What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-02-16 compared with 2020-02-18 · 208 added, 216 removed, 402 unchanged (51% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Index to Consolidated Financial Statements Page

Report of Independent Registered Public Accounting Firm 40

10 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

Alexander’s, Inc.

Paramus, New Jersey

To the Stockholders and the Board of Directors of Alexander’s, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Alexander’s, Inc.

and subsidiaries (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedules listed in the Index at Item 15 (collectively, the “financial statements”).

and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

3 unchanged sentences

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

9 unchanged sentences

Critical Audit Matter Description

The Company’s real estate assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company’s real estate assets are individually evaluated for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable.

The Company’s evaluation of the recoverability of real estate assets involves the comparison of undiscounted future cash flows expected to be generated by each real estate asset over the Company’s estimated holding period to the respective carrying amount.

The Company’s undiscounted future cash flow analyses require management to make certain estimates, including estimated terminal values determined using appropriate capitalization rates.

Given that the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets is a significant assumption made by management, performing audit procedures to evaluate the reasonableness of management’s undiscounted future cash flow analyses required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

The Company’s undiscounted future cash flow analyses require management to make significant estimates, including estimated terminal values determined using appropriate capitalization rates.

Given the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets is a significant assumption made by management, performing audit procedures to evaluate the reasonableness of management’s undiscounted future cash flow analyses required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination of capitalization rates included the following, among others:

We tested the design and operating effectiveness of controls over impairment, including those of determining the appropriate capitalization rates.

With the assistance of our fair value specialists, we evaluated the capitalization rates for real estate assets with possible impairment indicators by evaluating the source information and assumptions used by management.

We evaluated the reasonableness of management’s capitalization rates used by developing independent estimates of capitalization rates, focusing on geographical location and property type, and comparing our independent estimates to those used by the Company.

Our audit procedures related to the Company’s estimated capitalization rates used in the evaluation of impairment of real estate assets included the following, among others:

• We tested the effectiveness of controls over management’s evaluation of the recoverability of real estate, including controls over management’s determination of the reasonableness of the applicable capitalization rates.

• Inquired with management regarding their determination of the capitalization rates, including considerations related to the impact of COVID-19 and evaluating the consistency of the capitalization rates used with evidence obtained in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the Company’s estimated capitalization rates by:

◦ Testing the source information underlying the determination of the capitalization rates by evaluating the reasonableness of the capitalization rates used by management with independent market data, focusing on key factors, including the impact of COVID-19, geographical location, tenant composition, and property type.

◦ Developing a range of independent estimates of capitalization rates and comparing those to the capitalization rates utilized by management.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

New York, New York

February 16, 2021

4 unchanged sentences

(Amounts in thousands, except share and per share amounts)

ASSETS 2020 2019

Real estate, at cost:

Land $ 44,971 $ 44,971

Buildings and leasehold improvements 1,014,311 984,053

Development and construction in progress 11,761 12,318

Total 1,071,043 1,041,342

Accumulated depreciation and amortization ( 350,122 ) ( 324,499 )

5 unchanged sentences

Receivable arising from the straight-lining of rents 145,274 166,376

Deferred lease and other property costs, net, including unamortized leasing fees to Vornado of

Deferred lease costs, net, including unamortized leasing fees to Vornado of

$ 27,851 and $ 32,374 , respectively

36,524 41,123

Other assets 37,402 6,691

$ 1,404,138 $ 1,265,511

LIABILITIES AND EQUITY

17 unchanged sentences

Accumulated other comprehensive loss ( 707 ) ( 49 )

203,596 253,883

Treasury stock:

66,160 shares, at cost

( 368 ) ( 368 )

Total equity 203,228 253,515

$ 1,404,138 $ 1,265,511

See notes to consolidated financial statements.

4 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental revenues $ 199,142 $ 226,350 $ 232,825

Operating, including fees to Vornado of $ 5,429 , $ 5,386 and $ 4,700 , respectively

( 88,403 ) ( 89,738 ) ( 93,775 )

Depreciation and amortization ( 32,357 ) ( 31,351 ) ( 33,089 )

General and administrative, including management fees to Vornado of $ 2,380

in each year ( 6,307 ) ( 5,772 ) ( 5,343 )

Total expenses ( 127,067 ) ( 126,861 ) ( 132,207 )

4 unchanged sentences

Loss from discontinued operations (see Note 7) — — ( 23,797 )

Net income $ 41,939 $ 60,075 $ 32,844

Income per common share - basic and diluted:

9 unchanged sentences

Year Ended December 31,

Other comprehensive income (loss):

Change in fair value of marketable securities (see Note 5)

Change in value of interest rate cap

2020 2019 2018

Net income $ 41,939 $ 60,075 $ 32,844

Other comprehensive (loss) income:

Change in fair value of interest rate derivatives ( 658 ) 78 ( 1 )

Comprehensive income $ 41,281 $ 60,153 $ 32,843

6 unchanged sentences

Income (Loss)

Common Stock Additional

Capital Retained

Earnings Treasury

Shares Amount

Balance, December 31, 2017 5,173 $ 5,173 $ 31,577 $ 302,543 $ 5,030 $ ( 368 ) $ 343,955

Net income — — — 32,844 — — 32,844

Dividends paid ($ 18.00 per common share)

Change in fair value of marketable securities

Change in fair value of interest rate cap

— — — ( 92,100 ) — — ( 92,100 )

Cumulative effect of change in accounting principle — — — 5,156 ( 5,156 ) — —

Change in fair value of interest rate derivatives — — — — ( 1 ) — ( 1 )

Deferred stock unit grants — — 394 — — — 394

Balance, December 31, 2018 5,173 5,173 31,971 248,443 ( 127 ) ( 368 ) 285,092

Net income — — — 60,075 — — 60,075

Dividends paid ($ 18.00 per common share)

Cumulative effect of change in accounting

Change in fair value of interest rate cap

— — — ( 92,124 ) — — ( 92,124 )

Change in fair value of interest rate derivatives — — — — 78 — 78

Deferred stock unit grants — — 394 — — — 394

Balance, December 31, 2019 5,173 5,173 32,365 216,394 ( 49 ) ( 368 ) 253,515

Net income — — — 41,939 — — 41,939

Dividends paid ($ 18.00 per common share)

Change in fair value of interest rate cap

— — — ( 92,168 ) — — ( 92,168 )

Change in fair value of interest rate derivatives — — — — ( 658 ) — ( 658 )

Deferred stock unit grants — — 600 — — — 600

6 unchanged sentences

Year Ended December 31,

2020 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 41,939 $ 60,075 $ 32,844

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization, including amortization of debt issuance costs 35,121 36,515 38,499

Straight-lining of rental income

Straight-lining of rents 21,102 2,413 5,924

Write-off of tenant receivables 4,122 — —

Stock-based compensation expense 600 394 394

Change in fair value of marketable securities 8,599 8,757 11,990

Dividends received in stock ( 214 ) — —

Change in operating assets and liabilities:

Tenant and other receivables, net ( 6,146 ) ( 2,017 ) ( 1,382 )

Other assets ( 28,378 ) 21,553 ( 1,197 )

Amounts due to Vornado ( 402 ) 789 ( 1,907 )

3 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

Construction in progress and real estate additions

Rego Park II loan participation

Construction in progress, real estate additions and other ( 32,460 ) ( 9,449 ) ( 3,966 )

Repayment of Rego Park II loan participation — — 2,829

4 unchanged sentences

Debt repayments ( 50,000 ) — ( 160,142 )

Proceeds from borrowing

Net cash (used in) provided by financing activities

Proceeds from borrowings 239,708 — 78,246

Net cash provided by (used in) financing activities 90,294 ( 92,139 ) ( 176,185 )

Net increase (decrease) in cash and cash equivalents and restricted cash 135,900 24,482 ( 103,784 )

11 unchanged sentences

NON-CASH TRANSACTIONS

Lease liability arising from the recognition of right-of-use asset

Liability for real estate additions, including $ 489 , $ 18 and $ 125 for development fees due to

Vornado in 2020, 2019 and 2018, respectively $ 4,955 $ 3,191 $ 631

Write-off of fully amortized and/or depreciated assets 876 — 16,090

Reclassification of prepaid real estate taxes to construction in progress for property in

redevelopment — 1,466 —

Write-off of fully amortized and/or depreciated assets

Derecognition of Rego Park II loan participation asset (see Note 2)

Lease liability arising from the recognition of right-of-use asset — 5,428 —

Derecognition of Rego Park II loan participation asset — — 195,708

See notes to consolidated financial statements.

13 unchanged sentences

(“Bloomberg”) occupies all of the office space.

The Home Depot ( 83,000 square feet) and The Container Store ( 34,000 square feet) are the principal retail tenants;

The Home Depot ( 83,000 square feet) is the principal retail tenant;

• Rego Park I, a 338,000 square foot shopping center, located on Queens Boulevard and 63 rd Road in Queens.

On April 4, 2017, Sears closed its 195,000 square foot anchor store at the property ( $ 10,300,000 of annual revenue).

On October 15, 2018, Sears filed for Chapter 11 bankruptcy relief and rejected its lease.

On September 23, 2019, we leased 113,000 square feet at the property to IKEA Property, Inc.

(“IKEA”), replacing a significant portion of the space formerly occupied by Sears.

The center is also anchored by a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls;

The center is anchored by a 112,000 square foot IKEA, a 50,000 square foot Burlington, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls;

• Rego Park II, a 609,000 square foot shopping center, adjacent to the Rego Park I shopping center in Queens.

The center is anchored by a 145,000 square foot Costco, a 135,000 square foot Century 21 and a 133,000 square foot Kohl’s.

On April 13, 2019, Kohl’s closed its store at the property.

On January 24, 2020, Kohl’s subleased its store to At Home and remains obligated under its lease which expires in January 2031;

The center is anchored by a 145,000 square foot Costco and a 133,000 square foot Kohl’s, which has been subleased.

On September 10, 2020, Century 21 ($ 6,400,000 of annual revenue) filed for Chapter 11 bankruptcy and closed its 135,000 square foot store on December 7, 2020;

• The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square feet;

9 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

COVID-19 PANDEMIC

Our business has been adversely affected by the ongoing COVID-19 pandemic.

In March 2020, our “non-essential” retail tenants were ordered to temporarily close and although substantially all re-opened in the latter part of June 2020, there are limitations on occupancy and other restrictions that affect their ability to resume full operations.

In limited circumstances, we have agreed to and may continue to agree to rent deferrals and abatements for certain of our tenants.

We have made the policy election available to us based on the Financial Accounting Standards Board’s (“FASB”) guidance for leases during the COVID-19 pandemic, which allows us to continue recognizing rental revenue for rent deferral agreements and to recognize rent abatements as a reduction to rental revenue in the period granted.

See Note 3 - Summary of Significant Accounting Policies for additional information.

Overall, we have collected approximately 95 % of rent billed for the quarter ended December 31, 2020 ( 96 % including rent deferrals under agreements which generally require repayment in monthly installments over a period of time not to exceed twelve months), including 100 % for our office tenant, approximately 90 % for our retail tenants ( 91 % including rent deferrals) and approximately 98 % for our residential tenants.

On September 10, 2020, Century 21, which leased 135,000 square feet at our Rego Park II shopping center ($ 6,400,000 of annual revenue), filed for Chapter 11 bankruptcy and closed its store on December 7, 2020.

Based on our assessment of the probability of collecting rent from certain tenants, we have written off as uncollectible tenant receivables of $ 4,122,000 during the year ended December 31, 2020, resulting in a reduction of rental revenues.

Of this amount, $ 2,716,000 is attributable to Century 21.

In addition, we have written off receivables arising from the straight-lining of rents related to these tenants of $ 10,837,000 during the year ended December 31 2020, resulting in a reduction of rental revenues.

Of this amount, $ 5,919,000 is attributable to Century 21.

Prospectively, revenue recognition for these tenants will be based on actual amounts received.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

All intercompany amounts have been eliminated.

Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires us 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 financial statements and the reported amounts of revenues and expenses during the reporting periods.

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires us 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.

Certain prior year balances have been reclassified in order to conform to the current year presentation.

Subsequent to the issuance of our consolidated financial statements for the year ended December 31, 2018, we determined that the $ 195,708,000 participation in our Rego Park II shopping center mortgage loan was incorrectly classified as an asset, presented as “Rego Park II loan participation,” instead of as a reduction to “mortgages payable, net of deferred debt issuance costs” on our consolidated balance sheet as of December 31, 2018.

On December 12, 2018, we refinanced this mortgage loan and the interest rate on the existing loan participation was adjusted to equal the interest rate on the refinanced loan.

Consequently, we should have considered $ 195,708,000 of the Rego Park II shopping center mortgage loan liability extinguished as the participation interest is considered the reacquisition of our debt.

Accordingly, our consolidated balance sheet for the year ended December 31, 2018 has been restated to reclassify $ 195,708,000 from “Rego Park II loan participation” to “mortgages payable, net of deferred debt issuance costs.” This reclassification had no material impact to our consolidated statements of income, comprehensive income, changes in equity or statement of cash flows for the year ended December 31, 2018.

Certain prior year balances have been reclassified in order to conform to the current period presentation.

For the years ended December 31, 2018 and 2017, “property rentals” of $ 152,795,000 and $ 152,857,000 , respectively, and “expense reimbursements” of $ 80,030,000 and $ 77,717,000 , respectively, were grouped into “rental revenues” on our consolidated statements of income in accordance with Accounting Standards Codification (“ASC”) Topic 205 Presentation of Financial Statements.

Recently Issued Accounting Literature – In February 2016, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2016-02”) establishing ASC Topic 842, Leases (“ASC 842”), as amended by subsequent ASUs on the topic, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors.

ASU 2016-02 requires lessees to apply a two- method approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase.

Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months.

Lease liabilities equal the present value of future lease payments.

Right-of-use assets equal the lease liabilities adjusted for accrued rent expense, initial direct costs, lease incentives and prepaid lease payments.

Leases with a term of 12 months or less will be accounted for similar to the previously existing guidance for operating leases.

Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.

The accounting applied by the lessor is largely unchanged from that applied under ASC Topic 840, Leases (“ASC 840”).

We adopted this standard effective January 1, 2019 using the modified retrospective approach.

In transitioning to ASC 842, we elected to use the practical expedient package available to us and did not elect to use hindsight.

These elections have been applied consistently to all of our leases.

On January 1, 2019, for our Flushing property ground lease, which is classified as an operating lease, we recorded a right- of-use asset of $ 5,058,000 (included in “other assets”) and a lease liability of $ 5,428,000 (included in “other liabilities”) (see Note 9 - Leases ).

In June 2016, the FASB issued an update (“ASU 2016-13”) Measurement of Credit Losses on Financial Instruments establishing ASC Topic 326, Financial Instruments - Credit Losses , as amended by subsequent ASUs on the topic.

ASU 2016-13 changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The guidance replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset.

ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019.

We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements.

In August 2018, the FASB issued an update (“ASU 2018-13”) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement to ASC Topic 820, Fair Value Measurement (“ASC 820”).

ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, and/or adding certain disclosures.

ASU 2018-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019.

We elected to early adopt ASU 2018-13 effective January 1, 2019.

The adoption of this update did not have a material impact on our consolidated financial statements and disclosures.

For the year ended December 31, 2018, “property rentals” of $ 152,795,000 and “expense reimbursements” of $ 80,030,000 were grouped into “rental revenues” on our consolidated statements of income in accordance with Accounting Standards Codification (“ASC”) Topic 205 Presentation of Financial Statements.

Recently Issued Accounting Literature – In March 2020, the FASB issued an update (“ASU 2020-04”) establishing ASC Topic 848, Reference Rate Reform.

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

We are currently evaluating the impact of the guidance and our options related to the practical expedients.

In April 2020, the FASB issued a Staff Q&A on accounting for leases during the COVID-19 pandemic, focused on the application of lease guidance in ASC Topic 842, Leases (“ASC 842”).

The Staff Q&A states that it would be acceptable to make a policy election regarding rent concessions resulting from COVID-19, which would not require entities to account for these rent concessions as lease modifications when total cash flows resulting from the modified contract are “substantially the same or less” than the cash flows in the original contract.

Entities making the election will continue to recognize rental revenue on a straight-line basis for qualifying concessions.

In limited circumstances, we granted temporary rent deferrals and rent abatements to certain tenants as a result of the COVID-19 pandemic.

We have made a policy election in accordance with the Staff Q&A allowing us to not account for these rent concessions as lease modifications.

Accordingly, rent abatements are recognized as reductions to “rental revenues” during the period in which they were granted.

Rent deferrals result in an increase to “tenant and other receivables” during the deferral period with no impact on rental revenue recognition.

For any concessions that do not meet the guidance contained in the Staff Q&A, the modification guidance in accordance with ASC 842 will be applied.

See Note 2 - COVID-19 Pandemic for further details.

ALEXANDER’S, INC.

2 unchanged sentences

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

In October 2018, the FASB issued an update (“ASU 2018-16”) Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes to ASC 815.

ASU 2018-16 expands the list of U.S.

benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate.

ASU 2018-16 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2018, with early adoption permitted.

We adopted this update effective January 1, 2019.

The adoption of this update did not have a material impact on our consolidated financial statements.

Real Estate – Real estate is carried at cost, net of accumulated depreciation and amortization.

As of December 31, 2020 and 2019, the carrying amount of our real estate, net of accumulated depreciation and amortization, was $ 720,921,000 and $ 716,843,000 , respectively.

Maintenance and repairs are expensed as incurred.

Maintenance and repairs are generally expensed as incurred.

Depreciation requires an estimate by management of the useful life of each property and improvement as well as an allocation of the costs associated with a property to its various components.

10 unchanged sentences

Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.

Revenue Recognition – Our rental revenues include revenues from the leasing of space to tenants at our properties and revenues from parking and tenant services.

We have the following revenue recognition policies:

• Lease revenues from the leasing of space to tenants at our properties.

Revenues derived from base rent are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements.

We commence rental revenue recognition when the underlying asset is available for use by the lessee.

In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

Revenues derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred.

As lessor, we have elected to combine the lease components (base and variable rent), non-lease components (reimbursements of common area maintenance expenses) and reimbursement of real estate taxes and insurance expenses from our operating lease agreements and account for the components as a single lease component in accordance with ASC 842.

• Parking revenue arising from the rental of parking spaces at our properties.

This income is recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

• Tenant services is revenue arising from sub-metered electric, elevator and other services provided to tenants at their request.

This revenue is recognized as the services are transferred in accordance with ASC 606.

Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect substantially all of the future lease payments.

We consider the tenant’s payment history and current credit status when assessing collectability.

When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received.

We recognize changes in the collectability assessment of our operating leases as adjustments to rental revenues.

Prior to the adoption of ASC 842, we maintained an allowance for doubtful accounts for estimated losses on receivables under our lease agreements, including receivables arising from the straight-lining of rent.

During the year ended December 31, 2018, we had $ 4,459,000 of additions charged against operations and $ 5,289,000 of uncollectible accounts written off, with an ending allowance for doubtful accounts balance of $ 671,000 as of December 31, 2018.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Cash and Cash Equivalents – Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less and are carried at cost, which approximates fair value, due to their short-term maturities.

3 unchanged sentences

Marketable Securities – Our marketable securities consist of common shares of The Macerich Company (“Macerich”) (NYSE:

MAC), which are classified as available-for-sale.

Available-for-sale securities are presented at fair value on our consolidated balance sheets.

Prior to January 1, 2018, unrealized gains and losses resulting from the mark-to-market of these securities were included in “other comprehensive income (loss).” Effective January 1, 2018, changes in the fair value of these securities are recognized in current period earnings in accordance with ASC Topic 825 (“ASC 825”), Financial Instruments (see Note 5).

These shares are presented at fair value on our consolidated balance sheets and gains and losses resulting from the mark-to-market of these securities are recognized in current period earnings in accordance with ASC Topic 825 (“ASC 825”), Financial Instruments (see Note 6).

Deferred Charges – Direct financing costs are deferred and amortized over the terms of the related agreements as a component of interest and debt expense.

1 unchanged sentence

All other deferred charges are amortized on a straight-line basis, which approximates the effective interest rate method, in accordance with the terms of the agreements to which they relate.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Income Taxes – We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856 – 860 of the Internal Revenue Code of 1986, as amended (the “Code”).

1 unchanged sentence

We distribute to our stockholders 100 % of our taxable income and therefore, no provision for Federal income taxes is required.

Dividends distributed for the year ended December 31, 2019 were characterized, for federal income tax purposes, as 99.6 % ordinary income and 0.4 % long-term capital gain income.

Dividends distributed for the year ended December 31, 2020 were characterized, for federal income tax purposes, as 100.0 % ordinary income.

Dividends distributed for the year ended December 31, 2017 were categorized, for federal income tax purposes, as 99.5 % ordinary income and 0.5 % long-term capital gain income.

Dividends distributed for the year ended December 31, 2019 were characterized, for federal income tax purposes, as 99.6 % ordinary income and 0.4 % long-term capital gain income.

Dividends distributed for the year ended December 31, 2018 were categorized, for federal income tax purposes, as 100.0 % ordinary income.

The following table reconciles our net income to estimated taxable income for the years ended December 31, 2020, 2019 and 2018.

(Unaudited and in thousands)

Year Ended December 31,

(Unaudited and in thousands) Year Ended December 31,

2020 2019 2018

Net income $ 41,939 $ 60,075 $ 32,844

Straight-line rent adjustments 21,048 2,359 5,870

Depreciation and amortization timing differences

Depreciation and amortization 2,112 2,751 ( 6,586 )

Change in fair value of marketable securities (see Note 6) 8,599 8,757 11,990

Loss from discontinued operations (see Note 7) — — 23,797

Other 7,677 137 440

Estimated taxable income $ 81,375 $ 74,079 $ 68,355

4 unchanged sentences

REVENUE RECOGNITION

Our rental revenues include revenues from the leasing of space to tenants at our properties and revenues from parking and tenant services.

We have the following revenue recognition policies:

Lease revenues from the leasing of space to tenants at our properties.

Revenues derived from base rent are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements.

We commence rental revenue recognition when the underlying asset is available for use by the lessee.

Revenues derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred.

• Parking revenue arising from the rental of parking spaces at our properties.

This income is recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Tenant services is revenue arising from sub-metered electric, elevator and other services provided to tenants at their request.

This revenue is recognized as the services are transferred in accordance with ASC 606.

The following is a summary of revenue sources for the years ended December 31, 2020, 2019 and 2018.

For the Year Ended December 31,

Year Ended December 31,

(Amounts in thousands) 2020 2019 2018

Lease revenues (1)

$ 191,416 $ 217,251 $ 223,388

Parking revenue 4,207 5,608 5,680

1 unchanged sentence

Rental revenues $ 199,142 $ 226,350 $ 232,825

The components of lease revenues for the year ended December 31, 2019 are as follows:

(1) Reduced by $ 14,959 and $ 209 for the years ended December 31, 2020 and 2019, respectively, for the write-off of lease receivables deemed uncollectable (primarily write-offs of receivables arising from the straight-lining of rents).

The components of lease revenues for the years ended December 31, 2020 and 2019 are as follows:

Year Ended December 31,

(Amounts in thousands) 2020 2019

For the Year Ended December 31, 2019

Fixed lease revenues $ 120,395 $ 142,679

1 unchanged sentence

Lease revenues $ 191,416 $ 217,251

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS

5 unchanged sentences

(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.1 % of our outstanding common stock, in addition to the 2.3 % they indirectly own through Vornado.

Joseph Macnow, our Treasurer, is the Executive Vice President - Chief Financial Officer and Chief Administrative Officer of Vornado.

Matthew Iocco, our Chief Financial Officer, is the Executive Vice President - Chief Accounting Officer of Vornado.

7 unchanged sentences

We also have agreements with Building Maintenance Services, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security services at our Lexington Avenue property and (ii) security services at our Rego Park I and Rego Park II properties and The Alexander apartment tower.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS - continued

The following is a summary of fees to Vornado under the various agreements discussed above.

3 unchanged sentences

Development fees 489 29 125

Leasing fees 276 4,786 13

Property management, cleaning, engineering

and security fees 5,051 5,015 4,101

$ 8,616 $ 12,630 $ 7,039

As of December 31, 2020, the amounts due to Vornado were $ 845,000 for management, property management, cleaning, engineering and security fees;

$ 563,000 for leasing fees;

and $ 68,000 for development fees.

$ 557,000 for development fees;

and $ 114,000 for leasing fees.

As of December 31, 2019, the amounts due to Vornado were $ 795,000 for management, property management, cleaning, engineering and security fees;

1 unchanged sentence

and $ 563,000 for leasing fees.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS - continued

Toys “R” Us, Inc.

Our affiliate, Vornado, owned 32.5 % of Toys as of December 31, 2018.

On February 1, 2019, in connection with the Toys Chapter 11 bankruptcy, the plan of reorganization for Toys was declared effective and Vornado’s ownership in Toys was canceled and Toys’ Board of Directors was dissolved.

Joseph Macnow, Vornado’s Executive Vice President and Chief Financial Officer and Wendy A.

Silverstein, a member of our Board of Directors, represented Vornado as members of Toys’ Board of Directors.

Also in connection with the Toys Chapter 11 bankruptcy, Toys rejected its 47,000 square foot lease at our Rego Park II shopping center ( $ 2,600,000 of annual revenue) effective June 30, 2018 and possession of the space was returned to us.

MARKETABLE SECURITIES

As of December 31, 2019 and 2018 , we owned 535,265 common shares of Macerich.

These shares have an economic cost of $ 56.05 per share, or $ 30,000,000 in the aggregate.

As of December 31, 2020 and 2019, we owned 564,612 and 535,265 common shares, respectively, of Macerich.

The increase in shares owned was due to a dividend received in stock from Macerich during the year ended December 31, 2020.

As of December 31, 2020 and 2019, the fair value of these shares was $ 6,024,000 and $ 14,409,000 , respectively, based on Macerich’s closing share price of $ 10.67 per share and $ 26.92 per share, respectively.

These shares are included in “marketable securities” on our consolidated balance sheets and are classified as available-for-sale.

Available-for-sale securities are presented at fair value on our consolidated balance sheets and gains and losses resulting from the mark-to-market of these securities are recognized in current period earnings.

These shares are presented at fair value as “marketable securities” on our consolidated balance sheets and the gains and losses resulting from the mark-to-market of these securities are recognized in current period earnings.

DISCONTINUED OPERATIONS

4 unchanged sentences

On February 16, 2018, the New York City Tax Appeals Tribunal (the “Tribunal”) overturned the January 2017 determination.

The Vornado joint venture appealed the Tribunal’s decision to the Appellate Division of the Supreme Court of the

State of New York and on April 25, 2019, the Tribunal’s decision was unanimously upheld.

The Vornado joint venture appealed the Tribunal’s decision to the Appellate Division of the Supreme Court of the State of New York and on April 25, 2019, the Tribunal’s decision was unanimously upheld.

The Vornado joint venture filed a motion to reargue the Appellate Division’s decision or for leave to appeal to the New York State Court of Appeals.

3 unchanged sentences

As the results related to Kings Plaza were previously classified as discontinued operations, we have classified the expense as “loss from discontinued operations” on our consolidated statement of income for the year ended December 31, 2018 in accordance with the provisions of ASC Topic 360, Property, Plant and Equipment .

We are currently evaluating our options relating to this matter.

On January 12, 2021, we decided not to further contest the additional real property transfer taxes paid in connection with the sale of Kings Plaza.

ALEXANDER’S, INC.

2 unchanged sentences

MORTGAGES PAYABLE

On October 3, 2018, we extended our mortgage loan on our Paramus property.

The $ 68,000,000 interest-only loan has a fixed rate of 4.72 % and matures in October 2021.

Previously the loan bore interest at a fixed rate of 2.90 % .

The tenant pays all of the interest on this mortgage loan as part of its rent.

On December 12, 2018, we completed a refinancing of our Rego Park II shopping center in the amount of $ 252,544,000 .

The interest-only loan is at LIBOR plus 1.35 % ( 3.15 % as of December 31, 2019) and matures in December 2025.

As of December 31, 2019, we have a participation in the mortgage in the amount of $ 195,708,000 which for GAAP purposes is netted against the mortgage balance.

Therefore, the balance sheet amount of the mortgage loan is $ 56,836,000 .

On February 14, 2020, we reduced our participation in the mortgage loan to $ 50,000,000 and received cash proceeds of approximately $ 145,000,000 .

On February 14, 2020, we reduced our participation in our Rego Park II shopping center loan to $ 50,000,000 and received cash proceeds of approximately $ 145,000,000 .

On September 14, 2020, we amended and extended the $ 350,000,000 mortgage loan on the retail condominium of our 731 Lexington Avenue property.

Under the terms of the amendment, we paid down the loan by $ 50,000,000 to $ 300,000,000 , extended the maturity date to August 2025 and guaranteed the interest payments and certain leasing costs.

The principal of the loan is non-recourse to us.

The interest-only loan is at LIBOR plus 1.40 % ( 1.55 % as of December 31, 2020) which is subject to an interest rate swap with a fixed rate of 1.72 %.

On October 23, 2020, we completed a financing of The Alexander apartment tower in the amount of $ 94,000,000 .

The interest-only loan has a fixed rate of 2.63 % and matures in November 2027.

The following is a summary of our outstanding mortgages payable.

We may refinance our maturing debt as it comes due or choose to repay it.

Interest Rate at December 31, 2019

Balance at December 31,

(Amounts in thousands)

Interest Rate at December 31, 2020 Balance at December 31,

(Amounts in thousands) Maturity 2020 2019

First mortgages secured by:

731 Lexington Avenue, retail condominium (1)

04, 2021 4.72 % $ 68,000 $ 68,000

731 Lexington Avenue, office condominium (1)

11, 2024 1.06 % 500,000 500,000

731 Lexington Avenue, retail condominium (2)

05, 2025 1.55 % 300,000 350,000

Rego Park II shopping center (3)

12, 2025 1.50 % 202,544 56,836

The Alexander apartment tower Nov.

01, 2027 2.63 % 94,000 —

Total 1,164,544 974,836

Deferred debt issuance costs, net of accumulated

amortization of $ 13,034 and $ 14,362 , respectively

Interest at LIBOR plus 1.40%.

Maturity date represents the extended maturity based on our conditional right to extend.

( 8,374 ) ( 3,875 )

$ 1,156,170 $ 970,961

(1) Interest at LIBOR plus 0.90 %.

Maturity date represents the extended maturity based on our unilateral right to extend.

(2) Interest at LIBOR plus 1.40 % which is subject to an interest rate swap with a fixed rate of 1.72 %.

(3) Interest at LIBOR plus 1.35 %.

The amount of this loan is net of our $195,708 loan participation (see Note 2 - Summary of Significant Accounting Policies ).

The amount of this loan is net of our loan participation of $ 50,000 and $ 195,708 as of December 31, 2020 and 2019, respectively.

All of our debt is secured by mortgages and/or pledges of the stock of the subsidiaries holding the properties.

3 unchanged sentences

(Amounts in thousands)

Year Ending December 31,

Year Ending December 31, Amount

2021 $ 68,000

Thereafter 94,000

ALEXANDER’S, INC.

2 unchanged sentences

FAIR VALUE MEASUREMENTS

ASC 820 defines fair value and establishes a framework for measuring fair value.

ASC Topic 820, Fair Value Measurement (“ASC 820”) defines fair value and establishes a framework for measuring fair value.

ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

5 unchanged sentences

Financial Assets and Liabilities Measured at Fair Value

Financial assets measured at fair value on our consolidated balance sheets as of December 31, 2019 and 2018 consist of marketable securities, which are presented in the table below based on their level in the fair value hierarchy, and an interest rate cap, which fair value was insignificant as of December 31, 2019 and 2018.

There were no financial liabilities measured at fair value as of December 31, 2019 and 2018 .

Financial assets measured at fair value on our consolidated balance sheets as of December 31, 2020 and 2019 consist of marketable securities which are presented in the table below based on their level in the fair value hierarchy, and an interest rate cap, the fair value of which was insignificant as of December 31, 2020 and 2019.

Financial liabilities measured at fair value on our consolidated balance sheet as of December 31, 2020 consist of an interest rate swap which is presented in the table below based on its level in the fair value hierarchy.

As of December 31, 2020

(Amounts in thousands)

(Amounts in thousands) Total Level 1 Level 2 Level 3

Marketable securities $ 6,024 $ 6,024 $ — $ —

Interest rate swap (included in other liabilities) $ 667 $ — $ 667 $ —

As of December 31, 2019

(Amounts in thousands)

(Amounts in thousands) Total Level 1 Level 2 Level 3

Marketable securities $ 14,409 $ 14,409 $ — $ —

4 unchanged sentences

The table below summarizes the carrying amount and fair value of these financial instruments as of December 31, 2020 and 2019.

As of December 31, 2019

As of December 31, 2018

(Amounts in thousands)

As of December 31, 2020 As of December 31, 2019

Carrying Fair Carrying Fair

(Amounts in thousands) Amount Value Amount Value

Cash equivalents $ 393,070 $ 393,070 $ 263,688 $ 263,688

8 unchanged sentences

We also lease residential space at The Alexander apartment tower with 1 or 2 year lease terms.

We have elected to account for lease revenues (including fixed and variable rent) and the reimbursement of common area maintenance expenses as a single lease component presented as “rental revenues” in our consolidated statements of income.

Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect the future lease payments.

We consider the tenant’s payment history and current credit status when assessing collectability.

When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received.

Changes to the collectability of our operating leases are recorded as adjustments to “rental revenues” on our consolidated statements of income, which resulted in a decrease in income of $ 209,000 for the year ended December 31, 2019.

As a result, there is no allowance for doubtful accounts as of December 31, 2019.

The table below summarizes our allowance for doubtful accounts as of December 31, 2018 and 2017.

(Amounts in thousands)

Uncollectible

Balance at End of Year

Allowance for doubtful accounts:

Year Ended December 31, 2018

Year Ended December 31, 2017

Future undiscounted cash flows under our non-cancelable operating leases are as follows:

Under ASC 842

(Amounts in thousands)

As of December 31, 2019

For the year ending December 31,

Under ASC 840

(Amounts in thousands)

As of December 31, 2018

Future undiscounted cash flows under our contractual non-cancelable operating leases are as follows:

(Amounts in thousands) As of December 31, 2020

For the year ending December 31,

2021 $ 132,812

Thereafter 475,364

These amounts do not include reimbursements or additional rents based on a percentage of retail tenants’ sales.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

LEASES - continued

Bloomberg accounted for revenue of $ 109,066,000 , $ 109,113,000 , and $ 107,356,000 in the years ended December 31, 2020, 2019 and 2018, respectively, representing approximately 55 %, 48 % and 46 % of our total revenues in each year, respectively.

3 unchanged sentences

In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

On June 28, 2019, we entered into a lease agreement with Bloomberg for an additional 49,000 square feet at our 731 Lexington Avenue property

We are the lessee under a ground lease at our Flushing property, classified as an operating lease, which expires in 2027 and has one 10 -year extension option.

2 unchanged sentences

The discount rate applied to measure the right-of-use asset and lease liability is based on the incremental borrowing rate (“IBR”) for the property of 4.53 %.

We initially consider the general economic environment and factor in various financing and asset specific adjustments so that the IBR is appropriate to the intended use of the underlying lease.

As we did not elect to apply hindsight, the lease term assumption determined under ASC 840 was carried forward and applied in calculating our lease liability recorded under ASC 842.

We considered the general economic environment and factored in various financing and asset specific adjustments so that the IBR was appropriate to the intended use of the underlying lease.

As we did not elect to apply hindsight, the lease term assumption determined under ASC Topic 840, Leases was carried forward and applied in calculating our lease liability recorded under ASC 842.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

LEASES - continued

Future lease payments under this operating lease, excluding the extension option, are as follows:

Under ASC 842

(Amounts in thousands)

As of December 31, 2019

(Amounts in thousands) As of December 31, 2020

For the year ending December 31,

Thereafter 800

Total undiscounted cash flows 4,800

1 unchanged sentence

Lease liability as of December 31, 2020 $ 4,236

Under ASC 840

(Amounts in thousands)

As of December 31, 2018

For the year ending December 31,

We recognize rent expense as a component of “operating” expenses on our consolidated statements of income on a straight-line basis.

Rent expense was $ 746,000 in each of the years ended December 31, 2020, 2019 and 2018, respectively.

Cash paid for rent expense was $ 800,000 , $ 800,000 and $ 792,000 in the years ended December 31, 2019, 2018 and 2017, respectively.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Cash paid for rent expense was $ 800,000 in each of the years ended December 31, 2020, 2019 and 2018, respectively.

STOCK-BASED COMPENSATION

We account for stock-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation .

We account for stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”).

Our 2016 Omnibus Stock Plan (the “Plan”) provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, deferred stock units (“DSUs”) and performance shares, as defined, to the directors, officers and employees of the Company and Vornado.

On May 16, 2019, we granted each of the members of our Board of Directors 193 DSUs with a grant date fair value of $ 56,250 per grant, or $ 394,000 in the aggregate.

In May 2020, we granted each of the members of our Board of Directors 329 DSUs with a market value of $ 75,000 per grant.

The grant date fair value of these awards was $ 56,250 per grant, or $ 450,000 in the aggregate, in accordance with ASC 718.

In addition, 876 DSUs, constituting an initial award with a market value of $ 200,000 , were granted to a newly appointed Director.

The grant date fair value of this award was $ 150,000 in accordance with ASC 718.

The DSUs entitle the holders to receive shares of the Company’s common stock without the payment of any consideration.

1 unchanged sentence

As of December 31, 2020, there were 14,916 DSUs outstanding and 490,871 shares were available for future grant under the Plan.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

COMMITMENTS AND CONTINGENCIES

We maintain general liability insurance with limits of $ 300,000,000 per occurrence and per property, and all-risk property and rental value insurance coverage with limits of $ 1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties.

We maintain general liability insurance with limits of $ 300,000,000 per occurrence and per property, of which the first $ 1,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $ 1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.

Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027.

6 unchanged sentences

We are responsible for uninsured losses and for deductibles and losses in excess of our insurance coverage, which could be material.

Our mortgage loans are non-recourse to us and contain customary covenants requiring us to maintain insurance.

The principal amounts of our mortgage loans are non-recourse to us and the loans contain customary covenants requiring us to maintain insurance.

Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future.

Further, if lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.

In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc.

The lease has a purchase option in 2021 for $ 75,000,000 .

If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.

In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA.

The lease expires in 2041, with a purchase option in October 2021 for $ 75,000,000 .

The property is encumbered by a $ 68,000,000 interest-only mortgage loan with a fixed rate of 4.72 %, which matures in October 2021.

2 unchanged sentences

If the purchase option is not exercised, the triple-net rent for the last 20 years would include debt service sufficient to fully amortize $ 68,000,000 over the remaining 20 -year lease term.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

COMMITMENTS AND CONTINGENCIES - continued

Rego Park I Litigation

In June 2014, Sears Roebuck and Co.

(“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to space that Sears leased at our Rego Park I property alleging that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage.

(“Sears”) filed a lawsuit in the Supreme Court of the State of New York against Vornado and us (and certain of our subsidiaries) with regard to the 195,000 square foot store that Sears formerly leased at our Rego Park I property alleging that the defendants are liable for harm that Sears has suffered as a result of (a) water intrusions into the premises, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans with Disabilities Act in the premises’ parking garage.

Sears asserted various causes of actions for damages and sought to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a nuisance that Sears claims was a cause of the water intrusions into its premises.

3 unchanged sentences

The amount or range of reasonably possible losses, if any, is not expected to be greater than $ 650,000 .

On April 4, 2017, Sears closed its 195,000 square foot store at the property ( $ 10,300,000 of annual revenue).

On October 15, 2018, Sears filed for Chapter 11 bankruptcy relief and rejected its lease.

On October 15, 2018, Sears filed for Chapter 11 bankruptcy relief resulting in an automatic stay of this case.

Letters of Credit

2 unchanged sentences

In our opinion, the outcome of such matters in the aggregate will not have a material effect on our financial position, results of operations or cash flows.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MULTIEMPLOYER BENEFIT PLANS

9 unchanged sentences

In the years ended December 31, 2020, 2019 and 2018 our subsidiaries contributed $ 672,000 , $ 686,000 and $ 649,000 , respectively, towards these plans.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

EARNINGS PER SHARE

3 unchanged sentences

There were no potentially dilutive securities outstanding during the years ended December 31, 2020, 2019 and 2018.

For the Year Ended December 31,

Year Ended December 31,

(Amounts in thousands, except share and per share amounts) 2020 2019 2018

1 unchanged sentence

Loss from discontinued operations (see Note 7) — — ( 23,797 )

Net income $ 41,939 $ 60,075 $ 32,844

Weighted average shares outstanding – basic and diluted 5,120,922 5,118,198 5,116,838

2 unchanged sentences

Net income per common share – basic and diluted $ 8.19 $ 11.74 $ 6.42

SUMMARY OF QUARTERLY RESULTS (UNAUDITED)

Net Income (Loss) Per Common Share (1)

(Amounts in thousands, except per share amounts)

Net Income (Loss)

_______________________

The total for the year may differ from the sum of the quarters as a result of weighting.

Includes $23,797, or $4.65 per common share, of expense for potential additional New York City real property transfer taxes on the 2012 sale of Kings Plaza.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data