Item 1. Financial Statements
Item 1. Financial Statements
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands, except share and per share amounts)
As of
ASSETS June 30, 2022 December 31, 2021
Real estate, at cost:
Land $ 33,050 $ 33,050
Buildings and leasehold improvements 1,023,598 1,014,525
Development and construction in progress 16,738 21,851
Total 1,073,386 1,069,426
Accumulated depreciation and amortization ( 383,309 ) ( 370,557 )
Real estate, net 690,077 698,869
Cash and cash equivalents 310,349 463,539
Restricted cash 19,149 19,966
Investments in U.S. Treasury bills 197,369 —
Tenant and other receivables 4,407 6,385
Receivable arising from the straight-lining of rents 131,509 135,457
Deferred leasing costs, net, including unamortized leasing fees to Vornado
of $ 23,726 and $ 23,943 , respectively
30,573 31,312
Other assets 41,819 36,437
$ 1,425,252 $ 1,391,965
LIABILITIES AND EQUITY
Mortgages payable, net of deferred debt issuance costs $ 1,090,360 $ 1,089,613
Amounts due to Vornado 981 879
Accounts payable and accrued expenses 63,527 44,681
Other liabilities 20,468 4,203
Total liabilities 1,175,336 1,139,376
Commitments and contingencies
Preferred stock: $ 1.00 par value per share; authorized, 3,000,000 shares;
issued and outstanding, no ne
— —
Common stock: $ 1.00 par value per share; authorized, 10,000,000 shares;
issued, 5,173,450 shares; outstanding, 5,107,290 shares
5,173 5,173
Additional capital 33,865 33,415
Retained earnings 190,101 206,875
Accumulated other comprehensive income 21,145 7,494
250,284 252,957
Treasury stock: 66,160 shares, at cost
( 368 ) ( 368 )
Total equity 249,916 252,589
$ 1,425,252 $ 1,391,965
See notes to consolidated financial statements (unaudited).
4
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in thousands, except share and per share amounts)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 2022 2021
REVENUES
Rental revenues $ 49,824 $ 51,388 $ 99,039 $ 107,541
EXPENSES
Operating, including fees to Vornado of $ 1,536 , $ 1,489 , $ 2,914 and $ 3,049 , respectively
( 21,372 ) ( 23,422 ) ( 42,914 ) ( 47,222 )
Depreciation and amortization ( 7,413 ) ( 8,132 ) ( 14,764 ) ( 16,674 )
General and administrative, including management fees to Vornado of $ 610 , $ 595 , $ 1,220 and $ 1,190 , respectively
( 1,916 ) ( 1,823 ) ( 3,385 ) ( 3,366 )
Total expenses ( 30,701 ) ( 33,377 ) ( 61,063 ) ( 67,262 )
Interest and other income, net 1,173 151 1,267 323
Interest and debt expense ( 5,482 ) ( 5,086 ) ( 9,897 ) ( 10,226 )
Change in fair value of marketable securities — 3,698 — 4,280
Net gain on sale of real estate — 9,124 — 9,124
Net income $ 14,814 $ 25,898 $ 29,346 $ 43,780
Net income per common share - basic and diluted $ 2.89 $ 5.05 $ 5.73 $ 8.55
Weighted average shares outstanding - basic and diluted 5,125,710 5,123,255 5,125,098 5,122,733
See notes to consolidated financial statements (unaudited).
5
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(Amounts in thousands)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 2022 2021
Net income $ 14,814 $ 25,898 $ 29,346 $ 43,780
Other comprehensive income (loss):
Change in fair value of interest rate derivatives and other 1,924 ( 751 ) 13,651 4,447
Comprehensive income $ 16,738 $ 25,147 $ 42,997 $ 48,227
See notes to consolidated financial statements (unaudited).
6
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
(Amounts in thousands, except per share amounts)
Additional
Capital Retained
Earnings Accumulated
Other
Comprehensive Income Treasury
Stock Total Equity
Common Stock
Shares Amount
For the Three Months Ended June 30, 2022
Balance, March 31, 2022 5,173 $ 5,173 $ 33,415 $ 198,347 $ 19,221 $ ( 368 ) $ 255,788
Net income — — — 14,814 — — 14,814
Dividends paid ($ 4.50 per common share)
— — — ( 23,060 ) — — ( 23,060 )
Change in fair value of interest rate derivatives and other — — — — 1,924 — 1,924
Deferred stock unit grants — — 450 — — — 450
Balance, June 30, 2022 5,173 $ 5,173 $ 33,865 $ 190,101 $ 21,145 $ ( 368 ) $ 249,916
For the 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
Additional
Capital Retained
Earnings Accumulated
Other
Comprehensive Income (Loss) Treasury
Stock Total Equity
Common Stock
Shares Amount
For the Six Months Ended June 30, 2022
Balance, December 31, 2021 5,173 $ 5,173 $ 33,415 $ 206,875 $ 7,494 $ ( 368 ) $ 252,589
Net income — — — 29,346 — — 29,346
Dividends paid ($ 9.00 per common share)
— — — ( 46,120 ) — — ( 46,120 )
Change in fair value of interest rate derivatives and other — — — — 13,651 — 13,651
Deferred stock unit grants — — 450 — — — 450
Balance, June 30, 2022 5,173 $ 5,173 $ 33,865 $ 190,101 $ 21,145 $ ( 368 ) $ 249,916
For the Six Months Ended June 30, 2021
Balance, December 31, 2020 5,173 $ 5,173 $ 32,965 $ 166,165 $ ( 707 ) $ ( 368 ) $ 203,228
Net income — — — 43,780 — — 43,780
Dividends paid ($ 9.00 per common share)
— — — ( 46,100 ) — — ( 46,100 )
Change in fair value of interest rate derivatives — — — — 4,447 — 4,447
Deferred stock unit grants — — 450 — — — 450
Balance, June 30, 2021 5,173 $ 5,173 $ 33,415 $ 163,845 $ 3,740 $ ( 368 ) $ 205,805
See notes to consolidated financial statements (unaudited).
7
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in thousands)
For the Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES 2022 2021
Net income $ 29,346 $ 43,780
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amortization of debt issuance costs 15,587 17,503
Net gain on sale of real estate — ( 9,124 )
Straight-lining of rental income 3,948 5,019
Stock-based compensation expense 450 450
Change in fair value of marketable securities — ( 4,280 )
Other non-cash adjustments ( 611 ) —
Change in operating assets and liabilities:
Tenant and other receivables, net 1,978 554
Other assets 23,699 ( 16,917 )
Amounts due to Vornado 38 ( 276 )
Accounts payable and accrued expenses 18,727 26,138
Other liabilities 166 ( 328 )
Net cash provided by operating activities 93,328 62,519
CASH FLOWS FROM INVESTING ACTIVITIES
Construction in progress and real estate additions ( 3,800 ) ( 10,086 )
Proceeds from sale of real estate — 9,291
Return of short-term investment — 3,600
Purchase of U.S. Treasury bills ( 197,407 ) —
Net cash (used in) provided by investing activities ( 201,207 ) 2,805
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid ( 46,120 ) ( 46,100 )
Debt issuance costs ( 8 ) ( 45 )
Net cash used in financing activities ( 46,128 ) ( 46,145 )
Net (decrease) increase in cash and cash equivalents ( 154,007 ) 19,179
Cash, cash equivalents and restricted cash at beginning of period 483,505 449,877
Cash, cash equivalents and restricted cash at end of period $ 329,498 $ 469,056
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period $ 463,539 $ 428,710
Restricted cash at beginning of period 19,966 21,167
Cash and cash equivalents and restricted cash at beginning of period $ 483,505 $ 449,877
Cash and cash equivalents at end of period $ 310,349 $ 447,687
Restricted cash at end of period 19,149 21,369
Cash and cash equivalents and restricted cash at end of period $ 329,498 $ 469,056
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest $ 8,540 $ 9,401
NON-CASH TRANSACTIONS
Liability for real estate additions, including $ 3 and $ 79 for development fees due to Vornado in 2022 and 2021, respectively
$ 1,426 $ 1,776
Write-off of fully depreciated assets 23 5,628
See notes to consolidated financial statements (unaudited).
8
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO). We have six properties in the New York City metropolitan area.
2. Basis of Presentation
The accompanying consolidated financial statements are unaudited and include the accounts of Alexander’s and its consolidated subsidiaries. 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. These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.
We have made 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. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for the full year.
Our investments in U.S. Treasury bills are accounted for as available-for-sale debt instruments and are recorded at fair value in “investments in U.S. Treasury bills” on our consolidated balance sheet as of June 30, 2022. See Note 8 - Fair Value Measurements for information on our investments in U.S. Treasury bills.
We operate in one reportable segment.
3. Recently Issued Accounting Literature
In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 establishing Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform and in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “ASC 848”). ASC 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASC 848 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.
4. Revenue Recognition
The following is a summary of revenue sources for the three and six months ended June 30, 2022 and 2021.
For the Three Months Ended June 30, For the Six Months Ended June 30,
(Amounts in thousands) 2022 2021 2022 2021
Lease revenues $ 47,711 $ 48,904 $ 94,519 $ 103,315
Parking revenue 1,165 1,212 2,393 2,008
Tenant services 948 1,272 2,127 2,218
Rental revenues $ 49,824 $ 51,388 $ 99,039 $ 107,541
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ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. Revenue Recognition - continued
The components of lease revenues for the three and six months ended June 30, 2022 and 2021 are as follows:
For the Three Months Ended June 30, For the Six Months Ended June 30,
(Amounts in thousands) 2022 2021 2022 2021
Fixed lease revenues $ 33,418 $ 32,233 $ 65,621 $ 66,043
Variable lease revenues 14,293 16,671 28,898 37,272
Lease revenues $ 47,711 $ 48,904 $ 94,519 $ 103,315
Bloomberg L.P. (“Bloomberg”) accounted for revenue of $ 55,909,000 and $ 57,513,000 for the six months ended June 30, 2022 and 2021, respectively, representing approximately 56 % and 53 % of our total revenues in each period, respectively. No other tenant accounted for more than 10% of our total 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. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.
5. Related Party Transactions
Vornado
As of June 30, 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.
Management and Development Agreements
We pay Vornado an annual management fee equal to the sum of (i) $ 2,800,000 , (ii) 2 % of gross revenue from the Rego Park II shopping center, (iii) $ 0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue and (iv) $ 354,000 , escalating at 3 % per annum, for managing the common area of 731 Lexington Avenue. Vornado is also entitled to a development fee equal to 6 % of development costs, as defined.
Leasing and Other Agreements
Vornado also provides us with leasing services for a fee of 3 % of rent for the first ten years of a lease term, 2 % of rent for the eleventh through the twentieth year of a lease term, and 1 % of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by tenants. 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.
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.
10
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
5. Related Party Transactions - continued
The following is a summary of fees incurred to Vornado under the various agreements discussed above.
For the Three Months Ended June 30, For the Six Months Ended June 30,
(Amounts in thousands) 2022 2021 2022 2021
Company management fees $ 700 $ 700 $ 1,400 $ 1,400
Development fees — 46 3 79
Leasing fees — 28 1,318 439
Commission on sale of real estate — 300 — 300
Property management, cleaning, engineering and security fees
1,547 1,379 2,816 2,811
$ 2,247 $ 2,453 $ 5,537 $ 5,029
As of June 30, 2022, the amounts due to Vornado were $ 837,000 for management, property management, cleaning, engineering and security fees; and $ 144,000 for development fees. As of December 31, 2021, the amounts due to Vornado were $ 669,000 for management, property management, cleaning, engineering and security fees; $ 141,000 for development fees; and $ 69,000 for leasing fees.
6. Mortgages Payable
The following is a summary of our outstanding mortgages payable as of June 30, 2022 and December 31, 2021. We may refinance our maturing debt as it comes due or choose to pay it down.
Interest Rate at June 30, 2022 Balance as of
(Amounts in thousands) Maturity June 30, 2022 December 31, 2021
First mortgages secured by:
731 Lexington Avenue, office condominium (1)
Jun. 11, 2024 2.22 % $ 500,000 $ 500,000
731 Lexington Avenue, retail condominium (2)
Aug. 05, 2025 1.72 % 300,000 300,000
Rego Park II shopping center (3)
Dec. 12, 2025 3.02 % 202,544 202,544
The Alexander apartment tower Nov. 01, 2027 2.63 % 94,000 94,000
Total 1,096,544 1,096,544
Deferred debt issuance costs, net of accumulated amortization of $ 15,306 and $ 14,551 , respectively
( 6,184 ) ( 6,931 )
$ 1,090,360 $ 1,089,613
(1) Interest at LIBOR plus 0.90 %. Maturity represents the extended maturity based on our unilateral right to extend.
(2) Interest at LIBOR plus 1.40 % which was swapped to a fixed rate of 1.72 % through May 2025.
(3) Interest at LIBOR plus 1.35 %.
7. 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 2022, we granted each of the members of our Board of Directors 326 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, 2022, there were 19,796 DSUs outstanding and 485,991 shares were available for future grant under the Plan.
11
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
8. Fair Value Measurements
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: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities as well as certain U.S. Treasury securities that are highly liquid and are actively traded in secondary markets; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value.
Financial Assets and Liabilities Measured at Fair Value
Financial assets measured at fair value on our consolidated balance sheet as of June 30, 2022 consist of U.S. Treasury bills (classified as available-for-sale) and interest rate derivatives, which are presented in the table below based on their level in the fair value hierarchy. There were no financial liabilities measured at fair value as of June 30, 2022.
As of June 30, 2022
Total Level 1 Level 2 Level 3
(Amounts in thousands)
Investments in U.S. Treasury bills (1)
$ 197,369 $ 197,369 $ — $ —
Interest rate derivatives (included in other assets) 21,970 — 21,970 —
$ 219,339 $ 197,369 $ 21,970 $ —
(1) During the three months ended June 30, 2022, we purchased $ 197,407 of U.S. Treasury bills with an aggregate face value of $ 200,000 . As of June 30, 2022, our investments in U.S. Treasury bills have an aggregate amortized cost of $ 198,018 and have remaining maturities of less than one year.
Financial assets measured at fair value on our consolidated balance sheet as of December 31, 2021 consist of interest rate derivatives, which are presented in the table below based on their level in the fair value hierarchy. 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
Interest rate derivatives (included in other assets) $ 7,545 $ — $ 7,545 $ —
Financial Assets and Liabilities not Measured at Fair Value
Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents and mortgages payable. Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities and are classified as Level 1. 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 June 30, 2022 and December 31, 2021.
As of June 30, 2022 As of December 31, 2021
(Amounts in thousands) Carrying
Amount Fair
Value Carrying
Amount Fair
Value
Assets:
Cash equivalents
$ 245,404 $ 245,404 $ 427,601 $ 427,601
Liabilities:
Mortgages payable (excluding deferred debt issuance costs, net) $ 1,096,544 $ 1,053,622 $ 1,096,544 $ 1,064,122
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ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
9. Commitments and Contingencies
Insurance
We maintain general liability insurance with limits of $ 300,000,000 per occurrence and per property, of which the first $ 30,000,000 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. Coverage for acts of terrorism (including NBCR acts) is up to $ 1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $ 294,000 deductible and 20 % of the balance of a covered loss, and the Federal government is responsible for the remaining 80 % of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism or other events. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. 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. 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. If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.
Letters of Credit
Approximately $ 900,000 of standby letters of credit were issued and outstanding as of June 30, 2022.
Other
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 June 30, 2022.
There are various legal actions pending 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.
10. Earnings Per Share
The following table sets forth the computation of basic and diluted income per share. Basic income per share is determined using the weighted average shares of common stock outstanding during the period. 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 six months ended June 30, 2022 and 2021.
For the Three Months Ended June 30, For the Six Months Ended June 30,
(Amounts in thousands, except share and per share amounts)
2022 2021 2022 2021
Net income $ 14,814 $ 25,898 $ 29,346 $ 43,780
Weighted average shares outstanding – basic and diluted
5,125,710 5,123,255 5,125,098 5,122,733
Net income per common share – basic and diluted $ 2.89 $ 5.05 $ 5.73 $ 8.55
13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Alexander’s, Inc.
Results of Review of Interim Financial Information
We have reviewed the accompanying consolidated balance sheet of Alexander’s, Inc. and subsidiaries (the “Company”) as of June 30, 2022, the related consolidated statements of income, comprehensive income, and changes in equity, for the three-month and six-month periods ended June 30, 2022 and 2021, and of cash flows for the six-month periods ended June 30, 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.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 14, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This interim financial information is the responsibility of the Company's management. 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 reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ DELOITTE & TOUCHE LLP
New York, New York
August 1, 2022
14
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