Alexander's (ALX) 8-K Completion of Acquisition or Disposition of Assets

Exhibit 99.2

		Page
	Index to Pro Forma Condensed Consolidated Financial Statements	Number
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2012 (unaudited)		2
Condensed Consolidated Statements of Income for the Nine Months Ended
	September 30, 2012 and 2011 (unaudited)	3
Pro Forma Condensed Consolidated Statement of Income for the Year Ended
	December 31, 2011 (unaudited)	4
Pro Forma Condensed Consolidated Statement of Income for the Year Ended
	December 31, 2010 (unaudited)	5
Pro Forma Condensed Consolidated Statement of Income for the Year Ended
	December 31, 2009 (unaudited)	6
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)		7

1

 

ALEXANDER’S, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2012
(UNAUDITED)

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

ASSETS						As Reported		Pro Forma Adjustments				Pro Forma
	Real estate, at cost:
		Land				$	44,971	$	-		$	44,971
			Buildings and leasehold improvements				864,552		-			864,552
			Development and construction in progress				1,930		-			1,930
					Total		911,453		-			911,453
	Accumulated depreciation and amortization						(154,717)		-			(154,717)
	Real estate, net						756,736		-			756,736
	Cash and cash equivalents						508,363		(176,475)	(A)		331,888
	Investment in marketable securities						-		30,000	(B)		30,000
	Restricted cash						89,185		-			89,185
	Accounts receivable, net						3,270		-			3,270
	Receivable arising from the straight-lining of rents						173,043		-			173,043
	Deferred lease and other property costs, net						55,629		-			55,629
	Deferred debt issuance costs, net						6,107		-			6,107
	Assets related to discontinued operations						133,525		(133,525)	(C)		-
	Other assets						39,619		-			39,619
						$	1,765,477	$	(280,000)		$	1,485,477
LIABILITIES AND EQUITY
	Mortgages payable					$	1,069,776	$	-		$	1,069,776
	Amounts due to Vornado						39,794		-			39,794
	Accounts payable and accrued expenses						40,597		-			40,597
	Liabilities related to discontinued operations						250,000		(250,000)	(C)		-
	Other liabilities						1,213		2,000	(D)		3,213
					Total liabilities		1,401,380		(248,000)			1,153,380
	Commitments and contingencies
	Preferred stock: $1.00 par value per share; authorized, 3,000,000 shares; issued and outstanding, none						-		-			-
	Common stock: $1.00 par value per share; authorized, 10,000,000 shares; issued 5,173,450 shares; outstanding, 5,105,936 shares						5,173		-			5,173
	Additional capital						32,101		(2,775)	(E)		29,326
	Retained earnings						321,973		(24,000)	(F)		297,973
							359,247		(26,775)			332,472
	Treasury stock: 67,514 shares, at cost						(375)		-			(375)
					Total Alexander’s equity		358,872		(26,775)			332,097
	Noncontrolling interest in consolidated subsidiary						5,225		(5,225)	(E)		-
					Total equity		364,097		(32,000)			332,097
						$	1,765,477	$	(280,000)		$	1,485,477
				See notes to pro forma condensed consolidated financial statements (unaudited).

2

 

ALEXANDER’S, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in thousands, except share and per share amounts)
		As Reported
		Nine Months Ended September 30,
		2012		2011
REVENUES
	Property rentals	$	101,034	$	100,486
	Expense reimbursements		41,787		38,202
Total revenues			142,821		138,688
EXPENSES
	Operating		45,184		41,029
	Depreciation and amortization		21,577		20,931
	General and administrative		3,895		2,899
Total expenses			70,656		64,859
OPERATING INCOME			72,165		73,829
	Interest and other income, net		111		217
	Interest and debt expense		(34,206)		(32,613)
	Income before income taxes		38,070		41,433
	Income tax (expense) benefit		(62)		80
Income from continuing operations		$	38,008	$	41,513
Income from continuing operations per common share – basic and diluted		$	7.44	$	8.13
Weighted average shares outstanding – basic and diluted			5,107,474		5,106,642
See notes to pro forma condensed consolidated financial statements (unaudited).

3

 

ALEXANDER’S, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Amounts in thousands, except share and per share amounts)
		Year Ended December 31, 2011
			As Reported		Kings Plaza		Pro Forma Adjustments			Pro Forma
REVENUES
	Property rentals		$	174,634	$	40,952	$	-		$	133,682
	Expense reimbursements			79,618		28,054		-			51,564
Total revenues				254,252		69,006		-			185,246
EXPENSES
	Operating			84,936		29,455		-			55,481
	Depreciation and amortization			34,031		5,948		-			28,083
	General and administrative			4,357		361		300	(G)		4,296
Total expenses				123,324		35,764		300			87,860
OPERATING INCOME (LOSS)				130,928		33,242		(300)			97,386
	Interest and other income, net			2,672		1,671		-			1,001
	Interest and debt expense			(52,659)		(8,761)		-			(43,898)
	Income (loss) before income taxes			80,941		26,152		(300)			54,489
	Income tax benefit			105		63		-			42
Income (loss) from continuing operations			$	81,046	$	26,215	$	(300)		$	54,531
Income from continuing operations per common share – basic and diluted			$	15.87						$	10.68
Weighted average shares outstanding – basic and diluted				5,106,568							5,106,568
See notes to condensed consolidated pro forma financial statements (unaudited).

4

 

ALEXANDER’S, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Amounts in thousands, except share and per share amounts)
		Year Ended December 31, 2010
			As Reported		Kings Plaza		Pro Forma Adjustments			Pro Forma
REVENUES
	Property rentals		$	166,403	$	39,163	$	-		$	127,240
	Expense reimbursements			74,947		27,981		-			46,966
Total revenues				241,350		67,144		-			174,206
EXPENSES
	Operating			78,652		28,499		-			50,153
	Depreciation and amortization			31,343		5,655		-			25,688
	General and administrative			7,792		418		300	(G)		7,674
Total expenses				117,787		34,572		300			83,515
OPERATING INCOME (LOSS)				123,563		32,572		(300)			90,691
	Interest and other income, net			851		52		-			799
	Interest and debt expense			(58,372)		(12,917)		-			(45,455)
	Net loss on early extinguishment of debt			(1,238)		(1,238)		-			-
	Income (loss) before income taxes			64,804		18,469		(300)			46,035
	Income tax benefit (expense)			2,641		(183)		-			2,824
Income (loss) from continuing operations			$	67,445	$	18,286	$	(300)		$	48,859
Income from continuing operations per common share – basic and diluted			$	13.21						$	9.57
Weighted average shares outstanding – basic and diluted				5,105,936							5,105,936
See notes to condensed consolidated pro forma financial statements (unaudited).

5

 

ALEXANDER’S, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Amounts in thousands, except share and per share amounts)
		Year Ended December 31, 2009
			As Reported		Kings Plaza		Pro Forma Adjustments			Pro Forma
REVENUES
	Property rentals		$	155,275	$	37,055	$	-		$	118,220
	Expense reimbursements			68,254		26,780		-			41,474
Total revenues				223,529		63,835		-			159,694
EXPENSES
	Operating			73,340		27,743		-			45,597
	Depreciation and amortization			27,284		5,607		-			21,677
	General and administrative (including a reversal of stock appreciation rights expense of $34,275)			(28,246)		394		300	(G)		(28,340)
Total expenses				72,378		33,744		300			38,934
OPERATING INCOME (LOSS)				151,151		30,091		(300)			120,760
	Interest and other income, net			2,847		95		-			2,752
	Interest and debt expense			(57,473)		(15,363)		-			(42,110)
	Net loss on early extinguishment of debt			(519)		(519)		-			-
	Income (loss) before income taxes			96,006		14,304		(300)			81,402
	Income tax benefit (expense)			36,935		(60)		-			36,995
Income (loss) from continuing operations			$	132,941	$	14,244	$	(300)		$	118,397
Income from continuing operations per common share – basic			$	26.05						$	23.20
Weighted average shares outstanding – basic				5,103,790							5,103,790
Income from continuing operations per common share – diluted			$	26.04						$	23.19
Weighted average shares outstanding – diluted				5,105,370							5,105,370
See notes to condensed consolidated pro forma financial statements (unaudited).

6

 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.    DESCRIPTION OF TRANSACTION

On November 28, 2012, Alexander’s, Inc. (the “Company”) completed the sale of the 1.2 million square foot Kings Plaza Regional Shopping Center located in Brooklyn, New York (“Kings Plaza”) to The Macerich Company (NYSE: MAC) (“MAC”) for $751 million.  Net proceeds from the sale, after repaying the existing loan and closing costs, were approximately $479 million, of which $30 million (at the Company’s election) was received in MAC common shares.  The financial statement gain was approximately $600 million, which is net of $2 million that will be deferred and recognized upon the disposition of the MAC common shares.  The tax gain was approximately $624 million and will be paid out to stockholders during 2012, as a special long-term capital gain dividend.

2.    BASIS OF PRESENTATION

The Company’s unaudited pro forma condensed consolidated financial statements that accompany these notes consist of (i) the pro forma condensed consolidated balance sheet as of September 30, 2012, giving effect to the disposition of Kings Plaza as if it had occurred on September 30, 2012, (ii) the condensed consolidated statements of income for the nine months ended September 30, 2012 and 2011 as reported, and (iii) the pro forma condensed consolidated statements of income for each of the three years ended December 31, 2011, 2010 and 2009, respectively, giving effect to the disposition of Kings Plaza as if it had occurred on January 1, 2009.

In management’s opinion, all adjustments necessary to reflect the disposition of Kings Plaza have been made in the accompanying unaudited pro forma condensed consolidated financial statements.  These pro forma financial statements are not necessarily indicative of what the Company’s actual consolidated results of operations or consolidated financial position would have been had this transaction been consummated on the dates indicated, nor does it purport to represent the Company’s consolidated results of operations or consolidated financial position for any future period.  The Company’s consolidated results of operations for the nine months ended September 30, 2012 and 2011 are not necessarily indicative of the operating results for the full year.

      The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’sAnnual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on Form 10-Q for the period ended September 30, 2012.

7

 

ALEXANDER’S, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.    PRO FORMA ADJUSTMENTS

(A)       On November 28, 2012, the Company completed the sale of Kings Plaza.  The expected impact of the sale on the Company’s cash and cash equivalents is as follows:

(Amounts in thousands)
Sales proceeds	$	751,000
Portion of sales proceeds received in MAC common shares		(30,000)	(B)
Acquisition of the remaining 75% interest in the Kings Plaza Energy Plant joint venture		(8,000)	(E)
Estimated closing costs		(15,475)
Repayment of existing loan		(250,000)	(C)
Special long-term capital gain dividend		(624,000)
Net impact to cash and cash equivalents	$	(176,475)

(B)  To record the portion of the sales proceeds received in MAC common shares.

(C)  To remove the assets and liabilities of Kings Plaza as a result of the sale.

(D) Represents the portion of the gain that will be deferred based on our ownership in The Macerich Company, as a result of receiving a portion of the sales proceeds in MAC common shares.

(E) To account for the acquisition of the remaining 75% interest of our consolidated subsidiary, the Kings Plaza Energy Plant joint venture.

(F) The expected impact of the sale on the Company’s retained earnings is as follows:

(Amounts in thousands)
Sales proceeds	$	751,000
Assets related to discontinued operations		(133,525)	(C)
Estimated closing costs		(15,475)
Portion of gain to be deferred		(2,000)	(D)
Net gain on sale		600,000
Special long-term capital gain dividend		(624,000)
Net impact to retained earnings	$	(24,000)

(G)  To reallocate a portion of Corporate Overhead as a result of the sale.