ALEXANDERS INC — Interim / Quarterly Report 2003

Aug 7, 2003

10-Q 1 y89018e10vq.htm ALEXANDER'S, INC. ALEXANDER'S, INC. PAGEBREAK

Table of Contents

EXHIBIT INDEX ON PAGE 21

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2003

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission File Number: 1-6064

ALEXANDER’S, INC.

(Exact name of registrant as specified in its charter)

Delaware	51-0100517
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

888 Seventh Avenue, New York, New York	10019
(Address of principal executive offices)	(Zip Code)

(212) 894-7000

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes o No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

x Yes o No

As of July 25, 2003, there were 5,000,850 shares of common stock, par value $1 per share outstanding.

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6. (LOSS) INCOME PER SHARE
INDEPENDENT ACCOUNTANTS’ REPORT
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
LETTER REGARDING UNAUDITED INTERIM FINANCIALS
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
906 CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
906 CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

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Table of Contents

ALEXANDER’S, INC. AND SUBSIDIARIES INDEX

PART I.	Financial Information:
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of
June 30, 2003 (unaudited) and December 31, 2002	3
	Consolidated Statements of Operations (unaudited) for the
Three and Six Months Ended June 30, 2003 and June 30, 2002	4
	Consolidated Statements of Cash Flows (unaudited) for the
Six Months Ended June 30, 2003 and June 30, 2002	5
	Notes to Consolidated Financial Statements (unaudited)	6
	Independent Accountants’ Report	12
Item 2.	Management’s Discussion and Analysis of
Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17
Item 4.	Control and Procedures	18
PART II.	Other Information:
Item 1.	Legal Proceedings	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
Item 6.	Exhibits and Reports on Form 8-K	19
Signatures		20
Exhibit Index		21

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link1 "PART I. FINANCIAL INFORMATION"

link2 "Item 1. Financial Statements"

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements link3 "CONSOLIDATED BALANCE SHEETS"

ALEXANDER’S, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (amounts in thousands except share amounts)

	June 30, — 2003	2002
	(Unaudited)
ASSETS:
Real estate, at cost:
Land	$ 90,768	$	90,768
Buildings, leaseholds and leasehold improvements	173,368		173,368
Construction in progress (including Vornado Realty
Trust (“Vornado”) fees of $20,140 and $13,325)	453,060		315,781
Air rights acquired for Lexington Avenue Development	17,531		17,531
Total	734,727		597,448
Less accumulated depreciation and amortization	(58,145	)	(55,975	)
Real estate, net	676,582		541,473
Asset held for sale	1,502		1,502
Cash and cash equivalents	23,302		45,239
Restricted cash	3,799		2,425
Accounts receivable, net of allowance for doubtful accounts
of $233 and $96	1,957		2,508
Receivable arising from the straight-lining of rents	21,679		20,670
Deferred lease and other property costs (including unamortized
leasing fees to Vornado of $14,527 and $14,837)	27,105		27,765
Deferred debt expense	12,703		14,619
Other assets	6,425		8,711
TOTAL ASSETS	$ 775,054	$	664,912
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Debt (including $124,000 and $119,000 due to Vornado)	$ 634,907	$	543,807
Amounts due to Vornado	17,071		11,294
Accounts payable and accrued expenses	40,028		36,895
Other liabilities	13,975		4,251
TOTAL LIABILITIES	705,981		596,247
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred stock: no par value; authorized, 3,000,000 shares;
issued, none	—		—
Common stock: $1.00 par value per share; authorized,
10,000,000 shares; issued, 5,173,450 shares	5,174		5,174
Additional paid-in capital	24,843		24,843
Retained earnings	40,016		39,608
	70,033		69,625
Less treasury shares, 172,600 shares at cost	(960	)	(960	)
Total stockholders’ equity	69,073		68,665
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 775,054	$	664,912

See notes to consolidated financial statements.

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link3 "CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)"

ALEXANDER’S, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (amounts in thousands except per share amounts)

	For The Three Months				For The Six Months
	Ended June 30,				Ended June 30,
	2003		2002		2003	2002
REVENUES:
Property rentals	$ 12,805		$ 12,636		$ 25,477	$	25,041
Expense reimbursements	7,193		5,967		14,089		12,284
Total revenues	19,998		18,603		39,566		37,325
EXPENSES:
Operating (including management fees to Vornado
of $368 and $353 in each three month period and
$731 and $719 in each six month period)	8,727		7,436		17,640		14,306
General and administrative (including management
fees to Vornado of $540 and $1,080 in each
three and six month period)	10,940		5,169		11,863		6,034
Depreciation and amortization	1,649		1,620		3,256		3,232
Total expenses	21,316		14,225		32,759		23,572
OPERATING (LOSS) INCOME	(1,318	)	4,378		6,807		13,753
Interest and debt expense
(including interest on loans from Vornado)	(3,059	)	(6,156	)	(6,259	)	(12,734	)
Interest and other income, net	170		535		293		1,202
(Loss) income from continuing operations	(4,207	)	(1,243	)	841		2,221
(Loss) income from discontinued operations	(189	)	110		(433	)	177
NET (LOSS) INCOME	$ (4,396	)	$ (1,133	)	$ 408	$	2,398
Net (loss) income per share (basic and diluted):
Continuing operations	$ (.84	)	$ (.25	)	$ .17	$	.44
Discontinued operations	(.04	)	.02		(.09	)	.04
Net (loss) income	$ (.88	)	$ (.23	)	$ .08	$	.48

See notes to consolidated financial statements.

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link3 "CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)"

ALEXANDER’S, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (amounts in thousands)

	For The Six Months Ended
	June 30,
	2003	2002
Cash Flows From Operating Activities:
Income from continuing operations	$ 841	$	2,221
Adjustments to reconcile income from continuing operations to net cash
provided by continuing operating activities:
Depreciation and amortization (including debt issuance costs)	5,172		3,620
Straight-lining of rental income	(1,009	)	(1,524	)
Stock appreciation rights compensation expense	9,923		4,236
Change in assets and liabilities:
Accounts receivable	551		131
Amounts due to Vornado	(662	)	(2,725	)
Accounts payable and accrued expenses	(121	)	(4,465	)
Other liabilities	(200	)	1,455
Other	1,860		(2,507	)
Net cash provided by continuing operating activities	16,355		442
(Loss) income from discontinued operations	(433	)	177
Depreciation and amortization	—		62
Net cash (used in) provided by discontinued operations	(433	)	239
Net cash provided by operating activities	15,922		681
Cash Flows From Investing Activities:
Additions to real estate	(127,585	)	(34,903	)
Cash restricted for operating liabilities	(5,495	)	(4,479	)
Restricted cash made available for operating liabilities	4,121		4,233
Net cash used in investing activities	(128,959	)	(35,149	)
Cash Flows From Financing Activities:
Issuance of debt (including $5,000 from Vornado)	92,457		—
Debt repayments	(1,357	)	(1,261	)
Deferred debt expense	—		(86	)
Net cash provided by (used in) financing activities	91,100		(1,347	)
Net decrease in cash and cash equivalents	(21,937	)	(35,815	)
Cash and cash equivalents at beginning of period	45,239		135,258
Cash and cash equivalents at end of period	$ 23,302	$	99,443
Supplemental Disclosure of Cash Flow Information:
Cash payments for interest (of which $18,120 and $9,562
have been capitalized)	$ 22,367	$	23,499

See notes to consolidated financial statements.

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link3 "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)"

ALEXANDER’S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Balance Sheet as of June 30, 2003, the Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002, and the Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002 are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Alexander’s, Inc. and Subsidiaries’ (collectively, the “Company”) Annual Report on Form 10-K for the year ended December 31, 2002 as filed with the Securities and Exchange Commission. The results of operations for the three and six months ended June 30, 2003 are not necessarily indicative of the operating results for the full year.

The accompanying consolidated financial statements include the accounts of Alexander’s Inc. and its subsidiaries. All significant intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets , effective January 1, 2002, the Company reclassified its statements of operations to reflect revenue and expenses for properties which are held for sale or sold during 2002 and thereafter as discontinued operations.

2. RELATIONSHIP WITH VORNADO REALTY TRUST (“Vornado”)

Vornado owns 33.1% of the Company’s Common Stock as of June 30, 2003. Steven Roth is Chief Executive Officer and a director of the Company, the Managing General Partner of Interstate Properties (“Interstate”) and the Chairman of the Board and Chief Executive Officer of Vornado. At June 30, 2003, Mr. Roth, Interstate and the other two general partners of Interstate, David Mandelbaum and Russell B. Wight, Jr. (who are also directors of the Company and trustees of Vornado) owned, in the aggregate, 27.5% of the outstanding common stock of the Company in addition to the common stock owned directly by Vornado, and 12.5% of the outstanding common shares of beneficial interest of Vornado.

The Company is managed by and its properties are leased by Vornado pursuant to management, leasing and development agreements with one-year terms expiring in March of each year, which are automatically renewable. In conjunction with the closing of the Lexington Avenue construction loan on July 3, 2002 (see Note 4), these agreements were bifurcated to cover the Company’s Lexington Avenue property separately. Further, the management and development agreements with Vornado were amended to provide for a term lasting until substantial completion of the property, with automatic renewals, and for the payment of the development fee upon the earlier of January 3, 2006 or the payment in full of the construction loan encumbering the property.

Pursuant to this construction loan, Vornado has agreed to guarantee, among other things, the lien free, timely completion of the construction of the Lexington Avenue project and funding of project costs in excess of a stated loan budget, if not funded by the Company (the “Completion Guarantee”). The $6,300,000 estimated fee payable by the Company to Vornado for the Completion Guarantee is 1% of construction costs (as defined) and is due at the same time that the development fee is due. In addition, if Vornado should advance any funds under the Completion Guarantee in excess of the $26,000,000 which was available at July 3, 2002, under the line of credit, discussed below, interest on those advances would be at 15% per annum.

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ALEXANDER’S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The other fees payable by the Company to Vornado consist of (i) an annual management fee of $3,000,000 plus 3% of the gross income from the Kings Plaza Mall, (ii) a development fee equal to 6% of development costs, as defined, with a minimum guaranteed fee of $750,000 per annum, and (iii) a leasing fee. The development fee for the Lexington Avenue project is estimated to be approximately $26,300,000. At June 30, 2003, the Company owed Vornado $13,037,000 in development fees. The leasing fee to Vornado is equal to (i) 3% of the gross proceeds, as defined, from the sale of an asset and (ii) in the event of a lease or sublease of an asset, 3% of lease rent for the first ten years of a lease term, 2% of lease rent for the eleventh through the twentieth years of a lease term and 1% of lease rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by tenants. Such amounts is payable annually in an amount not to exceed $2,500,000, until the present value of such installments (calculated at a discount rate of 9% per annum) equals the amount that would have been paid had it been paid at the time the transactions which gave rise to the commissions occurred. Pursuant to the leasing agreement, in the event third-party real estate brokers are used, the fees to Vornado increase by 1% and Vornado is responsible for the fees to the third-party real estate brokers.

The following table shows the total amounts accrued under the above mentioned agreements.

	For The Three Months — Ended June 30,		For The Six Months — Ended June 30,
(amounts in thousands)	2003	2002	2003	2002
Management fee	$ 908	$ 893	$ 1,811	$ 1,799
Development fee,
guarantee fee and
rent for development
office	3,578	1,870	6,948	3,292
Leasing and other fees	90	744	625	1,511
	$ 4,576	$ 3,507	$ 9,384	$ 6,602

At June 30, 2003, the Company was indebted to Vornado in the amount of $124,000,000 comprised of (i) $95,000,000 financing, and (ii) $29,000,000 under a $50,000,000 line of credit (which carries a 1% unused commitment fee). The interest rate on the loan and line of credit is 12.48% and the maturity has been extended to the earlier of January 3, 2006 or the date the Lexington Avenue construction loan is repaid in full. The interest rate on the loan and the line of credit will reset quarterly using a Treasury index (with a 3% floor) plus the same spread to treasuries as previously existed. The Company incurred interest on its loans from Vornado of $3,837,000 and $3,820,000 in the three months ended June 30, 2003 and 2002, and $7,615,000 and $7,902,000 in the six months ended June 30, 2003 and 2002. At June 30, 2003, $21,000,000 was available under the line of credit.

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ALEXANDER’S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3. DEBT

Below is a summary of the Company’s outstanding debt.

			Balance as of
		Interest Rate
		as of June	June 30,	December 31,
	Maturity	30, 2003	2003	2002
(amounts in thousands)
Term loan to Vornado	January 2006	12.48 %	$ 124,000	$ 119,000
First mortgage loan, secured by
the Company’s Kings Plaza
Regional Shopping Center	June 2011	7.46 %	217,950	219,307
First mortgage loan, secured by
the Company’s Rego Park I
Shopping Center	May 2009	7.25 %	82,000	82,000
First mortgage loan, secured by the
Company’s Paramus Property	October 2011	5.92 %	68,000	68,000
Construction loan, secured by the
Company’s Lexington Avenue
Property	January 2006	3.62 %	142,957	55,500
			$ 634,907	$ 543,807

The scheduled principal repayments for the next five years and thereafter are as follows:

(amounts in thousands)

Year Ending December 31,
2003	$1,364
2004	3,226
2005	3,895
2006	271,155
2007	4,526
Thereafter	350,741

4. LEXINGTON AVENUE

The development plans at Lexington Avenue consist of an approximately 1.3 million square foot multi-use building. The building will contain approximately 154,000 net rentable square feet of retail space (45,000 square feet of which has been leased to Hennes & Mauritz), approximately 878,000 net rentable square feet of office space (695,000 square feet of which has been leased to Bloomberg L.P.) and approximately 248,000 net saleable square feet of residential space consisting of condominium units (through a taxable REIT subsidiary). Construction is expected to be completed in 2005. On July 3, 2002 the Company finalized a $490,000,000 loan with HVB Real Estate Capital (Hypo Vereinsbank) (the “Construction Loan”) to finance the construction of the Lexington Avenue property. The estimated construction costs in excess of the Construction Loan of approximately $140,000,000 have been provided by the Company. The Construction Loan has an interest rate of LIBOR plus 2.5% (currently 3.62%) and a term of forty-two months subject to two one-year extensions. The Company has received funding of $142,957,000 under the Construction Loan as of June 30, 2003. Of the total construction budget of $630,000,000, $300,800,000 has been expended through June 30, 2003 and an additional $117,400,000 has been committed.

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ALEXANDER’S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Pursuant to the Construction Loan, Vornado has agreed to guarantee, among other things, the lien free, timely completion of the construction of the project and funding of project costs in excess of a stated loan budget, if not funded by the Company.

There can be no assurance that the Lexington Avenue project ultimately will be completed, completed on time or completed for the budgeted amount. Further, the Company may need additional financing for the project, which may involve equity, debt, joint ventures and asset sales, and which may involve arrangements with Vornado. If the project is not completed on a timely basis, the Bloomberg L.P. lease may be cancelled and significant penalties may apply.

5. COMMITMENTS AND CONTINGENCIES

The Company’s debt instruments, consisting of mortgage loans secured by its properties (which are generally non-recourse to the Company), contain customary covenants requiring the Company to maintain insurance. There can be no assurance that the lenders under these instruments will not take the position that because the Company’s current all risk insurance policies differ from policies in effect prior to September 11, 2001 as to coverage for terrorist acts, there are breaches of these debt instruments that allow the lenders to declare an event of default and accelerate repayment of the debt. In addition, if lenders insist on coverage for these risks, as it existed prior to September 11, 2001, it could adversely affect the Company’s ability to finance and/or refinance its properties, including the construction of its Lexington Avenue development property.

In June 1997, the Kings Plaza Regional Shopping Center (the “Center”) commissioned an Environmental Study and Contamination Assessment Site Investigation (the Phase II “Study”) to evaluate and delineate environmental conditions disclosed in a Phase I study. The results of the Study indicate the presence of petroleum and bis (2-ethylhexyl) phthalate contamination in the soil and groundwater. The Company has delineated the contamination and has developed a remediation approach, which is ongoing. The New York State Department of Environmental Conservation (“NYDEC”) has approved a portion of the remediation approach. The Company accrued $2,675,000 in previous years, of which $2,215,000 has been paid as of June 30, 2003, for its estimated obligation with respect to the clean up of the site, which includes costs of (i) remedial investigation, (ii) feasibility study, (iii) remedial design, (iv) remedial action and (v) professional fees. If the NYDEC insists on a more extensive remediation approach, the Company could incur additional obligations.

The Company believes the majority of the contamination may have resulted from activities of third parties; however, the sources of the contamination have not been fully identified. Although the Company is pursuing claims against potentially responsible third parties, there can be no assurance that such parties will be identified, or if identified, whether these third parties will be solvent. In addition, the costs associated with pursuing responsible parties may be cost prohibitive. The Company has not recorded an asset as of June 30, 2003 for possible recoveries of environmental remediation costs from potentially responsible third parties.

Neither the Company nor any of its subsidiaries is a party to, nor is their property the subject of, any material pending legal proceeding other than routine litigation incidental to their businesses. The Company believes that these legal actions will not be material to the Company’s financial condition or results of operations.

Letters of Credit

Approximately $8,100,000 in standby letters of credit were issued at June 30, 2003.

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ALEXANDER’S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) link2 "6. (LOSS) INCOME PER SHARE"

6. (LOSS) INCOME PER SHARE

The following table sets forth the computation of basic and diluted (loss) income per share:

	For The Three Months				For The Six Months
	Ended June 30,				Ended June 30,
(amounts in thousands except per share amounts)	2003		2002		2003	2002
Numerator:
(Loss) income from continuing operations	$ (4,207	)	$ (1,243	)	$ 841	$	2,221
(Loss) income from discontinued operations	(189	)	110		(433	)	177
Net (loss) income	$ (4,396	)	$ (1,133	)	$ 408	$	2,398
Denominator:
Denominator for basic (loss) income per
share – weighted average shares	5,001		5,001		5,001		5,001
Effect of dilutive securities:
Employee stock options	—		—		9		—
Denominator for diluted (loss) income per
share – weighted average shares and effect
of dilutive securities conversions	5,001		5,001		5,010		5,001
(LOSS) INCOME PER COMMON
SHARE – BASIC AND DILUTED:
(Loss) income from continuing operations	$ (.84	)	$ (.25	)	$ .17	$	.44
(Loss) income from discontinued operations	(.04	)	.02		(.09	)	.04
Net (loss) income per common share	$ (.88	)	$ (.23	)	$ .08	$	.48

Options to purchase 125,000 shares of the Company’s common stock were considered in the computation of diluted income. These options are not dilutive in the three and six months ended June 30, 2002, as the average market prices of the Company’s common stock did not exceed the option exercise prices. These options are not included in the calculations of losses per share as they are anti-dilutive in those cases.

7. DISCONTINUED OPERATIONS

Discontinued operations include the Company’s Third Avenue property which was sold on August 30, 2002 and the Flushing property which is shown on the consolidated balance sheet as an “Asset held for sale”. Details of the operations at these properties are as follows:

	For The Three Months			For The Six Months
	Ended June 30,			Ended June 30,
(amounts in thousands)	2003		2002	2003		2002
Total revenues	$ 158		$ 587	$ 313		$ 1,167
Less: total expenses	347		477	746		990
(Loss) income from discontinued operations	$ (189	)	$ 110	$ (433	)	$ 177

On May 30, 2002 the Company entered into an agreement to sell its subsidiary which owns the building and has the ground lease for its property in Flushing, New York for $18,800,000 which would result in a gain of approximately $15,800,000. The Company has received a non-refundable deposit of $1,875,000 from the purchaser. By Notice of Default dated August 16, 2002, the Landlord of the premises notified the Company of certain alleged defaults under the lease including, but not limited to, the fact that the purchaser performed unauthorized construction

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ALEXANDER’S, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

at the premises. The Company commenced an action for injunctive relief and a declaration of the rights and obligations of the parties under the lease. The Company has obtained an injunction which temporarily restrains the Landlord from terminating the lease. On September 6, 2002, the scheduled closing date, the Company notified the purchaser that the purchaser failed to close and is in default of its obligations under the purchase contract. While negotiations are in process with the parties to attempt to settle the disputes, there can be no assurance that the sale will be consummated, or that the dispute with the Landlord will be resolved favorably, or that the deposit will not be required to be returned. The Company continues to explore all of its options, including subleasing the property.

8. STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation using the intrinsic value method (i.e., the difference between the price per share at the grant date and the option exercise price). Accordingly, no stock-based compensation was recognized in the Company’s financial statements for these years. If compensation cost for Plan awards had been determined based on fair value at the grant dates, net income and income per share would have been reduced to the pro-forma amounts below:

	For The Three Months				For The Six Months
	Ended June 30,				Ended June 30,
(Amounts in thousands, except per share amounts)	2003		2002		2003	2002
Net (loss) income applicable to common shares:
As reported	$ (4,396	)	$ (1,133	)	$ 408	$ 2,398
Stock-based compensation cost	—		—		—	384
Pro-forma	$ (4,396	)	$ (1,133	)	$ 408	$ 2,014
Net (loss) income per share applicable to common shares:
Basic and diluted:
As reported	$ (.88	)	$ (.23	)	$ .08	$ .48
Pro-forma	$ (.88	)	$ (.23	)	$ .08	$ .40

9. RECENTLY ISSUED ACCOUNTING STANDARDS

In April 2003, the FASB issued SFAS No.149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of SFAS No.149 on July 1, 2003, as required, had no impact on the Company’s consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity . SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 must be applied no later than the beginning of the first interim or annual reporting period beginning after June 15, 2003. The adoption of this pronouncement will not have a material effect on the Company’s consolidated financial statements.

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link3 "INDEPENDENT ACCOUNTANTS’ REPORT"

INDEPENDENT ACCOUNTANTS’ REPORT

Stockholders and Board of Directors Alexander’s Inc. New York, New York

We have reviewed the accompanying condensed consolidated balance sheet of Alexander’s Inc. and Subsidiaries as of June 30, 2003, and the related condensed consolidated statements of operations for the three-month and six-month periods ended June 30, 2003 and 2002 and of cash flows for the six-month periods ended June 30, 2003 and 2002. These financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Alexander’s Inc. and Subsidiaries as of December 31, 2002, and the related consolidated statements of income, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 5, 2003, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2002 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

DELOITTE & TOUCHE LLP

Parsippany, New Jersey August 6, 2003

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link2 "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations"

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “intends,” “plans” or similar expressions in this quarterly report on Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. Factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those set forth in our Annual Report on Form 10-K for the year ended December 31, 2002 on page 3. For these statements, we claim protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Overview

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of the Company’s consolidated financial statements for the three and six months ended June 30, 2003 and 2002. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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.

A summary of the Company’s critical accounting policies is included in the Company’s annual report on Form 10-K for the year ended December 31, 2002 in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the footnotes to the consolidated financial statements, Note 2 – Summary of Significant Accounting Policies. There have been no significant changes to those policies during 2003.

Results of Operations

The Company had a net loss of $4,396,000 in the quarter ended June 30, 2003, compared to a net loss of $1,133,000 in the quarter ended June 30, 2002, an increase of $3,263,000 and net income of $408,000 in the six months ended June 30, 2003, compared to a net income of $2,398,000 in the six months ended June 30, 2002, a decrease of $1,990,000.

Property rentals were $12,805,000 in the quarter ended June 30, 2003, compared to $12,636,000 in the prior year’s quarter, an increase of $169,000 and $25,477,000 in the six months ended June 30, 2003, compared to $25,041,000 in the six months ended June 30, 2002, an increase of $436,000. These increases resulted primarily from an increase in occupancy at the Kings Plaza Regional Shopping Center.

Expense reimbursements were $7,193,000 in the quarter ended June 30, 2003, compared to $5,967,000 in the prior year’s quarter, an increase of $1,226,000 and $14,089,000 in the six months ended June 30, 2003, compared to $12,284,000 in the six months ended June 30, 2002, an increase of $1,805,000. These increases resulted from higher reimbursements for real estate taxes, insurance and repairs and maintenance.

Operating expenses were $8,727,000 in the quarter ended June 30, 2003, compared to $7,436,000 in the prior year’s quarter, an increase of $1,291,000 and $17,640,000 in the six months ended June 30, 2003, compared to $14,306,000 in the six months ended June 30, 2002, an increase of $3,334,000. Of these increases (i) $1,025,000 resulted primarily from higher fuel costs for the utility plant at the Company’s Kings Plaza Regional Shopping Center and (ii) $273,000 resulted from bad debt expense this year as compared to a bad debt recovery in the prior year’s. The balance of the increase was due to higher real estate taxes, insurance and repairs and maintenance, which were billed to tenants.

General and administrative expenses were $10,940,000 in the quarter ended June 30, 2003, compared to $5,169,000 in the prior year’s quarter, an increase of $5,771,000 and $11,863,000 for the six months ended June 30, 2003, compared to $6,034,000 for the six months ended June 30, 2002, an increase of $5,829,000. These increases resulted primarily from stock appreciation rights compensation expense of $9,923,000 in the current year compared to $4,236,000 in the prior year based on the Company’s closing stock prices of $83.49 at June 30, 2003, and $76.80 at June 30, 2002.

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Interest and debt expense was $3,059,000 in the quarter ended June 30, 2003, compared to $6,156,000 in the prior year’s quarter, a decrease of $3,097,000 and $6,259,000 in the six months ended June 30, 2003, compared to $12,734,000 in the six months ended June 30, 2002, an decrease of $6,475,000. These decreases resulted from (i) higher capitalized interest relating to the Lexington Avenue development property (interest of $18,120,000 was capitalized in 2003, as compared to $9,562,000 in 2002), (ii) a decrease in average interest rates from 8.43% to 7.82%, offset by (iii) an increase in average debt from $ 515,106,000 to $571,244,000.

Interest and other income, net was $170,000 in the quarter ended June 30 2003, compared to $535,000 in the prior year’s quarter, a decrease of $365,000 and $293,000 in the six months ended June 30, 2003, compared to $1,202,000 in the six months ended June 30, 2002, a decrease of $909,000. These decreases resulted primarily from lower average cash balances due to funding of the Lexington Avenue development project.

Discontinued operations include the Company’s Third Avenue property which was sold on August 30, 2002 and the Flushing property which is shown on the consolidated balance sheet as an “Asset held for sale.” Details of the operations are as follows:

	For The Three Months			For The Six Months
	Ended June 30,			Ended June 30,
	2003		2002	2003		2002
(amounts in thousands)
Total revenues	$ 158		$ 587	$ 313		$ 1,167
Less: total expenses	347		477	746		990
(Loss) income from discontinued operations	$ (189	)	$ 110	$ (433	)	$ 177

The decrease in revenues and expenses in 2003 was due to the sale of the Third Avenue property in August of 2002.

Liquidity and Capital Resources

Alexander’s operating properties do not generate sufficient cash flow to pay all of its expenses. After the completion of the Lexington Avenue property, which is not expected until 2005, the Company expects that cash flow will become positive.

Development Plans

The development plans at Lexington Avenue consist of an approximately 1.3 million square foot multi-use building. The building will contain approximately 154,000 net rentable square feet of retail space (45,000 square feet of which has been leased to Hennes & Mauritz), approximately 878,000 net rentable square feet of office space (695,000 square feet of which has been leased to Bloomberg L.P.) and approximately 248,000 net saleable square feet of residential space consisting of condominium units (through a taxable REIT subsidiary). Construction is expected to be completed in 2005. On July 3, 2002 the Company finalized a $490,000,000 loan with HVB Real Estate Capital (Hypo Vereinsbank) (the “Construction Loan”) to finance the construction of the Lexington Avenue property. The estimated construction costs in excess of the Construction Loan of approximately $140,000,000 have been provided by the Company. The Construction Loan has an interest rate of LIBOR plus 2.5% (currently 3.62%) and a term of forty-two months subject to two one-year extensions. The Company has received funding of $142,957,000 under the Construction Loan as of June 30, 2003. Of the total construction budget of $630,000,000, $300,800,000 has been expended through June 30, 2003 and an additional $117,400,000 has been committed to. Pursuant to the Construction Loan, Vornado has agreed to guarantee, among other things, the lien free, timely, completion of the construction of the project and funding of project costs in excess of a stated loan budget, if not funded by the Company. If Vornado should advance any funds under the Completion Guarantee in excess of the $26,000,000 which was available at July 3, 2002, under its line of credit with the Company, interest on those advance would be at 15% per annum.

The Company’s lease with Bloomberg L.P. has an initial term of 25 years, with a ten-year renewal option. Base annual net rent is $34,529,000 in each of the first four years and $38,533,000 in the fifth year with a similar percentage increase each four years thereafter.

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There can be no assurance that the Lexington Avenue project ultimately will be completed, completed on time or completed for the budgeted amount. Further, the Company may need additional financing for the project, which may involve equity, debt, joint ventures and asset sales, and which may involve arrangements with Vornado. If the project is not completed on a timely basis, the Bloomberg L.P. lease may be cancelled and significant penalties may apply.

Insurance

The Company’s debt instruments, consisting of mortgage loans secured by its properties (which are generally non-recourse to the Company), contain customary covenants requiring the Company to maintain insurance. There can be no assurance that the lenders under these instruments will not take the position that because the Company’s current all risk insurance policies differ from policies in effect prior to September 11, 2001 as to coverage for terrorist acts, there are breaches of these debt instruments that allow the lenders to declare an event of default and accelerate repayment of the debt. In addition, if lenders insist on coverage for these risks as it existed prior to September 11, 2001, it could adversely affect the Company’s ability to finance and/or refinance its properties, including the construction of its Lexington Avenue development property.

Disposition of Property

On May 30, 2002, the Company entered into an agreement to sell its subsidiary which owns the building and has the ground lease for its property in Flushing, New York for $18,800,000 which would result in a gain of approximately $15,800,000. The Company has received a non-refundable deposit of $1,875,000 from the purchaser. By Notice of Default dated August 16, 2002, the Landlord of the premises notified the Company of certain alleged defaults under the lease, including, but not limited to the fact that the purchaser performed unauthorized construction at the premises. The Company commenced an action for injunctive relief and a declaration of the rights and obligations of the parties under the lease. The Company has obtained an injunction which temporarily restrains the Landlord from terminating the lease. On September 6, 2002, the scheduled closing date, the Company notified the purchaser that the purchaser failed to close and is in default of its obligations under the purchase contract. While negotiations are in process with the parties to attempt to settle the disputes, there can be no assurance that the sale will be consummated, or that the dispute with the Landlord will be resolved favorably, or that the deposit will not be required to be returned. The Company continues to explore all of its options, including subleasing the property.

Debt

At June 30, 2003, the Company was indebted to Vornado in the amount of $124,000,000 comprised of (i) $95,000,000 financing, and (ii) $29,000,000 under a $50,000,000 line of credit (which carries a 1% unused commitment fee). The interest rate on the loan and the line of credit, which is currently 12.48%, will reset quarterly using a Treasury index (with a 3% floor) plus the same spread to treasuries.

The Company has additional borrowing capacity of $21,000,000 under its line of credit with Vornado. The Company believes that it can also raise additional capital through mezzanine level borrowing (deeply subordinated debt which is not secured by a senior interest in assets) and through the sale of securities and assets (the Company estimates that the fair market value of its assets are substantially in excess of their historical cost). The Company continues to evaluate its financing alternatives.

Although there can be no assurance, the Company believes that its cash sources as outlined above will be adequate to fund its cash requirements until its operations generate adequate cash flow.

Cash Flows

Six Months Ended June 30, 2003

Net cash provided by operating activities of $15,922,000 is comprised of (i) net income of $408,000 (including a loss from discontinued operations of $433,000), (ii) non-cash items of $14,086,000 and (iii) the net change in operating assets and liabilities of $1,428,000. The adjustments for non-cash items are comprised of (i) depreciation and amortization of $5,172,000, (ii) stock appreciation rights compensation expense of $9,923,000, offset by (iii) the effect of straight-lining of rental income of $1,009,000.

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Net cash used in investing activities of $128,959,000 is primarily comprised of capital expenditures of $127,585,000. The capital expenditures were primarily related to the Lexington Avenue development project.

Net cash provided by financing activities of $91,100,000 resulted from increased borrowings of $92,457,000 primarily to fund the Lexington Avenue development project, offset by debt repayments of $1,357,000.

Six Months Ended June 30, 2002

Net cash provided by operating activities of $681,000 is comprised of (i) net income of $2,398,000 (including income from discontinued operations of $177,000), (ii) non-cash items of $6,394,000, offset by (iii) the net change in operating assets and liabilities of $8,111,000. The adjustments for non-cash items are comprised of (i) depreciation and amortization of $3,682,000, (ii) stock appreciation rights compensation expense of $4,236,000, offset by (iii) the effect of straight-lining of rental income of $1,524,000.

Net cash used in investing activities of $35,149,000 is primarily attributable to capital expenditures of $34,903,000. The capital expenditures were primarily related to the Lexington Avenue development project.

Net cash used in financing activities of $1,347,000 resulted primarily from debt payments of $1,261,000.

Funds (used in) from Operations for the Three and Six Months Ended June 30, 2003, and 2002

Funds used in operations was $2,747,000 in the quarter ended June 30, 2003, compared to funds from operations (“FFO’’) of $518,000 in the prior year’s quarter, a decrease of $3,265,000. FFO was $3,664,000 in the six months ended June 30, 2003, compared to $5,692,000 in the prior year’s six months, a decrease of $2,028,000. Funds used in operations and FFO for the quarter and six months ended June 30, 2003 includes stock appreciation rights compensation expense of $9,923,000 based on the Company’s closing stock price of $83.49 at June 30, 2003 and FFO for the three and six months ended June 30, 2002, includes stock appreciation rights compensation expense of $4,236,000 based on the Company’s closing stock price of $76.80 at June 30, 2002. Effective with the Company’s filing of its 2003 first quarter Form 10-Q, the Company has revised its definition of FFO to include the effect of straight-lining of rent and exclude the effect of leasing fees paid directly to Vornado in excess of expense recognized. This change was made in order to comply with the Securities and Exchange Commission’s Regulation G concerning non-GAAP financial measures, to adhere to the National Association of Real Estate Investment Trust’s (“NAREIT’s”) definition of FFO and to disclose FFO on a comparable basis with virtually all other companies in the industry. FFO for the three and six months ended June 30, 2002 has been restated for comparability. Straight-lining of rents amounted to $449,000 or $.09 per share and $780,000 or $.16 per share for the quarters ended June 30, 2003 and 2002, respectively and $1,009,000 or $.20 per share and $1,524,000 or $.30 per share for the six months ended June 30, 2003 and 2002, respectively. Leasing fees paid in excess of expense recognized amounted to $595,000 or $.12 per share and $1,177,000 or $.24 per share for the quarter and six months ended June 30, 2002, respectively. The following table reconciles net (loss) income to funds (used in) from operations:

| (amounts in thousands except per share amounts) | For The Three Months — Ended June 30, | | | | For The
Six Months — Ended June 30, | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2003 | | 2002 | | 2003 | 2002 |
| Net (loss) income | $ (4,396 | ) | $ (1,133 | ) | $ 408 | $ 2,398 |
| Depreciation and amortization of real property
(including $31 and $62 from
discontinued operations in the
quarter and six months ended June 30,
2002 | 1,649 | | 1,651 | | 3,256 | 3,294 |
| Funds (used in) from operations | $ (2,747 | ) | $ 518 | | $ 3,664 | $ 5,692 |
| Funds (used in) from operations per share | $ (.55 | ) | $ .10 | | $ .73 | $ 1.14 |

FFO does not represent cash generated from operating activities in accordance with accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs, which is disclosed in the Consolidated Statements of Cash Flows for the applicable periods. There are no material legal or functional restrictions on the use of FFO. FFO should not be considered as an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flows as a measure of liquidity. Management considers FFO a relevant supplemental measure of operating performance because it provides a basis for comparison among REITs. FFO is computed in accordance with NAREIT’s standards, which

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may not be comparable to FFO reported by other REITs that do not define the term in accordance with NAREIT’s definition or that interpret NAREIT’s definition differently.

Below are the cash flows provided by (used in) operating, investing and financing activities:

(amounts in thousands)	For The Six Months Ended — June 30,
	2003		2002
Operating activities	$ 15,922		$ 681
Investing activities	$ (128,959	)	$ (35,149	)
Financing activities	$ 91,100		$ (1,347	)

Recently Issued Accounting Standards

In April 2003, the FASB issued SFAS No.149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of SFAS No.149 on July 1, 2003, as required, had no impact on the Company’s consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity . SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 must be applied no later than the beginning of the first interim or annual reporting period beginning after June 15, 2003. The adoption of this pronouncement will not have a material effect on the Company’s consolidated financial statements. link2 "Item 3. Quantitative and Qualitative Disclosures About Market Risk"

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s exposure to a change in interest rates is as follows:

	2003	Weighted	Effect of 1%	2002	Weighted
(amounts in thousands except	June 30	Average	Change In	December 31	Average
per share amounts)	Balance	Interest Rate	Base Rates	Balance	Interest Rate
Variable rate	$ 266,957	7.74 %	$ 2,670	$ 174,500	9.76 %
Fixed rate	367,950	7.13 %	—	369,307	7.13 %
	$ 634,907		2,670	$ 543,807
Total effect on the Company’s
annual net income			$ 2,670
Per share-diluted			$ .53

The fair value of the Company’s debt, based on discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt, exceeds the aggregate carrying amount by approximately $22,427,000 at June 30, 2003.

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link2 "Item 4. Controls and Procedures"

Item 4. Controls and Procedures

(a) Disclosure Controls Procedure. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.

(b) Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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link1 "PART II. OTHER INFORMATION"

PART II. OTHER INFORMATION link2 "Item 1. Legal Proceedings"

Item 1. Legal Proceedings

For a discussion of the litigation concerning the sale of the Company’s subsidiary which owns the building and has the ground lease for its property in Flushing, New York, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Other than routine proceedings incidental to their businesses, neither the Company nor any of its subsidiaries is a party to, nor is their property the subject of, any material pending legal proceeding. The Company believes that these legal actions will not be material to the Company’s financial conditions or results of operations or cash flows. link2 "Item 4. Submission of Matters to a Vote of Security Holders"

Item 4. Submission of Matters to a Vote of Security Holders

On May 28, 2003, the Company held its Annual Meeting of Stockholders. The stockholders voted, in person or by proxy, for the election of the three nominees to serve on the Board of Directors for a term of three years, or until their respective successors are duly elected and qualified. The three nominees were approved. The results of the voting are shown below:

Nominees — Steven Roth	4,785,093	107,410
Arthur Sonnenblick	4,871,953	20,550
Russell Wight	4,871,953	20,550

Because of the nature of the matters voted upon, there were no abstentions or broker non-votes. link2 "Item 6. Exhibits and Reports on Form 8-K"

Item 6. Exhibits and Reports on Form 8-K

| (a) | Exhibits required by Item 601 of Regulation of S-K are filed herewith and
are listed in the attached Exhibit Index. |
| --- | --- |
| (b) | Reports on Form 8-K |
| | During the quarter ended June 30, 2003, the Company did not file any reports on
Form 8-K. |

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link1 "SIGNATURES"

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALEXANDER’S, INC.
	(Registrant)
Date: August 7, 2003	By:	/s/ Joseph Macnow
		Joseph Macnow,
	Executive Vice President – Finance and
Administration and Chief Financial
Officer (Principal Financial and
Accounting Officer)

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link1 "EXHIBIT INDEX"

EXHIBIT INDEX

The following is a list of all exhibits filed as part of the Report:

Exhibit — No.			Page
3(i)	—	Certificate of Incorporation, as amended.
Incorporated herein by reference from Exhibit 3.0 to
the Registrant’s Current Report on Form 8-K dated
September 21, 1993.	*
3(ii)	—	By-laws, as amended. Incorporated herein by
reference from Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2000.	*
15.1	—	Letter regarding unaudited interim financial information
31.1	—	Certification by the Chief Executive Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of
1934, as amended
31.2	—	Certification by the Chief Financial Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of
1934, as amended
32.1	—	Certification by the Chief Executive Officer pursuant
to 18 U.S.C Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32.2	—	Certification by the Chief Financial Officer pursuant
to 18 U.S.C Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

• Incorporated by reference

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