SEC Filing | SL Green Realty Corp.

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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A No. 1 CURRENT REPORT ------------------ Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 10, 2001 SL GREEN REALTY CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND (STATE OF INCORPORATION) 1-13199 13-3956775 (COMMISSION FILE NUMBER) (IRS EMPLOYER ID. NUMBER) 420 Lexington Avenue 10170 New York, New York (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (212) 594-2700 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant herby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K/A No.1, dated January 10, 2001 (filed with the Securities and Exchange Commission on January 25, 2001), as set forth in the pages attached hereto. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) and (b) FINANCIAL STATEMENTS OF PROPERTY ACQUIRED AND PRO FORMA FINANCIAL INFORMATION UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Pro Forma Balance Sheet (Unaudited) as of December 31, 2000 ............................. F4 Pro Forma Income Statement (Unaudited) for the year ended December 31, 2000 ................ F5 Notes to Pro Forma Financial Information ................................. F6 Report of Independent Auditors ........................................... F7 Statement of Revenues and Certain Expenses of One Park Avenue for the year ended December 31, 2000 ............................ F8 Notes to Statement of Revenues and Certain Expenses ...................... F9 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. SL GREEN REALTY CORP. By: /s/ Thomas E. Wirth ---------------------------- Thomas E. Wirth Chief Financial Officer Date: March 26, 2001 F2

SL GREEN REALTY CORP. PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The unaudited pro forma consolidated balance sheet of SL Green Realty Corp. (the "Company") as of December 31, 2000 has been prepared as if the Company's acquisition of the fee and mortgage interests of One Park Avenue ("One Park") had been consummated on December 31, 2000. The unaudited pro forma consolidated income statement for the year ended December 31, 2000 is presented as if the Company's acquisition of One Park occurred on January 1, 2000 and the effect was carried forward through the year. On September 29, 2000, the Company announced that it had signed an agreement to acquire various ownership and mortgage interests in the 913,000 square foot, 20-story office building at One Park Avenue, New York, New York. The purchase was consummated on January 10, 2001. The property One Park is located between 32nd and 33rd Streets in the Grand Central sub-market of midtown Manhattan. The pro forma consolidated financial statements do not purport to represent what the Company's financial position or results of operations would have been assuming the completion of the Company's acquisition of One Park had occurred on January 1, 2000 and period indicated, nor do they purport to project the Company's financial position or results of operations at any future date or for any future period. These pro forma consolidated financial statements should be read in conjunction with the Company's 2000 Annual Report on Form 10-K. F3

SL GREEN REALTY CORP. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2000 (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) SL GREEN REALTY CORP. PURCHASE OF COMPANY HISTORICAL ONE PARK PRO FORMA (A) (B) AS ADJUSTED ASSETS: Commerical real estate properties at cost: Land and land interests $ 125,572 $ 46,768 $ 172,340 Buildings and improvements 618,637 187,074 805,711 Building leasehold 139,393 139,393 Property under capital lease 12,208 12,208 ----------- ---------- ----------- 895,810 233,842 1,129,652 Less accumulated depreciation (78,432) (78,432) ----------- ---------- ----------- 817,378 233,842 1,051,220 Properties held for sale 10,895 10,895 Cash and cash equivalents 10,793 10,793 Restricted cash 86,823 86,823 Tenant and other receivables, net of allowance of $1,723 7,580 7,580 Related party receivables 917 917 Deferred rents receivable, net of allowance for tenant credit loss of $4,860 45,816 45,816 Investment in and advances to affiliates 6,373 6,373 Mortgage loans receivable and preferred equity investment, net of $3,321 discount 51,293 51,293 Investments in unconsolidated joint ventures 65,031 65,031 Deferred costs, net 40,113 40,113 Other assets 18,142 18,142 ----------- ---------- ----------- Total Assets $ 1,161,154 $ 233,842 $ 1,394,996 =========== ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable $ 414,342 $ 150,000 $ 564,342 Revolving credit facilities 46,374 83,842 130,216 Accrued interest payable 2,349 2,349 Accounts payable and accrued expenses 24,818 24,818 Deferred compensation awards 2,833 2,833 Deferred revenue 1,112 1,112 Capitalized lease obligations 15,303 15,303 Deferred land lease payable 13,158 13,158 Dividend and distributions payable 12,678 12,678 Security deposits 19,014 19,014 ----------- ---------- ----------- Total liabilities 551,981 233,842 785,823 Commitments and Contingencies Minority interest in Operating Partnership 43,326 43,326 8% Preferred Income Equity Redeemable SharesSM $0.01 par value $25.00 mandatory liquidation preference, 25,000 authorized and 4,600 outstanding at December 31, 2000 110,774 110,774 STOCKHOLDERS' EQUITY Common stock, $0.01 par value 100,000 shares authorized, 24,516 issued and outstanding at December 31, 2000 246 246 Additional paid - in capital 428,698 428,698 Deferred compensation plans (5,037) (5,037) Retained earnings in excess of earnings 31,166 31,166 ----------- ---------- ----------- Total stockholders' equity 455,073 455,073 ----------- ---------- ----------- Total liabilities and stockholders' equity $ 1,161,154 $ 233,842 $ 1,394,996 =========== ========== =========== The accompanying notes are an integral part of these pro forma financial statements. F4

SL GREEN REALTY CORP. PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2000 (UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) SL GREEN REALTY ONE PARK PRO FORMA COMPANY CORP HISTORICAL ACQUISITION ADJUSTMENTS PRO FORMA (A) (B) REVENUES Rental revenue $ 189,048 $ 24,963 $ (499)(C) $ 213,512 Escalation and reimbursement revenues 24,732 5,610 30,342 Signage rent 2,137 2,137 Investment income 13,271 13,271 Other income 1,135 274 1,409 --------- ---------- ------------ --------- Total revenues 230,323 30,847 (499) 260,671 --------- ---------- ------------ --------- EXPENSES Operating expenses including $4,644 to affiliates 54,644 6,751 61,395 Real estate taxes 28,850 4,380 33,230 Ground rent 12,660 12,660 Interest 40,431 16,474(D) 56,905 Depreciation and amortization 32,511 4,677(E) 37,188 Marketing, general and administrative 11,561 11,561 --------- ---------- ------------ --------- Total expenses 180,657 11,131 21,151 212,939 --------- ---------- ------------ --------- Income before equity in net income from affiliates, equity in net income of unconsolidated joint ventures, gain on sale, minority interest and extraordinary items 49,666 19,716 (21,650) 47,782 Equity in net income from affiliates 378 378 Equity in net income of unconsolidated joint ventures 3,108 3,108 Equity in net gain on sale of joint venture property 6,025 6,025 Gain on sale of rental property/preferred investment 35,391 35,391 Minority interest (7,430) (1,696) 1,862(F) (7,264) Extraordinary items, net of minority interest of $81 (921) (921) --------- ---------- ------------ --------- Net income 86,217 18,020 (19,788) 84,449 Preferred stock dividends (9,200) (9,200) Preferred stock accretion (426) (426) --------- ---------- ------------ --------- Net income available to common shareholders $ 76,591 $ 18,020 $ (19,788) $ 74,823 ========= ========== ============ ========= BASIC EARNINGS PER SHARE:(G) Net income before gain on sale and extraordinary item $ 1.48 $ 1.41 Gain on sales 1.70 1.70 Extraordinary items (0.04) (0.04) --------- --------- Net income $ 3.14 $ 3.07 ========= ========= DILUTED EARNINGS PER SHARE:(G) Net income before gain on sale and extraordinary item $ 1.66 $ 1.61 Gain on sales 1.30 1.30 Extraordinary items (0.03) (0.03) --------- --------- Net income $ 2.93 $ 2.88 ========= ========= Basic weighted average common shares outstanding 24,373 24,373 ========= ========= Diluted weighted average common shares and common share equivalents outstanding 31,818 31,818 ========= ========= The accompanying notes are an integral part of these pro forma financial statements F5

SL GREEN REALTY CORP. YEAR ENDED DECEMBER 31, 2000 (UNAUDITED) NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET (A) To reflect the consolidated balance sheet of SL Green Realty Corp. as reported on Form 10-K at December 31, 2000. (B) To reflect the January 10, 2001 purchase price allocation for the Company's acquisition of the property located at One Park as of December 31, 2000 for $233.8 million. There was no independent valuation performed on this property. The purchase was financed through a $150 million mortgage note collateralized by One Park with the remainder financed through the Company's revolving credit facility. The mortgage interests have been recorded as a property since the mortgage interest provides the Company with all the cash flow from the property's operations. NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT (A) To reflect the consolidated statement of income of SL Green Realty Corp. for the year ended December 31, 2000 as reported on the Company's Annual Report on Form 10-K (B) To reflect the historical operations of One Park for the year ended December 31, 2000. (C) Rental income from One Park adjusted to reflect straight line amounts as of January 1, 2000. (D) To reflect the interest expense for borrowings under the mortgage note financing secured by One Park ($150 million at 7.07%) and under the Company's revolving credit facility ($83.8 million at 7.0%). (E) To reflect straight line depreciation for One Park based on an estimated useful life of 40 years. (F) To reflect the minority shareholders interest of 8.6% in the operating partnership. (G) Basic income per common share is calculated based on 24,373 weighted average common shares outstanding and diluted income per common share is calculated based on 31,818 weighted average common shares and common share equivalents outstanding. F6

REPORT OF INDEPENDENT AUDITORS To the Board of Directors of SL Green Realty Corp. We have audited the statement of revenues and certain expenses of the property located at One Park Avenue, as described in Note 1, for the year ended December 31, 2000. The statement of revenues and certain expenses is the responsibility of management of the Property. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purposes of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Form 8-K/A of SL Green Realty Corp., and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property, as described in Note 1 for the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States. /s/ Ernst and Young LLP New York, New York March 19, 2001 F7

ONE PARK AVENUE STATEMENT OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) NOTE 1 YEAR ENDED DECEMBER 31, 2000 Revenues Rental revenue $24,963 Escalations and reimbursement revenue 5,610 Other income 274 ------- Total revenues 30,847 ------- Certain expenses Real estate taxes 4,380 Utilities 2,438 Payroll and expenses 286 Cleaning and service contracts 2,631 Management fees 185 Repairs and maintenance 314 Professional fees 144 Insurance 169 Other operating expenses 84 ------- Total certain expenses 11,131 ------- Revenues in excess of certain expenses $19,716 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT. F8

ONE PARK AVENUE NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) FOR THE YEAR ENDED DECEMBER 31, 2000 1. BASIS OF PRESENTATION Presented herein is the statement of revenues and certain expenses related to the operations of the property, located at One Park Avenue, in the Grand Central sub-market, in the borough of Manhattan in New York City (the "Property"). On January 10, 2001, SL Green Realty Corp. (the "Company") acquired the fee interest in the Property, which is subject to a ground lease position held by third-parties, and certain mortgage interests in the property for approximately $233,800. As part of the transaction, SL Green acquired an option to purchase the ground lease position. The accompanying statement of revenues and certain expenses has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the statement of revenues and certain expenses excludes certain expenses that may not be comparable to those expected to be incurred by the Company, in the proposed future operations of the Property. Items excluded consist of interest expense, amortization and depreciation. 2. USE OF ESTIMATES The preparation of the statement of revenues and certain expenses in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that effect the amounts reported in the statement of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates. 3. REVENUE RECOGNITION The Property is leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the term of the lease. The excess of amounts recognized over amounts due pursuant to the underlying leases amounted to approximately $1,539 for the year ended December 31, 2000. 4. CONCENTRATION OF REVENUE Approximately 69% of the Property's rental revenue for the year ended December 31, 2000 was derived from five tenants. 5. MANAGEMENT AGREEMENTS During 2000, Insignia/ESG managed the Property. The management fees were based on a fixed monthly fee collected for the year ended December 31, 2000. The fee incurred for managing the Property for the year ended December 31, 2000 was approximately $185. F9

ONE PARK AVENUE NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES (CONTINUED) (DOLLARS IN THOUSANDS) 6. LEASE AGREEMENTS The Property is being leased to tenants under operating leases with term expiration dates ranging from 2000 to 2015. The minimum rental amounts due under the leases are generally subject to scheduled fixed increases. The leases generally also require that the tenants reimburse the Property for increases in certain operating costs and real estate taxes above their base year costs. Approximate future minimum rents to be received over the next five years and thereafter for non-cancelable operating leases as of December 31, 2000 (exclusive of renewal option periods) are as follows: 2001 $ 27,222 2002 26,604 2003 21,652 2004 21,992 2005 19,703 Thereafter 107,867 --------- $ 225,040 ========= F10