Shareholders’ Equity/Partners’ Capital

Common Shares (Vornado Realty Trust)

As of December 31, 2017, there were 189,983,858 common shares outstanding. During 2017, we paid an aggregate of $496,490,000 of common dividends comprised of quarterly common dividends of $0.71 per share in the first and second quarter and $0.60 per share in the third and fourth quarter. The third and fourth quarter dividends were after the July 17, 2017 spin-off of JBGS. JBGS' third and fourth quarter dividend amounts to $0.1125 per common share, adjusted for the 1:2 distribution to Vornado shareholders.

Class A Units (Vornado Realty L.P.)

As of December 31, 2017, there were 189,983,858 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, 2017, there were 12,528,899 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 9 – Redeemable Noncontrolling Interests/Redeemable Partnership Units). During 2017, the Operating Partnership paid an aggregate of $496,490,000 of distributions to Vornado comprised of quarterly common distributions of $0.71 per unit in the first and second quarter and $0.60 per unit in the third and fourth quarter. The third and fourth quarter distributions were after the July 17, 2017 spin-off of JBGS. JBGS' third and fourth quarter distribution amounts to $0.1125 per unit, adjusted for the 1:2 distribution to Vornado shareholders.

Preferred Share/Preferred Units

On September 1, 2016, we redeemed all of the outstanding 6.875% Series J cumulative redeemable preferred shares/units at their redemption price of $25.00 per share/unit, or $246,250,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption. In connection therewith, we expensed $7,408,000 of issuance costs, which reduced net income attributable to common shareholders and net income attributable to Class A unitholders in the twelve months ended December 31, 2016. These costs had been initially recorded as a reduction of shareholders’ equity and partners’ capital.

In December 2017, we sold 12,780,000 5.25% Series M cumulative redeemable preferred shares at a price of $25.00 per share in an underwritten public offering pursuant to an effective registration statement. We received aggregate net proceeds of $309,609,000, after underwriters’ discounts and issuance costs and contributed the net proceeds to the Operating Partnership in exchange for 12,780,000 5.25% Series M preferred units (with economic terms that mirror those of the Series M preferred shares). Dividends on the Series M preferred shares/units are cumulative and payable quarterly in arrears. The Series M 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), we may redeem the Series M preferred shares/units at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the date of redemption. The Series M preferred shares/units have no maturity date and will remain outstanding indefinitely unless redeemed by us.

In December 2017, we called for redemption of all of the outstanding 6.625% Series G and 6.625% Series I cumulative redeemable preferred shares/units. As a result, as of December 31, 2017, we reclassed the 6.625% Series G and 6.625% Series I cumulative redeemable preferred shares/units from shareholder's equity/partner's capital to liabilities on our consolidated balance sheets. On January 4, 2018, we redeemed all of the outstanding 6.625% Series G cumulative redeemable preferred shares/units at their redemption price of $25.00 per share/unit, or $200,000,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption. On January 4 and 11, 2018, we redeemed 6,000,000 shares/units and 4,800,000 shares/units, respectively, representing all of the outstanding 6.625% Series I cumulative redeemable preferred shares/units at their redemption price of $25.00 per share/unit, or $270,000,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption. Upon redemption of both series, we expensed $14,486,000 of issuance costs, which will be included in the quarter ended March 31, 2018 consolidated statements of income.


10.	Shareholders’ Equity/Partners’ Capital – 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, 2017 and 2016.



(Amounts in thousands, except share/unit and per share/per unit amounts)
							Per Share/Unit
	Balance as of December 31,				Shares/Units Outstanding at December 31,		Liquidation Preference		Annual Dividend/ Distribution⁽¹⁾
Preferred Shares/Units	2017		2016		2017	2016	Liquidation Preference		Annual Dividend/ Distribution⁽¹⁾
Convertible Preferred:
6.5% Series A: authorized 83,977 shares/units⁽²⁾	$	1,102	$	1,264	19,573	24,829	$	50.00	$	3.25
Cumulative Redeemable Preferred:
6.625% Series G: authorized 8,000,000 shares/units⁽³⁾⁽⁴⁾	—		193,135		—	8,000,000	25.00		1.65625
6.625% Series I: authorized 10,800,000 shares/units⁽³⁾⁽⁴⁾	—		262,379		—	10,800,000	25.00		1.65625
5.70% Series K: authorized 12,000,000 shares/units⁽³⁾	290,971		290,971		12,000,000	12,000,000	25.00		1.425
5.40% Series L: authorized 12,000,000 shares/units⁽³⁾	290,306		290,306		12,000,000	12,000,000	25.00		1.35
5.25% Series M: authorized 12,780,000 shares/units⁽³⁾	309,609		—		12,780,000	—	25.00		1.3125		⁽⁵⁾
	$	891,988	$	1,038,055	36,799,573	42,824,829

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(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)	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.


(4)	In December 2017, we called for redemption all of the outstanding 6.625% Series G and 6.625% Series I cumulative redeemable preferred shares/units. These shares were redeemed on January 4 and 11, 2018. As a result, we reclassed to liabilities all of the outstanding shares/units with the aggregate amount of $455,514 on our consolidated balance sheets as of December 31, 2017.


(5)	Annual dividend/distribution rate commencing in December 2017.

Accumulated Other Comprehensive Income (Loss)

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



(Amounts in thousands)	For the Year Ended December 31, 2017
	Total			Securities available- for-sale			Pro rata share of nonconsolidated subsidiaries' OCI			Interest rate swap		Other
Balance as of December 31, 2016	$	118,972		$	130,505		$	(12,058	)	$	8,066	$	(7,541	)
OCI before classifications	(4,692		)	(20,951		)	1,425			15,476		(642		)
Amounts reclassified from AOCI	14,402			—			14,402			—		—
Balance as of December 31, 2017	$	128,682		$	109,554		$	3,769		$	23,542	$	(8,183	)