What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-14 compared with 2021-02-16 · 102 added, 146 removed, 464 unchanged (35% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements Page

Report of Independent Registered Public Accounting Firm 40

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of December 31, 2021 and 2020 41

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Real Estate - Refer to Note 3 to the financial statements

Real Estate Impairment – Refer to Note 2 to the financial statements

Critical Audit Matter Description

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 evaluation of the recoverability of real estate assets consists of 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 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.

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

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• 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.

• Inquired with management regarding their determination of the capitalization rates, 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.

• 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 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.

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Retained earnings 206,875 166,165

Accumulated other comprehensive loss ( 707 ) ( 49 )

Accumulated other comprehensive income (loss) 7,494 ( 707 )

252,957 203,596

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Interest and debt expense ( 19,686 ) ( 24,204 ) ( 38,901 )

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

Change in fair value of marketable securities 3,482 ( 8,599 ) ( 8,757 )

Net gains on sale of real estate 69,950 — —

Income from continuing operations 130,582 41,939 60,075

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

Income from discontinued operations (see Note 7) 2,348 — —

Net income $ 132,930 $ 41,939 $ 60,075

1 unchanged sentence

Income from continuing operations $ 25.48 $ 8.19 $ 11.74

Loss from discontinued operations (see Note 7) — — ( 4.65 )

Income from discontinued operations (see Note 7) 0.46 — —

Net income per common share $ 25.94 $ 8.19 $ 11.74

8 unchanged sentences

Net income $ 132,930 $ 41,939 $ 60,075

Other comprehensive (loss) income:

Other comprehensive income (loss):

Change in fair value of interest rate derivatives 8,201 ( 658 ) 78

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Comprehensive

Income (Loss)

(Loss) Income

Common Stock Additional

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— — — ( 92,124 ) — — ( 92,124 )

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

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

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Stock-based compensation expense 450 600 394

Net gains on sale of real estate (including $ 2,348 from discontinued operations)

( 72,298 ) — —

Change in fair value of marketable securities ( 3,482 ) 8,599 8,757

8 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

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

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

Net cash used in investing activities ( 32,460 ) ( 9,449 ) ( 1,137 )

Construction in progress and real estate additions ( 19,520 ) ( 32,460 ) ( 9,449 )

Proceeds from sales of real estate 81,871 — —

Return of short-term investment 3,600 — —

Proceeds from sale of marketable securities 9,506 — —

Net cash provided by (used in) investing activities 75,457 ( 32,460 ) ( 9,449 )

CASH FLOWS FROM FINANCING ACTIVITIES

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Proceeds from borrowings — 239,708 —

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 )

Net cash (used in) provided by financing activities ( 160,294 ) 90,294 ( 92,139 )

Net increase in cash and cash equivalents and restricted cash 33,628 135,900 24,482

Cash and cash equivalents and restricted cash at beginning of year 449,877 313,977 289,495

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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.

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We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE:

We have seven properties in the greater New York City metropolitan area consisting of:

We have six properties in the New York City metropolitan area consisting of:

Operating properties

• 731 Lexington Avenue, a 1,079,000 square foot multi-use building, comprising the entire block bounded by Lexington Avenue, East 59 th Street, Third Avenue and East 58 th Street in Manhattan.

The building contains 920,000 and 155,000 of net rentable square feet of office and retail space, respectively, which we own, and 248,000 square feet of residential space consisting of 105 condominium units, which we sold.

The building contains 939,000 and 140,000 of net rentable square feet of office and retail space, respectively.

Bloomberg L.P.

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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;

• Paramus, located at the intersection of Routes 4 and 17 in Paramus, New Jersey, consists of 30.3 acres of land that is leased to IKEA;

• Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is sub-leased to New World Mall LLC for the remainder of our ground lease term.

• Flushing, a 167,000 square foot building, located on Roosevelt Avenue and Main Street in Queens, that is sub-leased to New World Mall LLC.

Property to be developed

• Rego Park III, a 140,000 square foot land parcel adjacent to the Rego Park II shopping center in Queens, at the intersection of Junction Boulevard and the Horace Harding Service Road.

We have determined that our properties have similar economic characteristics and meet the criteria that permit the properties to be aggregated into one reportable segment (the leasing, management, development and redeveloping of properties in the greater New York City metropolitan area).

Our chief operating decision-maker assesses and measures segment operating results based on a performance measure referred to as net operating income at the individual operating segment.

Net operating income for each property represents net rental revenues less operating expenses.

ALEXANDER’S, INC.

AND SUBSIDIARIES

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

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Actual results could differ from those estimates.

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

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recently Issued Accounting Literature – In March 2020, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2020-04”) establishing Accounting Standards Codification (“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 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 provides additional 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 adopted this update on January 1, 2022 and it 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.

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

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

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

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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.

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Restricted Cash – Restricted cash primarily consists of security deposits and other cash escrowed under loan agreements, including for debt service, real estate taxes, property insurance and capital improvements.

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

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.

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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, 2020 were characterized, for federal income tax purposes, as 100.0 % ordinary income.

Dividends distributed for the year ended December 31, 2021 were characterized, for federal income tax purposes, as 58.3 % ordinary income and 41.7 % 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,

2020 2019 2018

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

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

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

As of December 31, 2020, the net basis of our assets and liabilities for tax purposes is approximately $ 139,364,000 lower than the amount reported for financial statement purposes.

Dividends distributed for the year ended December 31, 2020 were characterized, for federal income tax purposes, as 100 % ordinary income.

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

ALEXANDER’S, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

The estimated taxable income attributable to our common stockholders (unaudited) for the years ended December 31, 2021, 2020 and 2019 was approximately $ 101,184,000 , $ 81,375,000 , and $ 74,079,000 , respectively.

The book to tax differences between net income and estimated taxable income primarily result from differences in the income recognition or deductibility of depreciation and amortization, gains or losses from the sale of real estate and other capital transactions, straight-line rent adjustments, the change in fair value of marketable securities and income from discontinued operations.

As of December 31, 2021, the net basis of our assets and liabilities for tax reporting purposes was approximately $ 144,100,000 lower than the amount reported for financial statement purposes.

REVENUE RECOGNITION

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Lease revenues $ 198,109 $ 191,416 $ 217,251

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

Parking revenue 4,407 4,207 5,608

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Rental revenues $ 206,148 $ 199,142 $ 226,350

(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, 2021, 2020 and 2019 are as follows:

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Lease revenues $ 198,109 $ 191,416 $ 217,251

REAL ESTATE SALES

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 after closing costs and the financial statement gain was $ 9,124,000 .

On October 4, 2021, we sold 30.3 acres of land located in Paramus, New Jersey (“Paramus Property”) to IKEA Property, Inc.

(“IKEA”), the tenant at the property, for $ 75,000,000 , pursuant to IKEA’s purchase option contained in the lease.

Net proceeds from the sale were $ 4,580,000 after closing costs and the repayment of the $ 68,000,000 mortgage loan.

The financial statement gain was $ 60,826,000 , which was recognized in the fourth quarter of 2021.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS

As of December 31, 2020, Vornado owned 32.4 % of our outstanding common stock.

As of December 31, 2021, Vornado owne d 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.

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Roth, Interstate and its other two general partners, David Mandelbaum and Russell B.

(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.

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

(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.0 % of our outstanding common stock, in addition to the 2.2 % th ey indirectly own through Vornado.

Management and Development Agreements

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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.

In addition, we paid a $ 750,000 sales commission to Vornado in the fourth quarter of 2021 related to the Paramus Property sale.

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.

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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.

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Leasing fees 1,800 276 4,786

Commission on sales of real estate 1,050 — —

Property management, cleaning, engineering

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and $ 114,000 for leasing fees.

MARKETABLE SECURITIES

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 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

In 2012, we sold the Kings Plaza Regional Shopping Center (“Kings Plaza”) and paid real property transfer taxes to New York City in connection with the sale.

In 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an additional New York City real property transfer tax amount, including interest.

In 2014, in a case with similar facts, the NYC DOF issued a Notice of Determination to a Vornado joint venture assessing an additional New York City real property transfer tax amount, including interest.

In January 2017, a New York City administrative law judge made a determination upholding the Vornado joint venture’s position that such additional real property transfer taxes were not due.

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

On December 12, 2019, that motion was denied and the case can no longer be appealed.

Based on the precedent of the Tribunal’s decision, we accrued an expense for the potential additional real property transfer taxes of $ 23,797,000 ($ 15,874,000 of real property transfer tax and $ 7,923,000 of interest) during the three months ended March 31, 2018.

On April 5, 2018, we paid this amount in order to stop the interest from accruing.

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 .

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MARKETABLE SECURITIES

In December 2021, we sold our 564,612 common shares of The Macerich Company (“Macerich”), realizing cash proceeds of $ 9,506,000 .

These shares were received in connection with the sale of Kings Plaza Regional Shopping Center (“Kings Plaza”) to Macerich in 2012.

The fair value of the shares as of December 31, 2020 was $ 6,024,000 based on Macerich’s closing share price of $ 10.67 per share.

These shares were presented at fair value as “marketable securities” on our consolidated balance sheet as of December 31, 2020 and the gains and losses resulting from the mark-to-market of these securities were recognized in current period earnings.

DISCONTINUED OPERATIONS

In 2012, when we sold Kings Plaza to Macerich, $ 2,348,000 of the financial statement gain was deferred since a portion of the sales price was received in Macerich common shares.

In December 2021, we recognized the $ 2,348,000 gain upon the disposition of our Macerich common shares.

As the results related to Kings Plaza were previously classified as discontinued operations, we have classified the gain as “income from discontinued operations” on our consolidated statement of income for the year ended December 31, 2021 in accordance with the provisions of ASC Topic 360, Property, Plant and Equipment .

MORTGAGES PAYABLE

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.

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First mortgages secured by:

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

731 Lexington Avenue, office condominium (1)

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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 %.

(2) Interest at LIBOR plus 1.40 % which was swapped to a fixed rate of 1.72 %.

(3) Interest at LIBOR plus 1.35 %.

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.

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 .

(4) On October 4, 2021, the mortgage loan was repaid in connection with the sale of the property.

See Note 4 - Real Estate Sales for further details.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MORTGAGES PAYABLE - continued

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

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Year Ending December 31, Amount

2021 $ 68,000

Thereafter 94,000

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FAIR VALUE MEASUREMENTS

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Financial Assets and Liabilities Measured at Fair Value

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.

Financial assets measured at fair value on our consolidated balance sheets as of December 31, 2021 consist of an interest rate swap which is presented in the table below based on its level in the fair value hierarchy, and an interest rate cap, the fair value of which was insignificant as of December 31, 2021.

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

As of December 31, 2021

(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 $ —

Interest rate swap (included in other assets) $ 7,545 $ — $ 7,545 $ —

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.

Financial liabilities measured at fair value 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

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

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

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FAIR VALUE MEASUREMENTS - continued

Financial Assets and Liabilities not Measured at Fair Value

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Mortgages payable (excluding deferred debt issuance costs, net) $ 1,096,544 $ 1,064,122 $ 1,164,544 $ 1,130,000

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

We lease space to tenants under operating leases in an office building and in retail centers.

3 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” on our consolidated statements of income.

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

4 unchanged sentences

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

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.

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

Bloomberg accounted for revenue of $ 113,140,000 , $ 109,066,000 , and $ 109,113,000 in the years ended December 31, 2021, 2020 and 2019, respectively, representing approximately 55 %, 55 % and 48 % of our rental revenues in each year, respectively.

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

If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition.

1 unchanged sentence

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

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

LEASES - continued

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.

On January 1, 2019, we recorded a right-of-use asset and lease liability related to this ground lease equal to the present value of the remaining minimum lease payments.

As of December 31, 2021, the right-of-use asset of $ 3,394,000 and the lease liability of $ 3,602,000 , are included in “ other assets ” and “ other liabilities ,” respectively, on our consolidated balance sheet.

2 unchanged sentences

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:

1 unchanged sentence

For the year ending December 31,

Thereafter 800

Total undiscounted cash flows 4,000

9 unchanged sentences

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.

17 unchanged sentences

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.

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.

Rego Park I Litigation

7 unchanged sentences

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

Both parties have filed motions for summary judgment and in November 2021, the parties stipulated to lift the stay to allow the motions to be decided by the court.

Letters of Credit

Approximately $ 960,000 of standby letters of credit were issued and outstanding as of December 31, 2020.

Approximat ely $ 960,000 of standby letters of credit were issued and outstanding as of December 31, 2021.

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

22 unchanged sentences

Income from continuing operations $ 130,582 $ 41,939 $ 60,075

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

Income from discontinued operations (see Note 7) 2,348 — —

Net income $ 132,930 $ 41,939 $ 60,075

1 unchanged sentence

Income from continuing operations $ 25.48 $ 8.19 $ 11.74

Loss from discontinued operations (see Note 7) — — ( 4.65 )

Income from discontinued operations (see Note 7) 0.46 — —

Net income per common share – basic and diluted $ 25.94 $ 8.19 $ 11.74

1 unchanged sentence

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