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EXHIBIT INDEX ON PAGE 19

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

|    |                                                        
|--- | -------------------------------------------------------
|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|    | SECURITIES EXCHANGE ACT OF 1934                        

For the quarterly period ended September 30, 2003

OR

|     |                                                         
|---- | --------------------------------------------------------
|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|     | SECURITIES EXCHANGE ACT OF 1934                         

For the transition period from  to

Commission File Number 001-14525

VORNADO OPERATING COMPANY

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 22-3569068                          
|                                                               |  |                                     
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|888 Seventh Avenue, New York, New York   |  | 10019     
|                                         |  |           
|(Address of principal executive offices) |  | (Zip Code)

(212) 894-7000




(Registrants telephone number, including area code)


N/A




(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[X] Yes [  ] No


Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

[  ] Yes [X] No


As of October 31, 2003, there were 4,068,924 shares of the registrants common
stock, par value $.01 per share, outstanding.

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|                                                   |                                                                                               |                                            |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                     
|                                                   | Item 1. Financial Statements                                                                 
|                                                   |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                                   |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                                   |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                                   |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                                   |                                                                                               | INDEPENDENT ACCOUNTANTS REPORT           
|                                                   | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                   | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                        
|                                                   | Item 1. Legal Proceedings                                                                    
|                                                   | Item 5. Other Information                                                                    
|                                                   | Item 6. Exhibits and Reports on Form 8-K:                                                    
|SIGNATURES                                        
|Exhibit Index                                     
|LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
|CERTIFICATION                                     
|CERTIFICATION                                     
|CERTIFICATION                                     
|CERTIFICATION                                     



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INDEX

|              |  |         |  |                                                                                                                                 |  |            
|------------- |  | ------- |  | ------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|              |  |         |  |                                                                                                                                 |  | Page Number
|              |  |         |  |                                                                                                                                 |  |            
|PART I.       |  |         |  | Financial Information:                                                                                                          |  |            
|              |  | Item 1. |  | Financial Statements:                                                                                                           |  |            
|              |  |         |  | Consolidated Balance Sheets as of
September 30, 2003 (unaudited) and December 31, 2002                                          |  | 3          
|              |  |         |  | Consolidated Statements of Operations (unaudited) for the
Three and Nine Months Ended September 30, 2003 and
September 30, 2002 |  | 4          
|              |  |         |  | Consolidated Statements of Cash Flows (unaudited) for the
Nine Months Ended September 30, 2003 and September 30, 2002           |  | 5          
|              |  |         |  | Notes to Consolidated Financial Statements (unaudited)                                                                          |  | 6          
|              |  |         |  | Independent Accountants Report                                                                                                 |  | 10         
|              |  | Item 2. |  | Managements Discussion and Analysis of
Financial Condition and Results of Operations                                           |  | 11         
|              |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                                      |  | 16         
|              |  | Item 4. |  | Controls and Procedures                                                                                                         |  | 16         
|PART II.      |  |         |  | Other Information:                                                                                                              |  |            
|              |  | Item 1. |  | Legal Proceedings                                                                                                               |  | 17         
|              |  | Item 5. |  | Other Information                                                                                                               |  | 17         
|              |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                                                |  | 17         
|SIGNATURES    |  |         |  | 18                                                                                                                             
|EXHIBIT INDEX |  |         |  | 19                                                                                                                             

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PART I. FINANCIAL INFORMATION
     Item 1.Financial Statements

VORNADO OPERATING COMPANY
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                    |  |               |             |              |  |   |             |  
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | ------------ |  | - | ----------- | -
|                                                                                                                                    |  | (UNAUDITED)   |             |              |  |  
|                                                                                                                                    |  | September 30, |             | December 31,
|                                                                                                                                    |  | 2003          |             | 2002        
|                                                                                                                                    |  |               |             |             
|ASSETS                                                                                                                              |  |               |             |              |  |   |             |  
|Cash and cash equivalents, including U.S. government
obligations under repurchase agreements of $550,000 and
$200,000, respectively |  | $             | 1,057,795   |              |  | $ | 344,686     |  
|Investments in and advances to AmeriCold Logistics                                                                                  |  |               |            |              |  |   |            |  
|Interest receivable from AmeriCold Logistics                                                                                        |  |               | 32,313      |              |  |   | 50,885      |  
|Prepaid expenses and other assets                                                                                                   |  |               | 73,707      |              |  |   | 254,016     |  
|                                                                                                                                    |  |               |             |              |  |   |             |  
|Total assets                                                                                                                        |  | $             | 1,163,815   |              |  | $ | 649,587     |  
|                                                                                                                                    |  |               |             |              |  |   |             |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                               |  |               |             |              |  |   |             |  
|Note, interest, and fees payable to Vornado Realty Trust                                                                            |  | $             | 25,001,931  |              |  | $ | 23,834,355  |  
|Due to Vornado Realty Trust                                                                                                         |  |               | 77,830      |              |  |   | 76,474      |  
|Accounts payable and accrued expenses                                                                                               |  |               | 162,060     |              |  |   | 171,758     |  
|                                                                                                                                    |  |               |             |              |  |   |             |  
|Total liabilities                                                                                                                   |  |               | 25,241,821  |              |  |   | 24,082,587  |  
|                                                                                                                                    |  |               |             |              |  |   |             |  
|Minority interest                                                                                                                   |  |               |            |              |  |   |            |  
|                                                                                                                                    |  |               |             |              |  |   |             |  
|COMMITMENTS AND CONTINGENCIES                                                                                                       |  |               |             |              |  |   |             |  
|STOCKHOLDERS DEFICIT                                                                                                               |  |               |             |              |  |   |             |  
|Common stock: par value $.01 per share; authorized,
40,000,000 shares; issued and outstanding, 4,068,924 shares
at each period end  |  |               | 40,689      |              |  |   | 40,689      |  
|Additional paid-in capital                                                                                                          |  |               | 22,462,555  |              |  |   | 22,462,555  |  
|Accumulated deficit                                                                                                                 |  |               | (44,245,103 | )            |  |   | (43,600,097 | )
|                                                                                                                                    |  |               |             |              |  |   |             |  
|                                                                                                                                    |  |               | (21,741,859 | )            |  |   | (21,096,853 | )
|Accumulated other comprehensive loss                                                                                                |  |               | (2,336,147  | )            |  |   | (2,336,147  | )
|                                                                                                                                    |  |               |             |              |  |   |             |  
|Total stockholders deficit                                                                                                         |  |               | (24,078,006 | )            |  |   | (23,433,000 | )
|                                                                                                                                    |  |               |             |              |  |   |             |  
|Total liabilities and stockholders deficit                                                                                         |  | $             | 1,163,815   |              |  | $ | 649,587     |  
|                                                                                                                                    |  |               |             |              |  |   |             |  

See notes to consolidated financial statements.

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VORNADO OPERATING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


|                                                                                                                                                 |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------- | -------- | ------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | - |  | - | ----------- | -
|                                                                                                                                                 |  | For The Three Months Ended |          | For The Nine Months Ended
|                                                                                                                                                 |  | September 30,              |          | September 30,            
|                                                                                                                                                 |  |                            |          |                          
|                                                                                                                                                 |  | 2003                       |          | 2002                      |  | 2003 |            | 2002
|                                                                                                                                                 |  |                            |          |                           |  |      |            |     
|REVENUES:                                                                                                                                        |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|Interest income                                                                                                                                  |  | $                          | 783      |                           |  | $    | 524        |      |  | $ | 2,649      |   |  | $ | 1,034       |  
|EXPENSES:                                                                                                                                        |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|General and administrative (including fees to
Vornado Realty Trust of $82,500 in each
three month period and $247,500 in each nine
month period) |  |                            | 357,914  |                           |  |      | 434,349    |      |  |   | 892,393    |   |  |   | 1,006,905   |  
|                                                                                                                                                 |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|                                                                                                                                                 |  |                            | (357,131 | )                         |  |      | (433,825   | )    |  |   | (889,744   | ) |  |   | (1,005,871  | )
|Interest and debt expense to Vornado Realty Trust                                                                                                |  |                            | (387,148 | )                         |  |      | (513,809   | )    |  |   | (1,167,576 | ) |  |   | (1,500,261  | )
|Income (loss) from AmeriCold Logistics                                                                                                           |  |                            | 477,114  |                           |  |      | (4,782,126 | )    |  |   | 1,412,314  |   |  |   | (12,020,127 | )
|                                                                                                                                                 |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|Loss before income tax benefit                                                                                                                   |  |                            | (267,165 | )                         |  |      | (5,729,760 | )    |  |   | (645,006   | ) |  |   | (14,526,259 | )
|Income tax benefit                                                                                                                               |  |                            |         |                           |  |      |           |      |  |   |           |   |  |   |            |  
|                                                                                                                                                 |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|NET LOSS                                                                                                                                         |  | $                          | (267,165 | )                         |  | $    | (5,729,760 | )    |  | $ | (645,006   | ) |  | $ | (14,526,259 | )
|                                                                                                                                                 |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  
|Net loss per share  basic and diluted                                                                                                           |  | $                          | (0.07    | )                         |  | $    | (1.41      | )    |  | $ | (0.16      | ) |  | $ | (3.57       | )
|                                                                                                                                                 |  |                            |          |                           |  |      |            |      |  |   |            |   |  |   |             |  

See notes to consolidated financial statements.

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VORNADO OPERATING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |             |   |  |            |  
|------------------------------------------------- | ---------------------------------------------- | - | ------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | - | --------------------------------------- | --------- | ----------- | - |  | ---------- | -
|                                                  |                                                |   |                                                                                 |                                                                                                 |   | For The Nine Months Ended September 30,
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                        
|                                                  |                                                |   |                                                                                 |                                                                                                 |   | 2003                                    |           | 2002       
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|CASH FLOWS FROM OPERATING ACTIVITIES:             |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|                                                  | Net loss                                       |   | $                                                                               | (645,006                                                                                        | ) |                                         | $         | (14,526,259 | )
|                                                  |                                                |   | Adjustments to reconcile net loss to net cash
provided by operating activities: |                                                                                                 |   |                                         |           |             |   |  |           
|                                                  |                                                |   |                                                                                 | Equity in loss of AmeriCold Logistics                                                           |   |                                         |          |             |   |  | 13,539,000 |  
|                                                  |                                                |   |                                                                                 | Recovery from repayments of loans to AmeriCold
Logistics previously reduced by equity in losses |   |                                         | (658,049  | )           |   |  |           |  
|                                                  | Changes in operating assets and liabilities:   |   |                                                                                 |                                                                                                 |   |                                         |           |             |  
|                                                  |                                                |   |                                                                                 | Prepaid expenses and other assets                                                               |   |                                         | 180,309   |             |   |  | 152,961    |  
|                                                  |                                                |   |                                                                                 | Interest and commitment fees payable on note to
Vornado Realty Trust                            |   |                                         | 1,167,576 |             |   |  | 1,336,384  |  
|                                                  |                                                |   |                                                                                 | Interest receivable from AmeriCold Logistics                                                    |   |                                         | 18,572    |             |   |  | (394,295   | )
|                                                  |                                                |   |                                                                                 | Accounts payable and accrued expenses                                                           |   |                                         | (9,698    | )           |   |  | (6,530     | )
|                                                  |                                                |   |                                                                                 | Due to Vornado Realty Trust                                                                     |   |                                         | 1,356     |             |   |  | (10,755    | )
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|Net cash provided by operating activities         |                                                |   | 55,060                                                                          |                                                                                                 |   |                                         | 90,506    |            
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|                                                  | Repayments of loans to AmeriCold Logistics     |   |                                                                                 | 658,049                                                                                         |   |                                         |           | 390,538     |  
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|                                                  | Proceeds from note to Vornado Realty Trust     |   |                                                                                 |                                                                                                |   |                                         |           | 65,000      |  
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|Net increase in cash and cash equivalents         |                                                |   | 713,109                                                                         |                                                                                                 |   |                                         | 546,044   |            
|Cash and cash equivalents at beginning of period  |                                                |   | 344,686                                                                         |                                                                                                 |   |                                         | 14,653    |            
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|Cash and cash equivalents at end of period        |                                                | $ | 1,057,795                                                                       |                                                                                                 |   | $                                       | 560,697   |            
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |             |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |            
|                                                  | Cash payments for interest and commitment fees |   | $                                                                               |                                                                                                |   |                                         | $         | 163,877     |  
|                                                  |                                                |   |                                                                                 |                                                                                                 |   |                                         |           |             |  

See notes to consolidated financial statements.

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VORNADO OPERATING COMPANYNOTES
TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)



|1. |  | ORGANIZATION
|-- |  | ------------

Vornado Operating Company (the Company) holds its assets and conducts
its business through Vornado Operating L.P., a Delaware limited partnership
(Company L.P.). The Company is the sole general partner of, and as of
September 30, 2003, owned a 90.1% partnership interest in, Company L.P. All
references to the Company refer to Vornado Operating Company and its
subsidiaries including Company L.P.



|2. |  | BASIS OF PRESENTATION
|-- |  | ---------------------

The consolidated balance sheet as of September 30, 2003, the consolidated
statements of operations for the three and nine months ended September 30, 2003
and 2002, and the consolidated statements of cash flows for the nine months
ended September 30, 2003 and 2002 are unaudited. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows
have been made. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted in accordance with Article 10 of Regulation S-X and the instructions to
Form 10-Q. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2002 as filed with the Securities and Exchange Commission. The
results of operations for the nine months ended September 30, 2003 are not
necessarily indicative of the operating results for the full year.

The accompanying consolidated financial statements include the accounts of
the Company and Company L.P. All significant intercompany amounts have been
eliminated. The Companys 60% interest in AmeriCold Logistics is currently
accounted for under the equity method of accounting as Crescent Operating,
Inc., the Companys partner in AmeriCold Logistics, has substantive
participating rights. The investments in and advances to AmeriCold Logistics
are recorded initially at cost and subsequently adjusted for the Companys
share of comprehensive income or loss and cash distributions or principal
repayments from AmeriCold Logistics. The interest earned on the advances to
AmeriCold Logistics is recorded as a component of income or loss from AmeriCold
Logistics. The Company does not record comprehensive losses in excess of the
cost of its investments in and advances to AmeriCold Logistics, as the Company
is not liable for the obligations of, or otherwise committed to provide
additional financial support to, AmeriCold Logistics. The Company did not
record its 60% share of AmeriCold Logistics net loss for the nine months ended
September 30, 2003 as the Companys investments in and advances to AmeriCold
Logistics were fully absorbed by the Companys share of the comprehensive
losses of AmeriCold Logistics at December 31, 2002. The Company will record
its share of future income from AmeriCold Logistics only for the portion of
such income that is in excess of its share of losses not previously recorded.
The Company's method for accounting for AmeriCold Logistics will
change in the fourth quarter of 2003 (see Note 6).

Management has made estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting periods. Actual
results could differ from those estimates.

Certain amounts in the prior periods consolidated financial statements
have been reclassified to conform to the current year presentation.



|3. |  | INVESTMENTS IN AND ADVANCES TO AMERICOLD LOGISTICS
|-- |  | --------------------------------------------------

At September 30, 2003, $7,712,000 was outstanding under the Companys
secured loans to AmeriCold Logistics, which mature on December 31, 2004. These
loans are carried at zero in the accompanying consolidated balance sheet as
they have been fully absorbed by the Companys share of comprehensive losses of
AmeriCold Logistics. AmeriCold Logistics is required to make loan payments
approximating $159,000 per month. The portions of the loan payments made
during the three and nine months ended September 30, 2003 that represented the
repayment of principal were $230,000 and $658,000, respectively, and are
reflected as income from AmeriCold Logistics as this principal was previously
reduced to zero by equity in losses of AmeriCold Logistics.

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VORNADO OPERATING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(UNAUDITED)

The following condensed balance sheet data represents 100% of AmeriCold
Logistics, in which the Company holds a 60% interest:

|                        |  |                    |         |                   |  |   |         |  
|----------------------- |  | ------------------ | ------- | ----------------- |  | - | ------- | -
|(amounts in thousands)  |  | September 30, 2003 |         | December 31, 2002
|                        |  |                    |         |                  
|Current assets          |  | $                  | 127,382 |                   |  | $ | 116,420 |  
|Non-current assets      |  |                    | 44,167  |                   |  |   | 47,670  |  
|                        |  |                    |         |                   |  |   |         |  
|                        |  | $                  | 171,549 |                   |  | $ | 164,090 |  
|                        |  |                    |         |                   |  |   |         |  
|Current liabilities     |  | $                  | 119,247 |                   |  | $ | 115,057 |  
|Non-current liabilities |  |                    | 122,918 |                   |  |   | 90,666  |  
|                        |  |                    |         |                   |  |   |         |  
|                        |  | $                  | 242,165 |                   |  | $ | 205,723 |  
|                        |  |                    |         |                   |  |   |         |  
|Partners deficit       |  | $                  | (70,616 | )                 |  | $ | (41,633 | )
|                        |  |                    |         |                   |  |   |         |  

The following condensed operating and cash flow data represents 100% of
AmeriCold Logistics, in which the Company holds a 60% interest:

|                                                      |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|----------------------------------------------------- |  | -------------------- | -------- | ------------------- |  | ---- | -------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                                      |  | For The Three Months |          | For The Nine Months
|                                                      |  | Ended September 30,  |          | Ended September 30,
|                                                      |  |                      |          |                    
|(amounts in thousands)                                |  | 2003                 |          | 2002                |  | 2003 |          | 2002
|                                                      |  |                      |          |                     |  |      |          |     
|Revenues                                              |  | $                    | 163,676  |                     |  | $    | 161,669  |      |  | $ | 477,556  |   |  | $ | 471,159  |  
|Costs applicable to revenues                          |  |                      | (120,534 | )                   |  |      | (122,084 | )    |  |   | (349,786 | ) |  |   | (347,032 | )
|                                                      |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|Gross margin                                          |  |                      | 43,142   |                     |  |      | 39,585   |      |  |   | 127,770  |   |  |   | 124,127  |  
|Depreciation and amortization                         |  |                      | (2,469   | )                   |  |      | (2,606   | )    |  |   | (7,327   | ) |  |   | (7,874   | )
|Rent                                                  |  |                      | (41,190  | )                   |  |      | (35,936  | )    |  |   | (122,494 | ) |  |   | (109,824 | )
|Other expenses, net                                   |  |                      | (9,714   | )                   |  |      | (10,301  | )    |  |   | (26,932  | ) |  |   | (28,994  | )
|                                                      |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|Net loss (1)                                          |  | $                    | (10,231  | )                   |  | $    | (9,258   | )    |  | $ | (28,983  | ) |  | $ | (22,565  | )
|                                                      |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  
|Cash flows (used in) provided by operating
activities |  | $                    | (2,949   | )                   |  | $    | 2,376    |      |  | $ | 3,768    |   |  | $ | (10,881  | )
|                                                      |  |                      |          |                     |  |      |          |      |  |   |          |   |  |   |          |  

The following represents the components of the Companys income (loss)
from AmeriCold Logistics:

|                                                                         |  |                      |     |                     |  |      |        |      |  |   |       |  |  |   |         |  
|------------------------------------------------------------------------ |  | -------------------- | --- | ------------------- |  | ---- | ------ | ---- |  | - | ----- |  |  | - | ------- | -
|                                                                         |  | For The Three Months |     | For The Nine Months
|                                                                         |  | Ended September 30,  |     | Ended September 30,
|                                                                         |  |                      |     |                    
|(amounts in thousands)                                                   |  | 2003                 |     | 2002                |  | 2003 |        | 2002
|                                                                         |  |                      |     |                     |  |      |        |     
|Equity in loss (1)                                                       |  | $                    |    |                     |  | $    | (5,555 | )    |  | $ |      |  |  | $ | (13,539 | )
|Interest on loans                                                        |  |                      | 247 |                     |  |      | 773    |      |  |   | 754   |  |  |   | 1,519   |  
|Recovery from
repayments of loans
previously reduced by
equity in losses |  |                      | 230 |                     |  |      |       |      |  |   | 658   |  |  |   |        |  
|                                                                         |  |                      |     |                     |  |      |        |      |  |   |       |  |  |   |         |  
|                                                                         |  | $                    | 477 |                     |  | $    | (4,782 | )    |  | $ | 1,412 |  |  | $ | (12,020 | )
|                                                                         |  |                      |     |                     |  |      |        |      |  |   |       |  |  |   |         |  



---

|(1) |  | The Company did not record $6,139 and $17,390 (the respective 60% shares of AmeriCold Logistics net losses
of $10,231 and $28,983) for the three and nine months ended September 30, 2003, respectively, as the Companys
investments in and advances to AmeriCold Logistics were fully absorbed by the Companys share of the
comprehensive losses of AmeriCold Logistics at December 31, 2002.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



VORNADO OPERATING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(UNAUDITED)

AmeriCold Logistics has reported losses since its inception and, at
September 30, 2003, the Companys 60% share of AmeriCold Logistics partners
deficit was $42,370,000, which includes $43,868,000 of deferred rent (rent
recognized as expense but not paid in cash) to the Vornado REIT/Crescent REIT
Partnership (the Landlord). On March 7, 2003, AmeriCold Logistics and the
Landlord extended the deferred rent period in AmeriCold Logistics leases with
the Landlord to December 31, 2004 from December 31, 2003. Based on its right
to defer rent, the management of AmeriCold Logistics anticipates it will have
sufficient cash flows to operate at least through September 30, 2004.
AmeriCold Logistics anticipates that by the end of the first quarter of 2004,
the Landlord will restructure the leases to provide additional cash flow to
AmeriCold Logistics. Further, the management of AmeriCold Logistics is also
considering the financing of certain trade receivables and equipment. In the
absence of such financings and the anticipated lease restructuring, AmeriCold
Logistics will not have the ability to distribute funds to the Company and in
turn, the Company will not have resources sufficient to repay its $25,002,000
loan from Vornado Realty Trust due December 31, 2004.

During the nine months ended September 30, 2003, AmeriCold Logistics
exercised its right, pursuant to the terms of its leases with the Landlord, to
defer the payment of rent. AmeriCold Logistics deferred rent liability at
September 30, 2003 is as follows:

|                                                          |  |           |        | 
|--------------------------------------------------------- |  | --------- | ------ | 
|                                                          |  | Total (1)
|(amounts in thousands)                                    |  |          
|Deferred during the three months ended September 30, 2003 |  | $         | 14,026 | 
|Deferred during the three months ended June 30, 2003      |  |           | 12,877 | 
|Deferred during the three months ended March 31, 2003     |  |           | 5,627  | 
|Aggregate deferral at December 31, 2002                   |  |           | 40,583 | 
|                                                          |  |           |        | 
|                                                          |  | $         | 73,113 | 
|                                                          |  |           |        | 

(1) The Company does not guarantee AmeriCold Logistics deferred rent liability.

On March 28, 2003, AmeriCold Logistics sold, without recourse, accounts
receivable of $6,640,000 to a joint venture owned 44% by Vornado Realty Trust
and 56% by Crescent Real Estate Equities Company, the owners of the Landlord,
for $6,500,000 in cash. AmeriCold Logistics recognized a loss of $140,000 on
the sale. AmeriCold Logistics also agreed to act as agent to collect the
accounts receivable. The accounts receivable have been collected in full.



|4. |  | COMMITMENTS AND CONTINGENCIES
|-- |  | -----------------------------

The Company is from time to time involved in legal actions arising in the
ordinary course of business. In the opinion of management, after consultation
with legal counsel, the outcome of such matters will not have a material effect
on the Companys financial condition, results of operations or cash flows.



|5. |  | LOSS PER SHARE
|-- |  | --------------

The following table sets forth the computation of basic and diluted loss
per share:

|                                       |                                     |                            |               |                           |               |      |       |           |   |   |       |           |   |   |       |           |  
|-------------------------------------- | ----------------------------------- | -------------------------- | ------------- | ------------------------- | ------------- | ---- | ----- | --------- | - | - | ----- | --------- | - | - | ----- | --------- | -
|                                       |                                     | For The Three Months Ended |               | For The Nine Months Ended
|                                       |                                     |                            | September 30, |                           | September 30,
|                                       |                                     |                            |               |                           |              
|(amounts in thousands,                 |                                     | 2003                       |               | 2002                      |               | 2003 |       | 2002     
|except share and per share amounts)    |                                     |                            |               |                           |               |      |       |          
|Numerator:                             |                                     |                            |               |                           |               |      |       |           |   |   |       |           |   |   |       |          
|                                       | Net loss                            |                            | $             | (267                      | )             |      | $     | (5,730    | ) |   | $     | (645      | ) |   | $     | (14,526   | )
|                                       |                                     |                            |               |                           |               |      |       |           |   |   |       |           |   |   |       |          
|Denominator:                           |                                     |                            |               |                           |               |      |       |           |   |   |       |           |   |   |       |          
|                                       | Weighted average shares outstanding |                            |               | 4,068,924                 |               |      |       | 4,068,924 |   |   |       | 4,068,924 |   |   |       | 4,068,924 |  
|                                       |                                     |                            |               |                           |               |      |       |           |   |   |       |           |   |   |       |          
|Net loss per share - basic and diluted |                                     | $                          | (0.07         | )                         |               | $    | (1.41 | )         |   | $ | (0.16 | )         |   | $ | (3.57 | )        
|                                       |                                     |                            |               |                           |               |      |       |           |   |   |       |           |   |   |       |          

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VORNADO OPERATING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(UNAUDITED)

The Companys stock options (358,569 outstanding and exercisable at September
30, 2003) are not dilutive in the reporting periods as the average market
prices of the Companys common stock did not exceed the option exercise prices
and as the Company reported net losses. The rights issued pursuant to the
Companys Stockholder Protection Rights Plan are not dilutive in the reporting
periods as the rights were not exercisable or outstanding. The limited
partnership units of Company L.P. not owned by the Company (447,017 at
September 30, 2003) are not dilutive in the reporting periods as the Company
reported net losses.



|6. |  | RECENTLY ISSUED ACCOUNTING STANDARDS
|-- |  | ------------------------------------

In December 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of FASB
Statement No. 123.SFAS No. 148 provides alternative methods of transition for
entities that voluntarily change to the fair value method of accounting for
stock-based employee compensation. The Company voluntarily adopted the fair
value provisions of SFAS No. 123, Accounting for Stock-Based Compensation,
prospectively for all employee awards granted, modified, or settled in 2003 and
thereafter. The Company will utilize an option-pricing model and appropriate
market assumptions to determine the value of such grants. Compensation expense
will be recognized on a straight-line basis over the vesting periods of the
grants. None of the Companys stock options accounted for under the intrinsic
value method (i.e., the difference between the price per share at the grant
date and the option exercise price) prescribed by Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, would have increased
net losses for the three and nine months ended September 30, 2003 and 2002 had
they been accounted for under the fair value method.

In January 2003, FASB issued FASB Interpretation (FIN) No. 46,
Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.
FIN No. 46 requires the consolidation of an entity by an enterprise if (i) that
enterprise, known as a primary beneficiary, has an interest that will absorb
a majority of the entitys expected losses if they occur, receive a majority of
the entitys expected residual returns if they occur, or both and (ii) the
entity is a variable interest entity. An entity is a variable interest entity
if (a) the total equity investment at risk in the entity is not sufficient to
permit the entity to finance its activities without additional subordinated
financial support from other parties or (b) the equity investors do not have
the characteristics of a controlling financial interest in the entity. The
initial determination of whether an entity is a variable interest entity shall
be made as of the date at which an enterprise becomes involved with the entity
and reconsidered as of the date that one of three triggering events described
in FIN No. 46 occurs.

The Company previously disclosed that its investments in AmeriCold
Logistics met the criteria for consolidation under FIN No. 46 and it would
consolidate AmeriCold Logistics beginning July 1, 2003 by restating its prior
period consolidated financial statements. However, in October 2003, FASB
issued FASB Staff Position No. FIN 46-6, Effective Date of FASB Interpretation
No. 46, Consolidation of Variable Interest Entities.This position allows
public entities to defer the date for implementing FIN No. 46, except for
certain required disclosures, until the end of the first interim or annual
period ending after December 15, 2003 if certain conditions apply. The Company
has concluded that AmeriCold Logistics qualifies for deferral and has elected
to implement FIN No. 46 on December 31, 2003. Additionally, the Company is
re-evaluating its implementation alternatives (i.e., restatement of its
previously issued consolidated financial statements or a cumulative-effect
adjustment). Had AmeriCold Logistics been consolidated as of September 30,
2003, the Companys accumulated deficit and accumulated other comprehensive
loss would have increased to $92,230,000 and $17,222,000, respectively.

In May 2003, FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity. SFAS No. 150
establishes standards for classifying and measuring certain financial
instruments that embody obligations of the issuer and have characteristics of
both liabilities and equity as liabilities. On October 29, 2003, the FASB
deferred, indefinitely, the application of paragraphs 9 and 10 of SFAS No. 150
as they relate to the fair value of mandatorily redeemable non-controlling
interests in consolidated subsidiaries that
have a finite life. The adoption of the remainder of SFAS No. 150 on July
1, 2003, as required, did not have a material effect on the Companys
consolidated financial statements.

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INDEPENDENT ACCOUNTANTS REPORT

Stockholders and Board of Directors
Vornado Operating Company
New York, New York

We have reviewed the accompanying condensed consolidated balance sheet of
Vornado Operating Company as of September 30, 2003, and the related condensed
consolidated statements of operations for the three and nine month periods
ended September 30, 2003 and 2002, and of cash flows for the nine month periods
ended September 30, 2003 and 2002. These financial statements are the
responsibility of the Companys management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them to
be in conformity with accounting principles generally accepted in the United
States of America.

We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the consolidated balance
sheet of Vornado Operating Company as of December 31, 2002, and the related
consolidated statements of operations, stockholders deficit, and cash flows
for the year then ended (not presented herein); and in our report dated March
7, 2003, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2002 is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.

DELOITTE & TOUCHE LLP

Parsippany, New Jersey
November 5, 2003

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Item 2.Managements Discussion and Analysis of Financial Condition and Results
of Operations

Certain statements contained herein constitute forward-looking statements
as such term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements are not guarantees of performance. Our future
results, financial condition and business may differ materially from those
expressed in these forward-looking statements. You can find many of these
statements by looking for words such as believes, expects, anticipates,
intends, plans or similar expressions in this Quarterly Report on Form
10-Q. These forward-looking statements are subject to numerous assumptions,
risks and uncertainties. Many of the factors that will determine these items
are beyond the Companys ability to control or predict. Factors that might
cause such a material difference include, but are not limited to: (a) the
Companys limited operating history; (b) restrictions on the Companys business
and future opportunities; (c) dependence upon Vornado Realty Trust; (d) the
substantial influence of the Companys controlling stockholders and conflicts
of interest; (e) the bankruptcy of the Companys joint venture partner in
AmeriCold Logistics, Crescent Operating, Inc.; (f) risks associated with
potential investments and the ability to manage those investments; (g)
competition; (h) the Companys obligations under the Revolving Credit Agreement
with Vornado Realty Trust; (i) AmeriCold Logistics obligations under the lease
agreements with the Vornado REIT/Crescent REIT Partnership (the Landlord);
(j) the Companys limited financial resources; (k) dependence on key personnel;
(l) potential anti-takeover effects of the Companys charter documents and
Stockholder Protection Rights Plan and applicable law; (m) dependence on
distributions from subsidiaries; (n) potential costs of compliance with
environmental laws; (o) changes in the general economic climate; and (p)
government regulations. See Item 1. Business - Risk Factors in the Companys
Annual Report on Form 10-K for the year ended December 31, 2002.

For these forward-looking statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue reliance
on the forward-looking statements, which speak only as of the date of this
Quarterly Report on Form 10-Q or the date of any document incorporated by
reference. All subsequent written and oral forward-looking statements
attributable to the Company or any person acting on the Companys behalf are
expressly qualified in their entirety by the cautionary statements contained or
referred to in this paragraph. The Company does not undertake any obligation
to release publicly any revisions to our forward-looking statements to reflect
events or circumstances after the date of this Quarterly Report on Form 10-Q.

Overview

Managements Discussion and Analysis of Financial Condition and Results of
Operations considers the Companys consolidated financial statements for the
three and nine months ended September 30, 2003 and 2002.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. Set forth below is a summary of the accounting
policies that management believes are critical to the preparation of the
consolidated financial statements. The summary should be read in conjunction
with the more complete discussion of the Companys significant accounting
policies included in Note 2 to the consolidated financial statements included
in Item 8. Financial Statements and Supplementary Data in the Companys
Annual Report on Form 10-K for the year ended December 31, 2002.

Investments in and Advances to AmeriCold Logistics

The Companys 60% interest in AmeriCold Logistics is currently accounted
for under the equity method of accounting as Crescent Operating Inc., the
Companys partner in AmeriCold Logistics, has substantive participating rights.
The investments in and advances to AmeriCold Logistics are recorded initially
at cost and subsequently adjusted for the Companys share of comprehensive
income or loss and cash distributions or principal repayments from AmeriCold
Logistics. The interest earned on the advances to AmeriCold Logistics is
recorded as a component of income or loss from AmeriCold Logistics. The
Company does not record comprehensive losses in excess of the cost of its
investments in and advances to AmeriCold Logistics, as the Company is not
liable for the obligations of, or otherwise committed to provide additional
financial support to, AmeriCold Logistics. The Company did not record its 60%
share of AmeriCold Logistics net loss for the nine months ended September 30,
2003 as the Companys investments in and advances to AmeriCold Logistics were
fully absorbed by the Companys share of the

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##### Table of Contents



comprehensive losses of AmeriCold Logistics at December 31, 2002. The Company
will record its share of future income of AmeriCold Logistics only for the
portion of such income that is in excess of its share of losses not previously
recorded.

In January 2003, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation (FIN) No. 46, Consolidation of Variable Interest
Entities, an interpretation of ARB No. 51. FIN No. 46 requires the
consolidation of an entity by an enterprise if (i) that enterprise, known as a
primary beneficiary, has an interest that will absorb a majority of the
entitys expected losses if they occur, receive a majority of the entitys
expected residual returns if they occur, or both and (ii) the entity is a
variable interest entity. An entity is a variable interest entity if (a) the
total equity investment at risk in the entity is not sufficient to permit the
entity to finance its activities without additional subordinated financial
support from other parties or (b) the equity investors do not have the
characteristics of a controlling financial interest in the entity. The initial
determination of whether an entity is a variable interest entity shall be made
as of the date at which an enterprise becomes involved with the entity and
reconsidered as of the date that one of three triggering events described in
FIN No. 46 occurs.

The Company previously disclosed that its investments in AmeriCold
Logistics met the criteria for consolidation under FIN No. 46 and it would
consolidate AmeriCold Logistics beginning July 1, 2003 by restating its prior
period consolidated financial statements. However, in October 2003, FASB
issued FASB Staff Position No. FIN 46-6, Effective Date of FASB Interpretation
No. 46, Consolidation of Variable Interest Entities.This position allows
public entities to defer the date for implementing FIN No. 46, except for
certain required disclosures, until the end of the first interim or annual
period ending after December 15, 2003 if certain conditions apply. The Company
has concluded that AmeriCold Logistics qualifies for deferral and has elected
to implement FIN No. 46 on December 31, 2003. Additionally, the Company is
re-evaluating its implementation alternatives (i.e., restatement of its
previously issued consolidated financial statements or a cumulative-effect
adjustment). Had AmeriCold Logistics been consolidated as of September 30,
2003, the Companys accumulated deficit and accumulated other comprehensive
loss would have increased to $92,230,000 and $17,222,000, respectively.

Results of Operations

The Company had a net loss of $267,000 for the three months ended
September 30, 2003, compared to $5,730,000 for the three months ended September
30, 2002, a decrease of $5,463,000, and $645,000 for the nine months ended
September 30, 2003, compared to $14,526,000 for the nine months ended September
30, 2002, a decrease of $13,881,000.

General and administrative expenses were $358,000 for the three months
ended September 30, 2003, compared to $434,000 for the three months ended
September 30, 2002, a decrease of $76,000. General and administrative expenses
were $892,000 for the nine months ended September 30, 2003, compared to
$1,007,000 for the nine months ended September 30, 2002, a decrease of
$115,000. These decreases resulted primarily from lower franchise taxes due to
the decline in the book value of the Companys investments in and advances to
AmeriCold Logistics and lower professional fees, partially offset by higher
corporate insurance costs.

Interest and debt expense to Vornado Realty Trust was $387,000 for the
three months ended September 30, 2003, compared to $514,000 for the three
months ended September 30, 2002, a decrease of $127,000, and $1,168,000 for the
nine months ended September 30, 2003, compared to $1,500,000 for the nine
months ended September 30, 2002, a decrease of $332,000. These decreases
resulted primarily from lower average balances outstanding and lower LIBOR
rates under the Revolving Credit Agreement with Vornado Realty Trust during the
current years periods.

The following represents the components of the Companys income (loss) from
AmeriCold Logistics:

|                                                                         |  |                      |     |                     |  |      |        |      |  |   |       |  |  |   |         |  
|------------------------------------------------------------------------ |  | -------------------- | --- | ------------------- |  | ---- | ------ | ---- |  | - | ----- |  |  | - | ------- | -
|                                                                         |  | For The Three Months |     | For The Nine Months
|                                                                         |  | Ended September 30,  |     | Ended September 30,
|                                                                         |  |                      |     |                    
|(amounts in thousands)                                                   |  | 2003                 |     | 2002                |  | 2003 |        | 2002
|                                                                         |  |                      |     |                     |  |      |        |     
|Equity in loss                                                           |  | $                    |    |                     |  | $    | (5,555 | )    |  | $ |      |  |  | $ | (13,539 | )
|Interest on loans                                                        |  |                      | 247 |                     |  |      | 773    |      |  |   | 754   |  |  |   | 1,519   |  
|Recovery from repayments of loans
previously reduced by equity
in losses |  |                      | 230 |                     |  |      |       |      |  |   | 658   |  |  |   |        |  
|                                                                         |  |                      |     |                     |  |      |        |      |  |   |       |  |  |   |         |  
|                                                                         |  | $                    | 477 |                     |  | $    | (4,782 | )    |  | $ | 1,412 |  |  | $ | (12,020 | )
|                                                                         |  |                      |     |                     |  |      |        |      |  |   |       |  |  |   |         |  

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The Company did not record $6,139,000 and $17,390,000 (the respective 60%
shares of AmeriCold Logistics net losses of $10,231,000 and $28,983,000) for
the three and nine months ended September 30, 2003, respectively, as the
Companys investments in and advances to AmeriCold Logistics were fully
absorbed by the Companys share of the comprehensive losses of AmeriCold
Logistics at December 31, 2002 and as the Company is not liable for the
obligations of, or otherwise committed to provide additional financial support
to, AmeriCold Logistics. In the three and nine months ended September 30,
2002, the Company recorded its 60% share of AmeriCold Logistics net losses of
$9,258,000 and $22,565,000 for those periods, or $5,555,000 and $13,539,000,
respectively. The decreases in interest earned on the Companys loans to
AmeriCold Logistics of $526,000 and $765,000 are attributable to lower average
loans outstanding in the current years periods. The amounts of $230,000 and
$658,000 recognized as income in the current years respective periods
represent repayments from AmeriCold Logistics of its loans from the Company
that were previously reduced to zero by equity in losses of AmeriCold
Logistics.

To keep the Companys stockholders knowledgeable about the Companys sole
investment, a discussion of AmeriCold Logistics results of operations is
included below. The amounts discussed below in AmeriCold Logistics Results
of Operations for the Three and Nine Months Ended September 30, 2003 and 2002
exclude the interest income and the gains of $230,000 and $658,000 recorded by
the Company during the three and nine month periods ended September 30, 2003.

AmeriCold Logistics Results of Operations for the Three and Nine Months Ended
September 30, 2003 and 2002

The following is a discussion of the results of operations of AmeriCold
Logistics, the Companys investee in the temperature controlled logistics
business. See the Companys Annual Report on Form 10-K for the year ended
December 31, 2002 for a discussion of this business and see Note 3 to the
unaudited consolidated financial statements included in this Quarterly Report
on Form 10-Q for condensed balance sheet and operating data of AmeriCold
Logistics. The data below represents 100% of this business, in which the
Company holds a 60% interest. For the purpose of the discussion below, Leased
Operations refer to operations at warehouses leased by AmeriCold Logistics and
Other Operations refer to (i) warehouses managed by AmeriCold Logistics for
the accounts of customers (Managed Warehouses), (ii) Transportation
Management Services, which includes freight routing, dispatching, freight rate
negotiation, backhaul coordination, and distribution channel assessments, and
(iii) Quarry Operations. In December 2002, AmeriCold Logistics sold its
quarries to a joint venture owned 44% by Vornado Realty Trust and 56% by
Crescent Real Estate Equities Company, the owners of the Landlord.
Additionally, AmeriCold Logistics agreed to manage and operate the quarries for
an annual management fee of approximately $200,000 plus all direct expenses
incurred as the operator.



| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Certain prior period amounts in this discussion were reclassified to
conform to the current period presentation.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Revenues were $163,676,000 for the three months ended September 30,
2003, compared to $161,669,000 for the three months ended September 30,
2002, an increase of $2,007,000, and $477,556,000 for the nine months
ended September 30, 2003, compared to $471,159,000 for the nine months
ended September 30, 2002, an increase of $6,397,000. Revenues from
Leased Operations were $109,921,000 for the three months ended September
30, 2003, compared to $110,342,000 for the three months ended September
30, 2002, a decrease of $421,000, and $317,508,000 for the nine months
ended September 30, 2003, compared to $322,544,000 for the nine months
ended September 30, 2002, a decrease of $5,036,000. Revenues from Other
Operations were $53,755,000 for the three months ended September 30,
2003, compared to $51,327,000 for the three months ended September 30,
2002, an increase of $2,428,000, and $160,048,000 for the nine months
ended September 30, 2003, compared to $148,615,000 for the nine months
ended September 30, 2002, an increase of $11,433,000.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The gross margin for Leased Operations was $38,603,000, or 35.1%,
for the three months ended September 30, 2003, compared to $36,478,000,
or 33.1%, for the three months ended September 30, 2002, an increase of
$2,125,000, and $114,819,000, or 36.2%, for the nine months ended
September 30, 2003, compared to $114,267,000, or 35.4%, for the nine
months ended September 30, 2002, an increase of $552,000. The revenue
decreases in Leased Operations for both the three and nine months ended
September 30, 2003 were primarily the result of lower storage and
accessorial revenues, partially offset by increased handling revenues.
Gross margins in the current years periods increased as a result of cost
containment measures.

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##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The increases in revenues from Other Operations were largely due to
(i) new Managed Warehouse contracts that commenced after the first
quarter of 2002 and (ii) increased volume from two significant
customers, partially offset by (iii) the discontinuation of
Transportation Management Services business with lower margin customers
and (iv) the effect of the December 2002 quarry sale noted above.
Operating income from Other Operations was $4,539,000 for the three
months ended September 30, 2003, compared to $3,107,000 for the three
months ended September 30, 2002, an increase of $1,432,000, and
$12,951,000 for the nine months ended September 30, 2003, compared to
$9,860,000 for the nine months ended September 30, 2002, an increase of
$3,091,000. These increases resulted chiefly from the new Managed
Warehouse contracts noted above and more favorable rates with
transportation carriers, partially offset by the effect of the December
2002 quarry sale.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Rent expense was $41,190,000 for the three months ended September
30, 2003, compared to $35,936,000 for the three months ended September
30, 2002, an increase of $5,254,000, and $122,494,000 for the nine months
ended September 30, 2003, compared to $109,824,000 for the nine months
ended September 30, 2002, an increase of $12,670,000. These increases
resulted from higher percentage rent in the current year as the lease
amendment with the Landlord that reduced percentage rent for the 2002
lease year expired.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | General and administrative expenses were $8,681,000 for the three
months ended September 30, 2003, compared to $8,885,000 for the three
months ended September 30, 2002, a decrease of $204,000, and $24,500,000
for the nine months ended September 30, 2003, compared to $25,704,000 for
the nine months ended September 30, 2002, a decrease of $1,204,000.
These decreases were primarily a result of cost containment measures.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Depreciation and amortization expense was $2,469,000 for the three
months ended September 30, 2003, compared to $2,606,000 for the three
months ended September 30, 2002, a decrease of $137,000, and $7,327,000
for the nine months ended September 30, 2003, compared to $7,874,000 for
the nine months ended September 30, 2002, a decrease of $547,000. These
decreases were primarily attributable to the December 2002 quarry sale.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Interest expense was $885,000 for the three months ended September
30, 2003, compared to $1,521,000 for the three months ended September 30,
2002, a decrease of $636,000, and $2,539,000 for the nine months ended
September 30, 2003, compared to $3,639,000 for the nine months ended
September 30, 2002, a decrease of $1,100,000. These decreases resulted
from lower average borrowings outstanding in the current year, partially
offset by the interest on higher average deferred rent balances in the
current year.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Other expenses, net was $148,000 for the three months ended
September 30, 2003, compared to other income, net of $105,000 for the
three months ended September 30, 2002, a decrease of $253,000. Other
income, net was $107,000 for the nine months ended September 30, 2003,
compared to $349,000 for the nine months ended September 30, 2002, a
decrease of $242,000. The decreases for both periods resulted from lower
interest rates on cash balances and a $115,000 adjustment to the gain on
the quarry sale. In addition, the decrease for the nine month period
includes the $140,000 loss on the March 2003 accounts receivable sale
(see Liquidity and Capital Resources below). This decrease was
partially offset by foreign currency translation gains at AmeriCold
Logistics warehouse in Canada.

Liquidity and Capital Resources

The Company has a $75,000,000 unsecured Revolving Credit Agreement with
Vornado Realty Trust which expires on December 31, 2004. Borrowings under this
facility bear interest at LIBOR plus 3% (4.12% at September 30, 2003). The
Company pays Vornado Realty Trust a commitment fee equal to 1% per annum on the
average daily unused portion of the facility pursuant thereto; such commitment
fees were $384,000 and $333,000 for the nine months ended September 30, 2003
and 2002, respectively. Amounts may be borrowed under the Revolving Credit
Agreement, repaid and reborrowed from time to time on a revolving basis (so
long as the principal amount outstanding at any time does not exceed
$75,000,000). Principal payments are not required under the Revolving Credit
Agreement during its term. The Revolving Credit Agreement prohibits the
Company from incurring indebtedness to third parties (other than certain
purchase money debt and certain other exceptions) and prohibits the Company
from paying any dividends. The Company currently has no external sources of
financing except this facility. At September 30, 2003, $1,198,000 of interest
and commitment fees were unpaid, which reduces the availability under the
Revolving Credit Agreement to $49,998,000.

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At September 30, 2003, $7,712,000 was outstanding under the Companys
secured loans to AmeriCold Logistics, which mature on December 31, 2004. These
loans are carried at zero in the Companys consolidated
balance sheet as they have been fully absorbed by the Companys share of
comprehensive losses of AmeriCold Logistics. AmeriCold Logistics is required
to make loan payments approximating $159,000 per month. The portions of the
loan payments made during the three and nine months ended September 30, 2003
that represented the repayment of principal were $230,000 and $658,000,
respectively, and are reflected as income from AmeriCold Logistics as this
principal was previously reduced to zero by equity in losses of AmeriCold
Logistics.

AmeriCold Logistics has reported losses since its inception and, at
September 30, 2003, the Companys 60% share of AmeriCold Logistics partners
deficit was $42,370,000, which includes $43,868,000 of deferred rent (rent
recognized as expense but not paid in cash) to the Landlord. On March 7, 2003,
AmeriCold Logistics and the Landlord extended the deferred rent period in
AmeriCold Logistics leases with the Landlord to December 31, 2004 from
December 31, 2003. Based on its right to defer rent, the management of
AmeriCold Logistics anticipates it will have sufficient cash flows to operate
at least through September 30, 2004. AmeriCold Logistics anticipates that by
the end of the first quarter of 2004, the Landlord will restructure the leases
to provide additional cash flow to AmeriCold Logistics. Further, the
management of AmeriCold Logistics is also considering the financing of certain
trade receivables and equipment. In the absence of such financings and the
anticipated lease restructuring, AmeriCold Logistics will not have the ability
to distribute funds to the Company and in turn, the Company will not have
resources sufficient to repay its $25,002,000 loan from Vornado Realty Trust
due December 31, 2004, as described above.

During the nine months ended September 30, 2003, AmeriCold Logistics
exercised its right, pursuant to the terms of its leases with the Landlord, to
defer the payment of rent. AmeriCold Logistics deferred rent liability at
September 30, 2003 is as follows:

|                                                          |  |           |        | 
|--------------------------------------------------------- |  | --------- | ------ | 
|(amounts in thousands)                                    |  | Total (1)
|                                                          |  |          
|Deferred during the three months ended September 30, 2003 |  | $         | 14,026 | 
|Deferred during the three months ended June 30, 2003      |  |           | 12,877 | 
|Deferred during the three months ended March 31, 2003     |  |           | 5,627  | 
|Aggregate deferral at December 31, 2002                   |  |           | 40,583 | 
|                                                          |  |           |        | 
|                                                          |  | $         | 73,113 | 
|                                                          |  |           |        | 

(1) The Company does not guarantee AmeriCold Logistics deferred rent liability.

On March 28, 2003, AmeriCold Logistics sold, without recourse, accounts
receivable of $6,640,000 to a joint venture owned 44% by Vornado Realty Trust
and 56% by Crescent Real Estate Equities Company, the owners of the Landlord,
for $6,500,000 in cash. AmeriCold Logistics recognized a loss of $140,000 on
the sale. AmeriCold Logistics also agreed to act as agent to collect the
accounts receivable. The accounts receivable have been collected in full.

On April 30, 2002, the American Stock Exchange (AMEX) notified the
Company that it had fallen below the AMEXs continued listing standards because
it had losses from continuing operations and/or net losses in two of its three
most recent fiscal years and it had not maintained at least $2,000,000 in
stockholders equity. The April 30, 2002 letter offered the Company an
opportunity to submit a plan that would ultimately bring the Company into
compliance with the AMEXs continued listing standards. On June 6, 2002, the
Company submitted a plan to the AMEX which included the anticipated
restructuring of AmeriCold Logistics leases with the Landlord to provide
additional cash flow; the sale of non-core assets by AmeriCold Logistics; and
operating improvements. After reviewing the Companys plan, the AMEX notified
the Company by letter dated July 8, 2002 that it accepted the Companys plan of
compliance and granted the Company an extension of time to regain compliance
with the continued listing standards. On June 30, 2003, the Company received
notice that, due to its continuing failure to meet the listing standards, the
AMEX was going to remove the Companys common stock from listing on the AMEX,
subject to approval by the Securities and Exchange Commission (SEC). As a
result, the AMEX suspended trading in the Companys common stock as of the
close of business on July 11, 2003. Effective July 14, 2003, the Companys
common stock began trading over the counter under its newly assigned ticker
symbol, VOOC. On July 24, 2003, the SEC issued an order to approve the removal
of the Companys common stock from listing on the AMEX. Effective July 25,
2003, the Companys common stock was eligible for trading on the OTC Bulletin
Board. Trading of the Companys common stock through market makers may involve
decreased liquidity and risks not present when common stock is traded on a
securities exchange.

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Cash Flows for the Nine Months Ended September 30, 2003

Net cash provided by operating activities of $55,000 is comprised of (i)
the net change in operating assets and liabilities of $1,358,000, partially
offset by (ii) a net loss of $645,000 and (iii) the non-cash and non-operating
income from AmeriCold Logistics of $658,000.

Cash provided by investing activities of $658,000 resulted from repayments
of loans to AmeriCold Logistics.

There were no cash flows from financing activities.

Cash Flows for the Nine Months Ended September 30, 2002

Net cash provided by operating activities of $91,000 is comprised of (i)
the non-cash loss from AmeriCold Logistics of $13,539,000 and (ii) the net
change in operating assets and liabilities of $1,078,000 partially offset by
(iii) a net loss of $14,526,000.

Cash provided by investing activities of $391,000 resulted from repayments
of loans to AmeriCold Logistics.

Cash provided by financing activities of $65,000 resulted from borrowings
under the Companys Revolving Credit Agreement with Vornado Realty Trust.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

See Item 7A. Quantitative and Qualitative Disclosures about Market Risk
in the Companys Annual Report on Form 10-K for the year ended December 31,
2002. There has been no material change to this information.

The fair value of the Companys note payable to Vornado Realty Trust,
estimated by discounting the future cash flows using current market rates
available to the Company, is approximately $2,900,000 less than the carrying
amount of such debt at September 30, 2003. Such fair value estimate is not
necessarily indicative of the amount that would be paid upon liquidation of the
Companys note payable.




Item 4. Controls and Procedures

(a)  Disclosure Controls and Procedures. The Companys management, with
the participation of the Companys Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Companys disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended) as of the end of the period
covered by this report. Based on such evaluation, the Companys Chief
Executive Officer and Chief Financial Officer have concluded that, as of the
end of such period, the Companys disclosure controls and procedures are
effective.

(b)  Internal Control Over Financial Reporting. There have not been any
changes in the Companys internal control over financial reporting during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Companys internal control over
financial reporting.

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PART II. OTHER INFORMATION




Item 1.Legal Proceedings

The Company is from time to time involved in legal actions arising in the
ordinary course of business. In the opinion of management, after consultation
with legal counsel, the outcome of such matters will not have a material effect
on the Companys financial condition, results of operations or cash flows.




Item 5.Other Information

Anthony Cossentino became the Chief Financial Officer of AmeriCold
Logistics on September 22, 2003. Mr. Cossentino was formerly the President and
Chief Executive Officer of Jazz Photo Corp., a privately-held designer,
importer and distributor of photographic equipment. Prior thereto, from
January 1995 to May 2001, he was the Chief Financial Officer of CS Integrated
LLC, a provider of logistics services with over 100 temperature controlled
warehouses throughout the United States and Europe and a wholly-owned
subsidiary of ProLogis. Mr. Cossentino, a certified public accountant,
replaced Jonathan C. Daiker, who resigned from the position of Chief Financial
Officer effective June 5, 2003.

Subject to confirmation of a plan of reorganization under Chapter 11 of
the United States Bankruptcy Code, Crescent Operating, Inc., the Companys
joint venture partner in AmeriCold Logistics, is expected to transfer its
interest in AmeriCold Logistics to an entity to be owned by the shareholders of
Crescent Real Estate Equities Company. The shareholders of Crescent Operating,
Inc. approved the plan of reorganization on March 6, 2003. It is uncertain
whether this plan will be confirmed and what effect, if any, this plan and the
proposed change in ownership will have on the operations and management of
AmeriCold Logistics.




Item 6.Exhibits and Reports on Form 8-K:

(a)  Exhibits required by Item 601 of Regulation S-K are filed herewith and are listed in the attached Exhibit Index.

(b)  Reports on Form 8-K:

During the quarter ended September 30, 2003, Vornado Operating Company filed the following reports
on Form 8-K:

| |  |                         |  |                                                          |  |                   
| |  | ----------------------- |  | -------------------------------------------------------- |  | ------------------
| |  | Period Covered (Date of |  |                                                          |  |                   
| |  | Event Reported)         |  | Items
Reported                                           |  | Date Filed        
| |  |                         |  |                                                          |  |                   
| |  | July 9, 2003            |  | Press release  suspension of trading
of common stock    |  | July 9, 2003      
| |  |                         |  |                                                          |  |                   
| |  | July 14, 2003           |  | Press release  new ticker symbol for
common stock       |  | July 15, 2003     
| |  |                         |  |                                                          |  |                   
| |  | September 23, 2003      |  | Press release  Vornado Realty Trust
investor conference |  | September 23, 2003

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                       |  |              |  |                                               
|---------------------- |  | ------------ |  | ----------------------------------------------
|                       |  |              |  | VORNADO OPERATING COMPANY                     
|                       |  |              |  |                                               
|                       |  | (Registrant)
|                       |  |              |  |                                               
|Date: November 5, 2003 |  | By:          |  | /s/ JOSEPH MACNOW                             
|                       |  |              |  |                                               
|                       |  |              |  | Joseph Macnow,
Executive Vice President      
|                       |  |              |  | Finance and Administration and Chief Financial
|                       |  |              |  | Officer (duly authorized officer and principal
|                       |  |              |  | financial and accounting officer)             

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Exhibit Index

|            |  |                                                                                                                                                                                                                                                          |  |  
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -
|Exhibit No. |  |                                                                                                                                                                                                                                                          |  |  
|            |  |                                                                                                                                                                                                                                                          |  |  
|            |  | The following is a list of all exhibits filed as part of this report.                                                                                                                                                                                    |  |  
|            |  |                                                                                                                                                                                                                                                          |  |  
|3.1         |  | Restated Certificate of Incorporation of Vornado Operating Company
(incorporated by reference to Exhibit 3.1 of the Companys
Registration Statement on Form S-11 (File No. 333-40701), as filed
with the Commission on September 28, 1998)              |  | *
|            |  |                                                                                                                                                                                                                                                          |  |  
|3.2         |  | Amended and Restated Bylaws of Vornado Operating Company
(incorporated by reference to Exhibit 3.2 of the Companys Quarterly
Report on Form 10-Q for the period ended March 31, 2000 (File No.
001-14525), as filed with the Commission on May 9, 2000) |  | *
|            |  |                                                                                                                                                                                                                                                          |  |  
|15.1        |  | Letter of Deloitte & Touche LLP regarding unaudited interim financial
information                                                                                                                                                                        |  |  
|            |  |                                                                                                                                                                                                                                                          |  |  
|31.1        |  | Certification by the Chief Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended                                                                                                                               |  |  
|            |  |                                                                                                                                                                                                                                                          |  |  
|31.2        |  | Certification by the Chief Financial Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended                                                                                                                               |  |  
|            |  |                                                                                                                                                                                                                                                          |  |  
|32.1        |  | Certification by the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002                                                                                                    |  |  
|            |  |                                                                                                                                                                                                                                                          |  |  
|32.2        |  | Certification by the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002                                                                                                    |  |  



---

|* |  | Incorporated by reference.
|- |  | --------------------------

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