VORNADO REALTY TRUST 50 CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Accumulated Distributions Other Preferred Common Additional in Excess of Comprehensive Shareholders’  Comprehensive (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Shares Shares Capital Net Income Loss Other Equity Income Balance, December 31, 2002 $ 265,488 $4,320 $ 2,481,414 $(169,629) $(13,564) $59,327 $2,627,356 $ 222,319 Net Income — — — 460,703 — — 460,703 $ 460,703 Dividends paid on Preferred Shares Series A Preferred Shares ($3.25 per share) — — — (3,473) — — (3,473) — Series B Preferred Shares ($2.125 per share) — — — (7,225) — — (7,225) — Series C Preferred Shares ($2.125 per share) — — — (9,775) — — (9,775) — Series D-10 Preferred Shares ($1.75 per share) — — — (342) — — (342) — Proceeds from issuance of Series D-10 Preferred Shares 40,000 — — — — — 40,000 — Conversion of Series A Preferred shares to common shares (54,496) 86 54,410 — — — — — Deferred compensation shares — 8 5,392 — — — 5,400 — Dividends paid on common shares ($2.91 per share, including $.16 special cash dividend) — — — (327,877) — — (327,877) — Common shares issued under employees’ share option plan — 183 141,036 — — — 141,219 — Redemption of Class A partnership  units for common shares — 140 144,291 — — — 144,431 — Common shares issued in connection with dividend reinvestment plan — 2 1,996 — — — 1,998 — Change in unrealized net gain on securities available for sale — — — — 5,517 — 5,517 5,517 Shelf registration costs — — (750) — — — (750) — Other—primarily increase in value  of Officers deferred  compensation plan — — — — 1,107 (716) 391 1,107 Balance, December 31, 2003 $ 250,992 $4,739 $ 2,827,789 $ (57,618) $ (6,940) $58,611 $3,077,573 $ 467,327 See notes to consolidated financial statements.