[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) This section provides the company's consolidated financial statements and management's discussion and analysis for the reported period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited consolidated financial statements, detailing decreased rental revenues and net income due to COVID-19, and shifts in assets and liabilities [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities increased, primarily due to mortgages payable, while total equity decreased Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$1,384,162** | **$1,265,511** | | Cash and cash equivalents | $441,905 | $298,063 | | Real estate, net | $716,559 | $716,843 | | **Total Liabilities** | **$1,159,191** | **$1,011,996** | | Mortgages payable, net | $1,118,813 | $970,961 | | **Total Equity** | **$224,971** | **$253,515** | - The increase in total liabilities was primarily driven by a rise in mortgages payable, which grew from **$971.0 million** to **$1.12 billion**[4](index=4&type=chunk) - Total equity decreased from **$253.5 million** at the end of 2019 to **$225.0 million** as of June 30, 2020, mainly due to dividends paid exceeding net income[5](index=5&type=chunk) [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Rental revenues decreased, leading to a significant 42% drop in net income for the six-month period Income Statement Summary (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Rental Revenues | $45,478 | $55,932 | $99,588 | $112,710 | | Total Expenses | ($29,522) | ($31,429) | ($60,635) | ($62,351) | | **Net Income** | **$12,331** | **$11,283** | **$16,903** | **$29,148** | | **Net Income per Share** | **$2.41** | **$2.20** | **$3.30** | **$5.70** | - For the six months ended June 30, 2020, net income decreased by **42%** year-over-year, falling from **$29.1 million** to **$16.9 million**. This was largely driven by lower rental revenues and a significant negative change in the fair value of marketable securities[7](index=7&type=chunk) [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the six months ended June 30, 2020, decreased compared to the prior year Comprehensive Income Summary (in thousands) | Period | 2020 | 2019 | | :--- | :--- | :--- | | Three Months Ended June 30 | $12,327 | $11,302 | | Six Months Ended June 30 | $16,924 | $29,180 | [Consolidated Statements of Changes in Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity declined due to dividends paid significantly exceeding net income - Total equity decreased from **$253.5 million** at December 31, 2019, to **$225.0 million** at June 30, 2020[15](index=15&type=chunk)[5](index=5&type=chunk) - The primary drivers for the decrease in equity during the first six months of 2020 were dividends paid of **$46.1 million**, which significantly exceeded the net income of **$16.9 million**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased significantly, primarily driven by financing activities including new borrowings Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $52,756 | $50,798 | | Net Cash used in Investing Activities | ($13,009) | ($4,901) | | Net Cash from Financing Activities | $99,541 | ($46,070) | | **Net Increase (Decrease) in Cash** | **$139,288** | **($173)** | - The significant increase in cash was driven by **$99.5 million** in net cash from financing activities, primarily from **$145.7 million** in proceeds from borrowing, offset by **$46.1 million** in dividends paid[18](index=18&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail rent collection challenges due to COVID-19, significant tenant concentration, and a mortgage loan transaction - Due to the COVID-19 pandemic, the company collected approximately **89%** of rent billed for Q2 2020 (**92%** including deferrals). It wrote off **$1.022 million** in uncollectible rent and **$4.247 million** in straight-line rent receivables during the period[24](index=24&type=chunk)[25](index=25&type=chunk) - Bloomberg is a significant tenant, accounting for approximately **53%** of total revenues for the first six months of 2020[37](index=37&type=chunk) - Vornado Realty Trust, which owns **32.4%** of the company's common stock, serves as manager and developer, receiving various fees for its services[38](index=38&type=chunk) - On February 14, 2020, the company reduced its participation in the Rego Park II mortgage loan, receiving cash proceeds of approximately **$145 million**[45](index=45&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses COVID-19's adverse impact on financial results, including declining rental revenues and FFO, while highlighting strong liquidity from a mortgage loan transaction [Overview](index=22&type=section&id=Overview) The overview details the adverse impact of COVID-19 on New York City properties, rent collection rates, and key financial highlights - The company's properties, all located in the greater New York City area, were adversely affected by the COVID-19 pandemic, with most retail tenants closing in March 2020 and reopening with limitations in June 2020[84](index=84&type=chunk) - For the quarter ended June 30, 2020, the company collected approximately **89%** of billed rent (**92%** including deferrals). Collection rates were **100%** for office, **76%** for retail (**83%** with deferrals), and **96%** for residential tenants[86](index=86&type=chunk) Q2 2020 Financial Highlights vs. Q2 2019 | Metric | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Net Income per Share | $2.41 | $2.20 | | FFO per Diluted Share (non-GAAP) | $3.51 | $4.75 | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Operational results show decreased rental revenues due to tenant vacancies and write-offs, partially offset by lower interest expenses - Q2 2020 rental revenues decreased by **$10.5 million** compared to Q2 2019, primarily due to a **$4.2 million** write-off of straight-line rents, **$3.0 million** from retail tenant vacancies, and **$1.0 million** in uncollectible rent[93](index=93&type=chunk) - Q2 2020 interest and debt expense fell by **$4.0 million** year-over-year, mainly due to a decrease in LIBOR[98](index=98&type=chunk) - For the first six months of 2020, rental revenues decreased by **$13.1 million** compared to the same period in 2019, driven by tenant vacancies and write-offs related to the pandemic's impact[101](index=101&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity, significantly boosted by financing activities including proceeds from a mortgage loan transaction - As of June 30, 2020, the company had a strong liquidity position of **$458.3 million**, consisting of cash, restricted cash, and marketable securities[110](index=110&type=chunk) - Cash and restricted cash increased by **$139.2 million** in the first half of 2020, largely due to **$99.5 million** in net cash provided by financing activities, including proceeds from reducing participation in the Rego Park II mortgage loan[111](index=111&type=chunk)[112](index=112&type=chunk) - A non-recourse mortgage loan for the 731 Lexington Avenue retail condominiums matures on August 5, 2020, and the company is in discussions with the lender for refinancing[110](index=110&type=chunk) [Funds from Operations ("FFO") (non-GAAP)](index=29&type=section&id=Funds%20from%20Operations%20%28%22FFO%22%29%20%28non-GAAP%29) FFO decreased in Q2 2020, reflecting operational challenges during the pandemic FFO Reconciliation Summary (in thousands) | Metric | Q2 2020 | Q2 2019 | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $12,331 | $11,283 | $16,903 | $29,148 | | Adjustments | $5,664 | $13,022 | $24,836 | $20,688 | | **FFO (non-GAAP)** | **$17,995** | **$24,305** | **$41,739** | **$49,836** | - FFO for Q2 2020 was **$18.0 million** (**$3.51 per share**), a decrease from **$24.3 million** (**$4.75 per share**) in Q2 2019, reflecting the operational challenges during the pandemic[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its variable-rate debt, with a 1% rate change impacting earnings by **$10.5 million**, partially mitigated by an interest rate cap Interest Rate Sensitivity Analysis (as of June 30, 2020) | Debt Type | Balance (in thousands) | Weighted Avg. Rate | Effect of 1% Rate Change (in thousands) | | :--- | :--- | :--- | :--- | | Variable Rate | $1,052,544 | 1.33% | $10,525 | | Fixed Rate | $68,000 | 4.72% | $0 | | **Total** | **$1,120,544** | **1.54%** | **$10,525** | - The company utilizes an interest rate cap with a notional amount of **$500 million** that caps LIBOR at **6.0%** to mitigate some of its interest rate risk[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[137](index=137&type=chunk) - No changes in internal control over financial reporting occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[138](index=138&type=chunk) [PART II. Other Information](index=31&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, updated risk factors, and other required disclosures [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal actions not expected to have a material impact, with a specific Sears litigation stayed due to bankruptcy, involving a **$650,000** claim - The company states that the outcome of various legal actions arising in the ordinary course of business will not have a material effect on its financial condition or results of operations[141](index=141&type=chunk) - A lawsuit from Sears regarding the Rego Park I property is stayed due to Sears' Chapter 11 bankruptcy. The remaining property damage claim is estimated to be approximately **$650,000**[124](index=124&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing the significant and ongoing adverse effects of the COVID-19 pandemic on operations, rent collection, and potential long-term impacts on capital access and asset values - The primary updated risk factor is the continued adverse effect of the COVID-19 pandemic on the business, financial condition, and cash flows[142](index=142&type=chunk) - The pandemic has negatively impacted all properties, which are located in the hard-hit New York City metropolitan area, leading to tenant store closures and operational limitations upon reopening[144](index=144&type=chunk) - Potential long-term impacts include constrained access to capital, decreased occupancy and rent levels, and a decline in real estate asset values, which could result in non-cash impairment charges[147](index=147&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None reported for the period[148](index=148&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None reported for the period[148](index=148&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[148](index=148&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed in this item - None reported for the period[148](index=148&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and financial data in iXBRL format - The report includes required exhibits such as officer certifications and financial statements formatted in iXBRL[148](index=148&type=chunk)

Alexander's, Inc. (NYSE:ALX) Q1 2020 Earnings Conference Call May 5, 2020 10:00 AM ET Company Participants Cathy Creswell - Director, Investor Relations Steven Roth - Chairman & Chief Executive Officer Michael Franco - President David Greenbaum - Vice Chairman Haim Chera - Executive Vice President & Head, Retail Glen Weiss - Executive Vice President Office, Leasing & Co-Head, Real Estate Joseph Macnow - Executive Vice President, Chief Financial Officer & Chief Administrative Officer Conference Call Particip ...

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: March 31, 2020 Or ☐ 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) (State or other jurisdiction of incorporation or ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Alexander's, Inc. is a REIT owning and managing seven properties in the greater New York City area, with significant revenue from a single tenant, Bloomberg L.P - The company operates as a REIT, focusing on leasing, managing, and developing its seven properties located in the greater New York City metropolitan area It is managed by Vornado Realty Trust[9](index=9&type=chunk) - The property portfolio includes six operating properties (731 Lexington Avenue, Rego Park I & II, The Alexander apartment tower, Paramus, and Flushing) and one property to be developed (Rego Park III)[10](index=10&type=chunk)[11](index=11&type=chunk) - As of December 31, 2019, Vornado owned **32.4%** of Alexander's common stock, with significant executive management overlaps[14](index=14&type=chunk) Revenue from Significant Tenant (Bloomberg L.P.) | Year | Revenue (in thousands) | Percentage of Total Revenue | | :--- | :--- | :--- | | 2019 | $109,113 | ~48% | | 2018 | $107,356 | ~46% | | 2017 | $105,224 | ~46% | [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from geographic concentration, reliance on a single property and tenant, tenant bankruptcies, cybersecurity threats, and related-party conflicts - All properties are located in the greater New York City metropolitan area, concentrating risk related to local economic conditions and real estate demand[23](index=23&type=chunk)[24](index=24&type=chunk) - The **731 Lexington Avenue** property accounted for approximately **68%** of total revenues in 2019, and its primary tenant, Bloomberg, accounted for **48%**, posing severe financial impact if lost[42](index=42&type=chunk)[43](index=43&type=chunk) - The company faces risks from anchor tenant closures and bankruptcies, including Sears at Rego Park I and Kohl's at Rego Park II[40](index=40&type=chunk) - Significant ownership and management overlap with Vornado Realty Trust and Interstate Properties creates potential conflicts of interest[86](index=86&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - As of December 31, 2019, the company had **$974.8 million** in total debt, posing risks related to debt service, refinancing, and potential foreclosure[71](index=71&type=chunk)[72](index=72&type=chunk) - The company faces cybersecurity risks, potentially disrupting operations, compromising confidential information, and damaging business relationships[45](index=45&type=chunk)[46](index=46&type=chunk) [Unresolved Staff Comments](index=19&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved comments from the Securities and Exchange Commission staff as of the report date - There are no unresolved SEC staff comments as of the filing date of this Form 10-K[95](index=95&type=chunk) [Properties](index=20&type=section&id=Item%202.%20Properties) The company's portfolio comprises seven properties totaling 2.45 million square feet, with key operating assets and significant mortgage loans Property Portfolio Overview (as of Dec 31, 2019) | Property | Type | Total Square Feet | Occupancy Rate (In Service) | | :--- | :--- | :--- | :--- | | 731 Lexington Avenue | Office/Retail | 1,075,000 | 100% (Office), 93% (Retail) | | Rego Park I | Retail | 343,000 | 100% | | Rego Park II | Retail | 609,000 | 92% | | The Alexander | Residential | 255,000 (312 units) | 94% | | Paramus, NJ | Land (Ground Lease) | 30.3 acres | 100% | | Flushing, Queens | Retail (Sub-lease) | 167,000 | 100% | | Rego Park III | Development Land | 140,000 | N/A | - The **731 Lexington Avenue** property is encumbered by two mortgage loans totaling **$850 million** as of December 31, 2019[105](index=105&type=chunk)[106](index=106&type=chunk) - At Rego Park I, Sears closed its **195,000 sq ft** store, with IKEA leasing **113,000 sq ft** of this space in September 2019[107](index=107&type=chunk) - At Rego Park II, Kohl's closed its store in April 2019 but subleased it to At Home in January 2020, remaining obligated until 2031[108](index=108&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary legal actions, including a stayed Sears lawsuit for **$650,000** related to Rego Park I - In June 2014, Sears filed a lawsuit regarding its leased space at Rego Park I, with a remaining claim for approximately **$650,000**[116](index=116&type=chunk) - The Sears lawsuit was automatically stayed following Sears' Chapter 11 bankruptcy filing on October 15, 2018[116](index=116&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[117](index=117&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE under 'ALX', with no equity repurchases in 2019, and underperformed key indices - The company's common stock is listed on the NYSE under the ticker symbol 'ALX', with **212** holders of record as of January 31, 2020[119](index=119&type=chunk) - During 2019, the company did not sell any unregistered securities or repurchase any of its equity securities[120](index=120&type=chunk) Five-Year Cumulative Total Return Comparison (2014-2019) | Index | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Alexander's | $100 | $91 | $105 | $102 | $82 | $94 | | S&P 500 Index | $100 | $101 | $114 | $138 | $132 | $174 | | NAREIT All Equity Index | $100 | $103 | $112 | $121 | $116 | $150 | [Selected Financial Data](index=26&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year financial summary, showing 2019 revenues of **$226.4 million** and net income of **$60.1 million** Selected Financial Data (2017-2019) | (In thousands, except per share) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total revenues | $226,350 | $232,825 | $230,574 | | Income from continuing operations | $60,075 | $56,641 | $80,509 | | Net income | $60,075 | $32,844 | $80,509 | | Net income per common share - diluted | $11.74 | $6.42 | $15.74 | | Dividends per common share | $18.00 | $18.00 | $17.00 | | Total assets | $1,265,511 | $1,285,549 | $1,632,395 | | Mortgages payable, net | $970,961 | $965,826 | $1,240,222 | | Total equity | $253,515 | $285,092 | $343,955 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses 2019 revenue decrease due to Sears vacancy, increased net income, and liquidity from rental income, with FFO at **$99.7 million** [Overview](index=27&type=section&id=Item%207.%20Overview) 2019 net income reached **$60.1 million** ($11.74/share), with the portfolio **96.5%** occupied and IKEA signing a key lease Financial Results Summary (FY 2019 vs FY 2018) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Net Income | $60,075,000 | $32,844,000 | | Diluted EPS | $11.74 | $6.42 | | FFO (non-GAAP) | $99,670,000 | $77,429,000 | | Diluted FFO per Share | $19.47 | $15.13 | - The 2018 results included a **$23,797,000** ($4.65/share) expense for potential transfer taxes on the 2012 sale of Kings Plaza Regional Shopping Center[130](index=130&type=chunk)[131](index=131&type=chunk) - As of Dec 31, 2019, the portfolio's **2,230,000** in-service square feet was **96.5%** occupied, with **219,000** square feet out of service for redevelopment[133](index=133&type=chunk) [Results of Operations](index=30&type=section&id=Item%207.%20Results%20of%20Operations) 2019 rental revenues decreased by **$6.5 million** due to Sears vacancy, while operating and interest expenses also declined - **2019 vs. 2018:** Rental Revenues decreased by **$6,475,000** due to Sears vacancy; Operating Expenses decreased by **$4,037,000** due to lower bad debt; Interest Expense decreased by **$5,632,000** from Rego Park II refinancing[148](index=148&type=chunk)[152](index=152&type=chunk) - **2018 vs. 2017:** Rental Revenues increased by **$2,251,000**; Operating Expenses increased by **$8,648,000** due to higher bad debt and real estate taxes; Interest Expense increased by **$13,059,000** from rising rates and refinancing[156](index=156&type=chunk)[157](index=157&type=chunk)[161](index=161&type=chunk) - The company recorded an expense of **$8,757,000** in 2019 and **$11,990,000** in 2018 from the decrease in the fair value of its investment in Macerich common stock[153](index=153&type=chunk)[162](index=162&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Item%207.%20Liquidity%20and%20Capital%20Resources) Property rental income is the primary liquidity source, with **$974.8 million** in outstanding debt and cash increasing by **$24.5 million** in 2019 - Primary source of cash flow is property rental income, expected to be adequate for operations, dividends, and capital expenditures for the next twelve months[168](index=168&type=chunk) Outstanding Debt Summary (as of Dec 31, 2019) | Property | Balance (in thousands) | Interest Rate | Maturity | | :--- | :--- | :--- | :--- | | Paramus | $68,000 | 4.72% | Oct. 2021 | | 731 Lexington, retail | $350,000 | 3.10% | Aug. 2022 | | 731 Lexington, office | $500,000 | 2.64% | Jun. 2024 | | Rego Park II | $56,836 | 3.15% | Dec. 2025 | | **Total** | **$974,836** | | | - On February 14, 2020, the company reduced its participation in the Rego Park II mortgage loan to **$50,000,000**, receiving cash proceeds of approximately **$145,000,000**[170](index=170&type=chunk) - Cash and cash equivalents increased by **$24,482,000** during 2019, driven by **$126,070,000** in net cash from operations, offset by **$92,139,000** used in financing[186](index=186&type=chunk) [Funds from Operations (FFO)](index=36&type=section&id=Item%207.%20Funds%20from%20Operations%20(FFO)) FFO, a non-GAAP measure, increased to **$99.7 million** ($19.47 per diluted share) in 2019 from **$77.4 million** in 2018 FFO Reconciliation (in thousands) | | Year Ended Dec 31, 2019 | Year Ended Dec 31, 2018 | | :--- | :--- | :--- | | Net income | $60,075 | $32,844 | | Depreciation and amortization of real property | 30,838 | 32,595 | | Change in fair value of marketable securities | 8,757 | 11,990 | | **FFO (non-GAAP)** | **$99,670** | **$77,429** | - FFO per diluted share increased to **$19.47** in 2019 from **$15.13** in 2018, with the 2018 figure including a **$4.65** per share negative impact from the Kings Plaza transfer tax expense[197](index=197&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces interest rate risk from **$906.8 million** in variable-rate debt, with a 1% rate increase impacting annual interest expense by **$9.1 million** Interest Rate Risk Exposure (as of Dec 31, 2019) | Debt Type | Balance (in thousands) | Weighted Avg. Rate | Effect of 1% Rate Change (in thousands) | | :--- | :--- | :--- | :--- | | Variable Rate | $906,836 | 2.85% | $9,068 | | Fixed Rate | $68,000 | 4.72% | $0 | | **Total** | **$974,836** | **2.98%** | **$9,068** | - The estimated fair value of the company's consolidated debt was **$974,000,000** as of December 31, 2019, closely approximating its carrying value[202](index=202&type=chunk) [Financial Statements and Supplementary Data](index=38&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for FY2019, including balance sheets, income statements, and cash flows, with total assets of **$1.27 billion** [Report of Independent Registered Public Accounting Firm](index=39&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on the financial statements, identifying real estate impairment as a critical audit matter - The auditor, Deloitte & Touche LLP, provided an unqualified opinion on the financial statements and on the effectiveness of internal control over financial reporting[205](index=205&type=chunk)[206](index=206&type=chunk) - The audit identified the impairment evaluation of real estate as a Critical Audit Matter, highlighting significant management judgment in estimating capitalization rates[209](index=209&type=chunk)[210](index=210&type=chunk) [Consolidated Financial Statements](index=41&type=section&id=Consolidated%20Financial%20Statements) As of Dec 31, 2019, total assets were **$1.27 billion**, total liabilities **$1.01 billion**, and net income for FY2019 was **$60.1 million** Consolidated Balance Sheet Highlights (as of Dec 31, 2019) | Account | Amount (in thousands) | | :--- | :--- | | Real estate, net | $716,843 | | Cash and cash equivalents | $298,063 | | **Total Assets** | **$1,265,511** | | Mortgages payable, net | $970,961 | | **Total Liabilities** | **$1,011,996** | | **Total Equity** | **$253,515** | Consolidated Statement of Income Highlights (FY 2019) | Account | Amount (in thousands) | | :--- | :--- | | Rental revenues | $226,350 | | Total expenses | ($126,861) | | Income from continuing operations | $60,075 | | **Net Income** | **$60,075** | - Net cash provided by operating activities was **$126.1 million** in 2019, with **$92.1 million** used in financing activities, almost entirely for dividend payments[227](index=227&type=chunk)[228](index=228&type=chunk) [Notes to Consolidated Financial Statements](index=47&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail significant revenue concentration from Bloomberg, extensive related-party transactions with Vornado, and **$974.8 million** in mortgage debt - Bloomberg accounted for **48%** of total revenues in 2019, with its loss adversely affecting financial results[290](index=290&type=chunk) - The company has extensive related-party agreements with Vornado for management, development, and leasing services, totaling **$12.6 million** in fees in 2019[262](index=262&type=chunk)[268](index=268&type=chunk) - In 2018, the company accrued a **$23.8 million** loss from discontinued operations for potential transfer taxes related to the 2012 Kings Plaza sale, paid in April 2018[271](index=271&type=chunk) - The company maintains general liability insurance of **$300 million** per occurrence and all-risk property insurance of **$1.7 billion** per occurrence, including terrorism coverage[295](index=295&type=chunk)[296](index=296&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=61&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure - None reported[313](index=313&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls and internal control over financial reporting were deemed effective by management and audited by Deloitte & Touche LLP - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year[314](index=314&type=chunk) - Management assessed internal control over financial reporting as effective, an assessment concurred by Deloitte & Touche LLP[318](index=318&type=chunk)[322](index=322&type=chunk) [Other Information](index=64&type=section&id=Item%209B.%20Other%20Information) No other information is reported for this period - None[328](index=328&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=64&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors and corporate governance is incorporated by reference, listing Steven Roth and Matthew Iocco as executive officers - Most information is incorporated by reference from the Proxy Statement; executive officers listed are Steven Roth (**78**, Chairman & CEO) and Matthew Iocco (**49**, CFO)[329](index=329&type=chunk)[331](index=331&type=chunk) [Executive Compensation](index=65&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from the Proxy Statement[333](index=333&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=65&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, with **11,408** securities to be issued and **494,379** available for future issuance Equity Compensation Plan Information (as of Dec 31, 2019) | Plan Category | Securities to be Issued (a) | Securities Remaining for Future Issuance (b) | | :--- | :--- | :--- | | Approved by security holders | 11,408 | 494,379 | | Not approved by security holders | N/A | N/A | | **Total** | **11,408** | **494,379** | [Certain Relationships and Related Transactions, and Director Independence](index=65&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the Proxy Statement[337](index=337&type=chunk) [Principal Accounting Fees and Services](index=65&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the Proxy Statement[338](index=338&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=66&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report, including financial statements, schedules, and a comprehensive list of exhibits - Financial Statement Schedule III - Real Estate and Accumulated Depreciation is included in the filing[341](index=341&type=chunk) - A detailed list of exhibits is provided, including governance documents, material contracts, loan agreements, and CEO/CFO certifications[348](index=348&type=chunk)[350](index=350&type=chunk)[356](index=356&type=chunk) [Form 10-K Summary](index=80&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided for this period - None[359](index=359&type=chunk)

Financial Performance - Net income for the quarter ended September 30, 2019, was $16,493,000, or $3.22 per diluted share, an increase from $15,003,000, or $2.93 per diluted share in the prior year's quarter [97]. - Funds from operations (FFO) for the quarter ended September 30, 2019, was $25,208,000, or $4.92 per diluted share, compared to $23,945,000, or $4.68 per diluted share in the prior year's quarter [97]. - FFO for the nine months ended September 30, 2019, was $75,044,000, or $14.66 per diluted share, compared to $53,271,000, or $10.41 per diluted share in the prior year [139]. Revenue and Occupancy - Rental revenues for the nine months ended September 30, 2019, were $170,470,000, a decrease of $4,788,000 from $175,258,000 in the prior year's nine months [112]. - As of September 30, 2019, the portfolio comprised seven properties totaling 2,449,000 square feet, with 99.5% occupancy in the in-service square feet [100]. - Significant tenant Bloomberg L.P. accounted for approximately 48% of total revenues for the nine months ended September 30, 2019, with revenue of $81,314,000 [102]. Expenses and Cash Flow - Operating expenses for the nine months ended September 30, 2019, were $66,905,000, down from $70,207,000 in the prior year's nine months, primarily due to reduced bad debt expense [113]. - Interest and debt expense for the nine months ended September 30, 2019, was $30,096,000, a decrease from $32,115,000 in the prior year's nine months [117]. - Net cash provided by operating activities was $99,953,000, consisting of net income of $45,641,000, non-cash adjustments of $36,002,000, and a net change in operating assets and liabilities of $18,310,000 [122]. Financing Activities - Net cash used in financing activities totaled $150,471,000, primarily due to debt repayments of $81,214,000 and dividends paid of $69,072,000 [125]. - The fair value of mortgages payable was estimated at $973,000,000 as of September 30, 2019, compared to $969,000,000 as of December 31, 2018 [145]. Cash and Equivalents - Cash and cash equivalents as of September 30, 2019, were $313,777,000, an increase of $24,282,000 from $289,495,000 as of December 31, 2018 [121]. - Cash and cash equivalents decreased by $84,032,000 to $309,247,000 as of September 30, 2018, compared to $393,279,000 as of December 31, 2017 [124]. Lease Agreements and Insurance - A 10-year lease agreement with IKEA for 112,500 square feet was signed on September 23, 2019, at the Rego Park I shopping center [101]. - The company maintains general liability insurance with limits of $300,000,000 per occurrence and all-risk property insurance coverage with limits of $1.7 billion per occurrence [127]. Marketable Securities and Interest Rates - Change in fair value of marketable securities was an expense of $6,257,000 for the nine months ended September 30, 2019, compared to $5,561,000 in the prior year's nine months [118]. - The company has an interest rate cap with a notional amount of $500,000,000 that caps LIBOR at a rate of 6.0% [144]. - The company has exposure to fluctuations in interest rates, with a weighted average interest rate of 3.17% for variable rate debt as of September 30, 2019 [144]. Non-Cash Adjustments - The adjustments for non-cash items in operating activities included depreciation and amortization of $27,401,000 and stock-based compensation expense of $394,000 [122].

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: June 30, 2019 Or ☐ 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) (State or other jurisdiction of incorporation or o ...

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for Q1 2019 show total assets of $1.30 billion, total liabilities of $1.02 billion, and a net income of $17.9 million, a significant turnaround from a $9.7 million net loss in Q1 2018 due to prior year's discontinued operations expense [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2019, total assets slightly increased to $1.296 billion, while total liabilities rose to $1.016 billion and total equity decreased to $279.9 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$1,295,712** | **$1,285,549** | | Real estate, net | $727,159 | $730,270 | | Cash and cash equivalents | $302,944 | $283,056 | | **Total Liabilities** | **$1,015,770** | **$1,000,457** | | Mortgages payable, net | $967,112 | $965,826 | | **Total Equity** | **$279,942** | **$285,092** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2019, the company reported a net income of $17.9 million ($3.49 per share), contrasting with a $9.7 million net loss ($1.90 per share) in Q1 2018, primarily due to a $23.8 million loss from discontinued operations in the prior year Statement of Income Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Rental Revenues | $56,778 | $57,880 | | Total Expenses | ($30,922) | ($31,822) | | Income from continuing operations | $17,865 | $14,097 | | Loss from discontinued operations | $0 | ($23,797) | | **Net Income (Loss)** | **$17,865** | **($9,700)** | | **Net Income (Loss) per common share** | **$3.49** | **($1.90)** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to $48.1 million in Q1 2019, with overall cash and restricted cash rising by $23.2 million during the quarter Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $48,083 | $36,805 | | Net cash (used in) provided by investing activities | ($1,816) | $125 | | Net cash used in financing activities | ($23,028) | ($23,993) | | **Net increase in cash and restricted cash** | **$23,239** | **$12,937** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's REIT structure, significant related-party transactions with Vornado, the impact of a major tenant (Bloomberg L.P.), the adoption of ASC 842, and a prior-year $23.8 million expense from discontinued operations - The company is a **REIT** engaged in leasing, managing, and developing its seven properties in the greater New York City metropolitan area, managed by Vornado Realty Trust[23](index=23&type=chunk) - Vornado owned **32.4%** of the company's common stock as of March 31, 2019, and provides management, development, and leasing services for fees[37](index=37&type=chunk) - **Bloomberg L.P.** is a significant tenant, accounting for approximately **48% of total revenues** for the three months ended March 31, 2019[46](index=46&type=chunk) - In Q1 2018, the company accrued an expense of **$23,797,000** for potential additional real property transfer taxes from the 2012 sale of Kings Plaza, classified as a loss from discontinued operations[45](index=45&type=chunk) - The company adopted the new lease accounting standard, **ASC 842**, effective January 1, 2019, recording a right-of-use asset of **$5.1 million** and a lease liability of **$5.4 million** for its Flushing property ground lease[28](index=28&type=chunk) [Report of Independent Registered Public Accounting Firm](index=22&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP reviewed the interim financial information for Q1 2019 and 2018, finding no material modifications needed for conformity with U.S. GAAP - The auditors conducted a review in accordance with **PCAOB standards** and stated they are not aware of any material modifications that should be made to the interim financial information[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q1 2019 net income of $17.9 million to the absence of a prior-year transfer tax expense, with Funds from Operations (FFO) at $25.5 million, and considers property rental income adequate for future liquidity [Overview](index=24&type=section&id=Overview) The company, a REIT managed by Vornado, reported Q1 2019 net income of $17.9 million, a significant improvement from Q1 2018's $9.7 million net loss, with its in-service portfolio 97.3% occupied Q1 2019 vs Q1 2018 Performance (Amounts in thousands, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net Income (Loss) | $17,865,000 | ($9,700,000) | | Diluted EPS | $3.49 | ($1.90) | | FFO (non-GAAP) | $25,531,000 | $3,621,000 | | FFO per diluted share (non-GAAP) | $4.99 | $0.71 | - As of March 31, 2019, the portfolio comprised seven properties totaling **2,437,000 square feet**, with **2,242,000 square feet in service** and **97.3% occupied**[88](index=88&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q1 2019 saw a $1.1 million decrease in rental revenues due to vacancies, a $0.4 million decrease in operating expenses, and a significant turnaround in marketable securities fair value from a $5.2 million loss to a $38,000 gain - Rental revenues decreased by **$1,102,000**, mainly due to the Sears vacancy (effective Oct 2018) and the Toys 'R' Us vacancy (effective June 2018)[91](index=91&type=chunk) - Operating expenses decreased by **$428,000**, primarily due to a bad debt write-off in the prior year's quarter related to Toys 'R' Us[92](index=92&type=chunk) - Change in fair value of marketable securities (Macerich shares) resulted in a **$38,000 gain** in Q1 2019 versus a **$5,170,000 loss** in Q1 2018[96](index=96&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Cash, cash equivalents, and restricted cash increased by $23.2 million in Q1 2019, driven by $48.1 million from operations, with the company's primary liquidity source being property rental income - Cash and cash equivalents and restricted cash increased by **$23.2 million** during Q1 2019, rising from **$289.5 million** to **$312.7 million**[99](index=99&type=chunk) - Key cash flow activities in Q1 2019 included **$48.1 million provided by operations**, **$1.8 million used in investing**, and **$23.0 million used in financing** (dividends)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The company has a lease with IKEA for its Paramus property, which includes a purchase option for IKEA in 2021 for **$75.0 million**[109](index=109&type=chunk) [Funds from Operations (FFO) (non-GAAP)](index=28&type=section&id=Funds%20from%20Operations%20(FFO)%20(non-GAAP)) Q1 2019 FFO, a non-GAAP metric, significantly increased to $25.5 million ($4.99 per diluted share) from $3.6 million ($0.71 per diluted share) in Q1 2018, largely due to the absence of a prior-year transfer tax expense FFO Reconciliation (in thousands, except per share data) | Line Item | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net Income (Loss) | $17,865 | ($9,700) | | Depreciation and amortization of real property | 7,704 | 8,151 | | Change in fair value of marketable securities | (38) | 5,170 | | **FFO (non-GAAP)** | **$25,531** | **$3,621** | | **FFO per diluted share (non-GAAP)** | **$4.99** | **$0.71** | [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its $906.8 million variable-rate debt, with a 1% rate change impacting annual income by approximately $9.1 million, mitigated by an interest rate cap Interest Rate Sensitivity (Amounts in thousands) | Debt Type | Balance (as of March 31, 2019) | Weighted Avg. Interest Rate | Effect of 1% Rate Change | | :--- | :--- | :--- | :--- | | Variable Rate | $906,836 | 3.60% | $9,068 | | Fixed Rate | $68,000 | 4.72% | $0 | | **Total** | **$974,836** | **3.68%** | **$9,068** | - The company has an interest rate cap with a notional amount of **$500.0 million** that caps LIBOR at **6.0%**[120](index=120&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2019, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's **disclosure controls and procedures are effective** as of the end of the reporting period[122](index=122&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[123](index=123&type=chunk) [PART II. Other Information](index=30&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the ordinary course of business, none of which are expected to materially affect its financial condition, results of operations, or cash flows - The company states that the outcome of legal actions arising in the ordinary course of business will not have a **material effect** on its financial position[125](index=125&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to its Annual Report on Form 10-K for the year ended December 31, 2018 - No **material changes in risk factors** were reported compared to the 2018 Form 10-K[126](index=126&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications (Rule 13a-14(a) and Section 1350) and XBRL data files - The report includes required exhibits such as **CEO/CFO certifications** and **XBRL data files**[127](index=127&type=chunk)

Part I [Business](index=5&type=section&id=Item%201.%20Business) Alexander's, Inc. is a REIT managing seven NYC-area properties, operated by Vornado, with Bloomberg L.P. as a major tenant - Alexander's, Inc. is a REIT engaged in leasing, managing, and developing properties, with all operations managed by Vornado Realty Trust[10](index=10&type=chunk) - The company's portfolio consists of seven properties in the greater New York City area, including six operating properties and one property to be developed (Rego Park III)[11](index=11&type=chunk)[12](index=12&type=chunk) - As of December 31, 2018, Vornado owned **32.4%** of Alexander's common stock. Key executives and directors of Alexander's also hold senior positions at Vornado, indicating a close relationship and shared management[15](index=15&type=chunk) Revenue from Significant Tenant (Bloomberg L.P.) | Year | Revenue (in thousands) | Percentage of Total Revenue | | :--- | :--- | :--- | | 2018 | $107,356 | ~46% | | 2017 | $105,224 | ~46% | | 2016 | $104,590 | ~46% | [Risk Factors](index=7&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from NYC property concentration, tenant dependence, substantial debt, operational issues, and Vornado conflicts [Geographic Concentration Risk](index=7&type=section&id=Geographic%20Concentration%20Risk) - All company properties are located in the greater New York City metropolitan area, exposing the business to risks inherent to this specific region, including local economic downturns, business relocations, and changes in state and local taxes[24](index=24&type=chunk)[25](index=25&type=chunk) - The company is subject to risks affecting the NYC retail environment, such as changes in consumer spending, competition from online shopping, and the threat of terrorism, which could decrease demand for space and property values[27](index=27&type=chunk)[28](index=28&type=chunk) [Real Estate and Tenant Risks](index=8&type=section&id=Real%20Estate%20and%20Tenant%20Risks) - The property 731 Lexington Avenue accounts for **approximately 65% of total revenues**, making any loss or damage to this building a significant risk to financial results[42](index=42&type=chunk) - Bloomberg L.P. is a critical tenant, contributing **about 46% of total revenues**. The loss of Bloomberg or its failure to meet lease obligations would materially harm the company's financial condition[43](index=43&type=chunk) - The company faces risks from anchor tenant closures and bankruptcies. Sears closed its store at Rego Park I and rejected its lease after filing for bankruptcy. Kohl's announced plans to close and sublease its store at Rego Park II[40](index=40&type=chunk) [Operational and Financial Risks](index=11&type=section&id=Operational%20and%20Financial%20Risks) - The company is exposed to cybersecurity risks, including attacks that could disrupt operations, compromise confidential information, and damage business relationships, potentially leading to material adverse effects on financial results[46](index=46&type=chunk)[47](index=47&type=chunk) - The company maintains insurance coverage, including for terrorism, but is responsible for uninsured losses, deductibles, and losses exceeding coverage limits, which could be material[52](index=52&type=chunk)[54](index=54&type=chunk) - As of December 31, 2018, the company had **$1.17 billion** in total debt outstanding. This substantial indebtedness poses risks, including insufficient cash flow to meet debt service and potential foreclosure if income from mortgaged properties is inadequate[68](index=68&type=chunk)[69](index=69&type=chunk) - Failure to maintain qualification as a REIT would result in the company being subject to federal income tax at corporate rates, significantly reducing funds available for distribution to stockholders[71](index=71&type=chunk) [Organizational and Ownership Risks](index=16&type=section&id=Organizational%20and%20Ownership%20Risks) - The company's charter includes provisions, such as stock ownership limits and a classified board of directors, that may delay or prevent a change in control, even if beneficial to stockholders[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Vornado, Interstate Properties, and their partners beneficially own **approximately 58.6%** of the company's common stock, giving them substantial influence and reducing the likelihood of a third-party tender offer[79](index=79&type=chunk) - Significant overlap in management and board members between Alexander's and Vornado creates potential conflicts of interest regarding business opportunities, strategic decisions, and the terms of agreements between the two entities[82](index=82&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) [Unresolved Staff Comments](index=18&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved comments from the SEC staff as of the report date - There are no unresolved comments from the SEC staff as of the filing date of this Form 10-K[91](index=91&type=chunk) [Properties](index=19&type=section&id=Item%202.%20Properties) As of December 31, 2018, the company's portfolio includes seven NYC-area properties: mixed-use, retail, residential, and development Property Portfolio Overview (as of Dec 31, 2018) | Property | Location | Type | Size (sq. ft.) | Occupancy | | :--- | :--- | :--- | :--- | :--- | | 731 Lexington Avenue | New York, NY | Office/Retail | 1,063,000 | 100% (Office), 99% (Retail) | | Rego Park I | Queens, NY | Retail | 343,000 | 43% | | Rego Park II | Queens, NY | Retail | 609,000 | 100% | | The Alexander | Queens, NY | Residential | 255,000 (312 units) | 96% | | Paramus | Paramus, NJ | Land Lease | 30.3 acres | 100% | | Flushing | Queens, NY | Retail | 167,000 | 100% | | Rego Park III | Queens, NY | Development | 3.2 acres | N/A | - The 731 Lexington Avenue property is encumbered by two separate mortgage loans: a **$500 million** loan on the office portion and a **$350 million** loan on the retail portion[98](index=98&type=chunk)[99](index=99&type=chunk) - The Rego Park I shopping center's occupancy was significantly impacted by the closure and lease rejection of its **195,000 sq. ft.** Sears anchor store[100](index=100&type=chunk) - The land in Paramus, NJ is ground-leased to IKEA Property, Inc. until 2041, with a purchase option for IKEA in 2021 for **$75 million**[105](index=105&type=chunk) [Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary legal actions, notably a Sears lawsuit regarding Rego Park I, which is currently stayed due to Sears' bankruptcy - In June 2014, Sears filed a lawsuit against the company regarding its leased space at Rego Park I, claiming damages of not less than **$4 million**. The claim for future damages was withdrawn, leaving a remaining property damage claim estimated at approximately **$650,000**[109](index=109&type=chunk) - The Sears lawsuit was automatically stayed on October 15, 2018, due to Sears filing for Chapter 11 bankruptcy relief[109](index=109&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine safety disclosures are not applicable to the registrant[110](index=110&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "ALX"; no unregistered securities were sold or equity repurchased in 2018 - The company's common stock trades on the NYSE under the symbol "ALX"[112](index=112&type=chunk) - During 2018, the company did not sell any unregistered securities or repurchase any of its equity securities[113](index=113&type=chunk) Five-Year Cumulative Total Return Comparison | Index | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Alexander's, Inc. | $100 | $137 | $125 | $144 | $139 | $113 | | S&P 500 Index | $100 | $114 | $115 | $129 | $157 | $150 | | NAREIT All Equity Index | $100 | $128 | $132 | $143 | $155 | $149 | [Selected Financial Data](index=24&type=section&id=Item%206.%20Selected%20Financial%20Data) Key financial data from 2014-2018 shows steady revenue growth, but 2018 net income declined due to discontinued operations and securities valuation Selected Financial Data (2014-2018) | (In thousands, except per share amounts) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $232,825 | $230,574 | $226,936 | $207,915 | $200,814 | | **Income from continuing operations** | $56,641 | $80,509 | $86,477 | $76,907 | $67,396 | | **Net income** | $32,844 | $80,509 | $86,477 | $76,907 | $67,925 | | **Net income per common share - diluted** | $6.42 | $15.74 | $16.91 | $15.04 | $13.29 | | **Dividends per common share** | $18.00 | $17.00 | $16.00 | $14.00 | $13.00 | | **Total assets** | $1,481,257 | $1,632,395 | $1,451,230 | $1,447,808 | $1,418,392 | | **Mortgages payable, net** | $1,161,534 | $1,240,222 | $1,052,359 | $1,053,262 | $1,027,956 | | **Total equity** | $285,092 | $343,955 | $352,845 | $352,880 | $348,399 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income declined in 2018 due to tax expenses, securities losses, and tenant bankruptcies, with liquidity maintained through rental income and cash [Overview](index=25&type=section&id=Overview) 2018 vs. 2017 Financial Summary | Metric | 2018 | 2017 | | :--- | :--- | :--- | | Net Income | $32.8M | $80.5M | | Diluted EPS | $6.42 | $15.74 | | FFO (non-GAAP) | $77.4M | $114.9M | | FFO per Diluted Share (non-GAAP) | $15.13 | $22.46 | - 2018 net income was significantly impacted by a **$23.8 million expense** for contested transfer taxes on the 2012 Kings Plaza sale and an **$11.9 million decrease** in the fair value of marketable securities[123](index=123&type=chunk) - The company recorded a **$23.8 million expense** for potential additional real property transfer taxes related to the 2012 sale of Kings Plaza, which is currently being contested in court[129](index=129&type=chunk)[131](index=131&type=chunk) - Tenant bankruptcies impacted results: Sears rejected its lease at Rego Park I in October 2018, and Toys "R" Us rejected its lease at Rego Park II in June 2018, leading to write-offs and accelerated depreciation[132](index=132&type=chunk)[133](index=133&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Comparison of Operations (2018 vs. 2017) | (In thousands) | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $232,825 | $230,574 | $2,251 | | Operating Expenses | $93,775 | $85,127 | $8,648 | | Depreciation & Amortization | $33,089 | $34,925 | ($1,836) | | Interest and Debt Expense | $44,533 | $31,474 | $13,059 | | Change in Fair Value of Marketable Securities | ($11,990) | $0 | ($11,990) | | Loss from Discontinued Operations | ($23,797) | $0 | ($23,797) | - Operating expenses increased by **$8.6 million** in 2018, primarily due to higher bad debt expense of **$4.4 million** and higher real estate taxes of **$2.2 million**[152](index=152&type=chunk) - Interest and debt expense rose by **$13.1 million** in 2018, mainly driven by an **$8.5 million** increase from higher average LIBOR and costs associated with the June 2017 refinancing of 731 Lexington Avenue[156](index=156&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) - The primary source of cash flow is property rental income, which is considered sufficient, along with existing cash, to fund operations, dividends, and capital expenditures for the next twelve months[172](index=172&type=chunk) - In 2018, the company extended a **$68 million** mortgage on its Paramus property to October 2021 and completed a **$252.5 million** refinancing of its Rego Park II shopping center, extending the maturity to December 2025[174](index=174&type=chunk)[176](index=176&type=chunk) Contractual Obligations as of December 31, 2018 (in thousands) | Obligation Type | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $1,388,931 | $43,602 | $154,502 | $411,860 | $778,967 | | Operating leases | $6,467 | $800 | $1,600 | $1,600 | $2,467 | | **Total** | **$1,395,398** | **$44,402** | **$156,102** | **$413,460** | **$781,434** | - Cash and cash equivalents decreased by **$103.8 million** in 2018, primarily due to **$176.2 million** used in financing activities (net debt repayments and dividends), partially offset by **$73.5 million** provided by operating activities[189](index=189&type=chunk)[190](index=190&type=chunk) [Funds from Operations (FFO)](index=35&type=section&id=Funds%20from%20Operations%20(FFO)) Reconciliation of Net Income to FFO (non-GAAP) | (In thousands) | Year Ended Dec 31, 2018 | Year Ended Dec 31, 2017 | | :--- | :--- | :--- | | Net income | $32,844 | $80,509 | | Depreciation and amortization of real property | $32,595 | $34,399 | | Change in fair value of marketable securities | $11,990 | — | | **FFO (non-GAAP)** | **$77,429** | **$114,908** | | **FFO per diluted share (non-GAAP)** | **$15.13** | **$22.46** | - FFO for 2018 included a **$23.8 million expense** (**$4.65 per share**) for the contested Kings Plaza transfer taxes[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, mitigated by an interest rate cap on its $500 million notional amount Interest Rate Sensitivity Analysis (as of Dec 31, 2018) | Debt Type | Balance (in thousands) | Weighted Avg. Interest Rate | Effect of 1% Change in Base Rates (in thousands) | | :--- | :--- | :--- | :--- | | Variable Rate | $1,102,544 | 3.61% | $11,025 | | Fixed Rate | $68,000 | 4.72% | $0 | | **Total** | **$1,170,544** | **3.67%** | **$11,025** | - A **1%** change in base interest rates would impact diluted earnings per share by an estimated **$2.15**[206](index=206&type=chunk) - The estimated fair value of the company's consolidated debt was $1.165 billion as of December 31, 2018, compared to a carrying value of $1.171 billion[207](index=207&type=chunk) [Financial Statements and Supplementary Data](index=37&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements for 2016-2018 show decreased assets, a sharp decline in 2018 net income from discontinued operations, and net cash decrease from financing [Consolidated Balance Sheets](index=39&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Real estate, net | $730,270 | $754,324 | | Cash and cash equivalents | $283,056 | $307,536 | | **Total Assets** | **$1,481,257** | **$1,632,395** | | Mortgages payable, net | $1,161,534 | $1,240,222 | | **Total Liabilities** | **$1,196,165** | **$1,288,440** | | **Total Equity** | **$285,092** | **$343,955** | [Consolidated Statements of Income](index=40&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated Income Statement Data (in thousands) | Account | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Total Revenues | $232,825 | $230,574 | $226,936 | | Operating Income | $100,622 | $105,270 | $105,461 | | Income from continuing operations | $56,641 | $80,509 | $86,477 | | Loss from discontinued operations | ($23,797) | $0 | $0 | | **Net Income** | **$32,844** | **$80,509** | **$86,477** | | **Net income per common share** | **$6.42** | **$15.74** | **$16.91** | [Consolidated Statements of Cash Flows](index=43&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Cash Flow Data (in thousands) | Cash Flow Category | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $73,538 | $123,426 | $130,820 | | Net cash used in investing activities | ($1,137) | ($201,971) | ($15,506) | | Net cash (used in) provided by financing activities | ($176,185) | $97,146 | ($85,292) | | **Net (decrease) increase in cash** | **($103,784)** | **$18,601** | **$30,022** | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=58&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure were reported - None reported[311](index=311&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 31, 2018, with no material changes to internal controls, and auditors issued an unqualified opinion - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year 2018[312](index=312&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter that materially affected, or are reasonably likely to materially affect, internal controls[313](index=313&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, audited the company's internal control over financial reporting and concluded that it was effective in all material respects as of December 31, 2018[318](index=318&type=chunk)[320](index=320&type=chunk) [Other Information](index=61&type=section&id=Item%209B.%20Other%20Information) No other information is reported under this item - None[326](index=326&type=chunk) Part III Part III incorporates information on directors, executive officers, corporate governance, compensation, security ownership, and related party transactions by reference from the Proxy Statement [Directors, Executive Officers and Corporate Governance](index=61&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section lists executive officers, with detailed information on directors and corporate governance incorporated by reference from the Proxy Statement Executive Officers | Name | Age | Position(s) | | :--- | :--- | :--- | | Steven Roth | 77 | Chairman of the Board and Chief Executive Officer | | Matthew Iocco | 48 | Chief Financial Officer | - Information regarding directors, the audit committee, and the audit committee financial expert is incorporated by reference from the company's Proxy Statement[327](index=327&type=chunk) [Executive Compensation](index=62&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's Proxy Statement - All information regarding executive compensation is incorporated by reference from the Proxy Statement[330](index=330&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=62&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details equity compensation plans as of December 31, 2018, with further security ownership information incorporated by reference from the Proxy Statement Equity Compensation Plan Information (as of Dec 31, 2018) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 10,057 | N/A | 495,730 | | Not approved by security holders | N/A | N/A | N/A | | **Total** | **10,057** | **N/A** | **495,730** | [Certain Relationships and Related Transactions, and Director Independence](index=62&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related party transactions, and director independence is incorporated by reference from the Proxy Statement - All information regarding related transactions and director independence is incorporated by reference from the Proxy Statement[334](index=334&type=chunk) [Principal Accounting Fees and Services](index=62&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the Proxy Statement - All information regarding principal accounting fees and services is incorporated by reference from the Proxy Statement[335](index=335&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=63&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including consolidated financial statements and supplementary schedules for Valuation and Real Estate - The filing includes financial statement schedules for Valuation and Qualifying Accounts (Schedule II) and Real Estate and Accumulated Depreciation (Schedule III)[338](index=338&type=chunk) [Form 10-K Summary](index=73&type=section&id=Item%2016.%20Form%2010-K%20Summary) No summary is provided under this item - None[359](index=359&type=chunk)