchase price fair value adjustment Partially-owned entities adjustments: Depreciation of real property Net gains on sale of real estate Income tax effect of adjustments Real estate impairment losses (Increase) decrease in fair value of marketable securities Noncontrolling interests’ share adjustments Preferred share dividends FFO Certain items that impact FFO FFO, as adjusted Below is a reconciliation of net income (loss) to EBITDA, as adjusted ($ IN MILLIONS) Net income (loss) (before noncontrolling interests) Less: net (income) loss attributable to noncontrolling interests in consolidated subsidiaries Net income (loss) attributable to the Operating Partnership Interest and debt expense Depreciation and amortization Net gain of sale of real estate Impairment losses on real estate Income tax expense/benefit Net gain on transfer to Fifth Avenue and Times Square JV, net EBITDA Gain on sale of 220 Central Park South units Hotel Pennsylvania (permanently closed April 5, 2021) Real Estate Fund 608 Fifth Avenue lease liability (gain) loss Severance and other reduction in force expenses Credit losses on loans receivable Other EBITDA, as adjusted (2019 to 2021 variance - 187 million) 2021 176.0 (74.9) 101.1 373.8 — 7.9 — — — — 139.2 (15.7) — — (1.1) (34.1) — 571.1 (21.2) 549.9 2021 207.5 (24.0) 183.5 297.1 526.5 (15.6) 7.9 (9.8) — 989.6 (50.3) 11.6 (3.8) — — — 1.9 949.0 236.3 4.9 32.0 5.5 — (2,559.1) — — (62.4) — 156.6 134.7 — — 409.1 2.8 (79.1) — — — — 2.9 141.7 — 750.5 1,003.4 (249.5) (342.9) 501.0 660.5 2020 (461.8) 2019 3,334.3 139.9 (321.9) 309.0 532.3 — 645.3 36.2 24.5 3,358.8 390.1 530.5 (178.7) 32.0 103.9 — (2,559.2) 1,677.4 (604.4) (8.3) 48.8 77.2 — — (55.1) 1,135.6 1,200.9 (381.3) 31.1 63.1 (70.3) 23.4 13.4 30.0 910.3 2017 264.1 (15.2) (3.2) (37.8) (0.5) — — 13.2 (65.3) 470.4 159.0 1.8 269.2 345.6 2017 227.4 (65.4) 162.0 468.0 (3.5) — — — — — — (44.1) (0.6) (71.2) 484.2 141.9 31.3 253.6 347.9 12.0 26.5 — — (27.3) 101.6 (4.0) 137.0 (17.8) — — 3.9 (22.8) — 729.7 (26.9) 702.8 — 7.7 — (36.7) 1.1 717.8 (16.8) 701.0 2016 982.0 (168.9) 23.6 (29.6) (160.4) — — (404.9) (66.2) 428.2 149.6 9.4 271.1 330.2 1,364.1 (220.0) 1,144.1 2016 906.9 (83.3) 823.6 531.6 (177.0) 160.7 — — — — 154.8 (2.9) — 6.3 — (41.1) 1.6 1,457.6 (785.3) 672.3 2015 859.4 9.9 (74.1) (27.2) (149.4) — — (223.5) (64.9) 294.8 149.3 12.5 245.8 309.3 1,341.9 (235.2) 1,106.7 2015 760.4 (80.6) 679.8 514.1 (289.1) 0.3 — — — — 144.0 (4.5) — 16.8 — (22.4) — 1,039.0 (409.3) 629.7 2014 1,009.0 58.5 2013 564.7 336.3 (163.0) (102.9) (38.6) (13.6) — — 20.8 (2.0) — — 2012 694.5 (428.9) (63.9) 252.7 (4.9) — — (686.9) (666.8) (378.1) (55.0) (58.6) (45.3) 360.7 141.9 18.4 207.7 337.4 342.5 150.3 24.9 175.1 323.5 1,176.5 1,107.8 304.5 140.5 17.4 152.1 315.7 956.3 (167.0) (154.3) (113.9) 1,009.5 953.5 842.4 2014 864.9 (81.5) 783.4 517.5 2013 476.0 (84.0) 392.0 501.8 2012 617.3 (67.9) 549.4 504.4 (507.2) (411.6) (245.8) 26.5 37.1 130.0 — — — — 117.8 (11.6) (7.3) — — (8.0) — 911.1 — — — — 157.3 (0.5) (26.7) 6.6 — (15.1) 0.1 641.0 — — — — 154.7 (241.6) (27.5) 11.6 — (16.6) — 818.6 (403.8) (173.0) (461.1) 507.3 468.0 357.5 Below is a reconciliation of net income (loss) to net income, as adjusted: 2021 101.1 (44.6) 29.5 (17.0) 7.9 (3.8) — 15.1 88.2 ($ IN MILLIONS) Net income (loss) applicable to common shares 220 Central Park South gains Hotel Pennsylvania (permanently closed April 5, 2021) Tax benefit net of tax liabilities Non-cash impairment losses Real Estate Fund Severance Certain other items that impact net income Net income, as adjusted 2020 (348.7) (332.1) 31.2 — 575.1 63.1 29.4 5.9 23.9 25 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K ☒ ☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2021 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number: Commission File Number: to 001-11954 (Vornado Realty Trust) 001-34482 (Vornado Realty L.P.) Vornado Realty Trust Vornado Realty L.P. (Exact name of registrants as specified in its charter) Vornado Realty Trust Maryland (State or other jurisdiction of incorporation or organization) 22-1657560 (I.R.S. Employer Identification Number) Vornado Realty L.P. Delaware (State or other jurisdiction of incorporation or organization) 13-3925979 (I.R.S. Employer Identification Number) 888 Seventh Avenue, New York, New York 10019 (Address of principal executive offices) (Zip Code) (212) 894-7000 (Registrants’ telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Registrant Vornado Realty Trust Vornado Realty Trust Vornado Realty Trust Vornado Realty Trust Vornado Realty Trust Common Shares of beneficial interest, $.04 par value per share Title of Each Class Trading Symbol(s) VNO Name of Exchange on Which Registered New York Stock Exchange Cumulative Redeemable Preferred Shares of beneficial interest, liquidation preference $25.00 per share: 5.40% Series L 5.25% Series M 5.25% Series N 4.45% Series O VNO/PL VNO/PM VNO/PN VNO/PO New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Registrant Vornado Realty Trust Vornado Realty L.P. Title of Each Class Series A Convertible Preferred Shares of beneficial interest, liquidation preference $50.00 per share Class A Units of Limited Partnership Interest Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: Yes ☐ No ☑ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Vornado Realty Trust: Yes ☐ No ☑ Vornado Realty L.P.: Yes ☐ No ☑ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: Yes ☑ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer," “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Vornado Realty Trust: ☑ Large Accelerated Filer ☐ Non-Accelerated Filer Vornado Realty L.P.: ☐ Large Accelerated Filer ☑ Non-Accelerated Filer ☐ Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐ Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Vornado Realty Trust: Yes ☑ No ☐ Vornado Realty L.P.: Yes ☑ No ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Vornado Realty Trust: Yes ☐ No ☑ Vornado Realty L.P.: Yes ☐ No ☑ The aggregate market value of the voting and non-voting common shares held by non-affiliates of Vornado Realty Trust, i.e. by persons other than officers and trustees of Vornado Realty Trust, was $8,259,860,000 at June 30, 2021. As of December 31, 2021, there were 191,723,608 common shares of beneficial interest outstanding of Vornado Realty Trust. There is no public market for the Class A units of limited partnership interest of Vornado Realty L.P. Based on the June 30, 2021 closing share price of Vornado Realty Trust’s common shares, which are issuable upon redemption of the Class A units, the aggregate market value of the Class A units held by non-affiliates of Vornado Realty L.P., i.e. by persons other than Vornado Realty Trust and its officers and trustees, was $515,447,000 at June 30, 2021. Part III: Portions of Proxy Statement for Annual Meeting of Vornado Realty Trust’s Shareholders to be held on May 19, 2022. Documents Incorporated by Reference EXPLANATORY NOTE This report combines the Annual Reports on Form 10-K for the fiscal year ended December 31, 2021 of Vornado Realty Trust and Vornado Realty L.P. Unless stated otherwise or the context otherwise requires, references to “Vornado” refer to Vornado Realty Trust, a Maryland real estate investment trust (“REIT”), and references to the “Operating Partnership” refer to Vornado Realty L.P., a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado. The Operating Partnership is the entity through which we conduct substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets. Vornado is the sole general partner and also a 92.6% limited partner of the Operating Partnership. As the sole general partner of the Operating Partnership, Vornado has exclusive control of the Operating Partnership’s day-to-day management. Under the limited partnership agreement of the Operating Partnership, unitholders may present their Class A units for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time). Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unitholder is equal to the quarterly dividend paid to a Vornado common shareholder. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. Vornado generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than having the Operating Partnership pay cash. With each such exchange or redemption, Vornado’s percentage ownership in the Operating Partnership will increase. In addition, whenever Vornado issues common shares other than to acquire Class A units of the Operating Partnership, Vornado must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must issue to Vornado an equivalent number of Class A units of the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT. The Company believes that combining the Annual Reports on Form 10-K of Vornado and the Operating Partnership into this single report provides the following benefits: • • • enhances investors’ understanding of Vornado and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the disclosure applies to both Vornado and the Operating Partnership; and creates time and cost efficiencies in the preparation of one combined report instead of two separate reports. The Company believes it is important to understand the few differences between Vornado and the Operating Partnership in the context of how Vornado and the Operating Partnership operate as a consolidated company. The financial results of the Operating Partnership are consolidated into the financial statements of Vornado. Vornado does not have any significant assets, liabilities or operations, other than its investment in the Operating Partnership. The Operating Partnership, not Vornado, generally executes all significant business relationships other than transactions involving the securities of Vornado. The Operating Partnership holds substantially all of the assets of Vornado. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by Vornado, which are contributed to the capital of the Operating Partnership in exchange for Class A units of partnership in the Operating Partnership, and the net proceeds of debt offerings by Vornado, which are contributed to the Operating Partnership in exchange for debt securities of the Operating Partnership, as applicable, the Operating Partnership generates all remaining capital required by the Company’s business. These sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit facility, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties. To help investors better understand the key differences between Vornado and the Operating Partnership, certain information for Vornado and the Operating Partnership in this report has been separated, as set forth below: • • • Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities; Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable; and Item 8. Financial Statements and Supplementary Data which includes the following specific disclosures for Vornado Realty Trust and Vornado Realty L.P.: • • • • Note 10. Redeemable Noncontrolling Interests Note 11. Shareholders' Equity/Partners' Capital Note 14. Stock-based Compensation Note 18. Income (Loss) Per Share/Income (Loss) Per Class A Unit This report also includes separate Part II, Item 9A. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of Vornado and the Operating Partnership in order to establish that the requisite certifications have been made and that Vornado and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350. Item Financial Information: Page Number INDEX 1. 1A. 1B. 2. 3. 4. 5. 6. 7. Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Reserved Management's Discussion and Analysis of Financial Condition and Results of Operations 7A. Quantitative and Qualitative Disclosures about Market Risk 8. 9. 9A. 9B. 9C. 10. 11. 12. 13. 14. 15. 16. Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Directors, Executive Officers and Corporate Governance(1) Executive Compensation(1) Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters(1) Certain Relationships and Related Transactions, and Director Independence(1) Principal Accounting Fees and Services(1) Exhibits, Financial Statement Schedules Form 10-K Summary 7 12 24 25 31 31 31 32 33 59 60 119 119 123 123 123 123 124 124 124 124 134 135 PART I. PART II. PART III. PART IV. Signatures ____________________ (1) These items are omitted in whole or in part because Vornado, the Operating Partnership’s sole general partner, will file a definitive Proxy Statement pursuant to Regulation 14A under the Securities Exchange Act of 1934 with the Securities and Exchange Commission no later than 120 days after December 31, 2021, portions of which are incorporated by reference herein. 5 FORWARD-LOOKING STATEMENTS Certain statements contained herein constitute forward‑looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 Annual Report on Form 10‑K. We also note the following forward-looking statements: in the case of our development and redevelopment projects, the estimated completion date, estimated project cost and cost to complete; and estimates of future capital expenditures, dividends to common and preferred shareholders and operating partnership distributions. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in this Annual Report on Form 10-K. Currently, one of the most significant factors is the ongoing adverse effect of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows, operating performance and the effect it has had and may continue to have on our tenants, the global, national, regional and local economies and financial markets and the real estate market in general. The extent of the impact of the COVID-19 pandemic will depend on future developments, including vaccination rates among the population, the efficacy and durability of vaccines against emerging variants, and governmental and tenant responses thereto, all of which are uncertain at this time but the impact could be material. Moreover, you are cautioned that the COVID-19 pandemic will heighten many of the risks identified in “Item 1A. Risk Factors” in this Annual Report on Form 10-K. 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 Annual Report on Form 10-K 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 Annual Report on Form 10-K. 6 PART I ITEM 1. BUSINESS Vornado is a fully‑integrated REIT and conducts its business through, and substantially all of its interests in properties are held by, the Operating Partnership, a Delaware limited partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders are dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the sole general partner of and owned approximately 92.6% of the common limited partnership interest in the Operating Partnership as of December 31, 2021. We currently own all or portions of: New York: • 67 Manhattan operating properties consisting of: • • • 20.6 million square feet of office space in 32 of the properties; 2.7 million square feet of street retail space in 60 of the properties; 1,674 units in eight residential properties; • Multiple development sites, including Hotel Pennsylvania; • A 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns six properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens; Signage throughout the Penn District and Times Square; and Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for our buildings and third parties. • • Other Real Estate and Investments: • • • • The 3.7 million square foot theMART in Chicago; A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet; A 25% interest in Vornado Capital Partners, our real estate fund (the "Fund"). We are the general partner and investment manager of the fund. The fund is in wind-down; and Other real estate and investments. OBJECTIVES AND STRATEGY Our business objective is to maximize Vornado shareholder value. We intend to achieve this objective by continuing to pursue our investment philosophy and to execute our operating strategies through: • maintaining a superior team of operating and investment professionals and an entrepreneurial spirit; • investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital appreciation; acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents; developing and redeveloping properties to increase returns and maximize value; and investing in operating companies that have a significant real estate component. • • • We expect to finance our growth, acquisitions and investments using internally generated funds and proceeds from asset sales and by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership units in exchange for property and may repurchase or otherwise reacquire these securities in the future. ACQUISITION We completed the following acquisition during 2021: • $158 million purchase of our joint venture partner's 45% ownership interest in One Park Avenue (valuing the property at $875 million, encumbered by $525 million of existing debt), increasing our ownership interest to 100%. DISPOSITIONS We completed the following sale transactions during 2021: • • • • • $137 million net proceeds from the sale of six condominium units at 220 Central Park South ("220 CPS"); $100 million aggregate sale of three Manhattan retail properties located at 677-679, 759-771 and 828-850 Madison Avenue; $75 million sale by Alexander's (32.4% interest) of its Paramus, New Jersey property to IKEA Property, Inc. ("IKEA"), the tenant at the property, pursuant to IKEA's purchase option contained in the lease; $28 million sale of 501 Broadway by the Fund (25% interest); and $10 million sale by Alexander's (32.4% interest) of a parcel of land in the Bronx, New York. 7 FINANCINGS We completed the following financing transactions during 2021: • $1.25 billion unsecured revolving credit facility extended from January 2023 to April 2026, lowering the interest rate to LIBOR plus 0.89% from LIBOR plus 1.00%; $1.2 billion refinancing of 555 California Street (70% interest); $950 million refinancing of 1290 Avenue of the Americas (70% interest); $750 million green bond public offering of senior unsecured notes; $675 million repayment of theMART mortgage loan; $525 million refinancing of One Park Avenue; $500 million modification of the PENN 11 mortgage loan lowering the interest rate to LIBOR plus 1.95% from LIBOR plus 2.75%, resulting in a fixed rate of 2.23% pursuant to the interest rate swap agreement; $350 million refinancing of 909 Third Avenue; $300 million issuance of 4.45% Series O cumulative redeemable preferred shares; and $300 million redemption of 5.70% Series K cumulative redeemable preferred shares. • • • • • • • • • DEVELOPMENT AND REDEVELOPMENT EXPENDITURES PENN District Farley Our 95% joint venture (5% is owned by the Related Companies ("Related")) is developing Farley Office and Retail, which will include approximately 845,000 rentable square feet of commercial space, comprised of approximately 730,000 square feet of office space and approximately 115,000 square feet of restaurant and retail space. The total development cost of this project is estimated to be approximately $1,120,000,000 at our 95% share, of which $896,186,000 of cash has been expended as of December 31, 2021. PENN 1 We are redeveloping PENN 1, a 2,547,000 square foot office building located on 34th Street between Seventh and Eighth Avenue. In December 2020, we entered into an agreement with the Metropolitan Transportation Authority (the “MTA”) to oversee the redevelopment of the Long Island Rail Road Concourse at Penn Station (the "Concourse"), within the footprint of PENN 1. Skanska USA Civil Northeast, Inc. will perform the redevelopment under a fixed price contract for $380,000,000 which is being funded by the MTA. In connection with the redevelopment, we entered into an agreement with the MTA which will result in the widening of the Concourse to relieve overcrowding and our trading of 15,000 square feet of back of house space for 22,000 square feet of retail frontage space. Vornado's total development cost for the PENN 1 project is estimated to be $450,000,000. As of December 31, 2021, $309,437,000 of cash has been expended. PENN 2 We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $161,066,000 of cash has been expended as of December 31, 2021. PENN 15 (Hotel Pennsylvania Site) We have permanently closed the Hotel Pennsylvania and plan to develop an office tower on the site. Demolition of the existing building structure commenced in the fourth quarter of 2021. We are also making districtwide improvements within the PENN District. The development cost of these improvements is estimated to be $100,000,000, of which $31,481,000 of cash has been expended as of December 31, 2021. We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in particular, the PENN District. There can be no assurance that the above projects will be completed, completed on schedule or within budget. 8 ENVIRONMENTAL SUSTAINABILITY INITIATIVES We have long believed a focus on environmental sustainability is responsible management of our business and important to our tenants. It has been central to Vornado's business strategy for over 10 years. The Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters, which includes climate change risk. Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with our business units. Vornado is an industry leader in sustainability, owning and operating more than 27 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing 95% of our office portfolio, with over 23 million square feet at LEED Gold or Platinum. In 2021, we were selected as a global “Sector Leader” for all Office/Retail Diversified REITs in the Global Real Estate Sustainability Benchmark ("GRESB"), ranked second among 94 responding listed companies in the United States and received the “Green Star” distinction for the ninth consecutive year. In 2020, we received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for the 11th consecutive year; were recognized as an EPA ENERGY STAR Partner of the Year, with the Sustained Excellence distinction; and received the 2020 Leadership Award from the United States Green Buildings Council (USGBC). We prioritize addressing climate change and in 2019 adopted a 10-year plan to make our buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy efficiency, demand management, and renewable power. We rely on both existing and future technology, as well as meaningful stakeholder collaboration with our tenants, our employees, and our communities, to achieve this plan. Our commitment to carbon neutrality and associated emissions reduction targets have been approved by the Science Based Targets Initiative as consistent with a 1.5°C climate scenario, the most ambitious goal of the Paris Agreement. We consider sustainability in all aspects of our business, including the design, construction, retrofit and ongoing maintenance and operations of our portfolio of buildings. We operate our buildings sustainably and efficiently by establishing best practices in energy and water consumption, carbon reduction, resource and waste management and ecologically sensitive procurement. Our policies, from 100% green cleaning to energy efficiency, are implemented across our entire portfolio. Mandatory sustainability training is required for all of our building operators and managers, and we undertake significant outreach with our tenants, employees and investors regarding Vornado’s sustainability programs and strategies. In January 2022, the Compensation Committee of Vornado's Board of Trustees approved the 2022 performance based long-term incentive plan which for the first time formally ties senior management compensation to achievement of certain ESG targets, including reductions in greenhouse emissions, achieving a specified GRESB score and targeting a higher percentage of LEED Gold or Platinum certified square footage. We are committed to transparent reporting of sustainability performance indicators and publish an annual ESG Report in accordance with the Global Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and recommendations set forth by the Task Force on Climate-related Financial Disclosures. Further details on our environmental sustainability initiatives and strategy, including our Vision 2030 Roadmap, can be found in our 2020 ESG Report at (esg.vno.com). There can be no assurance that our Vision 2030 commitment will be achieved in the planned time frame. The ESG Report is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K. HUMAN CAPITAL MANAGEMENT As of December 31, 2021, we have approximately 3,224 employees, consisting of (i) 2,710 employees of Building Maintenance Services LLC, a wholly owned subsidiary, which provides cleaning, security, and engineering services primarily to our New York properties, (ii) 235 employees in our corporate office, (iii) 161 employees in leasing and property management, and (iv) 118 employees of theMART. The foregoing does not include employees of partially owned entities. Human capital management is critical to our success and our employees are the foundation of our human capital. To foster talent and growth, we provide training and continuing education, promote career and personal development, and encourage innovation and engagement. Compensation, Benefits and Employees Wellbeing To attract and retain the best-qualified talent and to help our employees stay healthy, balance their work and personal lives, and meet their financial and retirement goals, we offer competitive benefits including, but not limited to, market-competitive compensation, healthcare (medical, dental and vision coverage), a health savings account, 401(k) and employer match, dependent care flexible spending account, parental leave, adoption/surrogacy benefits, short-term and long-term disability insurance, life insurance, time off/paid holidays, tuition reimbursement, subsidized gym memberships, employee wellness programs and incentives, in- workplace COVID-19 and flu vaccinations, onsite COVID-19 testing, commuter benefits, employee assistance program and workplace flexibility. Talent Development We promote career and personal development, provide training and continuing education, and encourage innovation and engagement. This includes tuition reimbursement for our employees’ continuing education and professional development, and the opportunity to participate in a variety of training and networking engagements. 9 HUMAN CAPITAL MANAGEMENT - CONTINUED Culture and Engagement Our employees are critical to our success, and we believe creating a positive and inclusive culture is essential to attracting and retaining engaged employees. We seek to retain our employees by actively engaging with our workforce and we solicit their feedback through our divisional leaders and employee surveys. We use their feedback to create and continually enhance programs that support their needs. Through our volunteer program, Vornado Volunteers, employees are granted one day of paid time off per calendar year to volunteer for a cause of their choice. Diversity and Inclusion Vornado is a diverse and inclusive environment that empowers the individual and enriches the employment experience. We have published Equal Employment Opportunity “EEO” data since 2017 and have a broadly diverse workforce across both our corporate base as well as our BMS division. Our employee demographics data can be found on our ESG micro-site (esg.vno.com), which is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K. Our diversity metrics set a baseline from where we constantly strive to improve. Health and Wellness / COVID-19 Response As a building owner and landlord to thousands of business tenants, we focus on maintaining and improving the health of our indoor environments, as well as communicating the value of our health and wellness programs with consistency and clarity to our stakeholders. We believe that consistent health programming and communications protocols not only mitigate health risks within our buildings, but they also create a responsible behavior framework for our employees, our tenants, and our visitors. We responded to the COVID-19 pandemic with determination to ensure that our tenants, employees and visitors remain healthy and safe. We fortified many of our buildings with protections that include daily health screenings and questionnaires, social distancing and PPE requirements, enhanced HVAC and indoor air quality, and installed onsite COVID-19 testing and vaccination locations. This infrastructure is further reinforced with our green cleaning program and our on-site operations team. Labor Relations BMS employs and manages janitorial and security staff who are members of 32BJ SEIU and engineering staff who are members of Local 94 of the International Union of Operating Engineers AFL-CIO. Through our active participation in the Realty Advisory Board on Labor Relations, we work collaboratively with both unions and consider our relations with our union employees to be very positive. For additional information on human capital matters, please see our most recent ESG report, available for download on our website at www.vno.com and in digital format at esg.vno.com. This report and other information on our website are not incorporated by reference into and do not form any part of this Annual Report on Form 10-K. COMPETITION We compete with a large number of real estate investors, property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends. See "Risk Factors" in Item 1A for additional information regarding these factors. SEGMENT DATA We operate in the following reportable segments: New York and Other. Financial information related to these reportable segments for the years ended December 31, 2021, 2020 and 2019 is set forth in Note 23 – Segment Information to our consolidated financial statements in this Annual Report on Form 10-K. TENANTS ACCOUNTING FOR OVER 10% OF REVENUES None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2021, 2020 and 2019. CERTAIN ACTIVITIES We do not base our acquisitions and investments on specific allocations by type of property. We have historically held our properties for long‑term investment; however, it is possible that properties in our portfolio may be sold or otherwise disposed of when circumstances warrant. Further, we have not adopted a policy that limits the amount or percentage of assets which could be invested in a specific property or property type. Generally our activities are reviewed and may be modified from time to time by Vornado’s Board of Trustees without the vote of our shareholders or Operating Partnership unitholders. PRINCIPAL EXECUTIVE OFFICES Our principal executive offices are located at 888 Seventh Avenue, New York, New York 10019; telephone (212) 894‑7000. 10 MATERIALS AVAILABLE ON OUR WEBSITE Copies of our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.vno.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the event of any changes to these charters or the code or guidelines, changed copies will also be made available on our website. Copies of these documents are also available directly from us free of charge. Our website also includes other financial and non-financial information, including certain non-GAAP financial measures, none of which is a part of this Annual Report on Form 10-K. Copies of our filings under the Securities Exchange Act of 1934 are also available free of charge from us, upon request. 11 ITEM 1A. RISK FACTORS Material factors that may adversely affect our business, operations and financial condition are summarized below. We refer to the equity and debt securities of both Vornado and the Operating Partnership as our “securities” and the investors who own shares of Vornado or units of the Operating Partnership, or both, as our “equity holders.” The risks and uncertainties described herein may not be the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, operations and financial condition. See “Forward-Looking Statements” contained herein on page 6. RISKS RELATED TO OUR PROPERTIES AND INDUSTRY Our business, financial condition, results of operations and cash flows have been and may continue to be adversely affected by the COVID-19 pandemic and the impact could be material to us. Our business has been adversely affected by the ongoing COVID-19 pandemic and preventive measures taken to curb the spread of the virus. The pandemic has resulted in governments and other authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and business closures. Existing and potential new variants make the on-going impact of the COVID-19 pandemic difficult to predict. If the virus continues to spread significantly in its current form or as a more contagious variant, governmental agencies and other authorities may order additional closures or impose further restrictions on businesses, which could negatively impact the financial condition of our tenants. The continuation of the pandemic could also have fundamental adverse effects on our business. Further delays in tenant return-to-work plans as a result of the continued risks of the pandemic and further dependence on work from home and flexible work arrangements may lead our office tenants to reassess their long-term physical space needs. Further, while many of the limitations and restrictions imposed on retailers during the onset of the pandemic have been lifted and/or eased, economic conditions, including a decline in Manhattan tourism since the onset of the virus, continue to adversely affect the financial health of our retail tenants. The impact of such conditions could cause retailers to reduce the number and size of their physical locations and further increase reliance on e-commerce. Over time, these factors could decrease the demand for office and retail space and ultimately decrease occupancy and/or rent levels across our portfolio, which may have a negative impact on our financial condition and/or access to capital. In addition, the value of our real estate assets may decline, which may result in non-cash impairment charges in future periods and the impact could be material. The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments, including vaccination rates among the population, the efficacy and durability of vaccines against emerging variants, and governmental and tenant responses thereto, all of which are uncertain at this time. Given the dynamic nature of the circumstances, it is difficult to predict the ongoing impact of the COVID-19 pandemic on our business, financial condition, results of operations and cash flows but the impact could be material. A significant portion of our properties is located in the New York City Metropolitan area and is affected by the economic cycles and risks inherent to this area. In 2021, approximately 88% of our net operating income ("NOI", a non-GAAP measure) came from properties located in the New York City metropolitan area. We may continue to concentrate a significant portion of our future acquisitions, development and redevelopment in this area. Real estate markets are subject to economic downturns and we cannot predict how economic conditions will impact this market in either the short or long term. Declines in the economy or declines in real estate markets in the New York City metropolitan area, including the effects of the COVID-19 pandemic, have hurt and could continue to hurt our financial performance and the value of our properties. In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in this region include: • • • • • • • • • • • financial performance and productivity of the media, advertising, professional services, financial, technology, retail, insurance and real estate industries; business layoffs or downsizing; any oversupply of, or reduced demand for, real estate; industry slowdowns; relocations of businesses; changing demographics; increased work from home and use of alternative work places; changes in the number of domestic and international tourists to our markets (including as a result of changes in the relative strengths of world currencies and as a result of the COVID-19 pandemic); the fiscal health of New York State and New York City governments and local transit authorities, particularly as a result of the COVID-19 pandemic; infrastructure quality; and changes in rates or the treatment of the deductibility of state and local taxes. 12 It is impossible for us to ensure the accuracy of predictions of the future or the effect of trends in the economic and investment climates of the geographic areas in which we concentrate, and more generally of the United States, or the real estate markets in these areas. Local, national or global economic downturns could negatively affect the value of our properties, our businesses and profitability. We are subject to risks that affect the general and New York City retail environments. Certain of our properties are Manhattan retail properties. In 2021, approximately 17% of our NOI is from Manhattan retail properties. As such, these properties are affected by the general and New York City retail environments, including office and residential occupancy rates, the level of consumer spending and consumer confidence, Manhattan tourism, employer remote-working policies, the threat of terrorism, increasing competition from on-line retailers, other retailers, and outlet malls, and the impact of technological change upon the retail environment generally. Further, New York City tourism has not yet fully recovered from the effects of the COVID-19 pandemic. The decline in international tourists, who comprise a major source of demand for our Manhattan retail tenants, has adversely affected such tenants. These factors could adversely affect the financial condition of our retail tenants, or result in the bankruptcy of such tenants, and the willingness of retailers to lease space in our retail locations, which could have an adverse effect on the value of our properties, our business and profitability. Our performance and the value of an investment in us are subject to risks associated with our real estate assets and with the real estate industry. The value of our real estate and the value of an investment in us fluctuates depending on conditions in the general economy and the real estate business. These conditions may also adversely impact our revenues and cash flows. The factors that affect the value of our real estate investments include, among other things: • • • • • • • • • • • • • • • • • • • • • • • • • • • • global, national, regional and local economic conditions; competition from other available space, including co-working space and sub-leases; local conditions such as an oversupply of space or a reduction in demand for real estate in the area; how well we manage our properties; the development and/or redevelopment of our properties; changes in market rental rates; the impact on our retail tenants and demand for retail space at our properties due to increased competition from online shopping; the timing and costs associated with property improvements and rentals; whether we are able to pass all or portions of any increases in operating costs through to tenants; changes in real estate taxes and other expenses; the ability of state and local governments to operate within their budgets; whether tenants and users such as customers and shoppers consider a property attractive; changes in consumer preferences adversely affecting retailers and retail store values; changes in space utilization by our tenants due to technology, economic conditions, and business environment; the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; consequences of any armed conflict involving, or terrorist attacks against, the United States or individual acts of violence in public spaces; trends in office real estate; availability of financing on acceptable terms or at all; inflation or deflation; fluctuations in interest rates; our ability to obtain adequate insurance; changes in zoning laws and taxation; government regulation; potential liability under environmental or other laws or regulations; natural disasters; general competitive factors; climate change; and pandemics. The rents or sales proceeds we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors. If rental revenues, sales proceeds and/or occupancy levels decline, we generally would expect to have less cash available for operating costs, to pay indebtedness and for distribution to equity holders. In addition, some of our major expenses, including mortgage payments, real estate taxes and maintenance costs generally do not decline when the related rents decline and maintenance costs can increase substantially in an inflationary environment. 13 Real estate is a competitive business and that competition may adversely impact us. We compete with a large number of real estate investors, property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Substantially all of our properties face competition from similar properties in the same market, which may adversely impact the rents we can charge at those properties and our results of operations. Our commercial office properties are located primarily in highly developed areas of the New York metropolitan area. Manhattan is the largest office market in the United States. The number of competitive office properties in the New York metropolitan area, which may be newer or better located than our properties, could have a material adverse effect on our ability to lease office space at our properties and on the effective rents we are able to charge. We depend on leasing space to tenants on economically favorable terms and collecting rent from tenants who may not be able to pay. Our financial results depend significantly on leasing space in our properties to tenants on economically favorable terms. In addition, because a majority of our income comes from renting of real property, our income, funds available to pay indebtedness and funds available for distribution to equity holders will decrease if a significant number of our tenants cannot pay their rent or if we are not able to maintain occupancy levels on favorable terms. If a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and may incur substantial legal and other costs. Even if we are able to enforce our rights, a tenant may not have recoverable assets. We may be adversely affected by trends in office real estate, including work from home trends. In 2021, approximately 79% of our NOI is from our office properties. Work from home, flexible or hybrid work schedules, open workplaces, videoconferencing, and teleconferencing are becoming more common, particularly as a result of the COVID-19 pandemic. These practices may enable businesses to reduce their office space requirements. There is also an increasing trend among some businesses to utilize shared office spaces and co-working spaces. A continuation of the movement towards these practices could, over time, erode the overall demand for office space and, in turn, place downward pressure on occupancy, rental rates, cash flows and property valuations. We may be unable to renew leases or relet space as leases expire. When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if tenants do renew or we can relet the space, the terms of renewal or reletting, considering among other things, rent and other concessions, the cost of improvements to the property and leasing commissions, may be less favorable than the terms in the expired leases. In addition, changes in space utilization by our tenants may impact our ability to renew or relet space without the need to incur substantial costs in renovating or redesigning the internal configuration of the relevant property. If we are unable to promptly renew the leases or relet the space at similar rates or if we incur substantial costs in renewing or reletting the space, our cash flow and ability to service debt obligations and pay dividends and distributions to equity holders could be adversely affected. Bankruptcy or insolvency of tenants may decrease our revenue, net income and available cash. From time to time, some of our tenants have declared bankruptcy, and other tenants may declare bankruptcy or become insolvent in the future. The bankruptcy or insolvency of a major tenant could cause us to suffer lower revenues and operational difficulties, including leasing the remainder of the property. As a result, the bankruptcy or insolvency of a major tenant could result in decreased net income and funds available to pay our indebtedness or make distributions to equity holders. Terrorist attacks may adversely affect the value of our properties and our ability to generate cash flow. We have significant investments in the New York City, Chicago and San Francisco metropolitan areas. In response to a terrorist attack or the perceived threat of terrorism, tenants in these areas may choose to relocate their businesses to less populated, lower- profile areas of the United States that may be perceived to be less likely targets of future terrorist activity and fewer customers may choose to patronize businesses in these areas. This, in turn, would trigger a decrease in the demand for space in these areas, which could increase vacancies in our properties and force us to lease space on less favorable terms. Furthermore, we may experience increased costs in security, equipment and personnel. As a result, the value of our properties and the level of our revenues and cash flows could decline materially. Natural disasters and the effects of climate change could have a concentrated impact on the areas where we operate and could adversely impact our results. Our investments are concentrated in the New York, Chicago and San Francisco metropolitan areas. Natural disasters, including earthquakes, storms, tornados, floods and hurricanes, could cause significant damage to our properties and the surrounding environment or area. Potentially adverse consequences of “global warming,” including rising sea levels, could similarly have an impact on our properties and the economies of the metropolitan areas in which we operate. Government efforts to combat climate change may impact the cost of operating our properties. Over time, these conditions could result in declining demand for office space in our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by 14 increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy at our properties and requiring us to expend funds as we seek to repair and protect our properties against such risks. The incurrence of these losses, costs or business interruptions may adversely affect our operating and financial results. Our properties are located in urban areas, which means the vitality of our properties is reliant on sound transportation and utility infrastructure. If that infrastructure is compromised in any way by an extreme weather event, such a compromise could have an adverse impact on our local economies and populations, as well as on our tenants’ ability to do business in our buildings. Our properties are subject to transitional risks related to climate-related policy change. De-carbonization of grid-supplied energy could lead to increased energy costs and operating expenses for our buildings. Retrofitting our building systems to consume less energy could lead to increased capital costs. Buildings which consume fossil fuel onsite may be subject to penalties. In addition, the full transition of grid-supplied energy to renewable sources (as has been mandated by the Climate Leadership and Community Protection Act in New York State) could lead to increased energy costs and operating expenses for our buildings. We may become subject to costs, taxes or penalties, or increases therein, associated with natural resource or energy usage, such as a “carbon tax” and by local legislation such as New York City’s Local Law 97, which sets limits on carbon emissions in our buildings and imposes penalties if we exceed those limits, or laws passed to impose limits or eliminate any onsite fossil fuel combustion in new construction and major renovations. These costs, taxes or penalties could increase our operating costs and decrease the cash available to pay our obligations or distribute to our equity owners. Changes to tax laws could affect REITs generally, the trading of our shares and our results of operations, both positively and negatively, in ways that are difficult to anticipate. The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the IRS and the Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely affect the taxation of REITs and their shareholders. We cannot predict whether, when, in what form, or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or decided, or technical corrections made, which could result in an increase in our, or our shareholders’, tax liability or require changes in the manner in which we operate in order to minimize increases in our tax liability. If such changes occur, we may be required to pay additional taxes on our assets or income and/or be subject to additional restrictions. These increased tax costs could, among other things, adversely affect the trading price for our common shares, our financial condition, our results of operations and the amount of cash available for the payment of dividends. RISKS RELATED TO OUR OPERATIONS AND STRATEGIES We face risks associated with property acquisitions. We have acquired in the past and intend to continue to pursue the acquisition of properties and portfolios of properties, including, but not limited to, large portfolios that could increase our size and result in alterations to our capital structure. Our acquisition activities and their success are subject to the following risks: • • • • • • • • even if we enter into an acquisition agreement for a property, we may be unable to complete that acquisition after making a non-refundable deposit and incurring certain other acquisition-related costs; we may be unable to obtain or assume financing for acquisitions on favorable terms or at all; acquired properties may fail to perform as expected; the actual costs of repositioning, redeveloping or maintaining acquired properties may be greater than our estimates and may require significantly greater time and attention of management than anticipated; the acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations to our satisfaction or other conditions that are not within our control, which may not be satisfied; acquired properties may be located in new markets where we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, costs associated with opening a new regional office and unfamiliarity with local governmental and permitting procedures; we may acquire real estate through the acquisition of the ownership entity subjecting us to the risks of that entity and we may be exposed to the liabilities of properties or companies acquired, some of which we may not be aware of at the time of acquisition; and we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and this could have an adverse effect on our results of operations and financial condition. Any delay or failure on our part to identify, negotiate, finance and consummate such acquisitions in a timely manner and on favorable terms, or operate acquired properties to meet our financial expectations, could impede our growth and have an adverse effect on us, including our financial condition, results of operations, cash flow and the market value of our securities. 15 We are exposed to risks associated with property redevelopment and repositioning that could adversely affect us, including our financial condition and results of operations. We continue to engage in redevelopment and repositioning activities with respect to our properties, and, accordingly, we are subject to certain risks, which could adversely affect us, including our financial condition and results of operations. These risks include, without limitation, (i) the availability and pricing of financing on favorable terms or at all; (ii) the availability and timely receipt of zoning and other regulatory approvals; (iii) the potential for the fluctuation of occupancy rates and rents at redeveloped properties, which may result in our investment not being profitable; (iv) start up, repositioning and redevelopment costs may be higher than anticipated; (v) cost overruns, especially in an inflationary environment, and untimely completion of construction (including risks beyond our control, such as weather or labor conditions, material shortages or supply chain delays); (vi) the potential that we may fail to recover expenses already incurred if we abandon development or redevelopment opportunities after we begin to explore them; (vii) the potential that we may expend funds on and devote management time to projects which we do not complete; (viii) the inability to complete leasing of a property on schedule or at all, resulting in an increase in carrying or redevelopment costs; (ix) the possibility that properties will be leased at below expected rental rates and (x) to the extent the redevelopment activities are conducted in partnership with third parties, the possibility of disputes with our joint venture development partners and the potential that we miss certain project milestone deadlines. These risks could result in substantial unanticipated delays or expenses and could prevent the initiation or the completion of redevelopment activities or the ultimate rents achieved on new developments, any of which could have an adverse effect on our financial condition, results of operations, cash flow, the market value of our common shares and ability to satisfy our principal and interest obligations and to make distributions to our shareholders. From time to time we have made, and in the future we may seek to make one or more material acquisitions. The announcement of such a material acquisition may result in a rapid and significant decline in the price of our securities. From time to time we have made, and in the future we may seek to make one or more material acquisitions that we believe will maximize shareholder value. However, an announcement by us of one or more significant acquisitions could result in a quick and significant decline in the price of our securities. It may be difficult to sell real estate timely, which may limit our flexibility. Real estate investments are relatively illiquid. Consequently, we may have limited ability to dispose of assets in our portfolio promptly in response to changes in economic or other conditions which could have an adverse effect on our sources of working capital and our ability to satisfy our debt obligations. We may not be able to effectively operate our business if we are unable to attract and retain qualified personnel due to a tight labor market and COVID-19 vaccine mandate in areas in which we operate. Our success depends on our ability to continue to attract, retain, and motivate qualified personnel. Currently, the U.S. job market is experiencing labor shortages and employee resignations at record levels. Factors impacting the labor shortage include continued fears of COVID-19, enhanced unemployment insurance benefits, people leaving the workforce entirely, higher pay from competitors, demand for flexible working hours and remote work, and many other factors. The increased ability of employees in the workforce to work from home or in other remote work arrangements has made it and may continue to make it more difficult for us to compete in the job market. In addition, we may find it difficult to attract and retain employees in New York City, where our corporate office and a significant portion of our properties are located, due to the implementation of a COVID-19 vaccine mandate beginning in December 2021. Our inability to attract, retain, and motivate qualified personnel, could have a material adverse effect on our ability to operate our business. Significant inflation could adversely affect our business and financial results. Increased inflation could adversely affect us by increasing costs of land, construction and renovation. In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit margins. In addition, our cost of labor and materials could increase, which could have an adverse impact on our business or financial results. While increases in most operating expenses at our properties can be passed on to our office and retail tenants, some tenants have fixed reimbursement charges and expenses at our residential properties may not be able to be passed on to residential tenants. Unreimbursed increased operating expenses may reduce cash flow available for payment of mortgage debt and interest and for distributions to shareholders. We may not be permitted to dispose of certain properties or pay down the debt associated with those properties when we might otherwise desire to do so without incurring additional costs. In addition, when we dispose of or sell assets, we may not be able to reinvest the sales proceeds and earn similar returns. As part of an acquisition of a property, or a portfolio of properties, we may agree, and in the past have agreed, not to dispose of the acquired properties or reduce the mortgage indebtedness for a long-term period, unless we pay certain of the resulting tax costs of the seller. These agreements could result in us holding on to properties that we would otherwise sell and not pay down or refinance. In addition, when we dispose of or sell assets, we may not be able to reinvest the sales proceeds and earn returns similar to those generated by the assets that were sold. 16 From time to time we have made, and in the future we may seek to make investments in companies over which we do not have sole control. Some of these companies operate in industries with different risks than investing and operating real estate. From time to time we have made, and in the future we may seek to make, investments in companies that we may not control, including, but not limited to, Alexander’s, our Fifth Avenue and Times Square JV, and other equity and loan investments. Although these businesses generally have a significant real estate component, some of them operate in businesses that are different from investing and operating real estate. Consequently, we are subject to operating and financial risks of those industries and to the risks associated with lack of control, such as having differing objectives than our partners or the entities in which we invest, or becoming involved in disputes, or competing directly or indirectly with these partners or entities. In addition, we rely on the internal controls and financial reporting controls of these entities and their failure to maintain effectiveness or comply with applicable standards may adversely affect us. We are subject to risks involved in real estate activity through joint ventures and private equity real estate funds. We currently own properties through joint ventures and private equity real estate funds with other persons and entities and may in the future acquire or own properties through joint ventures and funds when we believe circumstances warrant the use of such structures. Joint venture and fund investments involve risk, including: the possibility that our partners might refuse to make capital contributions when due and therefore we may be forced to make contributions to maintain the value of the property; that we may be responsible to our partners for indemnifiable losses; that our partners might at any time have business or economic goals that are inconsistent with ours; that third parties may be hesitant or refuse to transact with the joint venture or fund due to the identity of our partners; and that our partners may be in a position to take action or withhold consent contrary to our recommendations, instructions or requests. We and our respective joint venture partners may each have the right to trigger a buy-sell, put right or forced sale arrangement, which could cause us to sell our interest, or acquire our partner’s interest, or to sell the underlying asset, at a time when we otherwise would not have initiated such a transaction, without our consent or on unfavorable terms. In some instances, joint venture and fund partners may have competing interests in our markets that could create conflicts of interest. These conflicts may include compliance with the REIT requirements, and our REIT status could be jeopardized if any of our joint ventures or funds do not operate in compliance with REIT requirements. To the extent our partners do not meet their obligations to us or our joint ventures or funds, or they take action inconsistent with the interests of the joint venture or fund, we may be adversely affected. RISKS RELATED TO OUR INDEBTEDNESS AND ACCESS TO CAPITAL Capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the value of an investment in our debt and equity securities. There are many factors that can affect the value of our debt and equity securities, including the state of the capital markets and the economy. Demand for office and retail space typically declines nationwide due to an economic downturn, bankruptcies, downsizing, layoffs and cost cutting. Government action or inaction may adversely affect the state of the capital markets. The cost and availability of credit may be adversely affected by illiquid credit markets and wider credit spreads, which may adversely affect our liquidity and financial condition, including our results of operations, and the liquidity and financial condition of our tenants. Our inability or the inability of our tenants to timely refinance maturing liabilities and access the capital markets to meet liquidity needs may materially affect our financial condition and results of operations and the value of our securities. We may not be able to obtain capital to make investments. We depend primarily on external financing to fund the growth of our business. This is because one of the requirements of the Internal Revenue Code of 1986, as amended, for a REIT is that it distributes 90% of its taxable income, excluding net capital gains, to its shareholders. This, in turn, requires the Operating Partnership to make distributions to its unitholders. There is a separate requirement to distribute net capital gains or pay a corporate level tax in lieu thereof. Our access to debt or equity financing depends on the willingness of third parties to lend or make equity investments and on conditions in the capital markets generally. Although we believe that we will be able to finance any investments we may wish to make in the foreseeable future, there can be no assurance that new financing will be available or available on acceptable terms. For information about our available sources of funds, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and the notes to the consolidated financial statements in this Annual Report on Form 10-K. We depend on dividends and distributions from our direct and indirect subsidiaries. The creditors and preferred equity holders of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us. Substantially all of Vornado’s assets are held through its Operating Partnership that holds substantially all of its properties and assets through subsidiaries. The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in turn, substantially all of Vornado’s cash flow is dependent on cash distributions to it by the Operating Partnership. The creditors of each of Vornado’s direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before distributions may be made by that subsidiary to its equity holders. Thus, the Operating Partnership’s ability to make distributions to its equity holders depends on its subsidiaries’ ability first to satisfy their obligations to their creditors and then to make distributions to the Operating Partnership. Likewise, Vornado’s ability to pay dividends to its holders of common and preferred shares 17 depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and make distributions to holders of its preferred units and then to make distributions to Vornado. Furthermore, the holders of preferred units of the Operating Partnership are entitled to receive preferred distributions before payment of distributions to the Operating Partnership’s equity holders, including Vornado. Thus, Vornado’s ability to pay cash dividends to its equity holders and satisfy its debt obligations depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and make distributions to holders of its preferred units and then to its equity holders, including Vornado. As of December 31, 2021, there were three series of preferred units of the Operating Partnership not held by Vornado with a total liquidation value of $53,223,000. In addition, Vornado’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the liquidation, reorganization or insolvency is only after the claims of the creditors, including trade creditors and preferred equity holders, are satisfied. We have a substantial amount of indebtedness that could affect our future operations. As of December 31, 2021, our consolidated mortgages and unsecured indebtedness, excluding related premium, discount and deferred financing costs, totaled $8.7 billion. We are subject to the risks normally associated with debt financing, including the risk that our cash flow from operations will be insufficient to meet our required debt service. Our debt service costs generally will not be reduced if developments in the market or at our properties, such as the entry of new competitors or the loss of major tenants, cause a reduction in the income from our properties. Should such events occur, our operations may be adversely affected. If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be foreclosed upon by the mortgagee resulting in a loss of income and a decline in our total asset value. We have outstanding debt, and the amount of debt and its cost may increase and refinancing may not be available on acceptable terms. We rely on both secured and unsecured, variable rate and non-variable rate debt to finance acquisitions and development activities and for working capital. If we are unable to obtain debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected. In addition, the cost of our existing debt may increase, especially in the case of a rising interest rate environment, and we may not be able to refinance our existing debt in sufficient amounts or on acceptable terms. If the cost or amount of our indebtedness increases or we cannot refinance our debt in sufficient amounts or on acceptable terms, we are at risk of credit rating downgrades and default on our obligations that could adversely affect our financial condition and results of operations. Failure to hedge effectively against interest rate changes may adversely affect results of operations. The interest rate hedge instruments we use to manage some of our exposure to interest rate volatility involve risk and counterparties may fail to perform under these arrangements. In addition, these arrangements may not be effective in reducing our exposure to interest rate changes and when existing interest rate hedges terminate, we may incur increased costs in implementing further interest rate hedges. Failure to hedge effectively against interest rate changes may adversely affect our results of operations. Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities. The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the applicable lender, to further mortgage the applicable property or to discontinue insurance coverage. Our unsecured indebtedness and debt that we may obtain in the future may contain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including covenants that limit our ability to incur debt based upon the level of our ratio of total debt to total assets, our ratio of secured debt to total assets, our ratio of EBITDA to interest expense, and fixed charges, and that require us to maintain a certain ratio of unencumbered assets to unsecured debt. Our ability to borrow is subject to compliance with these and other covenants. In addition, failure to comply with our covenants could cause a default under the applicable debt instrument, and we may then be required to repay such debt with capital from such other sources or give possession of a secured property to the lender. Under those circumstances, other sources of capital may not be available to us or may be available only on unattractive terms. A downgrade in our credit ratings could materially and adversely affect our business and financial condition. Our credit rating and the credit ratings assigned to our debt securities and our preferred shares could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant such action. Moreover, these credit ratings are not recommendations to buy, sell or hold our common shares or any other securities. If any of the credit rating agencies that have rated our securities downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for that rating is negative, such action could have a material adverse effect on our costs and availability of funding, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows, the trading/redemption price of our securities, and our ability to satisfy our debt service obligations and to pay dividends and distributions to our equity holders. 18 RISK RELATED TO OUR ORGANIZATION AND STRUCTURE Vornado’s Amended and Restated Declaration of Trust (the “declaration of trust”) sets limits on the ownership of its shares. Generally, for Vornado to maintain its qualification as a REIT under the Internal Revenue Code, not more than 50% in value of the outstanding shares of beneficial interest of Vornado may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of Vornado’s taxable year. The Internal Revenue Code defines “individuals” for purposes of the requirement described in the preceding sentence to include some types of entities. Under Vornado’s declaration of trust, as amended, no person may own more than 6.7% of the outstanding common shares of any class, or 9.9% of the outstanding preferred shares of any class, with some exceptions for persons who held common shares in excess of the 6.7% limit before Vornado adopted the limit and other persons approved by Vornado’s Board of Trustees. In addition, our declaration of trust includes restrictions on ownership of our common shares and preferred shares to preserve our status as a "domestically controlled qualified investment entity" within the meaning of Section 897 (h)(4)(B) of the Internal Revenue Code of 1986, as amended. These restrictions on transferability and ownership may delay, deter or prevent a change in control of Vornado or other transaction that might involve a premium price or otherwise be in the best interest of equity holders. The Maryland General Corporation Law (the “MGCL”) contains provisions that may reduce the likelihood of certain takeover transactions. The MGCL imposes conditions and restrictions on certain “business combinations” (including, among other transactions, a merger, consolidation, share exchange, or, in certain circumstances, an asset transfer or issuance of equity securities) between a Maryland REIT and certain persons who beneficially own at least 10% of the corporation’s stock (an “interested shareholder”). Unless approved in advance by the board of trustees of the trust, or otherwise exempted by the statute, such a business combination is prohibited for a period of five years after the most recent date on which the interested shareholder became an interested shareholder. After such five-year period, a business combination with an interested shareholder must be: (a) recommended by the board of trustees of the trust, and (b) approved by the affirmative vote of at least (i) 80% of the trust’s outstanding shares entitled to vote and (ii) two-thirds of the trust’s outstanding shares entitled to vote which are not held by the interested shareholder with whom the business combination is to be effected, unless, among other things, the trust’s common shareholders receive a “fair price” (as defined by the statute) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for his or her shares. In approving a transaction, Vornado’s Board of Trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board of Trustees. Vornado’s Board of Trustees has adopted a resolution exempting any business combination between Vornado and any trustee or officer of Vornado or its affiliates. As a result, any trustee or officer of Vornado or its affiliates may be able to enter into business combinations with Vornado that may not be in the best interest of our equity holders. With respect to business combinations with other persons, the business combination provisions of the MGCL may have the effect of delaying, deferring or preventing a change in control of Vornado or other transaction that might involve a premium price or otherwise be in the best interest of our equity holders. The business combination statute may discourage others from trying to acquire control of Vornado and increase the difficulty of consummating any offer. Title 3, Subtitle 8 of the MGCL permits our Board of Trustees, without shareholder approval and regardless of what is currently provided in our declaration of trust or bylaws, to implement certain takeover defenses, including adopting a classified board or increasing the vote required to remove a trustee. Such takeover defenses may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in control of us under the circumstances that otherwise could provide our common shareholders with the opportunity to realize a premium over the then current market price. Vornado may issue additional shares in a manner that could adversely affect the likelihood of certain takeover transactions. Vornado’s declaration of trust authorizes the Board of Trustees to: • • • • cause Vornado to issue additional authorized but unissued common shares or preferred shares; classify or reclassify, in one or more series, any unissued preferred shares; set the preferences, rights and other terms of any classified or reclassified shares that Vornado issues; and increase, without shareholder approval, the number of shares of beneficial interest that Vornado may issue. Vornado’s Board of Trustees could establish a series of preferred shares whose terms could delay, deter or prevent a change in control of Vornado, and therefore of the Operating Partnership, or other transaction that might involve a premium price or otherwise be in the best interest of our equity holders, although Vornado’s Board of Trustees does not now intend to establish a series of preferred shares of this kind. Vornado’s declaration of trust and bylaws contain other provisions that may delay, deter or prevent a change in control of Vornado or other transaction that might involve a premium price or otherwise be in the best interest of our equity holders. We may change our policies without obtaining the approval of our equity holders. Our operating and financial policies, including our policies with respect to acquisitions of real estate or other companies, growth, operations, indebtedness, capitalization, dividends and distributions, are exclusively determined by Vornado’s Board of Trustees. Accordingly, our equity holders do not control these policies. 19 Steven Roth and Interstate Properties may exercise substantial influence over us. They and some of Vornado’s other trustees and officers have interests or positions in other entities that may compete with us. As of December 31, 2021, Interstate Properties, a New Jersey general partnership, and its partners beneficially owned an aggregate of approximately 6.9% of the common shares of beneficial interest of Vornado and 26.1% of the common stock of Alexander’s, which is described below. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the three partners of Interstate Properties. Mr. Roth is the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, the managing general partner of Interstate Properties, and the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. Messrs. Mandelbaum and Wight are Trustees of Vornado and Directors of Alexander’s. Because of these overlapping interests, Mr. Roth and Interstate Properties and its partners may have substantial influence over Vornado, and therefore over the Operating Partnership. In addition, certain decisions concerning our operations or financial structure may present conflicts of interest among Messrs. Roth, Mandelbaum and Wight and Interstate Properties and our other equity holders. In addition, Mr. Roth, Interstate Properties and its partners, and Alexander’s currently and may in the future engage in a wide variety of activities in the real estate business which may result in conflicts of interest with respect to matters affecting us, such as which of these entities or persons, if any, may take advantage of potential business opportunities, the business focus of these entities, the types of properties and geographic locations in which these entities make investments, potential competition between business activities conducted, or sought to be conducted, competition for properties and tenants, possible corporate transactions such as acquisitions and other strategic decisions affecting the future of these entities. We manage and lease the real estate assets of Interstate Properties pursuant to a management agreement for which we receive an annual fee equal to 4% of annual base rent and percentage rent. See Note 22 – Related Party Transactions to our consolidated financial statements in this Annual Report on Form 10-K for additional information. There may be conflicts of interest between Alexander’s and us. As of December 31, 2021, we owned 32.4% of the outstanding common stock of Alexander’s. Alexander’s is a REIT that has six properties, which are located in the greater New York metropolitan area. In addition to the 2.2% that they indirectly own through Vornado, Interstate Properties, which is described above, and its partners owned 26.1% of the outstanding common stock of Alexander’s as of December 31, 2021. Mr. Roth is the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, the managing general partner of Interstate Properties, and the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. Messrs. Mandelbaum and Wight are Trustees of Vornado and Directors of Alexander’s and general partners of Interstate Properties. Ms. Mandakini Puri and Dr. Richard West are Trustees of Vornado and Directors of Alexander’s. We manage, develop and lease Alexander’s properties under management, development and leasing agreements under which we receive annual fees from Alexander’s. These agreements are described in Note 5 - Investments in Partially Owned Entities to our consolidated financial statements in this Annual Report on Form 10-K. RISKS RELATED TO OUR COMMON SHARES AND OPERATING PARTNERSHIP CLASS A UNITS The trading price of Vornado’s common shares has been volatile and may continue to fluctuate. The trading price of Vornado’s common shares has been volatile and may continue to fluctuate widely as a result of several factors, many of which are outside our control. In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations have in the past and may in the future adversely affect the market price of Vornado’s common shares and the redemption price of the Operating Partnership’s Class A units. In particular, the market price of our common shares has been further adversely impacted since March 2020 due to the COVID-19 pandemic. These factors include: • • • • • • • • • • • • • • our financial condition and performance; the financial condition of our tenants, including the extent of tenant bankruptcies or defaults; actual or anticipated quarterly fluctuations in our operating results and financial condition; our dividend policy; the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, including securities issued by other real estate companies, and fixed income securities; uncertainty and volatility in the equity and credit markets; fluctuations in interest rates; changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; failure to meet analysts’ revenue or earnings estimates; speculation in the press or investment community; strategic actions by us or our competitors, such as acquisitions or restructurings; the extent of institutional investor interest in us; the extent of short-selling of Vornado common shares and the shares of our competitors; fluctuations in the stock price and operating results of our competitors; 20 • • • • general financial and economic market conditions and, in particular, developments related to market conditions for office REITs and other real estate related companies and the New York City real estate market; domestic and international economic factors unrelated to our performance; changes in tax laws and rules; and all other risk factors addressed elsewhere in this Annual Report on Form 10-K. A significant decline in Vornado’s stock price could result in substantial losses for our equity holders. Vornado has many shares available for future sale, which could hurt the market price of its shares and the redemption price of the Operating Partnership’s units. The interests of equity holders could be diluted if we issue additional equity securities. As of December 31, 2021, Vornado had authorized but unissued 58,276,392 common shares of beneficial interest, $.04 par value, and 58,387,098 preferred shares of beneficial interest, no par value; of which 20,859,593 common shares are reserved for issuance upon redemption of Class A Operating Partnership units, convertible securities and employee stock options and 11,200,000 preferred shares are reserved for issuance upon redemption of preferred Operating Partnership units. Any shares not reserved may be issued from time to time in public or private offerings or in connection with acquisitions. In addition, common and preferred shares reserved may be sold upon issuance in the public market after registration under the Securities Act or under Rule 144 under the Securities Act or other available exemptions from registration. We cannot predict the effect that future sales of Vornado’s common and preferred shares or Operating Partnership Class A and preferred units will have on the market prices of our securities. In addition, under Maryland law, Vornado’s Board of Trustees has the authority to increase the number of authorized shares without shareholder approval. Loss of our key personnel could harm our operations and adversely affect the value of our common shares and Operating Partnership Class A units. We are dependent on the efforts of Steven Roth, the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. While we believe that we could find a replacement for him and other key personnel, the loss of their services could harm our operations and adversely affect the value of our securities. RISKS RELATED TO REGULATORY COMPLIANCE Vornado may fail to qualify or remain qualified as a REIT and may be required to pay federal income taxes at corporate rates, which could adversely impact the value of our common shares. Although we believe that Vornado will remain organized and will continue to operate so as to qualify as a REIT for federal income tax purposes, Vornado may fail to remain so qualified. Qualifications are governed by highly technical and complex provisions of the Internal Revenue Code for which there are only limited judicial or administrative interpretations and depend on various facts and circumstances that are not entirely within our control. In addition, legislation, new regulations, administrative interpretations or court decisions may significantly change the relevant tax laws and/or the federal income tax consequences of qualifying as a REIT. If, with respect to any taxable year, Vornado fails to maintain its qualification as a REIT and does not qualify under statutory relief provisions, Vornado could not deduct distributions to shareholders in computing our taxable income and would have to pay federal income tax on its taxable income at regular corporate rates. The federal income tax payable would include any applicable alternative minimum tax. If Vornado had to pay federal income tax, the amount of money available to distribute to equity holders and pay its indebtedness would be reduced for the year or years involved, and Vornado would not be required to make distributions to shareholders in that taxable year and in future years until it was able to qualify as a REIT and did so. In addition, Vornado would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost, unless Vornado were entitled to relief under the relevant statutory provisions. Our failure to qualify as a REIT could impact our ability to expand our business and raise capital and adversely affect the value of our common shares. We may face possible adverse federal tax audits and changes in federal tax laws, which may result in an increase in our tax liability. In the normal course of business, certain entities through which we own real estate either have undergone or may undergo tax audits. Although we believe that we have substantial arguments in favor of our positions, in some instances there is no controlling precedent or interpretive guidance. There can be no assurance that audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations. At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict if or when any new U.S. federal income tax law, regulation, or administrative interpretation, or any amendment to any existing U.S. federal income tax law, Treasury regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. Vornado, its taxable REIT subsidiaries, and our security holders could be adversely affected by any such change in, or any new, U.S. federal income tax law, Treasury regulation or administrative interpretation. 21 We may face possible adverse state and local tax audits and changes in state and local tax law. Because Vornado is organized and qualifies as a REIT, it is generally not subject to federal income taxes, but we are subject to certain state and local taxes. In the normal course of business, certain entities through which we own real estate either have undergone, or are currently undergoing, tax audits. Although we believe that we have substantial arguments in favor of our positions in the ongoing audits, in some instances there is no controlling precedent or interpretive guidance on the specific point at issue. There can be no assurance that audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations. From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and size of such changes including changes in laws, regulations and administration of property and transfer taxes. If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for the payment of dividends and distributions to our security holders. Compliance or failure to comply with the Americans with Disabilities Act ("ADA") or other safety regulations and requirements could result in substantial costs. ADA generally requires that public buildings, including our properties, meet certain Federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the Federal government or the award of damages to private litigants and/or legal fees to their counsel. From time to time persons have asserted claims against us with respect to some of our properties under the ADA, but to date such claims have not resulted in any material expense or liability. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our properties, including the removal of access barriers, it could adversely affect our financial condition and results of operations, as well as the amount of cash available for distribution to equity holders. Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations. We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate. Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including air and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property. The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. The presence of contamination or the failure to remediate contamination may also impair our ability to sell or lease real estate or to borrow using the real estate as collateral. Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and govern emissions of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (PCBs) are also regulated by federal and state laws. We are also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals. Our predecessor companies may be subject to similar liabilities for activities of those companies in the past. We could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or related claims arising out of environmental contamination or human exposure to contamination at or from our properties. Each of our properties has been subject to varying degrees of environmental assessment. To date, these environmental assessments have not revealed any environmental condition material to our business. However, identification of new compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, human exposure to contamination or changes in clean-up or compliance requirements could result in significant costs to us. 22 GENERAL RISKS The occurrence of cyber incidents, or a deficiency in our cyber security, as well as other disruptions of our IT networks and related systems, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships or reputation, all of which could negatively impact our financial results. We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, ransomware, computer viruses, attachments to e-mails, persons who access our systems from inside or outside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Although we have not experienced cyber incidents that are individually, or in the aggregate, material, we have experienced cyber attacks in the past, which have thus far been mitigated by preventative, detective, and responsive measures that we have put in place. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations (including managing our building systems) and, in some cases, may be critical to the operations of certain of our tenants. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business, through human error, misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, computer viruses or other malicious codes, and similar means of unauthorized and destructive tampering. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. A security breach or other significant disruption involving our IT networks and related systems could disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our tenants; result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or which could expose us to damage claims by third- parties for disruptive, destructive or otherwise harmful purposes and outcomes; result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space; require significant management attention and resources to remedy any damages that result; may require payments to the attackers; subject us to litigation claims for breach of contract, damages, credits, fines, penalties, governmental investigations and enforcement actions or termination of leases or other agreements; or damage our reputation among our tenants and investors generally. Any or all of the foregoing could have a material adverse effect on our results of operations, financial condition and cash flows. A cyber attack or systems failure could interfere with our ability to comply with financial reporting requirements, which could adversely affect us. A cyber attack could also compromise the confidential information of our employees, tenants, customers and vendors. A successful attack could disrupt and materially affect our business operations, including damaging relationships with tenants, customers and vendors. Any compromise of our information security systems could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information (which may be confidential, proprietary and/or commercially sensitive in nature) and a loss of confidence in our security measures, which could harm our business. Competition for acquisitions may reduce the number of acquisition opportunities available to us and increase the costs of those acquisitions. We may acquire properties when we are presented with attractive opportunities. We may face competition for acquisition opportunities from other well-capitalized investors, including publicly traded and privately held REITs, private real estate funds, domestic and foreign financial institutions, life insurance companies, sovereign wealth funds, pension trusts, partnerships and individual investors, which may adversely affect us because that competition may cause an increase in the purchase price for a desired acquisition property or result in a competitor acquiring the desired property instead of us. If we are unable to successfully acquire additional properties, our ability to grow our business could be adversely affected. In addition, increases in the cost of acquisition opportunities could adversely affect our results of operations. We may be adversely affected by the discontinuation of London Interbank Offered Rate ("LIBOR"). On March 5, 2021, the United Kingdom Financial Conduct Authority ("FCA") announced that USD LIBOR will no longer be published after June 30, 2023. The Secured Overnight Financing Rate ("SOFR") has been identified by market participants as the preferred alternative to USD LIBOR in derivatives and other financial contracts. Our new floating rate loans entered into after December 31, 2021 no longer reference to LIBOR rates and instead reference to SOFR or another floating rate. As of December 31, 2021, we had approximately $6.7 billion of consolidated outstanding debt indexed to LIBOR. $2.2 billion of this debt is subject to interest rate swaps that convert the floating rates to a fixed interest rate. In the transition from the use of LIBOR 23 to SOFR or other alternatives, the level of interest payments we incur may change. In addition, although certain of our LIBOR based obligations provide for alternative methods of calculating the interest rate payable (including transition to an alternative benchmark rate) if LIBOR is not reported and we have been entering into amendments to certain of our financing agreements to provide for alternative benchmark rates if LIBOR is discontinued, uncertainty as to the extent and manner of future changes may result in interest rates and/or payments that are higher than or lower than or that do not otherwise correlate over time with the interest rates and/or payments that would have been made on our obligations if LIBOR was available in its current form. Use of alternative interest rates or other LIBOR reforms could result in increased volatility or a tightening of credit markets which could adversely affect our ability to obtain cost-effective financing. In addition, the transition of our existing LIBOR financing agreements to alternative benchmarks may result in unanticipated changes to the overall interest rate paid on our liabilities. Some of our potential losses may not be covered by insurance. For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $250,000,000 includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage. Our California properties have earthquake insurance with coverage of $350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2 billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,785,910 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC. We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material. Our debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance or refinance our properties and expand our portfolio. ITEM 1B. UNRESOLVED STAFF COMMENTS There are no unresolved comments from the staff of the Securities and Exchange Commission as of the date of this Annual Report on Form 10-K. 24 ITEM 2. PROPERTIES We operate in two reportable segments: New York and Other. The following pages provide details of our real estate properties as of December 31, 2021. NEW YORK SEGMENT Property PENN 1 (ground leased through 2098)(1) 1290 Avenue of the Americas PENN 2 909 Third Avenue (ground leased through 2063)(1) 280 Park Avenue(2) Independence Plaza, Tribeca (1,327 units)(2) 770 Broadway PENN 11 90 Park Avenue One Park Avenue 888 Seventh Avenue (ground leased through 2067)(1) 100 West 33rd Street Farley Office and Retail (ground and building leased through 2116)(1) 330 West 34th Street (65.2% ground leased through 2149)(1) 85 Tenth Avenue(2) 650 Madison Avenue(2) 350 Park Avenue 150 East 58th Street(4) 33-00 Northern Boulevard (Center Building) 7 West 34th Street(2) 595 Madison Avenue 640 Fifth Avenue(2) 50-70 West 93rd Street (324 units)(2) Manhattan Mall 40 Fulton Street 260 Eleventh Avenue (ground leased through 2114)(1) 4 Union Square South 61 Ninth Avenue (2 buildings) (ground leased through 2115)(1)(2) 512 West 22nd Street(2) 825 Seventh Avenue 1540 Broadway(2) Paramus 666 Fifth Avenue (2)(5) 1535 Broadway(2) 57th Street (2 buildings)(2) 689 Fifth Avenue(2) 478-486 Broadway (2 buildings) (10 units)(6) 150 West 34th Street 510 Fifth Avenue 655 Fifth Avenue(2) 155 Spring Street(6) 435 Seventh Avenue ________________________________________ See notes on page 27. % Ownership 100.0 % 70.0 % 100.0 % 100.0 % 50.0 % Type Office / Retail Office / Retail Office / Retail Office Office / Retail % Occupancy 82.4% 99.6% 100.0% 96.7% 98.1% Square Feet Under Development or Not Available for Lease Total Property 257,000 2,547,000 — 2,120,000 In Service 2,290,000 2,120,000 428,000 1,192,000 1,620,000 1,350,000 1,264,000 — — 1,350,000 1,264,000 50.1 % Retail / Residential 100.0% (3) 1,249,000 8,000 1,257,000 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 95.0 % 100.0 % 49.9 % 20.1 % 100.0 % 100.0 % 100.0 % 53.0 % 100.0 % 52.0 % 49.9 % 100.0 % 100.0 % 100.0 % 100.0 % 45.1 % 55.0 % 51.2 % 52.0 % 100.0 % 52.0 % 52.0 % 50.0 % 52.0 % Office / Retail Office / Retail Office / Retail Office / Retail Office / Retail Office Office / Retail Office / Retail Office / Retail Office / Retail Office / Retail Office / Retail Office Office / Retail Office / Retail Office / Retail Residential Retail Office / Retail Office Retail Office / Retail Office / Retail Office(2) / Retail Retail Office Retail Retail / Theatre Office / Retail Office / Retail 100.0 % Retail / Residential 100.0 % 100.0 % 50.0 % 100.0 % 100.0 % Retail Retail Retail Retail Retail 99.3% 99.3% 98.9% 96.9% 94.6% 95.3% 100.0% 74.2% 89.6% 93.3% 72.8% 88.3% 92.4% 100.0% 81.4% 84.9% 96.3% 18.3% 84.7% 95.5% 99.3% 94.5% 72.6% 44.7% 79.9% 85.2% 100.0% 98.2% 83.9% 93.9% 100.0% 100.0% 51.5% 100.0% 88.6% 100.0% (3) 1,182,000 1,153,000 956,000 944,000 887,000 859,000 756,000 725,000 638,000 601,000 581,000 545,000 498,000 477,000 332,000 315,000 283,000 257,000 251,000 209,000 204,000 192,000 172,000 172,000 161,000 129,000 114,000 107,000 103,000 98,000 33,000 78,000 66,000 57,000 50,000 43,000 — — — — — — 89,000 — — — — — — — — — — — — — — — — — — — — — — — 56,000 — — — — — 1,182,000 1,153,000 956,000 944,000 887,000 859,000 845,000 725,000 638,000 601,000 581,000 545,000 498,000 477,000 332,000 315,000 283,000 257,000 251,000 209,000 204,000 192,000 172,000 172,000 161,000 129,000 114,000 107,000 103,000 98,000 89,000 78,000 66,000 57,000 50,000 43,000 25 ITEM 2. PROPERTIES – CONTINUED NEW YORK SEGMENT – CONTINUED Property 692 Broadway 606 Broadway 697-703 Fifth Avenue(2) 1131 Third Avenue 131-135 West 33rd Street 715 Lexington Avenue 537 West 26th Street 443 Broadway 334 Canal Street (4 units) 304 Canal Street (4 units) 431 Seventh Avenue 759-771 Madison Avenue (40 East 66th Street) (4 units) 138-142 West 32nd Street 148 Spring Street 339 Greenwich Street 150 Spring Street (1 unit) 966 Third Avenue 968 Third Avenue(2) 137 West 33rd Street 57th Street(2) Eighth Avenue and 34th Street PENN 15 (Hotel Pennsylvania Site)(8) Other (3 buildings) Alexander's, Inc.: 731 Lexington Avenue(2) Rego Park II, Queens (6.6 acres)(2) Rego Park I, Queens (4.8 acres)(2) The Alexander Apartment Tower, Queens (312 units)(2) Flushing, Queens (1.0 acre ground leased through 2037)(1)(2) Rego Park III, Queens (3.2 acres)(2) Total New York Segment Our Ownership Interest ________________________________________ See notes on page 27. Type % Ownership 100.0 % Retail 50.0 % Office / Retail 44.8 % Retail 100.0 % Retail 100.0 % Retail 100.0 % Retail 100.0 % Retail Retail 100.0 % 100.0 % Retail / Residential 100.0 % Retail / Residential Retail 100.0 % Residential 100.0 % Retail 100.0 % Retail 100.0 % 100.0 % Retail 100.0 % Retail / Residential Retail 100.0 % Retail 50.0 % Retail 100.0 % Land 50.0 % Land 100.0 % Land 100.0 % Retail 100.0 % % Occupancy 64.4% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% —% 100.0% 100.0% 72.7% 100.0% 74.2% 100.0% 100.0% 100.0% (7) (7) (7) 100.0% (3) (3) (3) In Service 36,000 36,000 26,000 23,000 23,000 10,000 17,000 16,000 14,000 13,000 10,000 10,000 8,000 8,000 8,000 7,000 7,000 7,000 3,000 — — — 16,000 Square Feet Under Development or Not Available for Lease Total Property — — — — — 12,000 — — — — — — — — — — — — — — — — — 36,000 36,000 26,000 23,000 23,000 22,000 17,000 16,000 14,000 13,000 10,000 10,000 8,000 8,000 8,000 7,000 7,000 7,000 3,000 — — — 16,000 32.4 % 32.4 % 32.4 % 32.4 % 32.4 % 32.4 % Office / Retail Retail Retail Residential Retail Land 98.9% 84.4% 100.0% 95.2% 100.0% (7) 91.8% 1,056,000 480,000 260,000 255,000 167,000 23,000 135,000 78,000 1,079,000 615,000 338,000 — — 255,000 167,000 — 25,445,000 — 1,850,000 — 27,295,000 91.3% 20,086,000 1,683,000 21,769,000 26 ITEM 2. PROPERTIES – CONTINUED OTHER SEGMENT Property theMART: theMART, Chicago Piers 92 and 94 (New York) (ground and building leased through 2110)(1) 527 West Kinzie, Chicago Other (2 properties)(2), Chicago Total theMART Our Ownership Interest 555 California Street: 555 California Street 315 Montgomery Street 345 Montgomery Street Total 555 California Street Our Ownership Interest Other: % Ownership Type % Occupancy In Service Square Feet Under Development or Not Available for Lease Total Property Office / Retail / Trade show / Showroom 100.0 % 100.0 % Trade show / Other Land 100.0 % Retail 50.0 % 70.0 % 70.0 % 70.0 % Office / Retail Office / Retail Office / Retail 88.8% 3,673,000 — 3,673,000 —% (7) 100.0% 88.9% — — 19,000 3,692,000 208,000 — — 208,000 208,000 — 19,000 3,900,000 88.9% 3,683,000 208,000 3,891,000 97.8% 100.0% —% 93.8% 1,505,000 235,000 78,000 1,818,000 — — — — 1,505,000 235,000 78,000 1,818,000 93.8% 1,273,000 — 1,273,000 Rosslyn Plaza, VA (197 units)(2) Fashion Centre Mall, VA(2) Washington Tower, VA(2) Wayne Towne Center, Wayne, NJ (ground leased through 2064)(1) Annapolis, MD (ground leased through 2042)(1) Atlantic City, NJ (11.3 acres ground leased through 2070 to MGM Growth Properties for a portion of the Borgata Hotel and Casino complex) Total Other 46.2 % 7.5 % 7.5 % 100.0 % 100.0 % Office / Residential Retail Office (3) 65.1% 95.7% 75.0% Retail Retail 100.0% 100.0% 685,000 868,000 170,000 638,000 128,000 304,000 — — 52,000 — 989,000 868,000 170,000 690,000 128,000 100.0 % Land 100.0% 89.7% — 2,489,000 — 356,000 — 2,845,000 Our Ownership Interest 92.8% 1,154,000 192,000 1,346,000 Vornado Capital Partners Real Estate Fund ("Fund")(9) : Crowne Plaza Times Square, NY (0.64 acres owned in fee; 0.18 acres ground leased through 2187 and 0.05 acres ground leased through 2035) (1)(10) Lucida, 86th Street and Lexington Avenue, NY (ground leased through 2082)(1) (39 units) 1100 Lincoln Road, Miami, FL Total Real Estate Fund Our Ownership Interest 75.7 % 100.0 % 100.0 % Office / Retail / Hotel Retail / Residential Retail / Theatre 86.7% 246,000 (3) 100.0% 78.0% 87.0% 157,000 130,000 533,000 87.0% 152,000 — — — — — 246,000 157,000 130,000 533,000 152,000 ________________________________________ (1) Term assumes all renewal options exercised, if applicable. (2) Denotes property not consolidated in the accompanying consolidated financial statements and related financial data included in the Annual Report on Form 10-K. (3) Excludes residential occupancy statistics. (4) (5) (6) (7) Properties under development or to be developed. (8) We permanently closed the Hotel Pennsylvania and plan to develop an office tower on the site. Demolition of the existing building structure commenced in the Includes 962 Third Avenue (the Annex building to 150 East 58th Street) 50.0% ground leased through 2118(1). 75,000 square feet is leased from 666 Fifth Avenue Office Condominium. 478-482 Broadway and 155 Spring Street sold on January 13, 2022. fourth quarter of 2021. (9) We own a 25% interest in the Fund. The ownership percentage in this section represents the Fund's ownership in the underlying assets. (10) We own a 32.8% economic interest through the Fund and the Crowne Plaza Joint Venture. 27 PROPERTIES – CONTINUED ITEM 2. Top 10 Tenants Based on Annualized Escalated Rents(1) (at share): Tenant Meta Platforms, Inc. (formerly Facebook, Inc.) IPG and affiliates Google/Motorola Mobility (guaranteed by Google) New York University Bloomberg L.P. Equitable Financial Life Insurance Company Swatch Group USA Verizon Media Group Amazon (including its Whole Foods subsidiary) The City of New York ________________________________________ See note below. Annualized Escalated Rents(1) (at share) by Tenants’ Industry: Square Footage At Share Annualized Escalated Rents At Share 1,451,153 $ 156,036 967,552 759,446 632,628 304,385 336,644 14,949 313,726 312,694 636,573 66,748 42,785 40,948 38,237 35,196 32,349 31,475 29,353 25,887 Industry Office: Technology Financial Services Professional Services Advertising/Marketing Real Estate Insurance Entertainment and Electronics Education Banking Communications Apparel Engineering, Architect & Surveying Government Health Services Other Retail: Apparel Luxury Retail Banking Restaurants Grocery Other Showroom Total % of Total Annualized Escalated Rents At Share Percentage 8.6% 3.7% 2.4% 2.3% 2.1% 1.9% 1.8% 1.7% 1.6% 1.4% 17% 16% 8% 5% 4% 3% 3% 3% 3% 3% 2% 2% 2% 2% 4% 77% 6% 4% 2% 1% 1% 4% 18% 5% 100% ________________________________________ (1) Represents monthly contractual base rent before free rent plus tenant reimbursements multiplied by 12. Annualized escalated rents at share include leases signed but not yet commenced in place of current tenants or vacancy in the same space. 28 NEW YORK As of December 31, 2021, our New York segment consisted of 27.3 million square feet in 73 properties. The 27.3 million square feet is comprised of 20.6 million square feet of Manhattan office in 32 of the properties, 2.7 million square feet of Manhattan street retail in 60 of the properties, 1,674 units in eight residential properties, and our 32.4% interest in Alexander’s, which owns six properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens. The New York segment also includes 10 garages totaling 1.7 million square feet (4,875 spaces). As of December 31, 2021, the occupancy rate for our New York segment was 91.3%. Occupancy and weighted average annual rent per square foot: Office: Retail: Vornado's Ownership Interest As of December 31, Total Square Feet In Service Square Feet In Service Square Feet At Share Occupancy Rate Weighted Average Annual Escalated Rent Per Square Foot 2021 2020 2019 (1) 2018 2017 20,630,000 20,586,000 20,666,000 21,495,000 21,329,000 19,442,000 18,361,000 19,070,000 19,858,000 20,256,000 16,757,000 15,413,000 16,195,000 16,632,000 16,982,000 92.2% $ 93.4% 96.9% 97.2% 97.1% 80.01 79.05 76.26 74.04 71.09 Vornado's Ownership Interest As of December 31, Total Square Feet In Service Square Feet In Service Square Feet At Share Occupancy Rate Weighted Average Annual Escalated Rent Per Square Foot 2021 2020 2019 (1) 2018 2017 2,693,000 2,690,000 2,712,000 2,802,000 2,931,000 2,267,000 2,275,000 2,300,000 2,648,000 2,720,000 1,825,000 1,805,000 1,842,000 2,419,000 2,471,000 80.7% $ 78.8% 94.5% 97.3% 96.9% 214.22 226.38 209.86 228.43 217.17 Occupancy and average monthly rent per unit: Residential: Vornado's Ownership Interest As of December 31, Total Number of Units Total Number of Units Occupancy Rate Average Monthly Rent Per Unit 2021 2020 2019 2018 2017 1,986 1,995 1,996 2,004 2,031 951 960 960 968 995 96.4% $ 84.9% 97.5% 96.6% 96.7% 3,776 3,714 3,902 3,788 3,757 ________________________________________ (1) Reflects the transfer of 45.4% of common equity in the properties contributed to the Fifth Avenue and Times Square JV on April 18, 2019. 29 NEW YORK – CONTINUED Lease expirations as of December 31, 2021 (at share)(1): Year Office: Month to month 2022 2023(4) 2024 2025 2026 2027 2028 2029 2030 2031 Retail: Month to month 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Number of Expiring Leases Square Feet of Expiring Leases(2) Percentage of New York Square Feet Annualized Escalated Rents of Expiring Leases Total Per Square Foot 7 80 64 81 51 68 61 38 32 31 25 8 8 12 12 11 8 13 9 12 19 34 25,000 671,000 1,357,000 1,039,000 719,000 1,451,000 1,318,000 989,000 1,170,000 621,000 817,000 20,000 115,000 58,000 173,000 40,000 82,000 32,000 29,000 46,000 155,000 96,000 0.2% 4.4% 8.9% 6.8% 4.7% 9.7% 8.7% 6.5% 7.7% 4.1% 5.4% 1.6% 9.3% 4.7% 14.0% 3.2% 6.6% 2.6% 2.3% 3.7% 12.5% 7.8% $ $ 1,419,000 $ 48,405,000 125,367,000 93,258,000 57,919,000 107,605,000 90,028,000 70,334,000 94,220,000 48,939,000 72,149,000 1,548,000 $ 6,630,000 26,356,000 37,780,000 11,074,000 25,544,000 18,241,000 13,539,000 20,046,000 21,686,000 30,658,000 (3) (5) 56.76 72.14 92.39 89.76 80.55 74.16 68.31 71.12 80.53 78.81 88.31 77.40 57.65 454.41 218.38 276.85 311.51 570.03 466.86 435.78 139.91 319.35 ________________________________________ (1) Assumes tenants do not exercise renewal or cancellation options. (2) Excludes storage, vacancy and other. (3) Based on current market conditions, we expect to re-lease this space at rents between $70 to $80 per square foot. (4) Excludes the expiration of 492,000 square feet at 909 Third Avenue for U.S. Post Office as we assume the exercise of all renewal options through 2038 given the below-market rent on their options. (5) Based on current market conditions, we expect to re-lease this space at rents between $50 to $75 per square foot. Alexander’s As of December 31, 2021, we own 32.4% of the outstanding common stock of Alexander’s, which owns six properties in the greater New York metropolitan area aggregating 2.5 million square feet, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg L.P. headquarters building. Alexander’s had $1,096,544,000 of outstanding debt as of December 31, 2021, of which our pro rata share was $355,280,000, none of which is recourse to us. OTHER REAL ESTATE AND INVESTMENTS theMART As of December 31, 2021, we own the 3.7 million square foot theMART in Chicago, whose largest tenant is Motorola Mobility at 609,000 square feet, the lease of which is guaranteed by Google. As of December 31, 2021, theMART had an occupancy rate of 88.9% and a weighted average annual rent per square foot of $54.40. 30 OTHER REAL ESTATE AND INVESTMENTS - CONTINUED 555 California Street As of December 31, 2021, we own a 70% controlling interest in a three-building office complex aggregating 1.8 million square feet, located at California and Montgomery Streets in San Francisco’s financial district (“555 California Street”). 555 California Street is encumbered by a $1.2 billion mortgage loan that bears a rate of LIBOR plus 1.93% in years one through five (2.04% as of December 31, 2021), LIBOR plus 2.18% in year six and LIBOR plus 2.43% in year seven. The loan matures in May 2023, with five one-year extension options (May 2028 as fully extended). We swapped the interest rate on our $840,000,000 share of the loan to a fixed rate of 2.26% through May 2024. As of December 31, 2021, 555 California Street had an occupancy rate of 93.8% and a weighted average annual rent per square foot of $89.53. Vornado Capital Partners Real Estate Fund (the “Fund”) and Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) As of December 31, 2021, we own a 25% interest in the Fund, which is in wind-down, and currently has three investments, one of which is the Crowne Plaza Times Square Hotel in which we also own an additional interest through the Crowne Plaza Joint Venture. We are the general partner and investment manager of the Fund. As of December 31, 2021, these three investments including the Crowne Plaza Joint Venture's share of the Crowne Plaza Times Square Hotel are carried on our consolidated balance sheet at an aggregate fair value of $7,730,000. ITEM 3. LEGAL PROCEEDINGS 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. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES PART II Vornado Realty Trust Vornado’s common shares are traded on the New York Stock Exchange under the symbol “VNO.” As of February 1, 2022, there were 830 holders of record of Vornado common shares. Vornado Realty L.P. There is no established trading market for the Operating Partnership's Class A units. Class A units that are not held by Vornado may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unit holder is equal to the quarterly dividend paid to a Vornado common shareholder. As of February 1, 2022, there were 882 Class A unitholders of record. Recent Sales of Unregistered Securities During 2021, we issued 838,982 Class A units in connection with (i) the issuance of Vornado common shares and (ii) the exercise of awards pursuant to Vornado's omnibus share plan, including grants of restricted Vornado common shares and restricted units of the Operating Partnership and upon conversion, surrender or exchange of the Operating Partnership’s units or Vornado stock options. The consideration received included $898,703 in cash proceeds. Such units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. From time to time, in connection with equity awards granted under our Omnibus Share Plan, we may withhold common shares for tax purposes or acquire common shares as part of the payment of the exercise price. Although we treat these as repurchases for certain financial statement purposes, these withheld or acquired shares are not considered by us as repurchases for this purpose. Information relating to compensation plans under which Vornado’s equity securities are authorized for issuance is set forth under Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein. Recent Purchases of Equity Securities None. 31 Performance Graph The following graph is a comparison of the five-year cumulative return of Vornado’s common shares, the Standard & Poor’s 500 Index (the “S&P 500 Index”) and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index, a peer group index. The graph assumes that $100 was invested on December 31, 2016 in our common shares, the S&P 500 Index and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions. There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below. Vornado Realty Trust S&P 500 Index The NAREIT All Equity Index ITEM 6. RESERVED 2016 2017 2018 2019 2020 2021 $ 100 $ 96 $ 79 $ 90 $ 54 $ 100 100 122 109 116 104 153 134 181 127 63 233 180 32 Comparison of Five-Year Cumulative ReturnVornado Realty TrustS&P 500 IndexThe NAREIT All Equity Index201620172018201920202021$50$75$100$125$150$175$200$225$250 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Critical Accounting Estimates Net Operating Income At Share by Segment for the Years Ended December 31, 2021 and 2020 Results of Operations for the Year Ended December 31, 2021 Compared to December 31, 2020 Related Party Transactions Liquidity and Capital Resources Funds From Operations for the Years Ended December 31, 2021 and 2020 Page Number 34 41 42 46 51 52 58 33 Introduction The following discussion should be read in conjunction with the financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K. Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") within this section is focused on the years ended December 31, 2021 and 2020, including year-to-year comparisons between these years. Our MD&A for the year ended December 31, 2019, including year-to-year comparisons between 2020 and 2019, can be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Overview Vornado Realty Trust (“Vornado”) is a fully‑integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders are dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the sole general partner of and owned approximately 92.6% of the common limited partnership interest in the Operating Partnership as of December 31, 2021. All references to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado. We own and operate office and retail properties with a concentration in the New York City metropolitan area. In addition, we have a 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns six properties in the greater New York metropolitan area, as well as interests in other real estate and investments. Our business objective is to maximize Vornado shareholder value, which we measure by the total return provided to our shareholders. Below is a table comparing Vornado’s performance to the FTSE NAREIT Office Index (“Office REIT”) and the MSCI US REIT Index (“MSCI”) for the following periods ended December 31, 2021: Three-month One-year Three-year Five-year Ten-year Vornado Total Return(1) Office REIT MSCI 0.8% 17.7% (19.4%) (36.6%) 11.6% 7.9% 22.0% 30.8% 17.7% 102.6% 16.3% 43.1% 66.4% 66.8% 192.3% ____________________ (1) Past performance is not necessarily indicative of future performance. We intend to achieve this objective by continuing to pursue our investment philosophy and to execute our operating strategies through: • maintaining a superior team of operating and investment professionals and an entrepreneurial spirit; • investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital appreciation; acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents; developing and redeveloping properties to increase returns and maximize value; and investing in operating companies that have a significant real estate component. • • • We expect to finance our growth, acquisitions and investments using internally generated funds and proceeds from asset sales and by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership units in exchange for property and may repurchase or otherwise reacquire these securities in the future. We compete with a large number of real estate investors, property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends. See “Risk Factors” in Item 1A for additional information regarding these factors. 34 Overview - continued Our business has been adversely affected by the ongoing COVID-19 pandemic and the preventive measures taken to curb the spread of the virus. The pandemic has resulted in governments and other authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and business closures. Some of the effects on us include the following: • While many of the limitations and restrictions imposed on our retail tenants during the onset of the pandemic have been lifted and/or eased, economic conditions and other factors, including a decline in Manhattan tourism since the onset of the virus, continue to adversely affect the financial health of our retail tenants. • While our buildings are open, many of our office tenants are working remotely. • We temporarily closed the Hotel Pennsylvania on April 1, 2020 and on April 5, 2021, we permanently closed the hotel and • plan to develop an office tower on the site. Trade shows at theMART were cancelled beginning March of 2020 and resumed in the third quarter of 2021 with generally lower attendance than pre-pandemic levels. The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments, including vaccination rates among the population, the efficacy and durability of vaccines against emerging variants and governmental and tenant responses thereto, all of which are uncertain at this time. Given the dynamic nature of the circumstances, it is difficult to predict the ongoing impact of the COVID-19 pandemic on our business, financial condition, results of operations and cash flows but the impact could be material. 35 Overview - continued Year Ended December 31, 2021 Financial Results Summary Net income attributable to common shareholders for the year ended December 31, 2021 was $101,086,000, or $0.53 per diluted share, compared to net loss attributable to common shareholders of $348,744,000, or $1.83 per diluted share, for the year ended December 31, 2020. The years ended December 31, 2021 and 2020 include certain items that impact net income (loss) attributable to common shareholders, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders by $12,933,000, or $0.07 per diluted share, for the year ended December 31, 2021 and increased net loss attributable to common shareholders by $372,637,000, or $1.95 per diluted share, for the year ended December 31, 2020. Funds from operations ("FFO") attributable to common shareholders plus assumed conversions for the year ended December 31, 2021 was $571,074,000, or $2.97 per diluted share, compared to $750,522,000, or $3.93 per diluted share, for the year ended December 31, 2020. The years ended December 31, 2021 and 2020 include certain items that impact FFO, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO by $21,211,000, or $0.11 per diluted share, for the year ended December 31, 2021 and by $249,507,000, or $1.31 per diluted share, for the year ended December 31, 2020. The following table reconciles the difference between our net income (loss) attributable to common shareholders and our net income attributable to common shareholders, as adjusted: (Amounts in thousands) For the Year Ended December 31, 2021 2020 Certain (income) expense items that impact net income (loss) attributable to common shareholders: After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units $ (44,607) $ Hotel Pennsylvania loss (permanently closed on April 5, 2021) Tax benefit recognized by our taxable REIT subsidiaries Defeasance costs and write-off of unamortized deferred financing costs related to 1290 Avenue of the Americas refinancing, net of $7,664 attributable to noncontrolling interests Our share of Alexander's gain on sale of Paramus, New Jersey property pursuant to IKEA Property, Inc.'s purchase option Deferred tax liability on our investment in Farley Office and Retail (held through a taxable REIT subsidiary) Previously capitalized Series K preferred share issuance costs Real estate impairment losses Our share of (income) loss from real estate fund investments Non-cash impairment loss on our investment in Fifth Avenue and Times Square JV, net of $4,289 attributable to noncontrolling interests 608 Fifth Avenue non-cash lease liability extinguishment gain Severance and other reduction-in-force related expenses Credit losses on loans receivable resulting from a new GAAP accounting standard effective January 1, 2020 Severance accrual related to Hotel Pennsylvania closure, net of $3,145 of income tax benefit Mark-to-market decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (sold on January 23, 2020) Other Noncontrolling interests' share of above adjustments 29,472 (27,910) 17,882 (11,620) 10,868 9,033 7,880 (3,757) — — — — — — (1,379) (14,138) 1,205 Total of certain (income) expense items that impact net income (loss) attributable to common shareholders $ (12,933) $ (332,099) 31,280 — — — — — 236,286 63,114 409,060 (70,260) 23,368 13,369 6,101 4,938 12,586 397,743 (25,106) 372,637 36 Overview - continued Year Ended December 31, 2021 Financial Results Summary - continued The following table reconciles the difference between our FFO attributable to common shareholders plus assumed conversions and our FFO attributable to common shareholders plus assumed conversions, as adjusted: (Amounts in thousands) For the Year Ended December 31, 2021 2020 Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions: After-tax net gain on sale of 220 CPS condominium units Tax benefit recognized by our taxable REIT subsidiaries $ (44,607) $ (27,910) Defeasance costs and write-off of unamortized deferred financing costs related to 1290 Avenue of the Americas refinancing, net of $7,664 attributable to noncontrolling interests Hotel Pennsylvania loss (permanently closed on April 5, 2021) Deferred tax liability on our investment in Farley Office and Retail (held through a taxable REIT subsidiary) Previously capitalized Series K preferred share issuance costs Our share of (income) loss from real estate fund investments 608 Fifth Avenue non-cash lease liability extinguishment gain Severance and other reduction-in-force related expenses Credit losses on loans receivable resulting from a new GAAP accounting standard effective January 1, 2020 Severance accrual related to Hotel Pennsylvania closure, net of $3,145 of income tax benefit Other Noncontrolling interests' share of above adjustments 17,882 12,331 10,868 9,033 (3,757) — — — — 3,804 (22,356) 1,145 (332,099) — — 20,843 — — 63,114 (70,260) 23,368 13,369 6,101 9,660 (265,904) 16,397 Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net $ (21,211) $ (249,507) Same Store Net Operating Income ("NOI") At Share The percentage increase (decrease) in same store NOI at share and same store NOI at share - cash basis of our New York segment, theMART and 555 California Street are summarized below. Year Ended December 31, 2021 compared to December 31, 2020: Total New York theMART(1) 555 California Street Same store NOI at share % increase (decrease) Same store NOI at share - cash basis % increase (decrease) 2.9 % 1.6 % 4.0 % 3.2 % (14.2) % (14.9) % 7.9% 0.2% ___________________ (1) 2021 includes an increase in real estate tax expense of $18,285 primarily due to a recent increase in the triennial tax-assessed value of theMART. Calculations of same store NOI at share, reconciliations of our net income to NOI at share, NOI at share - cash basis and FFO and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s Discussion and Analysis of Financial Condition and Results of Operations. Acquisition One Park Avenue On August 5, 2021, pursuant to a right of first offer, we increased our ownership interest in One Park Avenue, a 944,000 square foot Manhattan office building, to 100.0% by acquiring our joint venture partner's 45.0% ownership interest in the property. The purchase price values the property at $875,000,000. We paid approximately $158,000,000 in cash and assumed our joint venture partner's share of the $525,000,000 mortgage loan. We previously accounted for our investment under the equity method and have consolidated the accounts of the property from the date of acquisition of the additional 45.0% ownership interest. Dispositions 220 CPS During the year ended December 31, 2021, we closed on the sale of six condominium units at 220 CPS for net proceeds of $137,404,000 resulting in a financial statement net gain of $50,318,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, $5,711,000 of income tax expense was recognized on our consolidated statements of income. From inception to December 31, 2021, we have closed on the sale of 106 units for net proceeds of $3,006,896,000 resulting in financial statement net gains of $1,117,255,000. 37 Overview - continued Dispositions - continued Alexander's, Inc. ("Alexander's") On June 4, 2021, Alexander's completed the sale of a parcel of land in the Bronx, New York for $10,000,000. As a result of the sale, we recognized our $2,956,000 share of the net gain and also received a $300,000 sales commission paid by Alexander's. On October 4, 2021, Alexander's sold its Paramus, New Jersey property to IKEA Property, Inc. ("IKEA"), the tenant at the property, for $75,000,000 pursuant to IKEA's purchase option contained in the lease. The property was encumbered by a $68,000,000 mortgage loan which was repaid at closing of the sale. As a result of the sale, we recognized our $11,620,000 share of the net gain and also received a $750,000 sales commission paid by Alexander's. Madison Avenue On September 24, 2021, we sold three Manhattan retail properties located at 677-679, 759-771 and 828-850 Madison Avenue in two separate sale transactions for an aggregate sales price of $100,000,000. Net proceeds from the sales were $96,503,000. In connection with the sales, we recorded $7,880,000 of non-cash impairment losses which are included in "impairment losses, transaction related costs and other" on our consolidated statements of income. Vornado Capital Partners Real Estate Fund (the "Fund") On December 7, 2021, the Fund completed the sale of the retail condominium located at 501 Broadway for $27,500,000. From the inception of this investment through its disposition, the Fund realized a $6,346,000 net loss. SoHo Properties On May 10, 2021, we entered into an agreement to sell two Manhattan retail properties located at 478-482 Broadway and 155 Spring Street for a sales price of $84,500,000. On January 13, 2022, we completed the sale transaction and realized net proceeds of $81,399,000. In connection with the sale, we will recognize a net gain of approximately $850,000 in the first quarter of 2022. Financings Secured Debt On February 26, 2021, the joint venture completed a $525,000,000 refinancing of One Park Avenue. The interest-only loan bears a rate of LIBOR plus 1.11% (1.22% as of December 31, 2021) and matures in March 2023, with three one-year extension options (March 2026, as fully extended). We realized our $105,000,000 share of net proceeds. The loan replaced the previous $300,000,000 loan that bore interest at LIBOR plus 1.75% and was scheduled to mature in March 2021. On March 7, 2021, we entered into an interest rate swap agreement for our $500,000,000 PENN 11 mortgage loan to swap the interest rate on the mortgage loan from LIBOR plus 2.75% to a fixed rate of 3.03% through March 2024. On December 1, 2021, we completed a loan modification which reduced the interest rate on the mortgage loan to LIBOR plus 1.95% (2.05% as of December 31, 2021) from LIBOR plus 2.75%, resulting in a fixed rate of 2.23% pursuant to the interest rate swap agreement. On March 26, 2021, we completed a $350,000,000 refinancing of 909 Third Avenue, a 1.4 million square foot Manhattan office building. The interest-only loan bears a fixed rate of 3.23% and matures in April 2031. The loan replaced the previous $350,000,000 loan that bore interest at a fixed rate of 3.91% and was scheduled to mature in May 2021. On May 10, 2021, we completed a $1.2 billion refinancing of 555 California Street, a three-building 1.8 million square foot office campus in San Francisco, in which we own a 70.0% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.93% in years one through five (2.04% as of December 31, 2021), LIBOR plus 2.18% in year six and LIBOR plus 2.43% in year seven. The loan matures in May 2023, with five one-year extension options (May 2028 as fully extended). We swapped the interest rate on our $840,000,000 share of the loan to a fixed rate of 2.26% through May 2024. The loan replaced the previous $533,000,000 loan that bore interest at a fixed rate of 5.10% and was scheduled to mature in September 2021. On May 28, 2021, we repaid the $675,000,000 mortgage loan on theMART, a 3.7 million square foot commercial building in Chicago, with proceeds from our senior unsecured notes offering. The loan bore interest at 2.70% and was scheduled to mature in September 2021. On November 16, 2021, we completed a $950,000,000 refinancing of 1290 Avenue of the Americas, a 2.1 million square foot Class A Manhattan office building, in which we own a 70.0% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.51% (1.62% as of December 31, 2021) in years one to five, increasing 0.25% in both years six and seven. The loan matures in November 2023 with five one-year extension options (November 2028 as fully extended). We defeased the existing $950,000,000 loan that bore interest at a fixed rate of 3.34% and was scheduled to mature in November 2022. As a result, we incurred $23,729,000 of defeasance costs, which are included in "interest and debt expense" on our consolidated statements of income, of which $7,119,000 is attributable to noncontrolling interest. 38 Overview - continued Financings - continued Unsecured Revolving Credit Facility On April 15, 2021, we extended our $1.25 billion unsecured revolving credit facility from January 2023 (as fully extended) to April 2026 (as fully extended). The interest rate on the extended facility was lowered to LIBOR plus 0.90% from LIBOR plus 1.00%. We subsequently qualified for a sustainability margin adjustment by achieving certain key performance indicator (KPI) metrics, which reduced our interest rate by 0.01% to LIBOR plus 0.89%. The facility fee remains at 20 basis points. Our separate $1.50 billion unsecured revolving credit facility matures in March 2024 (as fully extended) and has an interest rate of LIBOR plus 0.90% and a facility fee of 20 basis points. Senior Unsecured Notes On May 24, 2021, we completed a green bond public offering of $400,000,000 2.15% senior unsecured notes due June 1, 2026 ("2026 Notes") and $350,000,000 3.40% senior unsecured notes due June 1, 2031 ("2031 Notes"). Interest on the senior unsecured notes is payable semi-annually on June 1 and December 1, commencing December 1, 2021. The 2026 Notes were sold at 99.86% of their face amount to yield 2.18% and the 2031 Notes were sold at 99.59% of their face amount to yield 3.45%. Preferred Shares/Units On September 22, 2021, Vornado sold 12,000,000 4.45% Series O cumulative redeemable preferred shares at a price of $25.00 per share, pursuant to an effective registration statement. Vornado received aggregate net proceeds of $291,153,000, after underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 12,000,000 4.45% Series O preferred units (with economic terms that mirror those of the Series O preferred shares). Dividends on the Series O preferred shares/units are cumulative and payable quarterly in arrears. The Series O preferred shares/units are not convertible into, or exchangeable for, any of our properties or securities. On or after five years from the date of issuance (or sooner under limited circumstances), Vornado may redeem the Series O preferred shares/units at a redemption price of $25.00 per share/unit, plus accrued and unpaid dividends/distributions through the date of redemption. The Series O preferred shares/units have no maturity date and will remain outstanding indefinitely unless redeemed by Vornado. Vornado used the net proceeds for the redemption of its 5.70% Series K cumulative redeemable preferred shares/units. On October 13, 2021, we redeemed all of the outstanding 5.70% Series K preferred shares/units at their redemption price of $25.00 per share/unit, or $300,000,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption. We recognized $9,033,000 of previously capitalized issuance costs in "Series K preferred share/unit issuance costs" on our consolidated statements of income during the third quarter of 2021, when the preferred shares/units were called for redemption. Leasing Activity for the Year Ended December 31, 2021 The leasing activity and related statistics 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. • • • • 2,252,000 square feet of New York Office space (1,973,000 square feet at share) at an initial rent of $83.26 per square foot and a weighted average lease term of 11.1 years. The changes in the GAAP and cash mark-to-market rent on the 1,591,000 square feet of second generation space were positive 15.9% and positive 10.8%, respectively. Tenant improvements and leasing commissions were $10.31 per square foot per annum, or 12.4% of initial rent. 229,000 square feet of New York Retail space (208,000 square feet at share) at an initial rent of $145.44 per square foot and a weighted average lease term of 17.1 years. The changes in the GAAP and cash mark-to-market rent on the 109,000 square feet of second generation space were positive 37.1% and positive 13.2%, respectively. Tenant improvements and leasing commissions were $4.26 per square foot per annum, or 2.9% of initial rent. 330,000 square feet at theMART (all at share) at an initial rent of $51.18 per square foot and a weighted average lease term of 5.8 years. The changes in the GAAP and cash mark-to-market rent on the 273,000 square feet of second generation space were negative 0.5% and 0.0%, respectively. Tenant improvements and leasing commissions were $7.63 per square foot per annum, or 14.9% of initial rent. 74,000 square feet at 555 California Street (52,000 square feet at share) at an initial rent of $114.70 per square foot and a weighted average lease term of 4.0 years. The changes in the GAAP and cash mark-to-market rent on the 48,000 square feet of second generation space were positive 29.5% and positive 25.4%, respectively. Tenant improvements and leasing commissions were $3.94 per square foot per annum, or 3.4% of initial rent. 39 Overview - continued Square footage (in service) and Occupancy as of December 31, 2021: (Square feet in thousands) New York: Office Retail (includes retail properties that are in the base of our office properties) Residential - 1,986 units(2) Alexander's Other: theMART 555 California Street Other Total square feet at December 31, 2021 ____________________ See notes below. Number of properties Square Feet (in service) Total Portfolio Our Share Occupancy % 32 (1) 60 (1) 8 (1) 6 4 3 11 19,442 2,267 1,518 2,218 25,445 3,692 1,818 2,489 7,999 16,757 1,825 785 719 20,086 3,683 1,273 1,154 6,110 33,444 26,196 92.2% 80.7% 96.4% 95.6% 91.3% (2) (2) 88.9% 93.8% 92.8% Square footage (in service) and Occupancy as of December 31, 2020: (Square feet in thousands) New York: Office Retail (includes retail properties that are in the base of our office properties) Residential - 1,995 units(2) Alexander's Hotel Pennsylvania (temporarily closed on April 1, 2020 and permanently closed on April 5, 2021) Other: theMART 555 California Street Other Number of properties Square Feet (in service) Total Portfolio Our Share Occupancy % 32 (1) 63 (1) 9 (1) 7 1 4 3 11 18,361 2,275 1,526 2,366 — 24,528 3,692 1,741 2,489 7,922 15,413 1,805 793 766 — 93.4% 78.8% 84.9% 98.5% (2) (2) 18,777 92.2% 3,683 1,218 1,154 6,055 89.5% 98.4% 92.8% Total square feet at December 31, 2020 32,450 24,832 ____________________ (1) Reflects the Office, Retail and Residential space within our 77 and 79 total New York properties as of December 31, 2021 and 2020, respectively. (2) The Alexander Apartment Tower (312 units) is reflected in Residential unit count and occupancy. 40 Critical Accounting Estimates In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Accounting estimates are deemed critical if they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Below is a summary of the critical accounting estimates used in the preparation of our consolidated financial statements. A discussion of our accounting policies is included in Note 2 - Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K. Acquisitions of Real Estate Upon the acquisition of real estate, we assess whether the transaction should be accounted for as an asset acquisition or as a business combination. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. Our acquisitions of real estate generally will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related identified intangible assets). We assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase price on a relative fair value basis. We assess fair value based on estimated cash flow projections based on a number of factors such as historical operating results, known trends, and market/economic conditions and make key assumptions regarding the discount and capitalization rates used in our analyses. The use of different assumptions to value the acquired properties and allocate value between land and building could affect the revenues recognized over the terms of the leases at our properties and the expenses recognized over the property's estimated remaining useful life on our consolidated statements of income. Impairment Analyses for Investments in Real Estate and Unconsolidated Partially Owned Entities Our investments in consolidated properties, including any related right-of-use assets and intangible assets, and unconsolidated partially owned entities are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are prepared. Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows or estimated fair value of an asset and could thereby affect the value of our real estate investments on our consolidated balance sheets as well as any potential impairment losses recognized on our consolidated statements of income. Collectability Assessments for Revenue Recognition We evaluate on an individual lease basis whether it is probable that we will collect substantially all amounts due from our tenants and recognize changes in the collectability assessment of our operating leases as adjustments to rental revenue. Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status, publicly available information about the financial condition of the tenant, the impact of COVID-19 on tenants' businesses, and other factors. Our assessment of the collectability of tenant receivables can have a significant impact on the rental revenue recognized in our consolidated statements of income. Recent Accounting Pronouncements See Note 2 – Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements. 41 NOI At Share by Segment for the Years Ended December 31, 2021 and 2020 NOI at share represents total revenues less operating expenses including our share of partially owned entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We consider NOI at share - cash basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI at share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies. NOI at share - cash basis includes rent that has been deferred as a result of the COVID-19 pandemic. Below is a summary of NOI at share and NOI at share - cash basis by segment for the years ended December 31, 2021 and 2020. (Amounts in thousands) Total revenues Operating expenses NOI - consolidated Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries Add: NOI from partially owned entities NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other NOI at share - cash basis (Amounts in thousands) Total revenues Operating expenses NOI - consolidated Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries Add: NOI from partially owned entities NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other NOI at share - cash basis For the Year Ended December 31, 2021 Total New York Other $ 1,589,210 $ 1,257,599 $ (797,315) 791,895 (69,385) 310,858 1,033,368 (626,386) 631,213 (38,980) 300,721 892,954 1,318 (1,188) $ 1,034,686 $ 891,766 $ 331,611 (170,929) 160,682 (30,405) 10,137 140,414 2,506 142,920 For the Year Ended December 31, 2020 Total New York Other $ 1,527,951 $ 1,221,748 $ (789,066) 738,885 (72,801) 306,495 972,579 (640,531) 581,217 (43,773) 296,447 833,891 46,246 36,715 $ 1,018,825 $ 870,606 $ 306,203 (148,535) 157,668 (29,028) 10,048 138,688 9,531 148,219 42 NOI At Share by Segment for the Years Ended December 31, 2021 and 2020 - continued The elements of our New York and Other NOI at share for the years ended December 31, 2021 and 2020 are summarized below. (Amounts in thousands) New York: Office(1) Retail(2) Residential Alexander's(3) Hotel Pennsylvania(4) Total New York Other: theMART(5) 555 California Street Other investments Total Other NOI at share For the Year Ended December 31, 2021 2020 $ 677,167 $ 173,363 17,783 37,318 (12,677) 892,954 58,909 64,826 16,679 140,414 672,495 147,299 20,687 35,912 (42,502) 833,891 69,178 60,324 9,186 138,688 $ 1,033,368 $ 972,579 ________________________________________ (1) 2020 includes $18,173 of non-cash write-offs of receivables arising from the straight-lining of rents and $6,702 of write-offs of tenant receivables deemed uncollectible. 2020 includes $25,876 of non-cash write-offs of receivables arising from the straight-lining of rents and $12,017 of write-offs of tenant receivables deemed uncollectible. 2020 includes $3,511 of non-cash write-offs of receivables arising from the straight-lining of rents and $1,335 of write-offs of tenant receivables deemed uncollectible. (2) (3) (4) On April 5, 2021, we permanently closed the Hotel Pennsylvania. Beginning in the third quarter of 2021, we commenced capitalization of carrying costs in (5) connection with our development of the future PENN 15 (formerly Hotel Pennsylvania) site. 2021 includes an increase in real estate tax expense of $18,285 primarily due to a recent increase in the triennial tax-assessed value of theMART. 2020 includes $2,722 of non-cash write-offs of receivables arising from the straight-lining of rents and $1,742 of write-offs of tenant receivables deemed uncollectible. 43 NOI At Share by Segment for the Years Ended December 31, 2021 and 2020 - continued The elements of our New York and Other NOI at share - cash basis for the years ended December 31, 2021 and 2020 are summarized below. (Amounts in thousands) New York: Office(1) Retail(2) Residential Alexander's(3) Hotel Pennsylvania(4) Total New York Other: theMART(5) 555 California Street Other investments Total Other NOI at share - cash basis For the Year Ended December 31, 2021 2020 $ 686,507 $ 160,801 16,656 40,525 (12,723) 891,766 64,389 60,680 17,851 142,920 691,755 158,686 19,369 42,737 (41,941) 870,606 76,251 60,917 11,051 148,219 $ 1,034,686 $ 1,018,825 ________________________________________ (1) (2) (3) (4) On April 5, 2021, we permanently closed the Hotel Pennsylvania. Beginning in the third quarter of 2021, we commenced capitalization of carrying costs in 2020 includes $6,702 of write-offs of tenant receivables deemed uncollectible. 2020 includes $12,017 of write-offs of tenant receivables deemed uncollectible. 2020 includes $1,335 of write-offs of tenant receivables deemed uncollectible. (5) connection with our development of the future PENN 15 (formerly Hotel Pennsylvania) site. 2021 includes an increase in real estate tax expense of $18,285 primarily due to a recent increase in the triennial tax-assessed value of theMART. 2020 includes $1,742 of write-offs of tenant receivables deemed uncollectible. 44 Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2021 and 2020 Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2021 and 2020. (Amounts in thousands) Net income (loss) Depreciation and amortization expense General and administrative expense Impairment losses, transaction related costs and other (Income) loss from partially owned entities (Income) loss from real estate fund investments Interest and other investment (income) loss, net Interest and debt expense Net gains on disposition of wholly owned and partially owned assets Income tax (benefit) expense NOI from partially owned entities NOI attributable to noncontrolling interests in consolidated subsidiaries NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other NOI at share - cash basis NOI At Share by Region Region: New York City metropolitan area Chicago, IL San Francisco, CA For the Year Ended December 31, 2021 2020 $ 207,553 $ (461,845) 412,347 134,545 13,815 (130,517) (11,066) (4,612) 231,096 (50,770) (10,496) 310,858 (69,385) 1,033,368 1,318 1,034,686 399,695 181,509 174,027 329,112 226,327 5,499 229,251 (381,320) 36,630 306,495 (72,801) 972,579 46,246 1,018,825 For the Year Ended December 31, 2021 2020 88% 6% 6% 100% 87% 7% 6% 100% 45 Results of Operations – Year Ended December 31, 2021 Compared to December 31, 2020 Revenues Our revenues were $1,589,210,000 for the year ended December 31, 2021 compared to $1,527,951,000 in the prior year, an increase of $61,259,000. Below are the details of the increase by segment: (Amounts in thousands) Increase (decrease) due to: Rental revenues: Acquisitions, dispositions and other Development and redevelopment Hotel Pennsylvania(1) Trade shows(2) Same store operations Fee and other income: BMS cleaning fees Management and leasing fees Other income Total increase in revenues ________________________________________ See notes on the following page. Total New York Other $ 11,815 $ 9,696 $ (8,163) (8,493) 8,179 43,558 (3) 46,896 14,244 (7,691) 7,810 14,363 (8,163) (8,493) — 32,694 25,734 14,779 (7,331) 2,669 10,117 2,119 — — 8,179 10,864 21,162 (535) (360) 5,141 4,246 $ 61,259 $ 35,851 $ 25,408 46 Results of Operations – Year Ended December 31, 2021 Compared to December 31, 2020 - continued Expenses Our expenses were $1,367,869,000 for the year ended December 31, 2021 compared to $1,550,740,000 in the prior year, a decrease of $182,871,000. Below are the details of the decrease by segment: (Amounts in thousands) Increase (decrease) due to: Operating: Acquisitions, dispositions and other Development and redevelopment Non-reimbursable expenses Hotel Pennsylvania(1) Trade shows(2) BMS expenses Same store operations Depreciation and amortization: Acquisitions, dispositions and other Development and redevelopment Same store operations General and administrative Expense from deferred compensation plan liability Total New York Other $ 11,198 $ 11,198 $ (10,249) 11,125 (37,763) 3,293 7,670 22,975 8,249 15,080 11,351 (13,779) 12,652 (46,964) (5) 3,404 (10,249) 11,349 (37,763) — 8,205 3,115 (14,145) 15,080 11,351 (12,032) 14,399 (15,430) — Impairment losses, transaction related costs and other (160,212) (158,527) (6) — — (224) — 3,293 (535) 19,860 (4) 22,394 — — (1,747) (1,747) (31,534) 3,404 (1,685) Total decrease in expenses $ (182,871) $ (173,703) $ (9,168) ____________________ (1) On April 5, 2021, we permanently closed the Hotel Pennsylvania. Beginning in the third quarter of 2021, we commenced capitalization of carrying costs in connection with our development of the future PENN 15 (formerly Hotel Pennsylvania) site. Operating expense for 2020 includes a $9,246 severance accrual for furloughed union employees. 2020 includes $63,204 for the write-off of lease receivables deemed uncollectible (primarily write-offs of receivables arising from the straight-lining of rents). 2021 includes an increase in real estate tax expense of $18,285 primarily due to a recent increase in the triennial tax-assessed value of theMART. (2) We cancelled trade shows at theMART beginning late March of 2020 due to the COVID-19 pandemic and resumed in the third quarter of 2021. (3) (4) (5) Primarily due to the overhead reduction program, including $22,132 of severance and other reduction-in-force related expenses in 2020. (6) Primarily due to $236,286 of non-cash impairment losses related to wholly owned street retail assets in 2020, partially offset by $70,260 of lease liability extinguishment gain related to 608 Fifth Avenue recognized in 2020 and $7,880 of non-cash impairment losses for the three Manhattan retail properties sold in 2021. 47 Results of Operations – Year Ended December 31, 2021 Compared to December 31, 2020 - continued Income (Loss) from Partially Owned Entities Below are the components of income (loss) from partially owned entities. (Amounts in thousands) Our share of net income (loss): Fifth Avenue and Times Square JV: Equity in net income(1) Return on preferred equity, net of our share of the expense Non-cash impairment loss Alexander's(2) Partially owned office buildings(3) Other investments(4) Percentage Ownership at December 31, 2021 For the Year Ended December 31, 2021 2020 51.5% $ 47,144 $ 37,416 — 84,560 40,121 12,057 (6,221) 32.4% Various Various 21,063 37,357 (413,349) (354,929) 18,635 12,742 (5,560) $ 130,517 $ (329,112) ____________________ (1) 2021 includes decreases in our share of depreciation and amortization expense compared to the prior year of $17,448, primarily resulting from non-cash impairment losses recognized during 2020. 2020 includes $3,125 of write-offs of lease receivables deemed uncollectible. 2021 includes our $11,620 share of net gain on the sale of the Paramus, New Jersey property to IKEA Property, Inc., and our $2,956 share of net gain on the sale of a parcel of land in the Bronx, New York. We also recognized $750 and $300, respectively, of sales commissions paid by Alexander's in connection with these sales. 2020 includes our $4,846 share of write-offs of lease receivables deemed uncollectible. Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue (consolidated from August 5, 2021), 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others. Includes interests in Independence Plaza, Rosslyn Plaza and others. (2) (3) (4) Income (Loss) from Real Estate Fund Investments Below is a summary of income (loss) from the Fund and the Crowne Plaza joint venture. (Amounts in thousands) Net investment income (loss) Net unrealized income (loss) on held investments Net realized income on exited investments Income (loss) from real estate fund investments Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries For the Year Ended December 31, 2021 2020 $ 6,445 $ 3,257 1,364 11,066 (7,309) (220) (226,107) — (226,327) 163,213 (63,114) Income (loss) from real estate fund investments net of noncontrolling interests in consolidated subsidiaries $ 3,757 $ Interest and Other Investment Income (Loss), net The following table sets forth the details of interest and other investment income (loss), net. (Amounts in thousands) Interest on loans receivable Interest on cash and cash equivalents and restricted cash Credit losses on loans receivable Market-to-market decrease in the fair value of marketable security (sold on January 23, 2020) Other, net For the Year Ended December 31, 2021 2020 $ $ 2,517 $ 284 — — 1,811 4,612 $ 3,384 5,793 (13,369) (4,938) 3,631 (5,499) 48 Results of Operations – Year Ended December 31, 2021 Compared to December 31, 2020 - continued Interest and Debt Expense Interest and debt expense was $231,096,000 for the year ended December 31, 2021, compared to $229,251,000 in the prior year, an increase of $1,845,000. This increase was primarily due to (i) $23,729,000 of defeasance costs, of which $7,119,000 is attributable to noncontrolling interest, in connection with the refinancing of 1290 Avenue of the Americas partially offset by, (ii) $10,941,000 of lower interest expense due to variable rates on certain mortgage loans that were previously swapped to higher fixed rates under interest rate swap arrangements that expired in 2020, and (iii) $9,387,000 of lower interest expense resulting from lower average interest rates on our variable rate loans. Net Gains on Disposition of Wholly Owned and Partially Owned Assets Net gains on disposition of wholly owned and partially owned assets for the year ended December 31, 2021 was $50,770,000 compared to $381,320,000 in the prior year, a decrease of $330,550,000. This resulted primarily from lower net gains on sale of 220 CPS condominium units. Income Tax Benefit (Expense) Income tax benefit was $10,496,000 for the year ended December 31, 2021, compared to an expense of $36,630,000 in the prior year, a decrease in expense of $47,126,000. This was primarily due to a higher tax benefit recognized by our taxable REIT subsidiaries in 2021 and lower income tax expense from the sale of 220 CPS condominium units partially offset by an increase in the deferred tax liability on our investment in Farley Office and Retail. Net (Income) Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries Net income attributable to noncontrolling interests in consolidated subsidiaries was $24,014,000 for the year ended December 31, 2021, compared to net loss of $139,894,000 in the prior year, an increase in income of $163,908,000. This resulted primarily from a decrease in net loss allocated to the noncontrolling interests of our real estate fund investments. Net (Income) Loss Attributable to Noncontrolling Interests in the Operating Partnership (Vornado Realty Trust) Net income attributable to noncontrolling interests in the Operating Partnership was $7,540,000 for the year ended December 31, 2021, compared to net loss of $24,946,000 in the prior year, an increase in income of $32,486,000. This resulted primarily from higher net income subject to allocation to Class A unitholders. Preferred Share Dividends of Vornado Realty Trust Preferred share dividends were $65,880,000 for the year ended December 31, 2021, compared to $51,739,000 in the prior year, an increase of $14,141,000. This was primarily due to the issuance of the 5.25% Series N cumulative redeemable preferred shares in November 2020 and the 4.45% Series O cumulative redeemable preferred shares in September 2021, partially offset by the redemption of the 5.70% Series K cumulative redeemable preferred shares in October 2021. Preferred Unit Distributions of Vornado Realty L.P. Preferred unit distributions were $66,035,000 for the year ended December 31, 2021, compared to $51,904,000 in the prior year, an increase of $14,131,000. This was primarily due to the issuance of the 5.25% Series N cumulative redeemable preferred units in November 2020 and the 4.45% Series O cumulative redeemable preferred units in September 2021, partially offset by the redemption of the 5.70% Series K cumulative redeemable preferred units in October 2021. Preferred Share/Unit Issuance Costs Preferred share/unit issuance costs for the year ended December 31, 2021 were $9,033,000 representing the previously capitalized issuance costs which were expensed upon calling for redemption of all the outstanding Series K cumulative redeemable preferred shares/units in September 2021. 49 Results of Operations – Year Ended December 31, 2021 Compared to December 31, 2020 - continued Same Store Net Operating Income At Share Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies. Below are reconciliations of NOI at share to same store NOI at share for our New York segment, theMART, 555 California Street and other investments for the year ended December 31, 2021 compared to December 31, 2020. (Amounts in thousands) NOI at share for the year ended December 31, 2021 $ 1,033,368 $ 892,954 Total New York Less NOI at share from: Change in ownership interest in One Park Avenue Dispositions Development properties Hotel Pennsylvania (permanently closed on April 5, 2021) Other non-same store income, net Same store NOI at share for the year ended December 31, 2021 $ (9,651) 312 (28,793) 12,677 (23,464) 984,449 (9,651) 312 (28,793) 12,677 (6,785) 860,714 $ NOI at share for the year ended December 31, 2020 $ 972,579 $ 833,891 Less NOI at share from: Dispositions Development properties Hotel Pennsylvania (permanently closed on April 5, 2021) Other non-same store income, net 3,488 (31,707) 42,502 (30,321) 3,488 (31,707) 42,502 (20,382) Same store NOI at share for the year ended December 31, 2020 $ 956,541 $ 827,792 Increase (decrease) in same store NOI at share $ 27,908 $ 32,922 theMART(1) 58,909 $ 555 California Street Other $ 64,826 $ 16,679 — — — — — 58,909 69,178 — — — — — — — — 64,826 60,324 — — — — — — — (16,679) — 9,186 — — — $ $ $ $ (524) (229) (9,186) 68,654 $ 60,095 (9,745) $ 4,731 $ $ — — $ $ $ $ % increase (decrease) in same store NOI at share 2.9 % 4.0 % (14.2) % 7.9 % — % ___________________ (1) 2021 includes an increase in real estate tax expense of $18,285 primarily due to a recent increase in the triennial tax-assessed value of theMART. 50 Results of Operations – Year Ended December 31, 2021 Compared to December 31, 2020 - continued Same Store Net Operating Income At Share - continued Below are reconciliations of NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, theMART, 555 California Street and other investments for the year ended December 31, 2021 compared to December 31, 2020. (Amounts in thousands) NOI at share - cash basis for the year ended December 31, 2021 $ 1,034,686 $ 891,766 Total New York theMART(1) 64,389 $ 555 California Street Other $ 60,680 $ 17,851 Less NOI at share - cash basis from: Change in ownership interest in One Park Avenue Dispositions Development properties Hotel Pennsylvania (permanently closed on April 5, 2021) Other non-same store income, net (7,023) 611 (25,710) 12,723 (25,297) (7,023) 611 (25,710) 12,723 (7,446) — — — — — — — — — — — — — — (17,851) Same store NOI at share - cash basis for the year ended December 31, 2021 $ 989,990 $ 864,921 $ 64,389 $ 60,680 $ — NOI at share - cash basis for the year ended December 31, 2020 $ 1,018,825 $ 870,606 $ 76,251 $ 60,917 $ 11,051 Less NOI at share - cash basis from: Dispositions Development properties Hotel Pennsylvania (permanently closed on April 5, 2021) Other non-same store income, net (1,835) (42,998) 41,941 (41,652) (1,835) (42,998) 41,941 (29,663) — — — (553) — — — (385) Same store NOI at share - cash basis for the year ended December 31, 2020 $ 974,281 $ 838,051 $ 75,698 $ 60,532 Increase (decrease) in same store NOI at share - cash basis $ 15,709 $ 26,870 $ (11,309) $ 148 — — — (11,051) — — $ $ % increase (decrease) in same store NOI at share - cash basis 1.6 % 3.2 % (14.9) % 0.2 % — % ___________________ (1) 2021 includes an increase in real estate tax expense of $18,285 primarily due to a recent increase in the triennial tax-assessed value of theMART. Related Party Transactions See Note 22 - Related Party Transactions to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning related party transactions. 51 Liquidity and Capital Resources Our cash requirements include property operating expenses, capital improvements, tenant improvements, debt service, leasing commissions, dividends to our shareholders and distributions to unitholders of the Operating Partnership, as well as acquisition and development and redevelopment costs. The sources of liquidity to fund these cash requirements include rental revenue, which is our primary source of cash flow and is dependent upon the occupancy and rental rates of our properties; proceeds from debt financings, including mortgage loans, senior unsecured borrowings, unsecured term loans and unsecured revolving credit facilities; proceeds from the issuance of common and preferred equity; and asset sales. As of December 31, 2021, we have $4.1 billion of liquidity comprised of $1.9 billion of cash and cash equivalents and restricted cash and $2.2 billion available on our $2.75 billion revolving credit facilities. The on-going challenges posed by the COVID-19 pandemic could adversely impact our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to our shareholders, debt amortization and recurring capital expenditures. Capital requirements for development and redevelopment expenditures and acquisitions may require funding from borrowings, equity offerings and/or asset sales. 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. Summary of Cash Flows Cash and cash equivalents and restricted cash was $1,930,351,000 at December 31, 2021, a $199,982,000 increase from the balance at December 31, 2020. Our cash flow activities for the years ended December 31, 2021 and 2020 are summarized as follows: (Amounts in thousands) Net cash provided by operating activities Net cash used in investing activities Net cash used in financing activities Operating Activities For the Year Ended December 31, 2021 2020 Increase (Decrease) in Cash Flow $ 761,806 $ 424,240 $ (532,347) (29,477) (87,800) (213,202) 337,566 (444,547) 183,725 Net cash provided by operating activities primarily consists of cash inflows from rental revenues and operating distributions from our non-consolidated partially owned entities less cash outflows for property expenses, general and administrative expenses and interest expense. For the year ended December 31, 2021, net cash provided by operating activities of $761,806,000 was comprised of $758,260,000 of cash from operations, including distributions of income from partially owned entities of $214,521,000 and return of capital from real estate fund investments of $5,104,000, and a net increase of $3,546,000 in cash due to the timing of cash receipts and payments related to changes in operating assets and liabilities. 52 Liquidity and Capital Resources - continued Summary of Cash Flows - continued Investing Activities Net cash flow used in investing activities is impacted by the timing and extent of our development, capital improvement, acquisition and disposition activities during the year. The following table details the net cash used in investing activities for the years ended December 31, 2021 and 2020: (Amounts in thousands) For the Year Ended December 31, 2021 2020 Increase (Decrease) in Cash Flow Development costs and construction in progress $ (585,940) $ (601,920) $ Additions to real estate Proceeds from sale of condominium units at 220 Central Park South Acquisition of additional 45.0% ownership interest in One Park Avenue (inclusive of $5,806 of prorations and net working capital and net of $39,370 of cash and restricted cash balances consolidated upon acquisition) Distributions of capital from partially owned entities Proceeds from sales of real estate Investments in partially owned entities Acquisitions of real estate and other Proceeds from repayments of loans receivable Moynihan Train Hall expenditures Proceeds from sales of marketable securities Net cash used in investing activities Financing Activities (149,461) 137,404 (123,936) 106,005 100,024 (14,997) (3,000) 1,554 — — (155,738) 1,044,260 — 2,389 — (8,959) (1,156) — (395,051) 28,375 $ (532,347) $ (87,800) $ 15,980 6,277 (906,856) (123,936) 103,616 100,024 (6,038) (1,844) 1,554 395,051 (28,375) (444,547) Net cash flow used in financing activities is impacted by the timing and extent of issuances of debt and equity securities, distributions paid to common shareholders and unitholders of the Operating Partnership as well as principal and other repayments associated with our outstanding debt. The following table details the net cash used in financing activities for the years ended December 31, 2021 and 2020: (Amounts in thousands) Proceeds from borrowings Repayments of borrowings Purchase of marketable securities in connection with defeasance of mortgage payable Dividends paid on common shares/Distributions to Vornado Redemption of preferred shares/units Proceeds from the issuance of preferred shares/units Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries Dividends paid on preferred shares/Distributions to preferred unitholders Debt issuance costs Contributions from noncontrolling interests in consolidated subsidiaries Repurchase of shares/Class A units related to stock compensation agreements and related tax withholdings and other Proceeds received from exercise of Vornado stock options and other Moynihan Train Hall reimbursement from Empire State Development For the Year Ended December 31, 2021 2020 Increase (Decrease) in Cash Flow $ 3,248,007 $ 1,056,315 $ 2,191,692 (1,584,243) (1,067,564) (973,729) (406,109) (300,000) 291,153 (190,876) (65,880) (51,184) 4,052 (1,567) 899 — — (827,319) — 291,182 (91,514) (64,271) (10,901) 100,094 (137) 5,862 395,051 (516,679) (973,729) 421,210 (300,000) (29) (99,362) (1,609) (40,283) (96,042) (1,430) (4,963) (395,051) 183,725 Net cash used in financing activities $ (29,477) $ (213,202) $ 53 Liquidity and Capital Resources - continued Dividends On January 19, 2022, Vornado declared a quarterly common dividend of $0.53 per share (an indicated annual rate of $2.12 per common share). This dividend, if declared by the Board of Trustees for all of 2022, would require Vornado to pay out approximately $406,000,000 of cash for common share dividends. In addition, during 2022, Vornado expects to pay approximately $62,000,000 of cash dividends on outstanding preferred shares and approximately $30,000,000 of cash distributions to unitholders of the Operating Partnership. Debt We have an effective shelf registration for the offering of our equity and debt securities that is not limited in amount due to our status as a “well-known seasoned issuer.” We have issued senior unsecured notes from a shelf registration statement that contain financial covenants that restrict our ability to incur debt, and that require us to maintain a level of unencumbered assets based on the level of our secured debt. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal. As of December 31, 2021, we are in compliance with all of the financial covenants required by our senior unsecured notes and our unsecured revolving credit facilities. A summary of our consolidated debt as of December 31, 2021 and 2020 is presented below. (Amounts in thousands) As of December 31, 2021 As of December 31, 2020 Consolidated debt: Variable rate Fixed rate Total Deferred financing costs, net and other Total, net $ Balance 4,534,215 4,140,000 8,674,215 (58,268) Weighted Average Interest Rate 1.59% 3.06% 2.29% Weighted Average Interest Rate 1.83% 3.70% 2.89% $ Balance 3,220,815 4,212,643 7,433,458 (34,462) $ 8,615,947 $ 7,398,996 During 2022 and 2023, $700,000,000 and $0, respectively, of our outstanding consolidated debt matures (based on the extended maturity for certain loans in which we have the unilateral right to extend); we may refinance this maturing debt as it comes due or choose to repay it using cash and cash equivalents or our unsecured revolving credit facilities. We may also refinance or prepay other outstanding debt depending 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. Details of 2021 financing activities are provided in the “Overview” of Management’s Discussion and Analysis of Financial Condition and Results of Operations. The contractual principal and interest repayments schedule of our consolidated debt as of December 31, 2021 is as follows: (Amounts in thousands) Total Less than 1 Year 1 – 3 Years 3 – 5 Years Thereafter Notes and mortgages payable Senior unsecured notes due 2025 Senior unsecured notes due 2026 Senior unsecured notes due 2031 Unsecured term loan Revolving credit facilities Total contractual principal(1) and interest(2) repayments $ 6,484,855 $ 497,906 438,031 462,124 859,732 585,328 1,178,788 $ 15,750 8,600 11,900 29,799 8,181 4,112,696 $ 31,500 17,200 23,800 829,933 577,147 394,291 $ 450,656 412,231 23,800 — — 799,080 — — 402,624 — — $ 9,327,976 $ 1,253,018 $ 5,592,276 $ 1,280,978 $ 1,201,704 ____________________ (1) Based on the contractual maturity of our loans, including the extended maturity date of certain loans for which the unilateral right to extend has been exercised as of December 31, 2021. (2) Estimated interest for variable-rate debt based on the 1-month LIBOR curve available as of December 31, 2021. 54 Liquidity and Capital Resources - continued Capital Expenditures Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances and leasing commissions. During 2022, we expect to incur $275,000,000 of capital expenditures for our consolidated properties. We plan to fund these capital expenditures from operating cash flow, existing liquidity, and/or borrowings. Our partially owned non-consolidated subsidiaries typically fund their capital expenditures without any additional equity contribution from us. Development and Redevelopment Expenditures Development and redevelopment expenditures consist of all hard and soft costs associated with the development and redevelopment of a property. We plan to fund these development and redevelopment expenditures from operating cash flow, existing liquidity, and/or borrowings. See detailed discussion below for our current development and redevelopment projects. PENN District Farley Our 95% joint venture (5% is owned by the Related Companies ("Related")) is developing Farley Office and Retail, which will include approximately 845,000 rentable square feet of commercial space, comprised of approximately 730,000 square feet of office space and approximately 115,000 square feet of restaurant and retail space. The total development cost of this project is estimated to be approximately $1,120,000,000 at our 95% share, of which $896,186,000 of cash has been expended as of December 31, 2021. PENN 1 We are redeveloping PENN 1, a 2,547,000 square foot office building located on 34th Street between Seventh and Eighth Avenue. In December 2020, we entered into an agreement with the Metropolitan Transportation Authority (the “MTA”) to oversee the redevelopment of the Long Island Rail Road Concourse at Penn Station (the "Concourse"), within the footprint of PENN 1. Skanska USA Civil Northeast, Inc. will perform the redevelopment under a fixed price contract for $380,000,000 which is being funded by the MTA. In connection with the redevelopment, we entered into an agreement with the MTA which will result in the widening of the Concourse to relieve overcrowding and our trading of 15,000 square feet of back of house space for 22,000 square feet of retail frontage space. Vornado's total development cost for the PENN 1 project is estimated to be $450,000,000. As of December 31, 2021, $309,437,000 of cash has been expended. PENN 2 We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $161,066,000 of cash has been expended as of December 31, 2021. PENN 15 (Hotel Pennsylvania Site) We have permanently closed the Hotel Pennsylvania and plan to develop an office tower on the site. Demolition of the existing building structure commenced in the fourth quarter of 2021. We are also making districtwide improvements within the PENN District. The development cost of these improvements is estimated to be $100,000,000, of which $31,481,000 of cash has been expended as of December 31, 2021. We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in particular, the PENN District. There can be no assurance that the above projects will be completed, completed on schedule or within budget. Other Obligations We have contractual cash obligations for certain properties that are subject to long-term ground and building leases. During 2022, $36,044,000 of lease payments are due, including fair market rent resets accounted for as variable rent, under our operating leases. For 2023 and thereafter, we have $1,303,520,000 of future lease payments. We believe that our operating cash flow will be adequate to fund these lease payments. 55 Liquidity and Capital Resources - continued Insurance For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $250,000,000 includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage. Our California properties have earthquake insurance with coverage of $350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2 billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,785,910 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC. Certain condominiums in which we own an interest (including our leasehold interest in the Farley Condominiums) own insurance policies with different per occurrence and aggregate limits than our policies described above. We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material. Our debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance or refinance our properties and expand our portfolio. Other Commitments and Contingencies We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not currently expected to have a material adverse effect on our financial position, results of operations or cash flows. Each of our properties has been subjected to varying degrees of environmental assessment at various times. The environmental assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us. In July 2018, we leased 78,000 square feet at 345 Montgomery Street in San Francisco, CA, to a subsidiary of Regus PLC, for an initial term of 15 years. The obligations under the lease were guaranteed by Regus PLC in an amount of up to $90,000,000. The tenant purported to terminate the lease prior to space delivery. We commenced a suit on October 23, 2019 seeking to enforce the lease and the guaranty. On May 11, 2021, the court issued a final statement of decision in our favor and on July 7, 2021, the Regus subsidiary appealed the decision. On October 9, 2020, the successor to Regus PLC filed for bankruptcy in Luxembourg. We are actively pursuing claims relating to the guaranty against the successor to Regus PLC and its parent in Luxembourg and other jurisdictions. In November 2011, we entered into an agreement with the New York City Economic Development Corporation ("EDC") to lease Piers 92 and 94 (the "Piers"). In February 2019, EDC issued an order for us to vacate Pier 92 due to structural problems. Beginning March 2020 through August 2021, we did not pay EDC the monthly rent due under the non-recourse lease due to the loss of our right to use or occupy Pier 92. On August 31, 2021, both parties entered into a mutual release with respect to claims by EDC for unpaid rent owed and claims by the Company for costs and damages as a result of our inability to use or occupy Pier 92. 56 Liquidity and Capital Resources - continued Other Commitments and Contingencies - continued Our mortgage loans are non-recourse to us, except for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street and 435 Seventh Avenue, which we guaranteed and therefore are part of our tax basis. In certain cases we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. In addition, we have guaranteed the rent and payments in lieu of real estate taxes due to ESD, an entity of New York State, for Farley Office and Retail. As of December 31, 2021, the aggregate dollar amount of these guarantees and master leases is approximately $1,648,000,000. As of December 31, 2021, $15,273,000 of letters of credit were outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal. Our 95% consolidated joint venture (5% is owned by Related) is developing Farley Office and Retail. In connection with the development of the property, the joint venture admitted a historic tax credit investor partner (the "Tax Credit Investor"). Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a refund or reduction of the Tax Credit Investor’s capital contributions. As of December 31, 2021, the Tax Credit Investor has made $92,400,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor. As investment manager of the Fund we are entitled to an incentive allocation after the limited partners have received a preferred return on their invested capital. The incentive allocation is subject to catch-up and clawback provisions. Accordingly, based on the December 31, 2021 fair value of the Fund assets, at liquidation we would be required to make a $27,100,000 payment to the limited partners, net of amounts owed to us, representing a clawback of previously paid incentive allocations, which would have no income statement impact as it was previously accrued. As of December 31, 2021, we expect to fund additional capital to certain of our partially owned entities aggregating approximately $10,300,000. As of December 31, 2021, we have construction commitments aggregating approximately $494,000,000. 57 Funds From Operations Vornado Realty Trust FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of certain real estate assets, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. The calculations of both the numerator and denominator used in the computation of income per share are disclosed in Note 18 – Income (Loss) Per Share/Income (Loss) Per Class A Unit, in our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. FFO attributable to common shareholders plus assumed conversions was $571,074,000, or $2.97 per diluted share, for the year ended December 31, 2021, compared to $750,522,000, or $3.93 per diluted share, for the prior year. Details of certain items that impact FFO are discussed in the financial results summary of our “Overview.” (Amounts in thousands, except per share amounts) Reconciliation of net income (loss) attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions: Net income (loss) attributable to common shareholders Per diluted share FFO adjustments: Depreciation and amortization of real property Real estate impairment losses Decrease in fair value of marketable securities Proportionate share of adjustments to equity in net income (loss) of partially owned entities to arrive at FFO: Depreciation and amortization of real property Net gains on sale of real estate (Increase) decrease in fair value of marketable securities Non-cash impairment loss on our investment in Fifth Avenue and Times Square JV, net of $4,289 of noncontrolling interests Noncontrolling interests' share of above adjustments FFO adjustments, net FFO attributable to common shareholders Convertible preferred share dividends FFO attributable to common shareholders plus assumed conversions Per diluted share Reconciliation of weighted average shares outstanding: Weighted average common shares outstanding Effect of dilutive securities: Out-Performance Plan units Convertible preferred shares AO LTIP units Employee stock options and restricted stock awards Denominator for FFO per diluted share $ $ $ $ $ $ $ For the Year Ended December 31, 2021 2020 101,086 $ 0.53 $ (348,744) (1.83) 373,792 $ 7,880 — 139,247 (15,675) (1,155) — 504,089 (34,144) 469,945 $ 571,031 $ 43 571,074 $ 2.97 $ 368,556 236,286 4,938 156,646 — 2,801 409,060 1,178,287 (79,068) 1,099,219 750,475 47 750,522 3.93 191,551 191,146 557 26 10 4 — 28 — 19 192,148 191,193 58 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have exposure to fluctuations in market interest rates. Market interest rates are sensitive to many factors that are beyond our control. Our exposure to a change in interest rates on our consolidated and non-consolidated debt (all of which arises out of non- trading activity) is as follows: (Amounts in thousands, except per share and unit amounts) 2021 2020 Consolidated debt: Variable rate Fixed rate Pro rata share of debt of non-consolidated entities(1): Variable rate Fixed rate Noncontrolling interests’ share of consolidated subsidiaries Total change in annual net income attributable to the Operating Partnership Noncontrolling interests’ share of the Operating Partnership Total change in annual net income attributable to Vornado Total change in annual net income attributable to the Operating Partnership per diluted Class A unit Total change in annual net income attributable to Vornado per diluted share December 31, Balance Weighted Average Interest Rate Effect of 1% Change In Base Rates December 31, Balance Weighted Average Interest Rate $ $ $ $ 4,534,215 4,140,000 8,674,215 1,267,224 1,432,181 2,699,405 1.59% 3.06% 2.29% 1.78% 3.72% 2.81% $ 45,342 $ 3,220,815 — 4,212,643 45,342 $ 7,433,458 12,672 $ 1,384,710 (1) — 1,488,464 12,672 $ 2,873,174 1.83% 3.70% 2.89% 1.80% 3.76% 2.81% (6,821) 51,193 (3,496) 47,697 0.25 0.25 $ $ $ _______________________ (1) Net of our $16,200 share of Alexander's participation in its Rego Park II shopping center mortgage loan which is considered partially extinguished as the participation interest is a reacquisition of debt. On April 7, 2021, Alexander's used its participation in the loan to reduce the loan balance. Fair Value of Debt The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt. As of December 31, 2021, the estimated fair value of our consolidated debt was $8,657,000,000. Derivatives and Hedging We utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. The following table summarizes our consolidated derivative instruments, all of which hedge variable rate debt, as of December 31, 2021. (Amounts in thousands) Included in other assets: Hedged Item As of December 31, 2021 Variable Rate Fair Value Notional Amount Spread over LIBOR Interest Rate Swapped Rate Expiration Date 555 California Street mortgage loan interest rate swap $ 11,814 $ 840,000 (1) PENN 11 mortgage loan interest rate swap Various interest rate caps 6,565 550 500,000 1,650,000 $ 18,929 $ 2,990,000 L+193 L+195 2.04% 2.05% 2.26% 2.23% 5/24 3/24 Included in other liabilities: Unsecured term loan interest rate swap 33-00 Northern Boulevard mortgage loan interest rate swap $ $ 28,976 $ 750,000 (2) 3,861 100,000 32,837 $ 850,000 L+100 L+180 1.10% 1.91% 3.87% 4.14% 10/23 1/25 ________________________ (1) Represents our 70.0% share of the $1.2 billion mortgage loan. (2) Remaining $50,000 balance of our unsecured term loan bears interest at a floating rate of LIBOR plus 1.00%. 59 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS Vornado Realty Trust Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) Consolidated Balance Sheets at December 31, 2021 and 2020 Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Changes in Equity for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 Vornado Realty L.P. Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) Consolidated Balance Sheets at December 31, 2021 and 2020 Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Changes in Equity for the years ended December 31, 2021, 2020 and 2019 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 Vornado Realty Trust and Vornado Realty L.P. Notes to Consolidated Financial Statements Page Number 61 63 64 65 66 69 72 74 75 76 77 80 83 60 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Trustees Vornado Realty Trust New York, New York Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vornado Realty Trust and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with the accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 14, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate Recoverability Assessment — Refer to Note 2 to the financial statements Critical Audit Matter Description The Company’s wholly owned properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. The recoverability assessment is determined based on projected future cash flows that utilize capitalization rates and available market information. The Company’s undiscounted cash flows requires management to make significant estimates and assumptions related to future market rental rates and capitalization rates. We identified the recoverability assessment of wholly owned properties as a critical audit matter because of the significant estimates and assumptions related to future market rental rates and capitalization rates. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, where applicable. 61 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the recoverability assessment of wholly owned properties included the following, among other things: • We tested the effectiveness of controls over management’s evaluation of recoverability of its wholly owned properties, including those over future market rental rates and capitalization rates used in the assessment. • We evaluated the reasonableness of future market rental rates and capitalization rates used by management with independent market data, focusing on geographical location and property. In addition, we developed ranges of independent estimates of future market rental rates and capitalization rates and compared those to the amounts used by management. • We involved our fair value specialists in providing comparable market transaction details to further support the future market rental rate and capitalization rate assumptions, as applicable. • We evaluated the reasonableness of management’s projected future cash flows by comparing management’s projections to the Company’s historical results. • We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit. /s/ DELOITTE & TOUCHE LLP New York, New York February 14, 2022 We have served as the Company’s auditor since 1976. 62 VORNADO REALTY TRUST CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except unit, share and per share amounts) ASSETS Real estate, at cost: Land Buildings and improvements Development costs and construction in progress Leasehold improvements and equipment Total Less accumulated depreciation and amortization Real estate, net Right-of-use assets Cash and cash equivalents Restricted cash Tenant and other receivables Investments in partially owned entities Real estate fund investments 220 Central Park South condominium units ready for sale Receivable arising from the straight-lining of rents Deferred leasing costs, net of accumulated amortization of $211,775 and $196,972 Identified intangible assets, net of accumulated amortization of $97,186 and $93,113 Other assets LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY Mortgages payable, net Senior unsecured notes, net Unsecured term loan, net Unsecured revolving credit facilities Lease liabilities Accounts payable and accrued expenses Deferred revenue Deferred compensation plan Other liabilities Total liabilities Commitments and contingencies Redeemable noncontrolling interests: Class A units - 14,033,438 and 13,583,607 units outstanding Series D cumulative redeemable preferred units - 141,400 and 141,401 units outstanding Total redeemable noncontrolling partnership units Redeemable noncontrolling interest in a consolidated subsidiary Total redeemable noncontrolling interests Shareholders' equity: Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 48,792,902 and 48,793,402 shares Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 191,723,608 and 191,354,679 shares Additional capital Earnings less than distributions Accumulated other comprehensive loss Total shareholders' equity Noncontrolling interests in consolidated subsidiaries Total equity See notes to the consolidated financial statements. As of December 31, 2021 2020 2,540,193 $ 9,839,166 718,694 119,792 13,217,845 (3,376,347) 9,841,498 337,197 1,760,225 170,126 79,661 3,297,389 7,730 57,142 656,318 391,693 154,895 512,714 17,266,588 $ 6,053,343 $ 1,189,792 797,812 575,000 370,206 613,497 48,118 110,174 304,725 10,062,667 587,440 3,535 590,975 97,708 688,683 2,420,054 7,933,030 1,604,637 130,222 12,087,943 (3,169,446) 8,918,497 367,365 1,624,482 105,887 77,658 3,491,107 3,739 128,215 674,075 372,919 23,856 434,022 16,221,822 5,580,549 446,685 796,762 575,000 401,008 427,202 40,110 105,564 294,520 8,667,400 507,212 4,535 511,747 94,520 606,267 1,182,459 1,182,339 7,648 8,143,093 (3,079,320) (17,534) 6,236,346 278,892 6,515,238 17,266,588 $ 7,633 8,192,507 (2,774,182) (75,099) 6,533,198 414,957 6,948,155 16,221,822 $ $ $ $ 63 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) REVENUES: Rental revenues Fee and other income Total revenues EXPENSES: Operating Depreciation and amortization General and administrative Expense from deferred compensation plan liability Impairment losses, transaction related costs and other For the Year Ended December 31, 2021 2020 2019 $ 1,424,531 $ 1,377,635 $ 164,679 1,589,210 (797,315) (412,347) (134,545) (9,847) (13,815) 150,316 1,527,951 (789,066) (399,695) (181,509) (6,443) (174,027) 1,767,222 157,478 1,924,700 (917,981) (419,107) (169,920) (11,609) (106,538) Total expenses (1,367,869) (1,550,740) (1,625,155) Income (loss) from partially owned entities Income (loss) from real estate fund investments Interest and other investment income (loss), net Income from deferred compensation plan assets Interest and debt expense Net gain on transfer to Fifth Avenue and Times Square JV Net gains on disposition of wholly owned and partially owned assets Income (loss) before income taxes Income tax benefit (expense) Income (loss) from continuing operations Loss from discontinued operations Net income (loss) Less net (income) loss attributable to noncontrolling interests in: Consolidated subsidiaries Operating Partnership Net income (loss) attributable to Vornado Preferred share dividends Series K preferred share issuance costs NET INCOME (LOSS) attributable to common shareholders INCOME (LOSS) PER COMMON SHARE - BASIC: Net income (loss) per common share Weighted average shares outstanding INCOME (LOSS) PER COMMON SHARE - DILUTED: Net income (loss) per common share Weighted average shares outstanding 130,517 11,066 4,612 9,847 (231,096) — 50,770 197,057 10,496 207,553 — 207,553 (24,014) (7,540) 175,999 (65,880) (9,033) (329,112) (226,327) (5,499) 6,443 (229,251) — 381,320 (425,215) (36,630) (461,845) — 78,865 (104,082) 21,819 11,609 (286,623) 2,571,099 845,499 3,437,731 (103,439) 3,334,292 (30) (461,845) 3,334,262 139,894 24,946 (297,005) (51,739) — 24,547 (210,872) 3,147,937 (50,131) — $ $ $ 101,086 $ (348,744) $ 3,097,806 0.53 $ (1.83) $ 191,551 191,146 16.23 190,801 0.53 $ (1.83) $ 192,122 191,146 16.21 191,053 See notes to consolidated financial statements. 64 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Net income (loss) Other comprehensive income (loss): For the Year Ended December 31, 2021 2020 2019 $ 207,553 $ (461,845) $ 3,334,262 Increase (reduction) in value of interest rate swaps and other Other comprehensive income (loss) of nonconsolidated subsidiaries Amounts reclassified from accumulated other comprehensive loss relating to nonconsolidated subsidiary Comprehensive income (loss) Less comprehensive (income) loss attributable to noncontrolling interests 51,338 10,275 — 269,166 (35,602) (29,971) (14,342) — (506,158) 174,287 Comprehensive income (loss) attributable to Vornado $ 233,564 $ (331,871) $ (47,883) (938) (2,311) 3,283,130 (183,090) 3,100,040 See notes to consolidated financial statements. 65 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in thousands, except per share amount) Preferred Shares Common Shares Shares Amount Shares Amount Additional Capital Earnings Less Than Distributions Accumulated Other Comprehensive (Loss) Income Non- controlling Interests in Consolidated Subsidiaries Total Equity 48,793 $ 1,182,339 191,355 $ 7,633 $ 8,192,507 $ (2,774,182) $ (75,099) $ 414,957 $ 6,948,155 Balance as of December 31, 2020 Net income attributable to Vornado Net income attributable to nonredeemable noncontrolling interests in consolidated subsidiaries Dividends on common shares ($2.12 per share) Dividends on preferred shares (see Note 11 for dividends per share amounts) Series O cumulative redeemable preferred shares issuance Common shares issued: Upon redemption of Class A units, at redemption value Under employees' share option plan Under dividend reinvestment plan Contributions Distributions Conversion of Series A preferred shares to common shares Deferred compensation shares and options Other comprehensive income of nonconsolidated subsidiaries Increase in value of interest rate swaps Unearned 2018 Out-Performance Plan awards acceleration Redeemable Class A unit measurement adjustment Series K cumulative redeemable preferred shares called for redemption Redeemable noncontrolling interests' share of above adjustments Other — — — — — — — — — — — — — 350 1 21 — — 1 (4) — — — — — — — 12,000 291,153 — — — — — — — — — — — — — — — — (13) — — — — — (12,000) (290,967) — — — (53) — — — — — 14 — 1 — — — — — — — — — — — — 175,999 — — — — 14,562 22 876 — — 13 906 — — 10,283 (76,073) — (406,109) (65,880) — — — — — — — (114) — — — — — (9,033) — — — — — — — — — — — — 10,275 51,337 — — — — 175,999 20,826 20,826 — (406,109) — — — — — 4,052 (65,880) 291,153 14,576 22 877 4,052 (160,975) (160,975) — — — — — — — 792 10,275 51,337 10,283 (76,073) — (300,000) — (3) — (1) (4,048) 1 — 32 (4,048) (24) Balance as of December 31, 2021 48,793 $ 1,182,459 191,724 $ 7,648 $ 8,143,093 $ (3,079,320) $ (17,534) $ 278,892 $ 6,515,238 See notes to consolidated financial statements. 66 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED (Amounts in thousands, except per share amounts) Preferred Shares Common Shares Shares Amount Shares Amount Additional Capital Earnings Less Than Distributions Accumulated Other Comprehensive (Loss) Income Non- controlling Interests in Consolidated Subsidiaries Total Equity Balance as of December 31, 2019 36,796 $ 891,214 190,986 $ 7,618 $ 7,827,697 $ (1,954,266) $ (40,233) $ 578,948 $ 7,310,978 Cumulative effect of accounting change Net loss attributable to Vornado Net loss attributable to nonredeemable noncontrolling interests in consolidated subsidiaries Dividends on common shares ($2.38 per share) Dividends on preferred shares (see Note 11 for dividends per share amounts) Series N cumulative redeemable preferred shares issuance Common shares issued: Upon redemption of Class A units, at redemption value Under employees' share option plan Under dividend reinvestment plan Contributions: Real estate fund investments Other Distributions Conversion of Series A preferred shares to common shares Deferred compensation shares and options Other comprehensive loss of nonconsolidated subsidiaries Reduction in value of interest rate swaps Unearned 2017 Out-Performance Plan awards acceleration Redeemable Class A unit measurement adjustment Redeemable noncontrolling interests' share of above adjustments Other — — — — — — — — — — 12,000 291,182 — — — — — — — — — — — — (3) (57) — — — — — — — — — — — — — — — — — — — — 236 69 47 — — — 4 13 — — — — — — — — — — — — 9 3 2 — — — — 1 — — — — — — — — — — — — 9,257 3,514 2,343 — — — 57 (16,064) (297,005) — (454,939) (51,739) — — — — — — — — 1,305 (137) — — — — — — — — — — — — — — — — 10,824 344,043 — (6,533) — — — — — (32) (14,342) (29,972) — — 2,914 6,534 — — (16,064) (297,005) (140,438) (140,438) — (454,939) — — — — — 3,389 4,305 (51,739) 291,182 9,266 3,517 2,345 3,389 4,305 (33,007) (33,007) — — — — — — — 1,169 (14,342) (29,972) 10,824 344,043 — 1,760 2,914 1,729 Balance as of December 31, 2020 48,793 $ 1,182,339 191,355 $ 7,633 $ 8,192,507 $ (2,774,182) $ (75,099) $ 414,957 $ 6,948,155 See notes to consolidated financial statements. 67 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED (Amounts in thousands, except per share amount) Preferred Shares Common Shares Shares Amount Shares Amount Additional Capital Earnings Less Than Distributions Accumulated Other Comprehensive Income (Loss) Non- controlling Interests in Consolidated Subsidiaries Total Equity Balance as of December 31, 2018 36,800 $ 891,294 190,535 $ 7,600 $ 7,725,857 $ (4,167,184) $ 7,664 $ 642,652 $ 5,107,883 Net income attributable to Vornado Net loss attributable to noncontrolling interests in consolidated subsidiaries Dividends on common shares : Special dividend ($1.95 per share) Aggregate quarterly dividends ($2.64 per common share) Dividends on preferred shares Common shares issued: Upon redemption of Class A units, at redemption value Under employees' share option plan Under dividend reinvestment plan Contributions: Real estate fund investments Other Distributions Conversion of Series A preferred shares to common shares Deferred compensation shares and options Other comprehensive loss of nonconsolidated subsidiaries Reduction in value of interest rate swaps Amounts reclassified related to a nonconsolidated subsidiary Unearned 2016 Out-Performance Plan awards acceleration Redeemable Class A unit measurement adjustment Redeemable noncontrolling interests' share of above adjustments Deconsolidation of partially owned entity Other — — — — — — — — — — — — — — — — — — — — — — (2) (80) — — — — — — — — (2) — — — — — — — — — — — — — — 171 245 22 — — — 6 7 — — — — — — — — — — — — — 7 10 1 — — — — — — — — — — — — — — 3,147,937 — — — — — (372,380) (503,785) (50,131) 11,243 — 5,479 (8,587) 1,413 — — — 80 — — — — — 1,095 (105) — — — — — — — — — — — — — — — — 11,720 70,810 — — — — — — — — — — (31) (938) (47,885) (2,311) — — 3,235 — 2 — 3,147,937 (24,547) (24,547) — — — — — — 9,023 8,848 (372,380) (503,785) (50,131) 11,250 (3,098) 1,414 9,023 8,848 (45,587) (45,587) — — — — — — — — — 990 (938) (47,885) (2,311) 11,720 70,810 3,235 (11,441) (11,441) — (29) Balance as of December 31, 2019 36,796 $ 891,214 190,986 $ 7,618 $ 7,827,697 $ (1,954,266) $ (40,233) $ 578,948 $ 7,310,978 See notes to consolidated financial statements. 68 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2021 2020 2019 $ 207,553 $ (461,845) $ 3,334,262 (Amounts in thousands) Cash Flows from Operating Activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization (including amortization of deferred financing costs) Distributions of income from partially owned entities Equity in net (income) loss of partially owned entities Net gains on disposition of wholly owned and partially owned assets Stock-based compensation expense Defeasance cost in connection with refinancing of mortgage payable Amortization of below-market leases, net Straight-lining of rents Real estate impairment losses Write-off of lease receivables deemed uncollectible Return of capital from real estate fund investments Net realized and unrealized (income) loss on real estate fund investments Non-cash (gain on extinguishment of 608 Fifth Avenue lease liability) impairment loss on 608 Fifth Avenue right-of-use asset Credit losses on loans receivable Decrease in fair value of marketable securities Net gain on transfer to Fifth Avenue and Times Square JV Prepayment penalty on redemption of senior unsecured notes due 2022 Other non-cash adjustments Changes in operating assets and liabilities: Real estate fund investments Tenant and other receivables Prepaid assets Other assets Accounts payable and accrued expenses Other liabilities Net cash provided by operating activities Cash Flows from Investing Activities: Development costs and construction in progress Additions to real estate Proceeds from sale of condominium units at 220 Central Park South Acquisition of additional 45.0% ownership interest in One Park Avenue (inclusive of $5,806 of prorations and net working capital and net of $39,370 of cash and restricted cash balances consolidated upon acquisition) Distributions of capital from partially owned entities Proceeds from sales of real estate Investments in partially owned entities Acquisitions of real estate and other Proceeds from repayments of loans receivable Moynihan Train Hall expenditures Proceeds from sales of marketable securities Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash) Proceeds from redemption of 640 Fifth Avenue preferred equity Net cash (used in) provided by investing activities See notes to consolidated financial statements. 69 432,594 214,521 (130,517) (50,770) 38,329 23,729 (9,249) 8,644 7,880 7,695 5,104 (4,621) — — — — — 7,368 (4,474) (187) 30,466 (54,716) 35,856 (3,399) 761,806 (585,940) (149,461) 137,404 (123,936) 106,005 100,024 (14,997) (3,000) 1,554 — — — — 417,942 175,246 329,112 (381,320) 48,677 — (16,878) 24,404 236,286 63,204 — 226,107 (70,260) 13,369 4,938 — — 6,739 (7,197) (5,330) (137,452) (52,832) 14,868 (3,538) 424,240 (601,920) (155,738) 1,044,260 — 2,389 — (8,959) (1,156) — (395,051) 28,375 — — (532,347) (87,800) 438,933 116,826 (78,865) (845,499) 53,908 — (19,830) 9,679 26,705 17,237 — 106,109 75,220 — 5,533 (2,571,099) 22,058 (3,472) (10,000) (25,988) 7,558 (4,302) 5,940 1,626 662,539 (649,056) (233,666) 1,605,356 — 24,880 324,201 (18,257) (69,699) 1,395 (438,935) 168,314 1,248,743 500,000 2,463,276 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED (Amounts in thousands) Cash Flows from Financing Activities: Proceeds from borrowings Repayments of borrowings Purchase of marketable securities in connection with defeasance of mortgage payable Dividends paid on common shares Redemption of preferred shares Proceeds from the issuance of preferred shares Distributions to noncontrolling interests Dividends paid on preferred shares Debt issuance costs Contributions from noncontrolling interests Repurchase of shares related to stock compensation agreements and related tax withholdings and other Proceeds received from exercise of employee share options and other Moynihan Train Hall reimbursement from Empire State Development Prepayment penalty on redemption of senior unsecured notes due 2022 Net cash used in financing activities Net increase in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents and restricted cash at end of period Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents at beginning of period Restricted cash at beginning of period Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents at end of period Restricted cash at end of period Cash and cash equivalents and restricted cash at end of period For the Year Ended December 31, 2021 2020 2019 $ 3,248,007 $ 1,056,315 $ 1,108,156 (1,584,243) (1,067,564) (2,718,987) (973,729) (406,109) (300,000) 291,153 (190,876) (65,880) (51,184) 4,052 (1,567) 899 — — (29,477) 199,982 1,730,369 — (827,319) — 291,182 (91,514) (64,271) (10,901) 100,094 (137) 5,862 395,051 — (213,202) 123,238 1,607,131 (407,126) (503,785) (893) — (80,194) (50,131) (15,588) 17,871 (8,692) 6,903 438,935 (22,058) (2,235,589) 890,226 716,905 $ $ $ $ $ 1,930,351 $ 1,730,369 $ 1,607,131 1,624,482 $ 1,515,012 $ 105,887 92,119 1,730,369 $ 1,607,131 $ 570,916 145,989 716,905 1,760,225 $ 1,624,482 $ 1,515,012 170,126 105,887 92,119 1,930,351 $ 1,730,369 $ 1,607,131 See notes to consolidated financial statements. 70 VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED (Amounts in thousands) Supplemental Disclosure of Cash Flow Information: Cash payments for interest, excluding capitalized interest of $38,320, $40,855 and $67,980 Cash payments for income taxes Non-Cash Investing and Financing Activities: Marketable securities transferred in connection with the defeasance of mortgage payable Defeasance of mortgage payable Increase in assets and liabilities resulting from the consolidation of One Park Avenue: $ $ $ Real estate Identified intangible assets Mortgages payable Deferred revenue Accrued capital expenditures included in accounts payable and accrued expenses Write-off of fully depreciated assets Reclassification of assets held for sale (included in "other assets") Redeemable Class A unit measurement adjustment Decrease (increase) in accumulated other comprehensive loss due to change in fair value of consolidated interest rate swaps Reclassification of condominium units from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale" Decrease in assets and liabilities resulting from the deconsolidation of Moynihan Train Hall: Real estate, net Moynihan Train Hall Obligation Investments received in exchange for transfer to Fifth Avenue and Times Square JV: Preferred equity Common equity Lease liabilities arising from the recognition of right-of-use assets Special dividend/distribution declared and payable on January 15, 2020 Recognition of negative basis related to the sale of our investment in 330 Madison Avenue Amounts related to our investment in Pennsylvania Real Estate Investment Trust reclassified from "investments in partially owned entities" and "accumulated other comprehensive loss" to "marketable securities" upon conversion of operating partnership units to common shares For the Year Ended December 31, 2021 2020 2019 188,587 $ 9,155 $ 210,052 $ 15,105 $ 283,613 59,834 (973,729) $ 950,000 566,013 139,545 525,000 18,884 291,690 (123,537) 80,005 (76,073) 51,337 16,014 — — — — — — — — — $ — — — — — 117,641 (189,250) — 344,043 (407,126) 390,000 — — — — 109,975 (122,813) — 70,810 (29,972) (47,885) 388,280 1,311,468 (1,291,804) (1,291,804) — — — — — — — — 2,327,750 1,449,495 526,866 398,292 60,052 54,962 See notes to consolidated financial statements. 71 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Partners Vornado Realty L.P. New York, New York Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vornado Realty L.P. and subsidiaries (the "Partnership") as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with the accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 14, 2022, expressed an unqualified opinion on the Partnership's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate Recoverability Assessment — Refer to Note 2 to the financial statements Critical Audit Matter Description The Partnership’s wholly owned properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. The recoverability assessment is determined based on projected future cash flows that utilize capitalization rates and available market information. The Partnership’s undiscounted cash flows requires management to make significant estimates and assumptions related to future market rental rates and capitalization rates. We identified the recoverability assessment of wholly owned properties as a critical audit matter because of the significant estimates and assumptions related to future market rental rates and capitalization rates. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, where applicable. 72 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the recoverability assessment of wholly owned properties included the following, among other things: • We tested the effectiveness of controls over management’s evaluation of recoverability of its wholly owned properties, including those over future market rental rates and capitalization rates used in the assessment. • We evaluated the reasonableness of future market rental rates and capitalization rates used by management with independent market data, focusing on geographical location and property. In addition, we developed ranges of independent estimates of future market rental rates and capitalization rates and compared those to the amounts used by management. • We involved our fair value specialists in providing comparable market transaction details to further support the future market rental rate and capitalization rate assumptions, as applicable. • We evaluated the reasonableness of management’s projected future cash flows by comparing management’s projections to the Partnership’s historical results. • We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit. /s/ DELOITTE & TOUCHE LLP New York, New York February 14, 2022 We have served as the Partnership’s auditor since 1997. 73 VORNADO REALTY L.P. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except unit amounts) ASSETS Real estate, at cost: Land Buildings and improvements Development costs and construction in progress Leasehold improvements and equipment Total Less accumulated depreciation and amortization Real estate, net Right-of-use assets Cash and cash equivalents Restricted cash Tenant and other receivables Investments in partially owned entities Real estate fund investments 220 Central Park South condominium units ready for sale Receivable arising from the straight-lining of rents Deferred leasing costs, net of accumulated amortization of $211,775 and $196,972 Identified intangible assets, net of accumulated amortization of $97,186 and $93,113 Other assets LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY Mortgages payable, net Senior unsecured notes, net Unsecured term loan, net Unsecured revolving credit facilities Lease liabilities Accounts payable and accrued expenses Deferred revenue Deferred compensation plan Other liabilities Total liabilities Commitments and contingencies Redeemable noncontrolling interests: Class A units - 14,033,438 and 13,583,607 units outstanding Series D cumulative redeemable preferred units - 141,400 and 141,401 units outstanding Total redeemable noncontrolling partnership units Redeemable noncontrolling interest in a consolidated subsidiary Total redeemable noncontrolling interests Partners' equity: Partners' capital Earnings less than distributions Accumulated other comprehensive loss Total partners' equity Noncontrolling interests in consolidated subsidiaries Total equity See notes to the consolidated financial statements. As of December 31, 2021 2020 2,540,193 $ 9,839,166 718,694 119,792 13,217,845 (3,376,347) 9,841,498 337,197 1,760,225 170,126 79,661 3,297,389 7,730 57,142 656,318 391,693 154,895 512,714 17,266,588 $ 6,053,343 $ 1,189,792 797,812 575,000 370,206 613,497 48,118 110,174 304,725 10,062,667 587,440 3,535 590,975 97,708 688,683 9,333,200 (3,079,320) (17,534) 6,236,346 278,892 6,515,238 17,266,588 $ 2,420,054 7,933,030 1,604,637 130,222 12,087,943 (3,169,446) 8,918,497 367,365 1,624,482 105,887 77,658 3,491,107 3,739 128,215 674,075 372,919 23,856 434,022 16,221,822 5,580,549 446,685 796,762 575,000 401,008 427,202 40,110 105,564 294,520 8,667,400 507,212 4,535 511,747 94,520 606,267 9,382,479 (2,774,182) (75,099) 6,533,198 414,957 6,948,155 16,221,822 $ $ $ $ 74 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per unit amounts) REVENUES: Rental revenues Fee and other income Total revenues EXPENSES: Operating Depreciation and amortization General and administrative Expense from deferred compensation plan liability Impairment losses, transaction related costs and other For the Year Ended December 31, 2021 2020 2019 $ 1,424,531 $ 1,377,635 $ 164,679 1,589,210 (797,315) (412,347) (134,545) (9,847) (13,815) 150,316 1,527,951 (789,066) (399,695) (181,509) (6,443) (174,027) 1,767,222 157,478 1,924,700 (917,981) (419,107) (169,920) (11,609) (106,538) Total expenses (1,367,869) (1,550,740) (1,625,155) Income (loss) from partially owned entities Income (loss) from real estate fund investments Interest and other investment income (loss), net Income from deferred compensation plan assets Interest and debt expense Net gain on transfer to Fifth Avenue and Times Square JV Net gains on disposition of wholly owned and partially owned assets Income (loss) before income taxes Income tax benefit (expense) Income (loss) from continuing operations Loss from discontinued operations Net income (loss) Less net (income) loss attributable to noncontrolling interests in consolidated subsidiaries Net income (loss) attributable to Vornado Realty L.P. Preferred unit distributions Series K preferred unit issuance costs NET INCOME (LOSS) attributable to Class A unitholders INCOME (LOSS) PER CLASS A UNIT - BASIC: Net income (loss) per Class A unit Weighted average units outstanding INCOME (LOSS) PER CLASS A UNIT - DILUTED: Net income (loss) per Class A unit Weighted average units outstanding 130,517 11,066 4,612 9,847 (231,096) — 50,770 197,057 10,496 207,553 — 207,553 (24,014) 183,539 (66,035) (9,033) (329,112) (226,327) (5,499) 6,443 (229,251) — 381,320 (425,215) (36,630) (461,845) — (461,845) 139,894 (321,951) (51,904) — 78,865 (104,082) 21,819 11,609 (286,623) 2,571,099 845,499 3,437,731 (103,439) 3,334,292 (30) 3,334,262 24,547 3,358,809 (50,296) — $ $ $ 108,471 $ (373,855) $ 3,308,513 0.52 $ (1.86) $ 204,728 203,503 16.22 202,947 0.51 $ (1.86) $ 205,644 203,503 16.19 203,248 See notes to consolidated financial statements. 75 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) Net income (loss) Other comprehensive income (loss): For the Year Ended December 31, 2021 2020 2019 $ 207,553 $ (461,845) $ 3,334,262 Increase (reduction) in value of interest rate swaps and other Other comprehensive income (loss) of nonconsolidated subsidiaries Amounts reclassified from accumulated other comprehensive loss relating to nonconsolidated subsidiary Comprehensive income (loss) 51,338 10,275 — 269,166 (29,971) (14,342) — (506,158) Less comprehensive (income) loss attributable to noncontrolling interests in consolidated subsidiaries Comprehensive income (loss) attributable to Vornado Realty L.P. $ (24,014) 245,152 $ 139,894 (366,264) $ (47,883) (938) (2,311) 3,283,130 24,547 3,307,677 See notes to consolidated financial statements. 76 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in thousands, except per unit amount) Preferred Units Class A Units Owned by Vornado Units Amount Units Amount Earnings Less Than Distributions Accumulated Other Comprehensive (Loss) Income Non- controlling Interests in Consolidated Subsidiaries Total Equity Balance as of December 31, 2020 48,793 $ 1,182,339 191,355 $ 8,200,140 $ (2,774,182) $ (75,099) $ 414,957 $ 6,948,155 Net income attributable to Vornado Realty L.P. Net income attributable to redeemable partnership units Net income attributable to nonredeemable noncontrolling interests in consolidated subsidiaries Distributions to Vornado ($2.12 per unit) Distributions to preferred unitholders (see Note 11 for distributions per unit amounts) Series O cumulative redeemable preferred units issuance Class A Units issued to Vornado: Upon redemption of redeemable Class A units, at redemption value Under Vornado's employees' share option plan Under Vornado's dividend reinvestment plan Contributions Distributions Conversion of Series A preferred units to Class A units Deferred compensation units and options Other comprehensive income of nonconsolidated subsidiaries Increase in value of interest rate swaps Unearned 2018 Out-Performance Plan awards acceleration Redeemable Class A unit measurement adjustment Series K cumulative redeemable preferred units called for redemption Redeemable partnership units' share of above adjustments Other — — — — — — — — — — 12,000 291,153 — — — — — — — — — — — — — — — — — — — — — — — — — — — — (13) — — — — — (12,000) (290,967) — — — (53) 350 14,576 1 21 — — 1 (4) — — — — — — — 22 877 — — 13 906 — — 10,283 (76,073) — — (3) 183,539 (7,540) — (406,109) (65,880) — — — — — — — (114) — — — — (9,033) — (1) — — — — — — — — — — — — — 10,275 51,337 — — — (4,048) 1 — — 183,539 (7,540) 20,826 20,826 — — — — — — 4,052 (406,109) (65,880) 291,153 14,576 22 877 4,052 (160,975) (160,975) — — — — — — — — 32 — 792 10,275 51,337 10,283 (76,073) (300,000) (4,048) (24) Balance as of December 31, 2021 48,793 $ 1,182,459 191,724 $ 8,150,741 $ (3,079,320) $ (17,534) $ 278,892 $ 6,515,238 See notes to consolidated financial statements. 77 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY – CONTINUED (Amounts in thousands, except per unit amounts) Preferred Units Class A Units Owned by Vornado Units Amount Units Amount Earnings Less Than Distributions Accumulated Other Comprehensive (Loss) Income Non- controlling Interests in Consolidated Subsidiaries Total Equity Balance as of December 31, 2019 36,796 $ 891,214 190,986 $ 7,835,315 $ (1,954,266) $ (40,233) $ 578,948 $ 7,310,978 (16,064) (321,951) 24,946 — (454,939) (51,739) — — — — — — — — Cumulative effect of accounting change Net loss attributable to Vornado Realty L.P. Net loss attributable to redeemable partnership units Net loss attributable to nonredeemable noncontrolling interests in consolidated subsidiaries Distributions to Vornado ($2.38 per unit) Distributions to preferred unitholders (see Note 11 for distributions per unit amounts) Series N cumulative redeemable preferred units issuance Class A Units issued to Vornado: Upon redemption of redeemable Class A units, at redemption value Under Vornado's employees' share option plan Under Vornado's dividend reinvestment plan Contributions: Real estate fund investments Other Distributions Conversion of Series A preferred units to Class A units Deferred compensation units and options Other comprehensive loss of nonconsolidated subsidiaries Reduction in value of interest rate swaps Unearned 2017 Out-Performance Plan awards acceleration Redeemable Class A unit measurement adjustment Redeemable partnership units' share of above adjustments Other — — — — — — — — — — — — 12,000 291,182 — — — — — — — — — — — — — — — — — — — — (3) — — — — — — — — — — — — — (57) — — — — — — — 236 9,266 3,517 2,345 — — — 57 69 47 — — — 4 13 — — — — — — 1,306 (137) — — 10,824 344,043 — (6,533) — — — — — (32) (14,342) (29,972) — — 2,914 6,534 — — — — — — — — — — — — — — — — — — (140,438) — — — — — — 3,389 4,305 (16,064) (321,951) 24,946 (140,438) (454,939) (51,739) 291,182 9,266 3,517 2,345 3,389 4,305 (33,007) (33,007) — — — — — — — 1,760 — 1,169 (14,342) (29,972) 10,824 344,043 2,914 1,729 Balance as of December 31, 2020 48,793 $ 1,182,339 191,355 $ 8,200,140 $ (2,774,182) $ (75,099) $ 414,957 $ 6,948,155 See notes to consolidated financial statements. 78 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY – CONTINUED (Amounts in thousands, except per unit amount) Preferred Units Class A Units Owned by Vornado Units Amount Units Amount Earnings Less Than Distributions Accumulated Other Comprehensive Income (Loss) Non- controlling Interests in Consolidated Subsidiaries Total Equity Balance as of December 31, 2018 36,800 $ 891,294 190,535 $ 7,733,457 $ (4,167,184) $ 7,664 $ 642,652 $ 5,107,883 Net income attributable to Vornado Realty L.P. — Net income attributable to redeemable partnership units Net loss attributable to noncontrolling interests in consolidated subsidiaries Distributions to Vornado: Special distribution ($1.95 per Class A unit) Aggregate quarterly distributions to Vornado ($2.64 per Class A unit) Distributions to preferred unitholders Class A Units issued to Vornado: — — — — — Upon redemption of redeemable Class A units, at redemption value — Under Vornado's employees' share option plan — Under Vornado's dividend reinvestment plan — Contributions: Real estate fund investments Other Distributions Conversion of Series A preferred units to Class A units Deferred compensation units and options Other comprehensive loss of nonconsolidated subsidiaries Reduction in value of interest rate swaps Amounts reclassified related to a nonconsolidated subsidiary Unearned 2016 Out-Performance Plan awards acceleration — — — (2) — — — — — Redeemable Class A unit measurement adjustment — Redeemable partnership units' share of above adjustments Deconsolidation of partially owned entity Other — — (2) — — — — — — — — — — — — (80) — — — — — — — — — — — — — — — 171 245 22 — — — 6 7 — — — — — — — — — — — — — — 11,250 5,489 1,414 — — — 80 3,358,809 (210,872) — (372,380) (503,785) (50,131) — (8,587) — — — — — 1,095 (105) — — — — — — — — — — — — — — — — — 11,720 70,810 — — — — — — — — — — (31) (938) (47,885) (2,311) — — 3,235 — 2 — 3,358,809 — (210,872) (24,547) (24,547) — — — — — — 9,023 8,848 (372,380) (503,785) (50,131) 11,250 (3,098) 1,414 9,023 8,848 (45,587) (45,587) — — — — — — — — — 990 (938) (47,885) (2,311) 11,720 70,810 3,235 (11,441) (11,441) — (29) Balance as of December 31, 2019 36,796 $ 891,214 190,986 $ 7,835,315 $ (1,954,266) $ (40,233) $ 578,948 $ 7,310,978 See notes to consolidated financial statements. 79 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Cash Flows from Operating Activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization (including amortization of deferred financing costs) Distributions of income from partially owned entities Equity in net (income) loss of partially owned entities Net gains on disposition of wholly owned and partially owned assets Stock-based compensation expense Defeasance cost in connection with refinancing of mortgage payable Amortization of below-market leases, net Straight-lining of rents Real estate impairment losses Write-off of lease receivables deemed uncollectible Return of capital from real estate fund investments Net realized and unrealized (income) loss on real estate fund investments Non-cash (gain on extinguishment of 608 Fifth Avenue lease liability) impairment loss on 608 Fifth Avenue right-of-use asset Credit losses on loans receivable Decrease in fair value of marketable securities Net gain on transfer to Fifth Avenue and Times Square JV Prepayment penalty on redemption of senior unsecured notes due 2022 Other non-cash adjustments Changes in operating assets and liabilities: Real estate fund investments Tenant and other receivables Prepaid assets Other assets Accounts payable and accrued expenses Other liabilities Net cash provided by operating activities Cash Flows from Investing Activities: Development costs and construction in progress Additions to real estate Proceeds from sale of condominium units at 220 Central Park South Acquisition of additional 45.0% ownership interest in One Park Avenue (inclusive of $5,806 of prorations and net working capital and net of $39,370 of cash and restricted cash balances consolidated upon acquisition) Distributions of capital from partially owned entities Proceeds from sales of real estate Investments in partially owned entities Acquisitions of real estate and other Proceeds from repayments of loans receivable Moynihan Train Hall expenditures Proceeds from sales of marketable securities Proceeds from transfer of interest in Fifth Avenue and Times Square JV (net of $35,562 of transaction costs and $10,899 of deconsolidated cash and restricted cash) Proceeds from redemption of 640 Fifth Avenue preferred equity Net cash (used in) provided by investing activities For the Year Ended December 31, 2021 2020 2019 $ 207,553 $ (461,845) $ 3,334,262 432,594 214,521 (130,517) (50,770) 38,329 23,729 (9,249) 8,644 7,880 7,695 5,104 (4,621) — — — — — 7,368 (4,474) (187) 30,466 (54,716) 35,856 (3,399) 761,806 (585,940) (149,461) 137,404 (123,936) 106,005 100,024 (14,997) (3,000) 1,554 — — — — 417,942 175,246 329,112 (381,320) 48,677 — (16,878) 24,404 236,286 63,204 — 226,107 (70,260) 13,369 4,938 — — 6,739 (7,197) (5,330) (137,452) (52,832) 14,868 (3,538) 424,240 (601,920) (155,738) 1,044,260 — 2,389 — (8,959) (1,156) — (395,051) 28,375 — — (532,347) (87,800) 438,933 116,826 (78,865) (845,499) 53,908 — (19,830) 9,679 26,705 17,237 — 106,109 75,220 — 5,533 (2,571,099) 22,058 (3,472) (10,000) (25,988) 7,558 (4,302) 5,940 1,626 662,539 (649,056) (233,666) 1,605,356 — 24,880 324,201 (18,257) (69,699) 1,395 (438,935) 168,314 1,248,743 500,000 2,463,276 See notes to consolidated financial statements. 80 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED (Amounts in thousands) Cash Flows from Financing Activities: Proceeds from borrowings Repayments of borrowings Purchase of marketable securities in connection with defeasance of mortgage payable Distributions to Vornado Redemption of preferred units Proceeds from the issuance of preferred units Distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries Distributions to preferred unitholders Debt issuance costs Contributions from noncontrolling interests in consolidated subsidiaries Repurchase of Class A units related to stock compensation agreements and related tax withholdings and other Proceeds received from exercise of Vornado stock options and other Moynihan Train Hall reimbursement from Empire State Development Prepayment penalty on redemption of senior unsecured notes due 2022 Net cash used in financing activities Net increase in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents and restricted cash at end of period Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents at beginning of period Restricted cash at beginning of period Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents at end of period Restricted cash at end of period Cash and cash equivalents and restricted cash at end of period For the Year Ended December 31, 2021 2020 2019 $ 3,248,007 $ 1,056,315 $ 1,108,156 (1,584,243) (1,067,564) (2,718,987) (973,729) (406,109) (300,000) 291,153 (190,876) (65,880) (51,184) 4,052 (1,567) 899 — — (29,477) 199,982 1,730,369 — (827,319) — 291,182 (91,514) (64,271) (10,901) 100,094 (137) 5,862 395,051 — (213,202) 123,238 1,607,131 (407,126) (503,785) (893) — (80,194) (50,131) (15,588) 17,871 (8,692) 6,903 438,935 (22,058) (2,235,589) 890,226 716,905 $ $ $ $ $ 1,930,351 $ 1,730,369 $ 1,607,131 1,624,482 $ 1,515,012 $ 105,887 92,119 1,730,369 $ 1,607,131 $ 570,916 145,989 716,905 1,760,225 $ 1,624,482 $ 1,515,012 170,126 105,887 92,119 1,930,351 $ 1,730,369 $ 1,607,131 See notes to consolidated financial statements. 81 VORNADO REALTY L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED For the Year Ended December 31, 2021 2020 2019 188,587 $ 9,155 $ 210,052 $ 15,105 $ 283,613 59,834 (973,729) $ 950,000 566,013 139,545 525,000 18,884 291,690 (123,537) 80,005 (76,073) 51,337 16,014 — — — — — — — — — $ — — — — — 117,641 (189,250) — 344,043 (407,126) 390,000 — — — — 109,975 (122,813) — 70,810 (29,972) (47,885) 388,280 1,311,468 (1,291,804) (1,291,804) — — — — — — — — 2,327,750 1,449,495 526,866 398,292 60,052 54,962 (Amounts in thousands) Supplemental Disclosure of Cash Flow Information: Cash payments for interest, excluding capitalized interest of $38,320, $40,855 and $67,980 Cash payments for income taxes Non-Cash Investing and Financing Activities: Marketable securities transferred in connection with the defeasance of mortgage payable Defeasance of mortgage payable Increase in assets and liabilities resulting from the consolidation of One Park Avenue: $ $ $ Real estate Identified intangible assets Mortgages payable Deferred revenue Accrued capital expenditures included in accounts payable and accrued expenses Write-off of fully depreciated assets Reclassification of assets held for sale (included in "other assets") Redeemable Class A unit measurement adjustment Decrease (increase) in accumulated other comprehensive loss due to change in fair value of consolidated interest rate swaps Reclassification of condominium units from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale" Decrease in assets and liabilities resulting from the deconsolidation of Moynihan Train Hall: Real estate, net Moynihan Train Hall Obligation Investments received in exchange for transfer to Fifth Avenue and Times Square JV: Preferred equity Common equity Lease liabilities arising from the recognition of right-of-use assets Special dividend/distribution declared and payable on January 15, 2020 Recognition of negative basis related to the sale of our investment in 330 Madison Avenue Amounts related to our investment in Pennsylvania Real Estate Investment Trust reclassified from "investments in partially owned entities" and "accumulated other comprehensive loss" to "marketable securities" upon conversion of operating partnership units to common shares See notes to consolidated financial statements. 82 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Business Vornado Realty Trust (“Vornado”) is a fully‑integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders are dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the sole general partner of and owned approximately 92.6% of the common limited partnership interest in the Operating Partnership as of December 31, 2021. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado. We currently own all or portions of: New York: • 67 Manhattan operating properties consisting of: • • • 20.6 million square feet of office space in 32 of the properties; 2.7 million square feet of street retail space in 60 of the properties; 1,674 units in eight Manhattan residential properties; • Multiple development sites, including Hotel Pennsylvania; • A 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns six properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens; Signage throughout the Penn District and Times Square; and Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for our buildings and third parties. • • Other Real Estate and Investments: • • • • The 3.7 million square foot theMART in Chicago; A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet; A 25% interest in Vornado Capital Partners, our real estate fund (the "Fund"). We are the general partner and investment manager of the fund. The fund is in wind-down; and Other real estate and investments. 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of Vornado and the Operating Partnership and their consolidated subsidiaries. All inter-company amounts have been eliminated. Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Recently Issued Accounting Literature In March 2020, the Financial Accounting Standards Board ("FASB") issued an update ("ASU 2020-04") establishing Accounting Standards Codification ("ASC") Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. In August 2020, the FASB issued an update ("ASU 2020-06") Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock, removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2020-06 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements. 83 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2. Basis of Presentation and Significant Accounting Policies - continued Recently Issued Accounting Literature - continued In July 2021, the FASB issued an update ("ASU 2021-05") Lessors - Certain Leases with Variable Lease Payments to ASC Topic 842, Leases ("ASC 842"). ASU 2021-05 provides additional ASC 842 classification guidance as it relates to a lessor's accounting for certain leases with variable lease payments. ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day- one loss. ASU 2021-05 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2021-05 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements. Significant Accounting Policies Real Estate: Real estate is carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are expensed as incurred. For redevelopment of existing operating properties, the net book value of the existing property under redevelopment plus the cost for the construction and improvements incurred in connection with the redevelopment, including interest and debt expense, are capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the redeveloped property when complete. If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of the redeveloped property, the excess is charged to expense. Depreciation is recognized on a straight-line basis over the estimated useful lives of these assets which range from 7 to 40 years. Tenant allowances are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the assets. Upon the acquisition of real estate, we assess whether the transaction should be accounted for as an asset acquisition or as a business combination. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. Our acquisitions of real estate generally will not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e. land, buildings, and related identified intangible assets). We assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase price based on these assessments which are on a relative fair value basis. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. We amortize identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired. Our properties, including any related right-of-use ("ROU") assets and intangible assets, are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If our estimates of the future cash flows, anticipated holding periods, or market conditions change, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements. Estimates of future cash flows are subjective and are based, in part, on assumptions regarding future occupancy, rental rates, capital requirements, capitalization rates and discount rates that could differ materially from actual results. 84 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2. Basis of Presentation and Significant Accounting Policies - continued Significant Accounting Policies - continued Partially Owned Entities: We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider (i) whether the entity is a variable interest entity (“VIE”) in which we are the primary beneficiary or (ii) whether the entity is a voting interest entity in which we have a majority of the voting interests of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. We generally do not control a partially owned entity if the approval of all of the partners/members is contractually required with respect to decisions that most significantly impact the performance of the partially owned entity. This includes decisions regarding operating/capital budgets, and the placement of new or additional financing secured by the assets of the venture, among others. We account for investments under the equity method when the requirements for consolidation are not met, and we have significant influence over the operations of the investee. Equity method investments are initially recorded at cost and subsequently adjusted for our share of net income or loss and cash contributions and distributions each period. Investments that do not qualify for consolidation or equity method accounting are accounted for under the cost method. Investments in unconsolidated partially owned entities are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recorded when there is a decline in the fair value below the carrying value and we conclude such decline is other-than-temporary. An impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value. Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are prepared. 220 Central Park South Condominium Units Ready For Sale: Our 220 Central Park South ("220 CPS") residential condominium units are reclassified from "development costs and construction in progress" to "220 Central Park South condominium units ready for sale" upon receipt of the unit's temporary certificate of occupancy. These units are substantially complete and ready for sale. Each unit is carried at the lower of its carrying amount or fair value less costs to sell. We have used the relative sales value method to allocate costs to individual condominium units. GAAP income is recognized when legal title transfers upon closing of the condominium unit sales and is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. As of December 31, 2021 and 2020, none of the 220 CPS condominium units ready for sale had a carrying value that exceeded fair value. Cash and Cash Equivalents: Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less and are carried at cost, which approximates fair value due to their short-term maturities. The majority of our cash and cash equivalents consists of (i) deposits at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation limit, (ii) United States Treasury Bills, and (iii) Certificate of Deposits placed through an Account Registry Service. Restricted Cash: Restricted cash consists of security deposits, cash restricted for the purposes of facilitating a Section 1031 Like- Kind exchange, cash restricted in connection with our deferred compensation plan and cash escrowed under loan agreements, including for debt service, real estate taxes, property insurance and capital improvements. Deferred Charges: Direct financing costs are deferred and amortized over the terms of the related agreements as a component of interest expense. Direct and incremental costs related to successful leasing activities are capitalized and amortized on a straight-line basis over the lives of the related leases. All other deferred charges are amortized on a straight-line basis, which approximates the effective interest rate method, in accordance with the terms of the agreements to which they relate. 85 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2. Basis of Presentation and Significant Accounting Policies - continued Significant Accounting Policies - continued Revenue Recognition: • Rental revenues include revenues from the leasing of space at our properties to tenants, revenues from the Hotel Pennsylvania (permanently closed on April 5, 2021), trade shows, tenant services and parking garage revenues. • • • • • Revenues from the leasing of space at our properties to tenants includes (i) lease components, including fixed and variable lease payments, and nonlease components which include reimbursement of common area maintenance expenses, and (ii) reimbursement of real estate taxes and insurance expenses. As lessor, we have elected to combine the lease and nonlease components of our operating lease agreements and account for the components as a single lease component in accordance with ASC 842. • • Revenues from fixed lease payments for operating leases in our portfolio are recognized on a straight-line basis over the non-cancelable term of the lease, together with renewal options that are reasonably certain of being exercised. We commence revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. Revenue derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred. • We recognize amortization of acquired below-market leases as an increase to rental revenues and amortization of acquired above-market leases as a decrease to rental revenues over the term of the lease (see Note 8 - Identified Intangible Assets and Liabilities). Hotel revenues arising from the operation of Hotel Pennsylvania, which we permanently closed on April 5, 2021, consists of room revenue, food and beverage revenue, and banquet revenue. Room revenues are recognized when the rooms are made available for the guest, in accordance with ASC 842. Trade shows revenues arising from the operation of trade shows is primarily booth rentals. These revenues are recognized upon the occurrence of the trade shows when the trade show booths are made available for use by the exhibitors, in accordance with ASC 842. Tenant services revenues arises from sub-metered electric, elevator, trash removal and other services provided to tenants at their request. These revenues are recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). Parking garage revenues arise from the operations of our parking facilities which charge a hourly or monthly fee to provide parking services. These revenues are recognized as the services are transferred in accordance with ASC 606. • Fee and other income includes management, leasing and other revenue arising from contractual agreements with third parties or with partially owned entities and includes BMS cleaning, engineering and security services. This revenue is recognized as the services are transferred in accordance with ASC 606. We evaluate on an individual lease basis whether it is probable that we will collect substantially all amounts due from our tenants and recognize changes in the collectability assessment of our operating leases as adjustments to rental revenue. Management exercises judgment in assessing collectability of tenant receivables and considers payment history, current credit status and publicly available information about the financial condition of the tenant, the impact of COVID-19 on tenants' businesses, and other factors. Tenant receivables, including receivables arising from the straight-lining of rents, are written off when management deems that the collectability of substantially all future lease payments from a specific lease is not probable of collection, at which point, the Company will limit future rental revenues to cash received. We have made a policy election in accordance with the FASB Staff Q&A which provides relief in accounting for leases during the COVID-19 pandemic, allowing us to continue recognizing rental revenue on a straight-line basis for rent deferrals, with no impact to revenue recognition, and to recognize rent abatements as a reduction to rental revenue in the period granted. 86 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2. Basis of Presentation and Significant Accounting Policies - continued Significant Accounting Policies - continued Income Taxes: Vornado operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856‑860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90% of its REIT taxable income as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. Vornado distributes to its shareholders 100% of its REIT taxable income and therefore, no provision for Federal income taxes is required. Dividends distributed for the year ended December 31, 2021, were characterized, for federal income tax purposes, as 84.2% ordinary income under Section 199A of the Internal Revenue Code and 15.8% qualified dividend income (taxed as long-term capital gain). Dividends distributed for the year ended December 31, 2020, were characterized, for federal income tax purposes, as ordinary income. Dividends distributed for the year ended December 31, 2019, were characterized, for federal income tax purposes, as 62.1% ordinary income and 37.9% long-term capital gain. We have elected to treat certain consolidated subsidiaries, and may in the future elect to treat newly formed subsidiaries, as taxable REIT subsidiaries pursuant to an amendment to the Internal Revenue Code that became effective January 1, 2001. Taxable REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to Federal and State income tax at regular corporate tax rates. Farley Office and Retail, our 220 CPS condominium project and the operations of Hotel Pennsylvania, prior to its closure, are held through taxable REIT subsidiaries. As of December 31, 2021 and 2020, our taxable REIT subsidiaries had deferred tax assets, net of valuation allowances, of $8,582,000 and $15,017,000, respectively, and are included in “other assets” on our consolidated balance sheets. As of December 31, 2021 and 2020, our taxable REIT subsidiaries had deferred tax liabilities of $40,591,000 and $29,348,000, respectively, which are included in "other liabilities" on our consolidated balance sheets. The deferred tax assets and liabilities relate to net operating loss carry forwards and temporary differences between the book and tax basis of assets and liabilities. For the year ended December 31, 2021, we recognized $10,496,000 of income tax benefit based on an effective tax rate of approximately (5.3)%. For the years ended December 31, 2020 and 2019, we recognized $36,630,000 and $103,439,000 of income tax expense, respectively, based on effective tax rates of approximately (8.6)% and 3.0%, respectively. Income tax benefit (expense) recorded in each of the years primarily relates to our consolidated taxable REIT subsidiaries, and certain state, local, and franchise taxes. The year ended December 31, 2021 included $27,910,000 of income tax benefit recognized by our taxable REIT subsidiaries, $10,868,000 of income tax expense resulting from book to tax differences (primarily straight-line rent adjustments and depreciation) on our investment in Farley Office and Retail and $5,711,000 of income tax expense recognized on the sale of 220 CPS condominium units. The years ended December 31, 2020 and 2019, included $49,221,000 and $101,828,000, respectively, of income tax expense recognized on the sale of 220 CPS condominium units. The Company has no uncertain tax positions recognized as of December 31, 2021 and 2020. The Operating Partnership’s partners are required to report their respective share of taxable income on their individual tax returns. The estimated taxable income attributable to Vornado common shareholders (unaudited) for the years ended December 31, 2021, 2020 and 2019 was approximately $413,026,000, $419,812,000, and $917,162,000, respectively. The book to tax differences between net income (loss) and estimated taxable income primarily result from differences in the income recognition or deductibility of depreciation and amortization, gain or loss from the sale of real estate and other capital transactions, impairment losses, straight-line rent adjustments, stock option expense and repairs expense related to the tangible property regulations. The net basis of Vornado’s assets and liabilities for tax reporting purposes is approximately $2.6 billion lower than the amounts reported in Vornado’s consolidated balance sheet as of December 31, 2021. 87 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 3. Revenue Recognition Below is a summary of our revenues by segment. Additional financial information related to these reportable segments for the years ended December 31, 2021, 2020 and 2019 is set forth in Note 23 - Segment Information. (Amounts in thousands) Property rentals Trade shows(1) Lease revenues(2) Tenant services Parking revenues Rental revenues BMS cleaning fees Management and leasing fees Other income Fee and other income Total revenues ____________________ See notes on following page. (Amounts in thousands) Property rentals(4) Hotel Pennsylvania(5) Trade shows(1) Lease revenues(2) Tenant services Rental revenues BMS cleaning fees Management and leasing fees Other income Fee and other income Total revenues ____________________ See notes on following page. For the Year Ended December 31, 2021 Total New York Other $ 1,354,209 $ 1,071,816 $ 19,482 1,373,691 37,449 13,391 1,424,531 119,780 11,725 33,174 164,679 1,589,210 — 1,071,816 26,048 11,370 1,109,234 126,891 12,177 9,297 148,365 1,257,599 For the Year Ended December 31, 2020 Total New York Other $ 1,323,347 $ 1,051,009 $ 8,741 11,303 1,343,391 34,244 1,377,635 105,536 19,416 25,364 150,316 8,741 — 1,059,750 23,750 1,083,500 112,112 19,508 6,628 138,248 $ 1,527,951 $ 1,221,748 $ 282,393 19,482 301,875 11,401 2,021 315,297 (7,111) (3) (452) 23,877 16,314 331,611 272,338 — 11,303 283,641 10,494 294,135 (6,576) (3) (92) 18,736 12,068 306,203 88 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 3. Revenue Recognition - continued (Amounts in thousands) Property rentals(4) Hotel Pennsylvania Trade shows Lease revenues(2) Tenant services Rental revenues BMS cleaning fees Management and leasing fees Other income Fee and other income Total revenues For the Year Ended December 31, 2019 Total New York Other $ 1,589,539 $ 1,300,385 $ 89,594 40,577 1,719,710 47,512 1,767,222 124,674 13,542 19,262 157,478 89,594 — 1,389,979 35,011 1,424,990 133,358 13,694 5,818 152,870 $ 1,924,700 $ 1,577,860 $ 289,154 — 40,577 329,731 12,501 342,232 (8,684) (3) (152) 13,444 4,608 346,840 ____________________ (1) We cancelled trade shows at theMART beginning late March of 2020 due to the COVID-19 pandemic and resumed in the third quarter of 2021. (2) The components of lease revenues were as follows: (Amounts in thousands) Fixed billings Variable billings Total contractual operating lease billings Adjustment for straight-line rents and amortization of acquired below-market leases and other, net Less: write-off of straight-line rent and tenant receivables deemed uncollectible For the Year Ended December 31, 2021 2020 2019 $ 1,277,645 $ 1,292,174 $ 108,850 1,386,495 (5,109) (7,695) 126,907 1,419,081 (12,486) (63,204) 1,531,917 199,291 1,731,208 5,739 (17,237) Lease revenues $ 1,373,691 $ 1,343,391 $ 1,719,710 (3) Represents the elimination of theMART and 555 California Street BMS cleaning fees which are included as income in the New York segment. (4) Reduced by $63,204 and $17,237 for the years ended December 31, 2020 and 2019, respectively, for the write-off of lease receivables deemed uncollectible (primarily write-offs of receivables arising from the straight-lining of rents). (5) We temporarily closed the Hotel Pennsylvania on April 1, 2020 and on April 5, 2021, we permanently closed the hotel and plan to develop an office tower on the site. 89 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 4. Real Estate Fund Investments We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”) and own a 25.0% interest in the Fund, which had an initial eight-year term ending February 2019. On January 29, 2018, the Fund's term was extended to February 2023. The Fund's three-year investment period ended in July 2013. The Fund is accounted for under ASC Topic 946, Financial Services – Investment Companies (“ASC 946”) and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting. We are the general partner and investment manager of the Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) and own a 57.1% interest in the joint venture which owns the 24.3% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. The Crowne Plaza Joint Venture is also accounted for under ASC 946 and we consolidate the accounts of the joint venture into our consolidated financial statements, retaining the fair value basis of accounting. On June 9, 2020, the joint venture between the Fund and the Crowne Plaza Joint Venture defaulted on the $274,355,000 non-recourse loan on the Crowne Plaza Times Square Hotel. The interest-only loan, which bears interest at a floating rate of LIBOR plus 3.69% (3.79% as of December 31, 2021) and provides for additional default interest of 3.00%, was scheduled to mature on July 9, 2020. On April 12, 2021, the Fund defaulted on the $82,750,000 non-recourse loan on 1100 Lincoln Road. The interest-only loan currently bears interest at a floating rate of prime plus 1.40% (4.65% as of December 31, 2021) and provides for additional default interest of 3.00%. The loan was scheduled to mature on July 27, 2021. On December 7, 2021, the Fund completed the sale of the retail condominium located at 501 Broadway for $27,500,000. From the inception of this investment through its disposition, the Fund realized a $6,346,000 net loss. As of December 31, 2021, we had three real estate fund investments through the Fund and the Crowne Plaza Joint Venture with an aggregate fair value of $7,730,000, $328,055,000 below cost, and had remaining unfunded commitments of $28,465,000, of which our share was $8,849,000. As of December 31, 2020, we had four real estate fund investments with an aggregate fair value of $3,739,000. Below is a summary of income (loss) from the Fund and the Crowne Plaza Joint Venture. (Amounts in thousands) Net investment income (loss) Net unrealized income (loss) on held investments Net realized income on exited investments Income (loss) from real estate fund investments Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries Income (loss) from real estate fund investments net of noncontrolling interests in consolidated subsidiaries For the Year Ended December 31, 2021 2020 2019 $ 6,445 $ (220) $ 3,257 1,364 11,066 (7,309) (226,107) — (226,327) 163,213 2,027 (106,109) — (104,082) 55,274 $ 3,757 $ (63,114) $ (48,808) 5. Investments in Partially Owned Entities Fifth Avenue and Times Square JV As of December 31, 2021, we own a 51.5% common interest in a joint venture ("Fifth Avenue and Times Square JV") which owns interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, 689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the "Properties"). The remaining 48.5% common interest in the joint venture is owned by a group of institutional investors (the "Investors"). Our 51.5% common interest in the joint venture represents an effective 51.0% interest in the Properties. The 48.5% common interest in the joint venture owned by the Investors represents an effective 47.2% interest in the Properties. We also own $1.828 billion of preferred equity security interests in certain of the properties. The preferred equity has an annual coupon of 4.25% through April 2024, increasing to 4.75% for the subsequent five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis. As of December 31, 2021, the carrying amount of our investment in the joint venture was less than our share of the equity in the net assets of the joint venture by approximately $387,402,000, the basis difference primarily resulting from non-cash impairment losses recognized during 2020. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Fifth Avenue and Times Square JV’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as a reduction to depreciation expense over their estimated useful lives. Management, Development, Leasing and Other Agreements We provide various services to Fifth Avenue and Times Square JV in accordance with management, development, leasing and other agreements, as described on the following page. 90 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5. Investments in Partially Owned Entities - continued Fifth Avenue and Times Square JV - continued We receive an annual fee for managing the Properties equal to 2% of the gross revenues from the Properties. In addition, we are entitled to a development fee of 5% of development costs, plus reimbursement of certain costs, for development projects performed by us. We are entitled to 1.5% of development costs, plus reimbursement of certain costs, as a supervisory fee for development projects not performed by us. We provide leasing services for fees calculated based on a percentage of rents, less any commissions paid to third-party real estate brokers, if applicable. We jointly provide leasing services for the retail space with Crown Retail Services LLC, and exclusively provide leasing services for the office space. We recognized property management fee income, included in "fee and other income" on our consolidated statements of income, of $4,297,000, $3,982,000 and $3,085,000 for the years ended December 31, 2021, 2020 and 2019, respectively. BMS, our wholly-owned subsidiary, supervises cleaning, security and engineering services at certain of the Properties. We recognized income for these services, included in "fee and other income" on our consolidated statements of income, of $3,993,000, $3,595,000 and $3,087,000 for the years ended December 31, 2021, 2020 and 2019, respectively. We believe, based on comparable fees charged by other real estate companies, that the fees described above are consistent with the market. Alexander’s, Inc As of December 31, 2021, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common equity. We manage, develop and lease Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable. As of December 31, 2021 and 2020, Alexander’s owed us an aggregate of $879,000 and $1,516,000, respectively, pursuant to such agreements. On June 4, 2021, Alexander's completed the sale of a parcel of land in the Bronx, New York for $10,000,000. As a result of the sale, we recognized our $2,956,000 share of the net gain and also received a $300,000 sales commission paid by Alexander's. On October 4, 2021, Alexander's sold its Paramus, New Jersey property to IKEA Property, Inc. ("IKEA"), the tenant at the property, for $75,000,000 pursuant to IKEA's purchase option contained in the lease. The property was encumbered by a $68,000,000 mortgage loan which was repaid at closing of the sale. As a result of the sale, we recognized our $11,620,000 share of the net gain and also received a $750,000 sales commission paid by Alexander's. As of December 31, 2021, the market value (“fair value” pursuant to ASC Topic 820, Fair Value Measurements ("ASC 820")) of our investment in Alexander’s, based on Alexander’s December 31, 2021 closing share price of $260.30, was $430,554,000, or $339,149,000 in excess of the carrying amount on our consolidated balance sheet. As of December 31, 2021, 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 $30,081,000. 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. Management, Development, Leasing and Other Agreements We receive an annual fee for managing Alexander’s and all of its properties equal to the sum of (i) $2,800,000, (ii) 2% of the gross revenue from the Rego Park II Shopping Center, (iii) $0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue, and (iv) $344,000, escalating at 3% per annum, for managing the common area of 731 Lexington Avenue. In addition, we are entitled to a development fee of 6% of development costs, as defined. We provide Alexander’s with leasing services for a fee of 3% of rent for the first ten years of a lease term, 2% of rent for the eleventh through twentieth year of a lease term and 1% of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by Alexander’s tenants. In the event third-party real estate brokers are used, our fee increases by 1% and we are responsible for the fees to the third-parties. We are also entitled to a commission upon the sale of any of Alexander’s assets equal to 3% of gross proceeds, as defined, for asset sales less than $50,000,000, and 1% of gross proceeds, as defined, for asset sales of $50,000,000 or more. BMS, our wholly-owned subsidiary, supervises (i) cleaning, engineering and security services at Alexander’s 731 Lexington Avenue property and (ii) security services at Alexander’s Rego Park I, Rego Park II properties and The Alexander apartment tower. During the years ended December 31, 2021, 2020 and 2019, we recognized $4,234,000, $3,613,000 and $3,613,000 of income, respectively, for these services. 91 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5. Investments in Partially Owned Entities - continued Below is a schedule of our investments in partially owned entities. (Amounts in thousands) Investments: Fifth Avenue and Times Square JV (see page 90 for details) Partially owned office buildings/land(1) Alexander’s (see page 91 for details) Other investments(2) Investments in partially owned entities included in other liabilities(3): 7 West 34th Street 85 Tenth Avenue Percentage Ownership at December 31, 2021 Balance as of December 31, 2021 2020 51.5% Various 32.4% Various 53.0% 49.9% $ 2,770,633 $ 2,798,413 306,989 91,405 128,362 473,285 82,902 136,507 3,297,389 $ 3,491,107 (60,918) $ (18,067) (78,985) $ (55,340) (13,080) (68,420) $ $ $ ____________________ (1) Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue (consolidated from August 5, 2021, see Note 7 - Acquisitions and Dispositions for details), 512 West 22nd Street, 61 Ninth Avenue and others. (2) Includes interests in Independence Plaza, Rosslyn Plaza and others. (3) Our negative basis results from distributions in excess of our investment. Below is a schedule of income (loss) from partially owned entities. (Amounts in thousands) Our share of net income (loss): Fifth Avenue and Times Square JV (see page 90 for details): Equity in net income(1) Return on preferred equity, net of our share of the expense Non-cash impairment loss Alexander's (see page 91 for details): Equity in net income Net gain on sale of land Management, leasing and development fees Partially owned office buildings(3) Other investments(4) Percentage Ownership at December 31, 2021 For the Year Ended December 31, 2021 2020 2019 51.5% $ 47,144 $ 37,416 — 84,560 20,116 14,576 5,429 40,121 12,057 $ 21,063 37,357 (413,349) (354,929) 13,326 (2) — 5,309 18,635 12,742 (6,221) (5,560) 31,130 27,586 — 58,716 19,204 — 4,575 23,779 (3,443) (187) 32.4% Various Various ____________________ (1) 2021 includes decreases in our share of depreciation and amortization expense compared to the prior year of $17,448, primarily resulting from non-cash impairment losses recognized during 2020 (see page 90 for details). 2021 and 2020 include a $13,971 reduction in income related to a Forever 21 lease modification at 1540 Broadway. 2020 also includes $3,125 of write-offs of lease receivables deemed uncollectible. Includes our $4,846 share of write-offs of lease receivables deemed uncollectible. Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue (consolidated from August 5, 2021, see Note 7 - Acquisitions and Dispositions for details), 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others. Includes interests in Independence Plaza, Rosslyn Plaza, Urban Edge Properties (sold on March 4, 2019), Pennsylvania Real Estate Investment Trust (accounted for as a marketable security from March 12, 2019 and sold on January 23, 2020) and others. (2) (3) (4) $ 130,517 $ (329,112) $ 78,865 92 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5. Investments in Partially Owned Entities – continued Below is a summary of the debt of our partially owned entities. (Amounts in thousands) Mortgages Payable: Partially owned office buildings(2) Alexander's Fifth Avenue and Times Square JV Other(3) Percentage Ownership at December 31, 2021 Various 32.4% 51.5% Various Maturity 2022-2029 2024-2027 2022-2024 2022-2026 Weighted Average Interest Rate at December 31, 2021 100% Partially Owned Entities’ Debt at December 31,(1) 2021 2020 2.95% 1.43% 2.61% 3.67% $ 3,348,149 $ 1,096,544 950,000 1,292,012 3,622,572 1,164,544 950,000 1,288,265 ________________________________________ (1) All amounts are non-recourse to us except (i) the $500,000 mortgage loan on 640 Fifth Avenue, included in the Fifth Avenue and Times Square JV, and (ii) the $300,000 mortgage loan on 7 West 34th Street. Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue (consolidated from August 5, 2021), 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others. Includes interests in Independence Plaza, Rosslyn Plaza and others. (2) (3) Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned entities was $2,699,405,000 and $2,873,174,000 as of December 31, 2021 and 2020, respectively Summary of Condensed Combined Financial Information The following is a summary of condensed combined financial information for all of our partially owned entities. (Amounts in thousands) Balance Sheet: Assets Liabilities Noncontrolling interests Equity (Amounts in thousands) Income Statement: Total revenue Net income Net income (loss) attributable to the entities 6. 220 Central Park South As of December 31, 2021 2020 $ 12,689,000 $ 13,344,000 7,553,000 2,069,000 3,067,000 7,747,000 2,075,000 3,522,000 For the Year Ended December 31, 2021 2020 2019 $ 1,184,000 $ 1,163,000 $ 1,504,000 190,000 114,000 45,000 (33,000) 39,000 (32,000) During the year ended December 31, 2021, we closed on the sale of six condominium units at 220 CPS for net proceeds of $137,404,000 resulting in a financial statement net gain of $50,318,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, $5,711,000 of income tax expense was recognized on our consolidated statements of income. In addition, during 2021 our taxable REIT subsidiaries recognized a $27,910,000 income tax benefit on our consolidated statements of income. From inception to December 31, 2021, we have closed on the sale of 106 units for net proceeds of $3,006,896,000 resulting in financial statement net gains of $1,117,255,000. As of December 31, 2021, 95% of the condominium units have been sold. 93 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 7. Acquisitions and Dispositions One Park Avenue On August 5, 2021, pursuant to a right of first offer, we increased our ownership interest in One Park Avenue, a 944,000 square foot Manhattan office building, to 100.0% by acquiring our joint venture partner's 45.0% ownership interest in the property. The purchase price values the property at $875,000,000. We paid approximately $158,000,000 in cash and assumed our joint venture partner's share of the $525,000,000 mortgage loan (discussed below). We previously accounted for our investment under the equity method and have consolidated the accounts of the property from the date of acquisition of the additional 45.0% ownership interest. The aggregate purchase price and our existing basis in the property have been allocated between the assets acquired and the liabilities assumed (excluding working capital accounts) as follows: (Amounts in thousands) Assets: Land Building and improvements Identified intangible assets Assets consolidated Liabilities: Mortgages payable Deferred revenue Liabilities consolidated $ Net assets consolidated (excluding working capital) $ 197,057 368,956 139,545 705,558 525,000 18,884 543,884 161,674 On February 26, 2021, the joint venture completed a $525,000,000 refinancing of One Park Avenue. The interest-only loan bears a rate of LIBOR plus 1.11% (1.22% as of December 31, 2021) and matures in March 2023, with three one-year extension options (March 2026, as fully extended). We realized our $105,000,000 share of net proceeds. The loan replaced the previous $300,000,000 loan that bore interest at LIBOR plus 1.75% and was scheduled to mature in March 2021. Madison Avenue On September 24, 2021, we sold three Manhattan retail properties located at 677-679, 759-771 and 828-850 Madison Avenue in two separate sale transactions for an aggregate sales price of $100,000,000. Net proceeds from the sales were $96,503,000. In connection with the sales, we recorded $7,880,000 of non-cash impairment losses which are included in "impairment losses, transaction related costs and other" on our consolidated statements of income. SoHo Properties On May 10, 2021, we entered into an agreement to sell two Manhattan retail properties located at 478-482 Broadway and 155 Spring Street for a sales price of $84,500,000. On January 13, 2022, we completed the sale transaction and realized net proceeds of $81,399,000. In connection with the sale, we will recognize a net gain of approximately $850,000 in the first quarter of 2022. As of December 31, 2021, $80,005,000 of assets associated with these properties were classified as held-for-sale and are included in "other assets" on our consolidated balance sheets. 94 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8. Identified Intangible Assets and Liabilities The following summarizes our identified intangible assets (primarily above-market leases) and liabilities (primarily below- market leases). (Amounts in thousands) Identified intangible assets: Gross amount Accumulated amortization Total, net Identified intangible liabilities (included in deferred revenue): Gross amount Accumulated amortization Total, net Balance as of December 31, 2021 2020 $ $ $ $ 252,081 $ (97,186) 154,895 $ 256,065 $ (212,245) 43,820 $ 116,969 (93,113) 23,856 273,902 (238,541) 35,361 Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental revenues of $9,249,000, $16,878,000 and $19,830,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years commencing January 1, 2022 is as follows: (Amounts in thousands) 2022 2023 2024 2025 2026 $ 5,531 5,151 2,056 843 201 Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $7,330,000, $6,507,000 and $8,666,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases for each of the five succeeding years commencing January 1, 2022 is as follows: (Amounts in thousands) 2022 2023 2024 2025 2026 $ 9,805 8,743 7,906 6,330 6,136 95 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 9. Debt Secured Debt On March 7, 2021, we entered into an interest rate swap agreement for our $500,000,000 PENN 11 mortgage loan to swap the interest rate on the mortgage loan from LIBOR plus 2.75% to a fixed rate of 3.03% through March 2024. On December 1, 2021, we completed a loan modification which reduced the interest rate on the mortgage loan to LIBOR plus 1.95% (2.05% as of December 31, 2021) from LIBOR plus 2.75%, resulting in a fixed rate of 2.23% pursuant to the interest rate swap agreement. On March 26, 2021, we completed a $350,000,000 refinancing of 909 Third Avenue, a 1.4 million square foot Manhattan office building. The interest-only loan bears a fixed rate of 3.23% and matures in April 2031. The loan replaced the previous $350,000,000 loan that bore interest at a fixed rate of 3.91% and was scheduled to mature in May 2021. On May 10, 2021, we completed a $1.2 billion refinancing of 555 California Street, a three-building 1.8 million square foot office campus in San Francisco, in which we own a 70.0% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.93% in years one through five (2.04% as of December 31, 2021), LIBOR plus 2.18% in year six and LIBOR plus 2.43% in year seven. The loan matures in May 2023, with five one-year extension options (May 2028 as fully extended). We swapped the interest rate on our $840,000,000 share of the loan to a fixed rate of 2.26% through May 2024. The loan replaced the previous $533,000,000 loan that bore interest at a fixed rate of 5.10% and was scheduled to mature in September 2021. On May 28, 2021, we repaid the $675,000,000 mortgage loan on theMART, a 3.7 million square foot commercial building in Chicago, with proceeds from our senior unsecured notes offering discussed below. The loan bore interest at 2.70% and was scheduled to mature in September 2021. On November 16, 2021, we completed a $950,000,000 refinancing of 1290 Avenue of the Americas, a 2.1 million square foot Class A Manhattan office building, in which we own a 70.0% controlling interest. The interest-only loan bears a rate of LIBOR plus 1.51% (1.62% as of December 31, 2021) in years one to five, increasing 0.25% in both years six and seven. The loan matures in November 2023 with five one-year extension options (November 2028 as fully extended). We defeased the existing $950,000,000 loan that bore interest at a fixed rate of 3.34% and was scheduled to mature in November 2022. As a result, we incurred $23,729,000 of defeasance costs, which are included in "interest and debt expense" on our consolidated statements of income, of which $7,119,000 is attributable to noncontrolling interest. Unsecured Revolving Credit Facility On April 15, 2021, we extended our $1.25 billion unsecured revolving credit facility from January 2023 (as fully extended) to April 2026 (as fully extended). The interest rate on the extended facility was lowered to LIBOR plus 0.90% from LIBOR plus 1.00%. We subsequently qualified for a sustainability margin adjustment by achieving certain key performance indicator (KPI) metrics, which reduced our interest rate by 0.01% to LIBOR plus 0.89%. The facility fee remains at 20 basis points. Our separate $1.50 billion unsecured revolving credit facility matures in March 2024 (as fully extended) and has an interest rate of LIBOR plus 0.90% and a facility fee of 20 basis points. Senior Unsecured Notes On May 24, 2021, we completed a green bond public offering of $400,000,000 2.15% senior unsecured notes due June 1, 2026 ("2026 Notes") and $350,000,000 3.40% senior unsecured notes due June 1, 2031 ("2031 Notes"). Interest on the senior unsecured notes is payable semi-annually on June 1 and December 1, commencing December 1, 2021. The 2026 Notes were sold at 99.86% of their face amount to yield 2.18% and the 2031 Notes were sold at 99.59% of their face amount to yield 3.45%. 96 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 9. Debt - continued The following is a summary of our debt: (Amounts in thousands) Mortgages Payable: Fixed rate Variable rate Total Deferred financing costs, net and other Total, net Unsecured Debt: Senior unsecured notes Deferred financing costs, net and other Senior unsecured notes, net Unsecured term loan Deferred financing costs, net and other Unsecured term loan, net Weighted Average Interest Rate at December 31, 2021 Balance as of December 31, 2021 2020 2.80% 1.68% 2.08% 3.02% 3.70% $ 2,190,000 $ 3,909,215 6,099,215 (45,872) 3,012,643 2,595,815 5,608,458 (27,909) $ $ 6,053,343 $ 5,580,549 1,200,000 $ (10,208) 1,189,792 800,000 (2,188) 797,812 450,000 (3,315) 446,685 800,000 (3,238) 796,762 Unsecured revolving credit facilities 1.00% 575,000 575,000 Total, net $ 2,562,604 $ 1,818,447 The net carrying amount of properties collateralizing the above indebtedness amounted to $5.6 billion as of December 31, 2021. As of December 31, 2021, the principal repayments required for the next five years and thereafter are as follows: (Amounts in thousands) Year Ended December 31, 2022 2023 2024 2025 2026 Thereafter Mortgages Payable Unsecured Debt $ 1,046,600 $ 3,198,400 773,215 331,000 — 750,000 — 575,000 800,000 450,000 400,000 350,000 10. Redeemable Noncontrolling Interests Redeemable Noncontrolling Partnership Units Redeemable noncontrolling partnership units are primarily comprised of Class A Operating Partnership units held by third parties and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unitholder is equal to the quarterly dividend paid to a Vornado common shareholder. 97 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 10. Redeemable Noncontrolling Interests - continued Redeemable Noncontrolling Partnership Units - continued Below are the details of redeemable noncontrolling partnership units. (Amounts in thousands, except units and per unit amounts) Balance as of December 31, Units Outstanding as of December 31, Unit Series 2021 2020 2021 2020 Per Unit Liquidation Preference Preferred or Annual Distribution Rate Common: Class A units held by third parties $ 587,440 (1) $ 507,212 (1) 14,033,438 13,583,607 n/a $ 2.12 Perpetual Preferred/Redeemable Preferred: 5.00% D-16 Cumulative Redeemable(2) 3.25% D-17 Cumulative Redeemable(3) $ $ — 3,535 $ $ 1,000 3,535 — 1 n/a n/a 141,400 141,400 $ 25.00 $ 0.8125 ________________________________________ (1) Aggregate redemption value was based on Vornado's year-end closing common share price. (2) Redeemed on October 18, 2021. (3) Holders may tender units for redemption to the Operating Partnership for cash at their stated redemption amount; Vornado, at its option, may assume that obligation and pay the holders either cash or Vornado preferred shares on a one-for-one basis. These units are redeemable at Vornado's option at any time. Below is a table summarizing the activity of redeemable noncontrolling partnership units. (Amounts in thousands) Beginning balance Net income (loss) Other comprehensive income (loss) Distributions Redemption of Class A units for Vornado common shares, at redemption value Redeemable Class A unit measurement adjustment Other, net Ending balance For the Year Ended December 31, 2021 2020 $ 511,747 $ 7,540 4,048 (29,901) (14,576) 76,073 36,044 $ 590,975 $ 888,915 (24,946) (2,914) (32,595) (9,266) (344,043) 36,596 511,747 Redeemable noncontrolling partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC Topic 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $49,659,000 and $50,002,000 as of December 31, 2021 and 2020, respectively. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income. Redeemable Noncontrolling Interest in a Consolidated Subsidiary A consolidated joint venture in which we own a 95% interest is developing Farley Office and Retail (the "Project"). During 2020, a historic tax credit investor (the "Tax Credit Investor") funded $92,400,000 of capital contributions and is expected to make additional capital contributions in future periods. The arrangement includes a put option whereby the joint venture may be obligated to purchase the Tax Credit Investor’s ownership interest in the Project at a future date. The put price is calculated based on a pre-determined formula. As exercise of the put option is outside of the joint venture’s control, the Tax Credit Investor’s interest, together with the put option, have been recorded to “redeemable noncontrolling interest in a consolidated subsidiary” on our consolidated balance sheets as of December 31, 2021 and 2020. The redeemable noncontrolling interest is recorded at the greater of the carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. There was no adjustment required for the years ended December 31, 2021 and 2020. 98 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 10. Redeemable Noncontrolling Interests - continued Redeemable Noncontrolling Interest in a Consolidated Subsidiary - continued Below is a table summarizing the activity of the redeemable noncontrolling interest in a consolidated subsidiary. (Amounts in thousands) Beginning balance Net income Contributions Other, net Ending balance For the Year Ended December 31, 2021 2020 $ $ 94,520 $ 3,188 — — 97,708 $ — 544 92,400 1,576 94,520 11. Shareholders' Equity/Partners' Capital Common Shares (Vornado Realty Trust) As of December 31, 2021, there were 191,723,608 common shares outstanding. During 2021, we paid an aggregate of $406,109,000 of common dividends comprised of quarterly common dividends of $0.53 per share. Class A Units (Vornado Realty L.P.) As of December 31, 2021, there were 191,723,608 Class A units outstanding that were held by Vornado. These units are classified as “partners’ capital” on the consolidated balance sheets of the Operating Partnership. As of December 31, 2021, there were 14,033,438 Class A units outstanding, that were held by third parties. These units are classified outside of “partners’ capital” as “redeemable partnership units” on the consolidated balance sheets of the Operating Partnership (See Note 10 – Redeemable Noncontrolling Interests). During 2021, the Operating Partnership paid an aggregate of $406,109,000 of distributions to Vornado comprised of quarterly common distributions of $0.53 per unit. Preferred Shares/Units On September 22, 2021, Vornado sold 12,000,000 4.45% Series O cumulative redeemable preferred shares at a price of $25.00 per share, pursuant to an effective registration statement. Vornado received aggregate net proceeds of $291,153,000, after underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 12,000,000 4.45% Series O preferred units (with economic terms that mirror those of the Series O preferred shares). Dividends on the Series O preferred shares/units are cumulative and payable quarterly in arrears. The Series O preferred shares/units are not convertible into, or exchangeable for, any of our properties or securities. On or after five years from the date of issuance (or sooner under limited circumstances), Vornado may redeem the Series O preferred shares/units at a redemption price of $25.00 per share/unit, plus accrued and unpaid dividends/distributions through the date of redemption. The Series O preferred shares/units have no maturity date and will remain outstanding indefinitely unless redeemed by Vornado. Vornado used the net proceeds for the redemption of its 5.70% Series K cumulative redeemable preferred shares/units. On October 13, 2021, we redeemed all of the outstanding 5.70% Series K preferred shares/units at their redemption price of $25.00 per share/unit, or $300,000,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption. We recognized $9,033,000 of previously capitalized issuance costs in "Series K preferred share/unit issuance costs" on our consolidated statements of income during the third quarter of 2021, when the preferred shares/units were called for redemption. 99 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 11. Shareholders' Equity/Partners' Capital - continued Preferred Shares/Units - continued The following table sets forth the details of our preferred shares of beneficial interest and the preferred units of the Operating Partnership as of December 31, 2021 and 2020. During 2021, preferred dividends were $65,880,000. (Amounts in thousands, except share/unit and per share/per unit amounts) Preferred Shares/Units Convertible Preferred: Balance as of December 31, 2021 2020 Per Share/Unit Shares/Units Outstanding as of December 31, 2021 2020 Liquidation Preference Annual Dividend/ Distribution(1) 6.5% Series A: authorized 12,902 and 13,402 shares/units(2) $ 920 $ 934 12,902 13,402 $ 50.00 $ 3.25 Cumulative Redeemable Preferred(3): 5.70% Series K: authorized 12,000,000 shares/units(4) 5.40% Series L: authorized 13,800,000 shares/units 5.25% Series M: authorized 13,800,000 shares/units 5.25% Series N: authorized 12,000,000 shares/units 4.45% Series O: authorized 12,000,000 shares/units(5) — 290,971 — 12,000,000 290,306 308,946 291,134 291,153 290,306 12,000,000 12,000,000 308,946 12,780,000 12,780,000 291,182 12,000,000 12,000,000 — 12,000,000 — n/a 25.00 25.00 25.00 25.00 n/a 1.35 1.3125 1.3125 1.1125 $ 1,182,459 $ 1,182,339 48,792,902 48,793,402 ________________________________________ (1) Dividends on preferred shares and distributions on preferred units are cumulative and are payable quarterly in arrears. (2) Redeemable at the option of Vornado under certain circumstances, at a redemption price of 1.9531 common shares/Class A units per Series A Preferred Share/ Unit plus accrued and unpaid dividends/distributions through the date of redemption, or convertible at any time at the option of the holder for 1.9531 common shares/Class A units per Series A Preferred Share/Unit. (3) Series L preferred shares/units are redeemable at Vornado's option at a redemption price of $25.00 per share/unit, plus accrued and unpaid dividends/distributions through the date of redemption. Series M preferred shares/units are redeemable commencing December 2022, Series N preferred shares/units are redeemable commencing November 2025 and Series O preferred shares/units are redeemable commencing September 2026. Series K preferred shares/units were redeemed on October 13, 2021. (4) Redeemed on October 13, 2021. Issued in September 2021. (5) Accumulated Other Comprehensive Loss The following table sets forth the changes in accumulated other comprehensive loss by component for the year ended December 31, 2021. (Amounts in thousands) Balance as of December 31, 2020 Other comprehensive income (loss) Balance as of December 31, 2021 12. Variable Interest Entities Accumulated other comprehensive (loss) income of nonconsolidated subsidiaries Total Interest rate swaps Other $ $ (75,099) $ 57,565 (17,534) $ (14,338) $ (66,098) $ 10,275 51,337 (4,063) $ (14,761) $ 5,337 (4,047) 1,290 Unconsolidated VIEs As of December 31, 2021 and 2020, we have several unconsolidated VIEs. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities does not give us power over decisions that significantly affect these entities’ economic performance. We account for our investment in these entities under the equity method (see Note 5 – Investments in Partially Owned Entities). As of December 31, 2021 and 2020, the net carrying amount of our investments in these entities was $69,435,000 and $224,754,000, respectively, and our maximum exposure to loss in these entities is limited to the carrying amount of our investments. Consolidated VIEs Our most significant consolidated VIEs are the Operating Partnership (for Vornado), the Farley joint venture and certain properties that have non-controlling interests. These entities are VIEs because the non-controlling interests do not have substantive kick-out or participating rights. We consolidate these entities because we control all significant business activities. As of December 31, 2021, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, were $4,564,621,000 and $2,517,652,000 respectively. As of December 31, 2020, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, were $4,053,841,000 and $1,722,719,000, respectively. 100 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. Fair Value Measurements ASC 820 defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, our fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or disposition of these assets. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities that are measured at fair value on our consolidated balance sheets consist of (i) real estate fund investments, (ii) the assets in our deferred compensation plan (for which there is a corresponding liability on our consolidated balance sheets), (iii) loans receivable for which we have elected the fair value option under ASC Subtopic 825-10, Financial Instruments ("ASC 825-10"), (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. (Amounts in thousands) Real estate fund investments Deferred compensation plan assets ($9,104 included in restricted cash and $101,070 in other assets) Loans receivable ($46,444 included in investments in partially owned entities and $3,738 in other assets) Interest rate swaps and caps (included in other assets) Total assets Mandatorily redeemable instruments (included in other liabilities) Interest rate swaps (included in other liabilities) Total liabilities (Amounts in thousands) Real estate fund investments Deferred compensation plan assets ($10,813 included in restricted cash and $94,751 in other assets) Loans receivable ($43,008 included in investments in partially owned entities and $4,735 in other assets) Interest rate swaps (included in other assets) Total assets Mandatorily redeemable instruments (included in other liabilities) Interest rate swaps (included in other liabilities) Total liabilities As of December 31, 2021 Total Level 1 Level 2 Level 3 $ 7,730 $ — $ — $ 7,730 110,174 65,158 50,182 18,929 — — — — 18,929 45,016 50,182 — 187,015 $ 65,158 $ 18,929 $ 102,928 49,659 $ 49,659 $ — $ 32,837 — 32,837 82,496 $ 49,659 $ 32,837 $ — — — As of December 31, 2020 Total Level 1 Level 2 Level 3 3,739 $ — $ — $ 3,739 105,564 65,636 47,743 17 — — — — 17 157,063 $ 65,636 $ 17 $ 50,002 $ 50,002 $ — $ 66,033 — 66,033 116,035 $ 50,002 $ 66,033 $ 39,928 47,743 — 91,410 — — — $ $ $ $ $ $ $ 101 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. Fair Value Measurements - continued Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued Real Estate Fund Investments As of December 31, 2021, we had three real estate fund investments with an aggregate fair value of $7,730,000, or $328,055,000 below cost. These investments are classified as Level 3. Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and discount rates. These rates are based on the location, type and nature of each property, current and anticipated market conditions, industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable quantitative inputs in the table below were utilized in determining the fair value of these real estate fund investments. Range Weighted Average (based on fair value of assets) Unobservable Quantitative Input December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Discount rates Terminal capitalization rates 12.0% to 15.0% 5.5% to 8.8% 7.6% to 15.0% 5.5% to 10.3% 13.2% 7.4% 12.7% 7.9% The inputs above 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. (Amounts in thousands) Beginning balance Dispositions Purchases/additional fundings Net unrealized income (loss) on held investments Net realized income on exited investments Ending balance Deferred Compensation Plan Assets For the Year Ended December 31, 2021 2020 3,739 $ (5,104) 4,474 3,257 1,364 7,730 $ 222,649 — 7,197 (226,107) — 3,739 $ $ 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 that provide net asset values on a fair value basis from a third-party administrator, which are compiled from the quarterly reports provided to them from each limited partnership and investment fund. The period of time over which these underlying assets are expected to be liquidated is unknown. The third-party administrator does not adjust these values in determining our share of the net assets and we do not adjust these values when reported in our consolidated financial statements. The table below summarizes the changes in the fair value of deferred compensation plan assets that are classified as Level 3. (Amounts in thousands) Beginning balance Purchases Sales Realized and unrealized gains Other, net Ending balance Loans Receivable For the Year Ended December 31, 2021 2020 39,928 $ 5,705 (4,766) 2,250 1,899 45,016 $ 32,435 8,766 (5,467) 808 3,386 39,928 $ $ Loans receivable consist of loan investments in real estate related assets for which we have elected the fair value option under ASC 825-10. These investments are classified as Level 3. Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and discount rates. These rates are based on the location, type and nature of each property, current and anticipated market conditions, industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable quantitative inputs in the table on the following page were utilized in determining the fair value of these loans receivable. 102 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. Fair Value Measurements - continued Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued Loans Receivable - continued Range Weighted Average (based on fair value of investments) Unobservable Quantitative Input Discount rates Terminal capitalization rates December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 6.5 % 5.0 % 6.5 % 5.0 % 6.5% 5.0% 6.5% 5.0% The table below summarizes the changes in fair value of loans receivable that are classified as Level 3. (Amounts in thousands) Beginning balance Credit losses Interest accrual Paydowns Ending balance Derivatives and Hedging For the Year Ended December 31, 2021 2020 47,743 $ — 3,714 (1,275) 50,182 $ 59,251 (13,369) 2,461 (600) 47,743 $ $ We utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. We recognize the fair values of all derivatives in "other assets" or "other liabilities" on our consolidated balance sheets. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. The following tables summarize our consolidated derivative instruments, all of which hedge variable rate debt, as of December 31, 2021 and 2020, respectively. (Amounts in thousands) Included in other assets: Hedged Item 555 California Street mortgage loan interest rate swap(1) PENN 11 mortgage loan interest rate swap(3) Various interest rate caps Included in other liabilities: Unsecured term loan interest rate swap 33-00 Northern Boulevard mortgage loan interest rate swap As of December 31, 2021 Variable Rate Fair Value Notional Amount Spread over LIBOR Interest Rate Swapped Rate Expiration Date $ 11,814 $ 840,000 (2) 6,565 550 500,000 1,650,000 18,929 $ 2,990,000 28,976 $ 750,000 (4) 3,861 32,837 $ 100,000 850,000 $ $ $ L+193 L+195 2.04% 2.05% 2.26% 2.23% 5/24 3/24 L+100 L+180 1.10% 1.91% 3.87% 4.14% 10/23 1/25 ______________________________________________ (1) Entered into on May 15, 2021. (2) Represents our 70.0% share of the $1.2 billion mortgage loan. (3) Entered into on March 7, 2021. (4) Remaining $50,000 balance of our unsecured term loan bears interest at a floating rate of LIBOR plus 1.00%. (Amounts in thousands) Hedged Item Included in other assets: Various interest rate caps Included in other liabilities: Unsecured term loan interest rate swap 33-00 Northern Boulevard mortgage loan interest rate swap As of December 31, 2020 Variable Rate Fair Value Notional Amount Spread over LIBOR Interest Rate Swapped Rate Expiration Date $ $ $ 17 $ 175,000 57,723 $ 750,000 (1) 8,310 66,033 $ 100,000 850,000 L+100 L+180 1.15% 1.95% 3.87% 4.14% 10/23 1/25 ______________________________________ (1) Remaining $50,000 balance of our unsecured term loan bears interest at a floating rate of LIBOR plus 1.00%. 103 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 13. Fair Value Measurements - continued Fair Value Measurements on a Nonrecurring Basis There were no assets measured at fair value on a nonrecurring basis on our consolidated balance sheet as of December 31, 2021. As of December 31, 2020, assets measured at fair value on a nonrecurring basis on our consolidated balance sheet consisted of real estate assets that have been written down to estimated fair value for impairment purposes. The impairment losses primarily relate to wholly owned street retail assets. Our estimate of the fair value of these assets was measured using widely accepted valuation techniques including (i) discounted cash flow analyses based upon market conditions and expectations of growth and utilized unobservable quantitative inputs, including a capitalization rate of 5.0% and discount rate of 7.0%, and (ii) comparable sales activity. (Amounts in thousands) Real estate assets As of December 31, 2020 Total Level 1 Level 2 Level 3 $ 191,116 $ — $ — $ 191,116 Financial Assets and Liabilities not Measured at Fair Value Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents (primarily money market funds, which invest in obligations of the United States government), and our secured and unsecured debt. Estimates of the fair value of these instruments are determined by the standard practice of modeling the contractual cash flows required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate, which is provided by a third-party specialist. For floating rate debt, we use forward rates derived from observable market yield curves to project the expected cash flows we would be required to make under the instrument. The fair value of cash equivalents and borrowings under our unsecured revolving credit facilities and unsecured term loan are classified as Level 1. The fair value of our secured debt and unsecured debt are classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial instruments. (Amounts in thousands) Cash equivalents Debt: Mortgages payable Senior unsecured notes Unsecured term loan Unsecured revolving credit facilities Total As of December 31, 2021 As of December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value $ $ $ $ $ 1,346,684 6,099,215 1,200,000 800,000 575,000 $ $ 1,347,000 6,052,000 1,230,000 800,000 575,000 $ $ 1,476,427 5,608,458 450,000 800,000 575,000 1,476,000 5,612,000 476,000 800,000 575,000 8,674,215 (1) $ 8,657,000 $ 7,433,458 (1) $ 7,463,000 ____________________ (1) Excludes $58,268 and $34,462 of deferred financing costs, net and other as of December 31, 2021 and 2020, respectively. 104 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14. Stock-based Compensation Vornado's 2019 Omnibus Share Plan (the “Plan") provides the Compensation Committee of Vornado's Board of Trustees (the "Committee") the ability to grant incentive and nonqualified Vornado stock options, restricted stock, restricted Operating Partnership units ("OP units"), out-performance plan awards ("OPPs"), appreciation-only long-term incentive plan units (“AO LTIP Units”) and performance conditioned appreciation-only long-term incentive plan units ("Performance Conditioned AO LTIP Units") to certain of our employees and officers. Awards may be granted up to a maximum 5,500,000 shares, if all awards granted are Full Value awards, as defined in the Plan, and up to 11,000,000 shares, if all of the awards granted are Not Full Value Awards, as defined in the Plan. Full Value Awards are awards of securities, such as restricted shares, that, if all vesting requirements are met, do not require the payment of an exercise price or strike price to acquire the securities. Not Full Value Awards are awards of securities, such as options, that do require the payment of an exercise price or strike price. As of December 31, 2021, Vornado has approximately 3,490,000 shares available for future grants under the Plan, if all awards granted are Full Value Awards, as defined. We account for all equity-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation. Below is a summary of our stock-based compensation expense, a component of "general and administrative" expense on our consolidated statements of income. (Amounts in thousands) OP Units OPPs AO LTIP Units Vornado stock options Vornado restricted stock Performance Conditioned AO LTIP Units For the Year Ended December 31, 2020 2019 2021 $ 27,698 $ 33,431 $ 39,969 8,629 877 456 450 219 9,579 3,955 656 649 407 $ 38,329 $ 48,677 $ 1,944 2,636 547 549 8,263 53,908 Below is a summary of unrecognized compensation expense for the year ended December 31, 2021. (Amounts in thousands) OP Units OPPs AO LTIP Units Vornado stock options Vornado restricted stock Performance Conditioned AO LTIP Units OPPs As of December 31, 2021 Weighted-Average Remaining Contractual Term $ 13,460 5,104 565 489 483 94 $ 20,195 1.3 2.0 1.2 1.4 1.4 1.0 1.5 OPPs are multi-year, performance-based equity compensation plans under which participants have the opportunity to earn a class of units (“OPP units”) of the Operating Partnership if, and only if, Vornado outperforms a predetermined total shareholder return (“TSR”) and/or outperforms the market with respect to a relative TSR during the three-year or four-year performance period (the “Performance Period”) as described on the following page. OPP units, if earned, become convertible into Class A units of the Operating Partnership (and ultimately into Vornado common shares) following vesting. 2021 OPP On January 12, 2021, the Committee approved the 2021 OPP, a multi-year, $30,000,000 performance-based equity compensation plan. Awards under the 2021 OPP may potentially be earned if Vornado (i) achieves a TSR greater than 28% over a four-year performance period (the “2021 OPP Absolute Component”), and /or (ii) achieves a TSR above a benchmark weighted index (the "Index"), comprised of 80% of the constituents of the SNL US Office REIT Index at the time awards were granted, and 20% of the constituents of the SNL US Retail Index at the time awards were granted, over the Performance Period (the “2021 OPP Relative Component”). 105 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14. Stock-based Compensation – continued 2021 OPP - continued The value of awards under the 2021 OPP Absolute Component and 2021 OPP Relative Component will be calculated separately and will each be subject to an aggregate $30,000,000 maximum award cap for all participants. The two components will be added together to determine the aggregate award size, which shall also be subject to the aggregate $30,000,000 maximum award cap for all participants. In the event awards are earned under the 2021 OPP Absolute Component, but Vornado underperforms the Index by more than 200 basis points per annum over the Performance Period (800 basis points over the four years), the amount earned under the 2021 OPP Absolute Component will be reduced based on the degree by which the Index exceeds Vornado’s TSR with the maximum payout being 50% under the 2021 OPP Absolute Component. In the event awards are earned under the 2021 OPP Relative Component, but Vornado fails to achieve a TSR of at least 2% per annum, awards earned under the 2021 OPP Relative Component will be reduced on a ratable sliding scale based on Vornado’s absolute TSR performance, with the maximum payout being 50% under the 2021 OPP Relative Component in the event Vornado’s TSR during the four-year measurement period is 0% or negative. If the designated performance objectives are achieved, awards earned under 2021 OPP will vest 50% in year four and 50% in year five. In addition, all of Vornado’s senior executives are required to hold any earned and vested awards for one year following each such vesting date. Dividends on awards granted under the 2021 OPP accrue during the four-year performance period and are paid to participants if awards are ultimately earned based on the achievement of the designated performance objectives. Below is the summary of the OPP units granted during the years December 31, 2021, 2020 and 2018. Plan Year 2021 2020 2018 Total Plan Notional Amount Percentage of Notional Amount Granted Grant Date Fair Value(1) $ 30,000,000 35,000,000 35,000,000 99.1 % $ 94.0 % 78.2 % 9,950,000 11,700,000 10,300,000 OPP Units Earned To be determined in 2025 To be determined in 2023 Not earned ________________________________________ (1) During the years ended December 31, 2021, 2020 and 2018, $6,140,000, $7,583,000 and $8,040,000, respectively, was immediately expensed on the respective grant date due to acceleration of vesting for employees who are retirement eligible (have reached age 65 or age 60 with at least 20 years of service). Vornado Stock Options Vornado stock options are granted at an exercise price equal to the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant, generally vest over four years and expire ten years from the date of grant. Compensation expense related to Vornado stock option awards is recognized on a straight-line basis over the vesting period. Below is a summary of Vornado’s stock option activity for the year ended December 31, 2021. Outstanding as of December 31, 2020 Exercised Forfeited Expired Outstanding as of December 31, 2021 Options exercisable as of December 31, 2021 Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value 64.79 36.72 56.92 64.70 65.27 70.13 5.75 4.71 $ $ 152,920 37,820 Shares 765,637 $ (598) (3,008) (570,098) 191,933 $ 124,805 $ There were no Vornado stock options granted during the year ended December 31, 2021. The fair value of each option grant is estimated on the date of grant using an option-pricing model with the following weighted-average assumptions for grants in the years ended December 31, 2020 and 2019. Expected volatility Expected life Risk free interest rate Expected dividend yield As of December 31, 2020 35% - 36% 5.0 years 0.57% - 1.76% 3.2% - 3.4% 2019 35% 5.0 years 2.50% 2.9% The weighted average grant date fair value per share for options granted during the years ended December 31, 2020 and 2019 was $12.28 and $16.64, respectively. Cash received from option exercises for the years ended December 31, 2021, 2020 and 2019 was $22,000, $3,516,000 and $5,495,000, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $5,500, $859,000 and $18,954,000, respectively. 106 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14. Stock-based Compensation – continued Performance Conditioned AO LTIP Units Performance Conditioned AO LTIP Units are AO LTIP Units that require the achievement of certain performance conditions by a specified date or they are forfeited. The performance-based condition is met if Vornado common shares trade at or above 110% of the grant price per share for any 20 consecutive days on or before the fourth anniversary following the date of grant. If the performance conditions are not met, the awards are forfeited. If the performance conditions are met, once vested, the awards may be converted into Class A Operating Partnership units in the same manner as AO LTIP Units until ten years from the date of grant. Below is a summary of Performance Conditioned AO LTIP Units activity for the year ended December 31, 2021. Outstanding as of December 31, 2020 Outstanding as of December 31, 2021 Options exercisable at December 31, 2021 Weighted- Average Grant-Date Fair Value Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value 62.62 62.62 62.62 7.04 7.04 $ $ — — Units 496,792 496,792 322,313 (1) $ (1) $ $ ________________________________________ (1) Granted in 2019 at a grant price of $64.48 and a fair value of $8,983,000 at the date of grant. The fair value of each Performance Conditioned AO LTIP Units granted is estimated on the date of grant using an option-pricing model with the following weighted average assumptions for grants in the year ended December 31, 2019. Expected volatility Expected life Risk free interest rate Expected dividend yield AO LTIP Units 35% 8.0 years 2.76% 3.1% AO LTIP Units are a class of partnership interests in the Operating Partnership that are intended to qualify as “profits interests” for federal income tax purposes and generally only allow the recipient to realize value to the extent the fair market value of a Vornado common share exceeds the threshold level set at the time the AO LTIP Units are granted, subject to any vesting conditions applicable to the award. The threshold level is intended to be equal to 100% of the then fair market value of a Vornado common share on the date of grant. The value of vested AO LTIP Units is realized through conversion of the AO LTIP Units into Class A Operating Partnership units. The number of Class A Units into which vested AO LTIP Units may be converted is determined based on the quotient of (i) the excess of the conversion value on the conversion date over the threshold value designated at the time the AO LTIP Unit was granted, divided by (ii) the conversion value on the conversion date. The “conversion value” is the value of a Vornado common share on the conversion date multiplied by the Conversion Factor as defined in the Partnership Agreement, which is currently one. AO LTIP Units have a term of ten years from the grant date. Each holder will generally receive special income allocations in respect of an AO LTIP Unit equal to 10% (or such other percentage specified in the applicable award agreement) of the income allocated in respect of a Class A Unit. Upon conversion of AO LTIP Units to Class A Units, holders will be entitled to receive in respect of each such AO LTIP Unit, on a per unit basis, a special distribution equal to 10% (or such other percentage specified in the applicable award agreement) of the distributions received by a holder of an equivalent number of Class A Units during the period from the grant date of the AO LTIP Units through the date of conversion. Below is a summary of AO LTIP Units activity for the year ended December 31, 2021. Outstanding as of December 31, 2020 Exercised Forfeited Expired Outstanding as of December 31, 2021 Options exercisable as of December 31, 2021 Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value 59.71 36.72 56.30 66.32 59.91 61.83 7.29 7.06 $ $ 640,711 279,164 Shares 717,581 $ (16,669) (60,927) (72,246) 567,739 $ 327,535 $ 107 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 14. Stock-based Compensation – continued AO LTIP Units - continued There were no AO LTIP Units granted during the year ended December 31, 2021. AO LTIP Units granted during the years ended December 31, 2020 and 2019 had a fair value of $4,319,000 and $3,429,000, respectively. The fair value of each AO LTIP Unit granted is estimated on the date of grant using an option-pricing model with the following weighted-average assumptions for grants in the years ended December 31, 2020 and 2019. Expected volatility Expected life Risk free interest rate Expected dividend yield OP Units As of December 31, 2020 35% - 36% 5.0 years 0.57% - 1.76% 3.2% - 3.4% 2019 35% 5.0 years 2.50% 2.90% OP Units are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant, vest ratably over four years and are subject to a taxable book-up event, as defined. Compensation expense related to OP Units is recognized ratably over the vesting period using a graded vesting attribution model. Distributions paid on unvested OP Units amounted to $2,634,000, $5,316,000 and $4,070,000 in the years ended December 31, 2021, 2020 and 2019, respectively. Below is a summary of restricted OP unit activity for the year ended December 31, 2021. Unvested as of December 31, 2020 Unvested Units Granted Vested Forfeited Unvested as of December 31, 2021 Units Weighted-Average Grant-Date Fair Value 1,152,418 $ 816,019 (867,747) (17,603) 1,083,087 53.17 32.10 42.11 52.73 53.99 OP Units granted in 2021, 2020 and 2019 had a fair value of $26,194,000, $18,013,000 and $58,732,000, respectively. The fair value of OP Units that vested during the years ended December 31, 2021, 2020 and 2019 was $36,541,000, $24,373,000 and $27,821,000, respectively. Vornado Restricted Stock Vornado restricted stock awards are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant and generally vest over four years. Compensation expense related to Vornado’s restricted stock awards is recognized on a straight-line basis over the vesting period. Dividends paid on unvested Vornado restricted stock are charged directly to retained earnings and amounted to $35,000, $98,000 and $51,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Below is a summary of Vornado’s restricted stock activity for the year ended December 31, 2021. Unvested Shares Unvested as of December 31, 2020 Vested Forfeited Unvested as of December 31, 2021 Shares Weighted-Average Grant-Date Fair Value 25,315 $ (8,833) (708) 15,774 60.06 64.17 58.56 57.82 There were no Vornado restricted stock awards granted during the year ended December 31, 2021. Vornado restricted stock awards granted in 2020 and 2019 had a fair value of $853,000 and $568,000, respectively. The fair value of restricted stock that vested during the years ended December 31, 2021, 2020, and 2019 was $567,000, $602,000 and $477,000, respectively. 108 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 15. Impairment Losses, Transaction Related Costs and Other The following table sets forth the details of impairment losses, transaction related costs and other: (Amounts in thousands) Real estate impairment losses Transaction related costs 608 Fifth Avenue lease liability extinguishment gain in 2020 and impairment loss and related write- offs in 2019 For the Year Ended December 31, 2021 2020 2019 $ $ (7,880) (1) $ (5,935) (236,286) $ (8,001) — 70,260 (13,815) $ (174,027) $ (8,065) (4,613) (93,860) (106,538) ________________________________________ (1) See Note 7 - Acquisitions and Dispositions for additional information. 16. Interest and Other Investment Income (Loss), Net The following table sets forth the details of interest and other investment income (loss), net: (Amounts in thousands) Interest on loans receivable Interest on cash and cash equivalents and restricted cash Credit losses on loans receivable Market-to-market decrease in the fair value of marketable security (sold on January 23, 2020) Dividends on marketable securities Other, net 17. Interest and Debt Expense The following table sets forth the details of interest and debt expense: (Amounts in thousands) Interest expense(1) Capitalized interest and debt expense Amortization of deferred financing costs For the Year Ended December 31, 2021 2020 2019 $ 2,517 $ 3,384 $ 284 — — — $ 1,811 4,612 $ 5,793 (13,369) (4,938) — 3,631 (5,499) $ 6,326 13,380 — (5,533) 3,938 3,708 21,819 For the Year Ended December 31, 2020 2019 2021 $ $ 249,169 $ 251,847 $ (38,320) 20,247 (41,056) 18,460 231,096 $ 229,251 $ 335,016 (72,200) 23,807 286,623 ________________________________________ (1) 2021 includes $23,729 of defeasance costs, of which $7,119 is attributable to noncontrolling interest, in connection with the refinancing of 1290 Avenue of the Americas, a property in which we own a 70% controlling interest. See Note 9 - Debt for additional information. 2019 includes $22,540 of debt prepayment costs in connection with the redemption of $400,000 5.00% senior unsecured notes which were scheduled to mature in January 2022. 109 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 18. Income (Loss) Per Share/Income (Loss) Per Class A Unit Vornado Realty Trust The following table presents the calculations of (i) basic income (loss) per common share which includes the weighted average number of common shares outstanding without regard to dilutive potential common shares and (ii) diluted income (loss) per common share which includes the weighted average common shares and dilutive share equivalents. Unvested share-based payment awards that contain nonforfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include restricted stock awards, based on the two-class method. Other potential dilutive share equivalents such as our employee stock options, OP Units, OPPs, AO LTIP Units and Performance Conditioned AO LTIP Units are included in the computation of diluted earnings per share ("EPS") using the treasury stock method, while the dilutive effect of our Series A convertible preferred shares is reflected in diluted EPS by application of the if-converted method. (Amounts in thousands, except per share amounts) Numerator: For the Year Ended December 31, 2021 2020 2019 Income (loss) from continuing operations, net of (income) loss attributable to noncontrolling interests $ 175,999 $ (297,005) $ 3,147,965 Loss from discontinued operations Net income (loss) attributable to Vornado Preferred share dividends Series K preferred share issuance costs Net income (loss) attributable to common shareholders Earnings allocated to unvested participating securities Numerator for basic income (loss) per share Impact of assumed conversions: Convertible preferred share dividends Earnings allocated to Out-Performance Plan units Numerator for basic and diluted income (loss) per share Denominator: — 175,999 (65,880) (9,033) 101,086 (34) 101,052 — — — (297,005) (51,739) — (28) 3,147,937 (50,131) — (348,744) 3,097,806 (99) (309) (348,843) 3,097,497 — — 57 9 $ 101,052 $ (348,843) $ 3,097,563 Denominator for basic income (loss) per share – weighted average shares 191,551 191,146 190,801 Effect of dilutive securities(1): Employee stock options, restricted stock awards, AO LTIP Units and OPPs Convertible preferred shares 571 — — — 218 34 Denominator for diluted income (loss) per share – weighted average shares and assumed conversions 192,122 191,146 191,053 INCOME (LOSS) PER COMMON SHARE - BASIC: Net income (loss) per common share INCOME (LOSS) PER COMMON SHARE - DILUTED: Net income (loss) per common share $ $ 0.53 $ (1.83) $ 16.23 0.53 $ (1.83) $ 16.21 ________________________________________ (1) The effect of dilutive securities excluded an aggregate of 13,835, 14,007 and 13,020 weighted average common share equivalents in the years ended December 31, 2021, 2020 and 2019, respectively, as their effect was anti-dilutive. 110 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 18. Income (Loss) Per Share/Income (Loss) Per Class A Unit – continued Vornado Realty L.P. The following table presents the calculations of (i) basic income (loss) 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 (loss) per Class A unit which includes the weighted average Class A units and dilutive Class A unit equivalents. Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include Vornado restricted stock awards, OP Units and OPPs, based on the two-class method. Other potential dilutive unit equivalents such as Vornado stock options, AO LTIP Units and Performance Conditioned AO LTIP Units are included in the computation of diluted income per unit ("EPU") using the treasury stock method, while the dilutive effect of our Series A convertible preferred units is reflected in diluted EPU by application of the if-converted method. (Amounts in thousands, except per unit amounts) Numerator: Income (loss) from continuing operations, net of (income) loss attributable to noncontrolling interests in consolidated subsidiaries Loss from discontinued operations Net income (loss) attributable to Vornado Realty L.P. Preferred unit distributions Series K preferred unit issuance costs Net income (loss) attributable to Class A unitholders Earnings allocated to unvested participating securities Numerator for basic income (loss) per Class A unit Impact of assumed conversions: Convertible preferred unit distributions For the Year Ended December 31, 2021 2020 2019 $ 183,539 $ (321,951) $ 3,358,839 — 183,539 (66,035) (9,033) 108,471 (2,668) 105,803 — (321,951) (51,904) — (373,855) (5,417) (379,272) (30) 3,358,809 (50,296) — 3,308,513 (17,296) 3,291,217 — — 57 Numerator for basic and diluted income (loss) per Class A unit $ 105,803 $ (379,272) $ 3,291,274 Denominator: Denominator for basic income (loss) per Class A unit – weighted average units 204,728 203,503 202,947 Effect of dilutive securities(1): Vornado stock options, Vornado restricted stock awards, OP Units, AO LTIP Units and OPPs Convertible preferred units 916 — — — 267 34 Denominator for diluted income (loss) per Class A unit – weighted average units and assumed conversions 205,644 203,503 203,248 INCOME (LOSS) PER CLASS A UNIT - BASIC: Net income (loss) per Class A unit INCOME (LOSS) PER CLASS A UNIT - DILUTED: Net income (loss) per Class A unit $ $ 0.52 $ (1.86) $ 16.22 0.51 $ (1.86) $ 16.19 ________________________________________ (1) The effect of dilutive securities excluded an aggregate of 313, 1,650 and 825 weighted average Class A unit equivalents in the years ended December 31, 2021, 2020 and 2019 respectively, as their effect was anti-dilutive. 111 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 19. Leases As lessor We lease space to tenants under operating leases. Most of the leases provide for the payment of fixed base rent payable monthly in advance. Leases typically provide for periodic step‑ups in rent over the term of the lease and pass through to tenants their share of increases in real estate taxes and operating expenses over a base year. Certain leases also require additional variable rent payments based on a percentage of the tenants’ sales. Electricity is provided to tenants on a sub-metered basis or included in rent based on surveys and adjusted for subsequent utility rate increases. Leases also typically provide for free rent and tenant improvement allowances for all or a portion of the tenant’s initial construction costs of its premises. As of December 31, 2021, future undiscounted cash flows under non-cancelable operating leases were as follows: (Amounts in thousands) For the year ended December 31, 2022 2023 2024 2025 2026 Thereafter As of December 31, 2021 $ 1,313,854 1,266,425 1,132,125 1,021,434 977,834 7,068,874 As lessee We have a number of ground leases which are classified as operating leases. As of December 31, 2021, our ROU assets and lease liabilities were $337,197,000 and $370,206,000, respectively. As of December 31, 2020, our ROU assets and lease liabilities were $367,365,000 and $401,008,000, respectively. The discount rate applied to measure each ROU asset and lease liability is based on our incremental borrowing rate ("IBR"). We consider the general economic environment and our credit rating and factor in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. Certain of our ground leases offer renewal options which we assess against relevant economic factors to determine whether we are reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that we are reasonably certain will be exercised are included in the measurement of the lease liability and corresponding ROU asset. Certain of our ground leases are subject to fair market rent resets based on a percentage of the appraised value of the underlying assets at specified future dates. Fair market rent resets occurring during the lease term do not give rise to remeasurement of the related ROU assets and lease liabilities. Fair market rent resets occurring during the lease term, which may be material, will be recognized in the periods in which they are incurred as variable rent expense. The following table sets forth information related to the measurement of our lease liabilities as of December 31, 2021, 2020 and 2019: (Amounts in thousands) Weighted average remaining lease term (in years) Weighted average discount rate Cash paid for operating leases For the Year Ended December 31, 2020 2019 2021 44.4 4.85% 44.8 4.91% 40.2 4.84% $ 22,382 $ 23,932 $ 27,817 We recognize rent expense as a component of "operating" expenses on our consolidated statements of income. Rent expense is comprised of fixed and variable lease payments. The following table sets forth the details of rent expense for the years ended December 31, 2021, 2020 and 2019: (Amounts in thousands) Fixed rent expense Variable rent expense Rent expense For the Year Ended December 31, 2020 2019 2021 $ $ 24,901 $ 13,078 37,979 $ 28,503 $ 1,178 29,681 $ 33,738 1,978 35,716 112 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 19. Leases - continued As lessee - continued As of December 31, 2021, future lease payments under operating ground leases were as follows: (Amounts in thousands) For the year ended December 31, As of December 31, 2021 2022 2023 2024 2025 2026 Thereafter Total undiscounted cash flows Present value discount Lease liabilities Farley Office and Retail $ $ 21,080 22,802 23,154 23,522 23,911 833,728 948,197 (577,991) 370,206 The future lease payments detailed above exclude the ground and building lease at Farley Office and Retail. Our 95% consolidated joint venture has a 99-year triple-net lease with Empire State Development ("ESD") for 845,000 rentable square feet of commercial space at the property, comprised of approximately 730,000 square feet of office space and approximately 115,000 square feet of restaurant and retail space. Our lease of the commercial space at the property is accounted for as a “failed sale-leaseback” as a result of us being deemed the "accounting owner" during development of the property in accordance with ASC 842-40-55 and the lease subsequently meeting "finance lease" classification pursuant to ASC 842-40-25 upon substantial completion. The lease calls for annual rent payments and fixed payments in lieu of real estate taxes ("PILOT") through June 2030. Following the fixed PILOT payment period, the PILOT is calculated in a manner consistent with buildings subject to New York City real estate taxes and assessments. As of December 31, 2021, future rent and fixed PILOT payments are $542,631,000. 20. Multiemployer Benefit Plans Our subsidiaries make contributions to certain multiemployer defined benefit plans (“Multiemployer Pension Plans”) and health plans (“Multiemployer Health Plans”) for our union represented employees, pursuant to the respective collective bargaining agreements. Multiemployer Pension Plans Multiemployer Pension Plans differ from single-employer pension plans in that (i) contributions to multiemployer plans may be used to provide benefits to employees of other participating employers and (ii) if other participating employers fail to make their contributions, each of our participating subsidiaries may be required to bear its then pro rata share of unfunded obligations. If a participating subsidiary withdraws from a plan in which it participates, it may be subject to a withdrawal liability. As of December 31, 2021, our subsidiaries’ participation in these plans was not significant to our consolidated financial statements. In the years ended December 31, 2021, 2020 and 2019, we contributed $19,851,000, $7,049,000 and $10,793,000, respectively, towards Multiemployer Pension Plans, which is included as a component of “operating” expenses on our consolidated statements of income. During the year ended December 31, 2021, the Company funded its pension withdrawal liability in relation to the permanent closure of Hotel Pennsylvania which resulted in the Company funding more than 5% of total employer contributions to the related plan for the year. For our other Multiemployer Pension Plans, our subsidiaries’ contributions did not represent more than 5% of total employer contributions for the years ended December 31, 2021, 2020 and 2019. Multiemployer Health Plans Multiemployer Health Plans in which our subsidiaries participate provide health benefits to eligible active and retired employees. In the years ended December 31, 2021, 2020 and 2019, our subsidiaries contributed $23,431,000, $26,938,000 and $32,407,000, respectively, towards these plans, which is included as a component of “operating” expenses on our consolidated statements of income. 113 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21. Commitments and Contingencies Insurance For our properties, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which $250,000,000 includes communicable disease coverage, and we maintain all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake, excluding communicable disease coverage. Our California properties have earthquake insurance with coverage of $350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for certified terrorism acts with limits of $6.0 billion per occurrence and in the aggregate (as listed below), $1.2 billion for non-certified acts of terrorism, and $5.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of $1,785,910 and 20% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC. Certain condominiums in which we own an interest (including our leasehold interest in the Farley Condominiums) own insurance policies with different per occurrence and aggregate limits than our policies described above. We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism and other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material. Our debt instruments, consisting of mortgage loans secured by our properties, senior unsecured notes and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance or refinance our properties and expand our portfolio. Other Commitments and Contingencies We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not currently expected to have a material adverse effect on our financial position, results of operations or cash flows. Each of our properties has been subjected to varying degrees of environmental assessment at various times. The environmental assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us. In July 2018, we leased 78,000 square feet at 345 Montgomery Street in San Francisco, CA, to a subsidiary of Regus PLC, for an initial term of 15 years. The obligations under the lease were guaranteed by Regus PLC in an amount of up to $90,000,000. The tenant purported to terminate the lease prior to space delivery. We commenced a suit on October 23, 2019 seeking to enforce the lease and the guaranty. On May 11, 2021, the court issued a final statement of decision in our favor and on July 7, 2021, the Regus subsidiary appealed the decision. On October 9, 2020, the successor to Regus PLC filed for bankruptcy in Luxembourg. We are actively pursuing claims relating to the guaranty against the successor to Regus PLC and its parent in Luxembourg and other jurisdictions. In November 2011, we entered into an agreement with the New York City Economic Development Corporation ("EDC") to lease Piers 92 and 94 (the "Piers"). In February 2019, EDC issued an order for us to vacate Pier 92 due to structural problems. Beginning March 2020 through August 2021, we did not pay EDC the monthly rent due under the non-recourse lease due to the loss of our right to use or occupy Pier 92. On August 31, 2021, both parties entered into a mutual release with respect to claims by EDC for unpaid rent owed and claims by the Company for costs and damages as a result of our inability to use or occupy Pier 92. Our mortgage loans are non-recourse to us, except for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street and 435 Seventh Avenue, which we guaranteed and therefore are part of our tax basis. In certain cases we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. In addition, we have guaranteed the rent and payments in lieu of real estate taxes due to ESD, an entity of New York State, for Farley Office and Retail. As of December 31, 2021, the aggregate dollar amount of these guarantees and master leases is approximately $1,648,000,000. 114 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21. Commitments and Contingencies – continued Other Commitments and Contingencies - continued As of December 31, 2021, $15,273,000 of letters of credit were outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal. Our 95% consolidated joint venture (5% is owned by Related Companies ("Related")) is developing Farley Office and Retail. In connection with the development of the property, the joint venture admitted a historic tax credit investor partner. Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a refund or reduction of the Tax Credit Investor’s capital contributions. As of December 31, 2021, the Tax Credit Investor has made $92,400,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor. As investment manager of the Fund we are entitled to an incentive allocation after the limited partners have received a preferred return on their invested capital. The incentive allocation is subject to catch-up and clawback provisions. Accordingly, based on the December 31, 2021 fair value of the Fund assets, at liquidation we would be required to make a $27,100,000 payment to the limited partners, net of amounts owed to us, representing a clawback of previously paid incentive allocations, which would have no income statement impact as it was previously accrued. As of December 31, 2021, we expect to fund additional capital to certain of our partially owned entities aggregating approximately $10,300,000. As of December 31, 2021, we have construction commitments aggregating approximately $494,000,000. 22. Related Party Transactions Alexander’s, Inc. We own 32.4% of Alexander’s. Steven Roth, the Chairman of Vornado’s Board of Trustee’s and its Chief Executive Officer, is also the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. We provide various services to Alexander’s in accordance with management, development and leasing agreements. These agreements are described in Note 5 - Investments in Partially Owned Entities. Interstate Properties (“Interstate”) Interstate is a general partnership in which Mr. Roth is the managing general partner. David Mandelbaum and Russell B. Wight, Jr., Trustees of Vornado and Directors of Alexander’s, respectively, are Interstate’s two other general partners. As of December 31, 2021, Interstate and its partners beneficially owned an aggregate of approximately 6.9% of the common shares of beneficial interest of Vornado and 26.1% of Alexander’s common stock. We manage and lease the real estate assets of Interstate pursuant to a management agreement for which we receive an annual fee equal to 4% of annual base rent and percentage rent. The management agreement has a term of one year and is automatically renewable unless terminated by either of the parties on 60 days’ notice at the end of the term. We believe, based upon comparable fees charged by other real estate companies, that the management agreement terms are consistent with the market. We earned $203,000, $203,000, and $300,000 of management fees under the agreement for the years ended December 31, 2021, 2020 and 2019, respectively. Fifth Avenue and Times Square JV We provide various services to Fifth Avenue and Times Square JV in accordance with management, development, leasing and other agreements. These agreements are described in Note 5 - Investments in Partially Owned Entities. Haim Chera, Executive Vice President - Head of Retail, has an investment in Crown Acquisitions Inc. and Crown Retail Services LLC (collectively, "Crown"), companies controlled by Mr. Chera's family. Crown has a nominal minority interest in Fifth Avenue and Times Square JV. Additionally, we have other investments with Crown. 115 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 23. Segment Information We operate in two reportable segments, New York and Other, which is based on how we manage our business. Net operating income ("NOI") at share represents total revenues less operating expenses including our share of partially owned entities. NOI at share - cash basis represents NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, net and other non-cash adjustments. We consider NOI at share - cash basis to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI at share - cash basis, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI at share and NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies. NOI at share - cash basis includes rent that has been deferred as a result of the COVID-19 pandemic. Below is a summary of NOI at share, NOI at share - cash basis and selected balance sheet data by segment for the years ended December 31, 2021, 2020 and 2019. For the Year Ended December 31, 2021 Total New York Other $ 1,589,210 $ 1,257,599 $ (797,315) 791,895 (69,385) 310,858 1,033,368 (626,386) 631,213 (38,980) 300,721 892,954 1,318 (1,188) 1,034,686 $ 891,766 $ 13,217,845 $ 10,702,008 $ 2,515,837 3,297,389 17,266,588 3,265,933 15,969,498 31,456 1,297,090 For the Year Ended December 31, 2020 Total New York Other $ 1,527,951 $ 1,221,748 $ (789,066) 738,885 (72,801) 306,495 972,579 (640,531) 581,217 (43,773) 296,447 833,891 46,246 36,715 1,018,825 $ 870,606 $ 331,611 (170,929) 160,682 (30,405) 10,137 140,414 2,506 142,920 306,203 (148,535) 157,668 (29,028) 10,048 138,688 9,531 148,219 12,087,943 $ 9,581,830 $ 2,506,113 3,491,107 16,221,822 3,459,142 15,046,469 31,965 1,175,353 (Amounts in thousands) Total revenues Operating expenses NOI - consolidated Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries Add: NOI from partially owned entities NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other NOI at share - cash basis Balance Sheet Data: Real estate, at cost Investments in partially owned entities Total assets (Amounts in thousands) Total revenues Operating expenses NOI - consolidated Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries Add: NOI from partially owned entities NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net $ $ and other NOI at share - cash basis Balance Sheet Data: Real estate, at cost Investments in partially owned entities Total assets $ $ 116 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 23. Segment Information - continued (Amounts in thousands) Total revenues Operating expenses NOI - consolidated Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries Add: NOI from partially owned entities NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other NOI at share - cash basis For the Year Ended December 31, 2019 Total New York Other $ 1,924,700 $ 1,577,860 $ (917,981) 1,006,719 (69,332) 322,390 1,259,777 (758,304) 819,556 (40,896) 294,168 1,072,828 (6,060) (12,318) $ 1,253,717 $ 1,060,510 $ 346,840 (159,677) 187,163 (28,436) 28,222 186,949 6,258 193,207 Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2021, 2020 and 2019. (Amounts in thousands) Net income (loss) Depreciation and amortization expense General and administrative expense Impairment losses, transaction related costs and other (Income) loss from partially owned entities (Income) loss from real estate fund investments Interest and other investment (income) loss, net Interest and debt expense Net gain on transfer to Fifth Avenue and Times Square JV Net gains on disposition of wholly owned and partially owned assets Income tax (benefit) expense Loss from discontinued operations NOI from partially owned entities NOI attributable to noncontrolling interests in consolidated subsidiaries NOI at share Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other NOI at share - cash basis For the Year Ended December 31, 2021 2020 2019 $ 207,553 $ (461,845) $ 3,334,262 412,347 134,545 13,815 (130,517) (11,066) (4,612) 231,096 — (50,770) (10,496) — 310,858 (69,385) 1,033,368 399,695 181,509 174,027 329,112 226,327 5,499 229,251 — (381,320) 36,630 — 306,495 (72,801) 972,579 419,107 169,920 106,538 (78,865) 104,082 (21,819) 286,623 (2,571,099) (845,499) 103,439 30 322,390 (69,332) 1,259,777 1,318 46,246 (6,060) $ 1,034,686 $ 1,018,825 $ 1,253,717 117 VORNADO REALTY TRUST AND VORNADO REALTY L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 24. Subsequent Event 2022 Long-Term Performance Award On January 12, 2022, the Compensation Committee approved the 2022 Long-Term Performance Plan (“LTPP”), a multi-year, LTIP units-based performance equity compensation plan. Awards under the 2022 LTPP are bifurcated between operational performance (50%) and relative performance (50%) measurements and may be earned at specified threshold, target and maximum levels. The operational component awards may be earned based on Vornado’s 2022 operational performance in the following categories: • • Comparable FFO per share (75% weighting); and ESG performance metrics consisting of greenhouse emissions reductions, GRESB score and Green Building Certification (LEED) achievements (aggregate 25% weighting). Any LTPP award units tentatively earned based on Vornado’s 2022 operational performance are subject to an absolute return modifier pursuant to which such award units are subject to a potential reduction (but not increase) of up to 30% if Vornado’s aggregate total 3-year TSR for 2022-2025 is below specified levels. Awards under relative components may be earned based on Vornado’s 3-year TSR, measured against the Dow Jones U.S. Real Estate Office Index (50% weighting) and a Northeast peer group custom index (50% weighting). Awards earned under the relative component of the LTPP are subject to reductions of up to 30% if Vornado’s 3-year TSR is below specified levels. If the designated performance objectives are achieved, awards earned under 2022 LTPP will vest 50% in January 2025 and 50% in January 2026. In addition, the Chief Executive Officer is required to hold any earned and vested awards for three years following each such vesting date and all other award recipients are required to hold such awards for one year following each such vesting date. Dividends on awards granted under the 2022 LTPP accrue during the applicable performance period and are paid to participants if awards are ultimately earned based on the achievement of the designated performance objectives. Sale of SoHo Properties On January 13, 2022, we sold two Manhattan retail properties located at 478-482 Broadway and 155 Spring Street. See Note 7 - Acquisitions and Dispositions for additional information. 118 ITEM 9. None. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES Vornado Realty Trust Disclosure Controls and Procedures: Our management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a‑15 (e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, Vornado’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective. Internal Control Over Financial Reporting: There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management’s Report on Internal Control over Financial Reporting Management of Vornado Realty Trust, together with its consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of Vornado’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. As of December 31, 2021, management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2021 was effective. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorizations of management and our trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on the following page, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2021. 119 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Trustees Vornado Realty Trust New York, New York Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Vornado Realty Trust and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 14, 2022, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP New York, New York February 14, 2022 120 ITEM 9A. - CONTINUED Vornado Realty L.P. Disclosure Controls and Procedures: Vornado Realty L.P.’s management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a‑15 (e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, Vornado’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective. Internal Control Over Financial Reporting: There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management’s Report on Internal Control over Financial Reporting Management of Vornado Realty Trust, sole general partner of Vornado Realty L.P., together with Vornado Realty L.P.’s consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of Vornado’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. As of December 31, 2021, management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2021 was effective. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorizations of management and Vornado’s trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on the following page, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2021. 121 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Partners Vornado Realty L.P. New York, New York Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Vornado Realty L.P. and subsidiaries (the “Partnership”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Partnership and our report dated February 14, 2022, expressed an unqualified opinion on those financial statements. Basis for Opinion The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP New York, New York February 14, 2022 122 ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information relating to trustees of Vornado, the Operating Partnership’s sole general partner, including its audit committee and audit committee financial expert, will be contained in Vornado’s definitive Proxy Statement involving the election of Vornado’s trustees which Vornado will file with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after December 31, 2021, and such information is incorporated herein by reference. Also incorporated herein by reference is the information under the caption “16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement. Executive Officers of the Registrant The following is a list of the names, ages, principal occupations and positions with Vornado of the executive officers of Vornado and the positions held by such officers during the past five years. All executive officers of Vornado have terms of office that run until the next succeeding meeting of the Board of Trustees of Vornado following the Annual Meeting of Vornado’s Shareholders unless they are removed sooner by Vornado’s Board. Name Steven Roth Age 80 PRINCIPAL OCCUPATION, POSITION AND OFFICE (Current and during past five years with Vornado unless otherwise stated) Chairman of the Board; Chief Executive Officer since April 2013 and from May 1989 to May 2009; Managing General Partner of Interstate Properties, an owner of shopping centers and an investor in securities and partnerships; Chief Executive Officer of Alexander’s, Inc. since March 1995, a Director since 1989, and Chairman of the Board since May 2004. Michael J. Franco 53 President and Chief Financial Officer since December 2020; President since April 2019; Executive Vice President - Chief Investment Officer from April 2015 to April 2019; Executive Vice President - Head of Acquisitions and Capital Markets from November 2010 to April 2015. Haim Chera Barry S. Langer Glen J. Weiss 52 43 52 Executive Vice President - Head of Retail since April 2019; Principal at Crown Acquisitions from January 2000 - April 2019. Executive Vice President - Development - Co-Head of Real Estate since April 2019; Executive Vice President - Head of Development from May 2015 to April 2019. Executive Vice President - Office Leasing - Co-Head of Real Estate since April 2019; Executive Vice President - Office Leasing from May 2013 to April 2019. Vornado, the Operating Partnership’s sole general partner, has adopted a Code of Business Conduct and Ethics that applies to all officers and employees. This Code is available on Vornado’s website at www.vno.com. ITEM 11. EXECUTIVE COMPENSATION Information relating to Vornado’s executive officer and trustee compensation will be contained in Vornado’s Proxy Statement referred to above in Item 10, “Directors, Executive Officers and Corporate Governance,” and such information is incorporated herein by reference. 123 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information relating to security ownership of certain beneficial owners and management and related stockholder matters will be contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” and such information is incorporated herein by reference. Equity compensation plan information The following table provides information as of December 31, 2021 regarding Vornado’s equity compensation plans. Plan Category Equity compensation plans approved by security holders Equity compensation awards not approved by security holders Total Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the second column) 6,099,655 (1) $ — 6,099,655 $ 65.27 — 65.27 3,489,732 (2) — 3,489,732 ________________________________________ (1) Includes shares/units of (i) 191,933 Vornado Stock Options (124,805 of which are vested and exercisable), (ii) 567,739 Appreciation-Only Long-Term Incentive Plan ("AO LTIP") units (327,535 of which are vested and exercisable), (iii) 496,762 Performance Conditioned AO LTIP units (322,313 of which are vested and exercisable), (iv) 2,911,216 restricted Operating Partnership units (1,828,129 of which are vested and exercisable) and (v) 1,932,005 unearned Out-Performance Plan ("OPP") units, which do not have an exercise price. OPP units, if earned, become convertible into Class A units of the Operating Partnership (and ultimately into Vornado common shares) following vesting. Does not include 15,774 shares of Vornado Restricted Stock, as they have been reflected in Vornado's total shares outstanding. (2) Based on awards being granted as "Full Value Awards," as defined. If we were to grant "Not Full Value Awards," as defined, the number of securities available for future grants is approximately 6,980,000 shares. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information relating to certain relationships and related transactions, and director independence will be contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” and such information is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information relating to principal accounting fees and services will be contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” under the caption “Ratification of The Appointment of Independent Accounting Firm” and such information is incorporated herein by reference. ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this report: PART IV 1. The consolidated financial statements are set forth in Item 8 of this Annual Report on Form 10-K. The following financial statement schedules should be read in conjunction with the financial statements included in Item 8 of this Annual Report on Form 10-K. III--Real Estate and Accumulated Depreciation as of December 31, 2021, 2020 and 2019 Page in this Annual Report on Form 10-K 125 Schedules other than those listed above are omitted because they are not applicable or the information required is included in the consolidated financial statements or the notes thereto. 124 VORNADO REALTY TRUST AND VORNADO REALTY L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Amounts in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Initial cost to company Gross amount at which carried at close of period Encumbrances (1) Land Buildings and improvements Costs capitalized subsequent to acquisition Buildings and improvements Land Total (2) Accumulated depreciation and amortization Date of construction (3) Date acquired Life on which depreciation in latest income statement is computed New York Manhattan 1290 Avenue of the Americas $ One Park Avenue 350 Park Avenue PENN 1 100 West 33rd Street 150 West 34th Street PENN 2 90 Park Avenue Manhattan Mall 770 Broadway 888 Seventh Avenue PENN 11 909 Third Avenue 150 East 58th Street 595 Madison Avenue 330 West 34th Street 715 Lexington Avenue 484-486 Broadway 4 Union Square South Farley Office and Retail 260 Eleventh Avenue 510 Fifth Avenue 606 Broadway 40 Fulton Street 443 Broadway 435 Seventh Avenue 692 Broadway 131-135 West 33rd Street 950,000 525,000 400,000 — 398,402 205,000 575,000 — 181,598 700,000 299,400 500,000 350,000 — — — — — 120,000 — — — 74,119 — — 95,696 — — $ 518,244 $ 926,992 $ 268,355 $ 518,244 $ 1,195,347 $ 1,713,591 $ 440,097 197,057 (5) 265,889 — 242,776 119,657 53,615 8,000 88,595 52,898 — 40,333 — 39,303 62,731 — — 10,000 24,079 — — 34,602 45,406 15,732 11,187 19,893 6,053 8,315 369,016 363,381 412,169 247,970 268,509 164,903 175,890 113,473 95,686 117,269 85,259 120,723 80,216 62,888 8,599 26,903 6,688 55,220 476,235 80,482 18,728 8,993 26,388 41,186 19,091 22,908 21,312 1,525 49,025 675,839 44,038 — 261,859 198,970 31,237 188,436 164,940 118,666 121,136 57,661 68,956 154,213 20,217 7,358 11,398 911,408 5,530 36,745 51,709 41,597 (36,197) 2,166 3,901 477 197,057 265,889 — 242,776 119,657 52,689 8,000 88,595 52,898 — 40,333 — 39,303 62,731 — 30,085 10,000 24,079 — — 48,403 45,298 15,732 3,457 19,893 6,053 8,315 370,541 567,598 412,406 1,088,008 292,008 268,509 427,688 374,860 144,710 284,122 282,209 203,925 241,859 137,877 131,844 162,812 17,035 14,046 66,618 1,387,643 86,012 41,672 60,810 67,985 12,719 21,257 26,809 21,789 678,295 1,088,008 534,784 388,166 480,377 382,860 233,305 337,020 282,209 244,258 241,859 177,180 194,575 162,812 47,120 24,046 90,697 1,387,643 86,012 90,075 106,108 83,717 16,176 41,150 32,862 30,104 4,538 157,691 364,744 115,295 44,192 106,149 177,978 52,851 127,420 153,517 93,045 122,466 71,938 53,220 49,803 965 4,235 25,826 4,189 14,146 12,270 4,213 25,521 391 10,732 11,503 3,161 1963 1926 1960 1972 1911 1900 1968 1964 2009 1907 1980 1923 1969 1969 1968 1925 1923 2009 1965/2004 1912 1911 1987 2002 2007 2021 2006 1998 2007 2015 1997 1997 2007 1998 1998 1997 1999 1998 1999 1998 2001 2007 1993 2018 2015 2010 2016 1998 2013 1997 2005 2016 (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) 125 VORNADO REALTY TRUST AND VORNADO REALTY L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED (Amounts in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Initial cost to company Gross amount at which carried at close of period Encumbrances (1) Land Buildings and improvements Costs capitalized subsequent to acquisition Buildings and improvements Land Total (2) Accumulated depreciation and amortization Date of construction (3) Date acquired Life on which depreciation in latest income statement is computed $ New York - continued Manhattan - continued 304 Canal Street 1131 Third Avenue 431 Seventh Avenue 138-142 West 32nd Street 334 Canal Street 966 Third Avenue 148 Spring Street 150 Spring Street 137 West 33rd Street 825 Seventh Avenue 537 West 26th Street 339 Greenwich Street — $ — — — — — — — — — — — 3,511 $ 7,844 16,700 9,252 1,693 8,869 3,200 3,200 6,398 1,483 10,370 2,622 12,905 $ 7,844 2,751 9,936 6,507 3,631 8,112 5,822 1,550 697 17,632 12,333 (8,456) $ 5,683 — 2,002 (1,170) — 398 312 — 3,940 19,925 (10,019) 1,771 $ 7,844 16,700 9,252 752 8,869 3,200 3,200 6,398 1,483 26,631 865 6,189 $ 13,527 2,751 11,938 6,278 3,631 8,510 6,134 1,550 4,637 21,296 4,071 7,960 $ 21,371 19,451 21,190 7,030 12,500 11,710 9,334 7,948 6,120 47,927 4,936 169 3,093 1,014 1,844 205 756 2,941 2,109 262 829 2,062 123 PENN 15 (Hotel Pennsylvania site) Other (Including Signage) Total Manhattan — — 5,374,215 29,903 140,477 2,109,887 121,712 31,892 4,660,401 266,365 3,477 3,743,622 29,903 94,788 2,111,143 388,077 81,058 8,402,767 417,980 175,846 10,513,910 145,938 23,571 2,437,012 1910 1920 1932 1919 2014 1997 2007 2015 2011 2013 2008 2008 2015 1997 2018 2017 1997 Other Properties 33-00 Northern Boulevard, Queens, New York Paramus, New Jersey Total Other Properties 100,000 46,505 — — 100,000 46,505 86,226 — 86,226 14,493 23,348 37,841 46,505 1,036 47,541 100,719 22,312 123,031 147,224 23,348 170,572 17,829 19,393 37,222 1915 1967 2015 1987 Total New York 5,474,215 2,156,392 4,746,627 3,781,463 2,158,684 8,525,798 10,684,482 2,474,234 (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) 126 VORNADO REALTY TRUST AND VORNADO REALTY L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED (Amounts in thousands) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I Initial cost to company Gross amount at which carried at close of period Encumbrances (1) Land Buildings and improvements Costs capitalized subsequent to acquisition Buildings and improvements Land Total (2) Accumulated depreciation and amortization Date of construction (3) Date acquired Life on which depreciation in latest income statement is computed Other theMART theMART, Illinois $ — $ 64,528 $ 319,146 $ 413,854 $ 64,535 $ 732,993 $ 797,528 $ 369,439 1930 527 West Kinzie, Illinois Piers 92 and 94, New York Total theMART — — — 5,166 — 69,694 555 California Street, California 1,200,000 220 Central Park South, New York Borgata Land, Atlantic City, NJ 759-771 Madison Avenue (40 East 66th) Residential, New York Annapolis, Maryland Wayne Towne Center, New Jersey Other Total Other Leasehold improvements equipment and other — — 319,146 895,379 16,445 — 13,321 9,652 26,137 — 197 19,144 433,195 5,166 — 69,701 197 19,144 752,334 5,363 19,144 — 3,905 822,035 373,344 256,718 223,446 1,152,097 1,375,543 395,120 1922,1969 -1970 (106,014) — — 83,089 (8,193) 5,273 — 47,347 10,035 — — — 26,151 — 8,309 9,652 73,484 10,035 26,151 83,089 13,582 9,652 73,484 10,035 — — 3,101 4,713 34,112 1,942 223,446 115,720 83,089 8,454 — — — — — — — — — 1,200,000 500,403 1,280,080 633,088 381,509 2,032,062 2,413,571 812,332 — — — 119,792 — 119,792 119,792 89,781 1998 1998 2008 2007 2005 2010 2005 2005 2010 (4) (4) (4) (4) (4) (4) (4) (4) Total December 31, 2021 $ 6,674,215 $ 2,656,795 $ 6,026,707 $ 4,534,343 $ 2,540,193 $ 10,677,652 $ 13,217,845 $ 3,376,347 ________________________________________ (1) Represents contractual debt obligations. (2) The net basis of Vornado's assets and liabilities for tax reporting purposes is approximately $2.6 billion lower than the amounts reported for financial statement purposes. (3) Date of original construction –– many properties have had substantial renovation or additional construction –– see Column D. (4) Depreciation of the buildings and improvements are calculated over lives ranging from the life of the lease to forty years. (5) Secured amount outstanding on revolving credit facilities. 127 VORNADO REALTY TRUST AND VORNADO REALTY L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (Amounts in thousands) The following is a reconciliation of real estate assets and accumulated depreciation: Real Estate Balance at beginning of period Additions during the period: Land Buildings & improvements and other Less: Assets sold, written-off, reclassified to ready for sale and deconsolidated Balance at end of period Accumulated Depreciation Balance at beginning of period Additions charged to operating expenses Less: Accumulated depreciation on assets sold, written-off and deconsolidated Balance at end of period Year Ended December 31, 2021 2020 2019 $ 12,087,943 $ 13,074,012 $ 16,237,883 197,057 1,286,474 13,571,474 353,629 1,372 1,127,593 14,202,977 2,115,034 46,074 1,391,784 17,675,741 4,601,729 $ 13,217,845 $ 12,087,943 $ 13,074,012 $ 3,169,446 $ 3,015,958 $ 3,180,175 362,311 344,301 3,531,757 155,410 3,376,347 $ 3,360,259 190,813 3,169,446 $ 360,194 3,540,369 524,411 3,015,958 $ 128 (b) Exhibits: Exhibit No. 2.1 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 — Master Transaction Agreement, dated as of October 31, 2016, by and among Vornado Realty Trust, Vornado Realty L.P., JBG Properties, Inc., JBG/Operating Partners, L.P., certain affiliates of JBG Properties Inc. and JBG/Operating Partners set forth on Schedule A thereto, JBG SMITH Properties and JBG SMITH Properties LP. Incorporated by reference to Exhibit 2.1 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2016 (File No.001-11954), filed February 13, 2017 — Articles of Restatement of Vornado Realty Trust, as filed with the State Department of Assessments and Taxation of Maryland on July 30, 2007 - Incorporated by reference to Exhibit 3.75 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 001-11954), filed on July 31, 2007 — Amended and Restated Bylaws of Vornado Realty Trust, as amended on July 25, 2018 - Incorporated by reference to Exhibit 3.55 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 001-11954), filed on July 30, 2018 — Articles of Amendment to Declaration of Trust, dated September 30, 2016 – Incorporated by reference to Exhibit 3.3 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-11954), filed on February 16, 2021 — Articles of Amendment of Vornado Realty Trust, as filed with the State Department of Assessments and Taxation of Maryland on October 4, 2016—Incorporated by reference to Annex B to Vornado Realty Trust's Definitive Proxy Statement on Schedule 14A (File No. 001-11954), filed on April 8, 2016. — Articles of Amendment to Declaration of Trust, dated June 13, 2018 - Incorporated by reference to Exhibit 3.54 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 001-11954), filed on July 30, 2018 — Articles of Amendment to Declaration of Trust, dated August 7, 2019 - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on August 8, 2019 — Articles Supplementary, 5.40% Series L Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value – Incorporated by reference to Exhibit 3.6 to Vornado Realty Trust’s Registration Statement on Form 8-A (File No. 001-11954), filed on January 25, 2013 * * * * * * * * — Articles Supplementary Classifying Vornado Realty Trust's 5.25% Series M Cumulative Redeemable Preferred Shares of Beneficial * Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.7 to Vornado Realty Trust's Registration Statement on Form 8-A (File No. 001-11954), filed on December 13, 2017 — Articles Supplementary Classifying Vornado Realty Trust's 5.25% Series N Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on November 24, 2020 — Articles Supplementary Classifying Vornado Realty Trust's 4.45% Series O Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on September 22, 2021 — Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of October 20, 1997 (the “Partnership Agreement”) – Incorporated by reference to Exhibit 3.26 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003 — Amendment to the Partnership Agreement, dated as of December 16, 1997 – Incorporated by reference to Exhibit 3.27 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003 * * * * — Second Amendment to the Partnership Agreement, dated as of April 1, 1998 – Incorporated by reference to Exhibit 3.5 to Vornado * Realty Trust’s Registration Statement on Form S-3 (File No. 333-50095), filed on April 14, 1998 — Third Amendment to the Partnership Agreement, dated as of November 12, 1998 - Incorporated by reference to Exhibit 3.2 to Vornado * Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on November 30, 1998 — Fourth Amendment to the Partnership Agreement, dated as of November 30, 1998 - Incorporated by reference to Exhibit 3.1 to Vornado * Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on February 9, 1999 — Fifth Amendment to the Partnership Agreement, dated as of March 3, 1999 - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on March 17, 1999 — Sixth Amendment to the Partnership Agreement, dated as of March 17, 1999 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 7, 1999 — Seventh Amendment to the Partnership Agreement, dated as of May 20, 1999 - Incorporated by reference to Exhibit 3.3 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 7, 1999 — Eighth Amendment to the Partnership Agreement, dated as of May 27, 1999 - Incorporated by reference to Exhibit 3.4 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on July 7, 1999 — Ninth Amendment to the Partnership Agreement, dated as of September 3, 1999 - Incorporated by reference to Exhibit 3.3 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on October 25, 1999 — Tenth Amendment to the Partnership Agreement, dated as of September 3, 1999 - Incorporated by reference to Exhibit 3.4 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on October 25, 1999 * * * * * * * ________________________________ Incorporated by reference 129 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 3.37 3.38 3.39 3.40 3.41 3.42 3.43 3.44 3.45 3.46 — Eleventh Amendment to the Partnership Agreement, dated as of November 24, 1999 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on December 23, 1999 — Twelfth Amendment to the Partnership Agreement, dated as of May 1, 2000 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on May 19, 2000 — Thirteenth Amendment to the Partnership Agreement, dated as of May 25, 2000 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on June 16, 2000 — Fourteenth Amendment to the Partnership Agreement, dated as of December 8, 2000 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on December 28, 2000 — Fifteenth Amendment to the Partnership Agreement, dated as of December 15, 2000 - Incorporated by reference to Exhibit 4.35 to Vornado Realty Trust’s Registration Statement on Form S-8 (File No. 333-68462), filed on August 27, 2001 * * * * * — Sixteenth Amendment to the Partnership Agreement, dated as of July 25, 2001 - Incorporated by reference to Exhibit 3.3 to Vornado * Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001 — Seventeenth Amendment to the Partnership Agreement, dated as of September 21, 2001 - Incorporated by reference to Exhibit 3.4 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001 — Eighteenth Amendment to the Partnership Agreement, dated as of January 1, 2002 - Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust’s Current Report on Form 8-K/A (File No. 001-11954), filed on March 18, 2002 — Nineteenth Amendment to the Partnership Agreement, dated as of July 1, 2002 - Incorporated by reference to Exhibit 3.47 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-11954), filed on August 7, 2002 — Twentieth Amendment to the Partnership Agreement, dated April 9, 2003 - Incorporated by reference to Exhibit 3.46 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003 — Twenty-First Amendment to the Partnership Agreement, dated as of July 31, 2003 - Incorporated by reference to Exhibit 3.47 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (File No. 001-11954), filed on November 7, 2003 * * * * * — Twenty-Second Amendment to the Partnership Agreement, dated as of November 17, 2003 – Incorporated by reference to Exhibit 3.49 * to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-11954), filed on March 3, 2004 — Twenty-Third Amendment to the Partnership Agreement, dated May 27, 2004 – Incorporated by reference to Exhibit 99.2 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on June 14, 2004 — Twenty-Fourth Amendment to the Partnership Agreement, dated August 17, 2004 – Incorporated by reference to Exhibit 3.57 to Vornado Realty Trust and Vornado Realty L.P.’s Registration Statement on Form S-3 (File No. 333-122306), filed on January 26, 2005 — Twenty-Fifth Amendment to the Partnership Agreement, dated November 17, 2004 – Incorporated by reference to Exhibit 3.58 to Vornado Realty Trust and Vornado Realty L.P.’s Registration Statement on Form S-3 (File No. 333-122306), filed on January 26, 2005 — Twenty-Sixth Amendment to the Partnership Agreement, dated December 17, 2004 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on December 21, 2004 — Twenty-Seventh Amendment to the Partnership Agreement, dated December 20, 2004 – Incorporated by reference to Exhibit 3.2 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on December 21, 2004 — Twenty-Eighth Amendment to the Partnership Agreement, dated December 30, 2004 - Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on January 4, 2005 — Twenty-Ninth Amendment to the Partnership Agreement, dated June 17, 2005 - Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on June 21, 2005 — Thirtieth Amendment to the Partnership Agreement, dated August 31, 2005 - Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on September 1, 2005 — Thirty-First Amendment to the Partnership Agreement, dated September 9, 2005 - Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on September 14, 2005 — Thirty-Second Amendment and Restated Agreement of Limited Partnership, dated as of December 19, 2005 – Incorporated by reference to Exhibit 3.59 to Vornado Realty L.P.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (File No. 000-22685), filed on May 8, 2006 — Thirty-Third Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of April 25, 2006 – Incorporated by reference to Exhibit 10.2 to Vornado Realty Trust’s Form 8-K (File No. 001-11954), filed on May 1, 2006 — Thirty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of May 2, 2006 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on May 3, 2006 — Thirty-Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of August 17, 2006 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Form 8-K (File No. 000-22685), filed on August 23, 2006 * * * * * * * * * * * * * * __________________________________ Incorporated by reference 130 * * * * * * * * * * * * * * * * * * 3.47 3.48 3.49 3.50 3.51 3.52 3.53 3.54 3.55 3.56 3.57 — Thirty-Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of October 2, 2006 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Form 8-K (File No. 000-22685), filed on January 22, 2007 — Thirty-Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on June 27, 2007 — Thirty-Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.2 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on June 27, 2007 — Thirty-Ninth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.3 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on June 27, 2007 — Fortieth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.4 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on June 27, 2007 — Forty-First Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of March 31, 2008 – Incorporated by reference to Exhibit 3.44 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (file No. 001-11954), filed on May 6, 2008 — Forty-Second Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of December 17, 2010 – Incorporated by reference to Exhibit 99.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No 000-22685), filed on December 21, 2010 — Forty-Third Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of April 20, 2011 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on April 21, 2011 — Forty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as, of March 30, 2012 - Incorporated by reference to Exhibit 99.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 001-34482), filed on April 5, 2012 — Forty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership dated as of July 18, 2012 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 001-34482), filed on July 18, 2012 — Forty-Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of January 25, 2013 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K (File No. 001-34482), filed on January 25, 2013 3.58 — Forty-Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated April 1, 2015 - Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 001-34482), filed on April 2, 2015 3.59 3.60 3.61 3.62 3.63 4.1 4.2 ** — Forty-Seventh Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated December 13, 2017 - Incorporated by reference to Exhibit 3.2 to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 001-34482), filed on December 13, 2017 ** — Forty-Eighth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of January 12, 2018 - Incorporated by reference to Exhibit 3.53 to Vornado Realty Trust's Annual Report on 10-K for the year ended December 31, 2017 (File No. 001-11954), filed on February 12, 2018 — Forty-Ninth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of August 7, 2019 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on August 8, 2019 — Fiftieth Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of November 24, 2020 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on November 24, 2020 — Fifty-First Amendment to Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P., dated as of September 22, 2021 - Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on September 22, 2021 — Indenture, dated as of November 25, 2003, between Vornado Realty L.P. and The Bank of New York, as Trustee - Incorporated by reference to Exhibit 4.10 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 001-11954), filed on April 28, 2005 — Indenture, dated as of November 20, 2006, among Vornado Realty Trust, as Issuer, Vornado Realty L.P., as Guarantor and The Bank of * New York, as Trustee – Incorporated by reference to Exhibit 4.1 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954), filed on November 27, 2006 Certain instruments defining the rights of holders of long-term debt securities of Vornado Realty Trust and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Vornado Realty Trust hereby undertakes to furnish to the Securities and Exchange Commission, upon request, copies of such instruments 4.3 — Description of the Vornado Realty Trust securities registered pursuant to Section 12 of the Securities Exchange Act *** * ** *** __________________________________________ Incorporated by reference Management contract or compensatory agreement Filed herewith 131 4.4 10.1 10.2 10.3 10.4 10.5 — Description of Class A units of Vornado Realty L.P. and certain provisions of its agreement of limited partnership *** — Registration Rights Agreement between Vornado, Inc. and Steven Roth, dated December 29, 1992 - Incorporated by reference to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993 ** — Management Agreement between Interstate Properties and Vornado, Inc. dated July 13, 1992 – Incorporated by reference to Vornado, Inc.’s Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993 — Tax Reporting and Protection Agreement, dated December 31, 2001, by and among Vornado, Vornado Realty L.P., Charles E. Smith Commercial Realty L.P. and Charles E. Smith Commercial Realty L.L.C. - Incorporated by reference to Exhibit 10.3 to Vornado Realty Trust’s Current Report on Form 8-K/A (File No. 1-11954), filed on March 18, 2002 ** — Amendment to Real Estate Retention Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc. and Vornado Realty L.P. - Incorporated by reference to Exhibit 10(i)(E)(3) to Alexander’s Inc.’s Quarterly Report for the quarter ended June 30, 2002 (File No. 001-06064), filed on August 7, 2002 ** — 59th Street Real Estate Retention Agreement, dated as of July 3, 2002, by and between Vornado Realty L.P., 731 Residential LLC and 731 Commercial LLC - Incorporated by reference to Exhibit 10(i)(E)(4) to Alexander’s Inc.’s Quarterly Report for the quarter ended June 30, 2002 (File No. 001-06064), filed on August 7, 2002 10.6 — Amended and Restated Management and Development Agreement, dated as of July 3, 2002, by and between Alexander's, Inc., the subsidiaries party thereto and Vornado Management Corp. - Incorporated by reference to Exhibit 10(i)(F)(1) to Alexander's Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-06064), filed on August 7, 2020 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 ** — Second Amendment to Real Estate Retention Agreement, dated January 1, 2007, by and between Vornado Realty L.P. and Alexander’s Inc. – Incorporated by reference to Exhibit 10.55 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-11954), filed on February 27, 2007 ** — Amendment to 59th Street Real Estate Retention Agreement, dated January 1, 2007, by and among Vornado Realty L.P., 731 Retail One LLC, 731 Restaurant LLC, 731 Office One LLC and 731 Office Two LLC. – Incorporated by reference to Exhibit 10.56 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-11954), filed on February 27, 2007 ** — Vornado Realty Trust's 2010 Omnibus Share Plan - Incorporated by reference to Exhibit 10.41 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 001-11954) filed on August 3, 2010 ** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Incentive / Non-Qualified Stock Option Agreement - Incorporated by reference to Exhibit 99.1 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954) filed on April 5, 2012 ** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted Stock Agreement - Incorporated by reference to Exhibit 99.2 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954) filed on April 5, 2012 ** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 99.3 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954) filed on April 5, 2012 ** — Form of Vornado Realty Trust 2012 Outperformance Plan Award Agreement - Incorporated by reference to Exhibit 10.45 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 001-11954) filed on February 26, 2013 ** — Form of Vornado Realty Trust 2013 Outperformance Plan Award Agreement - Incorporated by reference to Exhibit 10.50 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 (File No. 001-11954), filed on May 6, 2013 ** — Employment agreement between Vornado Realty Trust and Michael J. Franco dated January 10, 2014 - Incorporated by reference to Exhibit 10.52 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File No. 001-11954), filed on May 5, 2014 ** — Form of Vornado Realty Trust 2010 Omnibus Share Plan AO LTIP Unit Award Agreement - Incorporated by reference to Exhibit 10.34 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 001-11954), filed on February 12, 2018 — Amended and Restated Term Loan Agreement dated as of October 26, 2018 among Vornado Realty L.P. as Borrower, Vornado Realty Trust as General Partner, the Banks listed on the signature pages thereof, and JP Morgan Chase Bank N.A. as Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.36 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-11954), filed on October 29, 2018 ** — Form of Performance Conditioned AO LTIP Award Agreement - Incorporated by reference to Exhibit 10.36 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-11954), filed on February 11, 2019 ** — Form of 2019 Amendment to Restricted LTIP Unit and Restricted Stock Agreements - Incorporated by reference to Exhibit 10.37 to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-11954), filed on February 11, 2019 10.20 ** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 10.38 * to Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-11954), filed on February 11, 2019 10.21 ** — Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted Stock Agreement - Incorporated by reference to Exhibit 10.39 to * Vornado Realty Trust's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-11954), filed on February 11, 2019 * ** *** __________________________________________ Incorporated by reference Management contract or compensatory agreement Filed herewith 132 * * * * * * * * * * * * * * * * * * * 10.22 — Second Amended and Restated Revolving Credit Agreement dated as of March 26, 2019, among Vornado Realty L.P., as Borrower, Vornado Realty Trust as General Partner, the Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A., as Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.40 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 001-11954), filed on April 29, 2019 10.23 ** — Vornado Realty Trust 2019 Omnibus Share Plan - Incorporated by reference to Annex B to Vornado Realty Trust's Proxy Statement dated April 5, 2019 (File No. 001-11954), filed on April 5, 2019 10.24 — Transaction Agreement between Vornado Realty L.P. and Crown Jewel Partner LLC, dated April 18, 2019 - Incorporated by reference to Exhibit 10.42 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (File No. 001-11954), filed on July 29, 2019 10.25 10.26 10.27 10.28 10.29 ** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Restricted Stock Agreement - Incorporated by reference to Exhibit 10.32 to Vornado Realty Trust's Quarterly Report on Form 10-K for the year ended December 31, 2019 (File No. 001-11954), filed on February 18, 2020 ** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Restricted LTIP Unit Agreement - Incorporated by reference to Exhibit 10.33 to Vornado Realty Trust's Quarterly Report on Form 10-K for the year ended December 31, 2019 (File No. 001-11954), filed on February 18, 2020 ** — Form of Vornado Realty Trust 2019 Omnibus Share Plan Incentive/Non-Qualified Stock Option Agreement - Incorporated by reference to Exhibit 10.34 to Vornado Realty Trust's Quarterly Report on Form 10-K for the year ended December 31, 2019 (File No. 001-11954), filed on February 18, 2020 ** — Employment agreement between Vornado Realty Trust and Glen J. Weiss dated May 25, 2018 - Incorporated by reference to Exhibit 10.35 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 001-11954), filed on May 4, 2020 ** — Employment agreement between Vornado Realty Trust and Haim Chera dated April 19, 2019 - Incorporated by reference to Exhibit 10.36 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 001-11954), filed on May 4, 2020 10.30 ** — Form of Vornado Realty Trust 2020 Outperformance Plan Award Agreement - Incorporated by reference to Exhibit 10.37 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 001-11954), filed on May 4, 2020 10.31 ** — Form of Vornado Realty Trust 2021 Outperformance Plan Award Agreement for Executives – Incorporated by reference to Exhibit 10.42 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-11954), filed on February 16, 2021 10.32 ** — Form of Vornado Realty Trust 2021 Outperformance Plan Award Agreement for Non-Executives – Incorporated by reference to Exhibit 10.43 to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-11954), filed on February 16, 2021 10.33 10.34 — Second Amended and Restated Revolving Credit Agreement dated as of April 15, 2021 among Vornado Realty L.P., as Borrower, the Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A., as Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.44 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (File No. 001-11954), filed on August 2, 2021 — Amendment No. 1 to Second Amended and Restated Revolving Credit Agreement dated as of April 16, 2021 among Vornado Realty L.P. as Borrower, the Banks listed on the signature pages thereof, and JP Morgan Chase Bank N.A. as Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.45 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (File No. 001-11954), filed on August 2, 2021 10.35 — Amendment No. 2 to Amended and Restated Term Loan Agreement dated as of April 16, 2021 among Vornado Realty L.P. as Borrower, the Banks listed on the signature pages thereof, and JP Morgan Chase Bank N.A. as Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.46 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (File No. 001-11954), filed on August 2, 2021 * * * * * * * * * * * * * * 10.36 — Form of Vornado Realty Trust 2022 Long-term Performance Plan LTIP Unit Award Agreement *** __________________________________________ Incorporated by reference Management contract or compensatory agreement Filed herewith * ** *** 133 21 23.1 23.2 31.1 31.2 31.3 31.4 32.1 32.2 32.3 32.4 101 104 — Subsidiaries of Vornado Realty Trust and Vornado Realty L.P. — Consent of Independent Registered Public Accounting Firm for Vornado Realty Trust — Consent of Independent Registered Public Accounting Firm for Vornado Realty L.P. — Rule 13a-14 (a) Certification of the Chief Executive Officer of Vornado Realty Trust — Rule 13a-14 (a) Certification of the Chief Financial Officer of Vornado Realty Trust — Rule 13a-14 (a) Certification of the Chief Executive Officer of Vornado Realty L.P. — Rule 13a-14 (a) Certification of the Chief Financial Officer of Vornado Realty L.P. — Section 1350 Certification of the Chief Executive Officer of Vornado Realty Trust — Section 1350 Certification of the Chief Financial Officer of Vornado Realty Trust — Section 1350 Certification of the Chief Executive Officer of Vornado Realty L.P. — Section 1350 Certification of the Chief Financial Officer of Vornado Realty L.P. — The following financial information from Vornado Realty Trust and Vornado Realty L.P. Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL) includes: (i) consolidated balance sheets, (ii) consolidated statements of income, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of changes in equity, (v) consolidated statements of cash flows, and (vi) the notes to consolidated financial statements. — The cover page from the Vornado Realty Trust and Vornado Realty L.P. Annual Report on Form 10-K for the year ended December 31, 2021, formatted as iXBRL and contained in Exhibit 101. *** *** *** *** *** *** *** *** *** *** *** *** *** _____________________________ Filed herewith *** ITEM 16. FORM 10-K SUMMARY None. 134 V O R N A D O C O R P O R A T E I N F O R M A T I O N TRUSTEES STEVEN ROTH Chairman of the Board CANDACE K. BEINECKE, Lead Trustee Senior Partner of Hughes Hubbard & Reed LLP MICHAEL D. FASCITELLI Owner of MDF Capital LLC and former President and Chief Executive Officer of Vornado BEATRICE HAMZA BASSEY Group General Counsel, Chief Compliance Officer and Corporate Secretary, Atlas Mara Ltd. WILLIAM W. HELMAN IV General Partner, Greylock Partners DAVID M. MANDELBAUM Partner, Interstate Properties RAYMOND J. MCGUIRE Former Vice Chairman, Citigroup MANDAKINI PURI* Private Equity Consultant DANIEL R. TISCH* Managing Member, TowerView LLC RICHARD R. WEST* Dean Emeritus, Leonard N. Stern School of Business, New York University RUSSELL B. WIGHT, JR Partner, Interstate Properties *Members of the Audit Committee DIVISION EXECUTIVE VICE PRESIDENTS DAVID BELLMAN Design & Construction ELANA BUTLER Leasing Counsel PAMELA CARUSO Leasing Counsel MICHAEL DOHERTY President – BMS Division ROBERT ENTIN Chief Information Officer RICHARD FAMULARO Controller JOSHUA GLICK Director of PENN DISTRICT Leasing FREDERICK HARRIS Development CORPORATE OFFICERS STEVEN ROTH Chairman of the Board Chief Executive Officer MICHAEL J. FRANCO President and Chief Financial Officer GLEN J. WEISS Executive Vice President – Office Leasing and Co-Head of Real Estate BARRY S. LANGER Executive Vice President – Development and Co-Head of Real Estate HAIM CHERA Executive Vice President – Head of Retail THOMAS SANELLI Executive Vice President – Finance and Chief Administrative Officer DEIRDRE MADDOCK Senior Vice President – Chief Accounting Officer DAVID R. GREENBAUM Vice Chairman JOSEPH MACNOW Senior Advisor ED HOGAN Retail Leasing – New York Division JAN LACHAPELLE Head of Capital Markets FRANK MAIORANO Head of Tax and Compliance MYRON MAURER Chief Operating Officer – theMART MICHAEL SCHNITT Acquisitions and Capital Markets GASTON SILVA Chief Operating Officer – New York Division LISA VOGEL Marketing Company Data COMPANY DATA EXECUTIVE OFFICES 888 Seventh Avenue New York, New York 10019 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP New York, New York COUNSEL Sullivan & Cromwell LLP New York, New York TRANSFER AGENT AND REGISTRAR American Stock Transfer & Trust Co. New York, New York MANAGEMENT CERTIFICATIONS The Company’s Chief Executive Officer and Chief Financial Officer provided certifications to the Securities and Exchange Commission as required by Section 302 of the Sarbanes-Oxley Act of 2002 and these certifications are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In addition, as required by Section 303A.12(a) of the New York Stock Exchange (NYSE) Listed Company Manual, on May 24, 2021, the Company’s Chief Executive Officer submitted to the NYSE the annual CEO certification regarding the Company’s compliance with the NYSE’s corporate governance listing standards. REPORT ON FORM 10-K Shareholders may obtain a copy of the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission free of charge (except for exhibits), by writing to the Secretary, Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019; or visit the Company’s website at www.vno.com and refer to the Company’s SEC filings. ANNUAL MEETING The annual meeting of shareholders of Vornado Realty Trust, will be held virtually, via the internet, at 11:30 AM. New York City time on May 19, 2022. To attend the virtual 2022 Annual Meeting you will need to access www.virtualshareholdermeeting.com/VNO2022 and enter the 16- digit control number found on your proxy card, voting instruction form or Notice of Internet Availability of Proxy Materials. There is no physical location for the annual meeting. We encourage you to allow ample time for online check-in, which will begin at 11:15 AM. New York City time. Additional details regarding how to participate in the Annual Meeting can be accessed at the Company’s website, www.vno.com or at www.proxyvote.com. 

Continue reading text version or see original annual report in PDF format above