<PAGE> 1
EXHIBIT INDEX ON PAGE 15
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/XX/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: JUNE 30, 1995
-------------------------------------------------
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: 1-6064
ALEXANDER'S, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 51-01-00517
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
PARK 80 WEST, PLAZA II, SADDLE BROOK, NEW JERSEY 07663
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(201)587-8541
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
31 West 34th Street, New York, New York, 10001
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,if changed since last
report)
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.
/X/ Yes / / No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
/ / Yes / / No
As of August 4, 1995 there were 5,000,850 common shares outstanding.
Page 1 of 16
<PAGE> 2
ALEXANDER'S, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the Three and Six Months
Ended June 30, 1995 and June 30, 1994 . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1995 and June 30, 1994 . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . 11
PART II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exhibit 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
Page 2 of 16
<PAGE> 3
PART I. FINANCIAL INFORMATION
ALEXANDER'S, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
--------- ------------
<S> <C> <C>
ASSETS:
Real estate, at cost:
Land $ 46,082 $ 26,460
Buildings leaseholds, and leasehold
improvements (including $7,645 of
construction in progress at June 30, 1995) 68,887 59,851
Capitalized expenses and predevelopment
costs 33,520 27,213
-------- --------
Total 148,489 113,524
Less accumulated depreciation and
amortization (37,013) (36,365)
-------- --------
111,476 77,159
Investment in unconsolidated joint
venture 9,324 7,499
-------- --------
Real estate, net 120,800 84,658
Cash and cash equivalents 18,962 2,363
Restricted cash 20,835 --
Deferred lease and other expenses 12,391 11,561
Deferred finance and debt expense 5,577 2,642
Other assets 7,514 3,645
Note receivable -- 4,550
-------- --------
TOTAL ASSETS $186,079 $109,419
======== ========
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
-------- ------------
<S> <C> <C>
LIABILITIES AND DEFICIENCY IN NET ASSETS:
Continuing Operations:
Secured debt $161,893 $ 51,654
Amounts due to Vornado Realty Trust 12,202 12,342
Taxes payable and accrued liabilities 10,732 9,067
Minority interest 600 1,574
Unsecured debt -- 1,188
-------- --------
Total continuing operations 185,427 75,825
-------- --------
Discontinued Retail Operations:
Accrual for losses from discontinued operations 19,652 26,742
Taxes payable and accrued liabilities 2,325 2,613
Liabilities subject to settlement under
reorganization proceedings 4,952 25,812
-------- --------
Total discontinued retail operations 26,929 55,167
-------- --------
TOTAL LIABILITIES 212,356 130,992
-------- --------
Commitments and contingencies
Deficiency in Net Assets:
Common stock; $1.00 par value per share;
authorized, 10,000,000 shares;
issued 5,173,450 5,174 5,174
Additional capital 24,843 24,843
Deficit (55,334) (50,630)
-------- --------
(25,317) (20,613)
Less treasury shares, 172,600 shares at
cost (960) (960)
-------- --------
Total deficiency in net assets (26,277) (21,573)
-------- --------
TOTAL LIABILITIES AND DEFICIENCY
IN NET ASSETS $186,079 $109,419
======== ========
</TABLE>
See notes to consolidated financial statements.
Page 3 of 16
<PAGE> 4
ALEXANDER'S, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share amounts)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
------------------------------- --------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
----------- ----------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Property rentals $ 2,189 $ 2,189 $ 4,378 $ 4,378
Expense reimbursements 310 286 595 571
Other income (including income from
unconsolidated joint venture of $88
and $861 in 1995 and $61 and $523 in 1994) 320 330 1,269 1,037
----------- ----------- ------- -------
Total Revenues 2,819 2,805 6,242 5,986
----------- ----------- ------- -------
Expenses:
Operating, general and administrative
(including management fee of $750 and
$1,000 to Vornado in 1995) 2,492 1,176 4,043 2,270
Depreciation and amortization 469 457 933 914
Reorganization costs 322 497 1,938 1,143
----------- ----------- ------- -------
Total expenses 3,283 2,130 6,914 4,327
----------- ----------- ------- -------
Operating (loss)/income (464) 675 (672) 1,659
Interest and debt expense (including interest
on loan from Vornado in 1995) (3,483) (624) (6,222) (1,220)
Interest and other income 687 35 784 136
Gain on sale of real estate -- -- -- 161
(Loss)/income before income tax benefit (3,260) 86 (6,110) 736
Benefit for income taxes -- -- 1,406 --
----------- ----------- ------- -------
NET (LOSS)/INCOME $ (3,260) $ 86 $ (4,704) $ 736
=========== =========== =========== ===========
Net (Loss)/Income Per Share $ (.65) $ .02 $ (.94) $ .15
=========== =========== =========== ===========
Weighted average number of common
shares outstanding during period 5,000,850 5,000,850 5,000,850 5,000,850
</TABLE>
See notes to consolidated financial statements.
Page 4 of 16
<PAGE> 5
ALEXANDER'S, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
------------------------
JUNE 30, 1995 JUNE 30, 1994
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income $ (4,704) $ 736
Adjustments to reconcile net (loss)/income to net
cash provided by operations:
Depreciation and amortization
(including debt issuance costs) 2,554 1,120
Gain on sale of real estate -- (161)
Equity in real estate operations (net of
contributions of $951 and $839
in 1995 and 1994) (1,812) (1,383)
Change in assets and liabilities:
Restricted cash (20,835) 775
Note receivable 4,550 --
Amounts due to Vornado Realty Trust (705) 170
Taxes payable and accrued liabilities (708) (295)
Other (3,887) 1,626
-------- --------
Net cash (used in)/provided by operating activities of
continuing operations (25,547) 2,588
Payment of liabilities of discontinued operations (28,238) (2,200)
-------- --------
Net cash (used in)/provided by operating activities (53,785) 388
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate (11,607) (4,033)
Proceeds from sale of real estate -- 200
-------- --------
Net cash used in investing activities (11,607) (3,833)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of secured debt 126,611 --
Debt repayments (39,658) (775)
Deferred finance and debt expense (4,962) (1,270)
-------- --------
Net cash provided by/(used in) financing activities 81,991 (2,045)
-------- --------
Net increase (decrease) in cash and cash equivalents 16,599 (5,490)
Cash and cash equivalents at beginning of period 2,363 7,053
-------- --------
Cash and cash equivalents at end of period $ 18,962 $ 1,563
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash payments for interest (including capitalized
interest of $3,100 and $851) $ 9,363 $ 1,220
======== ========
</TABLE>
Excludes an increase in real estate of $20,838 and secured debt of $21,812
and a reduction in minority interest of $974 as a result of the Company
acquiring a partnership interest (see last paragraph of Note 4).
See notes to consolidated financial statements.
Page 5 of 16
<PAGE> 6
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheets as of June 30, 1995, the consolidated
statements of operations for the three and six months ended June 30, 1995 and
June 30, 1994, and the consolidated statements of cash flows for the six months
ended June 30, 1995 and June 30, 1994 are unaudited. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
changes in cash flows at June 30, 1995 and June 30, 1994 have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These Consolidated Financial Statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's 1994 Annual Report to Shareholders. The results of operations
for the period ended June 30, 1995 are not necessarily indicative of the
operating results for the full year.
Effective in the first quarter of 1995, to be consistent with the prevalent
real estate industry practice, the Company changed the presentation of its
consolidated statements of operations to show tenant reimbursements of expenses,
previously offset against operating expenses, as part of revenues. Prior
period's amounts have been reclassified to conform with the current year's
presentation.
2. EMERGENCE FROM CHAPTER 11
In March 1995, the Company paid holders of allowed general unsecured claims
in full, together with accrued interest in respect of their claims. Such
payments aggregated $24,005,000. The Official Committee of Unsecured Creditors
has been dissolved and all secured and unsecured creditors having allowed claims
in the Bankruptcy Court cases have received the cash payments or debt
instruments contemplated to be delivered to them under the Plan. A number of
claims are being disputed by the Company and therefore are not allowed claims.
An escrow account has been established for the resolution of these claims (see
Note 4). The Bankruptcy Court has retained jurisdiction to resolve these
disputed claims and for other limited purposes.
The Company's ability to operate as a viable real estate company depends on
the successful development of certain of its properties and on its ability to
repay or refinance its debts when they become due. In order to do this, the
Company may need to raise additional capital.
3. RELATED PARTY TRANSACTIONS
Steven Roth is Chief Executive Officer and a Director of the Company, the
Managing General Partner of Interstate Properties ("Interstate") and Chairman of
the Board and Chief Executive Officer of Vornado Realty Trust ("Vornado").
Interstate owns 27.1% of the outstanding common stock of the Company and owns
27.7% of the outstanding common shares of beneficial interest of Vornado. In
addition, Mr. Roth owns 3.6% of the outstanding common shares of beneficial
interest of Vornado. Mr. Roth, Interstate and the other two general partners of
Interstate own, in the aggregate, 32.6% of the outstanding common shares of
beneficial interest of Vornado. Vornado owns 29.3% of the outstanding common
stock of the Company, including 27.1% purchased in March 1995.
Page 6 of 16
<PAGE> 7
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In March 1995, the Company and Vornado entered into a three-year management
and development agreement (the "Management Agreement"). The annual management
fee payable by the Company to Vornado is $3,000,000, plus 6% of development
costs with a minimum guaranteed fee for the development portion of $1,650,000
in the first year and $750,000 in each of the second and third years.
The fee pursuant to the Management Agreement is in addition to the leasing
fee the Company pays to Vornado under the leasing agreement (the "Leasing
Agreement") which has been in effect since 1992. Subject to the payment of rents
by tenants, Vornado is due $11,600,000, payable annually in an amount not to
exceed $2,500,000, until the present value of such installments (calculated at a
discount rate of 9% per annum) equals the amount that would have been paid had
it been paid on September 21, 1993, or at the time the transactions which gave
rise to the commissions occurred, if later. The term of the Leasing Agreement
has been extended to be coterminous with the term of the Management Agreement.
In March 1995, the Company borrowed $45,000,000 from Vornado, the
subordinated tranche of a $75,000,000 secured financing (see Note 4 (2)). The
Company recorded interest on the loan of $1,973,000 and $2,385,000 in the three
and six months ended June 30, 1995, of which $621,000 was capitalized.
Effective March 2, 1995, for a three-year period, Vornado and Interstate
agreed not to own in excess of two-thirds of the Company's common stock or to
enter into certain other transactions with the Company, other than the
transactions described above, without the consent of the Company's independent
directors.
4. DEBT AND RESTRICTED CASH
The Company borrowed $126,611,000 during the six months ended June 30, 1995,
of which $4,980,000 was borrowed in the second quarter. The proceeds of these
borrowings were used primarily to (i) pay construction costs associated with the
Company's Rego Park property of $7,600,000, (ii) pay $39,552,000 of outstanding
funded debt, and $24,005,000 of allowed general unsecured claims and (iii) fund
(a) interest-bearing escrow accounts for unpaid real estate taxes ($7,000,000)
and the remaining disputed claims in the Bankruptcy Court cases as they become
allowed ($8,000,000), and (b) collateral accounts for the Rego Park construction
($6,000,000). Substantially all of the assets of the Company and its
subsidiaries have been pledged and/or mortgaged to secure such indebtedness. The
borrowings consist of:
(1) A $25,000,000 five year loan maturing February 24, 2000, secured
principally by, a mortgage on the Company's Fordham Road property and guaranteed
by the parent. The loan bears annual interest at 30 day LIBOR +4.25% (10.31% at
June 30, 1995), capped at LIBOR 9.75% (all-in rate, 14%) and requires
amortization based on a 20 year term with an assumed interest rate of 9 1/2%.
Beginning in year four, all cash flow of the property, after debt service, will
further amortize the loan. The loan is not prepayable for the first six months
of its term and is only prepayable with yield maintenance during the next twelve
months in the event of certain types of refinancings. For the remainder of the
term, it is prepayable without penalty. The loan contains customary mortgage
covenants, including, among others, a default by the existing tenant. Further,
in the event debt service coverage falls below certain levels or the existing
tenant's financial condition, as defined, deteriorates, then during the first
three years of the loan term, all cash flow of the property, after debt service,
will be escrowed with the lender.
Page 7 of 16
<PAGE> 8
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(2) A $75,000,000 three-year loan secured by mortgages on all of the
Company's assets and/or pledges of the stock of subsidiaries owning the assets
and/or guarantees of such subsidiaries and the parent. The loan bears interest
at a blended rate of 13.8% per annum for the first two years and is comprised of
two separate notes of $45,000,000 to Vornado and $30,000,000 to a bank. Each
note is separately secured by the collateral described above. The Vornado loan
is subordinate to that of the bank and bears interest at 16.43% per annum for
the first two years and at a fixed rate for the third year of 992 basis points
over the one-year Treasury bill rate. The bank's loan bears interest at 9.86%
for the first two years and at a fixed rate for the third year of 325 basis
points over the one-year Treasury bill rate. The Company paid a loan origination
fee to Vornado and the bank of $1,500,000 and $375,000, respectively. The loans
are prepayable at the end of the second year of their term without penalty. The
loans contain customary covenants including, among others, lease approval
rights, limitations on additional debt, dividends, acquisitions, mergers,
property sales and restrict the Company from developing property without signed
leases for more than 50% of such property's leasable space. No dividends can be
paid unless required to maintain Real Estate Investment Trust ("REIT") status.
(3) A two year $60,000,000 construction loan and a two year $25,000,000
bridge loan from a bank, each secured by a mortgage on the Rego Park property.
As of June 30, 1995, approximately $26,600,000 was funded under such loans. The
loans mature on April 1, 1997 (but may be extended, subject to certain
conditions, for an additional year) and bear annual interest at (i) LIBOR plus
1.625% or (ii) the greater of (a) Federal Funds Rate plus 1.125% or (b) prime
plus 0.625%, at the option of the Company (7.75% at June 30, 1995). The ability
of the Company to borrow the $25,000,000 under the bridge loan is based on
conditions that cannot be met today and may not be met during the term of this
loan. The Company has not relied on this amount in its determination of its
ability to fund its current cash needs but believes that it will be able to
refinance the Rego Park property at a level exceeding $60,000,000 upon the
completion of construction and commencement of tenants paying rent.
In addition to the above, in January 1995, the Seven Thirty One Limited
Partnership ("the Partnership"), redeemed the first portion of the outside 731
Limited Partners' interest by giving such limited partners a promissory note due
in August 1998 in the amount of $21,812,000 (the "Note"). The Note bears annual
interest at Prime plus 1% and is secured by a third mortgage on the Lexington
Avenue property. The outside 731 Limited Partners have the right to put their
remaining 7.64% interest to the Partnership until October 1998, in exchange for
a five year secured note in the principal amount of $15,000,000, bearing annual
interest at Prime plus 1%.
5. INCOME TAXES
The Company intends to file, with its Federal income tax return for 1995, an
election to be treated as a REIT for Federal income tax purposes. As a result of
the Company's intention to elect to be taxed as a REIT, the deferred tax balance
of $1,406,000 at December 31, 1994 was reversed, resulting in an income tax
benefit in the first quarter of 1995. At June 30, 1995, net operating loss
carryovers of approximately $124,000,000 are available to offset both future
taxable income and the amount of the Company's REIT taxable income that
otherwise would be required to be distributed to stockholders.
Page 8 of 16
<PAGE> 9
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. CONTINGENCIES
Paramus Property
The State of New Jersey has notified the Company of its intention to condemn
a portion of the Paramus property. The New Jersey Department of Transportation
("DOT") has recently made an offer to purchase the land which is the subject of
the condemnation proceeding for $15,400,000 based on an appraisal performed on
their behalf. The Company and the DOT expect to continue negotiations to attempt
to reach agreement on the value. In the event that the Company and the DOT do
not reach agreement on the value, a formal process will be initiated by the DOT,
pursuant to which, among other things, a group of independent commissioners will
be appointed by a court to determine fair market value. If the condemnation
occurs, the Company will be required to change its development plans, Home Depot
and B.J.'s Wholesale Clubs will not be obligated under their current leases, and
the time and cost to develop the Paramus property may materially increase.
Lexington Avenue Property
The Company believes that, along with a number of other locations, a portion
of the Lexington Avenue property is being considered by the Port Authority of
New York and New Jersey (the "Port Authority") for the site of the terminus for
a rail link from midtown Manhattan to LaGuardia and Kennedy Airports. Approvals
of numerous Federal, New York State and New York City agencies are required
before construction could begin. If the project proceeds and the Port Authority
selects a portion of the Lexington Avenue property for such use and can
establish that it is needed to serve a public use, benefit or purpose, the Port
Authority, after conducting the requisite public hearings, may acquire such
portion of the Lexington Avenue property pursuant to its powers of eminent
domain. The Company has expressed its opposition to the possible condemnation of
a portion of the property and has the right to appeal any such action by the
Port Authority. If the Port Authority prevails, the Company would be entitled to
compensation for its loss. Since the nature and scope of any plans being
considered by the Port Authority, and whether any such plans would ultimately
affect the Lexington Avenue property, cannot be fully assessed by the Company at
this time, it is impossible to determine the ultimate effect that a taking, or
any uncertainty with respect thereto, would have on the Company's use or
development of the Lexington Avenue property.
Tax Certiorari Proceedings
Alexander's Department Stores of Valley Stream, Inc. ("ADS of Valley Stream")
is a party to a tax certiorari proceeding against The Board of Assessors and The
Board of Assessment Review of the County of Nassau (the "Board") for overpayment
of taxes on its former Valley Stream store property during the assessment rolls
from 1986 to 1992. In January 1995, the Supreme Court of Nassau County, New York
ruled that ADS of Valley Stream is entitled to an assessment reduction which
would result in a refund of approximately $6,600,000, plus interest (currently,
$3,200,000). Both the Board and the Company have appealed the Court's decision.
Page 9 of 16
<PAGE> 10
ALEXANDER'S, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Environmental Matters
The results of a 1993 Phase I environmental assessment at the Kings Plaza
property show that certain adjacent properties owned by third parties have
experienced petroleum hydrocarbon contamination. Based on this assessment and
additional investigation of the Kings Plaza property and historical operations
at the site, the Company believes there is a potential for hydrocarbon
contamination on the Kings Plaza property. However, no contamination has been
found on the property to date.
Page 10 of 16
<PAGE> 11
ALEXANDER'S, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The industry practice of REIT's is to consider funds from operations an
appropriate supplemental measure of operating performance. Funds from operations
were a negative $2,846,000 in the quarter ended June 30, 1995, as compared to a
positive $651,000 in the quarter ended June 30, 1994. Funds from operations were
a negative $4,009,000 in the six months ended June 30, 1995, as compared to a
positive $1,800,000 in the six months ended June 30, 1994.
The following table reconciles funds from operations and pre-tax income:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- --------------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
------------ --------- ------------ ----------
<S> <C> <C> <C> <C>
(Loss)/income before income taxes $(3,260,000) $ 86,000 $(6,110,000) $ 736,000
Gain on sale of real estate - - - (161,000)
Depreciation and amortization 469,000 457,000 933,000 914,000
Reorganization costs 322,000 497,000 1,938,000 1,143,000
Straight-lining of property rentals (377,000) (389,000) (770,000) (832,000)
----------- --------- ----------- ----------
Funds (used in)/provided by operations $(2,846,000) $ 651,000 $(4,009,000) $1,800,000
=========== ========= =========== ==========
</TABLE>
Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and is
not necessarily indicative of cash available to fund cash needs. Funds from
operations should not be considered as an alternative to net income as an
indicator of the Company's operating performance or as an alternative to cash
flows as a measure of liquidity.
The Company's revenues, which consist of property rentals, tenant expense
reimbursements and other income were $2,819,000 in the quarter ended June 30,
1995, compared to $2,805,000 in the prior year's quarter, an increase of $14,000
or 0.5%. Revenues were $6,242,000 for the six months ended June 30, 1995,
compared to $5,986,000 for the prior year's six months, an increase of $256,000
or 4.3%. This increase resulted primarily from an increase in the income derived
from the operation of the Kings Plaza Shopping Center and Marina during the
quarter ended March 31, 1995.
Operating, general and administrative expenses were $2,492,000 in the
quarter ended June 30, 1995, compared to $1,176,000 in the prior year's quarter,
an increase of $1,316,000. Operating, general and administrative expenses were
$4,043,000 in the six months ended June 30, 1995 compared to $2,270,000 for the
prior year's six months, an increase of $1,773,000. These increases resulted
primarily from fees under the Management Agreement and the commencement of
salary to the Chairman of the Board of Directors.
Depreciation and amortization expense for the three and six months ended
June 30, 1995, did not change significantly from such expense for the prior
year's periods.
Reorganization costs were $322,000 in the quarter ended June 30, 1995,
compared to $497,000 in the prior year's quarter, a decrease of $175,000.
Reorganization costs were $1,938,000 in the six months ended June 30, 1995,
compared to $1,143,000 in the prior year's periods, an increase of $795,000.
These expenses were primarily due to professional fees incurred in connection
with investigating financing alternatives, becoming a REIT and bankruptcy
expenses. The Company expects no further significant costs in connection with
these activities.
Page 11 of 16
<PAGE> 12
ALEXANDER'S, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Interest and debt expense was $3,483,000 in the quarter ended June 30, 1995,
as compared to $624,000 in the prior year's quarter, an increase of $2,859,000.
Interest and debt expense was $6,222,000 for the six months ended June 30, 1995,
compared to $1,220,000 for the prior year's period, an increase of $5,002,000.
Of these increases, $2,303,000 and $4,446,000 resulted from increased borrowings
and $556,000 resulted from the write-off of unamortized debt issuance costs on
debt repaid in the first quarter of 1995.
Interest and other income increased in 1995 as compared to 1994, as a result
of higher average cash invested due to increased borrowings.
As a result of the Company's intention to elect to be taxed as a REIT for
the year ended December 31, 1995, the deferred tax balance of $1,406,000 at
December 31, 1994 was reversed, resulting in an income tax benefit in the
quarter ended March 1995.
LIQUIDITY AND CAPITAL RESOURCES
On June 30, 1995, the Company had cash (including short-term investments) of
$19,000,000 compared to $2,400,000 at December 31, 1994, an increase of
$16,600,000. The increase in cash resulted primarily from new borrowings of
$126,600,000, partially offset by (i) deferred finance and debt expense of
$5,000,000, (ii) debt repayments of $39,600,000, (iii) repayment of liabilities
of discontinued operations of $28,200,000 including payment of general unsecured
claims (including principal and interest) of $24,000,000, (iv) cash used in
operating activities of $25,500,000, of which $21,000,000 was used to establish
restricted funds for (a) unpaid real estate taxes ($7,000,000) and the remaining
disputed claims in the bankruptcy court cases as they become allowed
($8,000,000), and (b) collateral accounts required for the Rego Park
construction ($6,000,000) and (v) capital expenditures of $11,600,000.
Substantially all of the assets of the Company and its subsidiaries have been
pledged and/or mortgaged to secure new borrowings.
In connection with the Company's redevelopment plans for its Rego Park
property, the Company has expended approximately $7,600,000 and expects to
expend up to an additional $29,000,000 during the balance of 1995, for a new
parking structure and other improvements. At June 30, 1995, there was
$33,400,000 available under a $60,000,000 construction loan to fund these
expenditures.
The Company estimates that its capital expenditure requirements for other
projects will include (i) the asbestos removal, building demolition and other
improvements at the Paramus property which are expected to cost between
$15,000,000 and $17,000,000, and (ii) $10,000,000 to subdivide the existing
space and other improvements at the Kings Plaza Store property. There is no
assurance that these potential projects will commence in 1995. The Company may
seek to obtain additional financings to develop these properties. However,
there can be no assurance that such financings can be obtained or, if obtained,
that such financings will be on terms that are acceptable to the Company. In
addition, in the event a portion of the Paramus property is condemned, the
Company's plan for development of this property would be affected, and the cost
and time required to develop the property may materially increase.
The Company's properties do not generate sufficient cash flow to pay all of
its expenses. However, the Company estimates that its cash and borrowings
available under its Rego Park construction loan are adequate to fund its
business operations and debt service obligations through the first quarter of
1996 and the cost to redevelop the Rego Park property.
Page 12 of 16
<PAGE> 13
ALEXANDER'S, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the 1995 Annual Meeting of Stockholders on May 25,
1995, the Stockholders elected the two nominees listed in the
Proxy Statement to serve on the Board of Directors for a term
of three years, or until their respective successors are duly
elected and qualify. A total of 4,594,714 shares of common
stock were voted in person or by proxy. The vote tabulation
with respect to each nominee was as follows:
<TABLE>
<CAPTION>
Votes Cast
Against or
Director Votes Cast For Withheld
------------------ -------------- ----------
<S> <C> <C>
Thomas DiBenedetto 4,582,732 11,982
Stephen Mann 4,582,620 12,094
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: The following exhibits are filed with this
Quarterly Report on Form 10-Q.
27 Financial Data Schedule
(b) Reports on Form 8-K
None
Page 13 of 16
<PAGE> 14
ALEXANDER'S, INC.
SIGNATURES
Pursuant to the requirements 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: August 10, 1995 /s/ Joseph Macnow
------------------------------------
JOSEPH MACNOW
Vice President - Chief Financial
Officer and Chief Accounting Officer
Page 14 of 16
<PAGE> 15
ALEXANDER'S, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER IN
SEQUENTIAL
EXHIBIT NO. NUMBERING
----------- --------------
<S> <C> <C>
27 Financial Data Schedule 16
</TABLE>
Page 15 of 16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 18,962
<SECURITIES> 0
<RECEIVABLES> 7,514
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 148,489
<DEPRECIATION> (37,013)
<TOTAL-ASSETS> 186,079
<CURRENT-LIABILITIES> 0
<BONDS> 161,893
<COMMON> 5,174
0
0
<OTHER-SE> (31,451)
<TOTAL-LIABILITY-AND-EQUITY> 186,079
<SALES> 0
<TOTAL-REVENUES> 6,242
<CGS> 0
<TOTAL-COSTS> 4,043
<OTHER-EXPENSES> 1,938
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,222
<INCOME-PRETAX> (6,110)
<INCOME-TAX> 1,406
<INCOME-CONTINUING> (4,704)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,704)
<EPS-PRIMARY> (.94)
<EPS-DILUTED> (.94)
</TABLE>
