VORNADO REALTY TRUST 59 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenues $1,351,321 Income before discontinued operations, gains on sale of real estate  and cumulative effect of change in accounting principle 275,910 Discontinued operations 10,342 Gains on sale of real estate 15,495 Cumulative effect of change in accounting principle (4,110) Net income 297,637 Preferred share dividends (36,505) Net income applicable to common shares 261,132 Net income per common share—basic 2.64 Net income per common share—diluted $ 2.56 Land, buildings and improvements $1,641,000 Intangible deferred charges 76,000 Working capital 41,000 Total Assets Acquired 1,758,000 Mortgages and notes payable 1,023,000 Intangible deferred credit 62,000 Other liabilities 34,000 Total Liabilities Assumed 1,119,000 Net Assets Acquired $ 639,000 (AMOUNTS IN THOUSANDS) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) CRYSTAL GATEWAY ONE BUILDING MAINTENANCE SERVICE COMPANY (“BMS”) The Company’ estimate of the weighted average useful life of acquired intangibles is approximately three years. This acquisition was recorded as a business combination under the purchase method of accounting. The purchase price was allocated to acquired assets and assumed liabilities using their relative fair values as of January 1, 2002 based on valuations and other studies. The operations of CESCR ar consolidated into the accounts of the Company beginning January 1, 2002. Prior to this date the Company accounted for its 34% interest on the equity method. The unaudited pro forma information set forth below presents the Company’s condensed consolidated statement of income for the year ended December 31, 2001 as if the following transactions had occurred on January 1, 2001, (i) the acquisition of CESCR described above and (ii) the Company’ November 21, 2001 sale of 9,775,000 common shares and the use of proceeds to repay indebtedness. On July 1, 2002, the Company acquired a 360,000 square foot of fice building from a limited partnership, which was approximately 50% owned by Mr. Robert H. Smith and Mr. Robert P. Kogod, trustees of the Company, and members of the Smith and Kogod families, in exchange for approximately 325,700 newly issued Vornado Operating Partnership units (valued at $13,679,000) and the assumption of $58,500,000 of debt. The building is located in the Crystal City complex in Arlington, Vir ginia. The operations of Crystal Gateway One are consolidated into the accounts of the Company from the date of acquisition. On January 1, 2003, the Company acquired for $13,000,000 in cash BMS, which provides cleaning, security and engineering services principally to the Company’s Manhattan office pr operties. This company was previously owned by the estate of Bernar Mendik and certain other individuals including David R. Greenbaum, one of the Company’s executive officers. This acquisition was recorded as a business combination under the purchase method of accounting. Accordingly, the operations of BMS ar consolidated into the accounts of the Company beginning January 1, 2003.