ALEXANDER’S, INC.
ANNUAL REPORT TO
STOCKHOLDERS
2015
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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(cid:134)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December 31, 2015
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
001-06064
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 (cid:95) NO (cid:134)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.
YES (cid:134) NO (cid:95)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES (cid:95) NO (cid:134)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files).
(cid:95) Yes (cid:134) No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (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. (cid:95)
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
(cid:95) Large Accelerated Filer
(cid:134) Non-Accelerated Filer (Do not check if smaller reporting company)
(cid:134) Accelerated Filer
(cid:134) Smaller Reporting Company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES (cid:134) NO (cid:95)
The aggregate market value of the voting and non-voting shares of common stock held by non-affiliates of the registrant, (i.e., by
persons other than officers and directors of Alexander’s, Inc.) was $862,931,000 at June 30, 2015.
As of January 31, 2016, 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 19, 2016.
Item
Financial Information:
Page Number
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
_____________________________
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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, 2015, 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 seven properties in the greater New York City metropolitan area consisting of:
Operating properties
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731 Lexington Avenue, a 1,311,000 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 889,000 and 174,000 of net
rentable square feet of office and retail space, respectively, which we own, and 248,000 square feet of residential space
consisting of 105 condominium units, which we sold. Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The
Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet) are the
principal retail tenants;
(cid:120) Rego Park I, a 343,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens. The center is
anchored by a 195,000 square foot Sears department store, a 50,000 square foot Burlington Coat Factory, a 46,000 square foot
Bed Bath & Beyond and a 36,000 square foot Marshalls;
(cid:120) Rego Park II, a 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;
(cid:120) The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square
feet. In December 2015, we received an updated temporary certificate of occupancy (“TCO”) covering approximately 93% of
the apartment tower where construction has been substantially completed, and accordingly 93% has been placed in service. We
expect to receive the TCO for the remaining 7% in 2016. During the year ended December 31, 2015, we leased 84 of the 312
units. We expect to reach stabilized occupancy in 2017;
(cid:120) Paramus, located at the intersection of Routes 4 and 17 in Paramus, New Jersey, consists of 30.3 acres of land that is leased to
IKEA Property, Inc.; and
(cid:120) 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 to be developed
(cid:120) 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.
As of December 31, 2015, 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. As of December 31, 2015, 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 2.2% 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 $94,468,000, $91,109,000 and $88,164,000, or approximately 45% of our total revenues in each of the
years ended December 31, 2015, 2014 and 2013, respectively. No other tenant accounted for more than 10% of our total revenues. If
we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely
affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s
creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and
evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015 for a term of
five years, covering 192,000 square feet of office space at our 731 Lexington Avenue property. In January 2016, we entered into a
lease amendment with Bloomberg which extends the lease term related to this space to be coterminous with the other 697,000 square
feet of office space leased by Bloomberg through February 2029, with a ten-year extension option. In connection with the lease
amendment, Bloomberg provided a $200,000,000 letter of credit, which amount may be reduced in certain circumstances. We may
draw on this letter of credit subject to certain terms of the lease amendment, including an event of default by Bloomberg.
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
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. Our success is also
subject to our ability to refinance existing debt on acceptable terms as it comes due.
Employees
We currently have 73 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 any time.
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;
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(cid:120)(cid:3) whether we are able to pass all or portions of any increases in operating costs through to tenants;
(cid:120)(cid:3)
(cid:120)(cid:3) whether tenants and users such as customers and shoppers consider a property attractive;
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(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
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(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
changes in space utilization by our tenants due to technology, economic conditions and business environment;
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.
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(cid:120)(cid:3)
(cid:120)(cid:3)
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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.
We may be unable to renew leases or relet space as leases expire.
When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if tenants do
renew or we can relet the space, the terms of renewal or reletting, taking into account among other things, the cost of improvements to
the property and leasing commissions, may be less favorable than the terms in the expired leases. In addition, changes in space
utilization by our tenants may impact our ability to renew or relet space without the need to incur substantial costs in renovating or
redesigning the internal configuration of the relevant property. If we are unable to promptly renew the leases or relet the space at
similar rates or if we incur substantial costs in renewing or reletting the space, our cash flow and ability to service debt obligations and
pay dividends and distributions to security holders could be adversely affected.
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 $137,411,000, $133,024,000 and $128,845,000, or approximately 65% of our total revenues
in each of the years ended December 31, 2015, 2014 and 2013, 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 $94,468,000, $91,109,000 and $88,164,000, or approximately 45% of our total revenues in each of the
years ended December 31, 2015, 2014 and 2013, respectively. No other tenant accounted for more than 10% of our total revenues. If
we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely
affect our results of operations and financial condition.
7
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.
We are required to comply with OFAC and related requirements and may be required to terminate or otherwise amend our leases,
loans, and other agreements. 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.
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.
We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware,
computer viruses, attachments to e-mails, persons who access our systems from inside or outside our organization, and other
significant disruptions of our IT networks and related systems. The risk of a security breach or disruption, particularly through cyber
attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the
number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our IT networks and
related systems are essential to the operation of our business and our ability to perform day-to-day operations (including managing our
building systems) and, in some cases, may be critical to the operations of certain of our tenants. Although we make efforts to maintain
the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the
risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that
attempted security breaches or disruptions would not be successful or damaging. Even the most well protected information, networks,
systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and
generally are not recognized until launched against a target, and in some cases are designed to not be detected and, in fact, may not be
detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other
preventative measures, and thus it is impossible for us to entirely mitigate this risk.
A security breach or other significant disruption involving our IT networks and related systems could disrupt the proper
functioning of our networks and systems and therefore our operations and/or those of certain of our tenants; result in the unauthorized
access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable
information of ours or others, which others could use to compete against us or which could expose us to damage claims by third-
parties for disruptive, destructive or otherwise harmful purposes and outcomes; result in our inability to maintain the building systems
relied upon by our tenants for the efficient use of their leased space; require significant management attention and resources to remedy
any damages that result; subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other
agreements; or damage our reputation among our tenants and investors generally. Any or all of the foregoing could have a material
adverse effect on our results of operations, financial condition and cash flows.
8
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.
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 per property, 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
($348,000 effective January 1, 2016) 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 and contain customary covenants requiring us to maintain insurance. Although we
believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent
amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are able to obtain, it could
adversely affect our ability to finance or refinance our properties.
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.
9
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.
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-term or long-term.
Declines in the economy or declines in the real estate market in this area could hurt our financial performance and the value of our
properties. In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in
this area include:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
financial performance and productivity of the 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 response to a terrorist attack or the perceived threat of
terrorism, 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 and the effects of climate change could have a concentrated impact on the area which we operate and could
adversely impact our results.
Our investments are in the greater New York City 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, 2015, this investment had a carrying
amount of $43,191,000. 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.
As of December 31, 2015, we had outstanding mortgage indebtedness of $1,059,587,000, secured by four of our properties. 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 a substantial amount of indebtedness that could affect our future operations.
As of December 31, 2015, total debt outstanding was $1,059,587,000. We are subject to the risks normally associated with debt
financing, including the risk that our cash flow from operations will be insufficient to meet required debt service. Our debt service
costs generally will not be reduced if developments at the property, such as the entry of new competitors or the loss of major tenants,
cause a reduction in the income from the property. Should such events occur, our operations may be adversely affected. If a property
is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property
could be foreclosed upon by the mortgagee resulting in a loss of income and a decline in our total asset value.
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, 2015, total debt outstanding was $1,059,587,000 and our ratio of total debt to total enterprise value was
38.4%. “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, 2015, our scheduled cash payments for
principal and interest were $25,547,000. 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:
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
(cid:120)(cid:3)
cause Alexander’s to issue additional authorized but unissued common stock or preferred stock;
classify or reclassify, in one or more series, any unissued preferred stock;
set the preferences, rights and other terms of any classified or reclassified stock that Alexander’s issues; and
increase, without stockholder approval, the number of shares of beneficial interest that Alexander’s may issue.
The Board of Directors could establish a series of preferred stock with terms that could delay, deter or prevent a change in control
of Alexander’s or other transaction that might involve a premium price or otherwise be in the best interest of our stockholders,
although the Board of Directors does not, at present, intend to establish a series of preferred stock of this kind. Alexander’s charter
documents contain other provisions that may delay, deter or prevent a change in control of the Company or other transaction that
might involve a premium price or otherwise be in the best interest of our stockholders.
In addition, Vornado, Interstate and its three general partners (each of whom are both trustees of Vornado and Directors of
Alexander’s) together beneficially own approximately 58.7% of our outstanding shares of common stock. This degree of ownership is
likely to reduce the possibility of a tender offer or an attempt to change control of the Company by a third party.
We may change our policies without obtaining the approval of our stockholders.
Our operating and financial policies, including our policies with respect to acquisitions of real estate or other assets, growth,
operations, indebtedness, capitalization and dividends, are exclusively determined by our Board of Directors. Accordingly, our
stockholders do not control these policies.
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.
As of December 31, 2015, Interstate and its partners owned approximately 7.1% 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.
As of December 31, 2015, 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 are on our Board of 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:
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(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
our financial condition and performance;
the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;
actual or anticipated quarterly fluctuations in our operating results and financial condition;
our dividend policy;
the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to
other equity securities, including securities issued by other real estate companies, and fixed income securities;
uncertainty and volatility in the equity and credit markets;
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, 2015, 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 6,881 shares of common stock are reserved for issuance upon redemption of the deferred stock units
previously granted to our Board of Directors. In addition, 887,859 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, 2015.
Property
Operating Properties:
731 Lexington Avenue
New York, New York
Office
Retail
Rego Park I
Queens, New York
Rego Park II
Queens, New York
Land
Acreage
Building
Occupancy Rent Per
Square Feet
Rate
Square Foot (1)
Tenants
Average
Annualized
Lease Expiration (s)
Original
Term
(2)
Option
Term
(3)
889,000 (4)
100%
$
107.10 (4)
Bloomberg L.P.
2029
2039
83,000
34,000
27,000
30,000
174,000
1,063,000
195,000
50,000
46,000
36,000
16,000
343,000
145,000
135,000
133,000
47,000
149,000
609,000
1.9
4.8
6.6
The Home Depot
The Container Store
Hennes & Mauritz
Various
2025
2021
2019
Various
2035
N/A
N/A
Various
100%
178.09
Sears
Burlington Coat Factory
Bed Bath & Beyond
Marshalls
Old Navy
2021
2022
2021
2021
2021
N/A
2027
N/A
N/A
N/A
100%
37.97
Costco
Century 21
Kohl’s
Toys "R"Us/Babies "R" Us
Various
2034
2030
2030
2021
Various
2059
2050
2050
2036
Various
99%
44.01
The Alexander apartment tower, 312 units
Queens, New York
-
255,000
26%
43.91
Residential
(5)
N/A
Paramus
Paramus, New Jersey
30.3
-
100%
-
IKEA (ground lessee)
2041
N/A
Flushing
Queens, New York (ground leased
through January 2037)
Property to be Developed:
Rego Park III, adjacent to Rego Park II
Queens, New York
1
167,000
100%
16.53
New World Mall LLC
2027
2037
3.2
-
2,437,000
-
-
-
-
-
(1) Represents the contractual weighted average rent per square foot, which excludes the impact of tenant concessions (such as free rent and tenant reimbursements), as of
December 31, 2015. For a discussion of our leasing activity, see Item 7 - Overview - Square Footage, Occupancy and Leasing Activity.
(2) Represents the year in which the tenant's lease expires, without consideration of any renewal or extension options. Lease expiration dates are based on noncancellable
lease terms and do not extend beyond any early termination rights that tenants may have under their lease.
(3) Represents the year in which the tenant's lease expires if all renewal or extension options are exercised.
(4) Reflects building square feet and average annualized rent per square foot resulting from the January 2016 lease amendment. Refer to page 17 for further discussion.
(5) Residential tenants have one year leases.
16
ITEM 2.
PROPERTIES – continued
Operating Properties
731 Lexington Avenue
731 Lexington Avenue, a 1,311,000 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 889,000 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.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015 for a term of
five years, covering 192,000 square feet of office space at our 731 Lexington Avenue property. In January 2016, we entered into a
lease amendment with Bloomberg which extends the lease term related to this space to be coterminous with the other 697,000 square
feet of office space leased by Bloomberg through February 2029, with a ten-year extension option. In connection with the lease
amendment, Bloomberg provided a $200,000,000 letter of credit, which amount may be reduced in certain circumstances. We may
draw on this letter of credit subject to certain terms of the lease amendment, including an event of default by Bloomberg.
The office portion of 731 Lexington Avenue is encumbered by a mortgage loan with a balance of $300,000,000 as of December
31, 2015. The interest-only loan is at LIBOR plus 0.95% (1.28% as of December 31, 2015) and matures in March 2017, with four
one-year extension options. 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%.
In August 2015, we completed a $350,000,000 refinancing of the retail portion of 731 Lexington Avenue. The interest-only loan is
at LIBOR plus 1.40% (1.67% as of December 31, 2015) and matures in August 2020, with two one-year extension options.
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 (1,241 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, 2015. The loan
bears interest at 0.40%, is prepayable at any time without penalty and matures in March 2016.
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
(1,326 spaces) that provides for paid parking.
This center is encumbered by a first mortgage loan with a balance of $263,341,000 as of December 31, 2015. The loan bears
interest at LIBOR plus 1.85% (2.27% as of December 31, 2015) and matures in November 2018.
17
ITEM 2.
PROPERTIES – continued
The Alexander Apartment Tower
The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square
feet. In December 2015, we received an updated temporary certificate of occupancy (“TCO”) covering approximately 93% of the
apartment tower where construction has been substantially completed, and accordingly 93% has been placed in service. We expect to
receive the TCO for the remaining 7% in 2016. During the year ended December 31, 2015, we leased 84 of the 312 units. We expect
to reach stabilized occupancy in 2017.
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 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.
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 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.
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, (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.
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
sales 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
2015
Low
Year Ended December 31,
2014
Dividends
High
Low
Dividends
$
486.25 $
411.49 $
3.50 $
392.54 $
320.50 $
468.25
434.50
410.51
390.56
356.00
360.01
3.50
3.50
3.50
376.17
337.24
411.75
458.00
361.41
373.60
3.25
3.25
3.25
3.25
Quarter
First
Second
Third
Fourth
On January 20, 2016, we increased our regular quarterly dividend to $4.00 per share (a new indicated annual rate of $16.00 per
share). As of January 31, 2016, there were approximately 268 holders of record of our common stock.
Recent Sales of Unregistered Securities
During 2015, 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 2015, 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, 2010 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
$200
$175
$150
$125
$100
$75
2010
2011
2012
2013
2014
2015
Alexander’s
S&P 500 Index
The NAREIT All Equity Index
Alexander’s
S&P 500 Index
The NAREIT All Equity Index
$
100 $
100
100
93 $
102
108
117 $
118
130
121 $
157
133
166 $
178
171
151
181
176
2010
2011
2012
2013
2014
2015
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)
2015
Year Ended December 31,
2013
2014
2012
2011
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
Dividends per common share(3)
$
$
$
$
$
207,915 $
200,814 $
196,459 $
191,312 $
185,246
76,907 $
-
76,907
-
76,907 $
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
15.04 $
15.04
15.04
15.04
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
14.00 $
13.00 $
11.00 $
137.00 $
12.00
Balance sheet data:
Total assets
Real estate, at cost
Accumulated depreciation and amortization
Mortgages payable, net of deferred debt issuance
costs
Total equity
$ 1,447,808 $ 1,418,392 $ 1,454,478 $ 1,476,288 $ 1,763,837
906,907
136,460
1,073,462
1,029,472
225,533
1,053,262
911,792
160,826
1,060,394
993,927
210,025
1,027,956
919,576
185,375
1,046,713
352,880
348,399
333,581
332,153
363,245
(1)
(2)
(3)
Includes the reversal of a portion of the liability for income taxes of $2,561 in 2011.
2012 includes a $599,628 net gain on sale of real estate.
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.
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 seven 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 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. Our
success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.
Year Ended December 31, 2015 Financial Results Summary
Net income for the year ended December 31, 2015 was $76,907,000, or $15.04 per diluted share, compared to $67,925,000, or
$13.29 per diluted share for the year ended December 31, 2014.
Funds from operations (“FFO”) for the year ended December 31, 2015 was $107,648,000, or $21.06 per diluted share, compared
to $96,980,000, or $18.98 per diluted share for the year ended December 31, 2014.
Quarter Ended December 31, 2015 Financial Results Summary
Net income for the quarter ended December 31, 2015 was $23,572,000, or $4.61 per diluted share, compared to $18,161,000, or
$3.55 per diluted share for the quarter ended December 31, 2014.
FFO for the quarter ended December 31, 2015 was $31,730,000, or $6.21 per diluted share, compared to $25,508,000, or $4.99 per
diluted share for the quarter ended December 31, 2014.
22
Overview – continued
Square Footage, Occupancy and Leasing Activity
As of December 31, 2015 our portfolio was comprised of seven properties aggregating 2,437,000 square feet. As of December 31,
2015, our office and retail properties had an occupancy rate of 99.7% and the Alexander apartment tower had an occupancy rate of
25.6%.
Significant Tenants
Bloomberg L.P. (“Bloomberg”) accounted for $94,468,000, $91,109,000 and $88,164,000, or approximately 45% of our total
revenues in each of the years ended December 31, 2015, 2014 and 2013, respectively. No other tenant accounted for more than 10%
of our total revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its
lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of
Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we
access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015 for a term of
five years, covering 192,000 square feet of office space at our 731 Lexington Avenue property. In January 2016, we entered into a
lease amendment with Bloomberg which extends the lease term related to this space to be coterminous with the other 697,000 square
feet of office space leased by Bloomberg through February 2029, with a ten-year extension option. In connection with the lease
amendment, Bloomberg provided a $200,000,000 letter of credit, which amount may be reduced in certain circumstances. We may
draw on this letter of credit subject to certain terms of the lease amendment, including an event of default by Bloomberg.
Financing
In August 2015, we completed a $350,000,000 refinancing of the retail portion of 731 Lexington Avenue. The interest-only loan is
at LIBOR plus 1.40% (1.67% as of December 31, 2015) and matures in August 2020, with two one-year extension options.
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, 2015 and 2014, the carrying
amount of our real estate, net of accumulated depreciation and amortization, was $803,939,000 and $783,902,000, 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. We
capitalize all property operating expenses directly associated with and attributable to, the development and construction of a project,
including interest expense. The capitalization period begins when development activities are underway and ends when it is determined
that the asset is substantially complete and ready for its intended use, which is typically evidenced by the receipt of a temporary
certificate of occupancy. 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 ($918,000 and $1,544,000 as of December 31, 2015 and 2014, 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:
(cid:120)(cid:3) Base Rent – revenue arising from tenant leases. These rents are recognized over the non-cancelable term of the related leases
on a straight-line basis, which includes the effects of rent steps and free rent abatements under the leases. We commence
rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for
its intended use. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are
owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the
lease.
(cid:120)(cid:3) Percentage Rent – revenue arising from retail tenant leases that is contingent upon the sales of tenants exceeding defined
thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales thresholds have
been achieved).
(cid:120)(cid:3) Expense Reimbursements – revenue arising from tenant leases which provide for the recovery of all or a portion of the
operating expenses and real estate taxes of the respective properties. This revenue is accrued in the same periods as the
expenses are incurred.
(cid:120)(cid:3) Parking income – revenue arising from the rental of parking space at our properties. This income is recognized as cash is
received.
Before we recognize revenue, we assess, among other things, its collectibility. If our assessment of the collectibility of revenue
changes, the impact on our consolidated financial statements could be material.
Income Taxes
We operate in a manner intended to enable us to continue to qualify as a 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, 2015 compared to December 31, 2014
Property Rentals
Property rentals were $138,688,000 in the year ended December 31, 2015, compared to $136,628,000 in the prior year, an
increase of $2,060,000. This increase was primarily due to higher straight-line rental income of $979,000 at our 731 Lexington
Avenue property resulting from the extensions of two of Bloomberg’s leases in October 2014 that were scheduled to expire in
December 2015. In addition, there was higher straight-line rental income of $524,000 from a new tenant at our Rego Park II property
and rental income of $364,000 from leasing activity at The Alexander apartment tower, of which 93% was placed in service during the
second half of 2015.
Expense Reimbursements
Tenant expense reimbursements were $69,227,000 in the year ended December 31, 2015, compared to $64,186,000 in the prior
year, an increase of $5,041,000. This increase was primarily due to higher reimbursable real estate taxes and higher reimbursable
operating expenses.
Operating Expenses
Operating expenses were $76,218,000 in the year ended December 31, 2015, compared to $69,897,000 in the prior year, an
increase of $6,321,000. This increase was due to (i) higher real estate taxes of $4,438,000; (ii) higher reimbursable operating
expenses of $1,904,000; and (iii) higher operating expenses of $1,565,000 related to The Alexander apartment tower; partially offset
by (iv) lower bad debt expense of $1,019,000 and lower non-reimbursable expenses of $567,000.
Depreciation and Amortization
Depreciation and amortization was $31,086,000 in the year ended December 31, 2015, compared to $29,196,000 in the prior
year, an increase of $1,890,000. This increase was primarily due to depreciation related to the portion of The Alexander apartment
tower that was placed in service during the second half of 2015.
General and Administrative Expenses
General and administrative expenses were $5,406,000 in the year ended December 31, 2015, compared to $5,032,000 in the prior
year, an increase of $374,000. This increase was primarily due to higher stock-based compensation expense as a result of deferred
stock units granted to a newly appointed member of our Board of Directors during the second quarter of 2015, comprised of an initial
award of $150,000 and a $56,000 annual award.
Interest and Other Income, net
Interest and other income, net was $5,949,000 in the year ended December 31, 2015, compared to $2,434,000 in the prior year,
an increase of $3,515,000. This increase was primarily due to (i) $2,141,000 of dividend income from our investment in common
shares of Macerich and (ii) $2,100,000 of income in connection with a settlement agreement with a former bankrupt tenant at our
Rego Park I property, partially offset by (iii) lease termination income of $800,000 in the prior year.
Interest and Debt Expense
Interest and debt expense was $24,239,000 in the year ended December 31, 2015, compared to $32,068,000 in the prior year, a
decrease of $7,829,000. This decrease was primarily due to (i) savings of $4,160,000 resulting from the refinancing of the retail
portion of 731 Lexington Avenue on August 5, 2015 at LIBOR plus 1.40%, or 1.67% as of December 31, 2015 (the prior loan had a
fixed rate of 4.93%); (ii) savings of $2,081,000 resulting from the refinancing of the office portion of 731 Lexington Avenue on
February 28, 2014 at LIBOR plus 0.95%, or 1.28% as of December 31, 2015 (the prior loan had a fixed rate of 5.33%); and (iii) higher
capitalized interest costs of $883,000 during the current year related to the development of The Alexander apartment tower.
Income Taxes
Income tax expense was $8,000 in the year ended December 31, 2015, compared to an income tax benefit of $341,000 in the
prior year. The income tax benefit in the prior year resulted from a reversal of tax liabilities after 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, representing the reversal of previously
accrued liabilities related to Kings Plaza, which was sold in November 2012.
25
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, 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 year
ended December 31, 2013, 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 2014 as compared to 2013. 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 2014 and 2013 primarily represents the reversal of previously
accrued liabilities related to Kings Plaza which was sold 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. As of December 31, 2015, 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 2.2% 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.
As of December 31, 2015, 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 Alexander apartment tower.
Dividends
On January 20, 2016, we increased our regular quarterly dividend to $4.00 per share (a new indicated annual rate of $16.00 per
share). The new dividend, if continued for all of 2016, would require us to pay out approximately $82,000,000.
The Alexander Apartment Tower
The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square
feet. The estimated cost of this project is approximately $125,000,000, of which $118,540,000 (including a development fee payable to
Vornado) has been incurred as of December 31, 2015. We expect to incur the remaining costs during the first quarter of 2016. In
December 2015, we received an updated TCO covering approximately 93% of the apartment tower where construction has been
substantially completed, and accordingly 93% has been placed in service. We expect to receive the TCO for the remaining 7% in 2016.
During the year ended December 31, 2015, we leased 84 of the 312 units. We expect to reach stabilized occupancy in 2017.
Financing Activities and Contractual Obligations
Below is a summary of our outstanding debt and maturities as of December 31, 2015. We intend to refinance our maturing debt as
it comes due.
Interest
Rate
0.40%
2.90%
2.27%
1.28%
1.67%
Maturity(1)
Mar. 2016
Oct. 2018
Nov. 2018
Mar. 2021
Aug. 2022
Balance
78,246
68,000
263,341
300,000
350,000
1,059,587
(Amounts in thousands)
Rego Park I shopping center (100% cash collateralized)(2)
$
Paramus
Rego Park II shopping center(3)
731 Lexington Avenue, office space(4)
731 Lexington Avenue, retail space(5)
Total
Deferred debt issuance costs, net of accumulated amortization of
$4,267
Total, net
_________________________________________
(1) Represents the extended maturity where we have the unilateral right to extend.
(2) Extended for one year from March 10, 2015.
(3) This loan bears interest at LIBOR plus 1.85%.
(4) This loan bears interest at LIBOR plus 0.95%.
(5) This loan bears interest at LIBOR plus 1.40%.
(6,325)
1,053,262
$
Below is a summary of our contractual obligations and commitments as of December 31, 2015.
One to
Total
Less than
One Year
More than
Three Years Five Years Five Years
Three to
(Amounts in thousands)
Contractual obligations (principal and interest(1)):
Long-term debt obligations
Operating lease obligations
Purchase obligations (primarily construction
commitments)
Commitments:
Standby letters of credit
$
$
$
1,141,723 $
8,758
99,639 $
700
362,339 $
1,592
19,666 $
1,600
660,079
4,866
45
45
-
-
1,150,526 $
100,384 $
363,931 $
21,266 $
-
664,945
2,074 $
2,074 $
- $
- $
-
(1) Interest on variable rate debt is computed using rates in effect as of December 31, 2015.
28
Liquidity and Capital Resources – continued
Commitments and Contingencies
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, 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
($348,000 effective January 1, 2016) 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 and contain customary covenants requiring us to maintain insurance. Although we
believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent
amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are able to obtain, it could
adversely affect our ability to finance our properties.
Rego Park I Litigation
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, (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.
Letters of Credit
Approximately $2,074,000 of standby letters of credit were outstanding as of December 31, 2015.
Other
In October 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an
additional $20,300,000 of transfer taxes (including interest and penalties) in connection with the sale of Kings Plaza in November
2012. We believe that the NYC DOF’s claim is without merit and intend to vigorously contest this assessment. We have determined
that the likelihood of a loss related to this issue is not probable and, after consultation with legal counsel, that the outcome of this
assessment is not expected to have a material adverse effect on our financial position, results of operations or cash flows.
29
Liquidity and Capital Resources – continued
Other – Continued
In October 2015, we entered into a settlement agreement with a former bankrupt tenant at our Rego Park I property. During the
fourth quarter of 2015, we received approximately $2,100,000 from the bankruptcy estate, which is included as “interest and other
income, net” in our consolidated statement of income for the year ended December 31, 2015.
There are various other 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 position, results of operations or cash flows.
Cash Flows
Cash and cash equivalents were $259,349,000 at December 31, 2015, compared to $227,815,000 at December 31, 2014, an
increase of $31,534,000. This increase resulted from (i) $106,201,000 of net cash provided by operating activities partially offset by
(ii) $48,839,000 of net cash used in financing activities and (iii) $25,828,000 of net cash used in investing activities.
Year Ended December 31, 2015
Net cash provided by operating activities of $106,201,000 was comprised of net income of $76,907,000 and $32,853,000 of
adjustments for non-cash items, partially offset by $3,559,000 for the net change in operating assets and liabilities. The adjustments
for non-cash items were primarily comprised of depreciation and amortization of $33,671,000, partially offset by straight-lining of
rental income of $1,418,000.
Net cash used in investing activities of $25,828,000 was primarily comprised of construction in progress and real estate additions
of $50,121,000 (primarily related to The Alexander apartment tower) partially offset by proceeds of $24,998,000 from short-term
investments that matured during the second quarter of 2015.
Net cash used in financing activities of $48,839,000 was primarily comprised of (i) debt repayments of $323,193,000 (primarily
repayment of the prior loan on the retail portion of 731 Lexington Avenue) and (ii) dividends paid of $71,571,000, partially offset by
(iii) $350,000,000 of proceeds from the refinancing of the retail portion of 731 Lexington Avenue in August 2015.
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 The Alexander 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.
30
Liquidity and Capital Resources – continued
Year Ended December 31, 2013
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.
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 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 for the year ended December 31, 2015 was $107,648,000, or $21.06 per diluted share, compared to $96,980,000, or $18.98
per diluted share for the prior year.
FFO for the quarter ended December 31, 2015 was $31,730,000, or $6.21 per diluted share, compared to $25,508,000, or $4.99 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
Depreciation and amortization of real property
FFO
FFO per diluted share
For the Year Ended
December 31,
For the Quarter Ended
December 31,
2015
2014
2015
2014
76,907 $
30,741
107,648 $
67,925 $
29,055
96,980 $
23,572 $
8,158
31,730 $
18,161
7,347
25,508
21.06 $
18.98 $
6.21 $
4.99
$
$
$
Weighted average shares used in computing FFO per diluted share
5,112,352
5,110,628
5,113,077
5,111,201
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.
2015
2014
(Amounts in thousands, except per share amounts)
Variable rate
Fixed rate
December 31,
Balance
Weighted
Average
Interest Rate
Effect of 1%
Change in
Base Rates
December 31,
Balance
$
$
913,341
146,246
1,059,587
1.71% $
1.56%
1.69% $
9,133 $
-
9,133 $
566,534
466,246
1,032,780
Weighted
Average
Interest Rate
1.54%
3.87%
2.59%
Total effect on diluted earnings per share
$
1.79
As of December 31, 2015 and 2014, we had 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, 2015 and 2014, the estimated fair value of our consolidated debt was $1,054,000,000 and $1,025,000,000, 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 as of December 31, 2015 and 2014
Consolidated Statements of Income for the
Years Ended December 31, 2015, 2014 and 2013
Consolidated Statements of Comprehensive Income for the
Years Ended December 31, 2015, 2014 and 2013
Consolidated Statements of Changes in Equity for the
Years Ended December 31, 2015, 2014 and 2013
Consolidated Statements of Cash Flows for the
Years Ended December 31, 2015, 2014 and 2013
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, 2015 and 2014, 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, 2015. 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 as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2015, 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, 2015, 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 16, 2016 expressed an unqualified opinion on the Company’s internal control over financial reporting.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 16, 2016
35
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
ASSETS
Real estate, at cost:
Land
Buildings and leasehold improvements
Development and construction in progress
Total
Accumulated depreciation and amortization
Real estate, net
Cash and cash equivalents
Short-term investments
Restricted cash
Marketable securities
Tenant and other receivables, net of allowance for doubtful accounts of $918 and $1,544, respectively
Receivable arising from the straight-lining of rents
Deferred lease and other property costs, net, including unamortized leasing fees to Vornado of
$33,482 and $33,974, respectively
Other assets
LIABILITIES AND EQUITY
Mortgages payable, net of deferred debt issuance costs
Amounts due to Vornado
Accounts payable and accrued expenses
Other liabilities
Total liabilities
Commitments and contingencies
Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares;
issued and outstanding, none
Common stock: $1.00 par value per share; authorized, 10,000,000 shares;
issued, 5,173,450 shares; outstanding, 5,106,196 shares
Additional capital
Retained earnings
Accumulated other comprehensive income
Treasury stock: 67,254 shares, at cost
Total equity
$
December 31,
2015
2014
44,971 $
975,015
9,486
1,029,472
(225,533)
803,939
259,349
-
85,307
43,191
4,014
181,357
44,971
873,667
75,289
993,927
(210,025)
783,902
227,815
24,998
84,602
44,646
2,213
179,939
45,840
24,811
$ 1,447,808 $
46,561
23,716
1,418,392
$ 1,053,262 $
8,551
30,158
2,957
1,094,928
1,027,956
3,922
35,127
2,988
1,069,993
-
-
5,173
30,739
304,340
13,002
353,254
(374)
352,880
$ 1,447,808 $
5,173
30,139
299,004
14,457
348,773
(374)
348,399
1,418,392
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,
2014
2015
2013
REVENUES
Property rentals
Expense reimbursements
Total revenues
EXPENSES
Operating, including fees to Vornado of $4,476, $4,516, and $4,196, respectively
Depreciation and amortization
General and administrative, including management fees to Vornado of $2,380
in each year
Total expenses
OPERATING INCOME
Interest and other income, net
Interest and debt expense
Income before income taxes
Income tax (expense) benefit
Income from continuing operations
Income from discontinued operations
Net income
Income per common share - basic and diluted:
Income from continuing operations
Income from discontinued operations
Net income per common share
Weighted average shares outstanding
$
138,688 $
69,227
207,915
136,628 $
64,186
200,814
135,908
60,551
196,459
76,218
31,086
69,897
29,196
5,406
112,710
5,032
104,125
64,930
28,987
5,026
98,943
95,205
96,689
97,516
5,949
(24,239)
76,915
(8)
76,907
-
76,907 $
2,434
(32,068)
67,055
341
67,396
529
67,925 $
1,527
(44,540)
54,503
160
54,663
2,252
56,915
15.04 $
-
15.04 $
13.19 $
0.10
13.29 $
10.70
0.44
11.14
$
$
$
5,112,352
5,110,628
5,109,055
See notes to consolidated financial statements.
37
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Year Ended December 31,
2014
2015
2013
Net income
Other comprehensive income:
Change in unrealized net gain on available-for-sale securities
Change in value of interest rate cap
Comprehensive income
$
76,907 $
67,925 $
56,915
(1,455)
-
75,452 $
13,124
(189)
80,860 $
316
-
57,231
$
See notes to consolidated financial statements.
38
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)
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
Balance, December 31, 2014
Net income
Dividends paid
Change in unrealized net gain
on available-for-sale securities
Deferred stock unit grant
Balance, December 31, 2015
Common Stock
Shares
Amount
Additional
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income
Treasury
Stock
Total
Equity
5,173 $
-
-
5,173 $
-
-
29,352 $
-
-
296,797 $
56,915
(56,197)
-
-
-
5,173
-
-
-
-
-
5,173
-
-
-
-
-
5,173
-
-
-
-
-
5,173
-
-
-
394
(1)
29,745
-
-
-
-
394
30,139
-
-
-
-
-
297,515
67,925
(66,436)
-
-
-
299,004
76,907
(71,571)
-
-
-
-
-
600
-
-
1,206
-
-
316
-
-
1,522
-
-
13,124
(189)
-
14,457
-
-
(1,455)
-
$
(375) $
-
-
-
-
1
(374)
-
-
-
-
-
(374)
-
-
-
-
332,153
56,915
(56,197)
316
394
-
333,581
67,925
(66,436)
13,124
(189)
394
348,399
76,907
(71,571)
(1,455)
600
5,173 $
5,173 $
30,739 $
304,340 $
13,002
$
(374) $
352,880
39
ALEXANDER’S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Year Ended December 31,
2014
2015
2013
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
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
Proceeds from maturing (purchases of) short-term investments
Restricted cash
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Debt repayments
Proceeds from borrowing
Dividends paid
Debt issuance costs
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
$
76,907 $
67,925 $
56,915
33,671
(1,418)
600
-
(1,801)
(4,777)
2,228
822
(31)
106,201
31,919
(2,538)
394
(420)
712
(4,334)
(42,779)
(1,373)
(19)
49,487
(50,121)
24,998
(705)
(25,828)
(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)
(323,193)
350,000
(71,571)
(4,075)
(48,839)
(317,179)
300,000
(66,436)
(4,255)
(87,870)
(15,957)
-
(56,197)
(87)
(72,241)
31,534
227,815
$ 259,349 $
(119,903)
347,718
227,815 $
(5,678)
353,396
347,718
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest, excluding capitalized interest of $1,486 and $603
in 2015 and 2014, respectively
$
22,354 $
30,656 $
42,121
NON-CASH TRANSACTIONS
Liability for real estate additions, including $5,795 and $3,394 due to Vornado
in 2015 and 2014, respectively
Write-off of fully amortized and/or depreciated assets
$
10,139 $
20,786
13,529 $
10,626
1,084
-
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 seven properties in the greater New York City metropolitan area consisting of:
Operating properties
(cid:120)
731 Lexington Avenue, a 1,311,000 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 889,000 and 174,000 of
net rentable square feet of office and retail space, respectively, which we own, and 248,000 square feet of residential space
consisting of 105 condominium units, which we sold. Bloomberg L.P. (“Bloomberg”) occupies all of the office space. The
Home Depot (83,000 square feet), The Container Store (34,000 square feet) and Hennes & Mauritz (27,000 square feet) are
the principal retail tenants;
(cid:120) Rego Park I, a 343,000 square foot shopping center, located on Queens Boulevard and 63rd Road in Queens. The center is
anchored by a 195,000 square foot Sears department store, a 50,000 square foot Burlington Coat Factory, a 46,000 square
foot Bed Bath & Beyond and a 36,000 square foot Marshalls;
(cid:120) Rego Park II, a 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;
(cid:120) The Alexander apartment tower, located above our Rego Park II shopping center, contains 312 units aggregating 255,000 square
feet. In December 2015, we received an updated temporary certificate of occupancy (“TCO”) covering approximately 93% of
the apartment tower where construction has been substantially completed, and accordingly 93% has been placed in service. We
expect to receive the TCO for the remaining 7% in 2016. During the year ended December 31, 2015, we leased 84 of the 312
units. We expect to reach stabilized occupancy in 2017;
(cid:120) Paramus, located at the intersection of Routes 4 and 17 in Paramus, New Jersey, consists of 30.3 acres of land that is leased
to IKEA Property, Inc.; and
(cid:120) 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 to be developed
(cid:120) 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 did not 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, 2017. We are currently evaluating the impact of the
adoption of ASU 2014-09 on our consolidated financial statements.
In April 2015, the FASB issued an update (“ASU 2015-03”) Simplifying the Presentation of Debt Issuance Costs to ASC Topic
835, Interest. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying
amount of the debt liability to which they relate, consistent with debt discounts, as opposed to being presented as assets. ASU 2015-
03 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2015. We elected to early adopt
ASU 2015-03 effective as of December 31, 2015 with retrospective application to our December 31, 2014 consolidating balance sheet.
The effect of the adoption of ASU 2015-03 was to reclassify deferred debt issuance costs, net of accumulated amortization, of
approximately $4,824,000 as of December 31, 2014 from “deferred debt issuance costs” to a contra account as a deduction from the
related mortgages payable. There was no effect on our consolidated statements of income.
In January 2016, the FASB issued an update (“ASU 2016-01”) Recognition and Measurement of Financial Assets and Financial
Liabilities to ASC Topic 825, Financial Instruments. ASU 2016-01 amends certain aspects of recognition, measurement, presentation
and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in
fair value recognized in net income. ASU 2016-01 is effective for interim and annual reporting periods in fiscal years beginning after
December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2016-01 on our consolidated financial
statements.
42
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Real Estate – Real estate is carried at cost, net of accumulated depreciation and amortization. As of December 31, 2015 and 2014,
the carrying amount of our real estate, net of accumulated depreciation and amortization, was $803,939,000 and $783,902,000,
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. We
capitalize all property operating expenses directly associated with and attributable to, the development and construction of a project,
including interest expense. The capitalization period begins when development activities are underway and ends when it is determined
that the asset is substantially complete and ready for its intended use, which is typically evidenced by the receipt of a TCO. General
and administrative costs are expensed as incurred.
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.
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 ($918,000 and $1,544,000 as of
December 31, 2015 and 2014, 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.
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.
43
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
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.
Income Taxes – We operate in a manner intended to enable us to continue to qualify as a 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 year ended December 31, 2015 were
characterized, for federal income taxes, as 97.3% ordinary income and 2.7% long-term capital gain income. 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, 2015, 2014 and
2013.
(Unaudited and in thousands)
Net income
Straight-line rent adjustments
Depreciation and amortization timing differences
Reversal of liability for income taxes
Other
Year Ended December 31,
2015
2014
2013
$
76,907 $
(1,418)
2,477
-
751
67,925 $
(2,538)
2,283
(420)
765
56,915
(3,707)
2,134
(206)
(2,186)
Estimated taxable income
$
78,717 $
68,015 $
52,950
As of December 31, 2015, the net basis of our assets and liabilities for tax purposes are approximately $200,876,000 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
As of December 31, 2015, 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. As of December 31, 2015, 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 2.2% 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) $289,000,
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 Alexander 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 and 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.
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 various agreements discussed above.
(Amounts in thousands)
Company management fees
Development fees
Leasing fees
Property management fees and payments for cleaning, engineering
and security services
Year Ended December 31,
2014
2015
2013
$
2,800 $
2,435
2,950
2,800 $
3,394
1,430
3,614
3,658
$
11,799 $
11,282 $
2,800
-
1,126
3,415
7,341
As of December 31, 2015, the amounts due to Vornado were $5,795,000 for development fees; $283,000 for management,
property management, cleaning and security fees; and $2,473,000 for leasing fees. As of December 31, 2014, the amounts due to
Vornado were $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 Regional Shopping Center (“Kings Plaza”) located in Brooklyn,
New York, to Macerich, for $751,000,000. Net proceeds from the sale, after repaying an existing loan and closing costs, were
$479,000,000, of which $30,000,000 was in Macerich common shares. In connection with the sale, we deferred $2,348,000 of the net
gain based upon our ownership of the Macerich common shares. The deferred gain will be recognized upon the disposition of the
Macerich common shares.
In accordance with the provisions of ASC 360, Property, Plant and Equipment, we have classified the revenues and expenses of
Kings Plaza as “income from discontinued operations” for all of the periods presented on our consolidated statements of income. As a
result, our consolidated statements of income reflect $529,000 and $2,252,000 as “income from discontinued operations” for the years
ended December 31, 2014 and 2013, respectively, representing interest and other income, net.
46
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5.
MARKETABLE SECURITIES
As of December 31, 2015 and 2014, 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, 2015 and 2014, the fair value of these shares were $43,191,000 and $44,646,000, respectively, based on Macerich’s
closing share price of $80.69 per share and $83.41 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 losses of $1,455,000 and unrealized gains of $13,124,000 for the years ended
December 31, 2015 and 2014, respectively.
In October 2015, we recognized $2,141,000 of dividend income as a result of special common dividends declared by Macerich,
which is included as a component of “interest and other income, net,” in our consolidated statement of income for the year ended
December 31, 2015.
6. MORTGAGES PAYABLE
In February 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. 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%.
In August 2015, we completed a $350,000,000 refinancing of the retail portion of 731 Lexington Avenue. The interest-only loan is
at LIBOR plus 1.40% and matures in August 2020, with two one-year extension options.
The following is a summary of our outstanding mortgages payable. We intend to refinance our maturing debt as it comes due.
(Amounts in thousands)
First mortgages secured by:
Rego Park I shopping center (100% cash
collateralized)(2)
Paramus
Rego Park II shopping center(3)
731 Lexington Avenue, office space(4)
731 Lexington Avenue, retail space
Total
Deferred debt issuance costs, net of accumulated
amortization of $4,267 and $11,295, respectively
Maturity(1)
Interest Rate at
December 31, 2015
Balance at December 31,
2014
2015
Mar. 2016
0.40 %
$
78,246 $
78,246
Oct. 2018
Nov. 2018
Mar. 2021
Aug. 2022
2.90 %
2.27 %
1.28 %
1.67 %
68,000
263,341
300,000
350,000 (5)
1,059,587
68,000
266,534
300,000
320,000
1,032,780
(6,325)
1,053,262 $
(4,824)
1,027,956
$
___________________
(1) Represents the extended maturity where we have the unilateral right to extend.
(2) Extended for one year from March 10, 2015.
(3) This loan bears interest at LIBOR plus 1.85%.
(4) This loan bears interest at LIBOR plus 0.95%.
(5) This loan bears interest at LIBOR plus 1.40%.
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 $684,054,000 at December 31, 2015. 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, 2015, the principal repayments for the
next five years and thereafter are as follows:
(Amounts in thousands)
Year Ending December 31,
2016
2017
2018
2019
2020
Thereafter
47
$
Amount
81,686
3,707
324,194
-
-
650,000
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 as of December 31, 2015 and 2014 consist 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
as of December 31, 2015 and 2014.
(Amounts in thousands)
Marketable securities
Total assets
(Amounts in thousands)
Marketable securities
Short-term investments
Interest rate cap (included in other assets)
Total assets
As of December 31, 2015
Total
Level 1
Level 2
Level 3
$
$
$
$
43,191
43,191
Total
44,646
24,998
11
69,655
$
$
$
$
43,191
$
43,191
$
-
-
As of December 31, 2014
Level 1
Level 2
44,646
24,998
-
69,644
$
$
-
-
11
11
$
$
$
$
-
-
Level 3
-
-
-
-
Financial Assets and Liabilities not Measured at Fair Value
Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents and
mortgages payable. Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities. 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 fair value of cash
equivalents is classified as Level 1 and the fair value of mortgages payable is classified as Level 2. The table below summarizes the
carrying amounts and fair value of these financial instruments as of December 31, 2015 and 2014.
(Amounts in thousands)
Assets:
Cash equivalents
As of December 31, 2015
As of December 31, 2014
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
$
226,476 $
226,476 $
111,590 $
111,590
Liabilities:
Mortgages payable (excluding deferred debt issuance costs, net) $
1,059,587 $
1,054,000 $
1,032,780 $
1,025,000
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,
2016
2017
2018
2019
2020
Thereafter
$
Amount
139,327
137,695
137,799
136,879
133,507
950,523
These future minimum amounts do not include additional rents based on a percentage of retail tenants’ sales. For the years ended
December 31, 2015, 2014, and 2013, these rents were $94,000, $108,000, and $416,000, respectively.
Bloomberg accounted for $94,468,000, $91,109,000 and $88,164,000, or approximately 45% of our total revenues in each of the
years ended December 31, 2015, 2014 and 2013, respectively. No other tenant accounted for more than 10% of our total revenues. If
we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely
affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s
creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and
evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.
In October 2014, Bloomberg exercised its option to extend leases that were scheduled to expire in December 2015 for a term of
five years covering 192,000 square feet of office space at our 731 Lexington Avenue property. In January 2016, we entered into a
lease amendment with Bloomberg which extends the lease term related to this space to be coterminous with the other 697,000 square
feet of office space leased by Bloomberg through February 2029, with a ten-year extension option. In connection with the lease
amendment, Bloomberg provided a $200,000,000 letter of credit, which amount may be reduced in certain circumstances. We may
draw on this letter of credit subject to certain terms of the lease amendment, including an event of default by Bloomberg. Upon
execution of the lease amendment in January 2016, an $8,916,000 leasing commission was due of which $7,200,000 was to a third
party broker and $1,716,000 was to Vornado.
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,
2016
2017
2018
2019
2020
Thereafter
$
Amount
700
792
800
800
800
4,866
Rent expense was $746,000 in each of the years ended December 31, 2015, 2014 and 2013.
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, 2015, there were 6,881 DSUs outstanding and 887,859 shares were available for future grant. We account for all
stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation.
In May 2015, we granted each of the members of our Board of Directors 176 DSUs with a grant date fair value of $56,250 per
grant, or $450,000 in the aggregate. In addition, 468 DSUs, constituting an initial award with a grant date fair value of $150,000, were
granted to a newly appointed Director. The DSUs entitle the holders to receive shares of the Company’s common stock without the
payment of any consideration. The DSUs vested immediately and accordingly, were expensed on the date of grant, but the shares of
common stock underlying the DSUs are not deliverable to the grantee until the grantee is no longer serving on the Company’s Board
of Directors.
10. COMMITMENTS AND CONTINGENCIES
Insurance
We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, 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
($348,000 effective January 1, 2016) 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 and contain customary covenants requiring us to maintain insurance. Although we
believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent
amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are able to obtain, it could
adversely affect our ability to finance our properties.
Rego Park I Litigation
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, (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.
50
ALEXANDER’S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. COMMITMENTS AND CONTINGENCIES – continued
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 $2,074,000 of standby letters of credit were issued and outstanding as of December 31, 2015.
Other
In October 2015, the New York City Department of Finance (“NYC DOF”) issued a Notice of Determination to us assessing an
additional $20,300,000 of transfer taxes (including interest and penalties) in connection with the sale of Kings Plaza in November
2012. We believe that the NYC DOF’s claim is without merit and intend to vigorously contest this assessment. We have determined
that the likelihood of a loss related to this issue is not probable and, after consultation with legal counsel, that the outcome of this
assessment is not expected to have a material adverse effect on our financial position, results of operations or cash flows.
In October 2015, we entered into a settlement agreement with a former bankrupt tenant at our Rego Park I property. During the
fourth quarter of 2015, we received approximately $2,100,000 from the bankruptcy estate, which is included as “interest and other
income, net” in our consolidated statement of income for the year ended December 31, 2015.
There are various other 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 position, 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, 2015, our
subsidiaries’ participation in these plans were not significant to our consolidated financial statements.
In the years ended December 31, 2015, 2014 and 2013 our subsidiaries contributed $144,000, $144,000 and $138,000,
respectively, towards Multiemployer Pension Plans. Our subsidiaries’ contributions did not represent more than 5% of total employer
contributions in any of these plans for the years ended December 31, 2015, 2014 and 2013.
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, 2015, 2014 and 2013 our subsidiaries contributed $554,000, $533,000 and $499,000, respectively,
towards these plans.
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, 2015, 2014 and 2013.
(Amounts in thousands, except share and per share amounts)
Income from continuing operations
Income from discontinued operations
Net income – basic and diluted
Weighted average shares outstanding – basic and diluted
Income from continuing operations
Income from discontinued operations
Net income per common share – basic and diluted
13. SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
For the Year Ended December 31,
2014
2013
2015
$
$
$
$
76,907 $
-
76,907 $
67,396 $
529
67,925 $
54,663
2,252
56,915
5,112,352
5,110,628
5,109,055
15.04 $
-
15.04 $
13.19 $
0.10
13.29 $
10.70
0.44
11.14
(Amounts in thousands, except per share amounts)
2015
December 31
September 30
June 30
March 31
2014
December 31
September 30
June 30
March 31
Revenues
Net Income
Basic
Diluted
Net Income Per
Common Share(1)
$
$
52,819 $
52,414
50,646
52,036
51,286 $
50,077
49,983
49,468
$
23,572
18,172
17,341
17,822
18,161 $
17,692
16,828
15,244
4.61 $
3.55
3.39
3.49
3.55 $
3.46
3.29
2.98
4.61
3.55
3.39
3.49
3.55
3.46
3.29
2.98
_______________________
(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, 2015, 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, 2015 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, 2015 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, 2015.
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, 2015, 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,
2015, 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, 2015 of the Company
and our report dated February 16, 2016 expressed an unqualified opinion on those financial statements and financial statement
schedules.
/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 16, 2016
55
ITEM 9B. OTHER INFORMATION
None.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
PART III
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, 2015. 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
74
Joseph Macnow
70
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, 2015, regarding our equity compensation.
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
6,881 $
N/A
6,881 $
-
N/A
-
887,859
N/A
887,859
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, 2015, 2014 and 2013
Schedule III – Real Estate and Accumulated Depreciation as of
December 31, 2015, 2014 and 2013
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.
12
21
23
31.1
31.2
32.1
32.2
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
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 16, 2016
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.
Signature
Title
By:
/s/Steven Roth
(Steven Roth)
Chairman of the Board of Directors and
Chief Executive Officer
(Principal Executive Officer)
By:
/s/Joseph Macnow
(Joseph Macnow)
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
By:
/s/Thomas R. DiBenedetto
Director
(Thomas R. DiBenedetto)
Date
February 16, 2016
February 16, 2016
February 16, 2016
By:
/s/David Mandelbaum
Director
February 16, 2016
(David Mandelbaum)
By:
/s/Arthur Sonnenblick
Director
February 16, 2016
(Arthur Sonnenblick)
By:
/s/Neil Underberg
Director
February 16, 2016
(Neil Underberg)
By:
/s/Richard R. West
Director
February 16, 2016
(Richard R. West)
By:
/s/Russell B. Wight Jr.
Director
February 16, 2016
(Russell B. Wight Jr)
By:
/s/Wendy Silverstein
Director
February 16, 2016
(Wendy Silverstein)
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, 2015
$
1,544 $
(314) $
(312) $
918
Year Ended December 31, 2014
$
1,993 $
705 $
(1,154) $
1,544
Year Ended December 31, 2013
$
2,219 $
348 $
(574) $
1,993
60
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(
ALEXANDER’S, INC. AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
REAL ESTATE:
Balance at beginning of period
Changes 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
2015
December 31,
2014
2013
$
993,927 $
919,576 $
911,792
-
112,538
(65,803)
1,040,662
(11,190)
$ 1,029,472 $
-
4,043
70,365
993,984
(57)
993,927 $
-
5,072
2,712
919,576
-
919,576
$
$
210,025 $
26,698
236,723
(11,190)
225,533 $
185,375 $
24,707
210,082
(57)
210,025 $
160,826
24,549
185,375
-
185,375
62
3.1
3.2
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Exhibit
No.
EXHIBIT INDEX
- Amended and Restated Certificate of Incorporation. Incorporated herein by reference from Exhibit 3.1
*
to the registrant’s Registration Statement on Form S-3 filed on September 20, 1995
- By-laws, as amended. Incorporated herein by reference from Exhibit 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
*
*
*
*
*
*
*
*
*
*
10.10
- Reimbursement Agreement, dated as of July 3, 2002, by and between Alexander’s, Inc., 731
Commercial LLC, 731 Residential LLC and Vornado Realty, L.P. Incorporated herein by reference
from Exhibit 10(i)(C)(8) to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2002, filed on August 7, 2002
*
___________________
Incorporated by reference.
63
10.11
10.12
- 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
10.21
10.22
- Second Amendment to Real Estate Retention Agreement, dated as of January 1, 2007, by and between
Alexander’s, Inc. and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.64 to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, filed on February 26,
2007
- Amendment to 59th Street Real Estate Retention agreement, dated as of January 1, 2007, by and among
Vornado Realty L.P., 731 Retail One LLC, 731 Restaurant LLC, 731 Office One LLC and 731 Office
Two LLC. Incorporated herein by reference from Exhibit 10.65 to the registrant’s Annual Report on
Form 10-K for the year ended December 31, 2006, filed on February 26, 2007
- First Amendment to Amended and Restated Management and Development Agreement, dated as of July
6, 2005, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado Management
Corp. Incorporated herein by reference from Exhibit 10.52 to the registrant’s Annual Report on Form
10-K, for the year ended December 31, 2007, filed on February 25, 2008
- Second Amendment to Amended and Restated Management and Development Agreement, dated as of
December 20, 2007, by and between Alexander’s, Inc., the subsidiaries party thereto and Vornado
Management Corp. Incorporated herein by reference from Exhibit 10.53 to the registrant’s Annual
Report on Form 10-K, for the year ended December 31, 2007, filed on February 25, 2008
- Third Amendment to Real Estate Retention Agreement, dated as of December 20, 2007, by and between
Alexander’s, Inc., and Vornado Realty L.P. Incorporated herein by reference from Exhibit 10.55 to the
registrant’s Annual Report on Form 10-K, for the year ended December 31, 2007, filed on February 25,
2008
- Loan Agreement dated as of March 10, 2009 between Alexander’s Rego Park Shopping Center Inc., as
Borrower and U.S. Bank National Association, as Lender. Incorporated herein by reference from
Exhibit 10.55 to the registrant’s Quarterly Report on for 10-Q for the quarter ended March 31, 2009,
filed on May 4, 2009
- Amended and Restated Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and
Rentals by and between Alexander’s Rego Shopping Center, Inc. as Borrower and U.S. Bank National
Association as Lender, dated as of March 10, 2009. Incorporated herein by reference from Exhibit
10.56 to the registrant’s Quarterly Report on for 10-Q for the quarter ended March 31, 2009, filed on
May 4, 2009
*
*
*
*
*
*
*
___________________
Incorporated by reference.
Management contract or compensatory agreement.
*
**
64
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
10.45
- 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
- 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
*
*
*
*
*
*
*
*
*
*
*
*
__________________
* Incorporated by reference.
** Management contract or compensatory agreement.
66
10.46
10.47
10.48
10.49
10.50
10.51
10.52
10.53
10.54
10.55
10.56
10.57
- 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
Commercial 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
Management 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
- 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
- Fourth Amendment to Real Estate Retention Agreement, dated December 22, 2014 by and between
Alexander's, Inc. and Vornado Realty, L.P. Incorporated herein by reference from exhibit 10.56 to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on February 17,
2015
- 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.
Incorporated herein by reference from exhibit 10.57 to the registrant’s Annual Report on Form 10-K for
the year ended December 31, 2014, filed on February 17, 2015
*
*
*
*
*
*
*
*
*
*
*
*
__________________
*
Incorporated by reference.
67
10.58
10.59
10.60
10.61
10.62
12
21
23
31.1
31.2
32.1
32.2
- 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. Incorporated herein by reference from exhibit 10.58
to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on
February 17, 2015
- First Amendment to Real-Estate Sub-Retention Agreement, dated December 22, 2014 by and between
Alexander's Management LLC and Vornado Realty, L.P. Incorporated herein by reference from exhibit
10.59 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on
February 17, 2015
- Third Omnibus Loan Modification and Extension Agreement, dated March 10, 2015, 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 10.1 to the registrant’s Quarterly Report on Form 10-Q,
filed on May 4, 2015
- Third Mortgage Modification Agreement, dated March 10, 2015, 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 10.2 to the registrant’s Quarterly Report on Form 10-Q, filed on May
4, 2015
- Loan Agreement, dated as of August 5, 2015, by and between 731 Retail One LLC and 731
Commercial LLC, as Borrower, and JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and
Landesbank Baden-Württemberg, New York Branch, as Lenders. Incorporated herein by reference
from exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q, filed on November 2, 2015
*
*
*
*
*
- 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 and Chief Executive
Officer, Vornado Realty Trust; Partner, Interstate
Properties
Thomas R. DiBenedetto*
President, Boston International Group, Inc.; President,
Junction Investors Ltd.; Managing Director, Olympic
Partners
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 Capital 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 19,
2016 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, 2015. In addition, as required by
Section 303A.12(a) of the New York Stock Exchange
(NYSE) Listed Company Manual, on July 7, 2015,
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