alx-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from:						to


Commission File Number:			001-06064

ALEXANDERS INC

(Exact name of registrant as specified in its charter)

Delaware

51-0100517

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

210 Route 4 East,

Paramus,

New Jersey

07652

(Address of principal executive offices)

(Zip Code)


(201)			587-8541

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1 par value per share

ALX

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


☐	Large Accelerated Filer	☑	Accelerated Filer
☐	Non-Accelerated Filer	☐	Smaller Reporting Company
		☐	Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of October 29, 2021, there were 5,107,290 shares of common stock, par value $1 per share, outstanding.

ALEXANDER’S, INC.

INDEX


		Page Number
PART I.	Financial Information

Item 1.	Financial Statements:

	Consolidated Balance Sheets (Unaudited) as of September 30, 2021 and December 31, 2020	4

	Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020	5

	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020	6

	Consolidated Statements of Changes in Equity (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020	7

	Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2021 and 2020	8

	Notes to Consolidated Financial Statements (Unaudited)	9

	Report of Independent Registered Public Accounting Firm	16

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Controls and Procedures	25

PART II.	Other Information

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	26

Exhibit Index		27

Signatures		28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

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


ASSETS	September 30, 2021		December 31, 2020
Real estate, at cost:
Land	$	44,804	$	44,971
Buildings and leasehold improvements	1,013,011		1,014,311
Development and construction in progress	18,945		11,761
Total	1,076,760		1,071,043
Accumulated depreciation and amortization	(364,290)		(350,122)
Real estate, net	712,470		720,921
Cash and cash equivalents	448,913		428,710
Restricted cash	20,858		21,167
Marketable securities	9,435		6,024
Tenant and other receivables	6,619		8,116
Receivable arising from the straight-lining of rents	137,863		145,274
Deferred leasing costs, net, including unamortized leasing fees to Vornado of $24,633 and $27,851, respectively	32,265		36,524
Other assets	45,163		37,402
	$	1,413,586	$	1,404,138


LIABILITIES AND EQUITY
Mortgages payable, net of deferred debt issuance costs	$	1,157,263	$	1,156,170
Amounts due to Vornado	2,092		1,516
Accounts payable and accrued expenses	53,200		35,342
Other liabilities	6,720		7,882
Total liabilities	1,219,275		1,200,910

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, 5,107,290 shares	5,173		5,173
Additional capital	33,415		32,965
Retained earnings	152,186		166,165
Accumulated other comprehensive income (loss)	3,905		(707)
	194,679		203,596
Treasury stock: 66,160 shares, at cost	(368)		(368)
Total equity	194,311		203,228
	$	1,413,586	$	1,404,138

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
REVENUES
Rental revenues	$	48,950	$	43,499	$	156,491	$	143,087
EXPENSES
Operating, including fees to Vornado of $1,536, $1,177, $4,585 and $3,795, respectively	(21,433)		(22,448)		(68,655)		(63,979)
Depreciation and amortization	(9,008)		(7,587)		(25,682)		(23,129)
General and administrative, including management fees to Vornado of $595 and $1,785 in each three and nine month period, respectively	(1,272)		(1,386)		(4,638)		(4,948)
Total expenses	(31,713)		(31,421)		(98,975)		(92,056)


Interest and other income, net	157		220		480		2,473
Interest and debt expense	(5,124)		(4,463)		(15,350)		(19,208)
Change in fair value of marketable securities	(869)		(1,231)		3,411		(10,789)
Net gain on sale of real estate	—		—		9,124		—
Net income	$	11,401	$	6,604	$	55,181	$	23,507


Net income per common share - basic and diluted	$	2.22	$	1.29	$	10.77	$	4.59

Weighted average shares outstanding - basic and diluted	5,124,478		5,122,206		5,123,321		5,120,490

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(Amounts in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	11,401	$	6,604	$	55,181	$	23,507
Other comprehensive income (loss):
Change in fair value of interest rate derivatives	165		(14)		4,612		7
Comprehensive income	$	11,566	$	6,590	$	59,793	$	23,514

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

(Amounts in thousands, except per share amounts)


				Additional Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Equity
	Common Stock
	Shares	Amount

Three Months Ended September 30, 2021
Balance, June 30, 2021	5,173	$	5,173	$	33,415	$	163,845	$	3,740	$	(368)	$	205,805
Net income	—	—		—		11,401		—		—		11,401
Dividends paid ($4.50 per common share)	—	—		—		(23,060)		—		—		(23,060)
Change in fair value of interest rate derivatives	—	—		—		—		165		—		165
Balance, September 30, 2021	5,173	$	5,173	$	33,415	$	152,186	$	3,905	$	(368)	$	194,311

Three Months Ended September 30, 2020
Balance, June 30, 2020	5,173	$	5,173	$	32,965	$	187,229	$	(28)	$	(368)	$	224,971
Net income	—	—		—		6,604		—		—		6,604
Dividends paid ($4.50 per common share)	—	—		—		(23,050)		—		—		(23,050)
Change in fair value of interest rate derivatives	—	—		—		—		(14)		—		(14)
Balance, September 30, 2020	5,173	$	5,173	$	32,965	$	170,783	$	(42)	$	(368)	$	208,511


				Additional Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Treasury Stock		Total Equity
	Common Stock
	Shares	Amount

Nine Months Ended September 30, 2021
Balance, December 31, 2020	5,173	$	5,173	$	32,965	$	166,165	$	(707)	$	(368)	$	203,228
Net income	—	—		—		55,181		—		—		55,181
Dividends paid ($13.50 per common share)	—	—		—		(69,160)		—		—		(69,160)
Change in fair value of interest rate derivatives	—	—		—		—		4,612		—		4,612
Deferred stock unit grants	—	—		450		—		—		—		450
Balance, September 30, 2021	5,173	$	5,173	$	33,415	$	152,186	$	3,905	$	(368)	$	194,311

Nine Months Ended September 30, 2020
Balance, December 31, 2019	5,173	$	5,173	$	32,365	$	216,394	$	(49)	$	(368)	$	253,515
Net income	—	—		—		23,507		—		—		23,507
Dividends paid ($13.50 per common share)	—	—		—		(69,118)		—		—		(69,118)
Change in fair value of interest rate derivatives	—	—		—		—		7		—		7
Deferred stock unit grants	—	—		600		—		—		—		600
Balance, September 30, 2020	5,173	$	5,173	$	32,965	$	170,783	$	(42)	$	(368)	$	208,511

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Amounts in thousands)


	Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2021		2020
Net income	$	55,181	$	23,507
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including amortization of debt issuance costs	26,923		25,554
Net gain on sale of real estate	(9,124)		—
Straight-lining of rental income	7,411		18,306
Write-off of tenant receivables	—		4,122
Stock-based compensation	450		600
Change in fair value of marketable securities	(3,411)		10,789
Dividends received in stock	—		(214)
Changes in operating assets and liabilities:
Tenant and other receivables	1,497		(4,886)
Other assets	(9,146)		(33,731)
Amounts due to Vornado	1,032		(697)
Accounts payable and accrued expenses	20,601		12,646
Other liabilities	(495)		(475)
Net cash provided by operating activities	90,919		55,521


CASH FLOWS FROM INVESTING ACTIVITIES
Construction in progress and real estate additions	(14,711)		(23,630)
Proceeds from sale of real estate	9,291		—
Return of short-term investment	3,600		—
Net cash used in investing activities	(1,820)		(23,630)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid	(69,160)		(69,118)
Debt issuance costs	(45)		(2,680)
Proceeds from borrowing	—		145,708
Debt repayments	—		(50,000)
Net cash (used in) provided by financing activities	(69,205)		23,910


Net increase in cash and cash equivalents and restricted cash	19,894		55,801
Cash and cash equivalents and restricted cash at beginning of period	449,877		313,977
Cash and cash equivalents and restricted cash at end of period	$	469,771	$	369,778


RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	428,710	$	298,063
Restricted cash at beginning of period	21,167		15,914
Cash and cash equivalents and restricted cash at beginning of period	$	449,877	$	313,977


Cash and cash equivalents at end of period	$	448,913	$	355,712
Restricted cash at end of period	20,858		14,066
Cash and cash equivalents and restricted cash at end of period	$	469,771	$	369,778

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	14,182	$	17,959


NON-CASH TRANSACTIONS
Liability for real estate additions, including $109 and $456 for development fees due to Vornado in 2021 and 2020, respectively	$	1,832	$	3,622
Write-off of fully depreciated assets	5,628		457

See notes to consolidated financial statements (unaudited).

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.Organization

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (“REIT”), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to “we,” “us,” “our,” “Company” and “Alexander’s” refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (“Vornado”) (NYSE: VNO). As of September 30, 2021, we had seven properties in the greater New York City metropolitan area, including 30.3 acres of land located in Paramus, New Jersey (“Paramus Property”) which we sold in October 2021. See Note 5 - Real Estate Sales for further details.

2.Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Alexander’s and its consolidated subsidiaries. All intercompany amounts have been eliminated and all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC.

We have made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full year.

We operate in one reportable segment.

3.Recently Issued Accounting Literature

In March 2020, the Financial Accounting Standards Board (“FASB”) issued an update (“ASU 2020-04”) establishing Accounting Standards Codification (“ASC”) Topic 848, Reference Rate Reform. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In July 2021, the FASB issued an update (“ASU 2021-05”) Lessors - Certain Leases with Variable Lease Payments to ASC Topic 842, Leases (“ASC 842”). ASU 2021-05 provides additional ASC 842 classification guidance as it relates to a lessor’s accounting for certain leases with variable lease payments. ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if either a sales-type lease or direct financing lease classification would trigger a day-one loss. ASU 2021-05 is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2021-05 on our consolidated financial statements, but do not believe the adoption of this standard will have a material impact on our consolidated financial statements.

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4.Revenue Recognition

Our rental revenues include revenues from the leasing of space to tenants at our properties and revenues from parking and tenant services. We have the following revenue recognition policies:

•Lease revenues from the leasing of space to tenants at our properties. Revenues derived from base rent are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements. We commence rental revenue recognition when the underlying asset is available for use by the lessee. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Revenues derived from the reimbursement of real estate taxes, insurance expenses and common area maintenance expenses are generally recognized in the same period as the related expenses are incurred. As lessor, we have elected to combine the lease components (base and variable rent), non-lease components (reimbursements of common area maintenance expenses) and reimbursement of real estate taxes and insurance expenses from our operating lease agreements and account for the components as a single lease component in accordance with ASC 842.

•Parking revenue arising from the rental of parking spaces at our properties. This income is recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

•Tenant services is revenue arising from sub-metered electric, elevator and other services provided to tenants at their request. This revenue is recognized as the services are transferred in accordance with ASC 606.

Under ASC 842, we must assess on an individual lease basis whether it is probable that we will collect substantially all of the future lease payments. We consider the tenant’s payment history, current credit status and other factors when assessing collectability. When collectability is not deemed probable, we write-off the tenant’s receivables, including straight-line rent receivable, and limit lease income to cash received. We recognize changes in the collectability assessment of our operating leases as adjustments to rental revenues. During the quarter ended September 30, 2021, there were no changes to our lease collectability assessment.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Lease revenues	$	46,535	$	41,394	$	149,850	$	137,479
Parking revenue	1,207		1,106		3,215		3,046
Tenant services	1,208		999		3,426		2,562
Rental revenues	$	48,950	$	43,499	$	156,491	$	143,087

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(Amounts in thousands)	2021		2020		2021		2020
Fixed lease revenues	$	31,072	$	33,609	$	97,115	$	101,348
Variable lease revenues	15,463		7,785

SEC Form 10-Q filed by Alexander&#39;s, Inc.

SEC Form 10-Q filed by Alexander's, Inc.