What changed in this filing

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Item 1. Financial Statements

2021-08-02 compared with 2021-05-03 · 117 added, 57 removed, 324 unchanged (35% of the section changed)

4 unchanged sentences

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

ASSETS March 31, 2021 December 31, 2020

ASSETS June 30, 2021 December 31, 2020

Real estate, at cost:

47 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Rental revenues $ 51,388 $ 45,478 $ 107,541 $ 99,588

2 unchanged sentences

Depreciation and amortization ( 8,132 ) ( 7,633 ) ( 16,674 ) ( 15,542 )

General and administrative, including management fees to Vornado of $ 595 in each period

General and administrative, including management fees to Vornado of $ 595 and $ 1,190 in each three and six month period, respectively

( 1,823 ) ( 2,111 ) ( 3,366 ) ( 3,562 )

5 unchanged sentences

3,698 1,837 4,280 ( 9,558 )

Net gain on sale of real estate 9,124 — 9,124 —

Net income $ 25,898 $ 12,331 $ 43,780 $ 16,903

6 unchanged sentences

(Amounts in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income $ 25,898 $ 12,331 $ 43,780 $ 16,903

Other comprehensive income:

Other comprehensive (loss) income:

Change in fair value of interest rate derivatives ( 751 ) ( 4 ) 4,447 21

7 unchanged sentences

Earnings Accumulated

Comprehensive Income (Loss) Treasury

Stock Total Equity

Shares Amount

Three Months Ended June 30, 2021

Balance, March 31, 2021 5,173 $ 5,173 $ 32,965 $ 160,997 $ 4,491 $ ( 368 ) $ 203,258

Net income — — — 25,898 — — 25,898

Dividends paid ($ 4.50 per common share)

— — — ( 23,050 ) — — ( 23,050 )

Change in fair value of interest rate derivatives — — — — ( 751 ) — ( 751 )

Deferred stock unit grants — — 450 — — — 450

Balance, June 30, 2021 5,173 $ 5,173 $ 33,415 $ 163,845 $ 3,740 $ ( 368 ) $ 205,805

Three Months Ended June 30, 2020

Balance, March 31, 2020 5,173 $ 5,173 $ 32,365 $ 197,932 $ ( 24 ) $ ( 368 ) $ 235,078

Net income — — — 12,331 — — 12,331

Dividends paid ($ 4.50 per common share)

— — — ( 23,034 ) — — ( 23,034 )

Change in fair value of interest rate derivatives — — — — ( 4 ) — ( 4 )

Deferred stock unit grants — — 600 — — — 600

Balance, June 30, 2020 5,173 $ 5,173 $ 32,965 $ 187,229 $ ( 28 ) $ ( 368 ) $ 224,971

Capital Retained

Earnings Accumulated

Comprehensive (Loss) Income Treasury

1 unchanged sentence

Shares Amount

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

Balance, December 31, 2020 5,173 $ 5,173 $ 32,965 $ 166,165 $ ( 707 ) $ ( 368 ) $ 203,228

3 unchanged sentences

Change in fair value of interest rate derivatives — — — — 4,447 — 4,447

Balance, March 31, 2021 5,173 $ 5,173 $ 32,965 $ 160,997 $ 4,491 $ ( 368 ) $ 203,258

Three Months Ended March 31, 2020

Deferred stock unit grants — — 450 — — — 450

Balance, June 30, 2021 5,173 $ 5,173 $ 33,415 $ 163,845 $ 3,740 $ ( 368 ) $ 205,805

Six Months Ended June 30, 2020

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

3 unchanged sentences

Change in fair value of interest rate derivatives — — — — 21 — 21

Balance, March 31, 2020 5,173 $ 5,173 $ 32,365 $ 197,932 $ ( 24 ) $ ( 368 ) $ 235,078

Deferred stock unit grants — — 600 — — — 600

Balance, June 30, 2020 5,173 $ 5,173 $ 32,965 $ 187,229 $ ( 28 ) $ ( 368 ) $ 224,971

See notes to consolidated financial statements (unaudited).

3 unchanged sentences

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES 2021 2020

2 unchanged sentences

Depreciation and amortization, including amortization of debt issuance costs 17,503 17,792

Net gain on sale of real estate ( 9,124 ) —

Straight-lining of rental income 5,019 8,820

Write-off of tenant receivables — 1,022

Stock-based compensation 450 600

Change in fair value of marketable securities

( 4,280 ) 9,558

Dividends received in stock — ( 214 )

Changes in operating assets and liabilities:

7 unchanged sentences

Construction in progress and real estate additions ( 10,086 ) ( 13,009 )

Proceeds from sale of real estate 9,291 —

Return of short-term investment 3,600 —

Net cash used in investing activities ( 242 ) ( 6,961 )

Net cash provided by (used in) investing activities 2,805 ( 13,009 )

CASH FLOWS FROM FINANCING ACTIVITIES

31 unchanged sentences

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

Although substantially all our retail tenants are currently open and operating, there are limitations on occupancy and other restrictions that affect their ability to resume full operations and impact their financial health.

Although substantially all our retail tenants are currently open and operating and previous government restrictions have been lifted, there continue to be economic conditions and other factors that adversely affect the financial health of our retail tenants.

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 for qualifying deferrals and abatements.

Overall, we have collected approximately 95 % of the rent due from our tenants for the quarter ended March 31, 2021, including 100 % from our office tenant, approximately 87 % from our retail tenants, and approximately 99 % from our residential tenants.

Overall, we have collected approximately 97 % of the rent due from our tenants for the quarter ended June 30, 2021, including 100 % from our office tenant, approximately 93 % from our retail tenants, and approximately 98 % from our residential tenants.

Basis of Presentation

5 unchanged sentences

Actual results could differ from those estimates.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the operating results for the full year.

We operate in one reportable segment.

3 unchanged sentences

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.

We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In July 2021, the FASB issued an update (“ASU 2021-05”) Lessors - Certain Leases with Variable Lease Payments to ASC Topic 842, Leases (“ASC 842”).

ASU 2021-05 improves ASC 842 classification guidance as it relates to a lessor’s accounting for certain leases with variable lease payments.

ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day-one loss.

ASU 2021-05 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted.

We are currently evaluating the impact of the adoption of ASU 2021-05 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements.

ALEXANDER’S, INC.

9 unchanged sentences

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 Topic 842, Leases (“ASC 842”).

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

3 unchanged sentences

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.

We consider the tenant’s payment history, current credit status and other factors 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.

The following is a summary of revenue sources for the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,

During the quarter ended June 30, 2021, there were no changes to our lease collectability assessment.

The following is a summary of revenue sources for the three and six months ended June 30, 2021 and 2020.

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2021 2020 2021 2020

3 unchanged sentences

Rental revenues $ 51,388 $ 45,478 $ 107,541 $ 99,588

The components of lease revenues for the three months ended March 31, 2021 and 2020 are as follows:

Three Months Ended March 31,

The components of lease revenues for the three and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2021 2020 2021 2020

2 unchanged sentences

Lease revenues $ 48,904 $ 44,099 $ 103,315 $ 96,085

Bloomberg accounted for revenue of $ 28,757,000 and $ 27,115,000 for the three months ended March 31, 2021 and 2020, respectively, representing approximately 51 % and 50 % of our total revenues in each period, respectively.

Bloomberg L.P.

(“Bloomberg”) accounted for revenue of $ 57,513,000 and $ 53,180,000 for the six months ended June 30, 2021 and 2020, respectively, representing approximately 53 % of our total revenues in each period.

No other tenant accounted for more than 10% of our total revenues.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Sale of Real Estate

On June 4, 2021, we sold a parcel of land in the Bronx, New York (“Bronx Land Parcel”) for $ 10,000,000 .

Net proceeds from the sale were $ 9,291,000 and the financial statement gain was $ 9,124,000 .

We do not expect to pay a special dividend related to this transaction.

Related Party Transactions

As of March 31, 2021, Vornado owned 32.4 % of our outstanding common stock.

As of June 30, 2021, Vornado owned 32.4 % of our outstanding common stock.

We are managed by, and our properties are leased and developed by, Vornado, pursuant to the agreements described below, which expire in March of each year and are automatically renewable.

5 unchanged sentences

In the event third-party real estate brokers are used, the fees to Vornado increase by 1 % and Vornado is responsible for the fees to the third-party real estate brokers.

Vornado is also entitled to a commission upon the sale of any of our assets equal to 3 % of gross proceeds, as defined, for asset sales less than $ 50,000,000 and 1 % of gross proceeds, as defined, for asset sales of $ 50,000,000 or more.

Pursuant to the Sales Agreement, we paid a $ 300,000 sales commission to Vornado in the second quarter of 2021 related to the sale of the Bronx Land Parcel.

We also have agreements with Building Maintenance Services LLC, a wholly owned subsidiary of Vornado, to supervise (i) cleaning, engineering and security services at our 731 Lexington Avenue property and (ii) security services at our Rego Park I and Rego Park II properties and The Alexander apartment tower.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2021 2020 2021 2020

2 unchanged sentences

Leasing fees 28 9 439 59

Commission on sale of real estate 300 — 300 —

Property management, cleaning, engineering and security fees

1,379 1,139 2,811 2,445

As of March 31, 2021, the amounts due to Vornado were $ 951,000 for management, property management, cleaning, engineering and security fees;

$ 428,000 for leasing fees;

and $ 33,000 for development fees.

$ 2,453 $ 1,970 $ 5,029 $ 4,172

As of June 30, 2021, the amounts due to Vornado were $ 648,000 for management, property management, cleaning, engineering and security fees;

$ 79,000 for development fees;

and $ 28,000 for leasing fees.

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

$ 557,000 for development fee;

$ 557,000 for development fees;

and $ 114,000 for leasing fees.

Marketable Securities

As of March 31, 2021 and December 31, 2020, we owned 564,612 common shares of The Macerich Company (“Macerich”) (NYSE:

As of March 31, 2021 and December 31, 2020, the fair value of these shares was $ 6,606,000 and $ 6,024,000 , respectively, based on Macerich’s closing share price of $ 11.70 per share and $ 10.67 per share, respectively.

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.

ALEXANDER’S, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Marketable Securities

As of June 30, 2021 and December 31, 2020, we owned 564,612 common shares of The Macerich Company (“Macerich”) (NYSE:

As of June 30, 2021 and December 31, 2020, the fair value of these shares was $ 10,304,000 and $ 6,024,000 , respectively, based on Macerich’s closing share price of $ 18.25 per share and $ 10.67 per share, respectively.

Mortgages Payable

The following is a summary of our outstanding mortgages payable as of March 31, 2021 and December 31, 2020.

The following is a summary of our outstanding mortgages payable as of June 30, 2021 and December 31, 2020.

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

(Amounts in thousands) Maturity Interest Rate at March 31, 2021 March 31, 2021 December 31, 2020

(Amounts in thousands) Maturity Interest Rate at June 30, 2021 June 30, 2021 December 31, 2020

First mortgages secured by:

16 unchanged sentences

(3) Interest at LIBOR plus 1.35 %.

The loan balance of $ 252,544 is presented net of our participation of $ 50,000 as of March 31, 2021 and December 31, 2020.

The loan balance of $ 252,544 as of December 31, 2020 is presented net of our participation of $ 50,000 .

On April 7, 2021, we used our participation in this loan to reduce the loan balance to $ 202,544 .

Stock-Based 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.

In May 2021, we granted each of the members of our Board of Directors 284 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.

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

The DSUs vested immediately and accordingly, were expensed on the date of grant, but the shares of common stock underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Company’s Board of Directors.

As of June 30, 2021, there were 17,188 DSUs outstanding and 488,599 shares were available for future grant under the Plan.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Fair Value Measurements

7 unchanged sentences

Financial Assets and Liabilities Measured at Fair Value

Financial assets measured at fair value on our consolidated balance sheet as of March 31, 2021 consist of marketable securities and an interest rate swap, 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 March 31, 2021.

There were no financial liabilities measured at fair value as of March 31, 2021.

As of March 31, 2021

Financial assets measured at fair value on our consolidated balance sheet as of June 30, 2021 consist of marketable securities and an interest rate swap, 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 June 30, 2021.

There were no financial liabilities measured at fair value as of June 30, 2021.

As of June 30, 2021

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

2 unchanged sentences

$ 14,099 $ 10,304 $ 3,795 $ —

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Fair Value Measurements - continued

Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2020 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, 2020.

8 unchanged sentences

The fair value of our mortgages payable is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings, which are provided by a third-party specialist, and is classified as Level 2.

The table below summarizes the carrying amounts and fair values of these financial instruments as of March 31, 2021 and December 31, 2020.

As of March 31, 2021 As of December 31, 2020

The table below summarizes the carrying amounts and fair values of these financial instruments as of June 30, 2021 and December 31, 2020.

As of June 30, 2021 As of December 31, 2020

(Amounts in thousands) Carrying

4 unchanged sentences

$ 1,164,544 $ 1,124,000 $ 1,164,544 $ 1,130,000

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Commitments and Contingencies

8 unchanged sentences

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

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Commitments and Contingencies - continued

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

1 unchanged sentence

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 contains a purchase option in October 2021 for $ 75,000,000 .

In 2001, we leased 30.3 acres of land in Paramus, New Jersey to IKEA Property, Inc (“IKEA”).

The lease contains a fixed-price purchase option granting IKEA the right to purchase the property 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 on October 4, 2021.

The annual triple-net rent is the sum of $ 700,000 plus the amount of interest on the mortgage loan.

If the purchase option is exercised, we will receive net cash proceeds of approximately $ 7,000,000 and recognize a gain on sale of land of approximately $ 60,000,000 .

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.

On May 13, 2021, IKEA exercised its purchase option.

We anticipate closing the sale in the fourth quarter of 2021 and expect to receive net cash proceeds of approximately $ 4,000,000 after repayment of the mortgage loan and closing costs.

We expect to recognize a financial statement gain of approximately $ 60,000,000 .

We do not expect to pay a special dividend related to this transaction.

Rego Park I Litigation

8 unchanged sentences

Letters of Credit

Approximately $ 960,000 of standby letters of credit were issued and outstanding as of March 31, 2021.

Approximately $ 960,000 of standby letters of credit were issued and outstanding as of June 30, 2021.

There are various other legal actions against us in the ordinary course of business.

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)

Earnings Per Share

2 unchanged sentences

Diluted income per share is determined using the weighted average shares of common stock outstanding during the period, and assumes all potentially dilutive securities were converted into common shares at the earliest date possible.

There were no potentially dilutive securities outstanding during the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,

There were no potentially dilutive securities outstanding during the three and six months ended June 30, 2021 and 2020.

Three Months Ended June 30, Six Months Ended June 30,

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

2021 2020 2021 2020

Net income $ 25,898 $ 12,331 $ 43,780 $ 16,903

6 unchanged sentences

We have reviewed the accompanying consolidated balance sheet of Alexander’s, Inc.

and subsidiaries (the “Company”) as of March 31, 2021, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the three-month periods ended March 31, 2021 and 2020, and the related notes (collectively referred to as the “interim financial information”).

and subsidiaries (the “Company”) as of June 30, 2021, the related consolidated statements of income, comprehensive income, and changes in equity, for the three-month and six-month periods ended June 30, 2021 and 2020, and of cash flows for the six-month periods ended June 30, 2021 and 2020, and the related notes (collectively referred to as the “interim financial information”).

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

12 unchanged sentences

New York, New York

August 2, 2021

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-Q

Item 1. Financial Statements