Document



    
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 20, 2017

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)


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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company     [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ]






Item 2.02.    Results of Operations and Financial Condition

Following the issuance of a press release on July 19, 2017 announcing SL Green Realty Corp.’s, or the Company, results for the quarter ended June 30, 2017, the Company has made available on its website supplemental information regarding the Company’s operations that is too voluminous for a press release. The Company is attaching the press release as Exhibit 99.1 and the supplemental package as Exhibit 99.2 to this Current Report on Form 8-K.

The information (including Exhibits 99.1 and 99.2) being furnished pursuant to this “Item 2.02. Results of Operations and Financial Condition” shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act regardless of any general incorporation language in such filing.

Item 7.01.    Regulation FD Disclosure

As discussed in Item 2.02 above, on July 19, 2017, the Company issued a press release announcing its results for the quarter ended June 30, 2017.

The information being furnished pursuant to this “Item 7.01. Regulation FD Disclosure” shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing. This information will not be deemed an admission as to the materiality of such information that is required to be disclosed solely by Regulation FD.

Item 9.01.    Financial Statements and Exhibits

(d)     Exhibits

99.1    Press Release regarding results for the quarter ended June 30, 2017.
99.2    Supplemental package.

Non-GAAP Supplemental Financial Measures

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).





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.
 
 
 
/s/ Matthew J. DiLiberto
 
Matthew J. DiLiberto
 
Chief Financial Officer
 
 
Date: July 20, 2017
 




Exhibit
Exhibit 99.1

CONTACT                        
Matt DiLiberto
Chief Financial Officer
(212) 594-2700

SL GREEN REALTY CORP. REPORTS SECOND QUARTER 2017 EPS OF $0.08 PER SHARE; AND FFO OF $1.78 PER SHARE


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 http://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 http://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 at http://slgreen.com/ 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).




Exhibit


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SL Green Realty Corp. is a self-managed real estate investment trust, or REIT, with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing.

As of June 30, 2017, the Company 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, the Company held ownership interests in 29 suburban buildings totaling 4.6 million square feet in Brooklyn, Long Island, Westchester County, Connecticut and New Jersey.
 
SL Green’s common stock is listed on the New York Stock Exchange, and trades under the symbol SLG.
SL Green maintains an internet site at www.slgreen.com at which most key investor relations data pertaining to dividend declaration, payout, current and historic share price, etc. can be found. Such information is not incorporated into this supplemental financial package. This supplemental financial package is available through the Company’s internet site.
This data is furnished to supplement audited and unaudited regulatory filings of the Company and should be read in conjunction with those filings. The financial data herein is unaudited and is provided from the perspective of timeliness to assist readers of quarterly and annual financial filings. As such, data otherwise contained in future regulatory filings covering the same period may restate the data presented herein.
 
Questions pertaining to the information contained herein should be referred to Investor Relations at investor.relations@slgreen.com or at 212-594-2700.

Ratings
Ratings are not recommendations to buy, sell or hold the Company’s securities.





 
SLG Interest
We highlight to investors that 'SLG Share' or 'Share of JV' is computed by multiplying each financial statement line items by the Company's percentage ownership in the respective joint ventures and may not accurately depict the legal and economic implications of holding a non-controlling interest in the joint ventures.

Forward-looking Statement
This supplemental reporting package 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.

The following discussion related to the consolidated financial statements of the Company should be read in conjunction with the financial statements for the quarter ended June 30, 2017 that will be released on Form 10-Q to be filed on or before August 9, 2017.


Supplemental Information
2
Second Quarter 2017

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TABLE OF CONTENTS


 
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Supplemental Definitions
 
 
 
 
Highlights
-
 
 
 
 
Comparative Balance Sheets
 
 
Comparative Statements of Operations
 
 
Comparative Computation of FFO and FAD
 
 
Consolidated Statement of Equity
 
 
 
 
Joint Venture Statements
-
 
 
 
 
Selected Financial Data
-
 
 
 
 
Debt Summary Schedule
-
 
 
 
 
Summary of Ground Lease Arrangements
 
 
 
 
Debt and Preferred Equity Investments
-
 
 
 
 
Selected Property Data
 
 
 
Composition of Property Portfolio
-
Largest Tenants
Tenant Diversification
Leasing Activity Summary
-
Annual Lease Expirations
-
 
 
 
 
Summary of Real Estate Acquisition/Disposition Activity
-
 
 
 
 
Corporate Information
 
 
Non-GAAP Disclosures and Reconciliations
 
 
Analyst Coverage



Supplemental Information
3
Second Quarter 2017

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SUPPLEMENTAL DEFINITIONS
                               
                          
                         
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Annualized cash rent - Monthly base rent and escalations per the lease, as of a certain date, multiplied by 12.
Debt service coverage - Adjusted EBITDA divided by total interest and principal payments.
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.
Fixed charge - Total payments for interest, principal amortization, ground leases and preferred stock dividend.
Fixed charge coverage - Adjusted EBITDA divided by fixed charge.
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.
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.
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.
Interest coverage - Adjusted EBITDA divided by total interest expense.
Junior Mortgage Participations - Subordinate interests in first mortgages.
Mezzanine Debt Loans - Loans secured by ownership interests.
 
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.
Percentage leased - The percentage of leased square feet, including month-to-month leases, to total rentable square feet owned, as of the date reported. Space is considered leased when the tenant has either taken physical or economic occupancy.
Preferred Equity Investments - Equity investments entitled to preferential returns that are senior to common equity.
Recurring capital expenditures - Non-incremental building improvements and leasing costs required to maintain current revenues. Recurring capital expenditures do not include immediate building improvements that were taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to “operating standard.”
Redevelopment costs - Non-recurring capital expenditures incurred in order to improve buildings to SLG’s “operating standards.” These building costs are taken into consideration during the underwriting for a given property’s acquisition.
Same-Store Properties (Same-Store) - Same-Store refers to properties owned in the same manner during both the current and prior year, and excludes development properties prior to being stabilized for both the current and prior year.
Second generation TIs and LCs - Tenant improvements, lease commissions, and other leasing costs incurred during leasing of second generation space. Costs incurred prior to leasing available square feet are not included until such space is leased. Second generation space excludes square footage vacant at acquisition.
SLG’s share of total debt to market capitalization - SLG’s share of total debt divided by the sum of total debt plus market equity and preferred stock at liquidation value. SLG’s share of total debt includes total consolidated debt plus SLG’s pro rata share of the debt of unconsolidated joint ventures. Market equity assumes conversion of all OP units into common stock.
Total square feet owned - The total square footage of properties either owned directly by SLG or in which SLG has an interest (e.g. joint ventures).



Supplemental Information
4
Second Quarter 2017

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SECOND QUARTER 2017 HIGHLIGHTS

Unaudited

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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

Supplemental Information
5
Second Quarter 2017

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SECOND QUARTER 2017 HIGHLIGHTS

Unaudited

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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.

Supplemental Information
6
Second Quarter 2017

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SECOND QUARTER 2017 HIGHLIGHTS

Unaudited

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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.


Supplemental Information
7
Second Quarter 2017

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KEY FINANCIAL DATA

Unaudited
(Dollars in Thousands Except Per Share)
 
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As of or for the three months ended
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
9/30/2016
 
6/30/2016
Earnings Per Share
 
 
 
 
 
 
 
 
 
Net income available to common stockholders - diluted
$
0.08

 
$
0.11

 
$
0.44

 
$
0.34

 
$
1.33

Funds from operations (FFO) available to common stockholders - diluted
$
1.78

 
$
1.57

 
$
1.43

 
$
1.63

 
$
3.39

 
 
 
 
 
 
 
 
 
 
Common Share Price & Dividends
 
 
 
 
 
 
 
 
 
Closing price at the end of the period
$
105.80

 
$
106.62

 
$
107.55

 
$
108.10

 
$
106.47

Closing high price during period
$
109.73

 
$
113.75

 
$
112.89

 
$
119.20

 
$
106.72

Closing low price during period
$
101.03

 
$
104.62

 
$
94.23

 
$
102.56

 
$
95.51

Common dividend per share
$
0.775

 
$
0.775

 
$
0.775

 
$
0.720

 
$
0.720

 
 
 
 
 
 
 
 
 
 
FFO payout ratio (trailing 12 months)
47.4
%
 
37.2
%
 
35.4
%
 
34.0
%
 
32.5
%
Funds available for distribution (FAD) payout ratio (trailing 12 months)
77.6
%
 
63.4
%
 
59.4
%
 
61.9
%
 
58.5
%
 
 
 
 
 
 
 
 
 
 
Common Shares & Units
 
 
 
 
 
 
 
 
 
Common shares outstanding
98,367

 
100,776

 
100,562

 
100,264

 
100,164

Units outstanding
4,562

 
4,563

 
4,364

 
4,495

 
4,504

Total common shares and units outstanding
102,929

 
105,339

 
104,926

 
104,759

 
104,668

 
 
 
 
 
 
 
 
 
 
Weighted average common shares and units outstanding - basic
104,462

 
105,250

 
104,794

 
104,730

 
104,476

Weighted average common shares and units outstanding - diluted
104,732

 
105,554

 
105,168

 
105,143

 
104,792

 
 
 
 
 
 
 
 
 
 
Market Capitalization
 
 
 
 
 
 
 
 
 
Market value of common equity
$
10,889,888

 
$
11,231,244

 
$
11,284,791

 
$
11,324,448

 
$
11,144,002

Liquidation value of preferred equity/units
531,884

 
532,009

 
532,009

 
532,309

 
532,460

Consolidated debt (1)
6,431,753

 
6,389,254

 
6,290,019

 
6,237,641

 
7,796,092

Consolidated market capitalization
$
17,853,525

 
$
18,152,507

 
$
18,106,819

 
$
18,094,398

 
$
19,472,554

SLG share of unconsolidated JV debt
2,924,816

 
2,775,302

 
2,742,857

 
2,694,274

 
1,854,131

Market capitalization including SLG share of unconsolidated JVs
$
20,778,341

 
$
20,927,809

 
$
20,849,676

 
$
20,788,672

 
$
21,326,685

 
 
 
 
 
 
 
 
 
 
Consolidated debt to market capitalization (2)
36.0
%
 
35.2
%
 
34.7
%
 
34.5
%
 
40.0
%
Debt to market capitalization including SLG share of unconsolidated JVs (2)
45.0
%
 
43.8
%
 
43.3
%
 
43.0
%
 
45.2
%
 
 
 
 
 
 
 
 
 
 
Consolidated debt service coverage (trailing 12 months)
3.07x

 
3.46x

 
3.39x

 
3.33x

 
3.29x

Consolidated fixed charge coverage (trailing 12 months)
2.59x

 
2.95x

 
2.91x

 
2.89x

 
2.87x

Debt service coverage, including SLG share of unconsolidated JVs (trailing 12 months)
2.66x

 
3.02x

 
2.97x

 
2.93x

 
2.90x

Fixed charge coverage, including SLG share of unconsolidated JVs (trailing 12 months)
2.29x

 
2.61x

 
2.58x

 
2.57x

 
2.56x

 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes debt associated with assets held for sale.
(2) Includes the liquidation value of preferred equity/units.

Supplemental Information
8
Second Quarter 2017

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KEY FINANCIAL DATA

Unaudited
(Dollars in Thousands Except Per Share)
 
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As of or for the three months ended
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
9/30/2016
 
6/30/2016
Selected Balance Sheet Data
 
 
 
 
 
 
 
 
 
Real estate assets before depreciation (1)
$
12,021,243

 
$
12,837,493

 
$
12,743,332

 
$
12,608,861

 
$
15,015,226

Investments in unconsolidated joint ventures
$
2,219,371

 
$
1,861,077

 
$
1,890,186

 
$
1,860,912

 
$
1,126,486

Debt and preferred equity investments
$
1,986,413

 
$
1,627,836

 
$
1,640,412

 
$
1,453,234

 
$
1,357,181

Cash and cash equivalents
$
270,965

 
$
468,035

 
$
279,443

 
$
405,896

 
$
276,226

Investment in marketable securities
$
29,524

 
$
29,260

 
$
85,110

 
$
60,352

 
$
39,339

 
 
 
 
 
 
 
 
 
 
Total assets
$
15,309,707

 
$
15,877,271

 
$
15,857,787

 
$
15,790,942

 
$
17,544,223

 
 
 
 
 
 
 
 
 
 
Fixed rate & hedged debt
$
5,190,393

 
$
5,249,091

 
$
5,184,434

 
$
5,226,651

 
$
6,344,936

Variable rate debt (2)
1,241,360

 
1,140,163

 
1,105,585

 
1,010,990

 
1,451,155

Total consolidated debt
$
6,431,753

 
$
6,389,254

 
$
6,290,019


$
6,237,641


$
7,796,091

Deferred financing costs, net of amortization
(56,820
)
 
(82,988
)
 
(82,258
)
 
(87,591
)
 
(101,521
)
Total consolidated debt, net
$
6,374,933

 
$
6,306,266

 
$
6,207,761

 
$
6,150,050

 
$
7,694,570

 
 
 
 
 
 
 
 
 
 
Total liabilities
$
7,172,522

 
$
7,380,279

 
$
7,330,984

 
$
7,275,544

 
$
9,008,192

 
 
 
 
 
 
 
 
 
 
Fixed rate & hedged debt, including SLG share of unconsolidated JV debt
$
6,532,638

 
$
6,589,967

 
$
6,718,900

 
$
6,720,214

 
$
6,998,500

Variable rate debt, including SLG share of unconsolidated JV debt (2)
2,823,931

 
2,574,589

 
2,313,976

 
2,211,700

 
2,651,723

Total debt, including SLG share of unconsolidated JV debt
$
9,356,569

 
$
9,164,556

 
$
9,032,876

 
$
8,931,914

 
$
9,650,223

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Operating Data
 
 
 
 
 
 
 
 
 
Property operating revenues
$
322,027

 
$
325,521

 
$
329,370

 
$
334,612

 
$
465,425

Property operating expenses
(140,105
)
 
(143,882
)
 
(147,355
)
 
(151,896
)
 
(145,755
)
Property NOI
$
181,922

 
$
181,639

 
$
182,015

 
$
182,716

 
$
319,670

SLG share of unconsolidated JV Property NOI
55,002

 
55,424

 
53,733

 
41,365

 
36,306

Property NOI, including SLG share of unconsolidated JV Property NOI
$
236,924

 
$
237,063

 
$
235,748

 
$
224,081

 
$
355,976

Investment income
60,622

 
40,299

 
38,661

 
75,396

 
44,214

Other income
15,501

 
11,561

 
6,211

 
6,673

 
107,975

Marketing general & administrative expenses
(24,256
)
 
(24,143
)
 
(25,785
)
 
(25,458
)
 
(24,484
)
SLG share of investment income and other income from unconsolidated JVs
5,078

 
5,789

 
6,962

 
5,389

 
3,953

EBITDA, including SLG share of unconsolidated JV EBITDA
$
293,869

 
$
270,569

 
$
261,797

 
$
286,081

 
$
487,634

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes assets held for sale of $119.2 million at 6/30/2017
(2) Does not reflect $1.3 billion of floating rate debt and preferred equity investments that provide a hedge against floating rate debt.

Supplemental Information
9
Second Quarter 2017

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KEY FINANCIAL DATA
Manhattan Properties (1)
Unaudited
(Dollars in Thousands Except Per Share)
 
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As of or for the three months ended
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
9/30/2016
 
6/30/2016
 
 
 
 
 
 
 
 
 
 
Selected Operating Data
 
 
 
 
 
 
 
 
 
Property operating revenues
$
294,596

 
$
292,520

 
$
297,431

 
$
301,165

 
$
432,422

Property operating expenses
120,518

 
125,387

 
124,022

 
133,725

 
127,057

Property NOI
$
174,078

 
$
167,133

 
$
173,409

 
$
167,440

 
$
305,365

 
 
 
 
 
 
 
 
 
 
Other income - consolidated
$
608

 
$
2,417

 
$
851

 
$
1,951

 
$
95,333

 
 
 
 
 
 
 
 
 
 
SLG share of property NOI from unconsolidated JVs
$
54,856

 
$
55,171

 
$
53,522

 
$
44,249

 
$
36,083

 
 
 
 
 
 
 
 
 
 
Portfolio Statistics
 
 
 
 
 
 
 
 
 
Consolidated office buildings in service
24

 
24

 
24

 
24

 
25

Unconsolidated office buildings in service
7

 
7

 
7

 
7

 
6

 
31

 
31

 
31

 
31

 
31

 
 
 
 
 
 
 
 
 
 
Consolidated office buildings in service - square footage
16,054,606

 
16,054,606

 
16,054,606

 
16,054,606

 
18,368,606

Unconsolidated office buildings in service - square footage
6,558,139

 
6,558,139

 
6,558,139

 
6,558,139

 
4,244,139

 
22,612,745

 
22,612,745

 
22,612,745

 
22,612,745

 
22,612,745

 
 
 
 
 
 
 
 
 
 
Same-store office occupancy (consolidated + JVs) (2)
92.6%
 
93.9%
 
94.6%
 
95.1%
 
95.3%
Same-store office occupancy inclusive of leases signed not yet commenced
94.9%
 
95.7%
 
96.2%
 
96.4%
 
96.4%
 
 
 
 
 
 
 
 
 
 
Office Leasing Statistics
 
 
 
 
 
 
 
 
 
Total office leases commenced
45

 
41

 
21

 
42

 
50

 
 
 
 
 
 
 
 
 
 
Commenced office square footage filling vacancy
118,230

 
114,996

 
17,202

 
109,247

 
37,556

Commenced office square footage on previously occupied space (M-T-M leasing) (3)
156,558

 
204,076

 
154,379

 
1,085,757

 
661,197

Total office square footage commenced
274,788

 
319,072

 
171,581

 
1,195,004

 
698,753

 
 
 
 
 
 
 
 
 
 
Average starting cash rent psf - office leases commenced
$71.43
 
$78.11
 
$70.94
 
$73.22
 
$67.55
Previously escalated cash rent psf - office leases commenced
$66.92
 
$69.26
 
$67.47
 
$61.84
 
$60.41
Increase in new cash rent over previously escalated cash rent (3)
6.7%
 
12.8%
 
5.1%
 
18.4%
 
11.8%
Average lease term
7.1
 
7.7
 
7.1
 
10.5
 
6.8
Tenant concession packages psf
$45.12
 
$53.87
 
$48.53
 
$40.40
 
$20.64
Free rent months
4.6
 
5.6
 
4.9
 
4.2
 
2.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Property data includes operating office, retail, residential, development, redevelopment, and land properties.
(2) The Manhattan same-store portfolio was revised on January 1, 2017 to include 280 Park Avenue, 600 Lexington Avenue, 110 Greene Street, 30 East 40th Street, and the Stonehenge Portfolio.
(3) Calculated on space that was occupied within the previous 12 months.

Supplemental Information
10
Second Quarter 2017

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KEY FINANCIAL DATA
Suburban Properties (1)
Unaudited
(Dollars in Thousands Except Per Share)
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https://cdn.kscope.io/7aa3d08152c38073b5b38df7e05240b3-bottomborder17q02.jpg

 
As of or for the three months ended
 
6/30/2017
 
3/31/2017
 
12/31/2016
 
9/30/2016
 
6/30/2016
 
 
 
 
 
 
 
 
 
 
Selected Operating Data
 
 
 
 
 
 
 
 
 
Property operating revenues
$
26,844

 
$
28,531

 
$
27,405

 
$
28,942

 
$
28,276

Property operating expenses
13,890

 
14,636

 
15,199

 
15,211

 
14,838

Property NOI
$
12,954

 
$
13,895

 
$
12,206

 
$
13,731

 
$
13,438

 
 
 
 
 
 
 
 
 
 
Other income - consolidated
$
1,300

 
$
107

 
$
1,047

 
$
118

 
$
624

 
 
 
 
 
 
 
 
 
 
SLG share of property NOI from unconsolidated JVs
$
192

 
$
207

 
$
211

 
$
120

 
$
228

 
 
 
 
 
 
 
 
 
 
Portfolio Statistics
 
 
 
 
 
 
 
 
 
Consolidated office buildings in service
24

 
25

 
25

 
25

 
26

Unconsolidated office buildings in service
2

 
2

 
2

 
2

 
2

 
26

 
27

 
27

 
27

 
28

 
 
 
 
 
 
 
 
 
 
Consolidated office buildings in service - square footage
3,933,800

 
4,113,800

 
4,113,800

 
4,113,800

 
4,235,300

Unconsolidated office buildings in service - square footage
640,000

 
640,000

 
640,000

 
640,000

 
640,000

 
4,573,800

 
4,753,800

 
4,753,800

 
4,753,800

 
4,875,300

 
 
 
 
 
 
 
 
 
 
Same-store office occupancy (consolidated + JVs)
84.6%
 
83.5%
 
83.8%
 
83.1%
 
82.4%
Same-store office occupancy inclusive of leases signed not yet commenced
85.1%
 
84.6%
 
84.6%
 
84.9%
 
83.3%
 
 
 
 
 
 
 
 
 
 
Office Leasing Statistics
 
 
 
 
 
 
 
 
 
Total office leases commenced
22

 
22

 
24

 
20

 
19

 
 
 
 
 
 
 
 
 
 
Commenced office square footage filling vacancy
98,500

 
37,184

 
66,425

 
43,111

 
63,105

Commenced office square footage on previously occupied space (M-T-M leasing) (2)
28,915

 
73,789

 
63,040

 
77,869

 
104,704

Total office square footage commenced
127,415

 
110,973

 
129,465

 
120,980

 
167,809

 
 
 
 
 
 
 
 
 
 
Average starting cash rent psf - office leases commenced
$46.80
 
$30.04
 
$35.86
 
$35.40
 
$38.42
Previously escalated cash rent psf - office leases commenced
$39.36
 
$29.33
 
$32.29
 
$34.61
 
$37.46
Increase in new cash rent over previously escalated cash rent (2)
18.9%
 
2.4%
 
11.1%