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: June 7, 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, dated June 7, 2001 (filed with the Securities and Exchange Commission on June 18, 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 March 31, 2001............................... F4 Pro Forma Income Statement (Unaudited) for the three months ended March 31, 2001.......... F5 Pro Forma Income Statement (Unaudited) for the year ended December 31, 2000 .............. F6 Notes to Pro Forma Financial Information ............................... F7 Report of Independent Auditors.......................................... F8 Statements of Revenues and Certain Expenses of 317 Madison Avenue for the three months ended March 31, 2001 (unaudited) and the year ended December 31, 2000........................... F9 Notes to Statements of Revenues and Certain Expenses.................... F10 (c) EXHIBITS None 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: July 13, 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 March 31, 2001 has been prepared as if the Company's acquisition of the fee interest in 317 Madison Avenue ("317 Madison") had been consummated on March 31, 2001. The unaudited pro forma consolidated income statements for the year ended December 31, 2000 and the three months ended March 31, 2001 are presented as if the Company's acquisition of 317 Madison occurred on January 1, 2000 and the effect was carried forward through the year and the three month period. On June 7, 2001, the Company announced that it had acquired the 450,000 square foot, 22-story office building at 317 Madison, New York, New York. The property 317 Madison is located at the Northeast corner of Madison Avenue and 42nd Street 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 317 Madison 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 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001. F3

SL GREEN REALTY CORP. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2001 (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) SL GREEN REALTY CORP. PURCHASE OF COMPANY HISTORICAL 317 MADISON PROFORMA ADJUSTED (A) (B) ASSETS: Commerical real estate properties at cost: Land and land interests $ 165,814 $ 21,120 $ 186,934 Buildings and improvements 785,280 84,480 869,760 Building leasehold 140,951 140,951 Property under capital lease 12,208 12,208 ----------- ----------- ----------- 1,104,253 105,600 1,209,853 Less accumulated depreciation (81,409) (81,409) ----------- ----------- ----------- 1,022,844 105,600 1,128,444 Properties held for sale 82,153 82,153 Cash and cash equivalents 8,078 8,078 Restricted cash 43,445 43,445 Tenant and other receivables, net of allowance of $2,141 8,940 8,940 Related party receivables 1,046 1,046 Deferred rents receivable, net of allowance for tenant credit loss of $5,334 46,843 46,843 Investment in and advances to affiliates 6,919 6,919 Mortgage loans receivable and preferred equity investment, net of $2,562 discount 92,982 92,982 Investments in unconsolidated joint ventures 72,673 72,673 Deferred costs, net 40,940 40,940 Other assets 16,650 16,650 ----------- ----------- ----------- Total Assets $ 1,443,513 $ 105,600 $ 1,549,113 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable $ 528,535 $ 528,535 Revolving credit facilities 211,926 $ 105,600 317,526 Derivative Instruments at fair value 2,814 2,814 Accrued interest payable 3,676 3,676 Accounts payable and accrued expenses 22,122 22,122 Deferred compensation awards 1,838 1,838 Deferred revenue 2,073 2,073 Capitalized lease obligations 15,369 15,369 Deferred land lease payable 13,512 13,512 Dividend and distributions payable 12,746 12,746 Security deposits 20,137 20,137 ----------- ----------- ----------- Total liabilities 834,748 105,600 940,348 Commitments and Contingencies Minority interest in Operating Partnership 43,062 43,062 8% Preferred Income Equity Redeemable Shares(SM) $0.01 par value $25.00 mandatory liquidation preference, 25,000 authorized and 4,600 outstanding at March 31, 2001 110,888 110,888 STOCKHOLDERS' EQUITY Common stock, $0.01 par value 100,000 shares authorized, 24,705 issued and outstanding at March 31, 2001 248 248 Additional paid - in capital 433,482 433,482 Deferred compensation plans (8,393) (8,393) Officers' loans net (1,007) (1,007) Accumulated other comprehensive loss (2,409) (2,409) Retained earnings 32,894 32,894 ----------- ----------- ----------- Total stockholders' equity 454,815 454,815 ----------- ----------- ----------- Total liabilities and stockholders' equity $ 1,443,513 $ 105,600 $ 1,549,113 =========== =========== =========== 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 THREE MONTH PERIOD ENDED MARCH 31, 2001 (UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) SL GREEN REALTY 317 MADISON PRO FORMA COMPANY CORP HISTORICAL ACQUISITION ADJUSTMENTS PRO FORMA (A) (B) REVENUES Rental revenue $ 55,003 $ 2,856 $ (8)(C) $ 57,851 Escalation and reimbursement revenues 8,057 499 8,556 Signage rent 350 -- 350 Investment income 3,274 -- 3,274 Other income 310 43 353 -------- -------- -------- -------- Total revenues 66,994 3,398 (8) 70,384 -------- -------- -------- -------- EXPENSES Operating expenses including $893 to affiliates 15,826 1,216 17,042 Real estate taxes 8,180 473 8,653 Ground rent 3,159 -- 3,159 Interest 13,897 -- 1,444 (D) 15,341 Depreciation and amortization 9,720 -- 528 (E) 10,248 Marketing, general and administrative 3,547 -- 3,547 -------- -------- -------- -------- Total expenses 54,329 1,689 1,972 57,990 -------- -------- -------- -------- Income before equity in net loss from affiliates, equity in net income of unconsolidated joint ventures, gain on sale, minority interest and extraordinary items 12,665 1,709 (1,980) 12,394 Equity in net loss from affiliates (269) (269) Equity in net income of unconsolidated joint ventures 1,513 1,513 Gain on sale of rental property 1,514 1,514 -------- -------- -------- -------- Income before minority interest, extraordinary item and cumulative effect adjustment 15,423 1,709 (1,980) 15,152 Minority interest in operating property (1,081) (145) 168 (F) (1,058) -------- -------- -------- -------- Income before extraordinary item and cumulative effect adjustment 14,342 1,564 (1,812) 14,094 Extraordinary items, net of minority interest of $8 (98) (98) Cumulative effect of change in accounting principle (532) (532) -------- -------- -------- -------- Net income 13,712 1,564 (1,812) 13,464 Preferred stock dividends (2,300) (2,300) Preferred stock accretion (114) (114) -------- -------- -------- -------- Net income available to common shareholders $ 11,298 $ 1,564 $ (1,812) $ 11,050 ======== ======== ======== ======== BASIC EARNINGS PER SHARE:(G) Income before extraordinary item and cumulative effect adjustment $ 0.48 $ 0.47 Extraordinary items -- -- Cumulative effect of change in accounting principle (0.02) (0.02) -------- -------- Net income $ 0.46 $ 0.45 ======== ======== DILUTED EARNINGS PER SHARE:(G) Income before extraordinary item and cumulative effect adjustment $ 0.47 $ 0.46 Extraordinary item -- -- Cumulative effect of change in accounting principle (0.02) (0.02) -------- -------- Net income $ 0.45 $ 0.44 ======== ======== Basic weighted average common shares outstanding 24,639 24,639 ======== ======== Diluted weighted average common shares and common share equivalents outstanding 27,403 27,403 ======== ======== The accompanying notes are an integral part of these pro forma financial statements F5

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 317 MADISON PRO FORMA COMPANY CORP HISTORICAL ACQUISITION ADJUSTMENTS PRO FORMA (A) (B) REVENUES Rental revenue $ 189,048 $ 11,000 $ 416(C) $ 200,464 Escalation and reimbursement revenues 24,732 1,966 26,698 Signage rent 2,137 -- 2,137 Investment income 13,271 -- 13,271 Other income 1,135 188 1,323 --------- --------- --------- --------- Total revenues 230,323 13,154 416 243,893 --------- --------- --------- --------- EXPENSES Operating expenses including $4,644 to affiliates 54,644 5,282 59,926 Real estate taxes 28,850 1,945 30,795 Ground rent 12,660 12,660 Interest 40,431 5,776(D) 46,207 Depreciation and amortization 32,511 2,112(E) 34,623 Marketing, general and administrative 11,561 11,561 --------- --------- --------- --------- Total expenses 180,657 7,227 7,888 195,772 --------- --------- --------- --------- 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 5,927 (7,472) 48,121 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) (510) 643 (F) (7,297) Extraordinary items, net of minority interest of $81 (921) (921) --------- --------- --------- --------- Net income 86,217 5,417 (6,829) 84,805 Preferred stock dividends (9,200) (9,200) Preferred stock accretion (426) (426) --------- --------- --------- --------- Net income available to common shareholders $ 76,591 $ 5,417 $ (6,829) $ 75,179 ========= ========= ========= ========= BASIC EARNINGS PER SHARE:(G) Net income before gain on sale and extraordinary item $ 1.48 $ 1.42 Gain on sales 1.70 1.70 Extraordinary item (0.04) (0.04) --------- --------- Net income $ 3.14 $ 3.08 ========= ========= DILUTED EARNINGS PER SHARE:(G) Net income before gain on sale and extraordinary item $ 1.66 $ 1.62 Gain on sales 1.30 1.30 Extraordinary item (0.03) (0.03) --------- --------- Net income $ 2.93 $ 2.89 ========= ========= 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 F6

SL GREEN REALTY CORP. THREE MONTHS ENDED MARCH 31, 2001 (UNAUDITED) NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (A) To reflect the consolidated balance sheet of SL Green Realty Corp. as reported on Form 10-Q at March 31, 2001. (B) To reflect the June 7, 2001 purchase price allocation for the Company's acquisition of the property located at 317 Madison Avenue as of March 31, 2001 for $105.6 million. There was no independent valuation performed on this property. The purchase was financed through the Company's revolving credit facility. NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT THREE MONTHS ENDED MARCH 31, 2001 (A) To reflect the consolidated statement of income of SL Green Realty Corp. for the three month period ended March 31, 2001 as reported on the Company's Quarterly Report on Form 10-Q. (B) To reflect the historical operations of 317 Madison Avenue for the three months ended March 31, 2001. (C) Rental income from 317 Madison Avenue adjusted to reflect straight line amounts commencing as of January 1, 2000. (D) To reflect the interest expense for borrowings under the Company's revolving credit facility ($105.6 million at 5.47%). (E) To reflect straight line depreciation for 317 Madison Avenue based on an estimated useful life of 40 years. (F) To reflect the minority shareholders interest of 8.5% in the operating partnership. (G) Basic income per common share is calculated based on 24,639 weighted average common shares outstanding and diluted income per common share is calculated based on 27,403 weighted average common shares and common share equivalents outstanding. NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT YEAR ENDED DECEMBER 31, 2000 (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 317 Madison Avenue for the year ended December 31, 2000. (C) Rental income from 317 Madison Avenue adjusted to reflect straight line amounts as of January 1, 2000. (D) To reflect the interest expense for borrowings under the Company's revolving credit facility ($105.6 million at 5.47%). (E) To reflect straight line depreciation for 317 Madison Avenue 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. F7

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 317 Madison 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 & Young LLP -------------------------- New York, New York June 20, 2001 F8

317 Madison Avenue Statements of Revenues and Certain Expenses (Dollars in thousands) Note 1 YEAR ENDED THREE MONTHS DECEMBER 31, ENDED MARCH 31, 2000 2001 --------------- ----------------- (Unaudited) Revenues Rental revenue $11,000 $ 2,856 Escalations and reimbursement revenue 1,966 499 Other income 188 43 ------- ------- Total revenues 13,154 3,398 ------- ------- Certain Expenses Property taxes 1,945 473 Utilities 1,592 378 Cleaning and service contracts 1,407 352 Payroll and expenses 472 129 Management fees (Note 5) 573 145 Repairs and maintenance 762 150 Professional fees 146 14 Insurance 85 24 Other operating expenses 245 24 ------- ------- Total certain expenses 7,227 1,689 ------- ------- Revenues in excess of certain expenses $ 5,927 $ 1,709 ======= ======= SEE ACCOMPANYING NOTES. F9

317 Madison Avenue Notes to Statements 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 317 Madison Avenue, located in the Grand Central South sub-market, in the borough of Manhattan in New York City, (the "Property"). On June 7, 2001, SL Green Realty Corp. (the "Company") acquired the Property, for an aggregate purchase price of approximately $105,600. 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 revenues and 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 amortization and depreciation, interest expense, interest income on the general partner's level, professional fees that relate to the Partnership that owned the Property and the interest rate swap related to the loan. 2. USE OF ESTIMATES The preparation of 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 generally recognized on a straight-line basis over the term of the lease. The excess of amounts due pursuant to the underlying leases over amounts recognized for the year ended December 31, 2000 and the three months ended March 31, 2001, amounted to approximately $125 and $5 (unaudited), respectively. 4. CONCENTRATION OF REVENUE There are no tenants that comprise more than 10% of the Property's rental revenue for the year ended December 31, 2000 and for the three months ended March 31, 2001, respectively. 5. MANAGEMENT AGREEMENTS AND RELATED PARTY TRANSACTIONS Until June 6, 2001, Williamson, Picket, Gross, Inc. managed the Property. The management fees were based on 1.5% of gross rents collected, as defined in the agreement. The fee incurred for managing the Property for the year ended December 31, 2000 and the three months ended March 31, 2001 was approximately $189 and $48 (unaudited), respectively. F10

317 Madison Avenue Notes to Statements of Revenues and Certain Expenses (continued) (Dollars in thousands) 5. MANAGEMENT AGREEMENTS AND RELATED PARTY TRANSACTIONS (CONTINUED) Pursuant to a separate agreement, the general partner performs supervisory and administrative services for an annual compensation of 3% of rent income, as defined in the agreement. The fee incurred for the year ended December 31, 2000 and the three months ended March 31, 2001 was approximately $384 and $97 (unaudited), respectively, and is included in management fees on the statement of revenues and certain expenses. An affiliate of the prior owner occupies an office in the Property, free of rent. 6. LEASE AGREEMENTS The Property is being leased to tenants under operating leases with term expiration dates ranging from 2001 to 2010. 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 $ 11,379 2002 10,698 2003 10,045 2004 8,300 2005 6,404 Thereafter 10,690 -------- $ 57,516 7. BENEFIT PLANS The building employees are covered by multi-employer defined benefit pension funds and post-retirement health and welfare plans. Contributions to these plans amounted to $74 and $21 (unaudited) during the year ended December 31, 2000 and the three months ended March 31, 2001, respectively. Separate actuarial information regarding such plans, is not made available to the contributing employers by the union administrators or trustees, since the plans do not maintain separate records for each reporting unit. 8. INTERIM UNAUDITED FINANCIAL INFORMATION The financial statement for the three months ended March 31, 2001 is unaudited, however, in the opinion of management all adjustments (consisting solely of normal recurring adjustments), necessary for a fair presentation of the financial statement for the interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year. F11