UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Original Report (Date of earliest event reported):
August 21, 2015 (August 18, 2015)
Date of Amendment:
October 30, 2015
SL Green Realty Corp.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Maryland |
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1-13199 |
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13-3956775 |
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(STATE OR OTHER |
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(COMMISSION FILE NUMBER) |
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(IRS EMPLOYER ID. NUMBER) |
SL Green Operating Partnership, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Delaware |
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33-167793-02 |
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13-3960398 |
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(STATE OR OTHER |
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(COMMISSION FILE NUMBER) |
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(IRS EMPLOYER ID. NUMBER) |
Reckson Operating Partnership, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Delaware |
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33-84580 |
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11-3233647 |
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(STATE OR OTHER |
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(COMMISSION FILE NUMBER) |
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(IRS EMPLOYER ID. NUMBER) |
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420 Lexington Avenue |
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|
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New York, New York |
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10170 |
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) |
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(ZIP CODE) |
(212) 594-2700
(REGISTRANTS’ TELEPHONE NUMBER, INCLUDING AREA CODE)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE
This Form 8-K/A amends and supplements the Form 8-K filed on August 21, 2015 (the “Initial Report”) reporting completion of the acquisition (the “Acquisition”) by SL Green Realty Corp. (the “Company”) of Eleven Madison Avenue in New York City (the “Property”). This Form 8-K/A is being filed for the sole purpose of providing the historical financial statements and pro forma information required by Item 9.01(a) and (b) of Form 8-K in connection with the Acquisition. This Form 8-K/A should be read in conjunction with the Initial Report.
After reasonable inquiry, the Company’s management are not aware of any material factors relating to the Property that would cause the reported financial information not to be necessarily indicative of future operating results.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On August 18, 2015, the Company completed the Acquisition of the Property for $2.4 billion.
The Property is a 29-story, 2.3 million useable square foot Class-A office property located in Midtown South.
The Acquisition has been financed with a combination of existing corporate liquidity (including sale proceeds from certain assets) and a $1.4 billion 10-year, interest only, fixed rate mortgage, with a stated interest rate of 3.838% per annum, which is secured by the Property.
The Property was sold to the Company by a partnership of the Sapir Organization and CIM Group, with whom the Company has no other relationship.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of real estate operations acquired.
The following financial information, as required by Item 9.01(a) of this Current Report on Form 8-K/A, is included in Exhibit 99.1 hereof, which is incorporated herein by reference:
1. the statements of revenues and certain expenses for the six months ended June 30, 2015 (unaudited) and for the year ended December 31, 2014.
(b) Pro forma financial information.
The following unaudited pro forma consolidated financial information of the Company, giving effect to the Acquisition, as required by Item 9.01(b) of this Current Report on Form 8-K/A, is included in Exhibit 99.2 hereof, which is incorporated herein by reference:
1. the unaudited pro forma condensed balance sheet and the notes thereto as of June 30, 2015;
2. the unaudited pro forma condensed consolidated statement of operations and notes thereto for the six months ended June 30, 2015; and
3. the unaudited pro forma condensed consolidated statement of operations and notes thereto for the year ended December 31, 2014.
(d) Exhibits.
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Exhibit No. |
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Document |
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|
|
|
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23.1 |
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Consent of Ernst & Young LLP for SL Green Realty Corp. |
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23.2 |
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Consent of Ernst & Young LLP for SL Green Operating Partnership, L.P. |
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99.1 |
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Financial Statements |
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99.2 |
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Pro Forma Financial Statements |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
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SL GREEN REALTY CORP. |
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/s/ Matthew J. DiLiberto |
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Matthew J. DiLiberto |
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Chief Financial Officer |
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SL GREEN OPERATING PARTNERSHIP, L.P. |
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By: SL GREEN REALTY CORP., its general partner |
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/s/ Matthew J. DiLiberto |
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Matthew J. DiLiberto |
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Chief Financial Officer |
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RECKSON OPERATING PARTNERSHIP, L.P. |
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By: WYOMING ACQUISITION GP LLC, its general partner |
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/s/ Matthew J. DiLiberto |
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Matthew J. DiLiberto |
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Treasurer |
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Date: October 30, 2015 |
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EXHIBIT INDEX
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Exhibit No. |
|
Document |
|
|
|
|
|
23.1 |
|
Consent of Ernst & Young LLP for SL Green Realty Corp. |
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23.2 |
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Consent of Ernst & Young LLP for SL Green Operating Partnership, L.P. |
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99.1 |
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Financial Statements |
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99.2 |
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Pro Forma Financial Statements |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-3 Nos. 333-70111, 333-30394, 333-68828, 333-62434, 333-126058, 333-179846, 333-185626, 333-189355 and 333-202320) of SL Green Realty Corp. and in the related Prospectuses,
(2) Registration Statement (Form S-8 Nos. 333-61555, 333-87485, 333-89964, 333-127014, 333-143721 and 333-189362) pertaining to the Stock Option and Incentive Plans of SL Green Realty Corp., and
(3) Registration Statement Form S-8 (No. 333-148973) pertaining to the 2008 Employee Stock Purchase Plan of SL Green Realty Corp.;
of our report dated October 30, 2015, with respect to the statement of revenues and certain expenses of 11 Madison Avenue Owner LLC for the year ended December 31, 2014, included in this Current Report on Form 8-K/A.
/s/ Ernst & Young LLP
New York, New York
October 30, 2015
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-185626) of SL Green Operating Partnership, L.P. and in the related Prospectus of our report dated October 30, 2015, with respect to the statement of revenues and certain expenses of 11 Madison Avenue Owner LLC for the year ended December 31, 2014, included in this Current Report on Form 8-K/A.
/s/ Ernst & Young LLP
New York, New York
October 30, 2015
Exhibit 99.1
Report of Independent Auditors
The Board of Directors and Stockholders of
SL Green Realty Corp.
We have audited the accompanying statement of revenues and certain expenses (Historical Summary) of 11 Madison Avenue Owner LLC for the year ended December 31, 2014, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the Historical Summary in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the Historical Summary that are free of material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Historical Summary 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 Historical Summary is free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Historical Summary. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Historical Summary, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Historical Summary in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Historical Summary.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the revenues and certain expenses described in Note 1 of 11 Madison Avenue Owner LLC for the year ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.
Basis of Accounting
As described in Note 1 to the financial statements, the Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K/A of SL Green Realty Corp., and is not intended to be a complete presentation of 11 Madison Avenue Owner LLC’s revenue and expenses. Our opinion is not modified with respect to this matter.
/s/ Ernst & Young LLP
New York, New York
October 30, 2015
11 MADISON AVENUE OWNER LLC
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
For the Six Months Ended June 30, 2015 and for the Year Ended December 31, 2014
(in thousands)
|
|
|
Six Months Ended |
|
Year Ended |
| ||
|
|
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(unaudited) |
|
|
| ||
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Revenues |
|
|
|
|
| ||
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Rental revenue, net |
|
$ |
39,903 |
|
$ |
64,226 |
|
|
Escalation and reimbursement |
|
6,724 |
|
15,887 |
| ||
|
Other income |
|
370 |
|
657 |
| ||
|
Total revenues |
|
46,997 |
|
80,770 |
| ||
|
Certain expenses |
|
|
|
|
| ||
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Operating expenses |
|
7,284 |
|
13,264 |
| ||
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Real estate taxes |
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4,936 |
|
9,124 |
| ||
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Total certain expenses |
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12,220 |
|
22,388 |
| ||
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Revenues in excess of certain expenses |
|
$ |
34,777 |
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$ |
58,382 |
|
See accompanying notes to statements of revenues and certain expenses.
11 MADISON AVENUE OWNER LLC
NOTES TO THE STATEMENTS OF REVENUES AND CERTAIN EXPENSES
For the Six Months Ended June 30, 2015 (unaudited) and for the Year Ended December 31, 2014
1. Basis of Presentation
On August 18, 2015, SL Green Realty Corp. (the “Company”), through its wholly owned entity 11 Madison Avenue Owner LLC, acquired a 2.3 million useable square-foot office building located at 11 Madison Avenue (the “Property”) in New York City from an unaffiliated third party for a purchase price of approximately $2.4 billion.
The accompanying statements of revenues and certain expenses relate to the Property and have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, the statements are not representative of the actual operations for the periods presented as revenues and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred in the future operations of the Property, have been excluded. Such items include depreciation, amortization, management fees, interest expense, interest income and amortization of above- and below-market leases.
These financial statements have been prepared for the most recent fiscal year and interim period (unaudited) prior to the acquisition as the acquisition was from an unrelated third party.
2. Significant Accounting Policies
Revenue Recognition
The Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset.
Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the applicable expenses are incurred.
Operating Expenses
Property operating expenses represent the direct expenses of operating the Property and include costs that are expected to continue in the ongoing operations of the Property.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.
3. Future Minimum Rent
The Property is leased to tenants under non-cancelable operating leases with expirations through September 30, 2030. The minimum rental amounts due under the leases are generally either subject to scheduled fixed increases or adjustments. The leases generally also require that the tenants reimburse us for increases in certain operating costs and real estate taxes above their base year costs.
As of June 30, 2015, the future minimum cash rents to be received over the next five years and thereafter for non-cancelable operating leases are as follows (unaudited, in thousands):
|
Remainder of 2015 |
|
$ |
33,199 |
|
|
2016 |
|
69,420 |
| |
|
2017 |
|
118,495 |
| |
|
2018 |
|
136,143 |
| |
|
2019 |
|
130,820 |
| |
|
2020 |
|
130,160 |
| |
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Thereafter |
|
1,694,479 |
| |
|
|
|
$ |
2,312,716 |
|
For the six months ended June 30, 2015 and year ended December 31, 2014, three tenants represented 82% (unaudited) and 91%, respectively, of the Property’s rental revenues.
4. Commitments and Contingencies
The Property is not involved in any material litigation nor, to management’s knowledge, was any material litigation threatened against the Property which if adversely determined could have a material adverse impact on us other than routine litigation arising in the ordinary course of business or litigation that is adequately covered by insurance.
5. Subsequent Events
The Company evaluated subsequent events through October 30, 2015, the date the financial statements were available to be issued.
Exhibit 99.2
11 MADISON AVENUE LLC
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma consolidated balance sheet of SL Green Realty Corp. (the “Company”) as of June 30, 2015 and unaudited pro forma consolidated statements of operations of the Company for the year ended December 31, 2014 and the six months ended June 30, 2015 have been prepared as if the acquisition of 11 Madison Avenue had occurred on June 30, 2015 for the pro forma consolidated balance sheet and on January 1, 2014 for both pro forma consolidated statements of operations.
Such unaudited pro forma financial information should be read in conjunction with the historical consolidated financial statements of the Company, including the notes thereto, which were filed as part of the Company’s annual report on Form 10-K for the year ended December 31, 2014 and on Form 10-Q for the six months ended June 30, 2015. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations of the Company that would have occurred if the acquisition of the Property had been completed on the dates indicated, nor does it purport to represent the Company’s financial position or results of operations as of any future date or for any future period. The pro forma condensed consolidated balance sheet and statements of operations of the Company only include the acquisition of the Property, as that was the only significant property acquisition that was completed during the period. Management believes all material adjustments necessary to reflect the effect of this acquisition have been made to the unaudited pro forma financial information.
SL Green Realty Corp.
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2015
(unaudited, in thousands)
|
|
|
June 30, 2015(1) |
|
Pro Forma |
|
Total |
| |||
|
|
|
|
|
|
|
|
| |||
|
Assets |
|
|
|
|
|
|
| |||
|
Commercial real estate properties, at cost: |
|
|
|
|
|
|
| |||
|
Land and land interests |
|
$ |
3,756,488 |
|
$ |
520,706 |
(2)(3) |
$ |
4,277,194 |
|
|
Building and improvements |
|
8,397,117 |
|
1,522,317 |
(2)(3) |
9,919,434 |
| |||
|
Building leasehold and improvements |
|
1,424,822 |
|
— |
|
1,424,822 |
| |||
|
Property under capital lease |
|
27,445 |
|
— |
|
27,445 |
| |||
|
|
|
13,605,872 |
|
2,043,023 |
|
15,648,895 |
| |||
|
Less accumulated depreciation |
|
(2,081,646 |
) |
10,094 |
|
(2,071,552 |
) | |||
|
|
|
11,524,226 |
|
2,053,117 |
|
13,577,343 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Assets held for sale |
|
420,569 |
|
(420,569 |
)(3) |
— |
| |||
|
Cash and cash equivalents |
|
215,896 |
|
24,318 |
|
240,214 |
| |||
|
Restricted cash |
|
128,234 |
|
136,500 |
|
264,734 |
| |||
|
Investment in marketable securities |
|
46,251 |
|
— |
|
46,251 |
| |||
|
Tenant and other receivables, net of allowance of $16,369 |
|
64,873 |
|
— |
|
64,873 |
| |||
|
Related party receivables |
|
11,395 |
|
— |
|
11,395 |
| |||
|
Deferred rents receivable, net of allowance of $23,656 |
|
433,999 |
|
(78,278 |
)(3) |
355,721 |
| |||
|
Debt and preferred equity investments, net of discounts and deferred origination fees of $18,867 |
|
1,685,234 |
|
29,000 |
|
1,714,234 |
| |||
|
Investments in unconsolidated joint ventures |
|
1,262,723 |
|
(57,378 |
)(3) |
1,205,345 |
| |||
|
Deferred costs, net |
|
328,838 |
|
14,255 |
(4) |
343,093 |
| |||
|
Other assets |
|
1,144,720 |
|
(178,104 |
(3)(5) |
966,616 |
| |||
|
Total Assets |
|
$ |
17,266,958 |
|
$ |
1,522,861 |
|
$ |
18,789,819 |
|
|
|
|
|
|
|
|
|
| |||
|
Liabilities |
|
|
|
|
|
|
| |||
|
Mortgages and other loans payable |
|
$ |
5,287,934 |
|
1,132,350 |
(6) |
6,420,284 |
| ||
|
Revolving credit facility |
|
705,000 |
|
200,000 |
(6) |
905,000 |
| |||
|
Term loan and senior unsecured notes |
|
2,113,050 |
|
100,000 |
(6) |
2,213,050 |
| |||
|
Accrued interest payable and other liabilities |
|
161,188 |
|
(6,004 |
) |
155,184 |
| |||
|
Accounts payable and accrued expenses |
|
147,028 |
|
38,500 |
|
185,528 |
| |||
|
Deferred revenue |
|
337,571 |
|
(104 |
) |
337,467 |
| |||
|
Capital lease obligations |
|
21,013 |
|
— |
|
21,013 |
| |||
|
Deferred land leases payable |
|
1,387 |
|
— |
|
1,387 |
| |||
|
Dividend and distributions payable |
|
66,026 |
|
— |
|
66,026 |
| |||
|
Security deposits |
|
67,985 |
|
243 |
|
68,228 |
| |||
|
Liabilities related to assets held for sale |
|
178,252 |
|
(178,252 |
)(3) |
— |
| |||
|
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities |
|
100,000 |
|
— |
|
100,000 |
| |||
|
Total Liabilities |
|
9,186,434 |
|
1,286,733 |
|
10,473,167 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Commitments and contingencies |
|
— |
|
— |
|
— |
| |||
|
Noncontrolling interests in Operating Partnership |
|
431,418 |
|
9,029 |
|
440,447 |
| |||
|
Preferred units |
|
124,723 |
|
— |
|
124,723 |
| |||
|
Equity |
|
|
|
|
|
|
| |||
|
SL Green Stockholders Equity: |
|
|
|
|
|
|
| |||
|
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding |
|
221,932 |
|
— |
|
221,932 |
| |||
|
Common stock, $0.01 par value, 160,000 shares authorized and 103,233 issued and outstanding (including 3,643 shares held in Treasury) |
|
1,033 |
|
— |
|
1,033 |
| |||
|
Additional paid-in-capital |
|
5,570,746 |
|
— |
|
5,570,746 |
| |||
|
Treasury stock at cost |
|
(325,207 |
) |
— |
|
(325,207 |
) | |||
|
Accumulated other comprehensive loss |
|
(10,906 |
) |
— |
|
(10,906 |
) | |||
|
Retained earnings |
|
1,657,911 |
|
227,099 |
|
1,885,010 |
| |||
|
Total SL Green stockholders’ equity |
|
7,115,509 |
|
227,099 |
|
7,351,637 |
| |||
|
Noncontrolling interests in other partnerships |
|
408,874 |
|
— |
|
408,874 |
| |||
|
Total Equity |
|
7,524,383 |
|
227,099 |
|
7,751,482 |
| |||
|
Total Liabilities and Equity |
|
$ |
17,266,958 |
|
$ |
1,522,861 |
|
$ |
18,789,819 |
|
SL Green Realty Corp.
Pro Forma Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 2015
(unaudited, in thousands, except per share data)
|
|
|
June 30, 2015(7) |
|
Pro Forma |
|
Total |
| |||
|
Revenues |
|
|
|
|
|
|
| |||
|
Rental revenue, net |
|
$ |
607,555 |
|
$ |
7,350 |
(8) |
$ |
614,905 |
|
|
Escalation and reimbursement |
|
82,376 |
|
4,020 |
(9) |
86,396 |
| |||
|
Investment income |
|
87,260 |
|
5,585 |
|
92,845 |
| |||
|
Other income |
|
28,182 |
|
357 |
(9) |
28,539 |
| |||
|
Total revenues |
|
805,373 |
|
17,312 |
|
822,685 |
| |||
|
Expenses |
|
|
|
|
|
|
| |||
|
Operating expenses, including $8,189 of related party expenses |
|
146,891 |
|
2,919 |
(9) |
149,810 |
| |||
|
Real estate taxes |
|
112,009 |
|
459 |
(9) |
112,468 |
| |||
|
Ground rent |
|
16,274 |
|
— |
|
16,274 |
| |||
|
Interest expense, net of interest income |
|
151,553 |
|
15,309 |
(10) |
166,862 |
| |||
|
Amortization of deferred financing costs |
|
12,567 |
|
467 |
(11) |
13,034 |
| |||
|
Depreciation and amortization |
|
307,902 |
|
12,230 |
(12) |
320,132 |
| |||
|
Transaction related costs |
|
4,210 |
|
(44 |
) |
4,166 |
| |||
|
Marketing, general and administrative |
|
48,664 |
|
— |
|
48,664 |
| |||
|
Total expenses |
|
800,070 |
|
31,340 |
|
831,410 |
| |||
|
Income (loss) from continuing operations before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate and loss on early extinguishment of debt |
|
5,303 |
|
(14,117 |
) |
(8,814 |
) | |||
|
Equity in net income from unconsolidated joint ventures |
|
7,024 |
|
2,327 |
|
9,351 |
| |||
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
769 |
|
— |
|
769 |
| |||
|
Loss on early extinguishment of debt |
|
(49 |
) |
— |
|
(49 |
) | |||
|
Income (loss) from continuing operations |
|
13,047 |
|
(11,790 |
) |
1,257 |
| |||
|
Net income from discontinued operations |
|
427 |
|
— |
|
427 |
| |||
|
Gain on sale of discontinued operations |
|
12,983 |
|
— |
|
12,983 |
| |||
|
Net income (loss) |
|
26,457 |
|
(11,790 |
) |
14,667 |
| |||
|
Net income attributable to noncontrolling interests: |
|
|
|
|
|
|
| |||
|
Noncontrolling interests in the Operating Partnership |
|
(166 |
) |
457 |
(14) |
291 |
| |||
|
Noncontrolling interests in other partnerships |
|
(12,553 |
) |
— |
|
(12,553 |
) | |||
|
Preferred units distributions |
|
(2,091 |
) |
— |
|
(2,091 |
) | |||
|
Net income (loss) attributable to SL Green |
|
11,647 |
|
(11,333 |
) |
314 |
| |||
|
Perpetual preferred stock dividends |
|
(7,476 |
) |
— |
|
(7,476 |
) | |||
|
Net income (loss) attributable to SL Green common stockholders |
|
$ |
4,171 |
|
$ |
(11,333 |
) |
$ |
(7,162 |
) |
|
Amounts attributable to SL Green common stockholders: |
|
|
|
|
|
|
| |||
|
Loss from continuing operations before gains on sale and discontinued operations |
|
$ |
(9,467 |
) |
$ |
(11,333 |
) |
$ |
(20,800 |
) |
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
740 |
|
— |
|
740 |
| |||
|
Net income from discontinued operations |
|
411 |
|
— |
|
411 |
| |||
|
Gain on sale of discontinued operations |
|
12,487 |
|
— |
|
12,487 |
| |||
|
Net income (loss) attributable to SL Green common stockholders |
|
$ |
4,171 |
|
$ |
(11,333 |
) |
$ |
(7,162 |
) |
|
Basic earnings per share: |
|
|
|
|
|
|
| |||
|
Loss from continuing operations before gains on sale and discontinued operations |
|
$ |
(0.10 |
) |
$ |
(0.11 |
) |
$ |
(0.21 |
) |
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
0.01 |
|
— |
|
0.01 |
| |||
|
Net income from discontinued operations |
|
— |
|
— |
|
— |
| |||
|
Gain on sale of discontinued operations |
|
0.13 |
|
— |
|
0.13 |
| |||
|
Net income (loss) attributable to SL Green common stockholders |
|
$ |
0.04 |
|
$ |
(0.11 |
) |
$ |
(0.07 |
) |
|
Diluted earnings per share: |
|
|
|
|
|
|
| |||
|
Loss from continuing operations before gains on sale and discontinued operations |
|
$ |
(0.10 |
) |
$ |
(0.11 |
) |
$ |
(0.21 |
) |
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
0.01 |
|
— |
|
0.01 |
| |||
|
Net income from discontinued operations |
|
— |
|
— |
|
— |
| |||
|
Gain on sale of discontinued operations |
|
0.13 |
|
— |
|
0.13 |
| |||
|
Net income (loss) attributable to SL Green common stockholders |
|
$ |
0.04 |
|
$ |
(0.11 |
) |
$ |
(0.07 |
) |
|
Basic weighted average common shares outstanding |
|
98,994 |
|
|
|
98,994 |
| |||
|
Diluted weighted average common shares and common share equivalents outstanding |
|
103,423 |
|
|
|
103,423 |
| |||
SL Green Realty Corp.
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2014
(unaudited, in thousands, except per share data)
|
|
|
December 31, |
|
Pro Forma |
|
Total |
| |||
|
Revenues |
|
|
|
|
|
|
| |||
|
Rental revenue, net |
|
$ |
1,121,066 |
|
$ |
(1,651 |
)(8) |
$ |
1,119,415 |
|
|
Escalation and reimbursement |
|
164,376 |
|
10,829 |
(9) |
175,205 |
| |||
|
Investment income |
|
178,815 |
|
11,109 |
|
189,924 |
| |||
|
Other income |
|
55,721 |
|
260 |
(9) |
55,981 |
| |||
|
Total revenues |
|
1,519,978 |
|
20,547 |
|
1,540,525 |
| |||
|
Expenses |
|
|
|
|
|
|
| |||
|
Operating expenses, including $19,308 of related party expenses |
|
282,283 |
|
5,365 |
(9) |
287,648 |
| |||
|
Real estate taxes |
|
217,843 |
|
466 |
(9) |
218,309 |
| |||
|
Ground rent |
|
32,307 |
|
— |
|
32,307 |
| |||
|
Interest expense, net of interest income |
|
317,400 |
|
37,187 |
(10) |
354,587 |
| |||
|
Amortization of deferred financing costs |
|
22,377 |
|
933 |
(11) |
23,310 |
| |||
|
Depreciation and amortization |
|
371,610 |
|
24,368 |
(12) |
395,978 |
| |||
|
Transaction related costs |
|
8,707 |
|
3,068 |
(13) |
11,775 |
| |||
|
Marketing, general and administrative |
|
92,488 |
|
— |
|
92,488 |
| |||
|
Total expenses |
|
1,345,015 |
|
71,387 |
|
1,416,402 |
| |||
|
Income (loss) from continuing operations before equity in net income from unconsolidated joint ventures, equity in net gain on sale of interest in unconsolidated joint venture/real estate, purchase price fair value adjustment, gain on sale of investment in marketable securities and loss on early extinguishment of debt |
|
174,963 |
|
(50,840 |
) |
124,123 |
| |||
|
Equity in net income from unconsolidated joint ventures |
|
26,537 |
|
3,813 |
|
30,350 |
| |||
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
123,253 |
|
60,008 |
|
183,261 |
| |||
|
Purchase price fair value adjustment |
|
67,446 |
|
— |
|
67,446 |
| |||
|
Gain on sale of investment in marketable securities |
|
3,895 |
|
— |
|
3,895 |
| |||
|
Loss on early extinguishment of debt |
|
(32,365 |
) |
— |
|
(32,365 |
) | |||
|
Income from continuing operations |
|
363,729 |
|
12,981 |
|
376,710 |
| |||
|
Net income from discontinued operations |
|
19,075 |
|
— |
|
19,075 |
| |||
|
Gain on sale of discontinued operations |
|
163,059 |
|
161,618 |
|
324,677 |
| |||
|
Net income |
|
$ |
545,863 |
|
$ |
174,599 |
|
$ |
720,462 |
|
|
Net income attributable to noncontrolling interests: |
|
|
|
|
|
|
| |||
|
Noncontrolling interests in the Operating Partnership |
|
(18,467 |
) |
6,180 |
(14) |
(12,287 |
) | |||
|
Noncontrolling interests in other partnerships |
|
(6,590 |
) |
— |
|
(6,590 |
) | |||
|
Preferred units distributions |
|
(2,750 |
) |
— |
|
(2,750 |
) | |||
|
Net income attributable to SL Green |
|
518,056 |
|
180,779 |
|
698,835 |
| |||
|
Perpetual preferred stock dividends |
|
(14,952 |
) |
— |
|
(14,952 |
) | |||
|
Net income attributable to SL Green common stockholders |
|
$ |
503,104 |
|
$ |
180,779 |
|
$ |
683,883 |
|
|
Amounts attributable to SL Green common stockholders: |
|
|
|
|
|
|
| |||
|
Income from continuing operations before gains on sale and discontinued operations |
|
143,466 |
|
(45,363 |
) |
98,103 |
| |||
|
Purchase price fair value adjustment |
|
65,059 |
|
— |
|
65,059 |
| |||
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
118,891 |
|
57,884 |
|
176,775 |
| |||
|
Net income from discontinued operations |
|
18,400 |
|
— |
|
18,400 |
| |||
|
Gain on sale of discontinued operations |
|
157,288 |
|
155,898 |
|
313,186 |
| |||
|
Net income attributable to SL Green common stockholders |
|
$ |
503,104 |
|
$ |
168,418 |
|
$ |
671,522 |
|
|
Basic earnings per share: |
|
|
|
|
|
|
| |||
|
Income from continuing operations before gains on sale and discontinued operations |
|
$ |
2.18 |
|
$ |
(0.47 |
) |
$ |
1.71 |
|
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
1.24 |
|
0.60 |
|
1.84 |
| |||
|
Net income from discontinued operations |
|
0.19 |
|
— |
|
0.19 |
| |||
|
Gain on sale of discontinued operations |
|
1.64 |
|
1.63 |
|
3.27 |
| |||
|
Net income attributable to SL Green common stockholders |
|
$ |
5.25 |
|
$ |
1.75 |
|
$ |
7.00 |
|
|
Diluted earnings per share: |
|
|
|
|
|
|
| |||
|
Income from continuing operations before gains on sale and discontinued operations |
|
$ |
2.17 |
|
$ |
(0.46 |
) |
$ |
1.71 |
|
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
|
1.24 |
|
0.58 |
|
1.82 |
| |||
|
Net income from discontinued operations |
|
0.19 |
|
— |
|
0.19 |
| |||
|
Gain on sale of discontinued operations |
|
1.63 |
|
1.56 |
|
3.19 |
| |||
|
Net income attributable to SL Green common stockholders |
|
$ |
5.23 |
|
$ |
1.69 |
|
$ |
6.92 |
|
|
Basic weighted average common shares outstanding |
|
95,774 |
|
|
|
95,774 |
| |||
|
Diluted weighted average common shares and common share equivalents outstanding |
|
99,696 |
|
|
|
99,696 |
| |||
SL Green Realty Corp.
Notes to the Unaudited Pro Forma Consolidated Financial Statements
(1) Derived from the Company’s unaudited consolidated balance sheet as of June 30, 2015.
(2) Reflects the preliminary allocation of the $2.428 billion purchase price to land ($0.8 billion) and building ($1.6 billion).
(3) Reflects the sale of real estate assets for properties that have either closed subsequent to June 30, 2015 or the Company is currently under contract to sell, as if the sales closed on June 30, 2015 for the pro forma consolidated balance sheet and on January 1, 2014 for both pro forma consolidated statements of operations.
(4) Represents costs incurred to obtain the $1.4 billion mortgage financing.
(5) Includes a $180.0 million cash deposit held in escrow at June 30, 2015.
(6) Represents the incremental borrowings, including a $1.4 billion 10-year, interest only, fixed rate mortgage financing carrying a per annum stated interest rate of 3.838%, to finance the acquisition. Actual funding of the acquisition may be different than what is assumed herein are not indicative of actual results.
(7) Derived from the Company’s consolidated statement of operations for the year ended December 31, 2014 and the six months ended June 30, 2015 (unaudited).
(8) Includes the straight-line rent that would be recorded for the Property assuming the Company acquired the Property on January 1, 2014, based on the leases in-place at the time of acquisition.
(9) Represents the adjustment for the acquisition of the Property, based on historical operating results.
(10) Represents the pro forma estimate of the incremental interest expense associated with the pro forma borrowings. The pro forma interest expense estimate is calculated based on the applicable interest rates. Actual funding of the acquisition may be different than what is assumed herein.
(11) Represents the effect of recording the pro forma amortization associated with deferred financing costs incurred as a result of obtaining a $1.4 billion mortgage financing.
(12) Represents the effect of recording the pro forma depreciation based on the new preliminary purchase price allocation resulting from the acquisition.
(13) Represents costs incurred to acquire the Property.
(14) Represents the proportionate share of the net impact of the pro forma adjustments attributable to the common limited partnership unit holders.