What changed in this filing

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Item 1. Financial Statements

2022-05-02 compared with 2021-11-01 · 51 added, 156 removed, 282 unchanged (42% of the section changed)

4 unchanged sentences

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

ASSETS September 30, 2021 December 31, 2020

ASSETS March 31, 2022 December 31, 2021

Real estate, at cost:

9 unchanged sentences

Restricted cash 18,988 19,966

Marketable securities 9,435 6,024

Tenant and other receivables 5,775 6,385

Receivable arising from the straight-lining of rents 133,318 135,457

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

of $ 24,633 and $ 27,851 , respectively

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

$ 24,505 and $ 23,943 , respectively

31,609 31,312

19 unchanged sentences

Retained earnings 198,347 206,875

Accumulated other comprehensive income (loss) 3,905 ( 707 )

Accumulated other comprehensive income 19,221 7,494

256,156 252,957

9 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Rental revenues $ 49,215 $ 56,153

2 unchanged sentences

Depreciation and amortization ( 7,351 ) ( 8,542 )

General and administrative, including management fees to Vornado of $ 595 and $ 1,785 in each three and nine month period, respectively

General and administrative, including management fees to Vornado of

$ 610 and $ 595 , respectively

( 1,469 ) ( 1,543 )

4 unchanged sentences

Change in fair value of marketable securities

( 869 ) ( 1,231 ) 3,411 ( 10,789 )

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

Net income $ 14,532 $ 17,882

6 unchanged sentences

(Amounts in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Net income $ 14,532 $ 17,882

Other comprehensive income (loss):

Other comprehensive income:

Change in fair value of interest rate derivatives 11,727 5,198

10 unchanged sentences

Shares Amount

Three Months Ended September 30, 2021

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

Net income — — — 11,401 — — 11,401

Dividends paid ($ 4.50 per common share)

— — — ( 23,060 ) — — ( 23,060 )

Change in fair value of interest rate derivatives — — — — 165 — 165

Balance, September 30, 2021 5,173 $ 5,173 $ 33,415 $ 152,186 $ 3,905 $ ( 368 ) $ 194,311

Three Months Ended September 30, 2020

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

Net income — — — 6,604 — — 6,604

Dividends paid ($ 4.50 per common share)

— — — ( 23,050 ) — — ( 23,050 )

Change in fair value of interest rate derivatives — — — — ( 14 ) — ( 14 )

Balance, September 30, 2020 5,173 $ 5,173 $ 32,965 $ 170,783 $ ( 42 ) $ ( 368 ) $ 208,511

Capital Retained

Earnings Accumulated

Comprehensive (Loss) Income Treasury

Stock Total Equity

Shares Amount

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Balance, December 31, 2021 5,173 $ 5,173 $ 33,415 $ 206,875 $ 7,494 $ ( 368 ) $ 252,589

3 unchanged sentences

Change in fair value of interest rate derivatives — — — — 11,727 — 11,727

Deferred stock unit grants — — 450 — — — 450

Balance, September 30, 2021 5,173 $ 5,173 $ 33,415 $ 152,186 $ 3,905 $ ( 368 ) $ 194,311

Nine Months Ended September 30, 2020

Balance, March 31, 2022 5,173 $ 5,173 $ 33,415 $ 198,347 $ 19,221 $ ( 368 ) $ 255,788

Three Months Ended March 31, 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 — — — — 5,198 — 5,198

Deferred stock unit grants — — 600 — — — 600

Balance, September 30, 2020 5,173 $ 5,173 $ 32,965 $ 170,783 $ ( 42 ) $ ( 368 ) $ 208,511

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

See notes to consolidated financial statements (unaudited).

3 unchanged sentences

(Amounts in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES 2022 2021

2 unchanged sentences

Depreciation and amortization, including amortization of debt issuance costs 7,762 8,958

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

Straight-lining of rental income 2,139 2,637

Write-off of tenant receivables — 4,122

Stock-based compensation 450 600

Change in fair value of marketable securities

( 3,411 ) 10,789

Dividends received in stock — ( 214 )

Changes in operating assets and liabilities:

7 unchanged sentences

Construction in progress and real estate additions ( 1,158 ) ( 3,842 )

Proceeds from sale of real estate 9,291 —

Return of short-term investment — 3,600

3 unchanged sentences

Debt issuance costs — ( 35 )

Proceeds from borrowing

Debt repayments — ( 50,000 )

Net cash (used in) provided by financing activities ( 69,205 ) 23,910

Net cash used in financing activities ( 23,060 ) ( 23,085 )

Net increase in cash and cash equivalents and restricted cash 7,967 30,639

23 unchanged sentences

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

As of September 30, 2021, we had seven properties in the greater New York City metropolitan area, including 30.3 acres of land located in Paramus, New Jersey (“Paramus Property”) which we sold in October 2021.

See Note 5 - Real Estate Sales for further details.

We have six properties in the New York City metropolitan area.

Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Alexander’s and its consolidated subsidiaries.

All intercompany amounts have been eliminated and all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made.

All adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted.

2 unchanged sentences

Actual results could differ from those estimates.

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

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year.

We operate in one reportable segment.

6 unchanged sentences

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 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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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.

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, 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.

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

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

Three Months Ended September 30, Nine Months Ended September 30,

The following is a summary of revenue sources for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31,

(Amounts in thousands) 2022 2021

3 unchanged sentences

Rental revenues $ 49,215 $ 56,153

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

Three Months Ended September 30, Nine Months Ended September 30,

The components of lease revenues for the three months ended March 31, 2022 and 2021 are as follows:

Three Months Ended March 31,

(Amounts in thousands) 2022 2021

2 unchanged sentences

Lease revenues $ 46,808 $ 54,411

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Revenue Recognition - continued

Bloomberg L.P.

(“Bloomberg”) accounted for revenue of $ 85,057,000 and $ 80,696,000 for the nine months ended September 30, 2021 and 2020, respectively, representing approximately 54 % and 56 % of our total revenues in each period, respectively.

(“Bloomberg”) accounted for revenue of $ 27,518,000 and $ 28,757,000 for the three months ended March 31, 2022 and 2021, respectively, representing approximately 56 % and 51 % of our total revenues in each period, respectively.

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

2 unchanged sentences

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)

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 our 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 will be recognized in the fourth quarter of 2021.

We do not expect to pay a special dividend related to these transactions.

Related Party Transactions

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

As of March 31, 2022, 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 (the “Sales Agreement”).

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 will pay 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 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.

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Related Party Transactions - continued

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

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Amounts in thousands) 2022 2021

2 unchanged sentences

Leasing fees 1,318 411

Commission on sale of real estate — — 300 —

Property management, cleaning, engineering and security fees

$ 3,290 $ 2,576

$ 3,489 $ 2,075 $ 8,518 $ 6,247

As of September 30, 2021, the amounts due to Vornado were $ 1,291,000 for leasing fees;

As of March 31, 2022, the amounts due to Vornado were $ 1,328,000 for leasing fees;

$ 606,000 for management, property management, cleaning, engineering and security fees;

3 unchanged sentences

and $ 69,000 for leasing fees.

Marketable Securities

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

As of September 30, 2021 and December 31, 2020, the fair value of these shares was $ 9,435,000 and $ 6,024,000 , respectively, based on Macerich’s closing share price of $ 16.71 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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Mortgages Payable

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

The following is a summary of our outstanding mortgages payable as of March 31, 2022 and December 31, 2021.

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

Interest Rate at September 30, 2021 Balance at

(Amounts in thousands) Maturity September 30, 2021 December 31, 2020

Interest Rate at March 31, 2022 Balance at

(Amounts in thousands) Maturity March 31, 2022 December 31, 2021

First mortgages secured by:

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

731 Lexington Avenue, office condominium (1)

10 unchanged sentences

$ 1,089,990 $ 1,089,613

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

See Note 5 - Real Estate Sales for further details.

(1) Interest at LIBOR plus 0.90 %.

2 unchanged sentences

(3) Interest at LIBOR plus 1.35 %.

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 .

ALEXANDER’S, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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 September 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 September 30, 2021.

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

As of September 30, 2021

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

Marketable securities $ 9,435 $ 9,435 $ — $ —

Financial assets measured at fair value on our consolidated balance sheet as of March 31, 2022 and December 31, 2021 consist of an interest rate swap which is presented in the tables below based on its level in the fair value hierarchy, and an interest rate cap, the fair value of which was insignificant as of March 31, 2022 and December 31, 2021.

There were no financial liabilities measured at fair value as of March 31, 2022 and December 31, 2021.

As of March 31, 2022

Total Level 1 Level 2 Level 3

(Amounts in thousands)

Interest rate swap (included in other assets) $ 19,253 $ — $ 19,253 $ —

$ 13,395 $ 9,435 $ 3,960 $ —

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, 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 $ —

ALEXANDER’S, INC.

6 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 September 30, 2021 and December 31, 2020.

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

The table below summarizes the carrying amounts and fair values of these financial instruments as of March 31, 2022 and December 31, 2021.

As of March 31, 2022 As of December 31, 2021

(Amounts in thousands) Carrying

3 unchanged sentences

Mortgages payable (excluding deferred debt issuance costs, net) $ 1,096,544 $ 1,060,157 $ 1,096,544 $ 1,064,122

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

Commitments and Contingencies

15 unchanged sentences

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 the 195,000 square foot store 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 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.

In addition to injunctive relief, Sears sought, among other things, damages of not less than $ 4,000,000 and future damages it estimated would not be less than $ 25,000,000 .

In March 2016, Sears withdrew its claim for future damages leaving a remaining claim for property damages, which we estimate to be approximately $ 650,000 based on information provided by Sears.

We intend to defend the remaining claim vigorously.

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

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

Letters of Credit

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

Approximately $ 900,000 of standby letters of credit were issued and outstanding as of March 31, 2022.

In January 2022, New World Mall LLC, the sub-tenant at our Flushing property, exercised its one remaining 10 -year extension option through January 2037.

As a result, we remeasured our related ground lease liability to include our 10 -year extension option and recorded an estimated incremental right-of-use asset and lease liability of approximately $ 17,000,000 which is included in “other assets” and “other liabilities,” respectively, on our consolidated balance sheet as of March 31, 2022.

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

4 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 and nine months ended September 30, 2021 and 2020.

Three Months Ended September 30, Nine Months Ended September 30,

There were no potentially dilutive securities outstanding during the three months ended March 31, 2022 and 2021.

Three Months Ended March 31,

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

2021 2020 2021 2020

Net income $ 14,532 $ 17,882

6 unchanged sentences

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

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

and subsidiaries (the “Company”) as of March 31, 2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, 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

November 1, 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