1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) JUNE 22, 1995
--------------------------
Commission File Number: 1-11954
VORNADO REALTY TRUST
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 22-1657560
- --------------------------------------------------------------------------------
(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) 587-1000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 29
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Items 1-4; 6, 8. Not Applicable.
Items 5 and 7. Other Events; Pro Forma Financial Information and
Exhibits.
There are filed herewith (a) the consolidated financial
statements of Alexander's, Inc. and subsidiaries ("Alexander's")
as described on page 3 and (b) the condensed consolidated pro
forma balance sheet of Vornado Realty Trust, ("Vornado") as at
December 31, 1994 and the condensed consolidated pro forma
statement of income of Vornado for the year ended December 31,
1994 prepared in connection with the acquisition by the Company
of 1,353,468 shares of the outstanding common stock of
Alexander's, Inc. (the "Acquisition"), which Acquisition was
previously described in Vornado's Annual Report on Form 10-K
(the "1994 Form 10-K") for the year ended December 31, 1994 and
Quarterly Report on Form 10-Q for the quarter ended March 31,
1995.
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3
(a) Financial Statements of Alexander's, Inc.
Page
Reference
---------
Independent Auditors' Report 4
Consolidated Balance Sheets at December 31, 1994
and December 31, 1993 5
Consolidated Statements of Operations for the
Year Ended December 31, 1994, the
Five Months Ended December 31, 1993 and the
53 Weeks Ended July 31, 1993 6
Consolidated Statements of Deficiency in Net
Assets for the Year Ended December 31, 1994,
the Five Months Ended December 31, 1993 and
the 53 Weeks Ended July 31, 1993 7
Consolidated Statements of Cash Flows for the Year Ended
December 31, 1994, the Five Months Ended December 31,
1993 and the 53 Weeks Ended July 31, 1993 8
Notes to Consolidated Financial Statements 9
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4
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
of Alexander's, Inc.
New York, New York
We have audited the accompanying consolidated balance sheets of Alexander's,
Inc. and Subsidiaries (the "Company") as of December 31, 1994 and 1993 and the
related statements of operations, deficiency in net assets and cash flows for
the year ended December 31, 1994, for the five months ended December 31, 1993
and for the 53 weeks ended July 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also included
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1994, and
1993, and the results of their operations and their cash flows for the year
ended December 31, 1994 and for the five months ended December 31, 1993 and the
53 weeks ended July 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Note 5 to the financial statements, the Company changed in
Fiscal 1993 its method of accounting for postretirement healthcare benefits to
conform with Statement of Financial Accounting Standards No. 106.
As emphasized in Note 1 to the financial statements, the Company's ability to
operate as a viable real estate company will depend on the successful completion
of the development and leasing of a substantial portion of its existing
properties, which is a material factor in the Company's ability to meet its debt
service requirements.
DELOITTE & TOUCHE LLP
New York, New York
March 29, 1995
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ALEXANDER'S, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(amounts in thousands except share amounts)
--------------------------------------------------------
December 31, December 31,
1994 1993
------------ ------------
ASSETS:
Real estate, net $ 84,658 $ 70,882
Cash and cash equivalents 2,363 7,053
Restricted cash -- 775
Note receivable 4,550 --
Deferred lease expense 11,561 8,608
Deferred finance and debt expense 2,642 1,184
Other assets 3,645 4,415
--------- ---------
TOTAL ASSETS $ 109,419 $ 92,917
========= =========
LIABILITIES AND DEFICIENCY IN NET ASSETS:
CONTINUING OPERATIONS:
Secured debt $ 51,654 $ 41,566
Taxes payable and accrued liabilities 21,409 13,204
Debt 1,188 1,188
Minority interest 1,574 1,574
--------- ---------
Total continuing operations 75,825 57,532
--------- ---------
DISCONTINUED RETAIL OPERATIONS:
Accrual for losses from discontinued operations 26,742 32,227
Taxes payable and accrued liabilities 2,613 2,353
Liabilities subject to settlement under reorganization
proceedings 25,812 26,411
--------- ---------
Total discontinued retail operations 55,167 60,991
--------- ---------
Total liabilities 130,992 118,523
COMMITMENTS AND CONTINGENCIES
DEFICIENCY IN NET ASSETS (21,573) (25,606)
--------- ---------
TOTAL LIABILITIES AND DEFICIENCY IN NET ASSETS $ 109,419 $ 92,917
========= =========
See notes to consolidated financial statements.
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ALEXANDER'S, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(amounts in thousands except share amounts)
-------------------------------------------------------
Year Five Months Fifty-Three
Ended Ended Weeks Ended
--------------- --------------- -------------
Dec. 31, 1994 Dec. 31, 1993 July 31, 1993
--------------- --------------- --------------
Continuing Operations:
Real estate operating revenue $ 11,572 $ 5,133 $ 5,580
Gains on sales of real estate and
real estate leases 161 -- 28,779
Reorganization costs (3,721) (1,808) (5,030)
Depreciation and amortization (1,821) (833) (2,124)
Operating, general and administrative
expenses (3,595) (1,391) (842)
Interest and debt expense (3,331) (855) --
Other income and interest 4,768 700 788
-------------- ------------- ------------
Income/(loss) from continuing operations 4,033 946 27,151
Loss from discontinued operations -- -- (477)
-------------- ------------- ------------
Income/(loss) before cumulative effect of
change in accounting principle 4,033 946 26,674
Cumulative effect of change in accounting -- -- (21,449)
-------------- ------------- ------------
NET INCOME/(LOSS) $ 4,033 $ 946 $ 5,225
============== ============= ============
NET INCOME/(LOSS) PER COMMON
SHARE:
Continuing operations $ 0.81 $ 0.19 $ 5.45
Discontinued operations -- -- (0.09)
Cumulative effect of change in
accounting -- -- (4.31)
-------------- ------------- ------------
$ 0.81 $ 0.19 $ 1.05
============== ============= ============
See notes to consolidated financial statements.
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ALEXANDER'S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF DEFICIENCY IN NET ASSETS
(amounts in thousands except share amounts)
-------------------------------------------------------------------
Year Five Months Fifty-Three
Ended Ended Weeks Ended
Dec. 31, 1994 Dec. 31, 1993 July 31, 1993
------------- ------------- -------------
PREFERRED STOCK - Authorized, 3,000,000
shares, none issued
COMMON STOCK - Authorized, 10,000,000
shares, par value $1.00 per share;
outstanding, [5,173,450] shares $ 5,174 $ 5,174 $ 5,174
--------- --------- ---------
EXCESS STOCK - Authorized, 13,000,000
shares, par value $1.00 per share,
none issued
ADDITIONAL PAID-IN-CAPITAL
Balance, beginning of period 24,843 24,843 23,779
Exercise of stock options -- -- 1,064
--------- --------- ---------
Balance, end of period 24,843 24,843 24,843
--------- --------- ---------
DEFICIENCY IN NET ASSETS:
Balance, beginning of period (54,663) (55,609) (60,834)
Net income/(loss) 4,033 946 5,225
--------- --------- ---------
Balance, end of period (50,630) (54,663) (55,609)
--------- --------- ---------
(20,613) (24,646) (25,592)
TREASURY SHARES - (172,600, 172,600
and 197,600 shares at cost)
Balance, beginning of period (960) (960) (1,099)
Issuance of treasury stock -- -- 139
--------- --------- ---------
Balance, end of period (960) (960) (960)
--------- --------- ---------
DEFICIENCY IN NET ASSETS $ (21,573) $ (25,606) $ (26,552)
========= ========= =========
See notes to consolidated financial statements.
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ALEXANDER'S, INC. AND SUBSIDIARIES
Consolidated Statements Of Cash Flows
(amounts in thousands)
--------------------------------------------------------------
Five Fifty-Three
Year Months Weeks
Ended Ended Ended
------------- ------------- -------------
Dec. 31, 1994 Dec. 31, 1993 July 31, 1993
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations $ 4,033 $ 946 $ 27,151
Adjustments to reconcile net income to net cash provided
by continuing operating activities:
Depreciation and amortization 2,251 833 2,124
Gains on sales of real estate and real estate leases (161) -- (28,779)
Equity in real estate operations (net of distributions of $(583),
$(4,211) and $(1,329) at December 31, 1994, December 31, 1993 and July
31, 1993, respectively) (1,260) 3,116 (326)
Change in operating assets and liabilities from continuing
operations:
Restricted cash 775 371 1,833
Note receivable (4,550) -- --
Taxes payable and accrued liabilities 1,793 (1,020) 2,331
Other 1,602 1,238 (250)
-------- -------- --------
Net cash provided by operating activities of
continuing operations 4,483 5,484 4,084
-------- -------- --------
Net cash (used in) discontinued operating activities (5,539) (21,567) (28,475)
-------- -------- --------
Net cash (used in) operating activities (1,056) (16,083) (24,391)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate (11,170) (2,549) --
Proceeds from sales of real estate and real estate leases 200 -- 33,701
Deferred lease expense -- (677) (575)
-------- -------- --------
Net cash (used in)/provided by investing activities (10,970) (3,226) 33,126
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of secured debt 10,000 -- --
Reduction of secured debt (775) (2,314) --
Exercise of stock option -- -- 625
Reduction of debt from capital lease obligations -- -- (144)
Deferred finance and debt expense (1,889) -- --
-------- -------- --------
Net cash provided by/(used in) financing activities 7,336 (2,314) 481
-------- -------- --------
CASH AND CASH EQUIVALENTS:
Net cash (used)/provided (4,690) (21,623) 9,216
Beginning of period 7,053 28,676 19,460
-------- -------- --------
End of period $ 2,363 $ 7,053 $ 28,676
======== ======== ========
SUPPLEMENTAL INFORMATION
Cash payments for interest $ 5,133 $ 4,424 $ 2,222
======== ======== ========
Cash payments for income taxes $ 131 $ 349 $ 179
======== ======== ========
Tax refunds received $ (200) $ (564) $ --
======== ======== ========
See notes to consolidated financial statements.
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ALEXANDER'S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. EMERGENCE FROM CHAPTER 11
On May 15, 1992 (the "Petition Date"), Alexander's and sixteen
of its subsidiaries filed petitions for relief (the "Bankruptcy Cases") under
chapter 11 of the United States Bankruptcy Code, 11 U.S.C. Sections 101 et seq.
(the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court"). On May 14, 1993, the Company
filed a Joint Plan of Reorganization (as amended and restated on July 21, 1993,
and modified thereafter, the "Plan"), which allowed the Company to emerge from
bankruptcy and continue operating as a real estate company. On September 21,
1993 (the "Confirmation Date"), the Bankruptcy Court confirmed the Plan, which
provided for general unsecured creditors of the Company to receive cash in full
for their allowed claims, together with interest on such claims, upon the
successful effectuation of the Plan.
On March 1, 1995, the Bankruptcy Court approved a $75,000,000
secured financing, a portion of the proceeds from which were to pay the balance
due and owing to the holders of allowed general unsecured claims. On March 15,
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. The Bankruptcy Court has
retained jurisdiction to resolve any remaining disputed claims and for other
limited purposes.
The Company's ability to operate as a viable real estate
company will depend on the successful completion of the development and leasing
of a substantial portion of its existing properties, which is a material factor
in the Company's ability to meet its debt service requirements. A failure to
raise additional cash through additional leasing, asset sales, external
financing or otherwise will substantially impede the Company's ability to
complete the development of its properties.
Liabilities subject to settlement under the Plan are as follows
(amounts in thousands):
Dec. 31,1994 Dec. 31,1993
------------ ------------
Discontinued retail operations:
Accounts payable and accrued
liabilities $22,381 $22,945
Unsecured debt 731 766
Other liabilities 2,700 2,700
------- -------
$25,812 $26,411
======= =======
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business -- The Company is engaged in the business of leasing,
managing, developing and redeveloping real estate properties, focusing on the
properties where its department stores were formerly located.
Principles of Consolidation -- The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries, and the
Partnership, a partnership in which the Company held a majority interest at
December 31, 1994. Investments in real estate and other property which are 50%
owned joint ventures are accounted for under the equity method. All material
intercompany accounts and transactions have been eliminated.
Cash and Cash Equivalents -- The Company includes in cash and cash
equivalents both cash and short-term highly liquid investments which are readily
convertible into cash and mature within three months.
Real Estate and Other Property -- Real estate and other property is
recorded at the lower of cost, less accumulated depreciation, or market.
Depreciation is provided on buildings and improvements on a straight-line basis
over their estimated useful lives. When real estate and other property is
undergoing development activities, all property operating expenses, including
interest expense, are capitalized to the cost of the real property to the extent
that management believes such costs are recoverable through the value of the
property.
Deferred Lease Expense -- The Company capitalizes the costs incurred in
connection with obtaining long-term leases. Deferred lease expense is amortized
on the straight-line method over the initial terms of the leases.
Deferred Finance and Debt Expense -- The Company capitalizes the costs
incurred in connection with obtaining short-term or long-term debt or
refinancing existing debt. These costs are amortized on the straight-line method
over the initial terms of the debt.
Leases -- All leases are operating leases whereby rents are recorded as
real estate operating revenue, and reimbursement of operating expenses are
offset against property expenses included in operating, general and
administrative expenses. The straight-line basis is used to recognize rents
under leases entered into which provide for varying rents over the lease terms.
Income Taxes -- The Company recognizes deferred taxes for the temporary
differences between the tax bases of its assets and liabilities and the amounts
reported in the financial statements at enacted statutory tax rates.
Reorganization Costs -- Reorganization costs consist of legal,
accounting and other professional fees incurred in connection with consultations
on restructuring alternatives of the Company.
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Amounts Per Share -- Amounts per share are computed based upon the
weighted average number of shares outstanding during the period.
3. COMPARABLE TRANSITIONAL PERIOD FINANCIAL DATA
In November 1993, the Company changed to a calendar year from a
fiscal year ending on the last Saturday in July to be consistent with the
predominant real estate industry practice. The change of fiscal year resulted in
a transition period of five months beginning on August 1, 1993 and ending on
December 31, 1993. Presented below is the financial data for the years ended
December 31, 1994 and 1993 (amounts in thousands).
Year Year
Ended Ended
December 31, December 31,
1994 1993
------------ ------------
(Unaudited)
Continuing Operations:
Real estate operating revenue $ 11,572 $ 9,320
Gains on sales of real estate and
real estate leases 161 7,686
Reorganization costs (3,721) (4,400)
Depreciation and amortization (1,821) (1,876)
Operating, general and
administrative expenses (3,595) (1,501)
Interest and debt expense (3,331) (855)
Other income and interest 4,768 1,270
-------- -------
Income from continuing operations 4,033 9,644
Loss from discontinued operations -- (280)
-------- -------
NET INCOME $ 4,033 $ 9,364
======== =======
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4. REAL ESTATE
(amounts in thousands)
December 31, December 31,
1994 1993
------------ ------------
Land $ 26,460 $ 26,460
Buildings, leaseholds and leasehold improvements 59,851 59,654
Predevelopment and other deferred costs 27,213 13,653
-------- --------
113,524 99,767
Less: Accumulated depreciation and amortization 36,365 35,124
-------- --------
77,159 64,643
Investment in unconsolidated joint venture
(Kings Plaza Mall) 7,499 6,239
-------- --------
Real estate, net $ 84,658 $ 70,882
======== ========
Summary financial information for the Kings Plaza Mall is as follows (amounts in
thousands):
Six Months
Ended Fiscal Year Ended June 30,
Dec. 31, --------------------------
1994 1994 1993
----------- -------- -------
(unaudited)
Operating revenue $ 12,694 $ 24,635 $23,890
-------- -------- -------
Operating costs 8,590 17,662 17,477
Depreciation and amortization 649 1,147 1,231
Interest expense 879 1,945 2,270
-------- -------- -------
10,118 20,754 20,978
-------- -------- -------
Income before taxes $ 2,576 $ 3,881 $ 2,912
======== ======== =======
Assets, principally cash (at
June 30, 1993 and 1992) and
property and equipment $ 28,600 $ 33,800 $40,500
======== ======== =======
Liabilities $ 17,400 $ 19,500 $22,600
======== ======== =======
As of March 24, 1995, the Company had not paid real estate
taxes that were due on its Rego Park, Lexington Avenue, Third Avenue and Kings
Plaza Store properties in the aggregate principal amount of approximately
$5,900,000 plus interest.
During the first quarter of 1995, the Company entered into
separate agreements with The City of New York on its Rego Park and Lexington
Avenue properties pursuant to which the Company made an initial installment
payment of 15% of all delinquent taxes, plus interest on each property
calculated to the date of the respective installment agreements. Thereafter, the
Company is required to make equal quarterly installment payments until all
delinquent taxes and interest on each of these properties are paid in full.
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On March 15, 1995, the Company entered into a 60-day escrow
agreement with a title company in the amount of approximately $7,000,000
representing both principal and interest owed on the unpaid real estate taxes
including the amounts owing under the agreements. The escrow agreement
established an interest-bearing cash collateral account and was funded from the
proceeds of certain of the Company's financings.
5. PROVISION FOR ESTIMATED LOSSES AND EXPENSES ON DISCONTINUED OPERATIONS
The results of the retail operations, together with the
provisions for estimated future losses, are presented as "discontinued
operations" in the consolidated statements of operations. The Company provided
significant reserves in the amount of approximately $97,800,000 in the third
quarter of the fiscal year ended July 25, 1992 for estimated expenses and losses
to be incurred in connection with discontinuing its retail operations. In
addition, the Company recorded a one-time transition charge of approximately
$21,400,000 resulting from its adoption of Statement of Financial Accounting
Standards ("SFAS") 106, "Employees' Accounting for Postretirement Benefits Other
Than Pensions" and increased the loss from discontinued operations by
approximately $500,000 for the fiscal year ended July 31, 1993. The amounts
utilized and remaining reserves are summarized as follows (amounts in
thousands):
Dec. 31, 1994 Dec. 31, 1993 July 31, 1993
------------- ------------- -------------
Balance at beginning of period $ 32,808 $ 44,047 $ 53,402
Provisions provided during period -- -- 21,926
Utilized during period (5,485) (11,239) (31,281)
--------- --------- ---------
Balance at end of period $ 27,323 $ 32,808 $ 44,047
========= ========= =========
The balance remaining is reflected in the consolidated balance
sheet as of December 31, 1994 as follows (amounts in thousands):
Accrual for losses from discontinued operations $ 26,742
Liabilities subject to settlement under reorganization
proceedings-discontinued retail operations 581
---------
$ 27,323
=========
It is the opinion of management that these reserves represent a
reasonable estimation of the remaining costs associated with discontinuing the
retail operations. However, due to the continuing uncertainties with respect to
(i) the final resolution of all bankruptcy claims filed or continuing to be
filed against the Company in the Bankruptcy Court cases, (ii) the final cost of
interest accruing on unpaid unsecured creditors' claims
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and (iii) the contingent obligations of the Company with respect to its former
employees' postretirement health care benefits, the ultimate amount of such
costs to be incurred is presently not determinable. Any future additions to
these reserves will be provided when known. Any excess in such reserves over
actual costs incurred will be recorded as income when they become reasonably
certain.
6. DEBT
(amounts in thousands)
Dec. 31, 1994 Dec. 31, 1993
------------- -------------
Items included in secured debt:
First mortgage loans, payable to
1998, with interest rates ranging
from 8.5% to 10.5% at December 31, 1994 $ 27,012 $ 16,136
Secured note, payable in semiannual
installments to 2000, with
interest at 7.3% at December 31, 1994 8,318 8,330
Bank loan with average interest rate
of 8.0% at December 31, 1994 16,324 17,100
-------- --------
51,654 41,566
-------- --------
Other debt:
Bank loans, 731 Limited
Partnership, with average interest
rates of 12.1% at December 31, 1994 1,188 1,188
Other (included in liabilities subject to
settlement under reorganization proceedings) 731 766
-------- --------
1,919 1,954
-------- --------
$ 53,573 $ 43,520
======== ========
A summary of maturities of long-term debt is as follows (amounts in thousands):
Year ending December 31,
1995 $ 11,223
1996 20,081
1997 135
1998 13,425
Thereafter 8,709
--------
$ 53,573
========
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Approximately $900,000 in standby letters of credit were issued
at December 31, 1994.
At December 31, 1994, the Company held an 82% interest in the
Seven Thirty One Limited Partnership (the "Partnership"). A third party (the
"731 Limited Partners"), as a limited partner, held an 18% interest in the
Partnership.
The outside 731 Limited Partners have the right to require the
Partnership to redeem their partnership interest in two separate stages for an
aggregate amount of $35,000,000, plus capitalized interest from the effective
date of the Plan to the date of redemption of approximately $1,800,000. In
January 1995, the Partnership redeemed the first portion of the outside 731
Limited Partners' interest by giving such limited partner a promissory note due
in August 1998 in the amount of approximately $21,800,000 (the "Note"). The
Note bears interest at rate equal to the Prime Rate plus 1% and is secured by a
second mortgage on the Lexington Avenue property. The outside 731 Limited
Partners have the right to put their remaining 7.64% interest to the Partnership
for a five-year period in exchange for a five-year secured note in the principal
amount of $15,000,000, bearing interest at a rate equal to the Prime Rate plus
1%. The Company currently holds a 92.36% interest in the Partnership.
The effect of the $21,800,000 redemption by the Partnership of
the first portion of the outside 731 Limited Partners' interest on the Company's
balance sheet will be an increase to real estate, a reduction in minority
interest for the redeemed shares, and an increase in debt.
The Company incurred $5,133,000 of total interest costs during
1994 of which $1,718,000 was capitalized.
The net carrying value of real estate collateralizing mortgages
amounted to $45,980,000 at December 31, 1994.
7. LEASES
Leases and Sales of Leases
During the 53 weeks ended July 31, 1993, the Company sold its
interests in four real property leases and assigned another real property lease.
The Company received proceeds of $33,701,000, and recorded a pre-tax gain of
$28,779,000.
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As Lessor
The Company currently (i) net leases to the Caldor Corporation
("Caldor") its Fordham Road property, (ii) net subleases to Caldor its Flushing
property and (iii) net leases its Third Avenue property to an affiliate of
Conway Stores, Inc. ("Conway").
The rental terms for the properties leased to Caldor and Conway range
from 20 years to approximately 34 years. The leases provide for the payment of
fixed base rentals payable monthly in advance and for the payment by the lessees
of additional rents based on a percentage of the tenants' sales as well as
reimbursements of real estate taxes, insurance and maintenance.
As of December 31, 1994, future base rental revenue under
noncancellable operating leases is as follows:
Year Ending Total
December 31, Amounts
------------ -------
1995 $ 7,287,000
1996 7,435,000
1997 7,467,000
1998 7,831,000
1999 7,876,000
Thereafter 185,430,000
Revenues from the Caldor leases represent approximately 63% of the
Company's consolidated revenues for the year ended December 31, 1994. Revenues
from the Conway lease represents approximately 13% of the Company's consolidated
revenues for the year ended December 31, 1994. The Company believes that the
loss of either of these tenants would have a material adverse effect on the
Company.
In addition, the Company has entered into leases with Sears, Caldor and
Marshalls for its Rego Park Redevelopment Property and has entered into "pad"
leases with Waban, Inc., which operates B.J.'s Wholesale Clubs and Home Depot at
its Paramus Redevelopment Property.
The Rego Park leases referred to above require the Company to build a
multi-level parking garage annexed to the existing building where these stores
will be located, to subdivide and reface the building and to make other
improvements. Rentals commence under these leases upon the completion of such
projects. Construction commenced in December 1994.
In connection with the Waban's and Home Depot leases at Paramus,
rentals commence upon the completion of the construction of the buildings which
is subject to obtaining various governmental approvals. If the proposed
condemnation of a portion of the Paramus property were to occur, the required
governmental approvals could not be obtained.
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As Lessee
The Company is a tenant under a long-term lease for the
Flushing property which expires on January 31, 2027. Future minimum lease
payments under the operating lease at December 31, 1994 are as follows:
Year Ending
December 31, Amount
------------ ------
1995 $ 496,000
1996 496,000
1997 344,000
1998 331,000
1999 331,000
Thereafter 6,017,000
8. INCOME TAXES
For the year ended December 31, 1994, the Company had net
income of approximately $4,033,000 for financial reporting purposes, for which
no Federal tax provision is currently provided due to the carryover of net
operating losses ("NOLs"). The Company has remaining NOL carryovers for tax
purposes of approximately $110,000,000 at December 31, 1994, of which
$5,000,000, $52,000,000, $22,000,000, $15,000,000 and $16,000,000 expire in
2005, 2006, 2007, 2008 and 2009, respectively. The Company also had investment
tax and targeted jobs tax credits of approximately $3,000,000 expiring in 2002
through 2005.
The Company intends to elect to be taxed as a real estate
investment trust ("REIT") under section 856 through 860 of the Internal Revenue
Code of 1986, as amended (the "Code"), effective for the taxable year ended
December 31, 1995. Under the Code, the Company's NOL carryovers generally would
be available to offset the amount of the Company's REIT taxable income that
otherwise would be required to be distributed to its stockholders. The Company
currently does not anticipate making any distributions during 1995. In
addition, the Company had a deferred tax liability of approximately $1,254,000
at December 31, 1994, which amount will be reversed in 1995 when the Company
elects to be taxed as a REIT.
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9. RELATED PARTY TRANSACTIONS
The Company is a party to a Real Estate Retention Agreement
with Vornado Realty Trust ("Vornado"). Interstate Properties ("Interstate"), a
partnership of which Steven Roth, a director of the Company, is the managing
general partner, owns 27.1% of the outstanding common stock of the Company and
owns 30.9% of the outstanding common shares of beneficial interest of Vornado.
In addition, Mr. Roth owns 4.1% 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, 36.6% of the outstanding Common Shares of
beneficial interest of Vornado. Vornado owns 29.3% of the outstanding common
stock of the Company and, because of the relationship between Interstate, Mr.
Roth and Vornado, Interstate and Vornado have filed as a "group" with the
Securities and Exchange Commission in connection with their respective holdings
in the Company. Pursuant to the Retention Agreement, Vornado agreed to act as
the Company's exclusive leasing agent. The Retention Agreement will continue
until March 2, 1998, after which it will automatically renew on a year-to-year
basis, terminable by either party at the end of each year on not less than 60
days' prior notice.
At December 31, 1994, the Company owed Vornado approximately
$12,400,000 for transactions completed to date in connection with the leasing
of, or the sale of leases on, approximately two-thirds of the Company's store
properties. This amount will be payable over a seven-year period in an amount
not to exceed $2,500,000 in any calendar year until the present value of such
installments (calculated at a discount rate of 9% per annum) paid to Vornado
equals the amount that would have been paid had it been paid on September 21,
1993 or at the time of the transaction giving rise to the commission, if later.
This amount is included in "taxes payable and accrued liabilities" in the
Consolidated Balance Sheets as of December 31, 1994.
In September 1994, the Company obtained from Interprop Fordham,
Inc., an affiliate of Interstate, and Citibank, N.A. a short-term secured loan
of $10,000,000 which enabled the Company to make the $2,600,000 payment to the
unsecured creditors and to fund a portion of the Company's working capital and
capital expenditure requirements. This loan was repaid during the first quarter
of 1995.
During the twelve months ended December 31, 1994, the five
months ended December 31, 1993 and the fiscal year 1993, Vornado through
Interstate was paid $57,000, $2,000 and $445,000, respectively, by the Kings
Plaza Shopping Center for performing leasing services.
See Note 14 for a discussion of a recent financing provided by
Vornado.
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19
10. ISSUANCE OF SHARES
As of the Effective Date of the Company's Plan, the Company's
Certificate of Incorporation was amended and restated to authorize the issuance
of 26,000,000 shares, of which 3,000,000 are Preferred Stock, par value $1.00
per share, 10,000,000 shares are Common Stock, par value $1.00 per share, and
13,000,000 are Excess Stock, par value $1.00 per share. At December 31, 1994,
December 31, 1993 and July 31, 1993, 1,000,000 shares of Preferred Stock were
authorized (none issued) and there was no authorized Excess Stock.
11. LEGAL PROCEEDINGS
In 1991, the Company settled a zoning-related litigation with,
among others, the Borough of Paramus and the owners of a shopping center
proximate to the Company's Paramus, New Jersey property (the "Westland
Parties"). On November 14, 1994, the Company commenced a proceeding in the
Bankruptcy Court against the Westland Parties to compel payment pursuant to such
settlement. On December 30, 1994, the Company and the Westland Parties reached a
settlement with respect to such proceeding and the Company received a promissory
note from the Westland Parties in the principal amount of $4,550,000 which was
paid January 10, 1995 in exchange for a full release by the Company from any and
all claims relating to such matters.
12. COMMITMENTS AND CONTINGENCIES
Paramus Property
The State of New Jersey has notified the Company of its
intention to condemn a portion of the Paramus property and has conducted an
appraisal, the results of which have not yet been communicated to the Company.
If the condemnation occurs, the Company will be required to change its
development plans and 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 La Guardia and Kennedy
Airports. In June 1994, the Federal Aviation Administration ("FAA") and the New
York State Department of Transportation ("NYDOT") released a draft environmental
impact statement ("DEIS") and Section 4(f) Evaluation (the "DEIS and Section
4(f) Evaluation") of the Port Authority's proposed rail link. On December 15,
1994, the Company submitted a letter of comment and a report to the U.S.
Department of Transportation, the FAA and the
19
20
NYDOT on the DEIS and Section 4(f) Evaluation pursuant to the period of public
comment which terminated on December 15, 1994. The Company expressed its
opposition to the consideration of a portion of the Lexington Avenue property
for the site of the terminus. Approval of numerous Federal, New York State and
New York City agencies are required before construction could begin. The
Company does not know whether the rail link terminus project will be undertaken
or, if undertaken, the timing of the project and whether the Lexington Avenue
property will be chosen as the site of the terminus.
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 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
The Company is currently negotiating with The City of New York
a settlement of both these unpaid real estate taxes and certiorari proceedings
that are currently pending before The City of New York on several of its
properties, some of which are properties where the real estate taxes remain
unpaid.
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 for May 1, 1986 through May 1, 1992. On January 12,
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 $8,200,000, plus interest (currently, $1,300,000). The Company
has been informed by the Board that it intends to appeal the court's decision.
Rego Park Property
The Company is currently building a parking structure and
certain additional improvements at the Rego Park property. The Company
estimates that its construction costs to build the parking structure and make
certain additional improvements at the Rego Park site will be approximately
$33,000,000 to $35,000,000. This amount includes approximately $3,000,000 to
transport and dispose of soil containing lead which must be removed to complete
the project.
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13. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(amounts in thousands except per share amounts)
Year Ended Five Months Ended Fifty-Three Weeks Ended
December 31, 1994 December 31, 1993 July 31, 1993
---------------------------------------- ----------------- -------------------------------------
1st 2nd 3rd 4th 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(two (three
months) months)
Real estate operating
revenue $2,896 $2,519 $3,062 $3,095 $2,030 $3,103 $ 612 $ 1,205 $1,368 $2,395
Income/(loss) from
continuing operations 650 86 757 2,540 645 301 (1,546) 27,959 (99) 837
Loss from
discontinued operations -- -- -- -- -- -- (110) (147) (110) (110)
Cumulative effect of
change in accounting -- -- -- -- -- -- (21,449) -- -- --
Net income/(loss) 650 86 757 2,540 645 301 (23,105) 27,812 (209) 727
Income/(loss) per
common share:
Continuing operations 0.13 0.02 0.15 0.51 0.13 0.06 (0.31) 5.62 (0.02) 0.17
Discontinued operations -- -- -- -- -- -- (0.02) (0.03) (0.02) (0.02)
Cumulative effect of
change in accounting -- -- -- -- -- -- (4.31) -- -- --
------ ------ ------ ------ ------ ------ -------- ------ ------ ------
Total $ 0.13 $ 0.02 $ 0.15 $ 0.51 $ 0.13 $ 0.06 $ (4.64) $ 5.59 $(0.04) $ 0.15
====== ====== ====== ====== ====== ====== ======== ====== ====== ======
(a) The total for the year ended July 31, 1993 differs from the sum of the
quarters as a result of the weighting of the average number of shares
outstanding.
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14. SUBSEQUENT EVENTS
Effective March 2, 1995, following the Bankruptcy Court
approval of the financing and management arrangements described below, the
Company engaged Vornado Realty Trust ("Vornado") to act for it in the management
and direction of virtually all of its business affairs pursuant to the
Management and Development Agreement between the Company and Vornado dated
February 6, 1995 (the "Management and Development Agreement"). Under the
Management and Development Agreement, the term of which is three years, Vornado
will provide the Company with strategic and day-to-day management services,
including operation, maintenance, management, design, planning, construction and
development of the Company's Redevelopment Properties. Pursuant to the
Management and Development Agreement, Steven Roth, a director of the Company and
the Chairman and Chief Executive Officer of Vornado, a New York Stock Exchange
listed real estate investment trust and an affiliate of the Company, became the
Chief Executive Officer of the Company on March 2, 1995.
On March 2, 1995, Vornado, which previously owned 2.2% of the
Company's Common Shares, purchased 27.1% of the Company's Common Shares owned by
Citibank, N.A. (the "Vornado Acquisition"). In connection with the Vornado
Acquisition, Vornado agreed to provide the Company with certain financing
(described below) and to act as manager of the Company pursuant to the
Management and Development Agreement. In addition, the Company concluded to
elect to be taxed as a REIT effective for the taxable year ended December 31,
1995.
On March 15, 1995, the Company borrowed from Vornado and a bank
an aggregate amount of approximately $75,000,000, at a blended interest rate per
annum of 13.8%, secured by, among other things, mortgages on the Lexington
Avenue, Rego Park, Fordham Road, Kings Plaza Store, Third Avenue and Paramus
properties, a pledge of the stock of the Company and its wholly owned
subsidiaries and a pledge by the Company and one of its wholly owned
subsidiaries of their respective partnership interests in the 731 Partnership.
The loan with Vornado is in the principal amount of $45,000,000 and is
subordinated to that of the bank.
The loans, which are guaranteed by substantially all of the
Company's wholly owned subsidiaries, mature on March 15, 1998. As a result of
the subordination, the Vornado loan bears interest at a rate per annum equal to
16.43% during the first two years and 9.92% plus the One-Year Treasury Rate
during the third year and the bank loan bears interest at a rate per annum equal
to 9.86% during the first two years and 3.25% plus the One-Year Treasury Rate
during the third year. The Company paid a fee to the bank and to Vornado of
$375,000 and $1,500,000, respectively. In addition, the loans, among other
things, require the Company to grant to Vornado and the bank mortgage liens on
all after-acquired properties and prohibit the Company from developing
undeveloped property without approved leases for more than 50% of such
property's projected leasable space.
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23
The proceeds of the foregoing loans were used to pay the
general unsecured creditors of the Company, to repay existing loans on the
Lexington Avenue, Rego Park and Kings Plaza Store properties, to fund the cash
collateral account established pursuant to an escrow agreement for the payment
of certain unpaid real estate taxes, and to establish the cash collateral
accounts in the amount of approximately $8,100,000 for purposes of funding the
remaining disputed claims in the Bankruptcy Court cases as they become allowed.
The remaining proceeds of the such loans will be used for general corporate
purposes, including the development of the Redevelopment Properties.
On February 24, 1995, the Company obtained from a bank a
$25,000,000 bank loan secured by, among other things, a mortgage on the Fordham
Road property. The proceeds were used to discharge the existing mortgage on the
Fordham Road property, and for general corporate purposes. Such loan matures on
February 24, 2000 and bears interest at a rate per annum equal to the LIBOR Rate
plus 4.25%. In addition, the Company paid a one-time facility fee of $375,000.
On March 29, 1995, the Company obtained from a bank a
$60,000,000 construction loan and a $25,000,000 bridge loan each secured by,
among other things, a mortgage on the Rego Park property. As of March 30, 1995,
$21,600,000 in the aggregate was funded under such loans. The proceeds will be
used to construct certain improvements at the Rego Park property and for general
corporate purposes. Such loans mature on April 1, 1997 (but may be extended
under certain circumstances for one year) and bear interest at a variable rate
per annum equal to, at the option of the Company, (i) LIBOR Rate plus 1.625% or
(ii) the greater of (a) the Federal Funds Rate plus 1.125% or (b) the prime
commercial lending rate plus 0.625%.
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24
(b) Proforma financial information
The condensed consolidated pro forma financial information attached
presents (i) the statement of income for Vornado for the year ended
December 31, 1994 as if the Acquisition and the related agreements were
consummated and the offering by Vornado of 1,879,699 Common Shares of
Beneficial Interest, par value $.04 per share, on April 26, 1995 (the
"Offering") and the use of the proceeds therefrom had occurred on
January 1, 1994 and (ii) the condensed consolidated proforma balance
sheet as of December 31, 1994 as if the Acquisition and related
agreements and the issuance of 2,500,000 Common Shares of Beneficial
Interest, par value $.04 per share, had occurred on December 31, 1994.
Such statements are not necessarily indicative of what Vornado's
actual results of operations or financial position would have been had
the Acquisition and the related agreements been consummated and had the
Offering and the use of proceeds therefrom occurred on the dates
indicated, nor does it purport to represent Vornado's results of
operations for any future period.
The unaudited condensed consolidated pro forma financial information
should be read in conjunction with the Consolidated Financial
Statements and notes thereto included in the 1994 Form 10-K. In
management's opinion, all adjustments necessary to reflect the
Acquisition and the related agreements and the Offering and the use of
proceeds therefrom have been made.
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25
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(Unaudited)
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(in thousands, except share and per share amounts)
Revenues:
Property rentals $70,755 $70,755
Expense reimbursements 21,784 21,784
Other income (including fee income
from related parties of $1,144 of
which $250 is from Alexander's) 1,459 $5,043 (1) 6,502
------- ------ -------
Total revenues 93,998 5,043 99,041
------- ------ -------
Expenses:
Operating 30,223 30,223
Depreciation and amortization 9,963 9,963
General and administrative 6,495 1,000 (2) 7,495
------- ------ -------
Total expenses 46,681 1,000 47,681
------- ------ -------
Operating income 47,317 4,043 51,360
Income/(loss) applicable to Alexander's:
Equity in (loss) including amortization of
Vornado's proportionate interest in the fair
value of buildings in excess of historical
cost of $630 (2,212)(3) (2,212)
Interest and fee income on loan 7,894 (4) 7,894
Interest and dividend income 7,489 (3,009)(5) 4,480
Interest and debt expense (14,209) (14,209)
Net gain on marketable securities 643 643
------- ------ -------
Income from continuing operations $41,240 $6,716 $47,956
======= ====== =======
Income from continuing operations per share (6) $1.89 $2.02
======= =======
Other Data:
Funds from operations (7):
Income from continuing operations $41,240 $6,716 $47,956
Depreciation and amortization (including
debt issuance costs) 10,839 630 11,469
Straight-lining of property rentals (2,181) (2,181)
Excess of leasing fees received over
income recognized 1,857 1,857
Gains on sale of securities available
for sale (51) (51)
Proportionate share of adjustments to
Alexander's loss to arrive at funds
from operations (217) (217)
------- ------ -------
Funds from operations (7) $49,847 $8,986 $58,833
======= ====== =======
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26
(1) Fee income from Alexander's is as follows:
Leasing fees and related interest thereon $ 393
Management fees 3,000
Development fees:
Rego Park 900
Other properties 750
------
$5,043
======
(2) Reflects additional expenses associated with the Management and Development
Agreement dated as of February 6, 1995, between Vornado and Alexander's (the
"Management Agreement").
(3) Vornado's 29.3% share of Alexander's loss from continuing operations.
(4) Reflects interest on the loan of $45 million at 16.43% per annum and
amortization of $1.5 million of loan origination fees.
(5) Reflects a reduction in interest income associated with the use of $40.1
million of cash and cash equivalents to fund loans to and investments in
Alexander's.
(6) Pro forma income per share is based upon 23,733,419 Common Shares, which
represents the historical weighted average number of Common Shares
outstanding during the period, after giving effect to an increase of
1,879,699 Common Shares, which represents the number of Common Shares at the
estimated public offering price, net of offering expenses, necessary to
raise total cash equal to $60 million to be used to repay indebtedness
incurred in connection with the Alexander's transactions.
(7) 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 Vornado's operating performance or as an alternative to cash
flows as a measure of liquidity.
===================================================
Below is a summarized Statement of Operations of Alexander's for the year
ended December 31, 1994 presented on an historical and pro forma basis
adjusted to reflect (i) borrowings of $75 million under a term loan and the
use of proceeds therefrom and (ii) the terms of the Management Agreement
with Vornado, as if such borrowings were incurred and such Management
Agreement was entered into on January 1, 1994.
Historical Pro forma
---------- ---------
Continuing operations
Real estate operating revenue $11,572 $11,572
Expenses 9,137 12,137
------- -------
Operating income/(loss) 2,435 (565)
Gains on sale of real estate and
real estate leases 161 161
Other income and interest 4,768 4,768
Interest and debt expense, net (3,331) (9,762)
------- -------
Net Income/(loss) 4,033 (5,398)
======= =======
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27
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
DECEMBER 31, 1994
(Unaudited)
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(DOLLARS IN THOUSANDS)
Assets:
Real estate, net $237,127 $237,127
Investment in and advances to Alexander's 7,350 $96,680 (1 115,697
11,667 (2)
Cash and cash equivalents (including U.S.
Treasury obligations and marketable securities) 110,765 (20,120)(3) 90,645
Other 38,296 (160)(4) 38,136
-------- ------- --------
$393,538 $88,067 $481,605
======== ======= ========
Liabilities:
Notes and mortgages payable $234,160 $234,160
Due for U.S. Treasury obligations 34,275 34,275
Deferred leasing income from Alexander's $10,701 (2) 10,701
Other 8,415 8,415
-------- ------- --------
276,850 10,701 287,551
-------- ------- --------
Shareholders' equity:
Common Shares 866 100 (5) 966
Additional capital 198,184 79,735 (4) 277,919
Accumulated deficit (79,513) 966 (2) (78,547)
-------- ------- --------
119,537 80,801 200,338
Unrealized gain (loss) on securities available for sale 2,336 (3,435)(1) (1,099)
Less: Due from officers for purchase of
Common Shares (5,185) (5,185)
-------- ------- --------
116,688 77,366 194,054
-------- ------- --------
$393,538 $88,067 $481,605
======== ======= ========
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28
(1) Reflects (i) $56.6 million for the purchase of 1,353,468 shares of
Alexander's common stock from Citibank, at $40.50 per share (including
$1.8 million of costs associated therewith); (ii) a $45.0 million
subordinated loan to Alexander's, offset by $1.5 million in origination
fees received; and (iii) adjustments to the carrying value of the
historical investment in Alexander's to eliminate the unrealized gain of
$3.4 million.
(2) Reflects leasing fees receivable and related deferred income and equity
amounts recorded in connection with the Leasing Agreement with
Alexander's.
(3) Reflects an increase in cash associated with the $85.0 million of
proceeds from the issuance of 2,500,000 Common Shares in the Offering
offset by (i) offering costs of $5.0 million; (ii) the purchase of
1,353,468 shares of Alexander's common stock for $56.6 million
(including $1.8 million of costs associated therewith); and (iii) a
$45.0 million subordinated loan to Alexander's, offset by $1.5 million
in loan origination fees received.
(4) Reflects the excess of the net proceeds from the Offering over the par
value of Common Shares issued assuming offering costs of $5.2 million
($0.2 million of which was incurred prior to December 31, 1994 and
included in other assets).
(5) Reflects the public offering of 2,500,000 Common Shares, par value $0.04
per share.
===================================================
Below is a summarized Balance Sheet of Alexander's at December 31, 1994
presented on an historical cost basis.
Assets:
Real estate, net $ 84,658
Cash 2,363
Other assets 22,398
------------
$ 109,419
============
Liabilities and Deficiency in Net Assets:
Secured debt $ 51,654
Other liabilities-continuing operations 24,171
Other liabilities-discontinued retail operations 55,167
Deficiency in net assets (21,573)
------------
$ 109,419
============
At December 31, 1994, Alexander's had outstanding funded debt of $53.6
million. As of March 30, 1995, Alexander's had borrowed an additional
$121 million, including $45 million from Vornado, and had repaid $39.5
million of such funded debt. After giving effect to these transactions
and the repayment of other obligations of Alexander's existing at the
end of 1994 (such as general unsecured creditors' claims, the funding of
an escrow account for unpaid real estate taxes, and the funding of cash
collateral accounts for the purposes of funding the remaining disputed
bankruptcy claims as they become allowed), Alexander's cash position was
approximately $30 million.
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VORNADO REALTY TRUST
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 hereunto duly authorized.
VORNADO REALTY TRUST
-----------------------------
(Registrant)
Date: June 22, 1995 /s/ Joseph Macnow
-----------------------------
JOSEPH MACNOW
Vice President,
Chief Financial Officer
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