VORNADO REALTY TRUST 36 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (1) In Januar 2002, when the Company acquired the remaining 66% of CESCR it did not already own, it estimated that these costs would be approximately $75.0. (2) Subject to governmental approvals. The Company is also in the pre-development phase of a number of other projects including (i) retail space in the Penn Plaza area, (ii) repositioning of the Hotel Pennsylvania, (iii) expansion and r edevelopment of the Bergen Mall, (iv) expansion of Monmouth Mall and (v) renovation of the 2101 L Street office building.  There can be no assurance that any of the above projects will be ultimately completed, completed on time or completed for the budgeted amount. The Company’s Share of Costs Expended Estimated Estimated in Year Ended Estimated Completion Project December 31,  Costs to ($ IN MILLIONS) Date Cost 2003 Complete Office: New York City: 640 Fifth Avenue - construction of additional 47,000 square  feet of office space and redevelopment of existing building Summer 2004 $ 62.5 $ 29.4 $ 14.1 CESCR: Crystal City Office space to be vacated by the U.S. Government  Patent Office (“PTO”): (i) Renovation of buildings (see next page) 2005-2007 90.0 (1) — 90.0 (ii) Cost to retenant 2005-2007 60.0 — 60.0 Crystal Drive Retail - construction of additional 57,000 square feet of retail space and improvements to the infrastructure including streets, signals and signs as part of “way finding” program Fall 2004 43.0 12.5 28.7 Retail: 4 Union Square South - redevelopment of 198,000 square feet,  of which 193,000 square feet has been leased to Whole  Foods, Forever 21, DSW Shoe Warehouse and Filenes Spring 2005 54.3 14.0 34.8 Green Acres Mall - interior renovation, construction of an  additional 70,000 square feet of free-standing retail space,  parking decks and site-work and tenant improvements  for B.J.’s Wholesale who will construct its own store  (2) 2006 63.3 1.0 62.3 Strip shopping centers:  (i) site work and/or demolition of existing buildings as part of  the redevelopment of 7 properties released to Wal-Mart  and Lowes, who will construct their own stores at these  sites (six of these locations were previously leased to Bradlees). 2004-2005 21.3 6.4 14.9 (ii) expansion of shopping centers in Bensalem, Kearny  and Marlton aggregating 120,000 square feet (2) 2004-2005 9.5 — 9.5 715 Lexington Avenue - demolition of existing building and  construction of 24,000 square feet of retail space on  four floors Summer 2005 18.1 1.6 16.5 968 Third Avenue (50% interest) - demolition of existing building  and construction of 8,300 square feet of retail space on  three floors Fall 2004 5.7 — 5.7 Merchandise Mart: 350 North Orleans, Chicago - addition of 40,000 square feet at  street level and new lobby Fall 2004 18.2 1.6 16.6 Other: 400 North LaSalle, Chicago (85% interest) - construction of  381,000 square foot high rise rental apartment complex  containing 452 apartments Spring 2004 78.9 35.7 5.6 Penn Plaza Signage District - construction of approximately  21 signs at various locations in the Penn Plaza District,  of which 7 have been completed as of December 31, 2003 Fall 2006 36.9 8.9 24.8 $ 561.7 $ 111.1 $383.5