##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 JUNE 30, 2005
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
 001-6064
 ALEXANDERS, INC.
  Delaware
    
    51-0100517(State or other jurisdiction of incorporation or
organization)
    
    (I.R.S. Employer Identification No.)
 210 Route 4 East, Paramus, New Jersey
    
    07652(Address of principal executive offices)
    
    (Zip Code)
 (201) 587-8541
 
  N/A
 
   þ o
  þ o




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##### Table of Contents



ALEXANDERS, INC. AND SUBSIDIARIES
 INDEX
 Page NumberPART I. Financial InformationItem 1. Financial Statements:Consolidated Balance Sheets as of
June 30, 2005 (unaudited) and December 31, 2004
    
    
    3Consolidated Statements of Operations (unaudited) for the Three and
Six Months Ended June 30, 2005 and 2004
    
    
    4Consolidated Statements of Cash Flows (unaudited) for the
Six Months Ended June 30, 2005 and 2004
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Report of Independent Registered Public Accounting Firm
    
    
    12Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    18Item 4. Control and Procedures
    
    
    18PART II. Other InformationItem 1. Legal Proceedings
    
    
    19Item 4. Submissions of Matters to a Vote of Security Holders
    
    
    19Item 6. Exhibits
    
    
    19Signatures
    
    
    20Exhibit Index
    
    
    21EX-15.1: LETTER RE: FINANCIAL INFORMATIONEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
 2




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ALEXANDERS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
  June 30,
    
    December 31,2005
    
    2004(Unaudited)ASSETSReal estate, at cost:Land
    
    $
    69,455
    
    
    $
    69,455Buildings, leaseholds and leasehold improvements
    
    
    583,669
    
    
    
    466,593Construction in progress
    
    
    17,848
    
    
    
    419,059Total
    
    
    670,972
    
    
    
    955,107Accumulated depreciation and amortization
    
    
    (81,280
    )
    
    
    (74,028
    )Real estate, net
    
    
    589,692
    
    
    
    881,079Cash and cash equivalents
    
    
    378,932
    
    
    
    128,874Deposits on the sale of condominium units and restricted cash
    
    
    41,338
    
    
    
    66,930Accounts, net of allowance for doubtful accounts of $342 and $379
    
    
    1,712
    
    
    
    4,872Notes receivable
    
    
    4,201
    
    
    
    Receivable arising from the straight-lining of rents
    
    
    84,906
    
    
    
    70,739Receivable arising from the sale of condominiums
    
    
    164,271
    
    
    
    Deferred lease and other property costs (including unamortized leasing fees
to Vornado Realty Trust (Vornado) of $46,042 and $38,819, net
    
    
    74,672
    
    
    
    68,148Deferred debt expense, net
    
    
    13,420
    
    
    
    15,027Other assets
    
    
    9,429
    
    
    
    9,132TOTAL ASSETS
    
    $
    1,362,573
    
    
    $
    1,244,801LIABILITIES AND STOCKHOLDERS EQUITYDebt (including $124,000 due to Vornado in 2005 and 2004)
    
    $
    975,419
    
    
    $
    952,528Amounts due to Vornado
    
    
    59,584
    
    
    
    49,225Accounts payable and accrued expenses
    
    
    30,537
    
    
    
    37,706Liability for stock appreciation rights
    
    
    150,394
    
    
    
    121,706Other liabilities (includes taxes payable of $40,324 in 2005)
    
    
    78,955
    
    
    
    65,268TOTAL LIABILITIES
    
    
    1,294,889
    
    
    
    1,226,433COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY
    
    
    
    
    
    
    Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares;
issued, noneCommon stock: $1.00 par value per share; authorized, 10,000,000 shares;
issued, 5,173,450 shares
    
    
    5,173
    
    
    
    5,173Additional capital
    
    
    26,269
    
    
    
    25,685Retained earnings (deficit)
    
    
    37,080
    
    
    
    (11,602
    )68,522
    
    
    
    19,256Treasury shares: 150,600 and 159,600 shares at cost
    
    
    (838
    )
    
    
    (888
    )TOTAL STOCKHOLDERS EQUITY
    
    
    67,684
    
    
    
    18,368TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,362,573
    
    
    $
    1,244,801
  3




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ALEXANDERS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004REVENUESProperty rentals
    
    $
    33,570
    
    
    $
    27,136
    
    
    $
    65,243
    
    
    $
    51,703Expense reimbursements
    
    
    12,165
    
    
    
    7,663
    
    
    
    24,168
    
    
    
    16,861Total revenues
    
    
    45,735
    
    
    
    34,799
    
    
    
    89,411
    
    
    
    68,564EXPENSESOperating (including fees to Vornado of $545,
$593, $1,013 and $972, respectively)
    
    
    14,581
    
    
    
    10,741
    
    
    
    28,415
    
    
    
    21,237General and administrative (including stock
appreciation rights compensation expense of
$6,163, $6,579, $28,688 and $36,618,
respectively, and management fees to Vornado
of $540 and $1,080 in each three and six
month period)
    
    
    7,453
    
    
    
    7,656
    
    
    
    31,081
    
    
    
    38,861Depreciation and amortization
    
    
    4,974
    
    
    
    3,878
    
    
    
    9,623
    
    
    
    7,408Total expenses
    
    
    27,008
    
    
    
    22,275
    
    
    
    69,119
    
    
    
    67,506OPERATING INCOME
    
    
    18,727
    
    
    
    12,524
    
    
    
    20,292
    
    
    
    1,058Interest and other income, net
    
    
    1,976
    
    
    
    279
    
    
    
    2,957
    
    
    
    737Interest and debt expense (including interest
on loans from Vornado)
    
    
    (16,409
    )
    
    

    (10,280
    )
    
    
    (27,712
    )
    
    
    (19,214
    )Write off of unamortized deferred debt expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,050
    )Income (loss) from continuing operations
    
    
    4,294
    
    
    
    2,523
    
    
    
    (4,463
    )
    
    
    (20,469
    )Gain on sale of condominiums
    
    
    23,672
    
    
    
    
    
    
    
    98,339
    
    
    
    Income tax expense of taxable REIT subsidiary
    
    
    (10,502
    )
    
    
    
    
    
    
    (45,194
    )
    
    
    13,170
    
    
    
    
    
    
    
    53,145
    
    
    
    NET INCOME (LOSS)
    
    $
    17,464
    
    
    $
    2,523
    
    
    $
    48,682
    
    
    $
    (20,469
    )Income
(loss) per common share  Basic
    
    $
    3.48
    
    
    $
    0.50
    
    
    $
    9.70
    
    
    $
    (4.09
    )Income
(loss) per common share  Diluted
    
    $
    3.44
    
    
    $
    0.50
    
    
    $
    9.59
    
    
    $
    (4.09
    )
  4




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ALEXANDERS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
  Six Months Ended June 30,2005
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    48,682
    
    
    $
    (20,469
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Gain on sale of condominiums
    
    
    (98,339
    )
    
    
    Income tax expense on taxable REIT subsidiary
    
    
    40,324
    
    
    
    Write-off of unamortized deferred debt expense
    
    
    
    
    
    
    3,050Depreciation and amortization (including amortization of deferred
debt expense)
    
    
    11,232
    
    
    
    9,067Straight-lining of rental income
    
    
    (14,167
    )
    
    
    (26,285
    )Change in operating assets and liabilities:Accounts receivable, net
    
    
    3,160
    
    
    
    (927
    )Notes receivable
    
    
    (4,201
    )
    
    
    Amounts due to Vornado
    
    
    8,877
    
    
    
    8,715Accounts payable and accrued expenses
    
    
    (818
    )
    
    
    1,601Liability for stock appreciation rights
    
    
    28,688
    
    
    
    36,618Other liabilities
    
    
    (65
    )
    
    
    48Other assets
    
    
    (8,441
    )
    
    
    (2,043
    )Net cash provided by operating activities
    
    
    14,932
    
    
    
    9,375CASH FLOWS FROM INVESTING ACTIVITIESProceeds from the sale of condominiums
    
    
    261,531
    
    
    
    Investment in joint venture
    
    
    (750
    )
    
    
    Additions to real estate
    
    
    (48,197
    )
    
    
    (83,617
    )Cash restricted for operating liabilities
    
    
    (980
    )
    
    
    (3,397
    )Net cash provided by (used in) investing activities
    
    
    211,604
    
    
    
    (87,014
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowings
    
    
    24,832
    
    
    
    424,832Repayments of borrowings
    
    
    (1,941
    )
    
    
    (254,945
    )Deferred debt expense
    
    
    (3
    )
    
    
    (2,694
    )Exercise of share options
    
    
    634
    
    
    
    598Net cash provided by financing activities
    
    
    23,522
    
    
    
    167,791Net increase in cash and cash equivalents
    
    
    250,058
    
    
    
    90,152Cash and cash equivalents at beginning of period
    
    
    128,874
    
    
    
    21,336Cash and cash equivalents at end of period
    
    $
    378,932
    
    
    $
    111,488SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash payments for interest (of which $6,935 and $12,567 have been
capitalized)
    
    $
    32,990
    
    
    $
    29,378
  5




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ALEXANDERS, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1. ORGANIZATION
  2. BASIS OF PRESENTATION
    3. RELATIONSHIP WITH VORNADO REALTY TRUST
   Management Agreements
  Leasing Agreements
  6




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ALEXANDERS,
INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  731 Lexington Avenue Fees
     Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,(amounts in thousands)
    
    2005
    
    2004
    
    2005
    
    2004Company management fees
    
    $
    750
    
    
    $
    750
    
    
    $
    1,500
    
    
    $
    1,500Development fee,
guarantee fee and rent
for development office
    
    
    853
    
    
    
    1,609
    
    
    
    1,988
    
    
    
    3,312Leasing fees
    
    
    839
    
    
    
    5,813
    
    
    
    9,935
    
    
    
    10,203Property management
fees and payments for
cleaning, engineering
and security services
    
    
    1,675
    
    
    
    461
    
    
    
    2,246
    
    
    
    1,123$
    4,117
    
    
    $
    8,633
    
    
    $
    15,669
    
    
    $
    16,138
  7




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ALEXANDERS,
INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
  4. 731 LEXINGTON AVENUE
      5. LEASES
  (amounts in thousands)Year Ending December 31,2005
    
    $
    47,0752006
    
    
    107,8892007
    
    
    106,0802008
    
    
    108,8552009
    
    
    104,788Thereafter
    
    
    1,554,550
  8




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ALEXANDERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 6. DEBT
  InterestRate at
    
    Balance atJune 30,
    
    June 30,
    
    December 31,Maturity
    
    2005
    
    2005
    
    2004(amounts in thousands, except for percentages)First mortgage, secured by the office space at
the Lexington Avenue property
    
    Feb. 2014
    
    
    5.33
    %
    
    $
    400,000
    
    
    $
    400,000First mortgage, secured by the Kings Plaza
Regional
Shopping Center
    
    June 2011
    
    
    7.46
    %
    
    
    212,127
    
    
    
    213,699Term loan and line of credit to Vornado
    
    Jan. 2006
    
    
    9.30
    %
    
    
    124,000
    
    
    
    124,000First mortgage, secured by the Rego Park I
Shopping Center
    
    June 2009
    
    
    7.25
    %
    
    
    81,292
    
    
    
    81,661First mortgage, secured by the Paramus property
    
    Oct. 2011
    
    
    5.92
    %
    
    
    68,000
    
    
    
    68,000Construction loan, secured by the retail and
residential space at the Lexington Avenue
property
    
    Jan. 2006
    
    
    5.81
    %
    
    
    90,000
    
    
    
    65,168$
    975,419
    
    
    $
    952,528
 7. COMMITMENTS AND CONTINGENCIES
  Insurance
    Environmental Remediation
  9




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ALEXANDERS,
INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   Flushing Property
  Kings Plaza
  Rego Park II
 th nd
    10




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ALEXANDERS,
INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 Paramus
  Letters of Credit
  8. EARNINGS PER SHARE
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income (loss) available to common
shareholders  Basic and Diluted
    
    $
    17,464,000
    
    
    $
    2,523,000
    
    
    $
    48,682,000
    
    
    $
    (20,469,000
    )Weighted average shares
outstanding  Basic
    
    
    5,021,899
    
    
    
    5,007,141
    
    
    
    5,018,880
    
    
    
    5,004,655Effect of stock options
    
    
    59,214
    
    
    
    53,769
    
    
    
    58,464
    
    
    
    Weighted average shares
outstanding  Diluted
    
    
    5,081,113
    
    
    
    5,060,910
    
    
    
    5,077,344
    
    
    
    5,004,655Income (loss) per common share  Basic
    
    $
    3.48
    
    
    $
    0.50
    
    
    $
    9.70
    
    
    $
    (4.09
    )Income (loss) per common share  Diluted
    
    $
    3.44
    
    
    $
    0.50
    
    
    $
    9.59
    
    
    $
    (4.09
    )
  11




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
   Overview
   Condominium Sales
  13




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Stock Appreciation Rights
  Application of Critical Accounting Policies
 Real Estate
  Results of Operations
      14




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Liquidity and Capital Resources
  Development Projects
 731 Lexington Avenue
  Kings Plaza
  Rego Park II
 th nd
 15




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Stock Appreciation Rights
  Insurance
    Cash Flows
 Six Months Ended June 30, 2005
    Six Months Ended June 30, 2004
  16




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Funds from Operations for the Three and Six Months Ended June 30, 2005 and 2004
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,(amounts in thousands)
    
    2005
    
    2004
    
    2005
    
    2004Net income (loss)
    
    $
    17,464
    
    
    $
    2,523
    
    
    $
    48,682
    
    
    $
    (20,469
    )Depreciation and amortization of real property
    
    
    4,952
    
    
    
    3,878
    
    
    
    9,583
    
    
    
    7,408FFO
    
    $
    22,416
    
    
    $
    6,401
    
    
    $
    58,265
    
    
    $
    (13,061
    )
    17




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Weighted
    
    Annual Effect of(amounts in thousands except per share amount)
    
    June 30, 2005
    
    Average Interest
    
    Change In BaseBalance
    
    Rate
    
    Rates of 1%Variable rate
    
    $
    214,000
    
    
    
    7.83
    %
    
    $
    2,140Fixed rate
    
    
    761,419
    
    
    
    6.18
    %
    
    
    $
    975,419
    
    
    
    
    
    
    $
    2,140Total effect on the Companys
annual net earnings per share  diluted
    
    
    
    
    
    
    
    
    
    $
    0.42
  
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
 Internal Control Over Financial Reporting 
 18




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Votes Cast
    
    VotesNominees
    
    For
    
    WithheldSteven Roth
    
    
    4,709,686
    
    
    
    208,614Neil Underberg
    
    
    4,681,745
    
    
    
    236,555Russell B. Wight, Jr.
    
    
    4,902,895
    
    
    
    15,405
   Votes Cast
    
    Votes CastFor
    
    Against
    
    Abstentions4,917,660
    
    
    640

    
    
    
    0
  
 Item 6. Exhibits
 (a)
    
    Exhibits required by Item 601 of Regulation S-K are filed herewith and are listed in the
attached
Exhibit Index.
 19




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SIGNATURES
  ALEXANDERS, INC.(Registrant)Date: July 27, 2005
    
    /s/ Joseph MacnowJoseph MacnowExecutive Vice President and Chief Financial Officer(duly authorized officer and
principal financial and accounting officer)
 20




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EXHIBIT INDEX
 ExhibitNo.3.1
    

Amended and Restated Certificate of Incorporation.
Incorporated herein by reference from Exhibit 3.1 to the
registrants Registration Statement on Form S-3 filed on
September 20, 1995
    
    *3.2
    
    By-laws, as amended. Incorporated herein by reference
from Exhibit 10.1 to the registrants Quarterly Report
on Form 10-Q for the quarter ended June 30, 2000
    
    *15.1
    
    Letter regarding unaudited interim financial information31.1
    
    Rule 13a-14(a) certification of the Chief Executive
Officer31.2
    
    Rule 13a-14(a) certification of the Chief Financial
Officer32.1
    
    Section 1350 certification of the Chief Executive Officer32.2
    
    Section 1350 certification of the Chief Financial Officer
 
 *
    
    Incorporated by reference. 21