Income Per Share

9 Months Ended

Sep. 30, 2011

17. Income Per Share

The following table provides a reconciliation of both net income and the number of common shares used in the computation of (i) basic income per common share - which utilizes the weighted average number of common shares outstanding without regard to dilutive potential common shares, and (ii) diluted income per common share - which includes the weighted average common shares and dilutive share equivalents. Dilutive share equivalents may include our Series A convertible preferred shares, employee stock options, restricted stock and exchangeable senior debentures.

			For the Three Months				For the Nine Months
(Amounts in thousands, except per share amounts)			Ended September 30,				Ended September 30,
			2011		2010		2011		2010
Numerator:
	Income from continuing operations, net of income
		attributable to noncontrolling interests	$	50,314	$	107,919	$	437,576	$	402,591
	Income (loss) from discontinued operations, net of income
		attributable to noncontrolling interests		3,448		(3,667)		137,430		(11,681)
	Net income attributable to Vornado			53,762		104,252		575,006		390,910
	Preferred share dividends			(17,627)		(13,442)		(47,743)		(41,975)
	Discount on preferred share and unit redemptions			5,000		4,382		5,000		4,382
	Net income attributable to common shareholders			41,135		95,192		532,263		353,317
	Earnings allocated to unvested participating securities			(48)		(29)		(199)		(79)
	Numerator for basic income per share			41,087		95,163		532,064		353,238
	Impact of assumed conversions:
		Convertible preferred share dividends		-		-		94		121
	Numerator for diluted income per share		$	41,087	$	95,163	$	532,158	$	353,359

Denominator:
	Denominator for basic income per share –
		weighted average shares		184,398		182,462		184,220		182,014
	Effect of dilutive securities ⁽¹⁾:
		Employee stock options and restricted share awards		1,667		1,706		1,764		1,741
		Convertible preferred shares		-		-		55		71
	Denominator for diluted income per share –
		weighted average shares and assumed conversions		186,065		184,168		186,039		183,826

INCOME PER COMMON SHARE – BASIC:
	Income from continuing operations, net		$	0.20	$	0.54	$	2.14	$	2.00
	Income (loss) from discontinued operations, net			0.02		(0.02)		0.75		(0.06)
	Net income per common share		$	0.22	$	0.52	$	2.89	$	1.94

INCOME PER COMMON SHARE – DILUTED:
	Income from continuing operations, net		$	0.20	$	0.54	$	2.12	$	1.98
	Income (loss) from discontinued operations, net			0.02		(0.02)		0.74		(0.06)
	Net income per common share		$	0.22	$	0.52	$	2.86	$	1.92


(1)		The effect of dilutive securities above excludes anti-dilutive weighted average common share equivalents of 18,857 and 19,837 in the three months ended September 30, 2011 and 2010, respectively, and 18,687 and 19,843 in the nine months ended September 30, 2011 and 2010, respectively.