EXHIBIT INDEX ON PAGE 13

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-K/A

                                (AMENDMENT NO. 1)

[x]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

For the fiscal year ended  DECEMBER 31, 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                     (IRS Employer
     incorporation or organization)                   Identification No.)

  210 ROUTE 4 EAST, PARAMUS, NEW JERSEY                      07652
--------------------------------------------         ---------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code:  (201) 587-7721
                                                    ----------------------------


        Securities registered pursuant to Section 12(b) of the Act: NONE

        Securities registered pursuant to Section 12(g) of the Act: NONE

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. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES [ ] NO [X]


The aggregate market value of the voting and non-voting common shares held by
non-affiliates of the registrant (i.e., by persons other than officers and
directors of Vornado Operating Company) as of June 30, 2003 was $2,387,665.

As of April 16, 2004, there were 4,068,924 shares of the registrant's common
stock, par value $0.01 per share, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None



                                       1

                                EXPLANATORY NOTE

      This Form 10-K/A amends: Item 10. Directors and Executive Officers of the
Registrant; Item 11. Executive Compensation; Item 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters; Item
13. Certain Relationships and Related Transactions; and Item 14. Principal
Accountant Fees and Services of Part III of the Company's Annual Report on Form
10-K for the year ended December 31, 2003 to include information which the
Company originally intended to incorporate by reference to portions of the Proxy
Statement for the Annual Meeting of Stockholders to be held on May 27, 2004.

      Therefore, Items 10, 11, 12, 13 and 14 of Part III are replaced in their
entirety with the revised Items set forth herein. No other amendments have been
made to the Form 10-K for the year ended December 31, 2003. Certain information
in this first amendment to the Form 10-K is as of April 16, 2004, the record
date for the determination of stockholders entitled to notice of and to vote at
the annual meeting of stockholders to be held on May 27, 2004. Otherwise, the
Form 10-K has not been updated for any events that occurred subsequent to the
date of the filing of the Form 10-K.



                                       2

                                    PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

      Vornado Operating Company's (the "Company") Board of Directors has six
members. The Company's restated certificate of incorporation provides that the
directors of the Company be divided into three classes, as nearly equal in
number as reasonably possible, as determined by the Board. The term of office of
Class III directors will expire at the annual meeting of stockholders in 2004,
the term of office of Class I directors will expire at the annual meeting of
stockholders in 2005 and the term of office of Class II directors will expire at
the annual meeting of stockholders in 2006, with each class of directors to hold
office until their successors have been duly elected and qualified. At each
annual meeting of stockholders, directors elected to succeed the directors whose
terms expire at such annual meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders in the third year following the
year of their election and until their successors have been duly elected and
qualified.

      The following table sets forth the nominees for election to serve as
directors until the annual meeting of stockholders in 2007 (both of whom are
presently members of the Board) and the other present members of the Board.



                                                      YEAR
                                                      TERM              YEAR FIRST
                                                      WILL               APPOINTED
             NAME                  AGE               EXPIRE             AS DIRECTOR
                                                               
Nominees for Election to Serve as Directors Until the Annual Meeting in 2007
Steven Roth                         62                2004                 1998
Michael D. Fascitelli               47                2004                 1998

Present Directors Elected to Serve Until the Annual Meeting in 2005
Douglas H. Dittrick                 70                2005                 1998
Dr. Richard R. West                 66                2005                 1998

Present Directors Elected to Serve Until the Annual Meeting in 2006
Martin N. Rosen                     62                2006                 1998
Russell B. Wight, Jr.               64                2006                 1998


      Mr. Roth is Chairman of the Board and Chief Executive Officer of the
Company. Mr. Roth has been Chairman of the Board and Chief Executive Officer of
Vornado Realty Trust ("Vornado") (a real estate investment trust) since May 1989
and Chairman of the Executive Committee of the Board of Trustees of Vornado
since April 1980. Since 1968, he has been a general partner of Interstate
Properties ("Interstate") (an owner of shopping centers and an investor in
securities and partnerships) and, more recently, he has been its Managing
General Partner. In March 1995, he became Chief Executive Officer of
Alexander's, Inc. ("Alexander's") (a real estate investment trust). Mr. Roth is
also a director of Alexander's and of Capital Trust, Inc. (a real estate
lender).

      Mr. Fascitelli is President of the Company. Mr. Fascitelli has been the
President and a trustee of Vornado, and a director of Alexander's, since
December 1996. Mr. Fascitelli has been the President of Alexander's since August
2000. From December 1992 to December 1996, Mr. Fascitelli was a partner at
Goldman Sachs & Co. (an investment banking firm) in charge of its real estate
practice and was a vice president prior thereto.

      Mr. Dittrick has been the President and Chief Executive Officer of Douglas
Communications Corporation II (a cable television company) since July 1986.
Prior to July 1986, Mr. Dittrick was the President and Chief Executive Officer
of Tribune Cable Communications, a cable television subsidiary of Tribune
Company, which was sold in 1986. Mr. Dittrick is the Chairman of the Board of
Trustees of Valley Health Systems in Ridgewood, New Jersey.

      Dr. West is Dean Emeritus of the Leonard N. Stern School of Business at
New York University. He was a professor there from September 1984 until
September 1995 and Dean from September 1984 until August 1993. Prior thereto,
Dr. West was Dean of the Amos Tuck School of Business Administration at
Dartmouth College. Dr. West is also a trustee of Vornado and a director of
Alexander's, Bowne & Co., Inc. (a commercial printing company) and 20 investment
companies managed by Merrill Lynch Investment Managers.

      Mr. Rosen has been the President of United Yarn Products Co., Inc. (a
manufacturer of synthetic fiber) since 1970. Mr. Rosen is a


                                       3

board member of the YM-YWHA of North Jersey and the Daughters of Miriam Home for
the Aged Foundation.

      Mr. Wight has been a general partner of Interstate since 1968. Mr. Wight
is also a trustee of Vornado and a director of Alexander's.

      The Company is not aware of any family relationships among any directors
or executive officers of the Company or persons nominated or chosen by the
Company to become directors or executive officers. Messrs. Roth and Wight are
affiliated with each other as general partners of Interstate and through other
businesses.

Audit Committee

      The Board of Directors has an Audit Committee. Its purposes are to (i)
assist the Board in its oversight of (a) the integrity of the Company's
financial statements, (b) the Company's compliance with legal and regulatory
requirements, (c) the independent auditors' qualifications and independence, and
(d) the performance of the independent auditors and the Company's internal audit
function; and (ii) prepare an Audit Committee report as required by the
Securities and Exchange Commission ("SEC") for inclusion in the Company's annual
proxy statement. The function of the Audit Committee is oversight. The
management of the Company is responsible for the preparation, presentation and
integrity of the Company's financial statements and for the effectiveness of
internal control over financial reporting. Management is responsible for
maintaining appropriate accounting and financial reporting principles and
policies and internal controls and procedures that provide for compliance with
accounting standards and applicable laws and regulations. The independent
auditors are responsible for planning and carrying out a proper audit of the
Company's annual financial statements, reviews of the Company's quarterly
financial statements prior to the filing of each Quarterly Report on Form 10-Q,
annually auditing management's assessment of the effectiveness of internal
control over financial reporting (commencing the fiscal year ending December 31,
2004) and other procedures. The Board has adopted a written Audit Committee
Charter which is available on the Company's website, www.vornadoopco.com. The
Audit Committee consists of three members, Messrs. Dittrick, Rosen and West. Mr.
Dittrick is the Chairman of the Audit Committee.

      The Board has determined that each of Mr. Dittrick and Dr. West is an
"audit committee financial expert," as defined by SEC Regulation S-K. The Board
reached this conclusion based on each such director's relevant experience, as
described above under "Directors."

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10% of a
registered class of our equity securities, to file reports of ownership of, and
transactions in, our equity securities with the SEC. Such directors, executive
officers and 10% stockholders are also required to furnish us with copies of all
Section 16(a) reports they file.

      Based solely on a review of the Forms 3, 4 and 5, and any amendments
thereto, furnished to us, and on written representations from certain reporting
persons, we believe that there has been only one late filing under Section 16(a)
by our directors, executive officers and 10% stockholders in the year ended
December 31, 2003; this is a Form 4 for one transaction that was not filed on a
timely basis by Douglas H. Dittrick.

CODE OF ETHICS

      The Company has adopted a code of business conduct and ethics that applies
to each of its Chief Executive Officer and Executive Vice President and Chief
Financial Officer, among others. The code is posted on the Company's website at
www.vornadoopco.com. The Company intends to satisfy its disclosure obligation
regarding amendments and waivers of this code applicable to its Chief Executive
Officer and Executive Vice President and Chief Financial Officer by posting such
information on its website at www.vornadoopco.com.

EXECUTIVE OFFICERS

      For information concerning the executive officers of the Company, see
"Executive Officers of the Registrant" in Part I of this Annual Report on Form
10-K.

ITEM 11. EXECUTIVE COMPENSATION

      The Company's Chief Executive Officer and each of its two other executive
officers who were executive officers in 2003


                                       4

("Covered Executives") have not received compensation from or on behalf of the
Company since its formation, except for options and stock appreciation rights
("SARs") that were granted in 1998.

      The following table summarizes all exercises of options and SARs during
2003 and the number and value of options and SARs held at December 31, 2003 by
the Covered Executives.

  AGGREGATED OPTION/SAR EXERCISES IN 2003 AND FISCAL YEAR END OPTION/SAR VALUES



                                                         NUMBER OF
                                                         SECURITIES            VALUE OF
                                                         UNDERLYING           UNEXERCISED
                            SHARES                      UNEXERCISED          IN-THE-MONEY
                           ACQUIRED                   OPTIONS/SARS AT       OPTIONS/SARS AT
                              ON          VALUE         12/31/03(#)           12/31/03($)
                           EXERCISE     REALIZED        EXERCISABLE/         EXERCISABLE/
          NAME                (#)          ($)         UNEXERCISABLE         UNEXERCISABLE
          ----                ---          ---         -------------         -------------
                                                                
Steven Roth                    --           --           205,000/0               0/0
Michael D. Fascitelli          --           --           200,000/0               0/0
Joseph Macnow                  --           --           20,000/0                0/0


COMPENSATION OF DIRECTORS

      Messrs. Roth, Fascitelli and Wight each receive compensation from the
Company at a rate of $25,000 per year for serving as a director of the Company.
Messrs. West, Dittrick and Rosen each receive compensation from the Company at a
rate of $50,000 per year for serving as a director of the Company. Messrs. West,
Dittrick and Rosen's annual retainers are reflective of their membership on the
Audit Committee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      The Company has a Compensation Committee, consisting of Dr. West and Mr.
Rosen. There are no interlocking relationships involving the Company's Board
which require disclosure under the executive compensation rules of the SEC.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

      The Compensation Committee of the Board is responsible for establishing
the terms of the compensation of the executive officers and the granting of
awards under the Company's Omnibus Stock Plan. None of the Company's executive
officers received compensation from or on behalf of the Company in 2003.

      The factors and criteria which the Compensation Committee utilizes in
establishing the compensation of the Company's executive officers include an
evaluation of the Company's overall financial and business performance, the
officer's overall leadership, management, and contributions to the Company's
acquisitions or investments. The Compensation Committee also considers the
compensation provided in the prior year and estimates of compensation to be
provided by similar companies in the current year. The primary objective of the
Compensation Committee in establishing the terms of the executive officers'
compensation is to provide strong financial incentives for the executive
officers to maximize stockholder value. The Compensation Committee believes that
the best way to accomplish this objective is to grant substantial awards on a
fixed share basis without adjusting the number of shares granted to offset
changes in the Company's stock price.

      Section 162(m) of the Internal Revenue Code, which was adopted in 1993,
provides that, in general, publicly traded companies may not deduct, in any
taxable year, compensation in excess of $1,000,000 paid to the company's chief
executive officer and four other most highly compensated executive officers as
of the end of any fiscal year which is not "performance based," as defined in
Section 162(m). Options granted under the Omnibus Stock Plan to date satisfy the
performance-based requirements under the final regulations issued with respect
to Section 162(m).

                                                         DR. RICHARD R. WEST
                                                         MARTIN N. ROSEN




                                       5

PERFORMANCE GRAPH

      The following graph compares the performance of the Company's common
stock, par value $0.01 per share, ("Shares") with the performance of the
Russell 2000 Index and the NASDAQ Industrial Index, a peer group index. The
graph assumes that $100 was invested on December 31, 1998 in each of the
Company's Shares, the Russell 2000 Index and the NASDAQ Industrial Index,
and that all dividends were reinvested without the payment of any commission.
THERE CAN BE NO ASSURANCE THAT THE PERFORMANCE OF THE COMPANY'S SHARES WILL
CONTINUE IN LINE WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH BELOW.

                            [PERFORMANCE LINE GRAPH]




                                            12/31/98    12/31/99   12/31/00   12/31/01   12/31/02   12/31/03
                                            --------    --------   --------   --------   --------   --------
                                                                                  
 Vornado Operating Company                     100         74         26          6          6          5
 Russell 2000 Index                            100        121         118        121        96         144
 NASDAQ Industrial Index                       100        158         127        128        102        148




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

      A summary of the Company's equity compensation plans follows.

                      Equity Compensation Plan Information



                                    Number of securities                                  Number of securities
                                     to be issued upon                                 remaining available for
                                        exercise of            Weighted-average         future issuance under
                                    outstanding options,      exercise price of       equity compensation plans
                                    warrants and rights      outstanding options,       (excluding securities
          Plan Category                     (a)               warrants and rights      reflected in column (a))

                                                                             
Equity compensation plans
approved by security holders              355,554                   $5.54                      893,832

Equity compensation plans not
approved by security holders                N/A                      N/A                         N/A

Total                                     355,554                   $5.54                      893,832


      See "Note 7. Employees' Stock Options and Stock Appreciation Rights" to
the Company's consolidated financial statements included in this Annual Report
on Form 10-K.



                                       6

PRINCIPAL SECURITY HOLDERS

      The following table sets forth the number of Shares and units of limited
partnership interest ("Units") in Vornado Operating L.P., a Delaware limited
partnership ("Company L.P."), as of April 16, 2004, beneficially owned by (i)
each person who holds more than a 5% interest in the Company, (ii) directors of
the Company, (iii) named executive officers of the Company and (iv) the
directors and executive officers of the Company as a group.



                                                                      NUMBER OF
                                                                      SHARES OF
                                                                     COMMON STOCK                    PERCENT OF
                                                 ADDRESS OF           AND UNITS       PERCENT OF     ALL SHARES
                                                 BENEFICIAL          BENEFICIALLY     ALL SHARES     AND UNITS
        NAME OF BENEFICIAL OWNER                   OWNER               OWNED(1)         (1)(2)         (1)(2)
        ------------------------                   -----               --------         ------         ------
                                                                                         
NAMED EXECUTIVE OFFICERS AND DIRECTORS
Steven Roth(3)(4).....................              (5)                 726,295          6.9%          16.1%
Russell B. Wight, Jr.(3)(6)...........              (5)                 674,640          5.6%          14.9%
Michael D. Fascitelli(7)..............              (5)                 245,977          5.8%           5.2%
Douglas H. Dittrick(7)................              (5)                  25,000            *              *
Martin N. Rosen(7)....................              (5)                  15,000            *              *
Dr. Richard R. West(7)(8).............              (5)                  31,150            *              *
Joseph Macnow(7)(9)...................              (5)                  23,750            *              *
All executive officers and directors
  as a group (seven persons)(7).......              (5)               1,094,662         14.9%          22.9%
OTHER BENEFICIAL OWNERS
David Mandelbaum(3)...................              (5)                 663,099          5.3%          14.7%
Interstate Properties(3)..............              (5)                 647,150          4.9%          14.3%
Gregg Frankel(10).....................          37 Water Street         333,800          8.2%           7.4%
                                               Lebanon, NJ 08833


----------

*     Less than 1%.

(1)   Unless otherwise indicated, each person is the direct owner of, and has
      sole voting power and sole investment power with respect to, such Shares
      and Units. Numbers and percentages in the table are based on 4,068,924
      Shares and 447,017 Units outstanding as of April 16, 2004.

(2)   The total number of Shares and Units outstanding used in calculating this
      percentage assumes that all Shares that each person has the right to
      acquire within 60 days, pursuant to the exercise of options, are deemed to
      be outstanding, but are not deemed to be outstanding for the purpose of
      computing the ownership percentage of any other person.

(3)   Interstate, a partnership of which Messrs. Roth, Wight and Mandelbaum are
      the general partners, owns 200,133 Shares and 447,017 Units. Interstate
      has the right to have its Units redeemed by Company L.P. either for (a)
      cash in an amount equal to the fair market value, at the time of
      redemption, of 447,017 shares of Common Stock or (b) 447,017 shares of
      Common Stock, in each case as selected by the Company and subject to
      customary anti-dilution adjustments. Messrs. Roth, Wight and Mandelbaum
      share voting power and investment power with respect to these Shares and
      Units.

(4)   Includes 4,145 Shares owned by the Daryl and Steven Roth Foundation, over
      which Mr. Roth holds sole voting power and sole investment power. Does not
      include 1,800 Shares owned by Mr. Roth's wife, as to which Mr. Roth
      disclaims any beneficial interest.

(5)   The address of such person(s) is c/o Vornado Operating Company, 210 Route
      4 East, Paramus, New Jersey 07652.

(6)   Includes 4,690 Shares owned by the Wight Foundation, over which Mr. Wight
      holds sole voting power and sole investment power.

(7)   The number of Shares beneficially owned by the following persons includes
      the number of Shares indicated due to vesting of options: Michael D.
      Fascitelli -- 200,000; Douglas H. Dittrick -- 15,000; Martin N. Rosen --
      15,000; Dr. Richard R. West -- 15,000; Joseph Macnow -- 20,000; and all
      directors and executive officers as a group -- 265,000.



                                       7

(8)   Dr. West and his wife own 150 of these Shares jointly.

(9)   Mr. Macnow and his wife own 3,750 of these Shares jointly.

(10)  Based on a Schedule 13G filed on May 2, 2002, Gregg Frankel has the sole
      power to vote or to direct the vote of, and the sole power to dispose or
      to direct the disposition of, 333,800 Shares. 141,300 of the 333,800
      Shares are held in accounts for Mr. Frankel's minor children.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

VORNADO AGREEMENT

      The Company and Vornado Realty Trust ("Vornado") have entered into an
agreement (the "Vornado Agreement") pursuant to which, among other things, (a)
Vornado will under certain circumstances offer the Company an opportunity to
become the lessee of certain real property owned now or in the future by Vornado
(under mutually satisfactory lease terms) and (b) the Company will not make any
real estate investment or other REIT-Qualified Investment, as defined below,
unless it first offers Vornado the opportunity to make such investment and
Vornado has rejected that opportunity.

      More specifically, the Vornado Agreement requires, subject to certain
terms, that Vornado provide the Company with an opportunity (a "Tenant
Opportunity") to become the lessee of any real property owned now or in the
future by Vornado if Vornado determines in its sole discretion that, consistent
with Vornado's status as a real estate investment trust ("REIT"), it is required
to enter into a "master" lease arrangement with respect to such property and
that the Company is qualified to act as lessee thereof. In general, a master
lease arrangement is an arrangement pursuant to which an entire property or
project (or a group of related properties or projects) is leased to a single
lessee. Under the Vornado Agreement, the Company and Vornado will negotiate with
each other on an exclusive basis for 30 days regarding the terms and conditions
of the lease in respect of each Tenant Opportunity. If a mutually satisfactory
agreement cannot be reached within the 30-day period, Vornado may for a period
of one year thereafter enter into a binding agreement with respect to such
Tenant Opportunity with any third party on terms no more favorable to the third
party than the terms last offered to the Company. If Vornado does not enter into
a binding agreement with respect to such Tenant Opportunity within such one-year
period, Vornado must again offer the Tenant Opportunity to the Company in
accordance with the procedures specified above prior to offering such Tenant
Opportunity to any other party.

      In addition, the Vornado Agreement prohibits the Company from making (i)
any investment in real estate (including the provision of services related to
real estate, real estate mortgages, real estate derivatives or entities that
invest in the foregoing) or (ii) any other REIT-Qualified Investment, unless it
has provided written notice to Vornado of the material terms and conditions of
the investment opportunity and Vornado has determined not to pursue such
investment either by providing written notice to the Company rejecting the
opportunity within ten days from the date of receipt of notice of the
opportunity or by allowing such ten-day period to lapse. As used herein,
"REIT-Qualified Investment" means an investment from which at least 95% of the
gross income would qualify under the 95% gross income test set forth in Section
856(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code") (or
could be structured to so qualify), and the ownership of which would not cause
Vornado to violate the asset limitations set forth in Section 856(c)(4) of the
Code (or could be structured not to cause Vornado to violate the Section
856(c)(4) limitations); provided, however, that "REIT-Qualified Investment" does
not include an investment in government securities, cash or cash items (as
defined for purposes of Section 856(c)(4) of the Code), money market funds,
certificates of deposit, commercial paper having a maturity of not more than 90
days, bankers' acceptances or the property transferred to the Company by
Vornado. The Vornado Agreement also requires the Company to assist Vornado in
structuring and consummating any such investment which Vornado elects to pursue,
on terms determined by Vornado. In addition, the Company has agreed to notify
Vornado of, and make available to Vornado, investment opportunities developed by
the Company or of which the Company becomes aware but is unable or unwilling to
pursue.

      Under the Vornado Agreement, Vornado provides the Company with certain
administrative, corporate, accounting, financial, insurance, legal, tax, data
processing, human resources and operational services. Also, Vornado makes
available to the Company, at Vornado's offices, space for the Company's
principal corporate office. For these services, the Company compensates Vornado
in an amount determined in good faith by Vornado as the amount an unaffiliated
third party would charge the Company for comparable services and reimburses
Vornado for certain costs incurred and paid to third parties on behalf of the
Company. For such services, the Company paid $330,000 for the year ended
December 31, 2003.

      Vornado and the Company each have the right to terminate the Vornado
Agreement if the other party is in material default of the Vornado Agreement or
upon 90 days written notice to the other party at any time after December 31,
2003. In addition, Vornado has the right to terminate the Vornado Agreement upon
a change in control of the Company.



                                       8

      The Company's charter specifies that one of its corporate purposes is to
perform under the Vornado Agreement and, for so long as the Vornado Agreement
remains in effect, prohibits the Company from making any real estate investment
or other REIT-Qualified Investment without first offering the opportunity to
Vornado in the manner specified in the Vornado Agreement.

THE COMPANY'S MANAGEMENT

      Messrs. Roth, Fascitelli, West and Wight are directors of the Company and
trustees of Vornado. Mr. Roth is the Chairman of the Board and Chief Executive
Officer of the Company and of Vornado. Mr. Fascitelli is the President of the
Company and of Vornado. Certain other members of the Company's senior management
hold corresponding positions with Vornado.

VORNADO OPERATING L.P.

      The Company holds its assets and conducts its business through Company
L.P. The Company is the sole general partner of and as of April 16, 2004, 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.

      The remaining 9.9% partnership interest in Company L.P., or 447,017 Units,
is owned by Interstate. Interstate's partners are Steven Roth (Chairman of the
Board and Chief Executive Officer of Vornado and the Company), David Mandelbaum
(a trustee of Vornado) and Russell B. Wight, Jr. (a trustee of Vornado and a
director of the Company). Interstate has the right to have its limited
partnership interest in Company L.P. redeemed by Company L.P. either for (a)
cash in an amount equal to the fair market value, at the time of redemption, of
447,017 shares of Common Stock or (b) 447,017 shares of Common Stock, in each
case as selected by the Company and subject to customary anti-dilution
adjustments. As of April 16, 2004, Interstate and its partners owned
approximately 11.1% of the common shares of beneficial interest of Vornado and
approximately 7.9% of the Company's Common Stock.

REVOLVING CREDIT AGREEMENT

      The Company has a $75,000,000 unsecured Revolving Credit Agreement with
Vornado which expires on December 31, 2004. Borrowings under this facility bear
interest at LIBOR plus 3% (4.12% at December 31, 2003). The Company pays Vornado
a commitment fee equal to 1% per annum on the average daily unused portion of
the facility pursuant thereto; for the year ended December 31, 2003, the Company
recorded commitment fees of $505,000. 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. Debt under the Revolving Credit Agreement is fully
recourse against the Company. At December 31, 2003, $25,394,000 was outstanding
under the Revolving Credit Agreement (the largest amount outstanding during
2003). See "Note 2. Ability to Continue as a Going Concern" to the Company's
consolidated financial statements in this Annual Report on Form 10-K as to the
Company's ability to continue as a going concern and discharge this liability in
the normal course of business.

AMERICOLD LOGISTICS

      On March 11, 1999, the Company and Crescent Operating, Inc. ("COPI")
formed the Vornado Crescent Logistics Operating Partnership (which does business
under the name "AmeriCold Logistics") to purchase all of the non-real estate
assets of the Vornado REIT/Crescent REIT Partnership (the "Landlord") in which
Vornado has a 60% interest and Crescent Real Estate Equities Company
("Crescent") has a 40% interest. The Company and COPI have 60% and 40% interests
in AmeriCold Logistics, respectively.

      On March 11, 1999, AmeriCold Logistics entered into leases with the
Landlord covering 87 of the warehouses used in this business. The leases, as
amended, generally have 15-year terms with two five-year renewal options and
provide for the payment of fixed base rent and percentage rent based on revenue
from customers. AmeriCold Logistics is required to pay for all costs arising
from the operation, maintenance and repair of the properties, including all real
estate taxes and assessments, utility charges, permit fees and insurance
premiums, as well as property capital expenditures in excess of $9,500,000
annually. AmeriCold Logistics has the right to defer the payment of 15% of
annual fixed base rent and all percentage rent until December 31, 2005 to the
extent that available cash, as defined in the leases, is insufficient to pay
such rent. Pursuant thereto, AmeriCold Logistics' deferred rent liability at
December 31, 2003 was $82,394,000 (the largest amount outstanding during 2003).
The fixed base rent for each of the two five-year renewal options is equal,
generally, to the greater of the fair market rent and the fixed base rent for
the immediately preceding lease year plus 5%. On March 2, 2004, AmeriCold
Logistics and the Landlord extended the deferred rent period to December 31,
2005 from December 31, 2004.



                                       9

      On December 31, 2002, Vornado and Crescent formed a joint venture (the
"Quarry Company") in which Vornado holds a 44% interest and Crescent holds a 56%
interest. The Quarry Company acquired AmeriCold Logistics' Carthage, Missouri
and Kansas City, Kansas limestone quarries. AmeriCold Logistics entered into a
management agreement with the Quarry Company to manage and operate the quarries.
The agreement was for one year and automatically renews for additional one-year
periods unless terminated by either party. During the year ended December 31,
2003, AmeriCold Logistics received a management fee of $214,000 from the Quarry
Company for management services provided.

      On March 28, 2003, AmeriCold Logistics sold, without recourse, accounts
receivable of $6,640,000 to the Quarry Company for $6,500,000 in cash. In the
three months ended March 31, 2004, AmeriCold Logistics sold, without recourse,
accounts receivable of $10,200,000 to the Quarry Company for $10,000,000 in
cash. In each case, AmeriCold Logistics also agreed to act as agent to collect
the accounts receivable. Although the terms and conditions of the receivables
sales were not negotiated at arm's length, the Company believes that the terms
and conditions were fair to AmeriCold Logistics.

      Vornado is the day-to-day liaison to the management of AmeriCold
Logistics. AmeriCold Logistics pays Vornado an annual fee of $487,000, which is
based on the temperature controlled logistics operating assets acquired by
AmeriCold Logistics on March 11, 1999. The fee increases by an amount equal to
1% of the cost of new acquisitions, including transaction costs. At December 31,
2003, AmeriCold Logistics owed Vornado $2,340,000 for this fee (the largest
amount outstanding during 2003). AmeriCold Logistics provided financial
statement preparation, tax and similar services to the Landlord for a fee of
$276,000 in 2003.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

RETENTION OF INDEPENDENT AUDITORS FOR THE YEAR 2004

      The Board has retained Deloitte & Touche LLP to act as independent
auditors for the fiscal year ending December 31, 2004. Deloitte & Touche LLP was
engaged as independent auditors for the fiscal year ended December 31, 2003 and
representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting of Stockholders to be held on May 27, 2004. They will have an
opportunity to make a statement, if they desire to do so, and will be available
to respond to appropriate questions.

AUDIT FEES

      The aggregate fees billed by Deloitte & Touche LLP for the years ended
December 31, 2003 and 2002, for professional services rendered for the audits of
the Company's annual consolidated financial statements included in the Company's
Annual Reports on Form 10-K for those fiscal years and for the reviews of the
consolidated interim financial statements included in the Company's Quarterly
Reports on Form 10-Q for those fiscal years were $93,000 and $98,000,
respectively.

AUDIT-RELATED FEES

      The aggregate fees billed by Deloitte & Touche LLP for the year ended
December 31, 2003 for professional services rendered that are related to the
performance of the audits or reviews of the Company's consolidated financial
statements which are not reported above under "Audit Fees" were $15,000. These
fees relate to work performed in connection with the Company's evaluation of
recently issued accounting standards. There were no "Audit-Related Fees" billed
for the year ended December 31, 2002.

TAX FEES

      There were no "Tax Fees" billed by Deloitte & Touche LLP for the years
ended December 31, 2003 and 2002.

ALL OTHER FEES

      There were no fees billed by Deloitte & Touche LLP for professional
services rendered other than those described above under "Audit Fees" and
"Audit-Related Fees" for the years ended December 31, 2003 and 2002.

PRE-APPROVAL POLICIES AND PROCEDURES

      In May 2003, the Audit Committee established the following policies and
procedures for approving all professional services rendered by Deloitte & Touche
LLP. The Audit Committee reviews and approves engagement letters for the
services described above under "Audit Fees" before the provision of those
services commences. For all other services, the Audit Committee has pre-approved
the use of Deloitte & Touche LLP for specific services for which the Audit
Committee has set an aggregate quarterly limit of $25,000 on the amount of
services that Deloitte & Touche LLP can provide to the Company. Any services
that exceed the quarterly limit, or


                                       10

which would cause the amount of total services provided by Deloitte & Touche LLP
to exceed the quarterly limit, must be approved by the Audit Committee Chairman
before the provision of such services commences. The Audit Committee also
requires management to provide it with regular quarterly reports of the amount
of services provided by Deloitte & Touche LLP. Although the Audit Committee did
not formally establish these policies and procedures until May 2003, 100% of the
fees for the years ended December 31, 2003 and 2002 described in this Item 14
were approved by the Audit Committee in accordance with the policies and
procedures.



                                       11

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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

                                  By:      /s/ JOSEPH MACNOW
                                      ------------------------------------------
                                      Joseph Macnow, Executive Vice President
                                      and Chief Financial Officer

Date:  April 22, 2004

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



                   SIGNATURE                                      TITLE                              DATE
                   ---------                                      -----                              ----
                                                                                           
By: /s/  Steven Roth                             Chairman of the Board of Directors and          April 22, 2004
    --------------------------------             Chief Executive Officer (Principal
         (Steven Roth)                           Executive Officer)


By: /s/  Michael D. Fascitelli                   President and Director                          April 22, 2004
    --------------------------------
        (Michael D. Fascitelli)


By: /s/  Douglas H. Dittrick                     Director                                        April 22, 2004
    --------------------------------
         (Douglas H. Dittrick)

By: /s/  Joseph Macnow                           Executive Vice President and Chief              April 22, 2004
    --------------------------------             Financial Officer (Principal Financial
        (Joseph Macnow)                          and Accounting Officer)


By: /s/  Martin N. Rosen                         Director                                        April 22, 2004
    --------------------------------
         (Martin N. Rosen)

By: /s/  Richard R. West                         Director                                        April 22, 2004
    --------------------------------
         (Richard R. West)

By: /s/  Russell B. Wight, Jr.                   Director                                        April 22, 2004
    --------------------------------
        (Russell B. Wight, Jr.)





                                       12

                                  EXHIBIT INDEX

EXHIBIT NO.

      The following is a list of all exhibits filed as part of this report:

31.1  Rule 13a-14(a)/15d-14(a) certification of the Chief Executive Officer

31.2  Rule 13a-14(a)/15d-14(a) certification of the Chief Financial Officer

                                       13