ALEXANDER’S, INC.
ANNUAL REPORT TO
STOCKHOLDERS
2012
This Annual Report is printed on recycled paper and is recyclable .
EXHIBIT INDEX ON PAGE 69
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(cid:95)
(cid:134)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December 31, 2012
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File Number:
to
001-6064
ALEXANDER’S, INC.
(Exact name of registrant as specified in its
charter)
Delaware
(State or other jurisdiction of incorporation or organization)
51-0100517
(IRS Employer Identification No.)
210 Route 4 East, Paramus, New Jersey
(Address of principal executive offices)
07652
(Zip Code)
Registrant’s telephone number, including area code
(201) 587-8541
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1 par value per share
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Exchange Act.
YES (cid:95) NO (cid:134)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.
YES (cid:134) NO (cid:95)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
YES (cid:95) NO (cid:134)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files).
(cid:95) Yes (cid:134) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:134)
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
(cid:95) Large Accelerated Filer
(cid:134) Non-Accelerated Filer (Do not check if smaller reporting company)
(cid:134) Accelerated Filer
(cid:134) Smaller Reporting Company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES (cid:134) NO (cid:95)
The aggregate market value of the voting and non-voting shares of common stock held by non-affiliates of the registrant,
(i.e., by persons other than officers and directors of Alexander’s, Inc.) was $907,163,000 at June 30, 2012.
As of January 31, 2013 there were 5,105,936 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III: Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2013.
Item
Financial Information:
Page
INDEX
Part I.
1.
Business
1A.
Risk Factors
1B.
Unresolved Staff Comments
Part II.
2.
3.
4.
5.
6.
7.
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
7A.
Quantitative and Qualitative Disclosures about Market Risk
8.
9.
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
9A.
Controls and Procedures
9B.
Other Information
Part III.
10.
Directors, Executive Officers and Corporate Governance(1)
11.
12.
13.
14.
Executive Compensation(1)
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters(1)
Certain Relationships and Related Transactions, and Director Independence(1)
Principal Accounting Fees and Services(1)
Part IV.
15.
Exhibits, Financial Statement Schedules
Signatures
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_____________________________(cid:3)
4
7
16
17
20
20
21
23
24
38
39
59
59
62
62
63
63
63
63
64
65
(1) These items are omitted in part or in whole because the registrant will file a definitive Proxy Statement pursuant to
Regulation 14A under the Securities Exchange Act of 1934 with the Securities and Exchange Commission no later
than 120 days after December 31, 2012, portions of which are incorporated by reference herein.
2
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject
to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially
from those expressed in these forward-looking statements. You can find many of these statements by looking for words such
as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar
expressions in this Annual Report on Form 10-K. We also note the following forward-looking statements: in the case of our
development projects, the estimated completion date, estimated project costs and costs to complete; and estimates of
dividends on shares of our common stock. Many of the factors that will determine the outcome of these and our other
forward-looking statements are beyond our ability to control or predict. For a further discussion of factors that could
materially affect the outcome of our forward-looking statements, see “Item 1A - Risk Factors” in this Annual Report on
Form 10-K.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements,
which speak only as of the date of this Annual Report on Form 10-K or the date of any document incorporated by reference.
All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any
obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances occurring
after the date of this Annual Report on Form 10-K.
3
ITEM 1. BUSINESS
GENERAL
PART I
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 greater New York City metropolitan area consisting of:
Operating properties
(cid:120)
731 Lexington Avenue, a 1,307,000 square foot multi-use building, comprising the entire square block bounded by
Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan. The building contains
885,000 and 174,000 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. Bloomberg L.P.
(“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet), The Container Store
(34,000 square feet) and Hennes & Mauritz (27,000 square feet) are the principal retail tenants;
(cid:120) Rego Park I, a 343,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens. The
center is anchored by a 195,000 square foot Sears department store, a 50,000 square foot Burlington Coat Factory, a
46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls;
(cid:120) Rego Park II, a 610,000 square foot shopping center, located adjacent to the Rego Park I shopping center in Queens.
The center is anchored by a 145,000 square foot Costco, a 135,000 square foot Century 21 and a 133,000 square
foot Kohl’s. In addition, 47,000 square feet is leased to Toys “R” Us/Babies “R” Us, a one-third owned affiliate of
Vornado;
(cid:120)
(cid:120)
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 Property, Inc.; and
Flushing, a 167,000 square foot building, located at Roosevelt Avenue and Main Street in Queens, that is sub-leased
to New World Mall LLC for the remainder of our ground lease term.
(cid:3)
(cid:3)
Properties to be developed
(cid:120)
(cid:3)
(cid:120)
Rego Park II Apartment Tower; we are considering a proposed development containing approximately 300 units
aggregating 250,000 square feet, to be constructed above our Rego Park II shopping center. The funding required
for the proposed development will be approximately $100,000,000 to $120,000,000. There can be no assurance
that the project will commence, or if commenced, be completed on schedule or within budget.
Rego Park III, a 3.4 acre land parcel adjacent to the Rego Park II shopping center in Queens at the intersection of
Junction Boulevard and the Horace Harding Service Road.
Kings Plaza Regional Shopping Center
On November 28, 2012, we completed the sale of the Kings Plaza Regional Shopping Center (“Kings Plaza”) located in
Brooklyn, New York, to The Macerich Company (NYSE: MAC) (“Macerich”), for $751,000,000. Net proceeds from the
sale, after repaying the existing loan and closing costs, were $479,000,000, of which $30,000,000 was in Macerich common
shares. The financial statement gain was $601,976,000, of which $599,628,000 was recognized in the fourth quarter and the
remaining $2,348,000 was deferred and will be recognized upon the disposition of the Macerich common shares. Prior to the
sale, in November 2012, we acquired the remaining 75% interest in our consolidated subsidiary, the Kings Plaza energy plant
joint venture (which was sold with Kings Plaza), for $7,800,000 in cash. On November 30, 2012, our Board of Directors
declared a special long-term capital gain dividend of $122.00 per share, or $623,178,000 in the aggregate, to distribute the tax
gain resulting from the sale of Kings Plaza.
4
Relationship with Vornado
We are managed by, and our properties are leased and developed by, Vornado, pursuant to agreements which expire in
March of each year and are automatically renewable. Vornado is a fully-integrated REIT with significant experience in
managing, leasing, developing, and operating retail and office properties.
At December 31, 2012, Vornado owned 32.4% of our outstanding common stock. Steven Roth is the Chairman of our
Board of Directors and Chief Executive Officer, the Managing General Partner of Interstate Properties (“Interstate”), a New
Jersey general partnership, and the Chairman of the Board of Trustees of Vornado. At December 31, 2012, Mr. Roth,
Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr. (who are also directors of the
Company and trustees of Vornado) owned, in the aggregate, 26.3% of our outstanding common stock, in addition to the 2.1%
they indirectly own through Vornado. Michael D. Fascitelli, our President and a member of our Board of Directors, is the
President, Chief Executive Officer and a member of the Board of Trustees of Vornado. Joseph Macnow, our Executive Vice
President and Chief Financial Officer, holds the same position with Vornado.
Significant Tenants
Bloomberg accounted for $86,468,000, $84,526,000 and $83,137,000, or 45%, 46% and 48% of our total revenues in the
years ended December 31, 2012, 2011 and 2010, respectively. No other tenant accounted for more than 10% of our total
revenues in any of the last three years. If we were to lose Bloomberg as a tenant, or if Bloomberg were to fail or become
unable to perform its obligations under its lease, it would adversely affect our results of operations and financial condition.
We receive and evaluate certain confidential financial information and metrics from Bloomberg on a semi-annual basis. In
addition, we access and evaluate financial information regarding Bloomberg from private sources, as well as publicly
available data.
Competition
We operate in a highly competitive environment. All of our properties are located in the greater New York City
metropolitan area. We compete with a large number of property owners and developers. Principal factors of competition are
the amount of rent charged, attractiveness of location and quality and breadth of services provided. Our success depends
upon, among other factors, trends affecting national and local economies, the financial condition and operating results of
current and prospective tenants, the availability and cost of capital, interest rates, construction and renovation costs, taxes,
governmental regulations and legislation, population trends, zoning laws, and our ability to lease, sublease or sell our
properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it
comes due.
5
Employees
We currently have 72 employees.
Executive Office
Our executive office is located at 210 Route 4 East, Paramus, New Jersey, 07652 and our telephone number is (201) 587-
8541.
Available Information
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, directors, and 10% beneficial owners
filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934, are available free of
charge on our website (www.alx-inc.com) as soon as reasonably practicable after they are electronically filed with, or
furnished to, the Securities and Exchange Commission (“SEC”). Also available on our website are copies of our Audit
Committee Charter, Compensation Committee Charter, Code of Business Conduct and Ethics and Corporate Governance
Guidelines. In the event of any changes to these items, revised copies will be made available on our website. Copies of these
documents are also available directly from us, free of charge.
On April 11, 2000, Vornado and Interstate filed with the SEC, the 26th amendment to a Form 13D indicating that they, as
a group, own in excess of 51% of our common stock. This ownership level makes us a “controlled” company for the
purposes of the New York Stock Exchange, Inc.’s Corporate Governance Standards (the “NYSE Rules”). This means that
we are not required to, among other things, have a majority of the members of our Board of Directors be independent under
the NYSE Rules, have all of the members of our Compensation Committee be independent under the NYSE Rules or to have
a Nominating Committee. While we have voluntarily complied with a majority of the independence requirements of the
NYSE Rules, we are under no obligation to do so and this situation may change at anytime.
6
ITEM 1A. RISK FACTORS
Material factors that may adversely affect our business and operations are summarized below. The risks and
uncertainties described herein may not be the only ones we face. Additional risks and uncertainties not presently known to us
or that we currently believe to be immaterial may also adversely affect our business. See “Forward-Looking Statements”
contained herein on page 3.
REAL ESTATE INVESTMENTS’ VALUE AND INCOME FLUCTUATE DUE TO VARIOUS FACTORS.
The value of real estate fluctuates depending on conditions in the general economy and the real estate business. These
conditions may also adversely impact our revenues and cash flows.
The factors that affect the value of our real estate include, among other things:
changes in real estate taxes and other expenses;
national, regional and local economic conditions;
competition from other available space;
local conditions such as an oversupply of space or a reduction in demand for real estate in the area;
how well we manage our properties;
changes in market rental rates;
the timing and costs associated with property improvements and rentals;
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3) whether we are able to pass all or portions of any increases in operating costs through to tenants;
(cid:120)(cid:3)
(cid:120)(cid:3) whether tenants and users such as customers and shoppers consider a property attractive;
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)
the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
availability of financing on acceptable terms or at all;
fluctuations in interest rates;
our ability to obtain adequate insurance;
changes in zoning laws and taxation;
government regulation;
consequences of any armed conflict involving, or terrorist attack against, the United States;
potential liability under environmental or other laws or regulations;
natural disasters;
general competitive factors; and
climate changes.
The rents we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of
these factors. If our rental revenues and/or occupancy levels decline, we generally would expect to have less cash available
to pay our indebtedness and for distribution to our stockholders. In addition, some of our major expenses, including
mortgage payments, real estate taxes and maintenance costs generally do not decline when the related rents decline.
Capital markets and economic conditions can materially affect our financial condition and results of operations and
the value of our debt and equity securities.
There are many factors that can affect the value of our equity securities and any debt securities we may issue in the
future, including the state of the capital markets and economy, which over the past few years have negatively affected
substantially all businesses, including ours. Demand for office and retail space may continue to decline nationwide as it did
in 2008 and 2009, due to bankruptcies, downsizing, layoffs and cost cutting. Government action or inaction may adversely
affect the state of the capital markets. The cost and availability of credit may be adversely affected by illiquid credit markets
and wider credit spreads may adversely affect our liquidity and financial condition, and the liquidity and financial condition
of our tenants. Our inability or the inability of our tenants to timely refinance maturing liabilities and access the capital
markets to meet liquidity needs may materially affect our financial condition and results of operations and the value of our
equity securities and any debt securities we may issue in the future.
7
Real estate is a competitive business.
We operate in a highly competitive environment. All of our properties are located in the greater New York City
metropolitan area. We compete with a large number of property owners and developers, some of which may be willing to
accept lower returns on their investments than we are. Principal factors of competition include rents charged, attractiveness
of location, the quality of the property and breadth and quality of services provided. Our success depends upon, among other
factors, trends affecting national and local economies, the financial condition and operating results of current and prospective
tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations,
legislation and population trends.
We depend on leasing space to tenants on economically favorable terms and collecting rent from tenants who may not be
able to pay.
Our financial results depend significantly on leasing space in our properties to tenants on economically favorable terms.
In addition, because a majority of our income is derived from renting real property, our income, funds available to pay
indebtedness and funds available for distribution to stockholders will decrease if certain of our tenants cannot pay their rent
or if we are not able to maintain our occupancy levels on favorable terms. If a tenant does not pay its rent, we might not be
able to enforce our rights as landlord without delays and might incur substantial legal and other costs. During periods of
economic adversity, there may be an increase in the number of tenants that cannot pay their rent and an increase in vacancy
rates.
Bankruptcy or insolvency of tenants may decrease our revenues, net income and available cash.
From time to time, some of our tenants have declared bankruptcy, and other tenants may declare bankruptcy or become
insolvent in the future. In the case of our shopping centers, the bankruptcy or insolvency of a major tenant could cause us to
have difficulty leasing the remainder of the affected property. Our leases generally do not contain restrictions designed to
ensure the creditworthiness of our tenants. As a result, the bankruptcy or insolvency of a major tenant could result in a lower
level of net income and funds available for the payment of our indebtedness or distribution to stockholders.
731 Lexington Avenue accounts for a substantial portion of our revenues. Loss of or damage to the building could
adversely affect our financial condition and results of operations.
731 Lexington accounted for $126,034,000, $123,195,000 and $120,587,000, or 66%, 67% and 69% of our total
revenues in the years ended December 31, 2012, 2011 and 2010, respectively. Loss of or damage to the building in excess of
our insurance coverage, including as a result of a terrorist attack, could adversely affect our results of operations and financial
condition.(cid:3)
Bloomberg represents a significant portion of our revenues. Loss of Bloomberg as a tenant or deterioration in
Bloomberg’s credit quality could adversely affect our financial condition and results of operations.
Bloomberg accounted for $86,468,000, $84,526,000 and $83,137,000, or 45%, 46% and 48% of our total revenues in the
years ended December 31, 2012, 2011 and 2010, respectively. No other tenant accounted for more than 10% of our total
revenues in any of the last three years. If we were to lose Bloomberg as a tenant, or if Bloomberg were to fail or become
unable to perform its obligations under its lease, it would adversely affect our financial condition and results of operations.
We face risks associated with our tenants being designated “Prohibited Persons” by the Office of Foreign Assets
Control.
Pursuant to Executive Order 13224 and other laws, the Office of Foreign Assets Control of the United States Department
of the Treasury (“OFAC”) maintains a list of persons designated as terrorists or who are otherwise blocked or banned
(“Prohibited Persons”) from conducting business or engaging in transactions in the United States. Our leases, loans and other
agreements may require us to comply with OFAC requirements. If a tenant or other party with whom we conduct business is
placed on the OFAC list we may be required to terminate the lease or other agreement. Any such termination could result in
a loss of revenue or otherwise negatively affect our financial results and cash flows.
Inflation or deflation may adversely affect our financial condition and results of operations.
Although neither inflation nor deflation has materially impacted our operations in the recent past, increased inflation
could have a pronounced negative impact on our mortgages and interest rates and general and administrative expenses, as
these costs could increase at a rate higher than our rents. Inflation could also have an adverse effect on consumer spending
which could impact our tenants’ sales and, in turn, our percentage rents, where applicable. Conversely, deflation could lead
to downward pressure on rents and other sources of income.
8
Our business and operations would suffer in the event of system failures.
Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our
internal information technology systems, our systems are vulnerable to damages from any number of sources, including
computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures.
Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business.
We may also incur additional costs to remedy damages caused by such disruptions.
The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by
causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage
to our business relationships, all of which could negatively impact our financial results.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of our
information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include
gaining unauthorized access to systems to disrupt operations, corrupt data, or steal confidential information. As our reliance
on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. Our three
primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to
our relationship with our tenants, and private data exposure. We have implemented processes, procedures and controls to
help mitigate these risks, but these measures, as well as our increased awareness of a risk of a cyber incident, do not
guarantee that our financial results will not be negatively impacted by such an incident.
We may incur costs to comply with environmental laws.
Our operations and properties are subject to various federal, state and local laws and regulations concerning the
protection of the environment including air and water quality, hazardous or toxic substances and health and safety. Under
some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up
hazardous or toxic substances released at a property. The owner or operator may also be held liable to a governmental entity
or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties
because of the contamination. These laws often impose liability without regard to whether the owner or operator knew of the
release of the substances or caused such release. The presence of contamination or the failure to remediate contamination
may impair our ability to sell or lease real estate or to borrow using the real estate as collateral. Other laws and regulations
govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing
materials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to
asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing
polychlorinated biphenyls (PCBs) and underground storage tanks are also regulated by federal and state laws. We are also
subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and
bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in
susceptible individuals. We could incur fines for environmental compliance and be held liable for the costs of remedial
action with respect to the foregoing regulated substances or tanks or related claims arising out of environmental
contamination or human exposure at or from our properties.
Each of our properties has been subjected to varying degrees of environmental assessment at various times. Except as
referenced above, the environmental assessments did not, as of the date of this Annual Report on Form 10-K, reveal any
environmental condition material to our business. However, identification of new compliance concerns or undiscovered
areas of contamination, changes in the extent or known scope of contamination, discovery of additional sites, human
exposure to the contamination or changes in cleanup or compliance requirements could result in significant costs to us.
9
Some of our potential losses may not be covered by insurance.
We maintain general liability insurance with limits of $300,000,000 per occurrence and all-risk property and rental value
insurance coverage with limits of $1.7 billion per occurrence, including coverage for terrorist acts, with sub-limits for certain
perils such as floods and earthquakes on each of our properties.
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 Program Reauthorization Act of 2007 (“TRIPRA”). Coverage for acts of terrorism
(including NBCR acts) is up to $1.7 billion per occurrence. Coverage for acts of terrorism (excluding NBCR acts) is fully
reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a
$275,000 deductible and 15% of the balance of a covered loss and the Federal government is responsible for the remaining
85% of a covered loss. We are ultimately responsible for any loss borne by FNSIC.
There can be no assurance that we will be able to maintain similar levels of insurance coverage in the future in amounts
and on terms that are commercially reasonable. We are responsible for deductibles and losses in excess of our insurance
coverage, which could be material.
Our mortgage loans are non-recourse to us, except for $75,000,000 of the $320,000,000 mortgage on our 731 Lexington
Avenue property, in the event of a substantial casualty, as defined. Our mortgage loans contain customary covenants
requiring us to maintain insurance. If lenders insist on greater coverage than we are able to obtain, it could adversely affect
our ability to finance our properties.
Compliance or failure to comply with the Americans with Disabilities Act or other safety regulations and requirements
could result in substantial costs.
The Americans with Disabilities Act (“ADA”) generally requires that public buildings, including our properties, meet
certain federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of
fines by the federal government or the award of damages to private litigants and/or legal fees to their counsel. If, under the
ADA, we are required to make substantial alterations and capital expenditures in one or more of our properties, including the
removal of access barriers, it could adversely affect our financial condition and results of operations, as well as the amount of
cash available for distribution to stockholders.
Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life
safety requirements. If we fail to comply with these requirements, we could incur fines or private damage awards. We do
not know whether existing requirements will change or whether compliance with future requirements will require significant
unanticipated expenditures that will affect our cash flow and results of operations.
A decision to dispose of real estate assets would change the holding period assumption in our valuation analyses,
which could result in material impairment losses and adversely affect our financial results.
We evaluate real estate assets for impairment based on the projected cash flow of the asset over our anticipated holding
period. If we change our intended holding period, due to our intention to sell or otherwise dispose of an asset, then under
accounting principles generally accepted in the United States of America, we must reevaluate whether that asset is impaired.
Depending on the carrying value of the property at the time we change our intention and the amount that we estimate we
would receive on disposal, we may record an impairment loss that would adversely affect our financial results. This loss
could be material to our results of operations in the period that it is recognized.
10
OUR INVESTMENTS ARE CONCENTRATED IN THE GREATER NEW YORK CITY METROPOLITAN AREA.
CIRCUMSTANCES AFFECTING THIS AREA GENERALLY COULD ADVERSELY AFFECT OUR BUSINESS.
All of our properties are in the greater New York City metropolitan area and are affected by the economic cycles and
risks inherent in that area.
All of our revenues come from properties located in the greater New York City metropolitan area. Real estate markets
are subject to economic downturns and we cannot predict how economic conditions will impact this market in either the short
or long term. Declines in the economy or declines in the real estate market in this area could hurt our financial performance
and the value of our properties. In addition to the factors affecting the national economic condition generally, the factors
affecting economic conditions in this area include:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
financial performance and productivity of the publishing, advertising, financial, technology, retail, insurance and
real estate industries;
unemployment levels;
business layoffs or downsizing;
industry slowdowns;
relocations of businesses;
changing demographics;
increased telecommuting and use of alternative work places;
infrastructure quality; and
any oversupply of, or reduced demand for, real estate.
It is impossible for us to assess the future effects of trends in the economic and investment climates of the greater New
York City metropolitan region, and more generally of the United States, on the real estate market in this area. Local, national
or global economic downturns, would negatively affect our business and profitability.
Terrorist attacks, such as those of September 11, 2001 in New York City, may adversely affect the value of our properties
and our ability to generate cash flow.
All of our properties are located in the greater New York City metropolitan area, and our most significant property, 731
Lexington Avenue, is located on Lexington Avenue and 59th Street in Manhattan. In the aftermath of a terrorist attack,
tenants in this area may choose to relocate their businesses to less populated, lower-profile areas of the United States that are
not as likely to be targets of future terrorist activity and fewer customers may choose to patronize businesses in this area.
This would trigger a decrease in the demand for space in these markets, which could increase vacancies in our properties and
force us to lease our properties on less favorable terms. As a result, the value of our properties and the level of our revenues
could decline materially.
Natural Disasters could have a concentrated impact on the area which we operate and could adversely impact our
results.
We have a significant investment in the New York metropolitan area. As our investment is concentrated along the
Eastern Seaboard, natural disasters, such as those resulting from superstorm Sandy, could impact our properties. Potentially
adverse consequences of “global warming” could similarly have an impact on our properties. As a result, we could become
subject to significant losses and/or repair costs which may or may not be fully covered by insurance and to the risk of
business interruption. The incurrence of these losses, costs or business interruptions may adversely affect our operating and
financial results.
We are subject to risks that affect the general retail environment.
A portion of our properties are in the retail shopping center real estate market. This means that we are subject to factors
that affect the retail environment generally, including the level of consumer spending and consumer confidence,
unemployment rates, the threat of terrorism and increasing competition from discount retailers, outlet malls, retail websites
and catalog companies. These factors could adversely affect the financial condition of our retail tenants and the willingness
of retailers to lease space in our shopping centers.
11
WE MAY ACQUIRE OR SELL ASSETS OR DEVELOP PROPERTIES. OUR FAILURE OR INABILITY TO
CONSUMMATE THESE TRANSACTIONS OR MANAGE THESE TRANSACTIONS COULD ADVERSELY
AFFECT OUR OPERATIONS AND FINANCIAL RESULTS.
We may acquire or develop properties and this may create risks.
Although our stated business strategy is not to engage in acquisitions, we may acquire or develop properties when we
believe that an acquisition or development project is otherwise consistent with our business strategy. We may not, however,
succeed in consummating desired acquisitions or in completing developments on time or within budget. In addition, we may
face competition in pursuing acquisition or development opportunities that could increase our costs. When we do pursue a
project or acquisition, we may not succeed in leasing newly-developed or acquired properties at rents sufficient to cover costs
of acquisition or development and operations. Difficulties in integrating acquisitions may prove costly or time-consuming
and could divert management’s attention. Acquisitions or developments in new markets or types of properties where we do
not have the same level of market knowledge may result in weaker than anticipated performance. We may abandon
acquisition or development opportunities that we have begun pursuing and consequently fail to recover expenses already
incurred and have devoted management time to a matter not consummated.
It may be difficult to buy and sell real estate quickly, which may limit our flexibility.
Real estate investments are relatively difficult to buy and sell quickly. Consequently, we may have limited ability to
vary our portfolio promptly in response to changes in economic or other conditions. Moreover, our ability to buy, sell, or
finance real estate assets may be adversely affected during periods of uncertainty or unfavorable conditions in the credit
markets as we, or potential buyers of our assets, may experience difficulty in obtaining financing.
We have an investment in marketable equity securities. The value of this investment may decline.
We have an investment in Macerich, a retail shopping center company. As of December 31, 2012, this investment had a
carrying amount of $31,206,000. A significant decline in the value of this investment due to, among other reasons,
Macerich’s operating performance or economic or market conditions, may result in the recognition of an impairment loss,
which could be material.
OUR ORGANIZATIONAL AND FINANCIAL STRUCTURE GIVES RISE TO OPERATIONAL AND FINANCIAL
RISKS.
We depend on dividends and distributions from our direct and indirect subsidiaries. The creditors of these subsidiaries
are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions
to us.
Substantially all of our properties and assets are held through our subsidiaries. We depend on cash distributions and
dividends from our subsidiaries for substantially all of our cash flow. The creditors of each of our direct and indirect
subsidiaries are entitled to payment of that subsidiary’s obligations to them when due and payable before that subsidiary may
make distributions or dividends to us. Thus, our ability to pay dividends, if any, to our security holders depends on our
subsidiaries’ ability to first satisfy their obligations to their creditors and our ability to satisfy our obligations, if any, to our
creditors.
In addition, our participation in any distribution of the assets of any of our direct or indirect subsidiaries upon the
liquidation, reorganization or insolvency of the subsidiary, is only after the claims of the creditors, including trade creditors,
and preferred security holders, if any, of the applicable direct or indirect subsidiaries are satisfied.
Our existing financing documents contain covenants and restrictions that may restrict our operational and financial
flexibility.
At December 31, 2012, substantially all of the individual properties we own were encumbered by mortgages. These
mortgages contain covenants that limit our ability to incur additional indebtedness on these properties, provide for lender
approval of tenants’ leases in certain circumstances, and provide for yield maintenance or defeasance premiums to prepay
them. These mortgages may significantly restrict our operational and financial flexibility. In addition, if we were to fail to
perform our obligations under existing indebtedness or become insolvent or were liquidated, secured creditors would be
entitled to payment in full from the proceeds of the sale of the pledged assets prior to any proceeds being paid to other
creditors or to any holders of our securities. In such an event, it is possible that we would have insufficient assets remaining
to make payments to other creditors or to any holders of our securities.
12
We have outstanding debt, and the amount of debt and its cost may increase and refinancing may not be available on
acceptable terms.
As of December 31, 2012, total debt outstanding was $1,065,916,000. Our ratio of total debt to total enterprise value
was 44.4% at December 31, 2012. “Enterprise value” means the market equity value of our common stock, plus debt, less
cash and cash equivalents at such date. In addition, we have significant debt service obligations. For the year ended
December 31, 2012, our scheduled cash payments for principal and interest from continuing operations were $58,317,000. In
the future, we may incur additional debt, and thus increase the ratio of total debt to total enterprise value. If our level of
indebtedness increases, there may be an increased risk of default which could adversely affect our financial condition and
results of operations. In addition, in a rising interest rate environment, the cost of refinancing our existing debt and any new
debt or market rate security or instrument may increase. Continued uncertainty in the equity and credit markets may
negatively impact our ability to obtain financing on reasonable terms or at all, which may negatively affect our ability to
refinance our debt.
We might fail to qualify or remain qualified as a REIT, and may be required to pay income taxes at corporate rates.
Although we believe that we will remain organized and will continue to operate so as to qualify as a REIT for federal
income tax purposes, we might fail to remain qualified. Our qualification as a REIT for federal income tax purposes is
governed by highly technical and complex provisions of the Internal Revenue Code (the “Code”) for which there are only
limited judicial or administrative interpretations. Our qualification as a REIT also depends on various facts and
circumstances that are not entirely within our control. In addition, legislation, new regulations, administrative interpretations
or court decisions might significantly change the tax laws with respect to the requirements for qualification as a REIT or the
federal income tax consequences of qualifying as a REIT.
If, with respect to any taxable year, we fail to maintain our qualification as a REIT and do not qualify under statutory
relief provisions, we could not deduct distributions to stockholders in computing our taxable income and would have to pay
federal income tax on our taxable income at regular corporate rates. The federal income tax payable would include any
applicable alternative minimum tax. If we had to pay federal income tax, the amount of money available to distribute to
stockholders and pay our indebtedness would be reduced for the year or years involved, and we would no longer be required
to make distributions to stockholders. In addition, we would also be disqualified from treatment as a REIT for the four
taxable years following the year during which qualification was lost, unless we were entitled to relief under the relevant
statutory provisions. Although we currently intend to operate in a manner designed to allow us to qualify as a REIT, future
economic, market, legal, tax or other considerations may cause us to revoke the REIT election or fail to qualify as a REIT.
We face possible adverse changes in tax laws, which may result in an increase in our tax liability.
From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our
tax liability. The shortfall in tax revenues for states and municipalities in recent years may lead to an increase in the
frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or
income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of
cash available for payment of dividends.
Loss of our key personnel could harm our operations and adversely affect the value of our common stock.
We are dependent on the efforts of Steven Roth, our Chief Executive Officer, and Michael D. Fascitelli, our President.
Although we believe that we could find replacements for these key personnel, the loss of their services could harm our
operations and adversely affect the value of our common stock.
13
ALEXANDER’S CHARTER DOCUMENTS AND APPLICABLE LAW MAY HINDER ANY ATTEMPT TO
ACQUIRE US.
Provisions in Alexander’s certificate of incorporation and by laws, as well as provisions of the Code and Delaware
corporate law, may delay or prevent a change in control of the Company or a tender offer, even if such action might be
beneficial to stockholders, and limit the stockholders’ opportunity to receive a potential premium for their shares of common
stock over then prevailing market prices.
Primarily to facilitate maintenance of its qualification as a REIT, Alexander’s certificate of incorporation generally
prohibits ownership, directly, indirectly or beneficially, by any single stockholder of more than 9.9% of the outstanding
shares of preferred stock of any class or 4.9% of outstanding common stock of any class. The Board of Directors may waive
or modify these ownership limits with respect to one or more persons if it is satisfied that ownership in excess of these limits
will not jeopardize Alexander’s status as a REIT for federal income tax purposes. In addition, the Board of Directors has,
subject to certain conditions and limitations, exempted Vornado and certain of its affiliates from these ownership limitations.
Stock owned in violation of these ownership limits will be subject to the loss of rights and other restrictions. These
ownership limits may have the effect of inhibiting or impeding a change in control.
Alexander’s Board of Directors is divided into three classes of directors. Directors of each class are chosen for three-
year staggered terms. Staggered terms of directors may have the effect of delaying or preventing changes in control or
management, even though changes in management or a change in control might be in the best interest of our stockholders.
In addition, Alexander’s charter documents authorize the Board of Directors to:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
cause Alexander’s to issue additional authorized but unissued common stock or preferred stock;
classify or reclassify, in one or more series, any unissued preferred stock;
set the preferences, rights and other terms of any classified or reclassified stock that Alexander’s issues; and
increase, without stockholder approval, the number of shares of beneficial interest that Alexander’s may issue.
The Board of Directors could establish a series of preferred stock with terms that could delay, deter or prevent a change
in control of Alexander’s or other transaction that might involve a premium price or otherwise be in the best interest of our
stockholders, although the Board of Directors does not, at present, intend to establish a series of preferred stock of this kind.
Alexander’s charter documents contain other provisions that may delay, deter or prevent a change in control of the Company
or other transaction that might involve a premium price or otherwise be in the best interest of our stockholders.
In addition, Vornado, Interstate and its three general partners (each of whom are both trustees of Vornado and Directors
of Alexander’s) together beneficially own approximately 58.7% of our outstanding shares of common stock. This degree of
ownership is likely to reduce the possibility of a tender offer or an attempt to change control of the Company by a third party.
We may change our policies without obtaining the approval of our stockholders.
Our operating and financial policies, including our policies with respect to acquisitions of real estate or other assets,
growth, operations, indebtedness, capitalization and dividends, are exclusively determined by our Board of Directors.
Accordingly, our stockholders do not control these policies.
14
OUR OWNERSHIP STRUCTURE AND RELATED-PARTY TRANSACTIONS MAY GIVE RISE TO CONFLICTS
OF INTEREST.
Steven Roth, Vornado and Interstate may exercise substantial influence over us. They and some of our other directors
and officers have interests or positions in other entities that may compete with us.
At December 31, 2012, Interstate and its partners owned approximately 6.5% of the common shares of beneficial interest
of Vornado and approximately 26.3% of our outstanding common stock. Steven Roth, David Mandelbaum and Russell B.
Wight, Jr. are the partners of Interstate. Mr. Roth is the Chairman of our Board of Directors and Chief Executive Officer, the
Chairman of the Board of Trustees of Vornado and the Managing General Partner of Interstate. Mr. Wight and
Mr. Mandelbaum are both trustees of Vornado and members of our Board of Directors. In addition, Vornado manages and
leases the real estate assets of Interstate.
At December 31, 2012, Vornado owned 32.4% of our outstanding common stock, in addition to the 26.3% owned by
Interstate and its partners. In addition to the relationships described in the immediately preceding paragraph, Michael D.
Fascitelli, President and Chief Executive Officer of Vornado, is our President and a member of our Board of Directors. Dr.
Richard West is a trustee of Vornado and a member of our Board of Directors. Joseph Macnow, our Executive Vice
President and Chief Financial Officer, holds the same position with Vornado.
Because of their overlapping interests, Vornado, Mr. Roth, Interstate and the other individuals noted in the preceding
paragraphs may have substantial influence over Alexander’s, and on the outcome of any matters submitted to Alexander’s
stockholders for approval. In addition, certain decisions concerning our operations or financial structure may present
conflicts of interest among Vornado, Messrs. Roth, Mandelbaum and Wight and Interstate and other security holders.
Vornado, Mr. Roth and Interstate may, in the future, engage in a wide variety of activities in the real estate business which
may result in conflicts of interest with respect to matters affecting us, such as, which of these entities or persons, if any, may
take advantage of potential business opportunities, the business focus of these entities, the types of properties and geographic
locations in which these entities make investments, potential competition between business activities conducted, or sought to
be conducted, by us, competition for properties and tenants, possible corporate transactions such as acquisitions, and other
strategic decisions affecting the future of these entities.
There may be conflicts of interest between Vornado, its affiliates and us.
Vornado manages, develops and leases our properties under agreements that have one-year terms expiring in March of
each year, which are automatically renewable. Because we share common senior management with Vornado and because
five of the trustees of Vornado also constitute the majority of our directors, the terms of the foregoing agreements and any
future agreements may not be comparable to those we could have negotiated with an unaffiliated third party.
For a description of Interstate’s ownership of Vornado and Alexander’s, see “Steven Roth, Vornado and Interstate may
exercise substantial influence over us. They and some of our other directors and officers have interests or positions in other
entities that may compete with us.” above.
15
THE NUMBER OF SHARES OF ALEXANDER’S COMMON STOCK AND THE MARKET FOR THOSE SHARES
GIVE RISE TO VARIOUS RISKS.
The price of our common shares has been volatile and may fluctuate.
The trading price of our common shares has been volatile and may continue to fluctuate widely as a result of a number of
factors, many of which are outside of our control. In addition, the stock market is subject to fluctuations in the share prices and
trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations have in the past
and may in the future adversely affect the market price of our common shares. Among the factors that could affect the price of
our common shares are:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
our financial condition and performance;
the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
actual or anticipated quarterly fluctuations in our operating results and financial condition;
our dividend policy;
the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in
comparison to other equity securities, including securities issued by other real estate companies, and fixed income
securities;
uncertainty and volatility in the equity and credit markets;
changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts
or actions taken by rating agencies with respect to our securities or those of other REITs;
failure to meet analysts’ revenue or earnings estimates;
speculation in the press or investment community;
strategic actions by us or our competitors, such as acquisitions or restructurings;
the extent of institutional investor interest in us;
the extent of short-selling of our common shares and the shares of our competitors;
fluctuations in the stock price and operating results of our competitors;
general financial and economic market conditions and, in particular, developments related to market conditions for
REITs and other real estate related companies;
domestic and international economic factors unrelated to our performance; and
all other risk factors addressed elsewhere in this annual report on form 10-K.
A significant decline in our stock price could result in substantial losses for stockholders.
Alexander’s has additional shares of its common stock available for future issuance, which could decrease the market
price of the common stock currently outstanding.
The interest of our current stockholders could be diluted if we issue additional equity securities. As of December 31,
2012, we had authorized but unissued 4,826,550 shares of common stock, par value of $1.00 per share and 3,000,000 shares
of preferred stock, par value $1.00 per share; of which, 2,080 shares of common stock are reserved for issuance upon
redemption of the deferred stock units previously granted to our Board of Directors. In addition, 892,920 shares are available
for future grant under the terms of our 2006 Omnibus Stock Plan. These awards may be granted in the form of options,
restricted stock, stock appreciation rights, deferred stock units, or other equity-based interests, and if granted, would reduce
that number of shares available for future grants, provided however that an award that may be settled only in cash, would not
reduce the number of shares available under the plan. We cannot predict the impact that future issuances of common or
preferred stock or any exercise of outstanding options or grants of additional equity-based interests would have on the market
price of our common stock.
Increased interest rates may hurt the value of our common shares.
We believe that investors consider the dividend rate on REIT shares, expressed as a percentage of the price of the shares,
relative to interest rates as an important factor in deciding whether to buy or sell the shares. If interest rates go up, prospective
purchasers of REIT shares may expect a higher dividend rate. Higher interest rates would likely increase our borrowing costs
and might decrease funds available for distribution. Thus, higher interest rates could cause the price of our common shares to
decline.
(cid:3)
(cid:3)
ITEM 1B. UNRESOLVED STAFF COMMENTS
There are no unresolved comments from the staff of the Securities and Exchange Commission as of the date of this
Annual Report on Form 10-K.
16
ITEM 2. PROPERTIES
The following table shows the location, ownership, approximate size (excluding parking garages) and occupancy of each of
our properties as of December 31, 2012.
Property
Operating Properties:
731 Lexington Avenue
New York, New York
Office
Retail
Rego Park I
Queens, New York
Rego Park II
Queens, New York
Lease
Expiration/
Option
Expiration(s)
2029/2039
2015/2020
2025/2035
2021
2019
Various
Land
Acreage
Building
Square Feet
Occupancy
Rate
Average
Annualized
Rent Per
Square Foot(1)
Tenants
697,000
188,000
885,000
83,000
34,000
27,000
30,000
174,000
1,059,000
195,000
50,000
46,000
36,000
16,000
343,000
145,000
135,000
133,000
47,000
150,000
610,000
1.9
4.8
6.6
100%
$
93.02
100%
164.35
Bloomberg L.P.
Bloomberg L.P.
The Home Depot
The Container Store
Hennes & Mauritz
Various
Sears
Burlington Coat Factory
Bed Bath & Beyond
Marshalls
Old Navy
2021
2022/2027
2021
2021
2021
Costco
Century 21
Kohl’s
Toys "R"Us/Babies "R" Us
Various
2034/2059
2030/2050
2030/2050
2021/2036
Various
100%
36.36
97%
40.05
Paramus
Paramus, New Jersey
30.3
-
100%
-
IKEA (ground lessee)
2041
Flushing
Queens, New York (ground leased
through January 2037)
Properties to be Developed:
Rego Park II Apartment Tower
Queens, New York
Rego Park III, adjacent to Rego Park II
Queens, New York
1
-
167,000
100%
15.74
New World Mall LLC
2027/2037
-
-
-
-
-
-
-
-
-
3.4
-
2,179,000
(1) Represents the cash basis weighted average rent per square foot, which includes periodic step-ups in rent. For a discussion of our leasing activity, see
(cid:3)
Item 7 - Overview - Leasing Activity, Square Footage and Occupancy.
(cid:3)
17
ITEM 2.
PROPERTIES – continued
Operating Properties
(cid:3)
731 Lexington Avenue
731 Lexington Avenue, a 1,307,000 square foot multi-use building, comprises the entire square block bounded by
Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan, New York, and is situated in the heart
of one of Manhattan’s busiest business and shopping districts, with convenient access to several subway and bus lines. The
property is located across the street from Bloomingdale’s flagship store and only a few blocks away from Fifth Avenue and
57th Street. The building contains 885,000 and 174,000 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.
Bloomberg L.P. occupies all of the office space. The Home Depot (83,000 square feet), The Container Store (34,000 square
feet) and Hennes & Mauritz (27,000 square feet) are the principal retail tenants.
The office and retail spaces are encumbered by first mortgage loans with balances of $327,425,000 and $320,000,000,
respectively, as of December 31, 2012. These loans bear interest at 5.33% and 4.93% and mature in February 2014 and July
2015, respectively.
Rego Park I
Rego Park I, a 343,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens, New York, is
anchored by a 195,000 square foot Sears department store, a 50,000 square foot Burlington Coat Factory, a 46,000 square
foot Bed Bath & Beyond and a 36,000 square foot Marshalls. The center contains a parking deck (1,265 spaces) that
provides for paid parking.
The center is encumbered by a 100% cash collateralized loan with a balance of $78,246,000 as of December 31, 2012.
The loan bears interest at 0.50%, is prepayable at any time without penalty and matures in March 2013.
Rego Park II
Rego Park II, a 610,000 square foot shopping center, adjacent to the Rego Park I shopping center in Queens, New York, is
anchored by a 145,000 square foot Costco, a 135,000 square foot Century 21 and a 133,000 square foot Kohl’s. In addition,
47,000 square feet is leased to Toys “R” Us/Babies “R” Us, a one-third owned affiliate of Vornado. The center contains a
parking deck (1,315 spaces) that provides for paid parking.
This center is encumbered by a first mortgage loan with a balance of $272,245,000 as of December 31, 2012. The loan
bears interest at LIBOR plus 1.85% (2.06% at December 31, 2012) and matures in November 2018.
18
ITEM 2.
PROPERTIES – continued
Paramus
We own 30.3 acres of land located at the intersection of Routes 4 and 17 in Paramus, New Jersey. The property is located
directly across from the Garden State Plaza regional shopping mall and is within two miles of three other regional shopping
malls and ten miles of New York City. This land is leased to IKEA Property, Inc. The lease has a 40-year term expiring in
2041, with a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage
loan with a fixed rate of 2.90%, which matures in October 2018. The annual triple-net rent is the sum of $700,000 plus the
amount of debt service on the mortgage loan. If the purchase option is exercised, we will receive net cash proceeds of
approximately $7,000,000 and recognize a net gain on the sale of the land of approximately $60,000,000. If the purchase
option is not exercised, the triple-net rent for the last 20 years must include debt service sufficient to fully amortize
$68,000,000 over the remaining 20-year lease term.
Flushing
Flushing is located on Roosevelt Avenue and Main Street in the downtown, commercial section of Flushing, Queens, New
York. Roosevelt Avenue and Main Street are active shopping districts and there are many national retailers located in the
area. A subway entrance is located directly in front of the property with bus service across the street. The property
comprises a four-floor building containing 167,000 square feet and a parking garage, which is sub-leased to New World Mall
LLC for the remainder of our ground lease term, which expires in 2027 and has one 10-year extension option.
In 2002 Flushing Expo, Inc. (“Expo”) agreed to purchase the stock of the entity which owns the Flushing property from us
(“Purchase of the Property”) and gave us a non-refundable deposit of $1,875,000. Pursuant to a stipulation of settlement, we
settled the action Expo brought against us regarding the Purchase of the Property and in June 2011, deposited the settlement
amount with the Court, in exchange for which we received a stipulation of discontinuance, with prejudice, as well as general
releases. In November 2011, Expo filed another action, this time against our tenant at the Flushing property asserting, among
other things, that such tenant interfered with Expo's Purchase of the Property from us and sought $50,000,000 in damages
from our tenant, who sought indemnification from us for such amount. In August 2012, the Court entered judgment denying
Expo's claim for damages. Expo filed a motion to re-argue the decision, which the Court denied on December 7, 2012. Expo
has appealed the Court’s original decision. We believe, after consultation with counsel, that the amount or range of
reasonably possible losses, if any, cannot be estimated.
Properties to be Developed
Rego Park II Apartment Tower
We are currently evaluating plans to construct an apartment tower containing approximately 300 units aggregating
250,000 square feet, above our Rego Park II shopping center. The funding required for the proposed development will be
approximately $100,000,000 to $120,000,000. There can be no assurance that the project will commence, or if commenced,
be completed on schedule or within budget.
Rego Park III
We own approximately 3.4 acres of land adjacent to the Rego Park II shopping center in Queens, New York, which
comprises a one-quarter square block and is located at the intersection of Junction Boulevard and the Horace Harding Service
Road. The land is currently being used for public paid parking and while the current plans for the development of this parcel
are preliminary, it may include up to 80,000 square feet of retail space. Final plans and budgeted costs for this project have
not been finalized. There can be no assurance that this project will commence.
19
ITEM 2.
PROPERTIES – continued
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and all-risk property and rental value
insurance coverage with limits of $1.7 billion per occurrence, including coverage for terrorist acts, with sub-limits for certain
perils such as floods and earthquakes on each of our properties.
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 Program Reauthorization Act of 2007 (“TRIPRA”). Coverage for acts of terrorism
(including NBCR acts) is up to $1.7 billion per occurrence. Coverage for acts of terrorism (excluding NBCR acts) is fully
reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a
$275,000 deductible and 15% of the balance of a covered loss and the Federal government is responsible for the remaining
85% of a covered loss. We are ultimately responsible for any loss borne by FNSIC.
There can be no assurance that we will be able to maintain similar levels of insurance coverage in the future in amounts
and on terms that are commercially reasonable. We are responsible for deductibles and losses in excess of our insurance
coverage, which could be material.
Our mortgage loans are non-recourse to us, except for $75,000,000 of the $320,000,000 mortgage on our 731 Lexington
Avenue property, in the event of a substantial casualty, as defined. Our mortgage loans contain customary covenants
requiring us to maintain insurance. If lenders insist on greater coverage than we are able to obtain, it could adversely affect
our ability to finance our properties.
ITEM 3.
LEGAL PROCEEDINGS
We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after
consultation with our legal counsel, the outcome of such matters will not have a material effect on our financial condition,
results of operations or cash flows.
For a discussion of the litigation concerning our Flushing, New York property, see “Item 2. Properties – Operating
Properties – Flushing.”
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
20
PART II
(cid:3)
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
(cid:3)
Our common stock is listed on the New York Stock Exchange under the symbol “ALX.” Set forth below are the high and
low closing prices for the shares of our common stock for each full quarterly period within the two most recent years and any
dividends paid per share during such periods.
(cid:3)
(cid:3)
Year Ended December 31,
Quarter
First
Second
Third
Fourth
High
2012
Low
$
411.97
$
350.60
$
431.11
458.07
461.26
361.00
422.86
329.90
Dividends
High
2011
Low
Dividends
3.75
3.75
3.75
125.75 (1)
$
419.93
$
363.96
$
454.00
445.80
456.73
373.48
350.25
333.00
3.00
3.00
3.00
3.00
______________________
(1) Comprised of a regular quarterly dividend of $3.75 per share and a special long-term capital gain dividend of $122.00 per share.
(cid:3)
On January 16, 2013, we adjusted our regular quarterly dividend to $2.75 per share (a new indicated annual rate of $11.00
per share). The regular quarterly dividend was adjusted to reflect the sale of the Kings Plaza Regional Shopping Center in
November 2012, which resulted in a special long-term capital gain dividend of $122.00 per share. As of January 31, 2013,
there were approximately 328 holders of record of our common stock.
Recent Sales of Unregistered Securities
During 2012, we did not sell any unregistered securities.
Information relating to compensation plans under which our equity securities are authorized for issuance is set forth under
Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein.
Recent Purchases of Equity Securities
(cid:3)
During 2012, we did not repurchase any of our equity securities.
(cid:3)
21
Performance Graph
The following graph is a comparison of the five-year cumulative return of our common stock, the Standard & Poor’s 500
Index (the “S&P 500 Index”) and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index,
a peer group index. The graph assumes that $100 was invested on December 31, 2007 in our common stock, the S&P 500
Index and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions.
There can be no assurance that the performance of our stock will continue in line with the same or similar trends depicted in
the graph below.
Comparison of Five-Year Cumulative Return
$150
$125
$100
$75
$50
2007
2008
2009
2010
2011
2012
Alexander's
S&P 500 Index
The NAREIT All Equity Index
(cid:3)
(cid:3)
Alexander’s
S&P 500 Index
The NAREIT All Equity Index
$
100 $
100
100
75 $
63
62
88 $
80
80
122 $
92
102
113 $
94
110
143
109
132
2007
2008
2009
2010
2011
2012
22
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating data. As a result of the sale of the Kings Plaza Regional
Shopping Center, certain prior year balances have been reclassified in order to conform to current year presentation. This
data should be read in conjunction with the consolidated financial statements and notes thereto and “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. This data
may not be comparable to, or indicative of, future operating results.
(cid:3)
(cid:3)
(Amounts in thousands, except per share amounts)
Year Ended December 31,
2010
2011
2012
2009
2008
Total revenues
Income from continuing operations(1)
Income from discontinued operations(2)
Net income
Net income attributable to the noncontrolling interest
Net income attributable to Alexander’s
Income per common share:
Income from continuing operations – basic
Income from continuing operations – diluted
Net income per common share – basic
Net income per common share – diluted
$
$
$
$
$
$
$
$
$
$
$
$
191,312
50,041
624,952
674,993
(606)
674,387
9.80
9.80
132.04
132.04
185,246
54,831
26,215
81,046
(1,623)
79,423
10.74
10.74
15.55
15.55
$
$
$
$
174,206
49,159
18,286
67,445
(1,016)
66,429
9.63
9.63
13.01
13.01
$
$
$
$
159,694
118,697
14,244
132,941
(751)
132,190
23.26
23.25
25.90
25.89
147,004
64,464
11,831
76,295
(7)
76,288
12.72
12.64
15.05
14.96
Dividends per common share(3)
$
137.00
$
12.00
$
7.50
$
-
$
7.00
Balance sheet data:
Total assets
Real estate, at cost
Accumulated depreciation and amortization
Mortgages payable
Total equity
$ 1,481,810
911,792
160,826
1,065,916
332,153
$ 1,771,307
906,907
136,460
1,080,932
363,245
$ 1,679,300
897,312
112,765
1,095,197
343,776
$ 1,703,769
879,833
91,247
1,095,646
314,626
$ 1,603,568
823,716
76,139
1,021,718
180,751
(1)
Includes reversals of stock appreciation rights ("SARs") compensation expense of $34,275 and $20,254 in 2009 and 2008,
respectively, and reversals of a portion of the liability for income taxes of $2,561, $5,113, and $42,472 in 2011, 2010 and 2009,
respectively.
(2) 2012 includes a $599,628 gain on sale of real estate.
(3) 2012 includes a special long-term capital gain dividend of $122.00 per share. We began paying a regular quarterly dividend in the
second quarter of 2010. We also paid a special dividend of $7.00 per share in 2008.
23
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing,
managing, developing and redeveloping 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 greater New York City metropolitan
area.
We compete with a large number of property owners and developers. Our success depends upon, among other factors,
trends affecting national and local economies, the financial condition and operating results of current and prospective tenants,
the availability and cost of capital, interest rates, construction and renovation costs, taxes, governmental regulations and
legislation, population trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our
success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.
Kings Plaza Regional Shopping Center
On November 28, 2012, we completed the sale of the Kings Plaza Regional Shopping Center (“Kings Plaza”) located in
Brooklyn, New York, to The Macerich Company (NYSE: MAC) (“Macerich”), for $751,000,000. Net proceeds from the
sale, after repaying the existing loan and closing costs, were $479,000,000, of which $30,000,000 was in Macerich common
shares. The financial statement gain was $601,976,000, of which $599,628,000 was recognized in the fourth quarter and the
remaining $2,348,000 was deferred and will be recognized upon the disposition of the Macerich common shares. Prior to the
sale, in November 2012, we acquired the remaining 75% interest in our consolidated subsidiary, the Kings Plaza energy plant
joint venture (which was sold with Kings Plaza), for $7,800,000 in cash.
Special Dividend
On November 30, 2012, our Board of Directors declared a special long-term capital gain dividend of $122.00 per share,
or $623,178,000 in the aggregate, to distribute the tax gain resulting from the sale of Kings Plaza.
Year Ended December 31, 2012 Financial Results Summary
Net income attributable to common stockholders for the year ended December 31, 2012 was $674,387,000, or $132.04
per diluted share, compared to $79,423,000, or $15.55 per diluted share for the year ended December 31, 2011. The year
ended December 31, 2012 includes $599,628,000, or $117.40 per diluted share for the net gain on sale of Kings Plaza. Net
income from continuing operations was $50,041,000, or $9.80 per diluted share for the year ended December 31, 2012,
compared to $54,831,000, or $10.74 per diluted share for the year ended December 31, 2011.
Funds from operations attributable to common stockholders (“FFO”) for the year ended December 31, 2012 was
$107,616,000, or $21.07 per diluted share, compared to $112,894,000, or $22.11 per diluted share for the prior year. FFO
from continuing operations was $78,680,000, or $15.40 per diluted share for the year ended December 31, 2012, compared to
$82,747,000, or $16.21 per diluted share for the prior year.
Quarter Ended December 31, 2012 Financial Results Summary
Net income attributable to common stockholders for the quarter ended December 31, 2012 was $617,157,000, or $120.82
per diluted share, compared to $20,634,000, or $4.04 per diluted share for the quarter ended December 31, 2011. The quarter
ended December 31, 2012 includes $599,628,000, or $117.39 per diluted share for the net gain on sale of Kings Plaza. Net
income from continuing operations was $12,033,000, or $2.36 per diluted share for the quarter ended December 31, 2012,
compared to $13,318,000, or $2.61 per diluted share for the quarter ended December 31, 2011.
FFO for the quarter ended December 31, 2012 was $24,723,000, or $4.84 per diluted share, compared to $29,145,000, or
$5.71 per diluted share for the prior year’s quarter. FFO from continuing operations was $19,227,000, or $3.76 per diluted
share for the quarter ended December 31, 2012, compared to $20,429,000, or $4.00 per diluted share for the prior year’s
quarter.
(cid:3)
(cid:3)
24
Overview – continued
Leasing Activity, Square Footage and Occupancy
As of December 31, 2012 and 2011, our portfolio was comprised of six properties aggregating 2,179,000 square feet that
had occupancy rates of 99.1% and 98.7%, respectively.
(cid:3)
In the year ended December 31, 2012, we leased 9,799 square feet that was placed into service at our Rego Park II
shopping center, at an initial rent of $70.00 per square foot for a 21-year lease term.
(cid:3)
Significant Tenants
Bloomberg L.P. (“Bloomberg”) accounted for $86,468,000, $84,526,000 and $83,137,000, or 45%, 46% and 48% of our
total revenues in the years ended December 31, 2012, 2011 and 2010, respectively. No other tenant accounted for more than
10% of our total revenues in any of the last three years. If we were to lose Bloomberg as a tenant, or if Bloomberg were to
fail or become unable to perform its obligations under its lease, it would adversely affect our financial condition and results
of operations. We receive and evaluate certain confidential financial information and metrics from Bloomberg on a semi-
annual basis. In addition, we access and evaluate financial information regarding Bloomberg from private sources, as well as
publicly available data.
(cid:3)
(cid:3)
Recently Issued Accounting Literature
In May 2011, the Financial Accounting Standards Board (“FASB”) issued Update No. 2011-04, Fair Value
Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in
U.S. GAAP and IFRSs (“ASU No. 2011-04”). ASU No. 2011-04 provides a uniform framework for fair value measurements
and related disclosures between GAAP and International Financial Reporting Standards (“IFRS”) and requires additional
disclosures, including: (i) quantitative information about unobservable inputs used, a description of the valuation processes
used, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs, for Level
3 fair value measurements; (ii) fair value of financial instruments not measured at fair value but for which disclosure of fair
value is required, based on their levels in the fair value hierarchy; and (iii) transfers between Level 1 and Level 2 of the fair
value hierarchy. The adoption of this update on January 1, 2012, did not have a material impact on our consolidated financial
statements, but resulted in additional fair value measurement disclosures.
In June 2011, the FASB issued Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive
Income (“ASU No. 2011-05”). ASU No. 2011-05 requires the presentation of net income and other comprehensive income
in one continuous statement or in two separate but consecutive statements. The adoption of this update on January 1, 2012,
resulted in the presentation of comprehensive income as a separate financial statement.
(cid:3)
25
Critical Accounting Policies and Estimates
Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of
America (“GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ from those estimates. Set forth below is a
summary of our accounting policies that we believe are critical to the preparation of our consolidated financial statements.
This summary should be read in conjunction with a more complete discussion of our accounting policies included in Note 2
to the consolidated financial statements in this Annual Report on Form 10-K.
Real Estate
Real estate is carried at cost, net of accumulated depreciation and amortization. As of December 31, 2012 and 2011, the
carrying amount of our real estate, net of accumulated depreciation and amortization, was $750,966,000 and $770,447,000,
respectively. Maintenance and repairs are expensed as incurred. Depreciation requires an estimate by management of the
useful life of each property and improvement as well as an allocation of the costs associated with a property to its various
components. If we do not allocate these costs appropriately or incorrectly estimate the useful lives of our real estate,
depreciation expense may be misstated. As real estate is undergoing development activities, all property operating expenses
directly associated with and attributable to, the development and construction of a project, including interest expense, are
capitalized to the cost of the real property to the extent that we believe such costs are recoverable through the value of the
property. The capitalization period begins when development activities are underway and ends when the project is
substantially complete. General and administrative costs are expensed as incurred.
Our properties and related intangible assets, including properties to be developed in the future, are individually reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be
recoverable. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset. Estimates of future cash flows are based on our current
plans, intended holding periods and available market information at the time the analyses are prepared. For our development
properties, estimates of future cash flows also include all future expenditures necessary to develop the asset, including
interest payments that will be capitalized as part of the cost of the asset. An impairment loss is recognized only if the
carrying amount of the asset is not recoverable and is measured based on the excess of the property’s carrying amount over
its estimated fair value. If our estimates of future cash flows, anticipated holding periods, or fair values change, based on
market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be
material to our consolidated financial statements. Estimates of future cash flows are subjective and are based, in part, on
assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results.
Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
Allowance for Doubtful Accounts
We periodically evaluate the collectibility of amounts due from tenants, including the receivable arising from the straight-
lining of rents, and maintain an allowance for doubtful accounts ($2,219,000 and $1,039,000 as of December 31, 2012 and
2011, respectively) for estimated losses resulting from the inability of tenants to make required payments under the lease
agreements. We exercise judgment in establishing these allowances and consider payment history and current credit status in
developing these estimates. These estimates may differ from actual results, which could be material to our consolidated
financial statements.
26
Critical Accounting Policies and Estimates – continued
Revenue Recognition
We have the following revenue sources and revenue recognition policies:
(cid:120)(cid:3) Base Rent – revenue arising from tenant leases. These rents are recognized over the non-cancelable term of the
related leases on a straight-line basis, which includes the effects of rent steps and free rent abatements under the
leases. We commence rental revenue recognition when the tenant takes possession of the leased space and the leased
space is substantially ready for its intended use. 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.
(cid:120)(cid:3) Percentage Rent – revenue arising from retail tenant leases that is contingent upon the sales of tenants exceeding
defined thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales
thresholds have been achieved).
(cid:120)(cid:3) Expense Reimbursements – revenue arising from tenant leases which provide for the recovery of all or a portion of
the operating expenses and real estate taxes of the respective properties. This revenue is accrued in the same periods
as the expenses are incurred.
(cid:120)(cid:3) Parking income – revenue arising from the rental of parking space at our properties. This income is recognized as
cash is received.
Before we recognize revenue, we assess, among other things, its collectibility. If our assessment of the collectibility of
revenue changes, the impact on our consolidated financial statements could be material.
Income Taxes
We operate in a manner intended to enable us to continue to qualify as a Real Estate Investment Trust (“REIT”) under
Sections 856 – 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to maintain our qualification as
a REIT under the Code, we must distribute at least 90% of our taxable income to stockholders each year. We distribute to
our stockholders 100% of our taxable income and therefore, no provision for Federal income taxes is required. If we fail to
distribute the required amount of income to our stockholders, or fail to meet other REIT requirements, we may fail to qualify
as a REIT, which may result in substantial adverse tax consequences.
(cid:3)
(cid:3)
27
Results of Operations – Year Ended December 31, 2012 compared to December 31, 2011
Property Rentals
Property rentals were $134,847,000 in the year ended December 31, 2012, compared to $133,682,000 in the prior year,
an increase of $1,165,000.
Expense Reimbursements
Tenant expense reimbursements were $56,465,000 in the year ended December 31, 2012, compared to $51,564,000 in
the prior year, an increase of $4,901,000. This increase was primarily due to higher real estate taxes and reimbursable
operating expenses.
Operating Expenses
Operating expenses were $61,755,000 in the year ended December 31, 2012, compared to $55,481,000 in the prior year,
an increase of $6,274,000. This increase was primarily comprised of higher (i) real estate taxes of $4,395,000, (ii)
reimbursable operating expenses of $622,000 and (iii) bad debt expense of $1,041,000.
Depreciation and Amortization
Depreciation and amortization was $28,815,000 in the year ended December 31, 2012, compared to $28,083,000 in the
prior year, an increase of $732,000.
General and Administrative Expenses
General and administrative expenses were $5,162,000 in the year ended December 31, 2012, compared to $3,996,000 in
the prior year, an increase of $1,166,000. This increase was primarily due to an $807,000 reversal of a portion of the
litigation loss accrual at our Flushing property in the prior year.
Interest and Other Income, net
Interest and other income, net was $177,000 in the year ended December 31, 2012, compared to $1,001,000 in the prior
year, a decrease of $824,000. This decrease was primarily due to $740,000 of income in the prior year resulting from the
collection of prior period real estate tax billings.
Interest and Debt Expense
Interest and debt expense was $45,652,000 in the year ended December 31, 2012, compared to $43,898,000 in the prior
year, an increase of $1,754,000. This increase was primarily due to a $2,561,000 reversal of previously recognized interest
expense related to our income tax liability in the prior year, due to the expiration of the applicable statute of limitations,
partially offset by savings of $621,000 from lower average debt balances.
28
Results of Operations – Year Ended December 31, 2012 compared to December 31 2011 - continued
Income Tax (Expense) Benefit
In the year ended December 31, 2012, we had income tax expense of $64,000, compared to a $42,000 income tax
benefit in the prior year, an increase in expense of $106,000. This increase resulted from a true-up of our estimated income
tax liability in the prior year.
Income from Discontinued Operations
Income from discontinued operations was $624,952,000 in the year ended December 31, 2012, compared to
$26,215,000 in the prior year, an increase of $598,737,000. The increase resulted primarily from a $599,628,000 net gain on
sale of the Kings Plaza Regional Shopping Center on November 28, 2012.
Net Income Attributable to the Noncontrolling Interest
Net income attributable to the noncontrolling interest was $606,000 in the year ended December 31, 2012, compared to
$1,623,000 in the prior year, a decrease of $1,017,000. This decrease was primarily due to our Kings Plaza energy plant venture
partner’s 75% pro-rata share of a true-up in straight-line rental income in the prior year. The Kings Plaza energy plant was sold
together with the Kings Plaza Regional Shopping Center in November 2012.
29
Results of Operations – Year Ended December 31, 2011 Compared to December 31, 2010
Property Rentals
Property rentals were $133,682,000 in the year ended December 31, 2011, compared to $127,240,000 in the year ended
December 31, 2010, an increase of $6,442,000. This increase was primarily attributable to the lease-up of space at our Rego
Park I and Rego Park II properties.
Expense Reimbursements
Tenant expense reimbursements were $51,564,000 in the year ended December 31, 2011, compared to $46,966,000 in the
year ended December 31, 2010, an increase of $4,598,000. This increase was primarily due to higher real estate taxes and
reimbursable operating expenses, and attributable to tenants at our Rego Park II property whose space was placed into service
during 2010.
Operating Expenses
Operating expenses were $55,481,000 in the year ended December 31, 2011, compared to $50,153,000 in the year ended
December 31, 2010, an increase of $5,328,000. This increase was comprised of higher real estate taxes and reimbursable
operating expenses of $3,719,000 and an increase in bad debt expense and other non-reimbursable expenses of $1,609,000.
Depreciation and Amortization
Depreciation and amortization was $28,083,000 in the year ended December 31, 2011, compared to $25,688,000 in the
year ended December 31, 2010, an increase of $2,395,000. This increase resulted primarily from depreciation on the portion
of Rego Park II placed into service during 2010.
General and Administrative Expenses
General and administrative expenses were $3,996,000 in the year ended December 31, 2011, compared to $7,374,000 in
the year ended December 31, 2010, a decrease of $3,378,000. This decrease was primarily due to a $3,135,000 litigation loss
accrual in 2010 related to our Flushing property, of which $807,000 was reversed in 2011 in connection with the litigation’s
settlement, partially offset by $405,000 of higher compensation to our Board of Directors in 2011, of which $300,000
represents the fair value of a deferred stock unit grant.
Interest and Other Income, net
Interest and other income, net was $1,001,000 in the year ended December 31, 2011, compared to $799,000 in the year
ended December 31, 2010, an increase of $202,000. This increase was primarily due to $740,000 of income from the
collection of prior period real estate tax billings, partially offset by $479,000 from lower average yields on investments.
Interest and Debt Expense
Interest and debt expense was $43,898,000 in the year ended December 31, 2011, compared to $45,455,000 in the year
ended December 31, 2010, a decrease of $1,557,000. This decrease was primarily due to $850,000 of interest related to our
income tax liability, resulting primarily from a higher reversal of previously recognized interest expense in 2011 as compared
to 2010 and $647,000 of lower amortization of debt issuance costs resulting from the refinancing of our Rego Park II
property.
30
Results of Operations – Year Ended December 31, 2011 Compared to December 31, 2010 - continued
Income Tax Benefit
In the year ended December 31, 2011, we had a $42,000 income tax benefit, compared to a $2,824,000 income tax benefit
in the year ended December 31, 2010. The income tax benefit in 2011 resulted from a true-up of the income tax liability
accrued during 2010. The income tax benefit in 2010 resulted primarily from the reversal of a portion of the income tax
liability due to the expiration of the applicable statute of limitations.
Net Income Attributable to the Noncontrolling Interest
Net income attributable to the noncontrolling interest was $1,623,000 in the year ended December 31, 2011, compared to
$1,016,000 in the year ended December 31, 2010, an increase of $607,000. This increase was primarily due to our Kings
Plaza energy plant venture partner’s 75% pro-rata share of a true-up in straight-line rental income during 2011.
(cid:3)
(cid:3)
31
Related Party Transactions
(cid:3)
Vornado
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of
Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees of Vornado.
At December 31, 2012, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr.
(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.3% of our outstanding common
stock, in addition to the 2.1% they indirectly own through Vornado. Michael D. Fascitelli, our President and a member of
our Board of Directors, is the President, Chief Executive Officer and a member of the Board of Trustees of Vornado. Joseph
Macnow, our Executive Vice President and Chief Financial Officer, holds the same position with Vornado.
At December 31, 2012, Vornado owned 32.4% of our outstanding common stock. We are managed by, and our
properties are leased and developed by, Vornado, pursuant to various agreements, which expire in March of each year and are
automatically renewable. These agreements are described in Note 3 – Related Party Transactions, to our consolidated
financial statements in this Annual Report on Form 10-K.
(cid:3)
(cid:3)
32
Liquidity and Capital Resources
Property rental income is our primary source of cash flow and is dependent on a number of factors including the
occupancy level and rental rates of our properties, as well as our tenants’ ability to pay their rents. Our properties provide us
with a relatively consistent stream of cash flow that enables us to pay our operating expenses, interest expense, recurring
capital expenditures and cash dividends to stockholders. Other sources of liquidity to fund cash requirements include our
existing cash, proceeds from financings, including mortgage or construction loans secured by our properties and proceeds
from asset sales. We anticipate that cash flows from continuing operations over the next twelve months, together with
existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt amortization
and maturities, and recurring capital expenditures.
Dividends
On January 16, 2013, we adjusted our regular quarterly dividend to $2.75 per share (a new indicated annual rate of $11.00
per share). The regular quarterly dividend was adjusted to reflect the sale of the Kings Plaza Regional Shopping Center in
November 2012, which resulted in a special long-term capital gain dividend of $122.00 per share. The new dividend, if
continued for all of 2013, would require us to pay out approximately $56,190,000.
Rego Park II Apartment Tower
We are currently evaluating plans to construct an apartment tower containing approximately 300 units aggregating
250,000 square feet, above our Rego Park II shopping center. The funding required for the proposed development will be
approximately $100,000,000 to $120,000,000. There can be no assurance that the project will commence, or if commenced,
be completed on schedule or within budget.
Financing Activities and Contractual Obligations
Below is a summary of our outstanding debt and maturities as of December 31, 2012.
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(Amounts in thousands)
Rego Park I(1)
Lexington Office
Lexington Retail(2)
Paramus
Rego Park II(3)
Balance
78,246
327,425
320,000
68,000
272,245
1,065,916
$
$
Interest
Rate
0.50%
5.33%
4.93%
2.90%
2.06%
Maturity
Mar. 2013
Feb. 2014
Jul. 2015
Oct. 2018
Nov. 2018
_________________________________________
(1) This loan is 100% cash collateralized.
(2) In the event of a substantial casualty, as defined, up to $75,000 of this loan may become recourse to us.
(3) This loan bears interest at LIBOR plus 1.85%.
Below is a summary of our contractual obligations and commitments as of December 31, 2012.
(Amounts in thousands)
Contractual obligations (principal and interest(1)):
Total
Long-term debt obligations
Operating lease obligations
Purchase obligations (primarily construction
commitments)
Other obligations (primarily due to Vornado)
$ 1,170,784 $
10,858
1,161
52,665
$ 1,235,468 $
Less than
One Year
One to
Three Years
Three to
Five Years
More than
Five Years
135,075 $
700
682,320 $
1,400
22,366 $
1,492
331,023
7,266
1,161
4,000
140,936 $
-
8,000
691,720 $
-
8,000
31,858 $
-
32,665
370,954
Commitments:
Standby letters of credit
$
4,058 $
4,058 $
- $
- $
-
(1) Interest on variable rate debt is computed using rates in effect at December 31, 2012.
(cid:3)
33
Liquidity and Capital Resources – continued
Commitments and Contingencies
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and all-risk property and rental value
insurance coverage with limits of $1.7 billion per occurrence, including coverage for terrorist acts, with sub-limits for certain
perils such as floods and earthquakes on each of our properties.
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 Program Reauthorization Act of 2007 (“TRIPRA”). Coverage for acts of terrorism
(including NBCR acts) is up to $1.7 billion per occurrence. Coverage for acts of terrorism (excluding NBCR acts) is fully
reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a
$275,000 deductible and 15% of the balance of a covered loss and the Federal government is responsible for the remaining
85% of a covered loss. We are ultimately responsible for any loss borne by FNSIC.
There can be no assurance that we will be able to maintain similar levels of insurance coverage in the future in amounts
and on terms that are commercially reasonable. We are responsible for deductibles and losses in excess of our insurance
coverage, which could be material.
Our mortgage loans are non-recourse to us, except for $75,000,000 of the $320,000,000 mortgage on our 731 Lexington
Avenue property, in the event of a substantial casualty, as defined. Our mortgage loans contain customary covenants
requiring us to maintain insurance. If lenders insist on greater coverage than we are able to obtain, it could adversely affect
our ability to finance our properties.
Flushing Property
In 2002 Flushing Expo, Inc. (“Expo”) agreed to purchase the stock of the entity which owns the Flushing property from
us (“Purchase of the Property”) and gave us a non-refundable deposit of $1,875,000. Pursuant to a stipulation of settlement,
we settled the action Expo brought against us regarding the Purchase of the Property and in June 2011, deposited the
settlement amount with the Court, in exchange for which we received a stipulation of discontinuance, with prejudice, as well
as general releases. In November 2011, Expo filed another action, this time against our tenant at the Flushing property
asserting, among other things, that such tenant interfered with Expo's Purchase of the Property from us and sought
$50,000,000 in damages from our tenant, who sought indemnification from us for such amount. In August 2012, the Court
entered judgment denying Expo's claim for damages. Expo filed a motion to re-argue the decision, which the Court denied
on December 7, 2012. Expo and has appealed the Court’s original decision. We believe, after consultation with counsel, that
the amount or range of reasonably possible losses, if any, cannot be estimated.
Paramus
In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has a 40-year term
with a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage loan
with a fixed rate of 2.90%, which matures in October 2018. The annual triple-net rent is the sum of $700,000 plus the amount
of debt service 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.
Other
There are various legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters
in the aggregate will not have a material effect on our financial condition, results of operations or cash flows.
34
Liquidity and Capital Resources – continued
Cash Flows
Cash and cash equivalents were $353,396,000 at December 31, 2012, compared to $506,619,000 at December 31, 2011, a
decrease of $153,223,000. This decrease resulted from $973,007,000 of net cash used in financing activities, partially offset
by $710,077,000 of net cash provided by investing activities and $109,707,000 of net cash provided by operating activities.
Our consolidated outstanding debt was $1,065,916,000 at December 31, 2012, a $15,016,000 decrease from the balance at
December 31, 2011.
Year Ended December 31, 2012
Net cash provided by operating activities was $109,707,000, of which $34,896,000 was related to discontinued
operations. Net cash provided by operating activities was comprised of net income of $674,993,000 and $2,154,000 for the
net change in operating assets and liabilities, partially offset by $567,440,000 of adjustments for non-cash items. The
adjustments for non-cash items were primarily comprised of a net gain on the sale of real estate of $599,628,000 and straight-
lining of rental income of $4,475,000, partially offset by depreciation and amortization of $36,363,000.
Net cash provided by investing activities of $710,077,000 was comprised of (i) net proceeds from the sale of real estate of
$714,054,000 (excluding $30,000,000 of stock consideration) and (ii) proceeds from maturing short-term investments of
$5,000,000, partially offset by (iii) $7,351,000 of real estate additions, primarily related to our Rego Park II property, and (iv)
an increase in restricted cash of $1,626,000.
Net cash used in financing activities of $973,007,000 was primarily comprised of (i) dividends paid on common stock of
$699,791,000, which included a special dividend of $623,178,000 to distribute the tax gain on the sale of Kings Plaza, (ii)
repayment of the Kings Plaza debt of $250,000,000 upon the sale of the property, (iii) repayments of borrowings of
$15,016,000 and (iv) a payment of $7,800,000 to acquire the noncontrolling interest in the Kings Plaza energy plant joint
venture, which was sold with the mall.
Year Ended December 31, 2011
Cash and cash equivalents were $506,619,000 at December 31, 2011, compared to $397,220,000 at December 31, 2010,
an increase of $109,399,000. This increase resulted from $92,514,000 of net cash provided by operating activities, $383,000
of net cash provided by investing activities and $16,502,000 of net cash provided by financing activities.
Net cash provided by operating activities of $92,514,000 was comprised of net income of $81,046,000, and $22,216,000
of adjustments for non-cash items, partially offset by $10,748,000 for the net change in operating assets and liabilities. The
adjustments for non-cash items were primarily comprised of (i) depreciation and amortization of $37,086,000, partially offset
by (ii) straight-lining of rental income of $12,609,000 and (iii) a $2,561,000 reversal of a portion of the liability for income
taxes.
Net cash provided by investing activities of $383,000 was comprised of (i) proceeds from maturing short-term
investments of $23,000,000, partially offset by (ii) $14,415,000 of real estate additions, primarily related to the development
of our Rego Park II property, (iii) purchases of short-term investments of $5,000,000, and (iv) an increase in restricted cash
of $3,202,000.
Net cash provided by financing activities of $16,502,000 was primarily comprised of (i) $593,000,000 of proceeds from
the refinancing of our Rego Park II, Kings Plaza and Paramus properties, partially offset by (ii) repayments of borrowings of
$508,479,000 (primarily Rego Park II, Kings Plaza and Paramus) and (iii) dividends paid on common stock of $61,277,000.
35
Liquidity and Capital Resources – continued
Year Ended December 31, 2010
Cash and cash equivalents were $397,220,000 at December 31, 2010, compared to $412,734,000 at December 31, 2009, a
decrease of $15,514,000. This decrease resulted from $72,143,000 of net cash used in financing activities and $19,393,000
of net cash used in investing activities, partially offset by $76,022,000 of net cash provided by operating activities.
Net cash provided by operating activities of $76,022,000 was comprised of net income of $67,445,000, and $15,792,000
of adjustments for non-cash items, partially offset by $7,215,000 for the net change in operating assets and liabilities. The
adjustments for non-cash items were primarily comprised of (i) depreciation and amortization of $34,849,000, partially offset
by (ii) straight-lining of rental income of $15,182,000 and (iii) a $5,113,000 reversal of a portion of the liability for income
taxes.
Net cash used in investing activities of $19,393,000 was primarily comprised of $42,310,000 of real estate additions,
primarily related to the development of our Rego Park II property, and purchases of short-term investments of $23,000,000,
partially offset by $40,000,000 of proceeds from maturing short-term investments.
Net cash used in financing activities of $72,143,000 was primarily comprised of (i) dividends paid on common stock of
$38,295,000, (ii) $27,500,000 for the purchase of a portion of our Kings Plaza debt, (iii) $24,039,000 for the repayment of a
portion of Rego Park II construction loan upon exercise of the one-year extension option and (iv) $17,080,000 for the
repayment of borrowings, partially offset by (v) $34,828,000 of borrowings under our Rego Park II construction loan.
36
Funds from Operations (“FFO”)
FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net
gains from sales of depreciated real estate assets, real estate impairment losses, depreciation and amortization expense from
real estate assets, extraordinary items and other specified non-cash items, including the pro rata share of such adjustments of
unconsolidated subsidiaries. FFO and FFO per diluted share are used by management, investors and analysts to facilitate
meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of
real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that
the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO
does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash
requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a
liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. A reconciliation
of our net income to FFO is provided below.
FFO attributable to common stockholders for the year ended December 31, 2012 was $107,616,000, or $21.07 per diluted
share, compared to $112,894,000, or $22.11 per diluted share for the year ended December 31, 2011. FFO from continuing
operations was $78,680,000, or $15.40 per diluted share for the year ended December 31, 2012, compared to $82,747,000, or
$16.21 per diluted share for the prior year.
FFO attributable to common stockholders for the quarter ended December 31, 2012 was $24,723,000, or $4.84 per diluted
share, compared to $29,145,000, or $5.71 per diluted share for the quarter ended December 31, 2011. FFO from continuing
operations was $19,227,000, or $3.76 per diluted share for the quarter ended December 31, 2012, compared to $20,429,000,
or $4.00 per diluted share for the prior year’s quarter.
The following table reconciles our net income to FFO:
(cid:3)
(cid:3)
(Amounts in thousands, except share and per share amounts)
Net income attributable to Alexander’s
Net gain on sale of real estate
Depreciation and amortization of real property
FFO attributable to common stockholders
FFO attributable to common stockholders per diluted share
For the Year Ended
December 31,
For the Quarter Ended
December 31,
2012
674,387
(599,628)
32,857
107,616
21.07
$
$
$
2011
79,423
-
33,471
112,894
22.11
$
$
$
2012
617,157
(599,628)
7,194
24,723
4.84
$
$
$
$
$
$
2011
20,634
-
8,511
29,145
5.71
Weighted average shares used in computing diluted FFO per share
5,107,610
5,106,568
5,108,016
5,106,984
37
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. Our
exposure to a change in interest rates is summarized in the table below.
(cid:3)
(cid:3)
(Amounts in thousands, except per share amounts)
Variable (including $45,803 and $40,728,
respectively, due to Vornado)
Fixed Rate
December 31,
Balance
$
$
318,048
793,671
1,111,719
Total effect on diluted earnings per share
(cid:3)
2012
Weighted
Average
Interest Rate
2011
Effect of 1%
Change in
Base Rates
December 31,
Balance
Weighted
Average
Interest Rate
2.07%
4.48%
$
$
$
3,180
-
3,180
$
$
315,524
806,136
1,121,660
2.10%
4.52%
0.62
The fair value of our consolidated debt 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. As of December 31, 2012 and 2011, the estimated fair value of our consolidated debt was $1,143,000,000. Our
fair value estimates, which are made at the end of the reporting period, may be different from the amounts that may
ultimately be realized upon the disposition of our financial instruments.
38
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(cid:3)
(cid:3)
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets at December 31, 2012 and 2011
Consolidated Statements of Income for the
Years Ended December 31, 2012, 2011 and 2010
Consolidated Statements of Comprehensive Income for the
Years Ended December 31, 2012, 2011 and 2010
Consolidated Statements of Changes in Equity for the
Years Ended December 31, 2012, 2011 and 2010
Consolidated Statements of Cash Flows for the
Years Ended December 31, 2012, 2011 and 2010
Notes to Consolidated Financial Statements
Page
Number
40
41
42
43
44
45
46
39
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Alexander’s, Inc.
Paramus, New Jersey
We have audited the accompanying consolidated balance sheets of Alexander’s, Inc. and subsidiaries (the “Company”) as
of December 31, 2012 and 2011, and the related consolidated statements of income, comprehensive income, changes in
equity, and cash flows for each of the three years in the period ended December 31, 2012. Our audits also included the
financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are
the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of
Alexander’s, Inc. and subsidiaries at December 31, 2012 and 2011, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2012, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth
therein.
As discussed in Note 4 to the consolidated financial statements, the Company completed the sale of Kings Plaza Regional
Shopping Center on November 28, 2012. The gain on sale and results prior to the sale are included in income from
discontinued operations in the accompanying financial statements. The accompanying 2011 and 2010 financial statements
have been retrospectively adjusted for discontinued operations.
As discussed in Note 2 to the consolidated financial statements, the Company adopted FASB Accounting Standards
Update No. 2011-05, Presentation of Comprehensive Income in 2012. The Company has presented net income and other
comprehensive income in two separate but consecutive statements for all periods presented.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of December 31, 2012, based on the criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated February 26, 2013 expressed an unqualified opinion on the Company’s internal control over financial
reporting.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 26, 2013
40
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
ASSETS
Real estate, at cost:
Land
Buildings and leasehold improvements
Development and construction in progress
Total
Accumulated depreciation and amortization
Real estate, net
Cash and cash equivalents
Restricted cash
Short-term investments
Marketable securities
Tenant and other receivables, net of allowance for doubtful accounts of $2,219 and $1,039, respectively
Receivable arising from the straight-lining of rents
Deferred lease and other property costs, net, including unamortized leasing fees to Vornado of
$39,910 and $42,678, respectively
Deferred debt issuance costs, net of accumulated amortization of $16,834 and $14,638, respectively
Assets related to discontinued operations
Other assets
LIABILITIES AND EQUITY
Mortgages payable
Amounts due to Vornado
Accounts payable and accrued expenses
Liabilities related to discontinued operations
Other liabilities, including $2,348 of deferred income from the sale of Kings Plaza in 2012
Total liabilities
Commitments and contingencies
Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares; issued and outstanding, none
Common stock: $1.00 par value per share; authorized, 10,000,000 shares; issued 5,173,450 shares;
outstanding, 5,105,936 shares
Additional capital
Retained earnings
Accumulated other comprehensive income
Treasury stock: 67,514 shares, at cost
Total Alexander’s equity
Noncontrolling interest in consolidated subsidiary
Total equity
December 31,
2012
2011
$
44,971
864,609
2,212
911,792
(160,826)
750,966
353,396
90,395
-
31,206
1,953
173,694
54,461
5,522
-
20,217
$ 1,481,810
$ 1,065,916
46,445
33,621
-
3,675
1,149,657
$
$
$
44,971
860,833
1,103
906,907
(136,460)
770,447
506,619
88,769
5,000
-
2,552
169,536
58,244
7,470
137,418
25,252
1,771,307
1,080,932
41,340
34,577
250,000
1,213
1,408,062
-
-
5,173
29,352
296,797
1,206
332,528
(375)
332,153
-
332,153
$ 1,481,810
5,173
31,801
322,201
-
359,175
(375)
358,800
4,445
363,245
1,771,307
$
See notes to consolidated financial statements.
41
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
REVENUES
Property rentals
Expense reimbursements
Total revenues
EXPENSES
Operating, including fees to Vornado of $4,318, $3,687, and $3,665, respectively
Depreciation and amortization
General and administrative, including management fees to Vornado of $2,160
in each year
Total expenses
OPERATING INCOME
Interest and other income, net
Interest and debt expense
Income before income taxes
Income tax (expense) benefit
Income from continuing operations
Income from discontinued operations, including a $599,628 net gain on sale of real
estate in 2012
Net income
Net income attributable to the noncontrolling interest
Net income attributable to Alexander’s
Income per common share - basic and diluted:
Income from continuing operations
Income from discontinued operations, net
Net income per common share
Weighted average shares outstanding
Year Ended December 31,
2011
2010
2012
$
$
134,847
56,465
191,312
$
133,682
51,564
185,246
127,240
46,966
174,206
61,755
28,815
5,162
95,732
55,481
28,083
3,996
87,560
50,153
25,688
7,374
83,215
95,580
97,686
90,991
177
(45,652)
50,105
(64)
50,041
624,952
674,993
(606)
674,387
9.80
122.24
132.04
$
$
$
1,001
(43,898)
54,789
42
54,831
26,215
81,046
(1,623)
79,423
10.74
4.81
15.55
$
$
$
799
(45,455)
46,335
2,824
49,159
18,286
67,445
(1,016)
66,429
9.63
3.38
13.01
5,107,610
5,106,568
5,105,936
$
$
$
See notes to consolidated financial statements.
42
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Net income
Other comprehensive income:
Change in unrealized net gain on securities available-for-sale
Comprehensive income
Less:
Year Ended December 31,
2011
2010
2012
$
674,993
$
81,046
$
67,445
1,206
676,199
-
81,046
-
67,445
Comprehensive income attributable to the noncontrolling interest
Comprehensive income attributable to Alexander's
(606)
675,593
$
$
(1,623)
79,423
$
(1,016)
66,429
See notes to consolidated financial statements.
43
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)
Accumulated
Other
Balance, December 31, 2009
Net income
Dividends paid
Balance, December 31, 2010
Net income
Dividends paid
Distributions
Deferred stock unit grant
Balance, December 31, 2011
Net income
Dividends paid, including a special
dividend of $623,178
Acquisition of the noncontrolling
interest
Change in unrealized net gain
on securities available-for-sale
Deferred stock unit grant
Common Stock
Shares Amount
Additional
Capital
5,173 $
-
-
5,173 $
-
-
31,501 $
-
-
5,173
5,173
31,501
-
-
-
-
-
-
-
-
-
-
-
300
5,173
5,173
31,801
-
-
-
-
-
-
-
-
-
-
-
-
(2,749)
-
300
Retained Comprehensive Treasury Alexander’s
Earnings
Income
Equity
Stock
Non-
controlling
Interest
Total
Equity
275,921 $
66,429
(38,295)
304,055
79,423
(61,277)
-
-
322,201
674,387
(699,791)
-
-
-
- $
-
-
-
-
-
-
-
-
-
-
-
1,206
-
(375) $
-
-
(375)
-
-
-
-
(375)
-
-
-
-
-
312,220 $
66,429
(38,295)
2,406 $
1,016
-
340,354
79,423
(61,277)
-
300
358,800
674,387
3,422
1,623
-
(600)
-
4,445
606
314,626
67,445
(38,295)
343,776
81,046
(61,277)
(600)
300
363,245
674,993
(699,791)
-
(699,791)
(2,749)
(5,051)
(7,800)
1,206
300
-
-
1,206
300
Balance, December 31, 2012
5,173 $
5,173 $
29,352 $
296,797 $
1,206 $
(375) $
332,153 $
- $
332,153
See notes to consolidated financial statements.
44
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year Ended December 31,
2011
2010
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Net gain on sale of real estate
Depreciation and amortization, including amortization of debt issuance costs
Straight-lining of rental income
Stock-based compensation expense
Reversal of income tax liability
Other non-cash adjustments
Change in operating assets and liabilities:
Tenant and other receivables, net
Other assets
Amounts due to Vornado
Accounts payable and accrued expenses
Income tax liability of taxable REIT subsidiary
Other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of real estate
Construction in progress and real estate additions
Proceeds from maturing short-term investments
Restricted cash
Purchases of short-term investments
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid, including a special dividend of $623,178, or $122.00 per share in 2012
Debt repayments
Acquisition of the noncontrolling interest
Debt issuance costs
Proceeds from borrowing
Distributions to the noncontrolling interest
Net cash (used in) provided by financing activities
$
674,993 $
81,046 $
67,445
(599,628)
36,363
(4,475)
300
-
-
234
4,318
(2,405)
(107)
29
85
109,707
714,054
(7,351)
5,000
(1,626)
-
710,077
(699,791)
(265,016)
(7,800)
(400)
-
-
(973,007)
-
37,086
(12,609)
300
(2,561)
-
1,672
(5,484)
(2,445)
(4,547)
87
(31)
92,514
-
(14,415)
23,000
(3,202)
(5,000)
383
(61,277)
(508,479)
-
(6,142)
593,000
(600)
16,502
-
34,849
(15,182)
-
(5,113)
1,238
(2,065)
(6,068)
(12,881)
13,273
704
(178)
76,022
-
(42,310)
40,000
5,917
(23,000)
(19,393)
(38,295)
(68,619)
-
(57)
34,828
-
(72,143)
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest, of which $1,269 was capitalized in 2010
NON-CASH TRANSACTIONS
Marketable securities received in connection with the sale of real estate
Commission payable to Vornado incurred in connection with the sale of real estate
Change in unrealized net gain on securities available-for-sale
Write-off of fully amortized and/or depreciated assets
Non-cash additions to real estate included in accounts payable and accrued expenses
$
$
$
(153,223)
506,619
353,396 $
109,399
397,220
506,619 $
(15,514)
412,734
397,220
47,932 $
53,343 $
52,889
30,000 $
7,510
1,206
648
221
- $
-
-
6,799
3,052
-
-
-
-
-
See notes to consolidated financial statements.
45
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 greater New York City metropolitan area consisting of:
Operating properties
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:3)
(cid:3)
731 Lexington Avenue, a 1,307,000 square foot multi-use building, comprising the entire square block bounded
by Lexington Avenue, East 59th Street, Third Avenue and East 58th Street in Manhattan. The building contains
885,000 and 174,000 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. Bloomberg L.P.
(“Bloomberg”) occupies all of the office space. The Home Depot (83,000 square feet), The Container Store
(34,000 square feet) and Hennes & Mauritz (27,000 square feet) are the principal retail tenants;
Rego Park I, a 343,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens. The
center is anchored by a 195,000 square foot Sears department store, a 50,000 square foot Burlington Coat
Factory, a 46,000 square foot Bed Bath & Beyond and a 36,000 square foot Marshalls;
Rego Park II, a 610,000 square foot shopping center, adjacent to the Rego Park I shopping center in Queens.
The center is anchored by a 145,000 square foot Costco, a 135,000 square foot Century 21 and a 133,000 square
foot Kohl’s. In addition, 47,000 square feet is leased to Toys “R” Us/Babies “R” Us, a one-third owned affiliate
of Vornado;
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 Property, Inc.; and
Flushing, a 167,000 square foot building, located at Roosevelt Avenue and Main Street in Queens, that is sub-
leased to New World Mall LLC for the remainder of our ground lease term.
Properties to be developed
(cid:120)
(cid:120)
Rego Park II Apartment Tower; we are considering a proposed development containing approximately 300 units
aggregating 250,000 square feet, to be constructed above our Rego Park II shopping center. The funding required
for the proposed development will be approximately $100,000,000 to $120,000,000. There can be no assurance
that the project will commence, or if commenced, be completed on schedule or within budget.
Rego Park III, a 3.4 acre 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 which 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.
46
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation – The accompanying consolidated financial statements include our accounts and those of our
consolidated subsidiaries. All intercompany amounts have been eliminated. Our financial statements are prepared in
conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires us to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates. Certain prior year balances have been reclassified in order to
conform to current year presentation.
Recently Issued Accounting Literature – In May 2011, the Financial Accounting Standards Board (“FASB”) issued
Update No. 2011-04, Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and
Disclosure Requirements in U.S. GAAP and IFRSs (“ASU No. 2011-04”). ASU No. 2011-04 provides a uniform framework
for fair value measurements and related disclosures between GAAP and International Financial Reporting Standards
(“IFRS”) and requires additional disclosures, including: (i) quantitative information about unobservable inputs used, a
description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements to changes
in the unobservable inputs, for Level 3 fair value measurements; (ii) fair value of financial instruments not measured at fair
value but for which disclosure of fair value is required, based on their levels in the fair value hierarchy; and (iii) transfers
between Level 1 and Level 2 of the fair value hierarchy. The adoption of this update on January 1, 2012, did not have a
material impact on our consolidated financial statements, but resulted in additional fair value measurement disclosures (see
Note 8 - Fair Value Measurements).
In June 2011, the FASB issued Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive
Income (“ASU No. 2011-05”). ASU No. 2011-05 requires the presentation of net income and other comprehensive income
in one continuous statement or in two separate but consecutive statements. The adoption of this update on January 1, 2012,
resulted in the presentation of comprehensive income as a separate financial statement.
Real Estate – Real estate is carried at cost, net of accumulated depreciation and amortization. Maintenance and repairs
are expensed as incurred. Depreciation requires an estimate by management of the useful life of each property and
improvement as well as an allocation of the costs associated with a property to its various components. If we do not allocate
these costs appropriately or incorrectly estimate the useful lives of our real estate, depreciation expense may be misstated. As
real estate is undergoing development activities, all property operating expenses directly associated with and attributable to,
the development and construction of a project, including interest expense, are capitalized to the cost of the real property to the
extent that we believe such costs are recoverable through the value of the property. The capitalization period begins when
development activities are underway and ends when the project is substantially complete. General and administrative costs
are expensed as incurred. Depreciation is provided on a straight-line basis over estimated useful lives, which range from 5 to
40 years. Tenant allowances are amortized on a straight-line basis over the lives of the related leases, which approximate the
useful lives of the assets.
Our properties and related intangible assets, including properties to be developed in the future, are individually reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be
recoverable. An impairment exists when the carrying amount of an asset exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset. Estimates of future cash flows are based on our current
plans, intended holding periods and available market information at the time the analyses are prepared. For our development
properties, estimates of future cash flows also include all future expenditures necessary to develop the asset, including
interest payments that will be capitalized as part of the cost of the asset. An impairment loss is recognized only if the
carrying amount of the asset is not recoverable and is measured based on the excess of the property’s carrying amount over
its estimated fair value. If our estimates of future cash flows, anticipated holding periods, or fair values change, based on
market conditions or otherwise, our evaluation of impairment charges may be different and such differences could be
material to our consolidated financial statements. Estimates of future cash flows are subjective and are based, in part, on
assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results.
Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
47
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. 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. The majority
of our cash and cash equivalents consist of (i) deposits at major commercial banks, which may at times exceed the Federal
Deposit Insurance Corporation limit, (ii) money market funds, which invest in obligations of the United States government
and (iii) certificates of deposit placed through an account registry service (“CDARS”). To date we have not experienced any
losses on our invested cash.
Short-term Investments – Short-term investments consist of CDARS with original maturities greater than three but less
than six months. These investments are FDIC insured and classified as available-for-sale.
Restricted Cash – Restricted cash primarily consists of cash held in a non-interest bearing escrow account in connection
with our Rego Park I 100% cash collateralized mortgage, as well as security deposits and other cash escrowed under loan
agreements for debt service, real estate taxes, property insurance and capital improvements.
Marketable Securities – Our marketable securities consist of common shares of The Macerich Company (NYSE: MAC)
(“Macerich”), which are classified as available-for-sale. Available-for-sale securities are presented at fair value on our
consolidated balance sheet. Unrealized gains and losses resulting from the mark-to-market of these securities are included in
“other comprehensive income” and are recognized in earnings only upon the sale of the securities. We evaluate our
marketable securities for impairment at the end of each reporting period. If investments have unrealized losses, we evaluate
the underlying cause of the decline in value and the estimated recovery period, as well as the severity and duration of the
decline. In our evaluation, we consider our ability and intent to hold our investment for a reasonable period of time sufficient
for us to recover our cost basis, as well as the near-term prospects for the investment in relation to the severity and duration
of the decline.
Allowance for Doubtful Accounts – We periodically evaluate the collectibility of amounts due from tenants, including
the receivable arising from the straight-lining of rents, and maintain an allowance for doubtful accounts ($2,219,000 and
$1,039,000 as of December 31, 2012 and 2011, respectively) for the estimated losses resulting from the inability of tenants to
make required payments under the lease agreements. We exercise judgment in establishing these allowances and consider
payment history and current credit status in developing these estimates.
Deferred Charges – Direct financing costs are deferred and amortized over the terms of the related agreements as a
component of interest and debt expense. Direct costs related to leasing activities are capitalized and amortized on a straight-
line basis over the lives of the related leases. All other deferred charges are amortized on a straight-line basis, which
approximates the effective interest rate method, in accordance with the terms of the agreements to which they relate.
Revenue Recognition – We have the following revenue sources and revenue recognition policies:
Base Rent – revenue arising from tenant leases. These rents are recognized over the non-cancelable term of the related
leases on a straight-line basis, which includes the effects of rent steps and free rent abatements under the leases. We
commence rental revenue recognition when the tenant takes possession of the leased space and the leased space is
substantially ready for its intended use. 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.
Percentage Rent – revenue arising from retail tenant leases that is contingent upon the sales of tenants exceeding defined
thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales thresholds have
been achieved).
Expense Reimbursements – revenue arising from tenant leases which provide for the recovery of all or a portion of the
operating expenses and real estate taxes of the respective properties. This revenue is accrued in the same periods as the
expenses are incurred.
Parking Income – revenue arising from the rental of parking space at our properties. This income is recognized as cash is
received.
48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ALEXANDER’S, INC. AND SUBSIDIARIES
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Income Taxes – We operate in a manner intended to enable us to continue to qualify as a Real Estate Investment Trust
(“REIT”) under Sections 856 – 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to maintain
our qualification as a REIT under the Code, we must distribute at least 90% of our taxable income to stockholders each year.
We distribute to our stockholders 100% of our taxable income and therefore, no provision for Federal income taxes is
required. If we fail to distribute the required amount of income to our stockholders, or fail to meet other REIT requirements,
we may fail to qualify as a REIT, which may result in substantial adverse tax consequences.
The following table reconciles our net income to estimated taxable income for the years ended December 31, 2012, 2011
and 2010.
(cid:3)
(Unaudited and in thousands)
Net income attributable to Alexander’s
Additional tax gain on sale of the Kings Plaza Regional
$
Years Ended December 31,
2011
2010
$
79,423
$
66,429
2012
674,387
Shopping Center
Straight-line rent adjustments
Depreciation and amortization timing differences
Interest expense
Reversal of liability for income taxes
Other
Taxable income before net operating loss ("NOL")
NOL carried forward
Estimated taxable income
23,928
(4,475)
910
29
-
4,396
699,175
-
699,175
$
-
(12,609)
1,263
(2,425)
-
(3,429)
62,223
-
62,223
$
-
(15,182)
602
-
(3,162)
6,245
54,932
(16,939)
37,993
$
At December 31, 2012, the net basis of our assets and liabilities for tax purposes are approximately $184,806,000 lower
than the amount reported for financial statement purposes.
Income Per Share – Basic income per share is computed based on weighted average shares of common stock (including
deferred stock units) outstanding during the period. Diluted income per share is computed based on the weighted average
shares of common stock (including deferred stock units) outstanding during the period, and assumes all potentially dilutive
securities were converted into common stock at the earliest date possible. There were no potentially dilutive securities
outstanding during the years ended December 31, 2012, 2011 and 2010.
(cid:3)(cid:3)
49
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS
Vornado
At December 31, 2012, 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.
Steven Roth is the Chairman of our Board of Directors and Chief Executive Officer, the Managing General Partner of
Interstate Properties (“Interstate”), a New Jersey general partnership, and the Chairman of the Board of Trustees of Vornado.
At December 31, 2012, Mr. Roth, Interstate and its other two general partners, David Mandelbaum and Russell B. Wight, Jr.
(who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 26.3% of our outstanding common
stock, in addition to the 2.1% they indirectly own through Vornado. Michael D. Fascitelli, our President and a member of
our Board of Directors, is the President, Chief Executive Officer and a member of the Board of Trustees of Vornado. Joseph
Macnow, our Executive Vice President and Chief Financial Officer, holds the same position with Vornado.
Management and Development Agreements
Effective December 1, 2012, as a result of the sale of the Kings Plaza Regional Shopping Center (“Kings Plaza”) (see
Note 4 – Discontinued Operations), the management and development agreement with Vornado was amended. Pursuant to
the amended agreement, 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) $264,000, escalating at 3% per annum, for managing the common area of 731 Lexington
Avenue.
In addition, Vornado is entitled to a development fee of 6% of development costs, as defined.
Leasing 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. The total of these amounts is payable in annual
installments in an amount not to exceed $4,000,000, with interest on the unpaid balance at LIBOR plus 1% (2.13% at
December 31, 2012). As a result of the sale of Kings Plaza (see Note 4 – Discontinued Operations), we accrued a
$7,510,000 sales commission payable to Vornado, which is responsible for the fee to a third-party broker.
Other Agreements
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, for an annual fee of the cost for such services plus 6%.
(cid:3)
(cid:3)
50
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS – continued
The following is a summary of fees to Vornado under the agreements discussed above, which includes property management
and leasing fees related to Kings Plaza of $2,261,000, $3,385,000 and $1,758,000 in the years ended December 31, 2012,
2011 and 2010, respectively.
(cid:3)
(cid:3)
(Amounts in thousands)
Company management fees
Development fees
Leasing fees
Commission on sale of real estate
Property management fees and payments for cleaning, engineering
Year Ended December 31,
2011
3,000
727
4,267
-
2,983
438
2,217
7,510
3,000
750
4,472
-
2010
2012
$
$
$
and security services
(cid:3)
5,103
18,251
$
4,648
12,870
$
4,342
12,336
$
At December 31, 2012, we owed Vornado $45,803,000 for leasing fees (including the $7,510,000 Kings Plaza sales
commission) and $642,000 for management, property management and cleaning fees.
(cid:3)
4.
DISCONTINUED OPERATIONS
On November 28, 2012, we completed the sale of Kings Plaza located in Brooklyn, New York, to Macerich, for
$751,000,000. Net proceeds from the sale, after repaying the existing loan and closing costs, were $479,000,000, of which
$30,000,000 was in Macerich common shares. The financial statement gain was $601,976,000, of which $599,628,000 was
recognized in the fourth quarter and the remaining $2,348,000 was deferred and will be recognized upon the disposition of
the Macerich common shares. Prior to the sale, in November 2012, we acquired the remaining 75% interest in our
consolidated subsidiary, the Kings Plaza energy plant joint venture (which was sold with Kings Plaza), for $7,800,000 in
cash. Pursuant to Accounting Standards Codification (“ASC”) Topic 810, Consolidation, we have recorded the difference
between the acquisition price and the carrying amount of the noncontrolling interest as a reduction of “additional capital” on
our consolidated balance sheet.
On November 30, 2012, our Board of Directors declared a special long-term capital gain dividend of $122.00 per share,
or $623,178,000 in the aggregate, to distribute the tax gain resulting from the sale of Kings Plaza.
In accordance with the provisions of ASC 360, Property, Plant and Equipment, we have reclassified the revenues and
expenses of Kings Plaza to “income from discontinued operations” and the related assets and liabilities to “assets related to
discontinued operations” and “liabilities related to discontinued operations”, respectively, for all of the periods presented in
the accompanying financial statements. The tables below set forth the assets and liabilities related to discontinued operations
at December 31, 2012 and 2011 and their combined results of operations for the years ended December 31, 2012, 2011 and
2010.
(cid:3)
(cid:3)
(Amounts in thousands)
Kings Plaza
(Amounts in thousands)
Total revenues
Total expenses(1)
Net gain on sale
Income from discontinued operations
Assets Related to
Discontinued Operations as of
December 31,
Liabilities Related to
Discontinued Operations as of
December 31,
2012
2011
2012
2011
$
-
$
137,418
$
-
$
250,000
For the Year Ended December 31,
2011
2012
2010
$
$
61,836
36,512
25,324
599,628
624,952
$
$
$
69,006
42,791
26,215
-
26,215
$
67,144
48,858
18,286
-
18,286
___________________
(1)
Includes fees to Vornado of $1,608, $1,801 and $1,517 for the years ended December 31, 2012, 2011 and 2010, respectively.
51
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5.
MARKETABLE SECURITIES
As of December 31, 2012, we own 535,265 Macerich common shares, or approximately 0.39% of its outstanding
common shares. These shares were received as part of the consideration for the sale of Kings Plaza and have an economic
basis of $56.05 per share, or $30,000,000 in the aggregate. As of December 31, 2012, these shares have an aggregate fair
value of $31,206,000, based on Macerich’s closing share price of $58.30 per share at December 31, 2012. These shares are
included in “marketable securities” on our consolidated balance sheet and are classified as available-for-sale. Available-for-
sale securities are presented at fair value. Unrealized gains and losses resulting from the mark-to-market of these securities
are included in “other comprehensive income” and are recognized in earnings only upon the sale of the securities. Other
comprehensive income includes a $1,206,000 unrealized gain for the year ended December 31, 2012.
(cid:3)
(cid:3)
6. MORTGAGES PAYABLE
The following is a summary of outstanding mortgages payable.
(cid:3)
(cid:3)
(Amounts in thousands)
First mortgages secured by:
Rego Park I shopping center (100% cash
collateralized)
731 Lexington Avenue, office space
731 Lexington Avenue, retail space(1)
Paramus
Rego Park II shopping center(2)
___________________
Maturity
Interest Rate at
December 31, 2012
Balance at December 31,
2011
2012
Mar. 2013
Feb. 2014
Jul. 2015
Oct. 2018
Nov. 2018
0.50 %
5.33 %
4.93 %
2.90 %
2.06 %
$
78,246
327,425
320,000
68,000
272,245
$ 1,065,916
$
78,246
339,890
320,000
68,000
274,796
$ 1,080,932
In the event of a substantial casualty, as defined, up to $75,000 of this loan may become recourse to us.
This loan bears interest at LIBOR plus 1.85%.
(1)
(2)
(cid:3)
All of our debt is secured by mortgages and/or pledges of the stock of the subsidiaries holding the properties. The net
carrying value of real estate collateralizing the debt amounted to $746,867,000 at December 31, 2012. Our existing financing
documents contain covenants that limit our ability to incur additional indebtedness on these properties, provide for lender
approval of tenants’ leases in certain circumstances, and provide for yield maintenance to prepay them. As of December 31,
2012, the principal repayments for the next five years and thereafter are as follows:
(cid:3)
(cid:3)
(Amounts in thousands)
Year Ending December 31,
2013
2014
2015
2016
2017
Thereafter
$
Amount
94,203
317,179
323,193
3,440
3,707
324,194
(cid:3)
We may refinance our maturing debt as it comes due or choose to repay it at maturity.
52
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. STOCK-BASED COMPENSATION
Our 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, and any other person or entity as designated by the Omnibus Stock Plan Committee
of our Board of Directors. As of December 31, 2012, there were 2,080 DSUs outstanding and 892,920 shares were available
for future grant. We account for all stock-based compensation in accordance with ASC 718, Compensation – Stock
Compensation.
DSUs
In May 2012, the Company granted each of the members of its Board of Directors, 129 DSUs with a grant date fair value
of $37,500 per grant, or $300,000 in the aggregate. The DSUs entitle the holder 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.
(cid:3)
(cid:3)
8. FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurement and Disclosures defines fair value and establishes a framework for measuring fair
value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date (the exit price). 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; 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 at December 31, 2012 consists of marketable
securities and is presented in the table below, based on its level in the fair value hierarchy. There were no financial assets
measured at fair value at December 31, 2011 and no financial liabilities measured at fair value at December 31, 2012 and
2011.
(Amounts in thousands)
Marketable securities
(cid:3)
(cid:3)
As of December 31, 2012
Total
Level 1
Level 2
Level 3
$
31,206
$
31,206
$
-
$
-
53
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. FAIR VALUE MEASUREMENTS - continued
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, short-term investments, mortgages payable and leasing commissions due to Vornado. Cash equivalents and
short-term investments are carried at cost, which approximates fair value, due to their short-term maturities. 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. The leasing
commissions due to Vornado are carried at cost plus interest at variable rates, which approximate fair value. The fair value of
cash equivalents (primarily money market funds) is classified as Level 1 and the fair value of short-term investments,
mortgages payable and leasing commissions due to Vornado is classified as Level 2. The table below summarizes the
carrying amounts and fair value of these financial instruments as of December 31, 2012 and 2011.
(Amounts in thousands)
Assets:
Cash equivalents
Short-term investments
Liabilities:
Mortgages payable
Leasing commissions (included in Amounts due to Vornado)
(cid:3)
As of December 31, 2012
As of December 31, 2011
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
289,054 $
289,054
$
35,000 $
-
-
5,000
289,054 $
289,054
$
40,000 $
35,000
5,000
40,000
1,065,916 $
1,097,000
$
1,080,932 $
1,102,000
45,803
46,000
40,728
41,000
1,111,719 $
1,143,000
$
1,121,660 $
1,143,000
(cid:3)
(cid:3)
$
$
$
$
54
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. LEASES
As Lessor
We lease space to tenants in an office building and in retail centers. The rental terms range from approximately 5 to 25
years. The leases provide for the payment of fixed base rents payable monthly in advance as well as reimbursements of real
estate taxes, insurance and maintenance costs. Retail leases may also provide for the payment by the lessee of additional
rents based on a percentage of their sales.
Future base rental revenue under these non-cancelable operating leases is as follows:
(cid:3)
(cid:3)
(cid:3)
(Amounts in thousands)
Year Ending December 31,
2013
2014
2015
2016
2017
Thereafter
$
Amount
125,249
125,536
125,642
117,257
118,500
1,124,840
These future minimum amounts do not include additional rents based on a percentage of tenants’ sales. For the years ended
December 31, 2012, 2011, and 2010, these rents were $416,000, $427,000, and $418,000, respectively.
Bloomberg accounted for $86,468,000, $84,526,000 and $83,137,000, or 45%, 46% and 48% of our total revenues in the
years ended December 31, 2012, 2011 and 2010, respectively. No other tenant accounted for more than 10% of our total
revenues in any of the last three years. If we were to lose Bloomberg as a tenant, or if Bloomberg were to fail or become
unable to perform its obligations under its lease, it would adversely affect our financial condition and results of operations.
We receive and evaluate certain confidential financial information and metrics from Bloomberg on a semi-annual basis. In
addition, we access and evaluate financial information regarding Bloomberg from private sources, as well as publicly
available data.
As Lessee
We are a tenant under a long-term ground lease at our Flushing property, which expires in 2027 and has one 10-year
extension option. Future lease payments under this operating lease, excluding the extension option, are as follows:
(cid:3)
(cid:3)
(Amounts in thousands)
Year Ending December 31,
2013
2014
2015
2016
2017
Thereafter
$
Amount
700
700
700
700
792
7,266
(cid:3)
Rent expense was $746,000 in each of the years ended December 31, 2012, 2011 and 2010.
55
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMITMENTS AND CONTINGENCIES
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and all-risk property and rental value
insurance coverage with limits of $1.7 billion per occurrence, including coverage for terrorist acts, with sub-limits for certain
perils such as floods and earthquakes on each of our properties.
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 Program Reauthorization Act of 2007 (“TRIPRA”). Coverage for acts of terrorism
(including NBCR acts) is up to $1.7 billion per occurrence. Coverage for acts of terrorism (excluding NBCR acts) is fully
reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a
$275,000 deductible and 15% of the balance of a covered loss and the Federal government is responsible for the remaining
85% of a covered loss. We are ultimately responsible for any loss borne by FNSIC.
There can be no assurance that we will be able to maintain similar levels of insurance coverage in the future in amounts
and on terms that are commercially reasonable. We are responsible for deductibles and losses in excess of our insurance
coverage, which could be material.
Our mortgage loans are non-recourse to us, except for $75,000,000 of the $320,000,000 mortgage on our 731 Lexington
Avenue property, in the event of a substantial casualty, as defined. Our mortgage loans contain customary covenants
requiring us to maintain insurance. If lenders insist on greater coverage than we are able to obtain, it could adversely affect
our ability to finance our properties.
Flushing Property
In 2002 Flushing Expo, Inc. (“Expo”) agreed to purchase the stock of the entity which owns the Flushing property from
us (“Purchase of the Property”) and gave us a non-refundable deposit of $1,875,000. Pursuant to a stipulation of settlement,
we settled the action Expo brought against us regarding the Purchase of the Property and in June 2011, deposited the
settlement amount with the Court, in exchange for which we received a stipulation of discontinuance, with prejudice, as well
as general releases. In November 2011, Expo filed another action, this time against our tenant at the Flushing property
asserting, among other things, that such tenant interfered with Expo's Purchase of the Property from us and sought
$50,000,000 in damages from our tenant, who sought indemnification from us for such amount. In August 2012, the Court
entered judgment denying Expo's claim for damages. Expo filed a motion to re-argue the decision, which the Court denied
on December 7, 2012. Expo has appealed the Court’s original decision. We believe, after consultation with counsel, that the
amount or range of reasonably possible losses, if any, cannot be estimated.
Paramus
In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has a 40-year term
with a purchase option in 2021 for $75,000,000. The property is encumbered by a $68,000,000 interest-only mortgage loan
with a fixed rate of 2.90%, which matures in October 2018. The annual triple-net rent is the sum of $700,000 plus the amount
of debt service 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.
Letters of Credit
Approximately $4,058,000 of standby letters of credit were issued and outstanding as of December 31, 2012.
Other
There are various legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters
will not have a material effect on our financial condition, results of operations or cash flows.
56
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. MULTIEMPLOYER BENEFIT PLANS
Our subsidiaries make contributions to certain multiemployer defined benefit plans (“Multiemployer Pension Plans”) and
health plans (“Multiemployer Health Plans”) for our union represented employees, pursuant to the respective collective
bargaining agreements.
Multiemployer Pension Plans
Multiemployer Pension Plans differ from single-employer pension plans in that (i) contributions to multiemployer plans
may be used to provide benefits to employees of other participating employers and (ii) if other participating employers fail to
make their contributions, each of our subsidiaries may be required to bear their pro-rata share of unfunded obligations. If a
participating subsidiary withdraws from a plan in which it participates, it may be subject to a withdrawal liability. As of
December 31, 2012, our subsidiaries’ participation in these plans were not significant to our consolidated financial
statements.
In the years ended December 31, 2012, 2011 and 2010 our subsidiaries contributed $196,000, $215,000 and $229,000,
respectively, towards Multiemployer Pension Plans. Of these amounts, $135,000, $140,000 and $149,000, in the years ended
December 31, 2012, 2011 and 2010, respectively, represent contributions associated with continuing operations, which are
included as a component of “operating” expenses on our consolidated statements of income. Our subsidiaries’ contributions
did not represent more than 5% of total employer contributions in any of these plans for the years ended December 31, 2012,
2011 and 2010.
Multiemployer Health Plans
Multiemployer Health Plans in which our subsidiaries participate provide health benefits to eligible active and retired
employees. In the years ended December 31, 2012, 2011 and 2010 our subsidiaries contributed $734,000, $731,000 and
$735,000, respectively, towards these plans. Of these amounts, $484,000, $480,000 and $510,000 in the years ended
December 31, 2012, 2011 and 2010, respectively, represent contributions associated with continuing operations, which are
included as a component of “operating” expenses on our consolidated statements of income.
12. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted income per share, including a reconciliation of net
income and the number of shares used in computing basic and diluted income per share. Basic income per share is
determined using the weighted average shares of common stock (including deferred stock units) outstanding during the
period. Diluted income per share is determined using the weighted average shares of common stock (including deferred
stock units) 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 years ended December 31,
2012, 2011 and 2010.
(cid:3)
(cid:3)
(Amounts in thousands, except share and per share amounts)
For the Years Ended December 31,
2011
2010
2012
Income from continuing operations
Income from discontinued operations, net of income attributable to
the noncontrolling interest
Net income attributable to common stockholders – basic and diluted
Weighted average shares outstanding – basic and diluted
Income from continuing operations
Income from discontinued operations, net
Net income per common share – basic and diluted
$
$
$
$
50,041
$
54,831
$
49,159
624,346
674,387
5,107,610
9.80
122.24
132.04
$
$
$
24,592
79,423
5,106,568
10.74
4.81
15.55
$
$
$
17,270
66,429
5,105,936
9.63
3.38
13.01
57
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
13. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
(cid:3)
(Amounts in thousands, except per share amounts)
2012
Revenues
Net Income
Attributable to
Common
Stockholders
Net Income Per
Common Share(1)
Basic
Diluted
December 31
September 30
June 30
March 31
2011
$
$
48,491
48,642
46,878
47,301
617,157 (2) $
18,856
18,892
19,482
120.82
3.69
3.70
3.81
December 31
September 30
June 30
March 31
_______________________
(1) The total for the year may differ from the sum of the quarters as a result of weighting.
(2) Includes a $599,628 net gain on sale of real estate.
46,558
46,949
45,377
46,362
$
$
20,634
20,425
20,157
18,207
$
4.04
4.00
3.95
3.57
$
$
120.82
3.69
3.70
3.81
4.04
4.00
3.95
3.57
58
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
(cid:3)
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures – Our management, with the participation of our Chief Executive Officer and Chief
Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this
Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of such period, our disclosure controls and procedures are effective.
Internal Control Over Financial Reporting – There have not been any changes in our internal control over financial
reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fourth quarter
of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
(cid:3)
(cid:3)
59
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
The management of Alexander’s, Inc., together with its consolidated subsidiaries (the “Company”), is responsible for
establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over
financial reporting is a process designed under the supervision of the Company’s principal executive and principal financial
officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s
financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United
States of America.
As of December 31, 2012, management conducted an assessment of the effectiveness of the Company’s internal control
over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has
determined that the Company’s internal control over financial reporting as of December 31, 2012 is effective.
The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable
assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made
only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could
have a material effect on the Company’s financial statements.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2012 has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on page 61 of
this Annual Report on Form 10-K, which expresses an unqualified opinion on the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2012.
(cid:3)
(cid:3)
60
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Alexander’s, Inc.
Paramus, New Jersey
We have audited the internal control over financial reporting of Alexander’s, Inc. and subsidiaries (the “Company”) as of
December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s
principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s
board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on
a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to
future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2012, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2012 of
the Company and our report dated February 26, 2013 expressed an unqualified opinion on those financial statements and
financial statement schedules and included explanatory paragraphs relating to the Company’s sale of the Kings Plaza
Regional Shopping Center and presentation of comprehensive income.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 26, 2013(cid:3)
61
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information relating to our directors, including our audit committee and audit committee financial expert, will be
contained in a definitive Proxy Statement involving the election of directors pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended. We will file the Proxy Statement with the Securities and Exchange Commission no later
than 120 days after December 31, 2012. Such information is incorporated by reference herein. Also incorporated herein by
reference is the information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy
Statement.
(cid:3)
The following is a list of the names, ages, principal occupations and positions with us of our executive officers and the
positions held by such officers during the past five years.
(cid:3)
(cid:3)
Name
Steven Roth
Age
71
Michael D. Fascitelli
56
Joseph Macnow
67
PRINCIPAL OCCUPATION, POSITION AND OFFICE
(Current and during past five years with the Company unless otherwise stated)
Chairman of the Board of Directors since May 2004 and Chief Executive Officer since
March 1995; Chairman of the Board of Vornado Realty Trust since May 1989; Chief
Executive Officer of Vornado Realty Trust from May 1989 through May 2009; a
Trustee of Vornado Realty Trust since 1979; and Managing General Partner of
Interstate Properties.
President since August 2000; Director of the Company since December 1996; Chief
Executive Officer of Vornado Realty Trust since May 2009 and President and Trustee
since December 1996; Partner at Goldman Sachs & Co., in charge of its real estate
practice, from December 1992 to December 1996; and, prior thereto, Vice President at
Goldman Sachs & Co.
Executive Vice President and Chief Financial Officer since June 2002; Executive Vice
President – Finance and Administration from March 2001 to June 2002; Vice President
and Chief Financial Officer from August 1995 to March 2001; Executive Vice President
– Finance and Administration of Vornado Realty Trust since January 1998 and Chief
Financial Officer of Vornado Realty Trust since March 2001; and Vice President and
Chief Financial Officer of Vornado Realty Trust from 1985 to January 1998.
We have a code of business conduct and ethics that applies to, among others, our Chief Executive Officer and Executive
Vice President and Chief Financial Officer. The code is posted on our website at www.alx-inc.com. We intend to satisfy our
disclosure obligation regarding amendments and waivers of this code applicable to our Chief Executive Officer and
Executive Vice President and Chief Financial Officer by posting such information on our website.
62
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation will be contained in the Proxy Statement referred to in “Item 10.
Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information is
incorporated by reference herein.
(cid:3)
(cid:3)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Information relating to security ownership of certain beneficial owners and management and related stockholder matters,
except as set forth below, will be contained in the Proxy Statement referred to in “Item 10. Directors, Executive Officers and
Corporate Governance” of this Annual Report on Form 10-K. Such information is incorporated by reference herein.
Equity Compensation Plan Information
The following table provides information as of December 31, 2012, regarding our equity compensation.
(cid:3)
(cid:3)
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
2,080 $
N/A
-
N/A
892,920
N/A
Total
(cid:3)
(cid:3)
(cid:3)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
2,080 $
892,920
-
INDEPENDENCE
Information relating to certain relationships and related transactions and director independence will be contained in the
Proxy Statement referred to in “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on
Form 10-K. Such information is incorporated by reference herein.
(cid:3)
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information relating to principal accounting fees and services will be contained in the Proxy Statement referred to in
“Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. Such information
is incorporated by reference herein.
63
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
PART IV
(a)
The following documents are filed as part of this Annual Report on Form 10-K.
1. The consolidated financial statements are set forth in Item 8 of this Annual Report on Form 10-K.
2. The following financial statement schedules should be read in conjunction with the financial statements included
in Item 8 of this Annual Report on Form 10-K.
(cid:3)
(cid:3)
(cid:3)
(cid:3)
Schedule II – Valuation and Qualifying Accounts – years ended
December 31, 2012, 2011 and 2010
Schedule III – Real Estate and Accumulated Depreciation as of
December 31, 2012, 2011 and 2010
Pages in this
Annual Report
on Form 10-K
66
67
All other financial statement schedules are omitted because they are not applicable, not required, or
the information is included elsewhere in the consolidated financial statements or the notes thereto.
3. The following exhibits listed on the Exhibit Index, which is incorporated herein by reference, are filed with this
Annual Report on Form 10-K.
Exhibit
No.
10.53
10.54
12
21
23
31.1
31.2
32.1
32.2
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
Contribution Agreement and Joint Escrow Instructions, dated as of October 21, 2012, by
and between Alexander’s Kings Plaza LLC, Alexander’s of Kings LLC and Kings Parking
LLC, and Brooklyn Kings Plaza LLC
Fifth Amendment to Amended and Restated Management and Development Agreement,
dated as of December 1, 2012, by and between Alexander’s, Inc., the subsidiaries party
thereto and Vornado Management Corp
Computation of Ratios
Subsidiaries of Registrant
Consent of Independent Registered Public Accounting Firm
Rule 13a-14(a) Certification of the Chief Executive Officer
Rule 13a-14(a) Certification of the Chief Financial Officer
Section 1350 Certification of the Chief Executive Officer
Section 1350 Certification of the Chief Financial Officer
XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Definition Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase
64
(cid:3)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(cid:3)
(cid:3)
ALEXANDER’S, INC.
(Registrant)
Date: February 26, 2013
(cid:3)
By:
/s/ Joseph Macnow
Joseph Macnow, Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
(cid:3)
(cid:3)
Signature
Title
By: /s/Steven Roth
(Steven Roth)
Chairman of the Board of Directors
(Principal Executive Officer)
Date
February 26, 2013
By: /s/Michael D. Fascitelli
(Michael D. Fascitelli)
By: /s/Joseph Macnow
(Joseph Macnow)
By: /s/Thomas R. DiBenedetto
(Thomas R. DiBenedetto)
By: /s/David Mandelbaum
(David Mandelbaum)
By: /s/Arthur Sonnenblick
(Arthur Sonnenblick)
By: /s/Neil Underberg
(Neil Underberg)
By: /s/Richard R. West
(Richard R. West)
By: /s/Russell B. Wight Jr.
(Russell B. Wight Jr)
President and Director
February 26, 2013
Executive Vice President and
February 26, 2013
Chief Financial Officer
(Principal Financial and Accounting Officer)
February 26, 2013
February 26, 2013
February 26, 2013
February 26, 2013
February 26, 2013
February 26, 2013
Director
Director
Director
Director
Director
Director
65
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(Amounts in thousands)
Column A
Description
Column B
Balance at
Beginning
of Year
Column C
Additions:
Charged
Against
Column D
Deductions:
Uncollectible
Accounts
Operations Written Off
Column E
Balance
at End
of Year
Allowance for doubtful accounts:
Year Ended December 31, 2012
Year Ended December 31, 2011
Year Ended December 31, 2010
$
$
$
1,039
1,047
1,736
$
$
$
1,304
427
(22)
$
$
$
(124)
(435)
(667)
$
$
$
2,219
1,039
1,047
66
S
E
I
R
A
I
D
I
S
B
U
S
D
N
A
.
C
N
I
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(
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
REAL ESTATE:
Balance at beginning of period
Additions (deletions) during the period:
Land
Buildings and leasehold improvements
Development and construction in progress
Less: Fully depreciated assets
Balance at end of period
ACCUMULATED DEPRECIATION:
Balance at beginning of period
Additions charged to operating expenses
Less: Fully depreciated assets
Balance at end of period
2012
December 31,
2011
2010
$
906,907
$
897,312
$
879,833
-
3,776
1,109
911,792
-
911,792
136,460
24,366
160,826
-
160,826
$
$
$
-
49,027
(39,432)
906,907
-
906,907
112,765
23,695
136,460
-
136,460
$
$
$
-
94,188
(76,646)
897,375
(63)
897,312
91,247
21,581
112,828
(63)
112,765
$
$
$
68
Exhibit
No.
3.1
3.2
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
-
-
-
-
-
-
-
-
-
-
EXHIBIT INDEX
Amended and Restated Certificate of Incorporation. Incorporated herein by reference from Exhibit
3.1 to the registrant’s Registration Statement on Form S-3 filed on September 20, 1995
By-laws, as amended. Incorporated herein by reference from Exhibit 10.1 to the registrant’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000
Real Estate Retention Agreement dated as of July 20, 1992, between Vornado Realty Trust and
Keen Realty Consultants, Inc., each as special real estate consultants, and the Company.
Incorporated herein by reference from Exhibit 10(i)(O) to the registrant’s Annual Report on Form
10-K for the fiscal year ended July 25, 1992
Extension Agreement to the Real Estate Retention Agreement, dated as of February 6, 1995,
between the Company and Vornado Realty Trust. Incorporated herein by reference from Exhibit
10(i)(G)(2) to the registrant’s Annual Report Form 10-K for the year ended December 31, 1994
Agreement of Lease dated as of April 30, 2001 between Seven Thirty One Limited Partnership,
landlord, and Bloomberg L.P., tenant. Incorporated herein by reference from Exhibit 10(v) B to the
registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, filed on August 2,
2001
Lease dated as of October 2, 2001 by and between ALX of Paramus LLC, as Landlord, and IKEA
Property, Inc. as Tenant. Incorporated herein by reference from Exhibit 10(v)(C)(4) to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2001, filed on March
13, 2002
First Amendment to Real Estate Retention Agreement, dated as of July 3, 2002, by and between
Alexander’s, Inc. and Vornado Realty, L.P. Incorporated herein by reference from Exhibit
10(i)(E)(3) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002,
filed on August 7, 2002
59th Street Real Estate Retention Agreement, dated as of July 3, 2002, by and between Vornado
Realty, L.P., 731 Residential LLC and 731 Commercial LLC. Incorporated herein by reference
from Exhibit 10(i)(E)(4) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002, filed on August 7, 2002
*
*
*
*
*
*
*
*
Amended and Restated Management and Development Agreement, dated as of July 3, 2002, by and
between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management Corp.
Incorporated herein by reference from Exhibit 10(i)(F)(1) to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2002, filed on August 7, 2002
*
Limited Liability Company Operating Agreement of 731 Residential LLC, dated as of July 3, 2002,
among 731 Residential Holding LLC, as the sole member, Domenic A. Borriello, as an Independent
Manager and Kim Lutthang, as an Independent Manager. Incorporated herein by reference from
Exhibit 10(i)(A)(1) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2002, filed on August 7, 2002
*
*
10.9
-
*
Limited Liability Company Operating Agreement of 731 Commercial LLC, dated as of July 3,
2002, among 731 Commercial Holding LLC, as the sole member, Domenic A. Borriello, as an
Independent Manager and Kim Lutthang, as an Independent Manager. Incorporated herein by
reference from Exhibit 10(i)(A)(2) to the registrant’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002, filed on August 7, 2002
___________________
Incorporated by reference.
69
10.10
- Reimbursement Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc., 731
Commercial LLC, 731 Residential LLC and Vornado Realty, L.P. Incorporated herein by
reference from Exhibit 10(i)(C)(8) to the registrant’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002, filed on August 7, 2002
10.11
-
First Amendment of Lease, dated as of April 19, 2002, between Seven Thirty One Limited
Partnership, landlord and Bloomberg L.P., tenant. Incorporated herein by reference from
Exhibit 10(v)(B)(2) to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2002, filed on August 7, 2002
10.12
10.13
10.14
10.15
10.16
10.17
10.18
- Loan and Security Agreement, dated as of February 13, 2004, between 731 Office One LLC,
as Borrower and German American Capital Corporation, as Lender. Incorporated herein by
reference from Exhibit 10.20 to the registrant’s Annual Report on Form 10-K for the year
ended December 31, 2003, filed on March 2, 2004
- Amended, Restated and Consolidated Mortgage, Security Agreement, Financing Statement
and Assignment of Leases, Rent and Security Deposits by and between 731 Office One LLC
as Borrower and German American Capital Corporation as Lender, dated as of February 13,
2004. Incorporated herein by reference from Exhibit 10.21 to the registrant’s Annual Report
on Form 10-K for the year ended December 31, 2003, filed on March 2, 2004
- Amended, Restated and Consolidated Note, dated as of February 13, 2004, by 731 Office One
LLC in favor of German American Capital Corporation. Incorporated herein by reference from
Exhibit 10.22 to the registrant’s Annual Report on Form 10-K for the year ended December
31, 2003, filed on March 2, 2004
- Assignment of Leases, Rents and Security Deposits from 731 Office One LLC to German
American Capital Corporation, dated as of February 13, 2004. Incorporated herein by
reference from Exhibit 10.23 to the registrant’s Annual Report on Form 10-K for the year
ended December 31, 2003, filed on March 2, 2004
- Account and Control Agreement, dated as of February 13, 2004, by and among German
American Capital Corporation as Lender, and 731 Office One LLC as Borrower, and JP
Morgan Chase as Cash Management Bank. Incorporated herein by reference from Exhibit
10.24 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2003,
filed on March 2, 2004
- Manager’s Consent and Subordination of Management Agreement dated February 13, 2004 by
731 Office One LLC and Alexander’s Management LLC and German American Capital
Corporation. Incorporated herein by reference from Exhibit 10.25 to the registrant’s Annual
Report on Form 10-K for the year ended December 31, 2003, filed on March 2, 2004
- Note Exchange Agreement dated as of February 13, 2004 by and between 731 Office One
LLC and German American Capital Corporation. Incorporated herein by reference from
Exhibit 10.26 to the registrant’s Annual Report on Form 10-K for the year ended December
31, 2003, filed on March 2, 2004
*
*
*
*
*
*
*
*
*
*
___________________
Incorporated by reference.
70
10.19
10.20
10.21
10.22
10.23
10.24
10.25
10.26
10.27
-
-
-
-
-
-
Promissory Note A-1 dated as of February 13, 2004 by 731 Office One LLC in favor of
German American Capital Corporation. Incorporated herein by reference from Exhibit
10.27 to the registrant’s Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 2, 2004
*
Promissory Note A-2 dated as of February 13, 2004 by 731 Office One LLC in favor of
German American Capital Corporation. Incorporated herein by reference from Exhibit
10.28 to the registrant’s Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 2, 2004
*
Promissory Note A-3 dated as of February 13, 2004 by 731 Office One LLC in favor of
German American Capital Corporation. Incorporated herein by reference from Exhibit
10.29 to the registrant’s Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 2, 2004
Promissory Note A-4 dated as of February 13, 2004, by 731 Office One LLC in favor of
German American Capital Corporation. Incorporated herein by reference from Exhibit
10.30 to the registrant’s Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 2, 2004
Promissory Note A-X dated as of February 13, 2004, by 731 Office One LLC in favor
of German American Capital Corporation. Incorporated herein by reference from
Exhibit 10.31 to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2003, filed on March 2, 2004
Promissory Note B dated as of February 13, 2004, by 731 Office One LLC in favor of
German American Capital Corporation. Incorporated herein by reference from Exhibit
10.32 to the registrant’s Annual Report on Form 10-K for the year ended December 31,
2003, filed on March 2, 2004
- Guaranty of Recourse Obligations dated as of February 13, 2004, by Alexander’s, Inc.
to and for the benefit of German American Capital Corporation. Incorporated herein by
reference from Exhibit 10.33 to the registrant’s Annual Report on Form 10-K for the
year ended December 31, 2003, filed on March 2, 2004
- Environmental Indemnity dated as of February 13, 2004, by Alexander’s, Inc. and 731
Office One LLC for the benefit of German American Capital Corporation. Incorporated
herein by reference from Exhibit 10.34 to the registrant’s Annual Report on Form 10-K
for the year ended December 31, 2003, filed on March 2, 2004
- Loan Agreement dated as of July 6, 2005, between 731 Retail One LLC, as Borrower
and Archon Financial, as Lender. Incorporated herein by reference from Exhibit 10.1 to
the registrant’s Current Report on Form 8-K, filed on July 12, 2005
*
*
*
*
*
*
*
*
10.28
**
-
Form of Stock Option Agreement between the Company and certain employees.
Incorporated herein by reference from Exhibit 10.61 to the registrant’s Quarterly Report
on Form 10-Q for the quarter ended September 30, 2005, filed on October 27, 2005
*
**
__________________
Incorporated by reference.
Management contract or compensatory agreement.
71
10.29
**
- Form of Restricted Stock Option Agreement between the Company and certain employees.
Incorporated herein by reference from Exhibit 10.62 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2005, filed on October 27, 2005
10.30
**
- Registrant’s 2006 Omnibus Stock Plan dated April 4, 2006. Incorporated herein by reference
from Annex B to Schedule 14A, filed by the registrant on April 28, 2006
10.31
10.32
10.33
10.34
10.35
10.36
10.37
10.38
10.39
- Second Amendment to Real Estate Retention Agreement, dated as of January 1, 2007, by and
between Alexander’s, Inc. and Vornado Realty L.P. Incorporated herein by reference from
Exhibit 10.64 to the registrant’s Annual Report on Form 10-K for the year ended December 31,
2006, filed on February 26, 2007
- Amendment to 59th Street Real Estate Retention agreement, dated as of January 1, 2007, by and
among Vornado Realty L.P., 731 Retail One LLC, 731 Restaurant LLC, 731 Office One LLC
and 731 Office Two LLC. Incorporated herein by reference from Exhibit 10.65 to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, filed on
February 26, 2007
- First Amendment to Amended and Restated Management and Development Agreement, dated
as of July 6, 2005, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado
Management Corp. Incorporated herein by reference from Exhibit 10.52 to the registrant’s
Annual Report on Form 10-K, for the year ended December 31, 2007, filed on February 25,
2008
- Second Amendment to Amended and Restated Management and Development Agreement,
dated as of December 20, 2007, by and between Alexander’s, Inc., the subsidiaries party thereto
and Vornado Management Corp. Incorporated herein by reference from Exhibit 10.53 to the
registrant’s Annual Report on Form 10-K, for the year ended December 31, 2007, filed on
February 25, 2008
- Third Amendment to Real Estate Retention Agreement, dated as of December 20, 2007, by and
between Alexander’s, Inc., and Vornado Realty L.P. Incorporated herein by reference from
Exhibit 10.55 to the registrant’s Annual Report on Form 10-K, for the year ended December 31,
2007, filed on February 25, 2008
- Loan Agreement dated as of March 10, 2009 between Alexander’s Rego Park Shopping Center
Inc., as Borrower and U.S. Bank National Association, as Lender. Incorporated herein by
reference from Exhibit 10.55 to the registrant’s Quarterly Report on for 10-Q for the quarter
ended March 31, 2009, filed on May 4, 2009
- Amended and Restated Mortgage, Security Agreement, Fixture Filing and Assignment of Leases
and Rentals by and between Alexander’s Rego Shopping Center, Inc. as Borrower and U.S.
Bank National Association as Lender, dated as of March 10, 2009. Incorporated herein by
reference from Exhibit 10.56 to the registrant’s Quarterly Report on for 10-Q for the quarter
ended March 31, 2009, filed on May 4, 2009
- Amended and Restated Promissory Note dated as of March 10, 2009, by Alexander’s Rego
Shopping Center Inc., in favor of U.S. Bank National Association. Incorporated herein by
reference from Exhibit 10.57 to the registrant’s Quarterly Report on for 10-Q for the quarter
ended March 31, 2009, filed on May 4, 2009
- Cash Pledge Agreement dated as of March 10, 2009, executed by Alexander’s Rego Shopping
Center Inc. to and for the benefit of U.S. Bank National Association. Incorporated herein by
reference from Exhibit 10.58 to the registrant’s Quarterly Report on for 10-Q for the quarter
ended March 31, 2009, filed on May 4, 2009
*
*
*
*
*
*
*
*
*
*
*
___________________
Incorporated by reference.
Management contract or compensatory agreement.
*
**
72
10.40
10.41
- Lease dated as of February 7, 2005, by and between 731 Office One LLC, as Landlord, and
Citibank, N.A., as Tenant. Incorporated herein by reference from Exhibit 10.59 to the
registrant’s Quarterly Report on for 10-Q for the quarter ended March 31, 2009, filed on May 4,
2009
- Assignment and Assumption and Consent Agreement, dated as of March 25, 2009, by and
between 731 Office One LLC, as Landlord, Citicorp North America, Inc., as Assignor, and
Bloomberg L.P., as Assignee. Incorporated herein by reference from Exhibit 10.60 to the
registrant’s Quarterly Report on form 10-Q for the quarter ended March 31, 2009, filed on May
4, 2009
10.42
**
- Alexander’s, Inc. 2006 Ominibus Stock Plan Deferred Stock Unit Agreement. Incorporated
herein by reference to Exhibit 99.1 to the registrant’s Current Report on Form 8-K, filed on June
2, 2011
10.43
10.44
10.45
10.46
10.47
10.48
10.49
10.50
- Third Amendment to Amended and Restated Management and Development Agreement, dated
as of November 30, 2011, by and between Alexander’s, Inc., the subsidiaries party thereto and
Vornado Management Corp. Incorporated herein by reference from Exhibit 10.49 to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on
February 27, 2012
- Loan and Security Agreement, dated November 30, 2011, by and between Rego II Borrower
LLC, as Borrower, and the Lender. Incorporated herein by reference from Exhibit 10.50 to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2011, filed on
February 27, 2012
- Consolidated, Amended and Restated Promissory Note, dated November 30, 2011, by and
between Rego II Borrower LLC, as Maker, and the Lender. Incorporated herein by reference
from Exhibit 10.51 to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2011, filed on February 27, 2012
- Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents and Security
Agreement, dated November 30, 2011, by and between Rego II Borrower LLC, as Mortgagor,
and the Mortgagee. Incorporated herein by reference from Exhibit 10.52 to the registrant’s
Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 27,
2012
- Guarantee of Recourse Carveouts, dated November 30, 2011, by Alexander’s, Inc., as
Guarantor, to and for the benefit of the Lender. Incorporated herein by reference from Exhibit
10.53 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2011,
filed on February 27, 2012
- Environmental Indemnity Agreement, dated November 30, 2011, among Rego II Borrower LLC
and Alexander’s, Inc., individually or collectively as Indemnitor, in favor of the Lender.
Incorporated herein by reference from Exhibit 10.54 to the registrant’s Annual Report on Form
10-K for the year ended December 31, 2011, filed on February 27, 2012
- First Omnibus Loan Modification and Extension Agreement dated March 12, 2012 by and
between Alexander’s Rego Shopping Center, Inc., as Borrower and U.S. Bank National
Association, as Lender. Incorporated herein by reference from Exhibit 10.55 to the registrant’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 7, 2012
- Mortgage Modification Agreement dated March 12, 2012 by and between Alexander’s Rego
Shopping Center, Inc., as Mortgagor and U.S. Bank National Association, as Mortgagee.
Incorporated herein by reference from Exhibit 10.56 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2012, filed on May 7, 2012.
*
*
*
*
*
*
*
*
*
*
*
*
**
___________________
Incorporated by reference.
Management contract or compensatory agreement.
73
10.51
10.52
10.53
10.54
12
21
23
31.1
31.2
32.1
32.2
-
-
First Amendment and Modification of Loan and Security Agreement and Other Loan
Documents, dated as of June 20, 2012 by and between Rego II Borrower LLC as
Borrower, and the Lender. Incorporated herein by reference from Exhibit 10.1 to the
registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed on
August 6, 2012
Fourth Amendment to Amended and Restated Management and Development Agreement,
dated as of August 1, 2012, by and between Alexander’s, Inc., the subsidiaries party
thereto and Vornado Management Corp. Incorporated herein by reference from Exhibit
10.2 to the registrants Quarterly Report on Form 10-Q for the quarter ended September 30,
2012, filed on November 1, 2012
*
*
- Contribution Agreement and Joint Escrow Instructions, dated as of October 21, 2012, by
and between Alexander’s Kings Plaza LLC, Alexander’s of Kings LLC and Kings Parking
LLC, and Brooklyn Kings Plaza LLC
-
Fifth Amendment to Amended and Restated Management and Development Agreement,
dated as of December 1, 2012, by and between Alexander’s, Inc., the subsidiaries party
thereto and Vornado Management Corp
- Computation of Ratios
-
Subsidiaries of Registrant
- Consent of Independent Registered Public Accounting Firm
- Rule 13a-14 (a) Certification of the Chief Executive Officer
- Rule 13a-14 (a) Certification of the Chief Financial Officer
-
-
Section 1350 Certification of the Chief Executive Officer
Section 1350 Certification of the Chief Financial Officer
101.INS
- XBRL Instance Document
101.SCH
- XBRL Taxonomy Extension Schema
101.CAL
- XBRL Taxonomy Extension Calculation Linkbase
101.DEF
- XBRL Taxonomy Extension Definition Linkbase
101.LAB
- XBRL Taxonomy Extension Label Linkbase
101.PRE
- XBRL Taxonomy Extension Presentation Linkbase
*
___________________
Incorporated by reference.
74
CORPORATE INFORMATION
Board of Directors
Officers
Steven Roth
Chairman of the Board of Trustees, Vornado Realty
Trust; Partner, Interstate Properties
Thomas R. DiBenedetto*
President, Boston
Junction Investors Ltd.
International Group,
Inc. and
Steven Roth
Chairman of the Board and Chief Executive Officer
Joseph Macnow
Executive Vice President and Chief Financial Officer
Company Data
Michael D. Fascitelli
Trustee, Vornado Realty Trust and its former President
and Chief Executive Officer
Executive Offices
210 Route 4 East
Paramus, New Jersey 07652
David Mandelbaum
A member of the law firm of Mandelbaum &
Mandelbaum, P.C.; Partner,
Interstate Properties;
Trustee, Vornado Realty Trust
Arthur I. Sonnenblick*
Former Senior Managing Director of Cushman &
Wakefield Sonnenblick Goldman
Neil Underberg
Partner in the law firm of Rosenberg & Estis, P.C.
Dr. Richard R. West*
Dean Emeritus, Leonard N. Stern School of Business,
New York University; Trustee, Vornado Realty Trust
Russell B. Wight, Jr.
Partner, Interstate Properties; Trustee, Vornado Realty
Trust
Annual Meeting
The annual meeting of stockholders of Alexander’s,
Inc., will be held at 10:00 A.M. on Thursday, May 23,
2013 at the Saddle Brook Marriott, Interstate 80 and the
Garden State Parkway, Saddle Brook, New Jersey,
07663.
*Member of the Audit Committee
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Parsippany, New Jersey
Counsel
Shearman & Sterling LLP
New York, New York
Transfer Agent and Registrar
American Stock
Transfer & Trust Co.
New York, New York
to
Management Certifications
The Company’s Chief Executive Officer and Chief
Financial Officer provided certifications
the
Securities and Exchange Commission as required by
Section 302 of the Sarbanes-Oxley Act of 2002 and
these certifications are included in the Company’s
Annual Report on Form 10-K for the year ended
December 31, 2012. In addition, as required by
Section 303A.12(a) of the New York Stock Exchange
(NYSE) Listed Company Manual, on June 6, 2012,
the Company’s Chief Executive Officer submitted to
the NYSE the annual CEO certification regarding the
Company’s compliance with the NYSE’s corporate
governance listing standards.
Report on Form 10-K
Stockholders may obtain a copy of the Company’s
Annual Report on Form 10-K as filed with the
Securities and Exchange Commission free of charge
(except for exhibits) by writing to the Secretary,
Alexander’s, Inc., 888 Seventh Avenue, New York,
New York, 10019 or by visiting the Company’s
website at www.alx-inc.com and referring to the
Company’s SEC Filings.
Stock Listing
New York Stock Exchange – ALX