Redeemable Noncontrolling Interests/Redeemable Partnership Units

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

Below are the details of redeemable noncontrolling interests/redeemable partnership units as of December 31, 2018 and 2017.



(Amounts in thousands, except units and per unit amounts)	Balance as of December 31,				Units Outstanding at December 31,		Per Unit Liquidation Preference		Preferred or Annual Distribution Rate
Unit Series	2018		2017		2018	2017	Per Unit Liquidation Preference		Preferred or Annual Distribution Rate
Common:
Class A units held by third parties	$	778,134	$	979,509	12,544,477	12,528,899	n/a		$	2.52

Perpetual Preferred/Redeemable Preferred⁽¹⁾:
5.00% D-16 Cumulative Redeemable	$	1,000	$	1,000	1	1	$	1,000,000.00	$	50,000.00
3.25% D-17 Cumulative Redeemable	$	4,428	$	4,428	177,100	177,100	$	25.00	$	0.8125

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(1)	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 interests/redeemable partnership units.



(Amounts in thousands)
Balance, December 31, 2016	$	1,278,446
Net income	10,910
Other comprehensive income	643
Distributions	(33,229		)
Redemption of Class A units for Vornado common shares, at redemption value	(38,747		)
Adjustments to carry redeemable Class A units at redemption value (including $224,069 attributable to the spin-off of JBGS)	(268,494		)
Other, net	35,408
Balance, December 31, 2017	984,937
Net income	25,672
Other comprehensive loss	(836		)
Distributions	(31,828		)
Redemption of Class A units for Vornado common shares, at redemption value	(17,068		)
Adjustments to carry redeemable Class A units at redemption value	(198,064		)
Other, net	20,749
Balance, December 31, 2018	$	783,562

Redeemable noncontrolling interests/redeemable partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $50,561,000 as of December 31, 2018 and 2017. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income.