ALEXANDERS INC

Previous wording

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

Current wording

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly, any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and nine months ended September 30, 2024 and 2023. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full year.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three months ended March 31, 2025. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the operating results for the full year.

Previous wording

A summary of the critical accounting estimates used in the preparation of our consolidated financial statements is included in our Annual Report on Form 10-K for the year ended December 31, 2023 in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a summary of our significant accounting policies is included in “Note 2 – Summary of Significant Accounting Policies” to the consolidated financial statements included therein. For the nine months ended September 30, 2024, there were no material changes to these estimates or policies.

Current wording

A summary of the critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. For the three months ended March 31, 2025, there were no material changes to these estimates or policies.

Previous wording

We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.

Current wording

We compete with a large number of real estate investors, property owners and developers, some of whom may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, tenant concessions offered, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national and local economies, the financial condition and operating results of current and prospective tenants and customers, the availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends, zoning laws, and our ability to lease, sublease or sell our properties, at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.

Previous wording

Additionally, our business has been, and may continue to be, affected by the increase in inflation and interest rates and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding these and other factors that may materially affect our results.

Current wording

Our business has been, and may continue to be, affected by interest rate fluctuations, the effects of inflation and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding these and other factors that may materially affect our results.

Previous wording

Three Months Ended September 30, 2024 Financial Results Summary

Current wording

Quarter Ended March 31, 2025 Financial Results Summary

Previous wording

Net income for the three months ended September 30, 2024 was $6,678,000, or $1.30 per diluted share, compared to $10,754,000 or $2.10 per diluted share in the prior year’s three months.

Current wording

Net income for the quarter ended March 31, 2025 was $12,312,000, or $2.40 per diluted share, compared to $16,109,000 or $3.14 per diluted share in the prior year’s quarter.

Previous wording

Funds from operations (“FFO”) (non-GAAP) for the three months ended September 30, 2024 was $14,582,000, or $2.84 per diluted share, compared to $18,623,000 or $3.63 per diluted share in the prior year’s three months.

Current wording

Funds from operations (“FFO”) (non-GAAP) for the quarter ended March 31, 2025 was $20,842,000, or $4.06 per diluted share, compared to $25,532,000 or $4.98 per diluted share in the prior year’s quarter.

Previous wording

Our portfolio is comprised of five properties aggregating 2,456,000 square feet. As of September 30, 2024, the commercial occupancy rate was 92.1% and the residential occupancy rate was 96.5%.

Current wording

Our portfolio is comprised of five properties aggregating 2,455,000 square feet. As of March 31, 2025, the commercial occupancy rate was 94.7% and the residential occupancy rate was 93.9%.

Previous wording

Bloomberg L.P. (“Bloomberg”) accounted for revenue of $93,179,000 and $89,863,000 for the nine months ended September 30, 2024 and 2023, respectively, representing approximately 55% of our rental revenues in each period. No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

Current wording

Bloomberg L.P. (“Bloomberg”) accounted for revenue of $32,205,000 and $29,963,000 for the three months ended March 31, 2025 and 2024, respectively, representing approximately 59% and 49% of our rental revenues in each period, respectively. No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

Previous wording

Rental revenues were $55,675,000 for the three months ended September 30, 2024, compared to $55,413,000 for the prior year’s three months, an increase of $262,000. This was primarily due to (i) $1,740,000 of higher straight-line rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue and (ii) $775,000 of higher lease termination fee income, partially offset by (iii) $1,523,000 of lower rental revenue from IKEA’s lease expiration at Rego Park I and (iv) $416,000 of lower operating expense reimbursements.

Current wording

Rental revenues were $54,915,000 for the three months ended March 31, 2025, compared to $61,397,000 for the prior year’s three months, a decrease of $6,482,000. This was primarily due to (i) $8,902,000 of lower straight-line rental revenue from IKEA’s lease expiration at Rego Park I and (ii) $1,337,000 of lower straight-line rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by (iii) $1,755,000 of payments received for tenant receivables that were previously written off and (iv) $1,740,000 of higher straight-line rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue.

Previous wording

Operating expenses were $26,446,000 for the three months ended September 30, 2024, compared to $25,593,000 for the prior year’s three months, an increase of $853,000. This was primarily due to higher real estate tax expense.

Current wording

Operating expenses were $25,564,000 for the three months ended March 31, 2025, compared to $25,263,000 for the prior year’s three months, an increase of $301,000. This was primarily due to $840,000 of higher real estate taxes partially offset by higher capitalized expenses of $633,000.

Previous wording

Depreciation and amortization was $26,146,000 for the nine months ended September 30, 2024, compared to $23,492,000 for the prior year’s nine months, an increase of $2,654,000. This was primarily due to (i) $1,748,000 of higher depreciation expense on capital projects placed into service and (ii) $840,000 of accelerated depreciation and amortization related to IKEA’s lease modification at Rego Park I.

Current wording

Depreciation and amortization was $8,599,000 for the three months ended March 31, 2025, compared to $9,477,000 for the prior year’s three months, a decrease of $878,000. This was due to a decrease of $1,110,000 associated with the accelerated depreciation and amortization related to IKEA’s lease expiration at Rego Park I in the prior year’s three months, partially offset by $232,000 of higher depreciation expense on capital projects placed into service.

Previous wording

Interest and other income was $6,105,000 for the three months ended September 30, 2024, compared to$6,622,000 for the prior year’s three months, a decrease of$517,000. This was primarily due to a decrease in average cash balances.

Current wording

Interest and other income was $3,945,000 for the three months ended March 31, 2025, compared to $7,162,000 for the prior year’s three months, a decrease of $3,217,000. This was primarily due to a decrease in average interest rates and investment balances.

Previous wording

As of September 30, 2024, we had $397,176,000 of liquidity comprised of cash and cash equivalents and restricted cash. Recent increases in interest rates and inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures. We may refinance our maturing debt as it comes due or choose to pay it down. However, there can be no assurance that additional financing or capital will be available to refinance our debt, or that the terms will be acceptable or advantageous to us.

Current wording

As of March 31, 2025, we had $377,645,000 of liquidity comprised of cash and cash equivalents and restricted cash. The ongoing challenges posed by fluctuations in interest rates and the effects of inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures. We may refinance our maturing debt as it comes due or choose to pay it down. However, there can be no assurance that additional financing or capital will be available to refinance our debt, or that the terms will be acceptable or advantageous to us.

Previous wording

Cash and cash equivalents and restricted cash were $397,176,000 as of September 30, 2024, compared to $552,977,000 as of December 31, 2023, a decr ease of$155,801,000. This decrease resulted from (i)$175,824,000 of net cash used in financing activities and (ii)$3,273,000 of net cash used in investing activities, partially offset by (iii)$23,296,000 of net cash provided by operating activities.

Current wording

Cash and cash equivalents and restricted cash were $377,645,000 as of March 31, 2025, compared to $393,836,000 as of December 31, 2024, a decr ease of $16,191,000. This decrease resulted from (i) $23,890,000 of net cash used in financing activities and (ii) $8,021,000 of net cash used in investing activities, partially offset by (iii) $15,720,000 of net cash provided by operating activities.

Previous wording

Net cash used in financing activities of $69,301,000 was comprised of dividends paid of $69,232,000 and debt issuance costs of $69,000.

Current wording

Net cash used in financing activities of $23,890,000 was comprised of $23,101,000 of dividends paid and $789,000 of debt repayments.

Previous wording

Net cash provided by operating activities of $64,367,000 was comprised of (i) net income of $86,127,000, partially offset by (ii) the net change in operating assets and liabilities of $4,322,000 and (iii) adjustments for non-cash items of $17,438,000. The adjustments for non-cash items were comprised of (i) net gain on sale of real estate of $53,952,000, partially offset by (ii) depreciation and amortization (including amortization of debt issuance costs) of $24,771,000, (iii) straight-lining of rents of $5,949,000, (iv) interest rate cap premium amortization of $4,049,000, (v) other non-cash adjustments of $1,295,000 and (vi) stock-based compensation expense of $450,000.

Current wording

Net cash provided by operating activities of $15,720,000 was comprised of (i) net income of $12,312,000 and (ii) adjustments for non-cash items of $12,743,000, partially offset by (iii) the net change in operating assets and liabilities of $9,335,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $9,389,000, (ii) other non-cash adjustments of $2,158,000, (iii) straight-lining of rents of $1,020,000 and (iv) interest rate cap premium amortization of $176,000.

Previous wording

Cash and cash equivalents and restricted cash were $529,081,000 as of September 30, 2023, compared to $214,478,000 as of December 31, 2022, an increase of $314,603,000. This increase resulted from (i) $319,537,000 of net cash provided by investing activities and (ii) $64,367,000 of net cash provided by operating activities, partially offset by (iii) $69,301,000 of net cash used in financing activities.

Current wording

Cash and cash equivalents and restricted cash were $547,399,000 as of March 31, 2024, compared to $552,977,000 as of December 31, 2023, a decr ease of $5,578,000. This decrease resulted from (i) $23,088,000 of net cash used in financing activities, partially offset by (ii) $16,825,000 of net cash provided by operating activities and (iii) $685,000 of net cash provided by investing activities.

Previous wording

Net cash provided by operating activities of$23,296,000 was comprised of (i) net income of $31,167,000 and (ii) adjustments for non-cash items of $45,349,000, partially offset by (iii) the net change in operating assets and liabilities of $53,220,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of$28,470,000, (ii) straight-lining of rents of$11,880,000, (iii) interest rate cap premium amortization of$6,213,000 and (iv) stock-based compensation expense of$450,000, partially offset by (v) other non-cash adjustments of$1,664,000.

Current wording

Net cash provided by operating activities of $16,825,000 was comprised of (i) net income of $16,109,000 and (ii) adjustments for non-cash items of $19,853,000, partially offset by (iii) the net change in operating assets and liabilities of $19,137,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $9,917,000, (ii) straight-lining of rents of $9,355,000 and (iii) interest rate cap premium amortization of $3,401,000, partially offset by (iv) other non-cash adjustments of $2,820,000.

Previous wording

Net cash used in investing activities of $3,273,000 was comprised of $9,836,000 of construction in progress and real estate additions, partially offset by proceeds from an interest rate cap of $6,563,000.

Current wording

Net cash provided by investing activities of $685,000 was comprised of $3,160,000 of proceeds from an interest rate cap, partially offset by construction in progress and real estate additions of $2,475,000.

Previous wording

Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.

Current wording

Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $338,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.