NEW YORK–(BUSINESS WIRE)–
SL Green Realty Corp. (NYSE:SLG):
Financial and Operating Highlights
-
Net income attributable to common stockholders of $0.08 per share
for the second quarter as compared to $1.33 per share for the same
period in 2016. Net income attributable to common stockholders for the
second quarter of 2016 includes $75.2 million, or $0.72 per share, of
income related to 388-390 Greenwich Street, which was sold in the
second quarter of 2016.
-
FFO of $1.78 per share for the second quarter compared to $3.39 per
share for the same period in 2016. FFO for the second quarter of 2017
included $9.4 million, or $0.09 per share, of previously unrecognized
income on the Company’s preferred equity investment in 885 Third
Avenue and $10.3 million, or $0.10 per share, of net fees related to
the closing of the One Vanderbilt joint venture. FFO for the second
quarter of 2016 included $185.8 million or $1.77 per share, of income
related to 388-390 Greenwich Street, which was sold in the second
quarter of 2016.
-
Same-store cash NOI, including our share of same-store cash NOI
from unconsolidated joint ventures, increased 0.6% for the first six
months of 2017, or 1.4%, excluding the effect of lease termination
income, as compared to the same period in the prior year. The Company
is reaffirming its full-year 2017 same store cash NOI guidance range
of 2.0% – 3.0%.
-
Signed 45 Manhattan office leases covering 314,399 square feet in
the second quarter and 89 Manhattan office leases covering 660,744
square feet in the first six months of 2017. The mark-to-market on
signed Manhattan office leases was 13.2% higher for the second quarter
and 17.5% higher for the first six months over the previously fully
escalated rents on the same spaces.
-
Signed 21 Suburban office leases covering 159,581 square feet in
the second quarter and 47 Suburban office leases covering 305,838
square feet in the first six months of 2017. The mark-to-market on
signed Suburban office leases was 7.1% higher for the second quarter
and 4.7% higher for the first six months over the previously fully
escalated rents on the same spaces.
-
Manhattan same-store occupancy, inclusive of leases signed but not
yet commenced, was 94.9% as of June 30, 2017. Suburban same-store
occupancy, inclusive of leases signed but not yet commenced, was 85.1%
as of June 30, 2017.
Investing Highlights
-
In the second quarter, the Company repurchased 2.4 million shares
of common stock under the previously announced $1.0 billion share
repurchase plan, at an average price of $103.41 per share.
-
Executed a Guaranteed Maximum Price (GMP) contract, secured a New
Building Permit and commenced vertical construction at One Vanderbilt
Avenue.
-
The Company, along with its joint venture partner, entered into an
agreement to sell 680-750 Washington Boulevard, in Stamford,
Connecticut, also known as Stamford Towers, for a gross sale price of
$97.0 million, or $298 per square foot. The transaction closed in July
and generated net proceeds of $45.5 million.
-
Entered into an agreement to sell 125 Chubb Avenue in Lyndhurst,
New Jersey for a gross sale price of $29.5 million. The transaction is
expected to close in August and generate net proceeds of approximately
$28.8 million.
-
Closed on the previously announced sale of a 90% interest in 102
Greene Street, a 9,200 square-foot retail property in SoHo, at a gross
asset valuation of $43.5 million, or $4,728 per square foot. The
Company recognized net proceeds of $38.0 million and a gain on sale of
$4.9 million.
-
Closed on the sale of 520 White Plains Road, a 180,000 square-foot
office property located in Tarrytown, New York, for a gross sale price
of $21.0 million, or $117 per square foot. The sale generated net
proceeds of $5.0 million to the Company.
-
Originated new debt and preferred equity investments totaling
$431.0 million in the second quarter, of which $369.8 million was
retained at a yield of 10.2%.
Financing Highlights
-
Closed on a new $300.0 million debt and preferred equity liquidity
facility, which provides for favorable financing of senior mortgage
loan investments. The new facility has a 1-year term with two 1-year
extension options.
Summary
New York, NY, July 19, 2017 – SL Green Realty Corp. (the “Company”)
(NYSE: SLG) today reported net income attributable to common
stockholders for the quarter ended June 30, 2017 of $8.2 million, or
$0.08 per share, as compared to net income attributable to common
stockholders of $133.5 million, or $1.33 per share, for the same
quarter in 2016. Net income attributable to common stockholders for the
quarter ended June 30, 2017 includes $9.3 million, or $0.09 per share,
of net gains recognized from the sale of real estate as compared to
$230.0 million, or $2.20 per share, for the same quarter in 2016.
The Company also reported net income attributable to common stockholders
for the six months ended June 30, 2017 of $19.6 million, or $0.19 per
share, as compared to net income attributable to common stockholders of
$156.7 million, or $1.56 per share, for the same period in 2016. Net
income attributable to common stockholders for the six months ended
June 30, 2017 includes $11.9 million, or $0.11 per share, of net gains
recognized from the sale of real estate as compared to $253.7 million,
or $2.43 per share, for the same period in 2016.
The Company reported funds from operations, or FFO, for the quarter
ended June 30, 2017 of $186.8 million, or $1.78 per share, as compared
to FFO for the same period in 2016 of $355.7 million, or $3.39 per
share. FFO for the second quarter of 2017 included $9.4 million, or
$0.09 per share, of previously unrecognized income on the Company’s
preferred equity investment in 885 Third Avenue and $10.3 million, or
$0.10 per share, of net fees related to the closing of the One
Vanderbilt joint venture. FFO for the second quarter of 2016 included
$185.8 million, or $1.77 per share, of income from 388-390 Greenwich
Street, which was sold in the second quarter of 2016.
The Company also reported FFO for the six months ended June 30, 2017 of
$352.7 million, or $3.36 per share, as compared to FFO for the same
period in 2016 of $547.5 million, or $5.24 per share. FFO for the first
six months of 2016 included $207.6 million, or $1.99 per share, of
income from 388-390 Greenwich Street, which was sold in the second
quarter of 2016.
All per share amounts in this press release are presented on a diluted
basis.
Operating and Leasing Activity
For the quarter ended June 30, 2017, the Company reported consolidated
revenues and operating income of $398.2 million and $237.2 million,
respectively, compared to $617.6 million and $451.1 million,
respectively, for the same period in 2016.
Same-store cash NOI, including our share of same-store cash NOI from
unconsolidated joint ventures, decreased by 0.5% for the quarter ended
June 30, 2017 as compared to the same period in 2016. For the quarter,
consolidated property same-store cash NOI decreased by 2.0% to $165.9
million, primarily as a result of expected tenant move-outs at 485
Lexington Avenue, 1515 Broadway and 220 E 42nd Street, while
unconsolidated joint venture property same-store cash NOI increased by
9.2% to $29.0 million in 2017 as compared to the same period in 2016.
Same-store cash NOI, including our share of same-store cash NOI from
unconsolidated joint ventures, increased by 0.6% for the six months
ended June 30, 2017, or 1.4% excluding the effect of lease termination
income, as compared to the same period in 2016. For the six months,
consolidated property same-store cash NOI decreased by 0.6% to $326.6
million, primarily as a result of expected tenant move-outs at 485
Lexington Avenue, 1515 Broadway and 220 E 42nd Street, while
unconsolidated joint venture property same-store cash NOI increased by
8.0% to $57.7 million in 2017 as compared to the same period in 2016.
In the second quarter, the Company signed 45 office leases in its
Manhattan portfolio totaling 314,399 square feet. Thirty-two leases
comprising 190,949 square feet, representing office leases on space that
had been occupied within the prior twelve months, are considered
replacement leases on which mark-to-market is calculated. Those
replacement leases had average starting rents of $66.91 per rentable
square foot, representing a 13.2% increase over the previously fully
escalated rents on the same office spaces. The average lease term on the
Manhattan office leases signed in the second quarter was 8.6 years and
average tenant concessions were 5.3 months of free rent with a tenant
improvement allowance of $61.26 per rentable square foot.
During the first six months of 2017, the Company signed 89 office leases
in its Manhattan portfolio totaling 660,744 square feet. Sixty-one
leases comprising 378,045 square feet, representing office leases on
space that had been occupied within the prior twelve months, are
considered replacement leases on which mark-to-market is calculated.
Those replacement leases had average starting rents of $72.60 per
rentable square foot, representing a 17.5% increase over the previously
fully escalated rents on the same office spaces. The average lease term
on the Manhattan office leases signed in the first six months of 2017
was 9.2 years and average tenant concessions were 4.8 months of free
rent with a tenant improvement allowance of $55.73 per rentable square
foot.
Occupancy in the Company’s Manhattan same-store portfolio was 94.9% at
June 30, 2017, inclusive of 505,984 square feet of leases signed but not
yet commenced, as compared to 95.7% at March 31, 2017.
In the second quarter, the Company signed 21 office leases in its
Suburban portfolio totaling 159,581 square feet. Eleven leases
comprising 64,742 square feet, representing office leases on space that
had been occupied within the prior twelve months, are considered
replacement leases on which mark-to-market is calculated. Those
replacement leases had average starting rents of $35.59 per rentable
square foot, representing a 7.1% increase over the previously fully
escalated rents on the same office spaces. The average lease term on the
Suburban office leases signed in the second quarter was 8.1 years and
average tenant concessions were 7.0 months of free rent with a tenant
improvement allowance of $37.67 per rentable square foot.
During the first six months of 2017, the Company signed 47 office leases
in its Suburban portfolio totaling 305,838 square feet. Twenty-six
leases comprising 143,471 square feet, representing office leases on
space that had been occupied within the prior twelve months, are
considered replacement leases on which mark-to-market is calculated.
Those replacement leases had average starting rents of $32.80 per
rentable square foot, representing a 4.7% increase over the previously
fully escalated rents on the same office spaces. The average lease term
on the Manhattan office leases signed in the first six months of 2017
was 6.8 years and average tenant concessions were 5.4 months of free
rent with a tenant improvement allowance of $29.66 per rentable square
foot.
Occupancy in the Company’s Suburban same-store portfolio was 85.1% at
June 30, 2017, inclusive of 19,643 square feet of leases signed but not
yet commenced, as compared to 84.6% at March 31, 2017.
Significant leases that were signed in the second quarter included:
-
New lease on 65,000 square feet with Ascensia Diabetes Care US Inc. at
100 Summit in Valhalla, New York, for 11.0 years;
-
New lease on 46,492 square feet with 100 Church Street Tenant LLC at
100 Church Street, for 15.6 years;
-
New lease on 22,522 square feet with Soroban Capital Partners at 55
West 46th Street, also known as Tower 46, for 10.0 years;
-
New lease on 20,132 square feet with Ermenegildo Zegna at 10 East 53rd
Street, for 11.0 years;
-
New lease on 17,587 square feet with Schlesinger Associates at 711
Third Avenue, for 10.5 years;
-
New lease on 17,320 square feet with Pretium Partners at 810 Seventh
Avenue, for 10.5 years;
-
New lease on 16,442 square feet with Exelon Generation Company at 500
Summit in Valhalla, New York, for 7.0 years;
Marketing, general and administrative, or MG&A, expenses for the three
months ended June 30, 2017 were $24.3 million, or 5.0% of total combined
revenues and an annualized 52 basis points of total assets, including
our share of assets from unconsolidated joint ventures.
Investment Activity
During the second quarter, the Company repurchased 2.4 million shares of
common stock under the previously announced $1.0 billion share
repurchase plan, at an average price of $103.41 per share.
In April, the Company, along with its joint venture partners, executed a
Guaranteed Maximum Price (GMP) contract with AECOM Tishman and secured a
New Building Permit from New York City for the construction at One
Vanderbilt Avenue. The GMP contract includes the procurement of more
than 25,000 tons of domestically-fabricated structural steel from Banker
Steel Company, a Virginia-based steel fabrication firm. Vertical
construction commenced in June.
In May, the Company, along with its joint venture partner, reached an
agreement to sell 680-750 Washington Boulevard, in Stamford,
Connecticut, also known as Stamford Towers, for a gross sale price of
$97.0 million, or $298 per square foot. The transaction closed in July
and generated net proceeds of $45.5 million.
In May, the Company reached an agreement to sell 125 Chubb Avenue, a
278,000 square-foot office property located in Lyndhurst, New Jersey,
for a gross sale price of $29.5 million. The transaction is expected to
close in August and generate net proceeds of approximately $28.8 million.
In April, the Company closed on the previously announced sale of a 90%
interest in 102 Greene Street, a 9,200 square-foot retail property in
SoHo, at a gross asset valuation of $43.5 million, or $4,728 per square
foot. The Company recognized net proceeds of $38.0 million and a gain on
sale of $4.9 million.
In April, the Company closed on the sale of 520 White Plains Road, a
180,000 square-foot office property located in Tarrytown, New York, for
a gross sale price of $21.0 million, or $117 per square foot. The
Company recognized net proceeds from the sale of $5.0 million.
Debt and Preferred Equity Investment Activity
The carrying value of the Company’s debt and preferred equity investment
portfolio totaled $2.13 billion at June 30, 2017, including $1.99
billion of investments at a weighted average current yield of 9.5% that
are classified in the debt and preferred equity line item on the balance
sheet, and investments aggregating $0.14 billion at a weighted average
current yield of 8.3% that are included in other balance sheet line
items for accounting purposes. In the second quarter, the Company
originated new debt and preferred equity investments totaling $431.0
million, of which $369.8 million was retained and $368.6 million was
funded, at a weighted average current yield of 10.2%. In the second
quarter, the Company recorded $235.4 million of principal reductions
from investments that were repaid, sold or syndicated.
Financing Activity
In June, the Company closed on a new $300.0 million debt and preferred
equity liquidity facility. The facility, which will be secured by select
senior mortgage loans in the Company’s debt portfolio, has a 1-year term
with two 1-year extension option and bears interest on a floating rate
basis at a spread to LIBOR based on the pledged collateral and advance
rate.
Dividends
In the second quarter of 2017, the Company declared quarterly dividends
on its outstanding common and preferred stock as follows:
-
$0.775 per share of common stock, which was paid on July 17, 2017 to
shareholders of record on the close of business on June 30, 2017; and
-
$0.40625 per share on the Company’s 6.50% Series I Cumulative
Redeemable Preferred Stock for the period April 15, 2017 through and
including July 14, 2017, which was paid on July 17, 2017 to
shareholders of record on the close of business on June 30, 2017, and
reflects the regular quarterly dividend, which is the equivalent of an
annualized dividend of $1.625 per share.
Conference Call and Audio Webcast
The Company’s executive management team, led by Marc Holliday, Chief
Executive Officer, will host a conference call and audio webcast on
Thursday, July 20, 2017 at 2:00 pm ET to discuss the financial results.
The supplemental data will be available prior to the quarterly
conference call in the Investors section of the SL Green Realty Corp.
website at https://slgreen.com/
under “Financial Reports.”
The live conference call will be webcast in listen-only mode in the
Investors section of the SL Green Realty Corp. website at https://slgreen.com/
under “Event Calendar & Webcasts”. The conference may also be accessed
by dialing toll-free (877) 312-8765 or international (419) 386-0002, and
using passcode 43379728.
A replay of the call will be available 7 days after the call by dialing
(855) 859-2056 using passcode 43379728. A webcast replay will also be
available in the Investors section of the SL Green Realty Corp. website
under “Event Calendar & Webcasts”.
Company Profile
SL Green Realty Corp., an S&P 500 company and New York City’s largest
office landlord, is a fully integrated real estate investment trust, or
REIT, that is focused primarily on acquiring, managing and maximizing
value of Manhattan commercial properties. As of June 30, 2017, SL Green
held interests in 119 Manhattan buildings totaling 47.4 million square
feet. This included ownership interests in 27.5 million square feet of
Manhattan buildings and debt and preferred equity investments secured by
19.9 million square feet of buildings. In addition, SL Green held
ownership interests in 29 suburban buildings totaling 4.6 million square
feet in Brooklyn, Long Island, Westchester County, Connecticut and New
Jersey.
To be added to the Company’s distribution list or to obtain the latest
news releases and other Company information, please visit our website at www.slgreen.com
or contact Investor Relations at (212) 594-2700.
Disclaimers
Non-GAAP Financial Measures
During the quarterly conference call, the Company may discuss
non-GAAP financial measures as defined by SEC Regulation G. In addition,
the Company has used non-GAAP financial measures in this press release.
A reconciliation of each non-GAAP financial measure and the comparable
GAAP financial measure can be found in this release and in the Company’s
Supplemental Package.
Forward-looking Statement
This press release includes certain statements that may be deemed to
be “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 and are intended to be covered
by the safe harbor provisions thereof. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that we expect, believe or
anticipate will or may occur in the future, are forward-looking
statements. Forward-looking statements are not guarantees of future
performance and we caution you not to place undue reliance on such
statements. Forward-looking statements are generally identifiable by the
use of the words “may,” “will,” “should,” “expect,” “anticipate,”
“estimate,” “believe,” “intend,” “project,” “continue,” or the negative
of these words, or other similar words or terms.
Forward-looking statements contained in this press release are
subject to a number of risks and uncertainties, many of which are beyond
our control, that may cause our actual results, performance or
achievements to be materially different from future results, performance
or achievements expressed or implied by forward-looking statements made
by us. Factors and risks to our business that could cause actual results
to differ from those contained in the forward-looking statements are
described in our filings with the Securities and Exchange Commission. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of future events, new information or
otherwise.
|
|
||||||||||||||||
|
SL GREEN REALTY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share data) |
||||||||||||||||
|
|
|
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
June 30, |
June 30, |
|||||||||||||||
|
2017 |
|
2016 |
2017 |
|
2016 |
|||||||||||
|
Revenues: |
||||||||||||||||
|
Rental revenue, net |
$ |
279,407 |
$ |
416,809 |
$ |
560,736 |
$ |
762,416 |
||||||||
|
Escalation and reimbursement |
42,620 |
48,616 |
86,812 |
94,227 |
||||||||||||
|
Investment income |
60,622 |
44,214 |
100,921 |
98,951 |
||||||||||||
|
Other income |
15,501 |
|
107,975 |
|
27,062 |
|
117,464 |
|
||||||||
|
Total revenues |
398,150 |
617,614 |
775,531 |
1,073,058 |
||||||||||||
|
Expenses: |
||||||||||||||||
|
Operating expenses, including related party expenses of $5,262 and $9,436 in 2017 and $6,667 and $10,129 in 2016. |
70,852 |
75,324 |
145,358 |
154,844 |
||||||||||||
|
Real estate taxes |
60,945 |
62,124 |
122,013 |
123,798 |
||||||||||||
|
Ground rent |
8,308 |
8,307 |
16,616 |
16,615 |
||||||||||||
|
Interest expense, net of interest income |
64,856 |
89,089 |
130,478 |
183,761 |
||||||||||||
|
Amortization of deferred financing costs |
3,432 |
7,433 |
8,193 |
15,365 |
||||||||||||
|
Depreciation and amortization |
133,054 |
425,042 |
227,188 |
604,350 |
||||||||||||
|
Transaction related costs |
46 |
2,115 |
179 |
3,394 |
||||||||||||
|
Marketing, general and administrative |
24,256 |
|
24,484 |
|
48,399 |
|
48,516 |
|
||||||||
|
Total expenses |
365,749 |
|
693,918 |
|
698,424 |
|
1,150,643 |
|
||||||||
|
Net income (loss) before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate, (loss) gain on sale of real estate net, depreciable real estate reserve, and (loss) gain on sale of marketable securities |
32,401 |
(76,304 |
) |
77,107 |
(77,585 |
) |
||||||||||
|
Equity in net income from unconsolidated joint ventures |
3,412 |
5,841 |
10,026 |
15,937 |
||||||||||||
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
13,089 |
33,448 |
15,136 |
43,363 |
||||||||||||
|
(Loss) gain on sale of real estate, net |
(3,823 |
) |
196,580 |
(3,256 |
) |
210,353 |
||||||||||
|
Depreciable real estate reserves |
(29,064 |
) |
(10,387 |
) |
(85,336 |
) |
(10,387 |
) |
||||||||
|
(Loss) gain on sale of marketable securities |
— |
|
(83 |
) |
3,262 |
|
(83 |
) |
||||||||
|
Net income |
16,015 |
149,095 |
16,939 |
181,598 |
||||||||||||
|
Net income attributable to noncontrolling interests in the Operating Partnership |
(419 |
) |
(5,586 |
) |
(895 |
) |
(6,508 |
) |
||||||||
|
Net (income) loss attributable to noncontrolling interests in other partnerships |
(786 |
) |
(3,435 |
) |
16,705 |
(5,409 |
) |
|||||||||
|
Preferred unit distributions |
(2,851 |
) |
(2,880 |
) |
(5,701 |
) |
(5,528 |
) |
||||||||
|
Net income attributable to SL Green |
11,959 |
137,194 |
27,048 |
164,153 |
||||||||||||
|
Perpetual preferred stock dividends |
(3,737 |
) |
(3,737 |
) |
(7,475 |
) |
(7,475 |
) |
||||||||
|
Net income attributable to SL Green common stockholders |
$ |
8,222 |
|
$ |
133,457 |
|
$ |
19,573 |
|
$ |
156,678 |
|
||||
|
|
||||||||||||||||
|
Earnings Per Share (EPS) |
||||||||||||||||
|
Net income per share (Basic) |
$ |
0.08 |
|
$ |
1.33 |
|
$ |
0.20 |
|
$ |
1.57 |
|
||||
|
Net income per share (Diluted) |
$ |
0.08 |
|
$ |
1.33 |
|
$ |
0.19 |
|
$ |
1.56 |
|
||||
|
|
||||||||||||||||
|
Funds From Operations (FFO) |
||||||||||||||||
|
FFO per share (Basic) |
$ |
1.79 |
|
$ |
3.40 |
|
$ |
3.36 |
|
$ |
5.25 |
|
||||
|
FFO per share (Diluted) |
$ |
1.78 |
|
$ |
3.39 |
|
$ |
3.36 |
|
$ |
5.24 |
|
||||
|
|
||||||||||||||||
|
Basic ownership interest |
||||||||||||||||
|
Weighted average REIT common shares for net income per share |
99,900 |
100,134 |
100,268 |
100,093 |
||||||||||||
|
Weighted average partnership units held by noncontrolling interests |
4,562 |
|
4,342 |
|
4,584 |
|
4,158 |
|
||||||||
|
Basic weighted average shares and units outstanding |
104,462 |
|
104,476 |
|
104,852 |
|
104,251 |
|
||||||||
|
|
||||||||||||||||
|
Diluted ownership interest |
||||||||||||||||
|
Weighted average REIT common share and common share equivalents |
100,170 |
100,450 |
100,556 |
100,375 |
||||||||||||
|
Weighted average partnership units held by noncontrolling interests |
4,562 |
|
4,342 |
|
4,584 |
|
4,158 |
|
||||||||
|
Diluted weighted average shares and units outstanding |
104,732 |
|
104,792 |
|
105,140 |
|
104,533 |
|
||||||||
|
|
||||||||||||||||
|
|
||||||||
|
SL GREEN REALTY CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data) |
||||||||
|
|
|
|||||||
|
June 30, |
December 31, |
|||||||
|
2017 |
2016 |
|||||||
|
Assets |
(Unaudited) |
|||||||
|
Commercial real estate properties, at cost: |
||||||||
|
Land and land interests |
$ |
2,936,879 |
$ |
3,309,710 |
||||
|
Building and improvements |
7,476,108 |
7,948,852 |
||||||
|
Building leasehold and improvements |
1,441,587 |
1,437,325 |
||||||
|
Properties under capital lease |
47,445 |
|
47,445 |
|
||||
|
11,902,019 |
12,743,332 |
|||||||
|
Less accumulated depreciation |
(2,397,299 |
) |
(2,264,694 |
) |
||||
|
9,504,720 |
10,478,638 |
|||||||
|
Assets held for sale |
119,224 |
— |
||||||
|
Cash and cash equivalents |
270,965 |
279,443 |
||||||
|
Restricted cash |
109,959 |
90,524 |
||||||
|
Investment in marketable securities |
29,524 |
85,110 |
||||||
|
Tenant and other receivables, net of allowance of $17,677 and $16,592 in 2017 and 2016, respectively |
50,946 |
53,772 |
||||||
|
Related party receivables |
23,725 |
15,856 |
||||||
|
Deferred rents receivable, net of allowance of $23,270 and $25,203 in 2017 and 2016, respectively |
385,040 |
442,179 |
||||||
|
Debt and preferred equity investments, net of discounts and deferred origination fees of $15,079 and $16,705 in 2017 and 2016, respectively |
1,986,413 |
1,640,412 |
||||||
|
Investments in unconsolidated joint ventures |
2,219,371 |
1,890,186 |
||||||
|
Deferred costs, net |
249,724 |
267,600 |
||||||
|
Other assets |
360,096 |
|
614,067 |
|
||||
|
Total assets |
$ |
15,309,707 |
|
$ |
15,857,787 |
|
||
|
|
||||||||
|
Liabilities |
||||||||
|
Mortgages and other loans payable |
$ |
3,857,421 |
$ |
4,140,712 |
||||
|
Revolving credit facility |
200,000 |
— |
||||||
|
Unsecured term loan |
1,183,000 |
1,183,000 |
||||||
|
Unsecured notes |
1,091,332 |
1,133,957 |
||||||
|
Deferred financing costs, net |
(56,820 |
) |
(82,258 |
) |
||||
|
Total debt, net of deferred financing costs |
6,274,933 |
6,375,411 |
||||||
|
Accrued interest payable |
36,478 |
36,052 |
||||||
|
Other liabilities |
197,261 |
212,493 |
||||||
|
Accounts payable and accrued expenses |
134,294 |
190,583 |
||||||
|
Deferred revenue |
229,692 |
217,955 |
||||||
|
Capitalized lease obligations |
42,480 |
42,132 |
||||||
|
Deferred land leases payable |
2,911 |
2,583 |
||||||
|
Dividend and distributions payable |
86,081 |
87,271 |
||||||
|
Security deposits |
68,286 |
66,504 |
||||||
|
Liabilities related to assets held for sale |
106 |
— |
||||||
|
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities |
100,000 |
|
100,000 |
|
||||
|
Total liabilities |
7,172,522 |
7,330,984 |
||||||
|
|
||||||||
|
Commitments and contingencies |
— |
— |
||||||
|
Noncontrolling interest in the Operating Partnership |
487,660 |
473,882 |
||||||
|
Preferred units |
301,885 |
302,010 |
||||||
|
|
||||||||
|
Equity |
||||||||
|
Stockholders’ equity: |
||||||||
|
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both June 30, 2017 and December 31, 2016 |
221,932 |
221,932 |
||||||
|
Common stock, $0.01 par value 160,000 shares authorized, 99,422 and 101,617 issued and outstanding at June 30, 2017 and December 31, 2016, respectively (including 1,055 held in Treasury at June 30, 2017 and December 31, 2016) |
995 |
1,017 |
||||||
|
Additional paid-in capital |
5,391,038 |
5,624,545 |
||||||
|
Treasury stock at cost |
(124,049 |
) |
(124,049 |
) |
||||
|
Accumulated other comprehensive income |
14,354 |
22,137 |
||||||
|
Retained earnings |
1,431,442 |
|
1,578,893 |
|
||||
|
Total SL Green Realty Corp. stockholders’ equity |
6,935,712 |
7,324,475 |
||||||
|
Noncontrolling interests in other partnerships |
411,928 |
|
426,436 |
|
||||
|
Total equity |
7,347,640 |
|
7,750,911 |
|
||||
|
Total liabilities and equity |
$ |
15,309,707 |
|
$ |
15,857,787 |
|
||
|
|
||||||||
|
|
|
|||||||||||||||
|
SL GREEN REALTY CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited and in thousands, except per share data) |
||||||||||||||||
|
|
|
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
June 30, |
June 30, |
|||||||||||||||
|
Funds From Operations (FFO) Reconciliation: |
2017 |
|
2016 |
2017 |
|
2016 |
||||||||||
|
|
||||||||||||||||
|
Net income attributable to SL Green common stockholders |
$ |
8,222 |
$ |
133,457 |
$ |
19,573 |
$ |
156,678 |
||||||||
|
Add: |
||||||||||||||||
|
Depreciation and amortization |
133,054 |
425,042 |
227,188 |
604,350 |
||||||||||||
|
Joint venture depreciation and noncontrolling interest adjustments |
25,086 |
8,328 |
49,419 |
18,842 |
||||||||||||
|
Net income attributable to noncontrolling interests |
1,205 |
9,021 |
(15,810 |
) |
11,917 |
|||||||||||
|
Less: |
||||||||||||||||
|
(Loss) gain on sale of real estate and discontinued operations, net |
(3,823 |
) |
196,580 |
(3,256 |
) |
210,353 |
||||||||||
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
13,089 |
33,448 |
15,136 |
43,363 |
||||||||||||
|
Depreciable real estate reserve |
(29,064 |
) |
(10,387 |
) |
(85,336 |
) |
(10,387 |
) |
||||||||
|
Depreciation on non-rental real estate assets |
564 |
|
500 |
|
1,080 |
|
996 |
|
||||||||
|
FFO attributable to SL Green common stockholders and noncontrolling interests |
$ |
186,801 |
|
$ |
355,707 |
|
$ |
352,746 |
|
$ |
547,462 |
|
||||
|
|
||||||||||||||||
|
|
|
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
June 30, |
June 30, |
|||||||||||||||
|
Operating income and Same-store NOI Reconciliation: |
2017 |
2016 |
2017 |
2016 |
||||||||||||
|
|
||||||||||||||||
|
Net income |
$ |
16,015 |
$ |
149,095 |
$ |
16,939 |
$ |
181,598 |
||||||||
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
(13,089 |
) |
(33,448 |
) |
(15,136 |
) |
(43,363 |
) |
||||||||
|
Loss (gain) on sale of real estate, net |
3,823 |
(196,580 |
) |
3,256 |
(210,353 |
) |
||||||||||
|
Depreciable real estate reserves |
29,064 |
10,387 |
85,336 |
10,387 |
||||||||||||
|
Loss on sale of marketable securities |
— |
83 |
(3,262 |
) |
83 |
|||||||||||
|
Depreciation and amortization |
133,054 |
425,042 |
227,188 |
604,350 |
||||||||||||
|
Interest expense, net of interest income |
64,856 |
89,089 |
130,478 |
183,761 |
||||||||||||
|
Amortization of deferred financing costs |
3,432 |
|
7,433 |
|
8,193 |
|
15,365 |
|
||||||||
|
Operating income |
237,155 |
|
451,101 |
|
452,992 |
|
741,828 |
|
||||||||
|
|
||||||||||||||||
|
Equity in net (income) from unconsolidated joint ventures |
(3,412 |
) |
(5,841 |
) |
(10,026 |
) |
(15,937 |
) |
||||||||
|
Marketing, general and administrative expense |
24,256 |
24,484 |
48,399 |
48,516 |
||||||||||||
|
Transaction related costs, net |
46 |
2,115 |
179 |
3,394 |
||||||||||||
|
Investment income |
(60,622 |
) |
(44,214 |
) |
(100,921 |
) |
(98,951 |
) |
||||||||
|
Non-building revenue |
(1,548 |
) |
1,006 |
|
(8,118 |
) |
(3,432 |
) |
||||||||
|
Net operating income (NOI) |
195,875 |
|
428,651 |
|
382,505 |
|
675,418 |
|
||||||||
|
|
||||||||||||||||
|
Equity in net income from unconsolidated joint ventures |
3,412 |
5,841 |
10,026 |
15,937 |
||||||||||||
|
SLG share of unconsolidated JV depreciation and amortization |
31,286 |
14,910 |
62,501 |
29,813 |
||||||||||||
|
SLG share of unconsolidated JV interest expense, net of interest income |
22,876 |
17,391 |
43,969 |
34,650 |
||||||||||||
|
SLG share of unconsolidated JV amortization of deferred financing costs |
2,314 |
2,136 |
4,935 |
3,432 |
||||||||||||
|
SLG share of unconsolidated JV transaction related costs |
56 |
— |
110 |
— |
||||||||||||
|
SLG share of unconsolidated JV investment income |
(3,916 |
) |
(4,108 |
) |
(8,746 |
) |
(10,007 |
) |
||||||||
|
SLG share of unconsolidated JV non-building revenue |
(1,158 |
) |
188 |
|
(2,108 |
) |
277 |
|
||||||||
|
NOI including SLG share of unconsolidated JVs |
250,745 |
|
465,009 |
|
493,192 |
|
749,520 |
|
||||||||
|
|
||||||||||||||||
|
NOI from other properties/affiliates |
(38,265 |
) |
(251,621 |
) |
(72,783 |
) |
(334,694 |
) |
||||||||
|
Same-Store NOI |
212,480 |
|
213,388 |
|
420,409 |
|
414,826 |
|
||||||||
|
|
||||||||||||||||
|
Ground lease straight-line adjustment |
524 |
608 |
1,048 |
1,216 |
||||||||||||
|
|
||||||||||||||||
|
Straight-line and free rent |
(10,780 |
) |
(8,954 |
) |
(21,995 |
) |
(16,868 |
) |
||||||||
|
Rental income – FAS 141 |
(4,471 |
) |
(3,740 |
) |
(9,240 |
) |
(7,434 |
) |
||||||||
|
Joint Venture straight-line and free rent |
(2,436 |
) |
(4,960 |
) |
(5,043 |
) |
(8,895 |
) |
||||||||
|
Joint Venture rental income – FAS 141 |
(409 |
) |
(440 |
) |
(888 |
) |
(883 |
) |
||||||||
|
Same-store cash NOI |
$ |
194,908 |
|
$ |
195,902 |
|
$ |
384,291 |
|
$ |
381,962 |
|
||||
|
|
||||||||||||||||
|
|
|
SL GREEN REALTY CORP. |
|
NON-GAAP FINANCIAL MEASURES – DISCLOSURES |
|
(unaudited and in thousands, except per share data) |
|
|
Funds from Operations (FFO)
FFO is a widely recognized non-GAAP measure of REIT performance. The
Company computes FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts, or NAREIT, which
may not be comparable to FFO reported by other REITs that do not compute
FFO in accordance with the NAREIT definition, or that interpret the
NAREIT definition differently than the Company does. The revised White
Paper on FFO approved by the Board of Governors of NAREIT in April 2002,
and subsequently amended, defines FFO as net income (loss) (computed in
accordance with Generally Accepted Accounting Principles, or GAAP),
excluding gains (or losses) from sales of properties, debt
restructurings and real estate related impairment charges, plus real
estate related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures.
The Company presents FFO because it considers it an important
supplemental measure of the Company’s operating performance and believes
that it is frequently used by securities analysts, investors and other
interested parties in the evaluation of REITs, particularly those that
own and operate commercial office properties. The Company also uses FFO
as one of several criteria to determine performance-based bonuses for
members of its senior management. FFO is intended to exclude GAAP
historical cost depreciation and amortization of real estate and related
assets, which assumes that the value of real estate assets diminishes
ratably over time. Historically, however, real estate values have risen
or fallen with market conditions. Because FFO excludes depreciation and
amortization unique to real estate, gains and losses from property
dispositions, and extraordinary items, it provides a performance measure
that, when compared year over year, reflects the impact to operations
from trends in occupancy rates, rental rates, operating costs, and
interest costs, providing perspective not immediately apparent from net
income. FFO does not represent cash generated from operating activities
in accordance with GAAP and should not be considered as an alternative
to net income (determined in accordance with GAAP), as an indication of
the Company’s financial performance or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of the
Company’s liquidity, nor is it indicative of funds available to fund the
Company’s cash needs, including our ability to make cash distributions.
Funds Available for Distribution (FAD)
FAD is a non-GAAP financial measure that is calculated as FFO plus
non-real estate depreciation, allowance for straight line credit loss,
adjustment for straight line ground rent, non-cash deferred
compensation, and a pro-rata adjustment for FAD for SLG’s unconsolidated
JV, less straight line rental income, free rent net of amortization,
second cycle tenant improvement and leasing costs, and recurring
building improvements.
FAD is not intended to represent cash flow for the period and is not
indicative of cash flow provided by operating activities as determined
in accordance with GAAP. FAD is presented solely as a supplemental
disclosure with respect to liquidity because the Company believes it
provides useful information regarding the Company’s ability to fund its
dividends. Because all companies do not calculate FAD the same way, the
presentation of FAD may not be comparable to similarly titled measures
of other companies. FAD does not represent cash flow from operating,
investing and finance activities in accordance with GAAP and should not
be considered as an alternative to net income (determined in accordance
with GAAP), as an indication of the Company’s financial performance, as
an alternative to net cash flows from operating activities (determined
in accordance with GAAP), or as a measure of the Company’s liquidity.
Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA)
EBITDA is a non-GAAP financial measure that is calculated as Operating
income before transaction related costs and gains/losses on early
extinguishment of debt. Adjusted EBITDA adds income taxes, loan loss
reserves and our share of joint venture depreciation and amortization to
EBITDA.
The Company presents EBITDA, because the Company believes that EBITDA,
along with cash flow from operating activities, investing activities and
financing activities, provides investors with an additional indicator of
the Company’s ability to incur and service debt. EBITDA should not be
considered as an alternative to net income (determined in accordance
with GAAP), as an indication of the Company’s financial performance, as
an alternative to net cash flows from operating activities (determined
in accordance with GAAP), or as a measure of the Company’s liquidity.
Adjusted earnings before interest, taxes, depreciation and amortization
(Adjusted EBITDA) is calculated by adding income taxes, loan loss
reserves and the Company’s share of joint venture depreciation and
amortization to EBITDA.
Net Operating Income (NOI) and Cash NOI
NOI is a non-GAAP financial measure that is calculated as operating
income before transaction related costs, gains/losses on early
extinguishment of debt, marketing general and administrative expenses
and non-real estate revenue. Cash NOI is calculated by subtracting free
rent (net of amortization), straight-line rent, FAS 141 rental income
from NOI, while adding ground lease straight-line adjustment and the
allowance for straight-line tenant credit loss.
The Company presents NOI and Cash NOI because the Company believes that
these measures, when taken together with the corresponding GAAP
financial measures and our reconciliations, provide investors with
meaningful information regarding the operating performance of
properties. When operating performance is compared across multiple
periods, the investor is provided with information not immediately
apparent from net income (determined in accordance with GAAP). These
measures provide information on trends in the revenue generated and
expenses incurred in operating our properties, unaffected by the cost of
leverage, straight-line adjustments, depreciation, amortization, and
other net income components. The Company uses these measures internally
as performance measures. None of these measures is an alternative to net
income (determined in accordance with GAAP) and same-store performance
should not be considered an alternative to GAAP net income performance.
Debt to Market Capitalization Ratio
Debt to Market Capitalization is a non-GAAP measure that is calculated
as the Company’s estimated market value based upon the quarter-end
trading price of the Company’s common stock multiplied by all common
shares and operating partnership units outstanding plus the face value
of the Company’s preferred equity divided by consolidated debt.
The Company presents the ratio of debt to market capitalization as a
measure of the Company’s leverage position relative to the Company’s
estimated market value. The Company believes this ratio may provide
investors with another measure of the Company’s current leverage
position. The debt to market capitalization ratio should be used as one
measure of the Company’s leverage position, and this measure is commonly
used in the REIT sector; however, such measure may not be comparable to
those used by other REITs that do not compute such measure in the same
manner. The debt to market capitalization ratio does not represent the
Company’s borrowing capacity and should not be considered an alternative
measure to the Company’s current lending arrangements.
Coverage Ratios
The Company presents fixed charge and interest coverage ratios to
provide a measure of the Company’s financial flexibility to service
current debt amortization, interest expense and ground rent from current
cash net operating income. These coverage ratios represent a common
measure of the Company’s ability to service fixed cash payments;
however, these ratios are not used as an alternative to cash flow from
operating, financing and investing activities (determined in accordance
with GAAP).
SLG-EARN
View source version on businesswire.com: http://www.businesswire.com/news/home/20170719006333/en/
SL Green Realty Corp.
Matt DiLiberto
Chief Financial Officer
(212)
594-2700
Source: SL Green Realty Corp.
News Provided by Acquire Media