ALEXANDER’S, INC.
ANNUAL REPORT TO
STOCKHOLDERS
2014
EXHIBIT INDEX ON PAGE 63
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(cid:2)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December 31, 2014
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 Act.
YES NO (cid:2)
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:2) NO
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 NO (cid:2)
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).
Yes (cid:2) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (section 229.405 of this
chapter) 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.
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.
Large Accelerated Filer
(cid:2) Non-Accelerated Filer (Do not check if smaller reporting company)
(cid:2) Accelerated Filer
(cid:2) 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:2) NO
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 $779,918,000 at June 30, 2014.
As of January 31, 2015, there were 5,106,196 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 21, 2015.
Item
Financial Information:
INDEX
Part I.
1.
Business
1A.
Risk Factors
1B.
Unresolved Staff Comments
2.
3.
4.
Properties
Legal Proceedings
Mine Safety Disclosures
Part II.
5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
6.
7.
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.
Executive Compensation(1)
12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters(1)
13.
Certain Relationships and Related Transactions, and Director Independence(1)
14.
Principal Accounting Fees and Services(1)
Part IV. 15.
Exhibits, Financial Statement Schedules
Signatures
_____________________________
Page
4
6
15
16
18
18
19
21
22
33
34
53
53
56
56
57
57
57
57
58
59
(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, 2014, 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 future 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
•
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 609,000 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;
• 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.
Property under development
• Rego Park II Apartment Tower; We are in the process of constructing an apartment tower above our Rego II
shopping center, containing 312 units aggregating 255,000 square feet, which is expected to be completed in 2015.
The estimated cost of this project is approximately $125,000,000, of which $73,327,000 has been incurred as of
December 31, 2014. There can be no assurance that the project will be completed, or completed on schedule or
within budget.
Property to be developed
• Rego Park III, a 3.2 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.
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, 2014, 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 and Chief Executive Officer of Vornado. At
December 31, 2014, 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. Joseph Macnow, our Executive Vice President and
Chief Financial Officer, is the Executive Vice President – Finance and Chief Administrative Officer of Vornado. Stephen W.
Theriot, our Assistant Treasurer, is the Chief Financial Officer of Vornado.
4
Significant Tenants
Bloomberg accounted for $91,109,000, $88,164,000 and $86,468,000, or 45% of our total revenues in each of the years
ended December 31, 2014, 2013 and 2012, 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.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015
covering 188,608 square feet of office space at our 731 Lexington Avenue property for a term of 5 years. We are currently in
negotiations with Bloomberg to determine the rental rate for the extension period.
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 of the world, national and local economies, the financial condition and operating results of
current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes,
governmental regulations, 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.
Employees
We currently have 68 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.
5
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;
global, 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;
•
•
•
•
•
•
• whether we are able to pass all or portions of any increases in operating costs through to tenants;
•
• whether tenants and users such as customers and shoppers consider a property attractive;
•
•
•
•
•
•
•
•
the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
availability of financing on acceptable terms or at all;
inflation or deflation;
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 or individual acts of
violence in public spaces, including retail centers;
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 liquidity, financial condition and results of
operations, as well as 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. Demand for office and retail space may decline nationwide as
it did in 2008 and 2009, due to the economic downturn, 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,
including our results of operations, 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.
6
We are subject to risks that affect the general and New York City retail environments.
Certain of our properties are New York City retail properties. As such, these properties are affected by the general and New
York City retail environments, 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
retail locations.
Real estate is a competitive business.
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 of the global, national and local economies, the financial condition and operating results of current and prospective
tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations,
legislation, population and employment trends, zoning laws and our ability to lease, sublease or sell our properties, at
profitable levels.
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. 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 to pay our indebtedness or make distributions to stockholders.
731 Lexington Avenue accounts for a substantial portion of our revenues. Loss of or damage to the building would
adversely affect our financial condition and results of operations.
731 Lexington Avenue accounted for $133,024,000, $128,845,000 and $126,034,000, or 66% of our total revenues in
each of the years ended December 31, 2014, 2013 and 2012, respectively. Loss of or damage to the building in excess of our
insurance coverage, including as a result of a terrorist attack, would adversely affect our results of operations and financial
condition.
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 $91,109,000, $88,164,000 and $86,468,000, or 45% of our total revenues in each of the years
ended December 31, 2014, 2013 and 2012, 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 face risks associated with our tenants being designated “Prohibited Persons” by the Office of Foreign Assets
Control and similar requirements.
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 and thereby restricts our
doing business with such persons. Our leases, loans and other agreements may require us to comply with OFAC and related
requirements. If a tenant or other party with whom we conduct business is placed on the OFAC list or is otherwise a party
with which we are prohibited from doing business, 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.
7
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 primary
risks that could directly result from the occurrence of a cyber incident are theft of assets, 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 significant costs to comply with environmental laws and environmental contamination may impair our
ability to lease and/or sell real estate.
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) 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 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. To date,
these environmental assessments have not revealed 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, human exposure to contamination or changes in cleanup or compliance requirements could result in
significant costs to us.
In addition, we may become subject to costs or taxes, or increases therein, associated with natural resource or energy
usage (such as a “carbon tax”). These costs or taxes could increase our operating costs and decrease the cash available to pay
our obligations or distribute to equity holders.
8
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 acts of terrorism, 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, which expires in December 2020. Coverage for acts of
terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism
(excluding NBCR acts) is fully reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts,
FNSIC is responsible for a $275,000 deductible and 15% of the balance (16% effective January 1, 2016) of a covered loss,
and the Federal government is responsible for the remaining 85% (84% effective January 1, 2016) of a covered loss. We are
ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.
However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. 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 the retail portion of
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. Although we believe that we have adequate insurance coverage for purposes of
these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders
insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our
properties.
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.
We depend upon anchor tenants to attract shoppers at our Rego Park I and II retail properties.
Our Rego Park I and II retail properties are anchored by well-known department stores and other tenants who generate
shopping traffic. The value of these properties would be adversely affected if our anchor tenants failed to meet their contractual
obligations, sought concessions in order to continue operations or ceased their operations, including as a result of bankruptcy. If
the sales of stores operating in our properties were to decline significantly due to economic conditions, closing of anchors or for
other reasons, tenants may be unable to pay their minimum rents or expense recovery charges. In the event of a default by a
tenant or anchor, we may experience delays and costs in enforcing our rights as landlord.
9
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:
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financial performance and productivity of the media, 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.
Our investments are in the New York metropolitan area and since they are concentrated along the Eastern Seaboard,
natural disasters, including hurricanes, 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.
10
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, including failing to complete such activities on time or
within budget, competition for such activities that could increase our costs, being unable to lease newly acquired,
developed or redeveloped properties at rents sufficient to cover our costs, difficulties in integrating acquisitions and
weaker than expected performance.
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, redeveloped or acquired properties at rents sufficient
to cover costs of acquisition, development or redevelopment 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, 2014, this investment had a
carrying amount of $44,646,000. 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.
Substantially all of our assets are owned by subsidiaries. We depend on dividends and distributions from these
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, 2014, 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.
11
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, 2014, total debt outstanding was $1,032,780,000 and our ratio of total debt to total enterprise value
was 34.3%. “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, 2014,
our scheduled cash payments for principal and interest were $35,835,000. 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. 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 and depends on various facts and circumstances that are not entirely within our
control. In addition, legislation, new regulations, administrative interpretations or court decisions may significantly change
the relevant tax laws and/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.
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. Although we believe that we could find a
replacement, the loss of his services could harm our operations and adversely affect the value of our common stock.
12
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:
•
•
•
•
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.
13
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, 2014, Interstate and its partners owned approximately 6.6% 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 and Chief Executive Officer 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, 2014, 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, Dr. Richard
West is a trustee of Vornado and a member of our Board of Directors and Joseph Macnow is our Executive Vice President
and Chief Financial Officer and the Executive Vice President – Finance and Chief Administrative Officer of Vornado.
Stephen W. Theriot, our Assistant Treasurer, is the Chief Financial Officer of 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
four 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.
14
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:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
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;
fluctuations in interest rates;
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,
2014, 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, 5,005 shares of common stock are reserved for issuance upon
redemption of the deferred stock units previously granted to our Board of Directors. In addition, 889,735 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.
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.
15
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, 2014.
Property
Operating Properties:
731 Lexington Avenue
New York, New York
Office
Retail
Rego Park I
Queens, New York
Rego Park II
Queens, New York
Paramus
Paramus, New Jersey
Flushing
Queens, New York (ground leased
through January 2037)
Property under Development:
Rego Park II Apartment Tower, 312 units
aggregating 255,000 square feet
under development
Queens, New York
Property to be Developed:
Rego Park III, adjacent to Rego Park II
Queens, New York
Land
Acreage
Building
Square Feet
Occupancy
Rate
Average
Annualized
Rent Per
Square Foot(1)
Lease
Expiration/
Option
Tenants
Expiration(s)
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
149,000
609,000
100%
$
98.38
100%
174.95
Bloomberg L.P.
Bloomberg L.P.
The Home Depot
The Container Store
Hennes & Mauritz
Various
2029/2039
2020
2025/2035
2021
2019
Various
Sears
Burlington Coat Factory
Bed Bath & Beyond
Marshalls
Old Navy
2021
2022/2027
2021
2021
2021
100%
37.97
Costco
Century 21
Kohl’s
Toys "R"Us/Babies "R" Us
Various
2034/2059
2030/2050
2030/2050
2021/2036
Various
99%
41.70
1.9
4.8
6.6
30.3
-
100%
-
IKEA (ground lessee)
2041
1
167,000
100%
16.53 New World Mall LLC
2027/2037
-
-
-
3.2
-
2,178,000
-
-
-
-
-
-
-
(1) Represents the contractual weighted average rent per square foot as of December 31, 2014. For a discussion of our leasing activity, see
Item 7 - Overview - Square Footage, Occupancy and Leasing Activity.
16
ITEM 2.
PROPERTIES – continued
Operating Properties
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. (“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.
On February 28, 2014, we completed a $300,000,000 refinancing of the office portion of 731 Lexington Avenue. The
interest-only loan is at LIBOR plus 0.95% (1.11% at December 31, 2014) and matures in March 2017, with four one-year
extension options. The proceeds of the new loan and existing cash were used to repay the existing loan and closing costs. In
connection therewith, we purchased an interest rate cap with a notional amount of $300,000,000 that caps LIBOR at a rate of
6.0%.
The retail space is encumbered by a first mortgage loan with a balance of $320,000,000 as of December 31, 2014, which
bears interest at 4.93% and matures in July 2015.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015
covering 188,608 square feet of office space at our 731 Lexington Avenue property for a term of 5 years. We are currently in
negotiations with Bloomberg to determine the rental rate for the extension period.
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 (1,258 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, 2014.
The loan bears interest at 0.40%, is prepayable at any time without penalty and matures in March 2015.
On June 24, 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against
Vornado and us (and certain of our subsidiaries) with regard to space that Sears leases at our Rego Park I property. Sears
alleges that the defendants are liable for harm Sears has suffered as a result of (a) water intrusions into the premises Sears
leases, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans
with Disabilities Act in the premises’ parking garage. Sears asserts various causes of actions for damages and seeks to
compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a
nuisance that Sears claims was a cause of the water intrusions into its premises. In addition to injunctive relief, Sears seeks,
among other things, damages of not less than $4 million and future damages it estimates will not be less than $25 million.
We intend to defend the claims vigorously; the amount or range of reasonable possible losses, if any, cannot be estimated.
Rego Park II
Rego Park II, a 609,000 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 $266,534,000 as of December 31, 2014. The loan
bears interest at LIBOR plus 1.85% (2.02% at December 31, 2014) and matures in November 2018.
17
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 land 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. The land has been ground leased to IKEA Property, Inc. since 2001. The lease
expires 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 gain on the sale of 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.
Property under Development
Rego Park II Apartment Tower
We are in the process of constructing an apartment tower above our Rego II shopping center, containing 312 units
aggregating 255,000 square feet, which is expected to be completed in 2015. The estimated cost of this project is
approximately $125,000,000, of which $73,327,000 has been incurred as of December 31, 2014. There can be no assurance
that the project will be completed, or completed on schedule or within budget.
Property to be Developed
Rego Park III
We own 3.2 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 paid public parking. We have not established plans or budgets for the development of this
site and there can be no assurance that we will do so.
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 Rego Park I property, see “Item 2. Properties – Operating Properties –
Rego Park I.”
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
18
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
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.
High
2014
Low
Year Ended December 31,
2013
Dividends
High
Low
Dividends
$
379.14 $
323.18 $
3.25 $
340.30 $
322.00 $
374.25
339.02
408.99
363.00
452.10
378.81
3.25
3.25
3.25
328.53
281.51
310.75
268.10
344.92
279.60
2.75
2.75
2.75
2.75
Quarter
First
Second
Third
Fourth
On January 21, 2015, we increased our regular quarterly dividend to $3.50 per share (a new indicated annual rate of
$14.00 per share). As of January 31, 2015, there were approximately 283 holders of record of our common stock.
Recent Sales of Unregistered Securities
During 2014, 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
During 2014, we did not repurchase any of our equity securities.
19
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, 2009 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
$250
$225
$200
$175
$150
$125
$100
2009
2010
2011
Alexander's
S&P 500 Index
The NAREIT All Equity Index
2012
2013
2014
Alexander’s
S&P 500 Index
The NAREIT All Equity Index
$
100 $
100
100
139 $
115
128
128 $
117
139
162 $
136
166
168 $
180
171
230
205
218
2009
2010
2011
2012
2013
2014
20
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating data. 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.
(Amounts in thousands, except per share amounts)
2014
Year Ended December 31,
2012
2013
2011
2010
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
$
$
$
$
200,814 $
196,459 $
191,312 $
185,246 $
174,206
67,396 $
529
67,925
-
67,925 $
54,663 $
2,252
56,915
-
56,915 $
50,041 $
624,952
674,993
(606)
674,387 $
54,831 $
26,215
81,046
(1,623)
79,423 $
49,159
18,286
67,445
(1,016)
66,429
13.19 $
13.19
13.29
13.29
10.70 $
10.70
11.14
11.14
9.80 $
9.80
132.04
132.04
10.74 $
10.74
15.55
15.55
9.63
9.63
13.01
13.01
Dividends per common share(3)
$
13.00 $
11.00 $
137.00 $
12.00 $
7.50
Balance sheet data:
Total assets
Real estate, at cost
Accumulated depreciation and amortization
Mortgages payable
Total equity
$ 1,423,216 $ 1,457,724 $ 1,481,810 $ 1,771,307 $ 1,679,300
897,312
112,765
1,095,197
343,776
993,927
210,025
1,032,780
348,399
919,576
185,375
1,049,959
333,581
911,792
160,826
1,065,916
332,153
906,907
136,460
1,080,932
363,245
Includes the reversal of a portion of the liability for income taxes of $2,561 and $5,113 in 2011 and 2010, respectively.
(1)
(2) 2012 includes a $599,628 net gain on sale of real estate.
(3) 2012 includes a special long-term capital gain dividend of $122.00 per share, to distribute the tax gain resulting from the sale of
Kings Plaza. We began paying a regular quarterly dividend in the second quarter of 2010.
21
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 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.
We compete with a large number of property owners and developers. Our success depends upon, among other factors,
trends of the world, national and local economies, the financial condition and operating results of current and prospective
tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations,
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.
Year Ended December 31, 2014 Financial Results Summary
Net income attributable to common stockholders for the year ended December 31, 2014 was $67,925,000, or $13.29 per
diluted share, compared to $56,915,000, or $11.14 per diluted share for the year ended December 31, 2013. Net income
attributable to common stockholders includes income from discontinued operations (Kings Plaza) of $529,000, or $0.10 per
diluted share for the year ended December 31, 2014, compared to $2,252,000, or $0.44 per diluted share for the year ended
December 31, 2013.
Funds from operations attributable to common stockholders (“FFO”) for the year ended December 31, 2014 was
$96,980,000, or $18.98 per diluted share, compared to $85,717,000, or $16.78 per diluted share for the prior year. FFO
includes FFO from discontinued operations (Kings Plaza) of $529,000, or $0.10 per diluted share for the year ended
December 31, 2014, compared to $2,252,000, or $0.44 per diluted share for the prior year.
Quarter Ended December 31, 2014 Financial Results Summary
Net income attributable to common stockholders for the quarter ended December 31, 2014 was $18,161,000, or $3.55 per
diluted share, compared to $15,790,000, or $3.09 per diluted share for the quarter ended December 31, 2013. Net income
attributable to common stockholders includes income from discontinued operations (Kings Plaza) of $529,000, or $0.10 per
diluted share for the quarter ended December 31, 2014, compared to $2,252,000, or $0.44 per diluted share for the quarter
ended December 31, 2013.
FFO for the quarter ended December 31, 2014 was $25,508,000, or $4.99 per diluted share, compared to $23,015,000, or
$4.50 per diluted share for the prior year’s quarter. FFO includes FFO from discontinued operations (Kings Plaza) of
$529,000, or $0.10 per diluted share for the quarter ended December 31, 2014, compared to $2,252,000, or $0.44 per diluted
share for the prior year’s quarter.
22
Overview – continued
Square Footage, Occupancy and Leasing Activity
As of December 31, 2014 and 2013, our portfolio was comprised of six properties aggregating 2,178,000 square feet that
had occupancy rates of 99.7% and 99.4%, respectively. In the year ended December 31, 2014 we leased 7,977 square feet
with an average initial rent of $83.62 per square foot and a weighted average lease term of 14.6 years.
Significant Tenants
Bloomberg L.P. (“Bloomberg”) accounted for $91,109,000, $88,164,000 and $86,468,000, or 45% of our total revenues
in each of the years ended December 31, 2014, 2013 and 2012, 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.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015
covering 188,608 square feet of office space at our 731 Lexington Avenue property for a term of 5 years. We are currently in
negotiations with Bloomberg to determine the rental rate for the extension period.
Financing
On February 28, 2014, we completed a $300,000,000 refinancing of the office portion of 731 Lexington Avenue. The
interest-only loan is at LIBOR plus 0.95% (1.11% at December 31, 2014) and matures in March 2017, with four one-year
extension options. The proceeds of the new loan and existing cash were used to repay the existing loan and closing costs. In
connection herewith, we purchased an interest rate cap with a notional amount of $300,000,000 that caps LIBOR at a rate of
6.0%.
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, 2014 and 2013, the
carrying amount of our real estate, net of accumulated depreciation and amortization, was $783,902,000 and $734,201,000,
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.
23
Critical Accounting Policies and Estimates – continued
Our properties and related intangible assets, including properties to be developed in the future and currently under
development, 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 ($1,544,000 and $1,993,000 as of December 31, 2014 and
2013, 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.
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.
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.
24
Results of Operations – Year Ended December 31, 2014 compared to December 31, 2013
Property Rentals
Property rentals were $136,628,000 in the year ended December 31, 2014, compared to $135,908,000 in the prior year,
an increase of $720,000. This increase was primarily due to higher parking revenues.
Expense Reimbursements
Tenant expense reimbursements were $64,186,000 in the year ended December 31, 2014, compared to $60,551,000 in
the prior year, an increase of $3,635,000. This increase was primarily due to higher real estate taxes.
Operating Expenses
Operating expenses were $69,897,000 in the year ended December 31, 2014, compared to $64,930,000 in the prior year,
an increase of $4,967,000. This increase was primarily comprised of higher real estate taxes of $3,536,000 and higher non-
reimbursable operating expenses of $1,860,000.
Depreciation and Amortization
Depreciation and amortization was $29,196,000 in the year ended December 31, 2014, compared to $28,987,000 in the
prior year, an increase of $209,000.
General and Administrative Expenses
General and administrative expenses were $5,032,000 in the year ended December 31, 2014, compared to $5,026,000 in
the prior year, an increase of $6,000.
Interest and Other Income, net
Interest and other income, net was $2,434,000 in the year ended December 31, 2014, compared to $1,527,000 in the
prior year, an increase of $907,000. This increase was primarily due to lease termination income of $800,000.
Interest and Debt Expense
Interest and debt expense was $32,068,000 in the year ended December 31, 2014, compared to $44,540,000 in the prior
year, a decrease of $12,472,000. This decrease was primarily due to savings resulting from the refinancing of the office
portion of 731 Lexington Avenue.
Income Tax Benefit
Income tax benefit was $341,000 in the year ended December 31, 2014, compared to $160,000 in the prior year, an
increase of $181,000. This increase resulted from a larger reversal of tax liabilities in the current year as compared to the
prior year. These liabilities were reversed as a result of the expiration of the applicable statute of limitations.
Income from Discontinued Operations
Income from discontinued operations was $529,000 in the year ended December 31, 2014, compared to $2,252,000 in
the year ended December 31, 2013, a decrease of $1,723,000. Income for the current and prior year primarily represent the
reversal of previously accrued liabilities related to Kings Plaza which was sold in November 2012.
25
Results of Operations – Year Ended December 31, 2013 compared to December 31, 2012
Property Rentals
Property rentals were $135,908,000 in the year ended December 31, 2013, compared to $134,847,000 in the year ended
December 31, 2012, an increase of $1,061,000. This increase was primarily due to higher occupancy.
Expense Reimbursements
Tenant expense reimbursements were $60,551,000 in the year ended December 31, 2013, compared to $56,465,000 in
the year ended December 31, 2012, an increase of $4,086,000. This increase was primarily due to higher real estate taxes and
reimbursable operating expenses.
Operating Expenses
Operating expenses were $64,930,000 in the year ended December 31, 2013, compared to $61,755,000 in the year ended
December 31, 2012, an increase of $3,175,000. This increase was primarily comprised of higher (i) real estate taxes of
$3,991,000 and (ii) reimbursable operating expenses of $512,000, partially offset by (iii) lower bad debt expense of
$1,362,000.
Depreciation and Amortization
Depreciation and amortization was $28,987,000 in the year ended December 31, 2013, compared to $28,815,000 in the
year ended December 31, 2012, an increase of $172,000.
General and Administrative Expenses
General and administrative expenses were $5,026,000 in the year ended December 31, 2013, compared to $5,162,000 in
the year ended December 31, 2012, a decrease of $136,000.
Interest and Other Income, net
Interest and other income, net was $1,527,000 in the year ended December 31, 2013, compared to $177,000 in the year
ended December 31, 2012, an increase of $1,350,000. This increase was primarily due to dividend income in the current year
on the Macerich common shares that we received in connection with the sale of Kings Plaza in November 2012.
Interest and Debt Expense
Interest and debt expense was $44,540,000 in the year ended December 31, 2013, compared to $45,652,000 in the year
ended December 31, 2012, a decrease of $1,112,000. This decrease was primarily due to lower average debt balances.
Income Tax Benefit (Expense)
In the year ended December 31, 2013, we had an income tax benefit of $160,000, compared to an income tax expense of
$64,000 in the year ended December 31, 2012, a decrease in expense of $224,000. This decrease resulted from a reduction of
our estimated income tax liability due to the expiration of the applicable statute of limitations.
Income from Discontinued Operations
Income from discontinued operations was $2,252,000 in the year ended December 31, 2013, compared to $624,952,000
in the year ended December 31, 2012, a decrease of $622,700,000. Income for the year ended December 31, 2013 represents
the reversal of previously accrued liabilities related to Kings Plaza. Income for the year ended December 31, 2012 is
comprised of a $599,628,000 net gain on sale of Kings Plaza and $25,324,000 of income from the operations of the property
prior to its sale in November 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, and represents
our venture partner’s 75% pro-rata share of the net income from the Kings Plaza energy plant joint venture, which was sold
together with Kings Plaza in November 2012.
26
Related Party Transactions
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 and Chief
Executive Officer of Vornado. At December 31, 2014, 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. Joseph
Macnow, our Executive Vice President and Chief Financial Officer, is the Executive Vice President – Finance and Chief
Administrative Officer of Vornado. Stephen W. Theriot, our Assistant Treasurer, is the Chief Financial Officer of Vornando.
At December 31, 2014, 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.
27
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,
recurring capital expenditures and development expenditures related to the Rego Park II apartment tower.
Dividends
On January 21, 2015, we increased our regular quarterly dividend to $3.50 per share (a new indicated annual rate of
$14.00 per share). The new dividend, if continued for all of 2015, would require us to pay out approximately $71,600,000.
Development Project
We are in the process of constructing an apartment tower above our Rego II shopping center, containing 312 units
aggregating 255,000 square feet, which is expected to be completed in 2015. The estimated cost of this project is
approximately $125,000,000, of which $73,327,000 has been incurred as of December 31, 2014. There can be no assurance
that the project will be completed, or 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, 2014. We intend to refinance our
maturing debt as it comes due.
(Amounts in thousands)
Rego Park I shopping center(2)
731 Lexington Avenue, retail space(3)
Paramus
Rego Park II shopping center(4)
731 Lexington Avenue, office space(5)
Balance
78,246
320,000
68,000
266,534
300,000
1,032,780
$
$
Interest
Rate
0.40%
4.93%
2.90%
2.02%
1.11%
Maturity(1)
Mar. 2015
Jul. 2015
Oct. 2018
Nov. 2018
Mar. 2021
_________________________________________
(1) Represents the extended maturity where we have the unilateral right to extend.
(2) This loan is 100% cash collateralized.
(3) In the event of a substantial casualty, as defined, up to $75,000 of this loan may become recourse to us.
(4) This loan bears interest at LIBOR plus 1.85%.
(5) This loan bears interest at LIBOR plus 0.95%.
Below is a summary of our contractual obligations and commitments as of December 31, 2014.
(Amounts in thousands)
Contractual obligations (principal and interest(1)):
Total
Less than
One Year
One to
More than
Three Years Five Years Five Years
Three to
Long-term debt obligations
Operating lease obligations
Purchase obligations (primarily construction
commitments)
$ 1,089,712 $
9,458
420,454 $
700
28,556 $
1,492
336,767 $
1,600
303,935
5,666
36,957
$ 1,136,127 $
36,957
458,111 $
-
30,048 $
-
338,367 $
-
309,601
Commitments:
Standby letters of credit
$
3,308 $
3,308 $
- $
- $
-
(1) Interest on variable rate debt is computed using rates in effect at December 31, 2014.
28
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 acts of terrorism, 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, which expires in December 2020. Coverage for acts of
terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism
(excluding NBCR acts) is fully reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts,
FNSIC is responsible for a $275,000 deductible and 15% of the balance (16% effective January 1, 2016) of a covered loss,
and the Federal government is responsible for the remaining 85% (84% effective January 1, 2016) of a covered loss. We are
ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.
However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. 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 the retail portion of
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. Although we believe that we have adequate insurance coverage for purposes of
these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders
insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance our properties.
Litigation
Rego Park I
On June 24, 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York
against Vornado and us (and certain of our subsidiaries) with regard to space that Sears leases at our Rego Park I property.
Sears alleges that the defendants are liable for harm Sears has suffered as a result of (a) water intrusions into the premises
Sears leases, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the
Americans with Disabilities Act in the premises’ parking garage. Sears asserts various causes of actions for damages and
seeks to compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to
abate a nuisance that Sears claims was a cause of the water intrusions into its premises. In addition to injunctive relief, Sears
seeks, among other things, damages of not less than $4 million and future damages it estimates will not be less than $25
million. We intend to defend the claims vigorously; the amount or range of reasonable 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 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.
29
Liquidity and Capital Resources – continued
Cash Flows
Cash and cash equivalents were $227,815,000 at December 31, 2014, compared to $347,718,000 at December 31, 2013, a
decrease of $119,903,000. This decrease resulted from $87,870,000 of net cash used in financing activities and $81,520,000
of net cash used in investing activities, partially offset by $49,487,000 of net cash provided by operating activities. Our
consolidated outstanding debt was $1,032,780,000 at December 31, 2014, a $17,179,000 decrease from the balance at
December 31, 2013.
Year Ended December 31, 2014
Net cash provided by operating activities of $49,487,000 was comprised of net income of $67,925,000 and $29,355,000
of adjustments for non-cash items, partially offset by $47,793,000 for the net change in operating assets and liabilities. The
adjustments for non-cash items were primarily comprised of depreciation and amortization of $31,919,000, partially offset by
straight-lining of rental income of $2,538,000. The change in operating assets and liabilities was primarily due to the
payment of accrued leasing commissions to Vornado of $40,353,000.
Net cash used in investing activities of $81,520,000 was primarily comprised of $61,964,000 of construction in progress
and real estate additions, primarily related to the development of our Rego Park II Apartment Tower, and purchases of short-
term investments of $24,998,000.
Net cash used in financing activities of $87,870,000 was primarily comprised of (i) debt repayments of $317,179,000
(primarily repayment of the loan on the office portion of 731 Lexington Avenue) and (ii) dividends paid on common stock of
$66,436,000, partially offset by (iii) $300,000,000 of proceeds from the refinancing of the office portion of 731 Lexington
Avenue.
Year Ended December 31, 2013
Cash and cash equivalents were $347,718,000 at December 31, 2013, compared to $353,396,000 at December 31, 2012, a
decrease of $5,678,000. This decrease resulted from $72,241,000 of net cash used in financing activities and $7,320,000 of
net cash used in investing activities, partially offset by $73,883,000 of net cash provided by operating activities.
Net cash provided by operating activities of $73,883,000 was comprised of net income of $56,915,000 and $27,876,000
of adjustments for non-cash items, partially offset by $10,908,000 for the net change in operating assets and liabilities. The
adjustments for non-cash items were primarily comprised of depreciation and amortization of $31,395,000, partially offset by
straight-lining of rental income of $3,707,000.
Net cash used in investing activities of $7,320,000 was primarily comprised of $7,671,000 of construction in progress and
real estate additions.
Net cash used in financing activities of $72,241,000 was primarily comprised of dividends paid on common stock of
$56,197,000 and debt repayments of $15,957,000.
30
Liquidity and Capital Resources – continued
Year Ended December 31, 2012
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.
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 construction in progress and 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) debt repayments 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.
31
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, 2014 was $96,980,000, or $18.98 per diluted
share, compared to $85,717,000, or $16.78 per diluted share for the prior year. FFO attributable to common stockholders
includes FFO from discontinued operations (Kings Plaza) of $529,000, or $0.10 per diluted share for the year ended
December 31, 2014, compared to $2,252,000, or $0.44 per diluted share for the prior year.
FFO attributable to common stockholders for the quarter ended December 31, 2014 was $25,508,000, or $4.99 per diluted
share, compared to $23,015,000, or $4.50 per diluted share for the prior year’s quarter. FFO attributable to common
stockholders includes FFO from discontinued operations (Kings Plaza) of $529,000, or $0.10 per diluted share for the quarter
ended December 31, 2014, compared to $2,252,000, or $0.44 per diluted share for the prior year’s quarter.
The following table reconciles our net income to FFO:
(Amounts in thousands, except share and per share amounts)
Net income attributable to Alexander’s
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,
2014
2013
2014
2013
67,925 $
29,055
96,980 $
56,915 $
28,802
85,717 $
18,161 $
7,347
25,508 $
15,790
7,225
23,015
18.98 $
16.78 $
4.99 $
4.50
$
$
$
Weighted average shares used in computing diluted FFO per share
5,110,628
5,109,055
5,111,201
5,109,717
32
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.
(Amounts in thousands, except per share amounts)
Variable (including $0 and $42,924,
respectively, due to Vornado)
Fixed Rate
Total effect on diluted earnings per share
2014
Weighted
December 31, Average
Effect of 1%
Change in
Interest Rate Base Rates
Balance
2013
Weighted
December 31, Average
Balance
Interest Rate
$
$
566,534
466,246
1,032,780
1.54%
3.87%
$
$
$
5,665 $
-
5,665 $
312,420
780,463
1,092,883
2.00%
4.46%
1.11
As of December 31, 2014, we have an interest rate cap with a notional amount of $300,000,000 that caps LIBOR at a rate
of 6.0%.
Fair Value of Debt
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, 2014 and 2013, the estimated fair value of our consolidated debt was $1,025,000,000 and
$1,115,000,000, respectively. 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.
33
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements
Page
Number
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets at December 31, 2014 and 2013
Consolidated Statements of Income for the
Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Comprehensive Income for the
Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Changes in Equity for the
Years Ended December 31, 2014, 2013 and 2012
Consolidated Statements of Cash Flows for the
Years Ended December 31, 2014, 2013 and 2012
Notes to Consolidated Financial Statements
35
36
37
38
39
40
41
34
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, 2014 and 2013, 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, 2014. 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, 2014 and 2013, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2014, 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.
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, 2014, based on the criteria established in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 17, 2015 expressed an unqualified opinion on the Company’s internal control
over financial reporting.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 17, 2015
35
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
ASSETS
December 31,
2014
2013
$
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
Short-term investments
Restricted cash
Marketable securities
Tenant and other receivables, net of allowance for doubtful accounts of $1,544 and $1,993, respectively
Receivable arising from the straight-lining of rents
Deferred lease and other property costs, net, including unamortized leasing fees to Vornado of
$33,974 and $36,728, respectively
Deferred debt issuance costs, net of accumulated amortization of $11,295 and $19,187, respectively
Other assets
44,971 $
873,667
75,289
993,927
(210,025)
783,902
227,815
24,998
84,602
44,646
2,213
179,939
46,561
4,824
23,716
LIABILITIES AND EQUITY
Mortgages payable
Amounts due to Vornado
Accounts payable and accrued expenses
Other liabilities
Total liabilities
Commitments and contingencies
$ 1,423,216 $
$ 1,032,780 $
3,922
35,127
2,988
1,074,817
44,971
869,681
4,924
919,576
(185,375)
734,201
347,718
-
90,044
31,522
2,925
177,401
50,273
3,246
20,394
1,457,724
1,049,959
43,307
27,450
3,427
1,124,143
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 5,106,196 shares
Additional capital
Retained earnings
Accumulated other comprehensive income
Treasury stock: 67,254 shares, at cost
Total equity
-
-
5,173
30,139
299,004
14,457
348,773
(374)
348,399
$ 1,423,216 $
5,173
29,745
297,515
1,522
333,955
(374)
333,581
1,457,724
See notes to consolidated financial statements.
36
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
Year Ended December 31,
2013
2014
2012
REVENUES
Property rentals
Expense reimbursements
Total revenues
EXPENSES
Operating, including fees to Vornado of $4,516, $4,196, and $4,318, respectively
Depreciation and amortization
General and administrative, including management fees to Vornado of $2,380, $2,380
and $2,160, respectively
Total expenses
OPERATING INCOME
Interest and other income, net
Interest and debt expense
Income before income taxes
Income tax benefit (expense)
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
$
136,628 $
64,186
200,814
135,908 $
60,551
196,459
134,847
56,465
191,312
69,897
29,196
5,032
104,125
64,930
28,987
5,026
98,943
61,755
28,815
5,162
95,732
96,689
97,516
95,580
2,434
(32,068)
67,055
341
67,396
1,527
(44,540)
54,503
160
54,663
177
(45,652)
50,105
(64)
50,041
529
67,925
-
67,925 $
2,252
56,915
-
56,915 $
624,952
674,993
(606)
674,387
13.19 $
0.10
13.29 $
10.70 $
0.44
11.14 $
9.80
122.24
132.04
5,110,628
5,109,055
5,107,610
$
$
$
See notes to consolidated financial statements.
37
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Year Ended December 31,
2013
2014
2012
Net income
Other comprehensive income:
Change in unrealized net gain on available-for-sale securities
Change in value of interest rate cap
Comprehensive income
Less comprehensive income attributable to the noncontrolling interest
Comprehensive income attributable to Alexander's
$
67,925 $
56,915 $
674,993
13,124
(189)
80,860
-
80,860 $
316
-
57,231
-
57,231 $
1,206
-
676,199
(606)
675,593
$
See notes to consolidated financial statements.
38
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)
Accumulated
Other
Additional
Capital
Retained
Earnings
Comprehensive Treasury
Income
Stock
Non-
controlling
Interest
Total
Equity
$
$
(375)
-
$
4,445
606
363,245
674,993
-
-
-
-
(375)
-
-
-
1
(374)
-
-
-
-
-
-
(699,791)
(5,051)
(7,800)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,206
300
332,153
56,915
(56,197)
316
394
-
333,581
67,925
(66,436)
13,124
(189)
394
$
348,399
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 available-for-sale securities
Deferred stock unit grant
Balance, December 31, 2012
Net income
Dividends paid
Change in unrealized net gain
on available-for-sale securities
Deferred stock unit grant
Other
Balance, December 31, 2013
Net income
Dividends paid
Change in unrealized net gain
on available-for-sale securities
Change in value of interest rate cap
Deferred stock unit grant
Common Stock
Shares
5,173
-
Amount
$ 5,173
-
-
-
-
-
-
-
-
-
5,173
-
5,173
-
-
-
-
5,173
-
-
-
-
-
-
-
-
5,173
-
-
-
-
-
$
31,801
-
$
322,201
674,387
$
-
(699,791)
(2,749)
-
300
29,352
-
-
394
(1)
29,745
-
-
-
-
394
-
-
-
296,797
56,915
(56,197)
-
-
-
297,515
67,925
(66,436)
-
-
-
-
-
-
-
1,206
-
1,206
-
316
-
-
1,522
-
-
13,124
(189)
-
Balance, December 31, 2014
5,173
$ 5,173
$
30,139
$
299,004
$
14,457
$
(374)
$
See notes to consolidated financial statements.
39
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year Ended December 31,
2013
2012
2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amortization of debt issuance costs
Straight-lining of rental income
Stock-based compensation expense
Reversal of income tax liability
Net gain on sale of real estate
Change in operating assets and liabilities:
Tenant and other receivables, net
Other assets
Amounts due to Vornado
Accounts payable and accrued expenses
Other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Construction in progress and real estate additions
Purchases of short-term investments
Restricted cash
Proceeds from sale of real estate
Proceeds from maturing short-term investments
Net cash (used in) provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments
Proceeds from borrowing
Dividends paid, including a special dividend of $623,178 in 2012
Debt issuance costs
Acquisition of the noncontrolling interest
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
$
67,925 $
56,915 $
674,993
31,919
(2,538)
394
(420)
-
712
(4,334)
(42,779)
(1,373)
(19)
49,487
(61,964)
(24,998)
5,442
-
-
(81,520)
31,395
(3,707)
394
(206)
-
(972)
(472)
(3,138)
(6,284)
(42)
73,883
(7,671)
-
351
-
-
(7,320)
(317,179)
300,000
(66,436)
(4,255)
-
(87,870)
(15,957)
-
(56,197)
(87)
-
(72,241)
(119,903)
347,718
(5,678)
353,396
$ 227,815 $ 347,718 $
36,363
(4,475)
300
-
(599,628)
234
4,318
(2,405)
(107)
114
109,707
(7,351)
-
(1,626)
714,054
5,000
710,077
(265,016)
-
(699,791)
(400)
(7,800)
(973,007)
(153,223)
506,619
353,396
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest, excluding capitalized interest of $603 in 2014
$
30,656 $
42,121 $
47,932
NON-CASH TRANSACTIONS
Liability for real estate additions
Marketable securities received in connection with the sale of real estate
Commission payable to Vornado incurred in connection with the sale of real estate
Write-off of fully amortized and/or depreciated assets
$
13,529 $
-
-
10,626
1,084 $
-
-
-
221
30,000
7,510
648
See notes to consolidated financial statements.
40
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
•
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 609,000 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.
Property under development
• Rego Park II Apartment Tower; We are in the process of constructing an apartment tower above our Rego II
shopping center, containing 312 units aggregating 255,000 square feet, which is expected to be completed in 2015.
The estimated cost of this project is approximately $125,000,000, of which $73,327,000 has been incurred as of
December 31, 2014. There can be no assurance that the project will be completed, or completed on schedule or
within budget.
Property to be developed
• Rego Park III, a 3.2 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 that permit the
properties to be aggregated into one reportable segment (the leasing, management, development and redeveloping of
properties in the greater New York City metropolitan area). Our chief operating decision-maker assesses and measures
segment operating results based on a performance measure referred to as net operating income at the individual operating
segment. Net operating income for each property represents net rental revenues less operating expenses.
41
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 April 2014, the Financial Accounting Standards Board (“FASB”) issued an
update (“ASU 2014-08”) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to
Accounting Standards Codification (“ASC”) Topic 205, Presentation of Financial Statements and ASC Topic 360, Property
Plant and Equipment. Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major
effect on the entity’s results and operations would qualify as discontinued operations. In addition, ASU 2014-08 expands the
disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose
information about disposals for individually significant components that do not meet the definition of discontinued
operations. ASU 2014-08 is effective for interim and annual reporting periods in fiscal years that begin after December 15,
2014. The adoption of this update on January 1, 2015 is not expected to have any impact on our consolidated financial
statements.
In May 2014, the FASB issued an update (“ASU 2014-09”) establishing ASC Topic 606, Revenue from Contracts with
Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising
from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an
entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain
additional disclosures. ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after
December 15, 2016. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial
statements.
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. 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 recognized on a straight-line basis over estimated useful lives, which range from 3
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 and currently under
development, 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.
42
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) United States Treasury Bills, (iii) money market funds, which invest in United
States Treasury Bills and (iv) 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 United States Treasury Bills with original maturities greater
than three but less than six months. These highly liquid investments are classified as available-for-sale and are presented at
fair value on our consolidated balance sheets. Unrealized gains and losses resulting from these investments are included in
“other comprehensive income” and are recognized in earnings only upon the expiration of the investments.
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 sheets. 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 ($1,544,000 and
$1,993,000 as of December 31, 2014 and 2013, 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.
43
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. Dividends distributed for the years ended December 31, 2014 and 2013 were categorized, for federal income tax
purposes, as ordinary income.
The following table reconciles our net income to estimated taxable income for the years ended December 31, 2014, 2013
and 2012.
(Unaudited and in thousands)
Net income attributable to Alexander’s
Straight-line rent adjustments
Depreciation and amortization timing differences
Interest expense
Reversal of liability for income taxes
Additional tax gain on sale of the Kings Plaza
Regional Shopping Center
Other
Estimated taxable income
$
$
Year Ended December 31,
2013
2014
67,925 $
(2,538)
2,283
10
(420)
56,915 $
(3,707)
2,134
27
(206)
2012
674,387
(4,475)
910
29
-
(357)
1,112
68,015 $
-
(2,213)
52,950 $
23,928
4,396
699,175
At December 31, 2014, the net basis of our assets and liabilities for tax purposes are approximately $204,815,000 lower
than the amount reported for financial statement purposes.
44
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS
Vornado
At December 31, 2014, 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 and Chief
Executive Officer of Vornado. At December 31, 2014, 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. Joseph
Macnow, our Executive Vice President and Chief Financial Officer, is the Executive Vice President – Finance and Chief
Administrative Officer of Vornado. Stephen W. Theriot, our Assistant Treasurer, is the Chief Financial Officer of Vornado.
Management and Development Agreements
We pay Vornado an annual management fee equal to the sum of (i) $2,800,000, (ii) 2% of gross revenue from the Rego
Park II shopping center, (iii) $0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue,
and (iv) $280,000, escalating at 3% per annum, for managing the common area of 731 Lexington Avenue. Vornado is also
entitled to a development fee equal to 6% of development costs, as defined. The payment of development fees for the Rego
Park II Apartment Tower is due on substantial completion of the construction, 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. Prior to December 22, 2014, the total of these
amounts was payable in annual installments in an amount not to exceed $4,000,000, with interest on the unpaid balance at
one-year LIBOR plus 1.0%. On December 22, 2014, the leasing agreements with Vornado were amended to eliminate the
annual installment cap of $4,000,000. In addition, we paid the accrued balance of leasing commissions of $40,353,000 to
Vornado.
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%.
45
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, and includes $2,021,000 of
property management and leasing fees for the year ended December 31, 2012, related to the Kings Plaza Regional Shopping
Center (“Kings Plaza”), which was sold in November 2012 (see Note 4 – Discontinued Operations).
(Amounts in thousands)
Company management fees
Development fees
Leasing fees
Commission on sale of real estate
Property management fees and payments for cleaning, engineering
and security services
Year Ended December 31,
2013
2012
2014
$
2,800 $
3,394
1,430
-
2,800 $
-
1,126
-
2,983
438
2,217
7,510
$
3,658
11,282 $
3,415
7,341 $
4,531
17,679
At December 31, 2014, we owed Vornado $3,394,000 for development fees and $528,000 for management, property
management and cleaning fees.
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 of 2012 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.
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” for all of the periods presented on our consolidated
statements of income. The table below sets forth the income from discontinued operations for the years ended December 31,
2014, 2013 and 2012.
(Amounts in thousands)
Total revenues
Total operating expenses(1)
Interest and other income, net
Interest and debt expense
Net gain on sale
Income from discontinued operations
___________________
(1)
Year Ended December 31,
2013
2014
2012
-
-
-
529
-
-
529
$
$
$
-
-
-
2,252
-
-
2,252
$
61,836
31,214
30,622
45
(5,343)
599,628
624,952
$
$
Includes fees to Vornado of $1,368 for the year ended December 31, 2012.
46
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5.
MARKETABLE SECURITIES
As of December 31, 2014 and 2013, we owned 535,265 Macerich common shares, which were received in connection
with the sale of Kings Plaza to Macerich. These shares have an economic cost of $56.05 per share, or $30,000,000 in the
aggregate. As of December 31, 2014 and 2013, the fair value of these shares were $44,646,000 and $31,522,000,
respectively, based on Macerich’s closing share price of $83.41 per share and $58.89 per share, respectively. These shares
are included in “marketable securities” on our consolidated balance sheets and are classified as available-for-sale. Available-
for-sale securities are presented at fair value and unrealized gains and losses resulting from the mark-to-market of these
securities are included in “other comprehensive income.” Other comprehensive income includes unrealized gains of
$13,124,000 and $316,000 for the years ended December 31, 2014 and 2013, respectively.
6. MORTGAGES PAYABLE
On February 28, 2014, we completed a $300,000,000 refinancing of the office portion of 731 Lexington Avenue. The
interest-only loan is at LIBOR plus 0.95% and matures in March 2017, with four one-year extension options. The proceeds
of the new loan and existing cash were used to repay the existing loan and closing costs. In connection therewith, we
purchased an interest rate cap with a notional amount of $300,000,000 that caps LIBOR at a rate of 6.0%.
The following is a summary of outstanding mortgages payable.
(Amounts in thousands)
First mortgages secured by:
Rego Park I shopping center (100% cash
collateralized)
731 Lexington Avenue, retail space(2)
Paramus
Rego Park II shopping center(3)
731 Lexington Avenue, office space(4)
Maturity(1)
Interest Rate at
December 31, 2014
Balance at December 31,
2013
2014
Mar. 2015
0.40 %
$
78,246
$
78,246
Jul. 2015
Oct. 2018
Nov. 2018
Mar. 2021
4.93 %
2.90 %
2.02 %
1.11 %
320,000
68,000
266,534
300,000
$ 1,032,780
320,000
68,000
269,496
314,217
$ 1,049,959
___________________
(1) Represents the extended maturity where we have the unilateral right to extend.
(2)
(3) This loan bears interest at LIBOR plus 1.85%.
(4) This loan bears interest at LIBOR plus 0.95%.
In the event of a substantial casualty, as defined, up to $75,000 of this loan may become recourse to us.
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 $706,791,000 at December 31, 2014. Our existing financing
documents contain covenants that limit our ability to incur additional indebtedness on these properties, and in certain
circumstances, provide for lender approval of tenants’ leases and yield maintenance to prepay them. As of December 31,
2014, the principal repayments for the next five years and thereafter are as follows:
(Amounts in thousands)
Year Ending December 31,
2015
2016
2017
2018
2019
Thereafter
We intend to refinance our maturing debt as it comes due.
47
$
Amount
401,439
3,440
3,707
324,194
-
300,000
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. 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 sheets at December 31, 2014 and 2013 consists of
marketable securities, short-term investments (treasury bills classified as available-for-sale) and an interest rate cap, which
are presented in the table below, based on their level in the fair value hierarchy. There were no financial liabilities measured
at fair value at December 31, 2014 and 2013.
(Amounts in thousands)
Marketable securities
Short-term investments
Interest rate cap (included in other assets)
Total assets
(Amounts in thousands)
Marketable securities
As of December 31, 2014
Total
Level 1
Level 2
Level 3
44,646 $
44,646
$
- $
24,998
24,998
11
-
-
11
69,655 $
69,644
$
11 $
-
-
-
-
Total
As of December 31, 2013
Level 2
Level 1
Level 3
31,522 $
31,522
$
- $
-
$
$
$
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, mortgages payable and leasing commissions due to Vornado. Cash equivalents 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 is classified as
Level 1 and the fair value of 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, 2014 and 2013.
(Amounts in thousands)
Assets:
Cash equivalents
As of December 31, 2014
As of December 31, 2013
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
$
111,590 $
111,590 $
184,796 $
184,796
Liabilities:
Mortgages payable
$
Leasing commissions (included in Amounts due to Vornado)
1,032,780 $
1,025,000 $
-
-
1,049,959 $
42,924
1,072,000
43,000
$
1,032,780 $
1,025,000 $
1,092,883 $
1,115,000
48
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. 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:
(Amounts in thousands)
Year Ending December 31,
2015
2016
2017
2018
2019
Thereafter
$
Amount
127,877
119,741
121,079
121,111
118,537
903,901
These future minimum amounts do not include additional rents based on a percentage of tenants’ sales. For the years ended
December 31, 2014, 2013, and 2012, these rents were $108,000, $416,000, and $416,000, respectively.
Bloomberg accounted for $91,109,000, $88,164,000 and $86,468,000, or 45% of our total revenues in each of the years
ended December 31, 2014, 2013 and 2012, 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.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015
covering 188,608 square feet of office space at our 731 Lexington Avenue property for a term of 5 years. We are currently in
negotiations with Bloomberg to determine the rental rate for the extension period.
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:
(Amounts in thousands)
Year Ending December 31,
2015
2016
2017
2018
2019
Thereafter
$
Amount
700
700
792
800
800
5,666
Rent expense was $746,000 in each of the years ended December 31, 2014, 2013 and 2012.
49
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. 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, 2014, there were 5,005 DSUs outstanding and 889,735 shares were available
for future grant. We account for all stock-based compensation in accordance with ASC 718, Compensation – Stock
Compensation.
In May 2014, we granted each of the members of our Board of Directors 212 DSUs with a grant date fair value of
$56,250 per grant, or $394,000 in the aggregate. The DSUs entitle the holder to receive shares of our 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.
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 acts of terrorism, 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, which expires in December 2020. Coverage for acts of
terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism
(excluding NBCR acts) is fully reinsured by third party insurance companies with no exposure to FNSIC. For NBCR acts,
FNSIC is responsible for a $275,000 deductible and 15% of the balance (16% effective January 1, 2016) of a covered loss,
and the Federal government is responsible for the remaining 85% (84% effective January 1, 2016) of a covered loss. We are
ultimately responsible for any loss incurred by FNSIC.
We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism.
However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. 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 the retail portion of
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. Although we believe that we have adequate insurance coverage for purposes of
these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders
insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance our properties.
Litigation
Rego Park I
On June 24, 2014, Sears Roebuck and Co. (“Sears”) filed a lawsuit in the Supreme Court of the State of New York against
Vornado and us (and certain of our subsidiaries) with regard to space that Sears leases at our Rego Park I property. Sears
alleges that the defendants are liable for harm Sears has suffered as a result of (a) water intrusions into the premises Sears
leases, (b) two fires in February 2014 that caused damages to those premises, and (c) alleged violations of the Americans
with Disabilities Act in the premises’ parking garage. Sears asserts various causes of actions for damages and seeks to
compel compliance with landlord’s obligations to repair the premises and to provide security, and to compel us to abate a
nuisance that Sears claims was a cause of the water intrusions into its premises. In addition to injunctive relief, Sears seeks,
among other things, damages of not less than $4 million and future damages it estimates will not be less than $25 million.
We intend to defend the claims vigorously; the amount or range of reasonably possible losses, if any, cannot be estimated.
50
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMITMENTS AND CONTINGENCIES – continued
Rego Park II Apartment Tower
We are in the process of constructing an apartment tower above our Rego II shopping center, containing 312 units
aggregating 255,000 square feet, which is expected to be completed in 2015. The estimated cost of this project is
approximately $125,000,000, of which $73,327,000 has been incurred as of December 31, 2014. There can be no assurance
that the project will be completed, or completed on schedule or within budget.
Paramus
In 2001, we leased 30.3 acres of land located in Paramus, New Jersey to IKEA Property, Inc. The lease has 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 $3,308,000 of standby letters of credit were issued and outstanding as of December 31, 2014.
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.
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, 2014, our subsidiaries’ participation in these plans were not significant to our consolidated financial
statements.
In the years ended December 31, 2014, 2013 and 2012 our subsidiaries contributed $144,000, $138,000 and $196,000,
respectively, towards Multiemployer Pension Plans. Of these amounts, $61,000 in the year ended December 31, 2012
represent contributions related to discontinued operations, which are included as a component of “income from discontinued
operations” 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, 2014, 2013 and 2012.
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, 2014, 2013 and 2012 our subsidiaries contributed $533,000, $499,000 and
$734,000, respectively, towards these plans. Of these amounts, $250,000 in the year ended December 31, 2012 represent
contributions related to discontinued operations, which are included as a component of “income from discontinued
operations” on our consolidated statements of income.
51
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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 DSUs) outstanding during the period. Diluted
income per share is determined using the weighted average shares of common stock (including DSUs) 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, 2014, 2013 and 2012.
(Amounts in thousands, except share and per share amounts)
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
For the Year Ended December 31,
2013
2012
2014
$
$
$
$
67,396 $
54,663 $
50,041
529
67,925 $
2,252
56,915 $
624,346
674,387
5,110,628
5,109,055
5,107,610
13.19 $
0.10
13.29 $
10.70 $
0.44
11.14 $
9.80
122.24
132.04
13. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
(Amounts in thousands, except per share amounts)
2014
December 31
September 30
June 30
March 31
2013
December 31
September 30
June 30
March 31
Net Income
Attributable to
Common
Stockholders
Revenues
Net Income Per
Common Share(1)
Basic
Diluted
$
$
51,286 $
50,077
49,983
49,468
50,496 $
49,886
47,302
48,775
$
18,161
17,692
16,828
15,244
15,790 $
13,824
13,139
14,162
3.55 $
3.46
3.29
2.98
3.09 $
2.71
2.57
2.77
3.55
3.46
3.29
2.98
3.09
2.71
2.57
2.77
_______________________
(1) The total for the year may differ from the sum of the quarters as a result of weighting.
52
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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.
53
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, 2014, 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 (2013) 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, 2014 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, 2014 has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on page 55 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, 2014.
54
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, 2014, based on criteria established in Internal Control—Integrated Framework (2013) 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’s 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, 2014, based on the criteria established in Internal Control—Integrated Framework (2013) 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, 2014 of
the Company and our report dated February 17, 2015 expressed an unqualified opinion on those financial statements and
financial statement schedules.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 17, 2015
55
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, 2014. 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.
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.
Name
Steven Roth
Age
73
Joseph Macnow
69
PRINCIPAL OCCUPATION, POSITION AND OFFICE
(Current and during past five years with the Company unless otherwise stated)
Chairman of the Board 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 since April 2013 and from May 1989 to May 2009; a
Trustee of Vornado Realty Trust since 1979; and Managing General Partner of
Interstate Properties.
Executive Vice President and Chief Financial Officer since June 2002; Executive Vice
President – Finance and Chief Administrative Officer of Vornado Realty Trust since
June 2013; Executive Vice President – Finance and Administration of Vornado Realty
Trust from January 1998 to June 2013; and Chief Financial Officer of Vornado Realty
Trust from March 2001 to June 2013.
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.
56
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.
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, 2014, regarding our equity compensation.
(a)
Number of securities
to be issued upon
exercise of
Weighted-average
exercise price of
outstanding options, outstanding options,
warrants and rights 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
Total
5,005 $
N/A
5,005 $
-
N/A
-
889,735
N/A
889,735
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
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.
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.
57
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
The following documents are filed as part of this Annual Report on Form 10-K.
PART IV
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.
Schedule II – Valuation and Qualifying Accounts – years ended
December 31, 2014, 2013 and 2012
Schedule III – Real Estate and Accumulated Depreciation as of
December 31, 2014, 2013 and 2012
Pages in this
Annual Report
on Form 10-K
60
61
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.
10.56
10.57
10.58
10.59
12
21
23
31.1
31.2
32.1
32.2
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
Fourth Amendment to Real Estate Retention Agreement, dated December 22, 2014 by and
between Alexander's, Inc. and Vornado Realty, L.P.
Second Amendment to 59th Street Real Estate Retention Agreement, dated December 22,
2014 by and between 731 Retail One LLC, 731 Restaurant LLC, 731 Office Two LLC and
Vornado Realty, L.P.
First Amendment to Rego II Real Estate Sub-Rentention Agreement, dated December 22,
2014 by and between Alexander's, Inc. and Vornado Realty L.P.
First Amendment to Real-Estate Sub-Retention Agreement, dated December 22, 2014 by and
between Alexander's Management LLC and Vornado Realty, L.P.
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
58
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.
ALEXANDER’S, INC.
(Registrant)
Date: February 17, 2015
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.
Date
February 17, 2015
February 17, 2015
February 17, 2015
February 17, 2015
February 17, 2015
February 17, 2015
February 17, 2015
February 17, 2015
Signature
Title
By:
/s/Steven Roth
(Steven Roth)
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)
Chairman of the Board of Directors and
Chief Executive Officer
(Principal Executive Officer)
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Director
Director
Director
Director
Director
Director
59
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(Amounts in thousands)
Column A
Column B Column C Column D Column E
Balance at Charged
Beginning
Against
Additions: Deductions:
Uncollectible
Accounts
Operations Written Off
Description
of Year
Balance
at End
of Year
Allowance for doubtful accounts:
Year Ended December 31, 2014
$
1,993 $
705 $
(1,154) $
1,544
Year Ended December 31, 2013
$
2,219 $
348 $
(574) $
1,993
Year Ended December 31, 2012
$
1,039 $
1,304 $
(124) $
2,219
60
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
COLUMN A
COLUMN B
COLUMN C
COLUMN D
Description
Encumbrances
Land
and Leasehold
Improvements
Initial Cost to Company(1)
Building,
Leaseholds
Costs
Capitalized
Subsequent
to Acquisition
DECEMBER 31, 2014
(Amounts in thousands)
COLUMN E
Gross Amount at Which
Carried at Close of Period
Building,
Leaseholds
COLUMN F
COLUMN G COLUMN H
COLUMN I
Land
and Leasehold
Improvements
Construction
In Progress
Total(2)
Amortization
Construction Acquired(1)
and
Date of
Date
Accumulated
Depreciation
Depreciation
in Latest
Income
Statement
is Computed
New York, NY
Rego Park I
Rego Park II:
Retail
Residential
Rego Park III
Flushing
$
78,246 $
1,647 $
8,953 $
50,553 $
1,647 $
59,370 $
136 $
61,153 $
27,569
1959
1992
3-39 years
266,534
3,127
-
-
-
-
779
-
1,467
-
-
1,660
12,355
3,127
386,260
384,926
73,327
2,196
(107)
-
779
-
Lexington Avenue
620,000
14,432
426,691
27,497
Paramus, NJ
68,000
1,441
-
10,313
11,754
-
503
1,553
425,981
-
-
133
73,327
1,693
-
-
-
-
389,520
73,327
2,975
1,553
453,478
52,747
-
120
791
128,798
2009
N/A
N/A
1975(3)
2003
1992
1992
1992
1992
1992
11,754
-
N/A
1992
167
-
N/A
1992
3-40 years
N/A
5-15 years
N/A
9-39 years
N/A
N/A
Other Properties
-
167
TOTAL
$
1,032,780 $
21,593 $
1,804
26,239 $
(1,804)
167
946,095 $
44,971 $
873,667 $
75,289 $
993,927 $
210,025
__________________________
Initial cost is as of May 15, 1992 (the date on which the Company commenced its real estate operations).
(1)
(2) The net basis of the Company’s assets and liabilities for tax purposes is approximately $204,815 lower than the amount reported for financial statement purposes.
(3) Represents the date the lease was acquired.
61
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
REAL ESTATE:
Balance at beginning of period
Additions 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
2014
December 31,
2013
2012
$
919,576 $
911,792 $
906,907
-
4,043
70,365
993,984
(57)
993,927 $
-
5,072
2,712
919,576
-
919,576 $
-
3,776
1,109
911,792
-
911,792
185,375 $
24,707
210,082
(57)
210,025 $
160,826 $
24,549
185,375
-
185,375 $
136,460
24,366
160,826
-
160,826
$
$
$
62
Exhibit
No.
EXHIBIT INDEX
3.1
3.2
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
- 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 3(ii) to the registrant’s Quarterly
*
Report on Form 10-Q for the quarter ended March 31, 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
- 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.
*
*
*
*
*
*
*
*
*
*
63
10.10
10.11
10.12
- 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
- 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
- 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
10.13
**
- 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
10.14
**
- 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
*
*
*
*
*
10.15
**
- 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
10.16
10.17
10.18
10.19
10.20
- 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
*
*
*
*
*
10.21
- 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
___________________
Incorporated by reference.
Management contract or compensatory agreement.
*
**
64
10.22
- 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
10.23
10.24
10.25
10.26
- 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
- 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
10.27
**
- Form of 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
10.28
10.29
10.30
10.31
10.32
10.33
- 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
__________________
Incorporated by reference.
Management contract or compensatory agreement.
*
**
*
*
*
*
*
*
*
*
*
*
*
65
10.34
10.35
10.36
10.37
10.38
10.39
10.40
10.41
- 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.
- 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
- Second Omnibus Loan Modification and Extension Agreement, dated March 8, 2013, 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 10.3 to the registrant’s Quarterly Report on Form 10-Q,
filed on May 6, 2013
- Second Mortgage Modification Agreement, dated March 8, 2013, by and between Alexander’s Rego
Shopping Center, Inc., as Mortgator and U.S. Bank National Association, as Mortgagee. Incorporated
herein by reference from exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q, filed on May 6,
2013
10.42
**
- Form of Alexander’s, Inc. 2006 Omnibus Stock Plan Deferred Stock Unit Grant Agreement.
Incorporated herein by reference from exhibit 10.59 to the registrant’s Annual Report on Form 10-K for
the year ended December 31, 2013, filed on February 24, 2014
10.43
10.44
- Second Amendment and Modification of Loan Agreement and Other Loan Documents and Ratification
of Guarantor, dated November 15, 2013, by and between Rego II Borrower LLC, as Borrower, and the
Lender. Incorporated herein by reference from exhibit 10.60 to the registrant’s Annual Report on Form
10-K for the year ended December 31, 2013, filed on February 24, 2014
- Partial Release of Mortgage, dated November 15, 2013, by and between Rego II Borrower LLC, as
Mortgagor, and the Mortgagee. Incorporated herein by reference from exhibit 10.61 to the registrant’s
Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 24, 2014
____________________________________
*
**
Incorporated by reference.
Management contract or compensatory agreement.
*
*
*
*
*
*
*
*
*
*
*
66
10.45
10.46
10.47
10.48
10.49
10.50
10.51
10.52
10.53
10.54
- Partial Release of Assignment of Leases and Rents, dated November 15, 2013, by and between Rego II
Borrower LLC, as Assignor, and the Assignee. Incorporated herein by reference from exhibit 10.61 to
the registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February
24, 2014
- Loan Agreement, date as of February 28, 2014, by and between 731 Office One LLC, as Borrower, and
German American Capital Corporation, as Lender. Incorporated herein by reference from exhibit 10.1 to
the registrant’s Quarterly report on Form 10-Q, filed on May 5, 2014
- Consolidated, Amended and Restated Promissory Note, dated as of February 28, 2014, by and between
731 Office One LLC, as Borrower, and German American Capital Corporation, as Lender. Incorporated
herein by reference from exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q, filed on May 5,
2014
- Amended and Restated Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of
February 28, 2014, by and between 731 Office One LLC, as Mortgagor, and German American Capital
Corporation, as Mortgagee. Incorporated herein by reference from exhibit 10.3 to the registrant’s
Quarterly Report on Form 10-Q, filed on May 5, 2014
- Assignment of Leases and Rents dated as of February 28, 2014, by and between 731 Office One LLC, as
Assignor, and German American Capital Corporation, as Assignee. Incorporated herein by reference
from exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q, filed on May 5, 2014
- Guaranty of Recourse Obligations dated as of February 28, 2014, by and between Alexander’s, Inc., as
Guarantor, and German American Capital Corporation, as Lender. Incorporated herein by reference
from exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q, filed on May 5, 2014
- Environmental Indemnity Agreement dated as of February 28, 2014, by and between 731 Office One
LLC, as Indemnitor, and German American Capital Corporation, as Indemnitee. Incorporated herein by
reference from exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q, filed on May 5, 2014
- Termination Agreement dated as of February 28, 2014, by and among 731 Office One LLC, Alexander’s
Management LLC, Vornado Realty L.P., 731 Office Two LLC, 731 Residential LLC, 731 Commerical
LLC, 731 Retail One LLC and 731 Restaurant LLC. Incorporated herein by reference from exhibit 10.7
to the registrant’s Quarterly Report on Form 10-Q, filed on May 5, 2014
- Real Estate Sub-Retention Agreement dated as of February 28, 2014, by and between Alexander’s
Managegment LLC, as Agent, and Vornado Realty L.P., as Sub-Agent. Incorporated herein by reference
from exhibit 10.8 to the registrant’s Quarterly Report on Form 10-Q, filed on May 5, 2014
- Sixth Amendment to Amended and Restated Management and Development Agreement, dated as of
March 21, 2014, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado
Management Corp. Incorporated herein by reference from exhibit 10.9 to the registrant’s Quarterly
Report on Form 10-Q, filed on May 5, 2014
___________________
Incorporated by reference.
*
*
*
*
*
*
*
*
*
*
*
67
10.55
- Rego Park II Residential Management and Development Agreement, dated as of March 21, 2014 by and
between Alexander’s of Rego Residential LLC and Vornado Management Corp. Incorporated herein by
reference from exhibit 10.10 to the registrant’s Quarterly Report on Form 10-Q, filed on May 5, 2014
*
10.56
- Fourth Amendment to Real Estate Retention Agreement, dated December 22, 2014 by and between
Alexander's, Inc. and Vornado Realty, L.P.
10.57
10.58
- Second Amendment to 59th Street Real Estate Retention Agreement, dated December 22, 2014 by and
between 731 Retail One LLC, 731 Restaurant LLC, 731 Office Two LLC and Vornado Realty, L.P.
- First Amendment to Rego II Real Estate Sub-Rentention Agreement, dated December 22, 2014 by and
between Alexander's, Inc. and Vornado Realty L.P.
10.59
- First Amendment to Real-Estate Sub-Retention Agreement, dated December 22, 2014 by and between
Alexander's Management LLC and Vornado Realty, L.P.
12
21
23
31.1
31.2
32.1
32.2
- 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.
*
68
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
David Mandelbaum
A member of
the
Mandelbaum, P.C.; Partner,
Trustee, Vornado Realty Trust
law firm of Mandelbaum &
Interstate Properties;
Wendy A. Silverstein
Former Executive Vice President –
Co-Head of Acquisitions and Captial Markets,
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 21,
2015 at the Saddle Brook Marriott, Interstate 80 and the
Garden State Parkway, Saddle Brook, New Jersey,
07663.
*Member of the Audit Committee
Steven Roth
Chairman of the Board and Chief Executive Officer
Joseph Macnow
Executive Vice President and Chief Financial Officer
Company Data
Executive Offices
210 Route 4 East
Paramus, New Jersey 07652
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, 2014. In addition, as required by
Section 303A.12(a) of the New York Stock Exchange
(NYSE) Listed Company Manual, on June 6, 2014,
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
69