VORNADO REALTY TRUST 29 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Supplemental Information Three Months Ended December 31, 2003 and December 31, 2002 Included in EBITDA are gains on sale of real estate of $158,378, of which $156,433 and $1,945 relate to the Office and Retail segments, respectively.  See notes on following page. Below is a summary of Net Income and EBITDA (1) by segment for the three months ended December 31, 2003 and 2002. For The Three Months Ended December 31, 2003 • The second and fourth quarters of the Merchandise Mart segment have historically been higher than the first and third quarters due to major trade shows occurring in those quarters. • The fourth quarter of the Retail segment have historically been higher than each of the first three quarters due to the recognition of percentage rental income in that quarter; and • The third quarter of the Office and Merchandise Mart segments have historically been impacted by higher net utility costs than in each other quarter of the year; In comparing the financial results of the Company’ segments on a quarterly basis, the following should be noted: Temperature Merchandise Controlled (AMOUNTS IN THOUSANDS) T otal Office Retail Mart Logistics Other (3) Property rentals $ 310,970 $ 206,664 $ 35,442 $51,906 $ — $ 16,958 Straight-line rents: Contractual rent increases 8,204 5,566 173 2,504 — (39) Amortization of free rent 1,958 (228) 1,415 780 — (9) Amortization of acquired below market leases, net 2,133 1,584 549 — — — Total rentals 323,265 213,586 37,579 55,190 — 16,910 Expense reimbursements 45,583 28,000 14,275 2,949 — 359 Fee and other income Tenant cleaning fees 7,300 7,300 — — — — Management and leasing fees 3,031 2,620 347 — — 64 Other 7,596 2,292 326 5,026 — (48) Total revenues 386,775 253,798 52,527 63,165 — 17,285 Operating expenses 148,800 93,258 17,153 26,391 — 11,998 Depreciation and amortization 59,535 40,211 6,322 8,924 — 4,078 General and administrative 35,763 10,434 2,177 5,872 — 17,280 Total expenses 244,098 143,903 25,652 41,187 — 33,356 Operating income 142,677 109,895 26,875 21,978 — (16,071) Income applicable to Alexander’s 3,233 — — — — 3,233 Income from partially-owned entities 13,736 358 847 (253) 7,213 5,571 Interest and other investment income 9,178 1,067 211 10 — 7,890 Interest and debt expense (58,864) (33,587) (14,780) (4,082) — (6,415) Net gain on disposition of wholly-owned and  partially-owned assets other than real estate 2,950 — — — — 2,950 Minority interest (67,040) — — — — (67,040) Income before discontinued operations and gains  on sale of real estate 45,870 77,733 13,153 17,653 7,213 (69,882) Discontinued operations 896 781 53 — — 62 Gains on sale of real estate (discontinued operations) 158,378 156,433 1,945 — — — Net income 205,144 234,947 15,151 17,653 7,213 (69,820) Interest and debt expense (2) 72,841 34,555 15,583 4,246 6,158 12,299 Depreciation and amortization (2) 78,270 40,871 6,796 9,274 8,722 12,607 Income taxes 1,627 45 — — — 1,582 EBITDA (1) $ 357,882 $ 310,418 $ 37,530 $31,173 $22,093 $(43,332)