SEC Filing | SL Green Realty Corp.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________________

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13199 (SL Green Realty Corp.)

Commission File Number: 33-167793-02 (SL Green Operating Partnership, L.P.)

______________________________________________________________________

SL GREEN REALTY CORP.

SL GREEN OPERATING PARTNERSHIP, L.P.

(Exact name of registrant as specified in its charter)

______________________________________________________________________



SL Green Realty Corp.	Maryland	13-3956755
SL Green Operating Partnership, L.P.	Delaware	13-3960938
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

420 Lexington Avenue, New York, NY 10170

(Address of principal executive offices—Zip Code)

(212) 594-2700

(Registrant's telephone number, including area code)

______________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

SL Green Realty Corp. Yes x No o SL Green Operating Partnership, L.P. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

SL Green Realty Corp. Yes x No o SL Green Operating Partnership, L.P. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

SL Green Realty Corp.



Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)
Smaller Reporting Company	o		Emerging Growth Company	o

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.				o

SL Green Operating Partnership, L.P.



Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	x	(Do not check if a smaller reporting company)
Smaller Reporting Company	o		Emerging Growth Company	o

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.				o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

SL Green Realty Corp. Yes o No x SL Green Operating Partnership, L.P. Yes o No x

As of May 9, 2018, 88,422,771 shares of SL Green Realty Corp.'s common stock, par value $0.01 per share, were outstanding. As of May 9, 2018, 1,468,438 common units of limited partnership interest of SL Green Operating Partnership, L.P. were held by non-affiliates. There is no established trading market for such units.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended March 31, 2018 of SL Green Realty Corp. and SL Green Operating Partnership, L.P. Unless stated otherwise or the context otherwise requires, references to "SL Green Realty Corp.," the "Company" or "SL Green" mean SL Green Realty Corp. and its consolidated subsidiaries; and references to "SL Green Operating Partnership, L.P.," the "Operating Partnership" or "SLGOP" mean SL Green Operating Partnership, L.P. and its consolidated subsidiaries. The terms "we," "our" and "us" mean the Company and all the entities owned or controlled by the Company, including the Operating Partnership.

The Company is a Maryland corporation which operates as a self-administered and self-managed real estate investment trust, or REIT, and is the sole managing general partner of the Operating Partnership. As a general partner of the Operating Partnership, the Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership.

As of March 31, 2018 the Company owns 94.98% of the outstanding general and limited partnership interest in the Operating Partnership. The Company also owns 9,200,000 Series I Preferred Units of the Operating Partnership. As of March 31, 2018, noncontrolling investors held, in aggregate, a 5.02% limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership.

The Company and the Operating Partnership are managed and operated as one entity. The financial results of the Operating Partnership are consolidated into the financial statements of the Company. The Company has no significant assets other than its investment in the Operating Partnership. Substantially all of our assets are held by, and our operations are conducted through, the Operating Partnership. Therefore, the assets and liabilities of the Company and the Operating Partnership are substantially the same.

Noncontrolling interests in the Operating Partnership, stockholders' equity of the Company and partners' capital of the Operating Partnership are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The common limited partnership interests in the Operating Partnership not owned by the Company are accounted as noncontrolling interests, within mezzanine equity, in the Company's and the Operating Partnership's consolidated financial statements.

We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:


•	Combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;


•	Combined reports eliminate duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the Company's disclosure applies to both the Company and the Operating Partnership; and


•	Combined reports create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:


•	consolidated financial statements;


•	the following notes to the consolidated financial statements:


◦	Note 11, Noncontrolling Interests on the Company’s Consolidated Financial Statements;


◦	Note 12, Stockholders' Equity of the Company;


◦	Note 13, Partners' Capital of the Operating Partnership.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Company and the Operating Partnership, respectively, in order to establish that the Chief Executive Officer and the Chief Financial Officer of the Company, in both their capacity as the principal executive officer and principal financial officer of the Company and the principal executive officer and principal financial officer of the general partner of the Operating Partnership, have made the requisite certifications and that the Company and the Operating Partnership are compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended.

SL GREEN REALTY CORP. AND SL GREEN OPERATING PARTNERSHIP, L.P.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS	4

	FINANCIAL STATEMENTS OF SL GREEN REALTY CORP.
	Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017	4
	Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)	6
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2018 and 2017 (unaudited)	8
	Consolidated Statement of Equity for the three months ended March 31, 2018 (unaudited)	9
	Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)	10

	FINANCIAL STATEMENTS OF SL GREEN OPERATING PARTNERSHIP, L.P.
	Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017	12
	Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)	14
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2018 and 2017 (unaudited)	16
	Consolidated Statement of Capital for the three months ended March 31, 2018 (unaudited)	17
	Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)	18
	Notes to Consolidated Financial Statements (unaudited)	20
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	53
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	68
Item 4.	Controls and Procedures (SL Green Realty Corp. and SL Green Operating Partnership, L.P.)	69
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	71
Item 5.	Other Information	72
Item 6.	Exhibits	73
	Signatures	74

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SL Green Realty Corp.

Consolidated Balance Sheets

(in thousands)



	March 31, 2018			December 31, 2017
	(unaudited)
Assets
Commercial real estate properties, at cost:
Land and land interests	$	2,098,406		$	2,357,051
Building and improvements	5,206,982			6,351,012
Building leasehold and improvements	1,420,346			1,450,614
Properties under capital lease	47,445			47,445
	8,773,179			10,206,122
Less: accumulated depreciation	(1,944,629		)	(2,300,116		)
	6,828,550			7,906,006
Assets held for sale	67,819			338,354
Cash and cash equivalents	288,808			127,888
Restricted cash	89,457			122,138
Investments in marketable securities	28,252			28,579
Tenant and other receivables, net of allowance of $18,363 and $18,637 in 2018 and 2017, respectively	49,552			57,644
Related party receivables	31,305			23,039
Deferred rents receivable, net of allowance of $16,897and $17,207 in 2018 and 2017, respectively	320,547			365,337
Debt and preferred equity investments, net of discounts and deferred origination fees of $24,998 and $25,507 in 2018 and 2017, respectively	2,085,871			2,114,041
Investments in unconsolidated joint ventures	3,034,596			2,362,989
Deferred costs, net	195,557			226,201
Other assets	360,556			310,688
Total assets ⁽¹⁾	$	13,380,870		$	13,982,904
Liabilities
Mortgages and other loans payable, net	$	2,433,994		$	2,837,282
Revolving credit facility, net	—			30,336
Unsecured term loan, net	1,491,922			1,491,575
Unsecured notes, net	1,396,320			1,395,939
Accrued interest payable	36,808			38,142
Other liabilities	103,654			188,005
Accounts payable and accrued expenses	131,797			137,142
Deferred revenue	177,896			208,119
Capital lease obligations	43,029			42,843
Deferred land leases payable	3,403			3,239
Dividend and distributions payable	82,337			85,138
Security deposits	64,647			67,927
Liabilities related to assets held for sale	42			4,074
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities	100,000			100,000
Total liabilities ⁽¹⁾	6,065,849			6,629,761

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SL Green Realty Corp.

Consolidated Balance Sheets

(in thousands, except per share data)



	March 31, 2018			December 31, 2017
	(unaudited)
Commitments and contingencies	—			—
Noncontrolling interests in Operating Partnership	475,807			461,954
Preferred units	301,585			301,735

Equity
SL Green stockholders' equity:
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both March 31, 2018 and December 31, 2017	221,932			221,932
Common stock, $0.01 par value, 160,000 shares authorized and 90,190 and 93,858 issued and outstanding at March 31, 2018 and December 31, 2017, respectively (including 1,055 shares held in treasury at March 31, 2018 and December 31, 2017)	902			939
Additional paid-in-capital	4,776,594			4,968,338
Treasury stock at cost	(124,049		)	(124,049		)
Accumulated other comprehensive income	28,573			18,604
Retained earnings	1,583,833			1,139,329
Total SL Green stockholders' equity	6,487,785			6,225,093
Noncontrolling interests in other partnerships	49,844			364,361
Total equity	6,537,629			6,589,454
Total liabilities and equity	$	13,380,870		$	13,982,904

⁽¹⁾ The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $174.8 million and $398.0 million of land, $0.3 billion and $1.4 billion of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $47.4 million and $47.4 million of properties under capital lease, $29.8 million and $330.9 million of accumulated depreciation, $706.0 million and $221.0 million of other assets included in other line items, $134.4 million and $628.9 million of real estate debt, net, $0.4 million and $2.5 million of accrued interest payable, $43.0 million and $42.8 million of capital lease obligations, and $17.7 million and $56.8 million of other liabilities included in other line items as of March 31, 2018 and December 31, 2017, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Realty Corp.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)



	Three Months Ended March 31,
	2018			2017
Revenues
Rental revenue, net	$	215,369		$	281,329
Escalation and reimbursement	26,399			44,192
Investment income	45,290			40,299
Other income	14,637			11,561
Total revenues	301,695			377,381
Expenses
Operating expenses, including related party expenses of $3,834 in 2018 and $4,173 in 2017.	59,782			74,506
Real estate taxes	45,661			61,068
Ground rent	8,308			8,308
Interest expense, net of interest income	47,916			65,622
Amortization of deferred financing costs	3,537			4,761
Depreciation and amortization	69,388			94,134
Transaction related costs	162			133
Marketing, general and administrative	23,528			24,143
Total expenses	258,282			332,675
Income before equity in net income from unconsolidated joint ventures, equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities	43,413			44,706
Equity in net income from unconsolidated joint ventures	4,036			6,614
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(6,440		)	2,047
Purchase price and other fair value adjustments	49,293			—
Gain on sale of real estate, net	23,521			567
Depreciable real estate reserves	—			(56,272		)
Gain on sale of investment in marketable securities	—			3,262
Net income	113,823			924
Net (income) loss attributable to noncontrolling interests:
Noncontrolling interests in the Operating Partnership	(5,272		)	(476		)
Noncontrolling interests in other partnerships	(198		)	17,491
Preferred units distributions	(2,849		)	(2,850		)
Net income attributable to SL Green	105,504			15,089
Perpetual preferred stock dividends	(3,738		)	(3,738		)
Net income attributable to SL Green common stockholders	$	101,766		$	11,351

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SL Green Realty Corp.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)



	Three Months Ended March 31,
	2018			2017
Amounts attributable to SL Green common stockholders:
Income before depreciable real estate reserves and gains on sale and fair value adjustments	$	38,657		$	62,660
Purchase price and other fair value adjustments	46,868			—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(6,123		)	1,957
Gain on sale of real estate, net	22,364			542
Depreciable real estate reserves	—			(53,808		)
Net income attributable to SL Green common stockholders	$	101,766		$	11,351
Basic earnings per share:
Income before depreciable real estate reserves and gains on sale and fair value adjustments	$	0.43		$	0.62
Purchase price and other fair value adjustments	0.52			—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(0.07		)	0.02
Gain on sale of real estate, net	0.24			0.01
Depreciable real estate reserves	—			(0.54		)
Net income attributable to SL Green common stockholders	$	1.12		$	0.11
Diluted earnings per share:
Income before depreciable real estate reserves and gains on sale and fair value adjustments	$	0.43		$	0.62
Purchase price and other fair value adjustments	0.52			—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(0.07		)	0.02
Gain on sale of real estate, net	0.24			0.01
Depreciable real estate reserves	—			(0.54		)
Net income attributable to SL Green common stockholders	$	1.12		$	0.11

Dividends per share	$	0.8125		$	0.775
Basic weighted average common shares outstanding	90,520			100,643
Diluted weighted average common shares and common share equivalents outstanding	95,256			105,554

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Realty Corp.

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)



	Three Months Ended March 31,
	2018			2017
Net income	$	113,823		$	924
Other comprehensive income (loss):
Change in net unrealized gain (loss) on derivative instruments, including SL Green's share of joint venture net unrealized gain (loss) on derivative instruments	10,913			(1,075		)
Change in unrealized gain on marketable securities	(325		)	(4,750		)
Other comprehensive income (loss)	10,588			(5,825		)
Comprehensive income (loss)	124,411			(4,901		)
Net (income) loss attributable to noncontrolling interests and preferred units distributions	(8,319		)	17,491
Other comprehensive (loss) income attributable to noncontrolling interests	(619		)	199
Comprehensive income attributable to SL Green	$	115,473		$	12,789

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Realty Corp.

Consolidated Statement of Equity

(unaudited, in thousands, except per share data)



	SL Green Realty Corp. Stockholders
				Common Stock
		Series I Preferred Stock		Shares		Par Value			Additional Paid- In-Capital			Treasury Stock			Accumulated Other Comprehensive Income		Retained Earnings			Noncontrolling Interests			Total
Balance at December 31, 2017		$	221,932	92,803		$	939		$	4,968,338		$	(124,049	)	$	18,604	$	1,139,329		$	364,361		$	6,589,454
Cumulative adjustment upon adoption of ASC 610-20																	570,524						570,524
Balance at January 1, 2018		$	221,932	92,803		$	939		$	4,968,338		$	(124,049	)	$	18,604	$	1,709,853		$	364,361		$	7,159,978
Net income																	105,504			198			105,702
Other comprehensive income															9,969								9,969
Preferred dividends																	(3,738		)				(3,738		)
DRSPP proceeds				1					42														42
Reallocation of noncontrolling interest in the Operating Partnership																	3,645						3,645
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings				(19	)				3,102														3,102
Repurchases of common stock				(3,654	)	(37		)	(195,617		)						(159,090		)				(354,744		)
Proceeds from stock options exercised				4					729														729
Contributions to consolidated joint venture interests																				157			157
Deconsolidation of partially owned entity																				(314,596		)	(314,596		)
Cash distributions to noncontrolling interests																				(276		)	(276		)
Cash distributions declared ($0.8125 per common share, none of which represented a return of capital for federal income tax purposes)																	(72,341		)				(72,341		)
Balance at March 31, 2018		$	221,932	89,135		$	902		$	4,776,594		$	(124,049	)	$	28,573	$	1,583,833		$	49,844		$	6,537,629

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

SL Green Realty Corp.

Consolidated Statements of Cash Flows

(unaudited, in thousands, except per share data)



	Three Months Ended March 31,
	2018			2017
Operating Activities
Net income	$	113,823		$	924
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	72,925			98,895
Equity in net income from unconsolidated joint ventures	(4,036		)	(6,614		)
Distributions of cumulative earnings from unconsolidated joint ventures	7,510			5,468
Equity in net loss (gain) on sale of interest in unconsolidated joint venture interest/real estate	6,440			(2,047		)
Purchase price and other fair value adjustments	(49,293		)	—
Depreciable real estate reserves	—			56,272
Gain on sale of real estate, net	(23,521		)	(567		)
Gain on sale of investments in marketable securities	—			(3,262		)
Deferred rents receivable	(3,120		)	(11,722		)
Other non-cash adjustments	12,155			23,245
Changes in operating assets and liabilities:
Tenant and other receivables	(1,847		)	1,272
Related party receivables	(4,567		)	(3,211		)
Deferred lease costs	(7,679		)	(9,421		)
Other assets	(47,826		)	(45,356		)
Accounts payable, accrued expenses, other liabilities and security deposits	18,890			(16,327		)
Deferred revenue and land leases payable	4,692			25,600
Net cash provided by operating activities	94,546			113,149
Investing Activities
Acquisitions of real estate property	(1,276		)	—
Additions to land, buildings and improvements	(51,631		)	(101,090		)
Acquisition deposits and deferred purchase price	(3,020		)	—
Investments in unconsolidated joint ventures	(51,158		)	(8,000		)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	142,694			37,811
Net proceeds from disposition of real estate/joint venture interest	409,867			3,000
Proceeds from sale or redemption of marketable securities	—			54,363
Other investments	(21,687		)	21,721
Origination of debt and preferred equity investments	(229,428		)	(402,453		)
Repayments or redemption of debt and preferred equity investments	261,641			411,969
Net cash provided by investing activities	456,002			17,321

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SL Green Realty Corp.

Consolidated Statements of Cash Flows

(unaudited, in thousands, except per share data)



	Three Months Ended March 31,
	2018			2017
Financing Activities
Proceeds from mortgages and other loans payable	$	99,115		$	778,445
Repayments of mortgages and other loans payable	(9,406		)	(680,572		)
Proceeds from revolving credit facility and senior unsecured notes	455,000			277,800
Repayments of revolving credit facility and senior unsecured notes	(495,000		)	(277,800		)
Proceeds from stock options exercised and DRIP issuance	771			8,808
Repurchase of common stock	(382,679		)	(102		)
Redemption of preferred stock	(150		)	—
Distributions to noncontrolling interests in other partnerships	(276		)	(469		)
Contributions from noncontrolling interests in other partnerships	157			31,947
Distributions to noncontrolling interests in the Operating Partnership	(3,841		)	(3,537		)
Dividends paid on common and preferred stock	(81,729		)	(84,179		)
Tax withholdings related to restricted share awards	(3,842		)	(3,816		)
Deferred loan costs and capitalized lease obligation	(429		)	(7,712		)
Net cash (used in) provided by financing activities	(422,309		)	38,813
Net increase in cash, cash equivalents, and restricted cash	128,239			169,283
Cash, cash equivalents, and restricted cash at beginning of year	250,026			369,967
Cash, cash equivalents, and restricted cash at end of period	$	378,265		$	539,250

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Issuance of units in the Operating Partnership	$	15,448		$	18,240
Redemption of units in the Operating Partnership for stock	—			13,112
Derivative instruments at fair value	6,937			4,734
Tenant improvements and capital expenditures payable	15,952			7,087
Fair value adjustment to noncontrolling interest in Operating Partnership	3,645			15,548
Deconsolidation of subsidiaries	298,403			—
Transfer of assets related to assets held for sale	—			54,694
Transfer of liabilities related to assets held for sale	—			43
Deferred leasing payable	1,203			1,455
Removal of fully depreciated commercial real estate properties	106,142			2,043
Share repurchase payable	27,935			—

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.



	Three Months Ended March 31,
	2018		2017
Cash and cash equivalents	$	288,808	$	468,035
Restricted cash	89,457		71,215
Total cash, cash equivalents, and restricted cash	$	378,265	$	539,250

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Operating Partnership, L.P.

Consolidated Balance Sheets

(in thousands)



	March 31, 2018			December 31, 2017
	(unaudited)
Assets
Commercial real estate properties, at cost:
Land and land interests	$	2,098,406		$	2,357,051
Building and improvements	5,206,982			6,351,012
Building leasehold and improvements	1,420,346			1,450,614
Properties under capital lease	47,445			47,445
	8,773,179			10,206,122
Less: accumulated depreciation	(1,944,629		)	(2,300,116		)
	6,828,550			7,906,006
Assets held for sale	67,819			338,354
Cash and cash equivalents	288,808			127,888
Restricted cash	89,457			122,138
Investments in marketable securities	28,252			28,579
Tenant and other receivables, net of allowance of $18,363 and $18,637 in 2018 and 2017, respectively	49,552			57,644
Related party receivables	31,305			23,039
Deferred rents receivable, net of allowance of $16,897and $17,207 in 2018 and 2017, respectively	320,547			365,337
Debt and preferred equity investments, net of discounts and deferred origination fees of $24,998 and $25,507 in 2018 and 2017, respectively	2,085,871			2,114,041
Investments in unconsolidated joint ventures	3,034,596			2,362,989
Deferred costs, net	195,557			226,201
Other assets	360,556			310,688
Total assets ⁽¹⁾	$	13,380,870		$	13,982,904
Liabilities
Mortgages and other loans payable, net	$	2,433,994		$	2,837,282
Revolving credit facility, net	—			30,336
Unsecured term loan, net	1,491,922			1,491,575
Unsecured notes, net	1,396,320			1,395,939
Accrued interest payable	36,808			38,142
Other liabilities	103,654			188,005
Accounts payable and accrued expenses	131,797			137,142
Deferred revenue	177,896			208,119
Capital lease obligations	43,029			42,843
Deferred land leases payable	3,403			3,239
Dividend and distributions payable	82,337			85,138
Security deposits	64,647			67,927
Liabilities related to assets held for sale	42			4,074
Junior subordinated deferrable interest debentures held by trusts that issued trust preferred securities	100,000			100,000
Total liabilities ⁽¹⁾	6,065,849			6,629,761
Commitments and contingencies	—			—
Limited partner interests in SLGOP (4,715 and 4,453 limited partner common units outstanding at March 31, 2018 and December 31, 2017, respectively)	475,807			461,954
Preferred units	301,585			301,735

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SL Green Operating Partnership, L.P.

Consolidated Balance Sheets

(in thousands)



	March 31, 2018		December 31, 2017
	(unaudited)
Capital
SLGOP partners' capital:
Series I Preferred Units, $25.00 liquidation preference, 9,200 issued and outstanding at both March 31, 2018 and December 31, 2017	221,932		221,932
SL Green partners' capital (939 and 973 general partner common units and 88,196 and 91,831 limited partner common units outstanding at March 31, 2018 and December 31, 2017, respectively)	6,237,280		5,984,557
Accumulated other comprehensive income	28,573		18,604
Total SLGOP partners' capital	6,487,785		6,225,093
Noncontrolling interests in other partnerships	49,844		364,361
Total capital	6,537,629		6,589,454
Total liabilities and capital	$	13,380,870	$	13,982,904

⁽¹⁾ The Operating Partnership's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. The consolidated balance sheets include the following amounts related to our consolidated VIEs, excluding the Operating Partnership: $174.8 million and $398.0 million of land, $0.3 billion and $1.4 billion of building and improvements, $2.0 million and $2.0 million of building and leasehold improvements, $47.4 million and $47.4 million of properties under capital lease, $29.8 million and $330.9 million of accumulated depreciation, $706.0 million and $221.0 million of other assets included in other line items, $134.4 million and $628.9 million of real estate debt, net, $0.4 million and $2.5 million of accrued interest payable, $43.0 million and $42.8 million of capital lease obligations, and $17.7 million and $56.8 million of other liabilities included in other line items as of March 31, 2018 and December 31, 2017, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Operating Partnership, L.P.

Consolidated Statements of Operations

(unaudited, in thousands, except per unit data)



	Three Months Ended March 31,
	2018			2017
Revenues
Rental revenue, net	$	215,369		$	281,329
Escalation and reimbursement	26,399			44,192
Investment income	45,290			40,299
Other income	14,637			11,561
Total revenues	301,695			377,381
Expenses
Operating expenses, including related party expenses of $3,834 in 2018 and $4,173 in 2017.	59,782			74,506
Real estate taxes	45,661			61,068
Ground rent	8,308			8,308
Interest expense, net of interest income	47,916			65,622
Amortization of deferred financing costs	3,537			4,761
Depreciation and amortization	69,388			94,134
Transaction related costs	162			133
Marketing, general and administrative	23,528			24,143
Total expenses	258,282			332,675
Income before equity in net income from unconsolidated joint ventures, equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities	43,413			44,706
Equity in net income from unconsolidated joint ventures	4,036			6,614
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(6,440		)	2,047
Purchase price and other fair value adjustments	49,293			—
Gain on sale of real estate, net	23,521			567
Depreciable real estate reserves	—			(56,272		)
Gain on sale of investment in marketable securities	—			3,262
Net income	113,823			924
Net (income) loss attributable to noncontrolling interests:
Noncontrolling interests in other partnerships	(198		)	17,491
Preferred units distributions	(2,849		)	(2,850		)
Net income attributable to SLGOP	110,776			15,565
Perpetual preferred unit distributions	(3,738		)	(3,738		)
Net income attributable to SLGOP common unitholders	$	107,038		$	11,827

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SL Green Operating Partnership, L.P.

Consolidated Statements of Operations

(unaudited, in thousands, except per unit data)



	Three Months Ended March 31,
	2018			2017
Amounts attributable to SLGOP common unitholders:
Income before depreciable real estate reserves and gains on sale and fair value adjustments	$	40,664		$	65,485
Purchase price and other fair value adjustments	49,293			—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(6,440		)	2,047
Gain on sale of real estate, net	23,521			567
Depreciable real estate reserves	—			(56,272		)
Net income attributable to SLGOP common unitholders	$	107,038		$	11,827
Basic earnings per unit:
Income before depreciable real estate reserves and gains on sale and fair value adjustments	$	0.43		$	0.62
Purchase price and other fair value adjustments	0.52			—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(0.07		)	0.02
Gain on sale of real estate, net	0.24			0.01
Depreciable real estate reserves	—			(0.54		)
Net income attributable to SLGOP common unitholders	$	1.12		$	0.11
Diluted earnings per unit:
Income before depreciable real estate reserves and gains on sale and fair value adjustments	$	0.43		$	0.62
Purchase price and other fair value adjustments	0.52			—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(0.07		)	0.02
Gain on sale of real estate, net	0.24			0.01
Depreciable real estate reserves	—			(0.54		)
Net income attributable to SLGOP common unitholders	$	1.12		$	0.11

Dividends per unit	$	0.8125		$	0.775
Basic weighted average common units outstanding	95,203			105,250
Diluted weighted average common units and common unit equivalents outstanding	95,256			105,554

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Operating Partnership, L.P.

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)



	Three Months Ended March 31,
	2018			2017
Net income	$	113,823		$	924
Other comprehensive income (loss):
Change in net unrealized gain on derivative instruments, including SLGOP's share of joint venture net unrealized gain on derivative instruments	10,913			(1,075		)
Change in unrealized gain on marketable securities	(325		)	(4,750		)
Other comprehensive income (loss)	10,588			(5,825		)
Comprehensive income (loss)	124,411			(4,901		)
Net (loss) income attributable to noncontrolling interests	(198		)	17,491
Other comprehensive (loss) income attributable to noncontrolling interests	(619		)	199
Comprehensive income attributable to SLGOP	$	123,594		$	12,789

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Operating Partnership, L.P.

Consolidated Statement of Capital

(unaudited, in thousands, except per unit data)



	SL Green Operating Partnership Unitholders
			Partners' Interest
	Series I Preferred Units		Common Units		Common Unitholders			Accumulated Other Comprehensive Income		Noncontrolling Interests			Total
Balance at December 31, 2017	$	221,932	92,803		$	5,984,557		$	18,604	$	364,361		$	6,589,454
Cumulative adjustment upon adoption of ASC 610-20					570,524								570,524
Balance at January 1, 2018	$	221,932	92,803		$	6,555,081		$	18,604	$	364,361		$	7,159,978
Net income					105,504					198			105,702
Other comprehensive income								9,969					9,969
Preferred distributions					(3,738		)						(3,738		)
DRSPP proceeds			1		42								42
Reallocation of noncontrolling interests in the operating partnership					3,645								3,645
Deferred compensation plan and stock awards, net of forfeitures and tax withholdings			(19	)	3,102								3,102
Repurchases of common stock			(3,654	)	(354,744		)						(354,744		)
Contribution to consolidated joint venture interests										157			157
Deconsolidation of partially owned entity										(314,596		)	(314,596		)
Contributions - proceeds from stock options exercised			4		729								729
Cash distributions to noncontrolling interests										(276		)	(276		)
Cash distributions declared ($0.8125 per common unit, none of which represented a return of capital for federal income tax purposes)					(72,341		)						(72,341		)
Balance at March 31, 2018	$	221,932	89,135		$	6,237,280		$	28,573	$	49,844		$	6,537,629

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Operating Partnership, L.P.

Consolidated Statements of Cash Flows

(unaudited, in thousands)



	Three Months Ended March 31,
	2018			2017
Operating Activities
Net income	$	113,823		$	924
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	72,925			98,895
Equity in net income from unconsolidated joint ventures	(4,036		)	(6,614		)
Distributions of cumulative earnings from unconsolidated joint ventures	7,510			5,468
Equity in net loss (gain) on sale of interest in unconsolidated joint venture interest/real estate	6,440			(2,047		)
Purchase price and other fair value adjustments	(49,293		)	—
Depreciable real estate reserves	—			56,272
Gain on sale of real estate, net	(23,521		)	(567		)
Gain on sale of investments in marketable securities	—			(3,262		)
Deferred rents receivable	(3,120		)	(11,722		)
Other non-cash adjustments	12,155			23,245
Changes in operating assets and liabilities:
Tenant and other receivables	(1,847		)	1,272
Related party receivables	(4,567		)	(3,211		)
Deferred lease costs	(7,679		)	(9,421		)
Other assets	(47,826		)	(45,356		)
Accounts payable, accrued expenses, other liabilities and security deposits	18,890			(16,327		)
Deferred revenue and land leases payable	4,692			25,600
Net cash provided by operating activities	94,546			113,149
Investing Activities
Acquisitions of real estate property	(1,276		)	—
Additions to land, buildings and improvements	(51,631		)	(101,090		)
Acquisition deposits and deferred purchase price	(3,020		)	—
Investments in unconsolidated joint ventures	(51,158		)	(8,000		)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	142,694			37,811
Net proceeds from disposition of real estate/joint venture interest	409,867			3,000
Proceeds from sale or redemption of marketable securities	—			54,363
Other investments	(21,687		)	21,721
Origination of debt and preferred equity investments	(229,428		)	(402,453		)
Repayments or redemption of debt and preferred equity investments	261,641			411,969
Net cash provided by investing activities	456,002			17,321

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SL Green Operating Partnership, L.P.

Consolidated Statements of Cash Flows

(unaudited, in thousands)



	Three Months Ended March 31,
	2018			2017
Financing Activities
Proceeds from mortgages and other loans payable	$	99,115		$	778,445
Repayments of mortgages and other loans payable	(9,406		)	(680,572		)
Proceeds from revolving credit facility and senior unsecured notes	455,000			277,800
Repayments of revolving credit facility and senior unsecured notes	(495,000		)	(277,800		)
Proceeds from stock options exercised and DRIP issuance	771			8,808
Repurchase of common stock	(382,679		)	(102		)
Redemption of preferred stock	(150		)	—
Distributions to noncontrolling interests in other partnerships	(276		)	(469		)
Contributions from noncontrolling interests in other partnerships	157			31,947
Distributions paid on common and preferred units	(85,570		)	(87,716		)
Tax withholdings related to restricted share awards	(3,842		)	(3,816		)
Deferred loan costs and capitalized lease obligation	(429		)	(7,712		)
Net cash (used in) provided by financing activities	(422,309		)	38,813
Net increase in cash, cash equivalents, and restricted cash	128,239			169,283
Cash, cash equivalents, and restricted cash at beginning of year	250,026			369,967
Cash, cash equivalents, and restricted cash at end of period	$	378,265		$	539,250

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Issuance of units in the Operating Partnership	$	15,448		$	18,240
Redemption of units in the Operating Partnership for stock	—			13,112
Derivative instruments at fair value	6,937			4,734
Tenant improvements and capital expenditures payable	15,952			7,087
Fair value adjustment to noncontrolling interest in Operating Partnership	3,645			15,548
Deconsolidation of subsidiaries	298,403			—
Transfer of assets related to assets held for sale	—			54,694
Transfer of liabilities related to assets held for sale	—			43
Deferred leasing payable	1,203			1,455
Removal of fully depreciated commercial real estate properties	106,142			2,043
Share repurchase payable	27,935			—



	Three Months Ended March 31,
	2018		2017
Cash and cash equivalents	$	288,808	$	468,035
Restricted cash	89,457		71,215
Total cash, cash equivalents, and restricted cash	$	378,265	$	539,250

The accompanying notes are an integral part of these consolidated financial statements.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements

March 31, 2018

(unaudited)

1. Organization and Basis of Presentation

SL Green Realty Corp., which is referred to as the Company or SL Green, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Operating Partnership received a contribution of interest in the real estate properties, as well as 95% of the economic interest in the management, leasing and construction companies which are referred to as the Service Corporation. All of the management, leasing and construction services that are provided to the properties that are wholly-owned by us and that are provided to certain joint ventures are conducted through SL Green Management LLC which is 100% owned by the Operating Partnership. The Company has qualified, and expects to qualify in the current fiscal year, as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Code, and operates as a self-administered, self-managed REIT. A REIT is a legal entity that holds real estate interests and, through payments of dividends to stockholders, is permitted to minimize the payment of Federal income taxes at the corporate level. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.

Substantially all of our assets are held by, and all of our operations are conducted through, the Operating Partnership. The Company is the sole managing general partner of the Operating Partnership. As of March 31, 2018, noncontrolling investors held, in the aggregate, a 5.02% limited partnership interest in the Operating Partnership. We refer to these interests as the noncontrolling interests in the Operating Partnership. The Operating Partnership is considered a variable interest entity, or VIE, in which we are the primary beneficiary. See Note 11, "Noncontrolling Interests on the Company's Consolidated Financial Statements".

Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P., or ROP, are wholly-owned subsidiaries of SL Green Realty Corp.

As of March 31, 2018, we owned the following interests in properties in the New York metropolitan area, primarily in midtown Manhattan. Our investments located outside of Manhattan are referred to as the Suburban properties:

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)



		Consolidated			Unconsolidated		Total
Location	Property Type	Number of Properties		Approximate Square Feet (unaudited)	Number of Properties	Approximate Square Feet (unaudited)	Number of Properties	Approximate Square Feet (unaudited)	Weighted Average Occupancy(1) (unaudited)
Commercial:
Manhattan	Office	20		12,387,091	11	12,165,164	31	24,552,255	94.2	%
	Retail	4	(2)	302,583	9	347,970	13	650,553	94.2	%
	Development/Redevelopment	8		318,985	3	416,214	11	735,199	44.4	%
	Fee Interest	1		176,530	1	—	2	176,530	100.0	%
		33		13,185,189	24	12,929,348	57	26,114,537	92.8	%
Suburban	Office	20	(3)	3,013,200	2	640,000	22	3,653,200	83.1	%
	Retail	1		52,000	—	—	1	52,000	100.0	%
	Development/Redevelopment	1		1,000	1	—	2	1,000	—	%
		22		3,066,200	3	640,000	25	3,706,200	83.3	%
Total commercial properties		55		16,251,389	27	13,569,348	82	29,820,737	91.6	%
Residential:
Manhattan	Residential	3	(2)	472,105	10	2,156,751	13	2,628,856	88.9	%
Suburban	Residential	—		—	—	—	—	—	—	%
Total residential properties		3		472,105	10	2,156,751	13	2,628,856	88.9	%
Total portfolio		58		16,723,494	37	15,726,099	95	32,449,593	91.4	%


(1)	The weighted average occupancy for commercial properties represents the total occupied square feet divided by total square footage at acquisition. The weighted average occupancy for residential properties represents the total occupied units divided by total available units.

(2)

As of March 31, 2018, we owned a building at 315 West 33rd Street, also known as The Olivia, that was comprised of approximately 270,132 square feet (unaudited) of retail space and approximately 222,855 square feet (unaudited) of residential space. For the purpose of this report, we have included this building in the number of retail properties we own. However, we have included only the retail square footage in the retail approximate square footage, and have listed the balance of the square footage as residential square footage.


(3)	Includes the properties at 115-117 Stevens Avenue in Valhalla, New York, and 1-6 International Drive in Rye Brook, New York which are classified as held for sale at March 31, 2018.

As of March 31, 2018, we also managed an approximately 336,000 square foot (unaudited) office building owned by a third party and held debt and preferred equity investments with a book value of $2.1 billion, including $0.1 billion of debt and preferred equity investments and other financing receivables that are included in balance sheet line items other than the Debt and Preferred Equity Investments line item.

Partnership Agreement

In accordance with the partnership agreement of the Operating Partnership, or the Operating Partnership Agreement, we allocate all distributions and profits and losses in proportion to the percentage of ownership interests of the respective partners. As the managing general partner of the Operating Partnership, we are required to take such reasonable efforts, as determined by us in our sole discretion, to cause the Operating Partnership to distribute sufficient amounts to enable the payment of sufficient dividends by us to minimize any Federal income or excise tax at the Company level. Under the Operating Partnership Agreement, each limited partner has the right to redeem units of limited partnership interests for cash, or if we so elect, shares of SL Green's common stock on a one-for-one basis.

Basis of Quarterly Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the financial position of the Company and the Operating Partnership at March 31, 2018 and the results of operations for the periods presented have been included. The operating results for the period presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

These financial statements should be read in conjunction with the financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2017 of the Company and the Operating Partnership.

The consolidated balance sheet at December 31, 2017 has been derived from the audited financial statements as of that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

Subsequent Events

In May 2018, the Company was the successful bidder for the leasehold interest at 2 Herald Square, at the foreclosure of the asset. The Company had purchased notes receivable secured by 2 Herald Square in April and May 2017. The loans were in maturity default at the time of acquisition and subsequently put on non-accrual in August 2017. No impairment had been recorded as the Company believed that the fair value of the property exceeded the carrying amount of the loans. The Company also reached an agreement to joint venture the asset with an Israeli-based institutional investor, subsequent to closing on the acquisition.

2. Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. Entities which we do not control through our voting interest and entities which are variable interest entities, but where we are not the primary beneficiary, are accounted for under the equity method. See Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures." All significant intercompany balances and transactions have been eliminated.

We consolidate a variable interest entity, or VIE, in which we are considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

Investment in Commercial Real Estate Properties

We allocate the purchase price of real estate to land and building (inclusive of tenant improvements) and, if determined to be material, intangibles, such as the value of above- and below-market leases and origination costs associated with the in-place leases. We depreciate the amount allocated to building (inclusive of tenant improvements) over their estimated useful lives, which generally range from three to 40 years. We amortize the amount allocated to the above- and below-market leases over the remaining term of the associated lease, which generally range from one to 14 years, and record it as either an increase (in the case of below-market leases) or a decrease (in the case of above-market leases) to rental income. We amortize the amount allocated to the values associated with in-place leases over the expected term of the associated lease, which generally ranges from one to 14 years. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off. The tenant improvements and origination costs are amortized as an expense over the remaining life of the lease (or charged against earnings if the lease is terminated prior to its contractual expiration date). We assess fair value of the leases based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property. To the extent acquired leases contain fixed rate renewal options that are below-market and determined to be material, we amortize such below-market lease value into rental income over the renewal period.

On a periodic basis, we assess whether there are any indications that the value of our real estate properties may be other than temporarily impaired or that their carrying value may not be recoverable. A property's value is considered impaired if management's estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the calculated fair value of the property. We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate assets held for sale are valued at the lower of their carrying value or fair value less costs to sell.

We recognized $2.4 million and $4.8 million of rental revenue for the three months ended March 31, 2018 and 2017 respectively, for the amortization of aggregate below-market leases in excess of above-market leases and a reduction in lease origination costs, resulting from the allocation of the purchase price of the applicable properties. For the three months ended March 31, 2018 and 2017, we recognized as a reduction to interest expense the amortization of above-market rate mortgages of $0.0 million and $0.7 million, respectively.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

The following summarizes our identified intangible assets (acquired above-market leases and in-place leases) and intangible liabilities (acquired below-market leases) as of March 31, 2018 and December 31, 2017 (in thousands):



	March 31, 2018			December 31, 2017
Identified intangible assets (included in other assets):
Gross amount	$	282,288		$	325,880
Accumulated amortization	(241,043		)	(277,038		)
Net⁽¹⁾	$	41,245		$	48,842
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	359,469		$	540,283
Accumulated amortization	(256,685		)	(402,583		)
Net⁽¹⁾	$	102,784		$	137,700


(1)	As of March 31, 2018 and December 31, 2017, $0.1 million and $13.9 million, respectively and $0.1 million and $4.1 million, respectively, of net intangible assets and net intangible liabilities, were reclassified to assets held for sale and liabilities related to assets held for sale.

Fair Value Measurements

See Note 16, "Fair Value Measurements."

Investment in Marketable Securities

At acquisition, we designate a debt security as held-to-maturity, available-for-sale, or trading. As of March 31, 2018, we did not have any debt securities designated as held-to-maturity or trading. We account for our available-for-sale debt securities at fair value pursuant to Accounting Standards Codification, or ASC, 820-10, with the net unrealized gains or losses reported as a component of accumulated other comprehensive income or loss. Any unrealized losses that are determined to be other-than-temporary are recognized in earnings up to their credit component.

The Company adopted ASU 2016-01 effective January 1, 2018 which required entities to measure investments in equity securities at fair value and recognize any changes in fair value in net income. Upon adoption we did not hold investments in equity securities and therefore did not record a cumulative-effect adjustment. We did not hold investments in equity securities as of March 31, 2018.

The cost of bonds and marketable securities sold is determined using the specific identification method.

At March 31, 2018 and December 31, 2017, we held the following marketable securities (in thousands):



	March 31, 2018		December 31, 2017
Commercial mortgage-backed securities	$	28,252	$	28,579
Total marketable securities available-for-sale	$	28,252	$	28,579

The cost basis of the commercial mortgage-backed securities was $27.5 million at both March 31, 2018 and December 31, 2017. These securities mature at various times through 2035. We held no equity marketable securities as of March 31, 2018 and December 31, 2017.

During the three months ended March 31, 2018, we did not dispose of any marketable securities. During the three months ended March 31, 2017, we disposed of marketable securities for aggregate net proceeds of $54.4 million and realized a gain of $3.3 million, which is included in gain on sale of investment in marketable securities on the consolidated statements of operations.

Investments in Unconsolidated Joint Ventures

We assess our investments in unconsolidated joint ventures for recoverability and if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on the joint ventures' projected discounted cash flows. We do not believe that the values of any of our equity investments were impaired at March 31, 2018.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Reserve for Possible Credit Losses

The reserve for possible credit losses in connection with debt and preferred equity investments is the charge to earnings to increase the allowance for possible credit losses to the level that we estimate to be adequate, based on Level 3 data, considering delinquencies, loss experience and collateral quality. Other factors considered include geographic trends, product diversification, the size of the portfolio and current economic conditions. Based upon these factors, we establish a provision for possible credit loss on each individual investment. When it is probable that we will be unable to collect all amounts contractually due, the investment is considered impaired.

Where impairment is indicated on an investment that is held to maturity, a valuation allowance is measured based upon the excess of the recorded investment amount over the fair value of the collateral. Any deficiency between the carrying amount of an asset and the calculated value of the collateral is charged to expense. We continue to assess or adjust our estimates based on circumstances of a loan and the underlying collateral. If additional information reflects increased recovery of our investment, we will adjust our reserves accordingly. There were no loan reserves recorded during the three months ended March 31, 2018 and 2017.

Debt and preferred equity investments held for sale are carried at the lower of cost or fair market value using available market information obtained through consultation with dealers or other originators of such investments as well as discounted cash flow models based on Level 3 data pursuant to ASC 820-10. As circumstances change, management may conclude not to sell an investment designated as held for sale. In such situations, the investment will be reclassified at its net carrying value to debt and preferred equity investments held to maturity. For these reclassified investments, the difference between the current carrying value and the expected cash to be collected at maturity will be accreted into income over the remaining term of the investment.

Income Taxes

SL Green is taxed as a REIT under Section 856(c) of the Code. As a REIT, SL Green generally is not subject to Federal income tax. To maintain its qualification as a REIT, SL Green must distribute at least 90% of its REIT taxable income to its stockholders and meet certain other requirements. If SL Green fails to qualify as a REIT in any taxable year, SL Green will be subject to Federal income tax on its taxable income at regular corporate rates. SL Green may also be subject to certain state, local and franchise taxes. Under certain circumstances, Federal income and excise taxes may be due on its undistributed taxable income.

The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the partners for inclusion in their respective income tax returns. The only provision for income taxes included in the consolidated statements of operations relates to the Operating Partnership’s consolidated taxable REIT subsidiaries. The Operating Partnership may also be subject to certain state, local and franchise taxes.

Pursuant to amendments to the Code that became effective January 1, 2001, we have elected, and may elect in the future, to treat certain of our existing or newly created corporate subsidiaries as taxable REIT subsidiaries, or TRSs. In general, TRSs may perform non-customary services for the tenants of the Company, hold assets that we cannot hold directly and generally may engage in any real estate or non-real estate related business. The TRSs generate income, resulting in Federal and state income tax liability for these entities.

During the three months ended March 31, 2018, we recorded Federal, state and local tax provisions of $0.5 million.

We follow a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that is more-likely-than-not to be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited.

On December 22, 2017, the Tax Cuts and Jobs Act (the ‘‘Tax Act’’) was signed into law and makes substantial changes to the Code. Many of the provisions of the Tax Act will require guidance through the issuance of Treasury regulations in order to assess their effect. The Tax Act has not had a material impact on our financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments, debt and preferred equity investments and accounts receivable. We place our cash investments with high quality financial institutions. The collateral securing our debt and preferred equity investments is located in the New York metropolitan area. See Note 5, "Debt and Preferred Equity Investments."

We perform ongoing credit evaluations of our tenants and require most tenants to provide security deposits or letters of credit. Though these security deposits and letters of credit are insufficient to meet the total value of a tenant's lease obligation, they are a measure of good faith and a source of funds to offset the economic costs associated with lost revenue and the costs associated with re-tenanting a space. The properties in our real estate portfolio are located in the New York metropolitan area. The tenants located in our buildings operate in various industries. Other than one tenant, Credit Suisse Securities (USA), Inc., who accounts for 8.2% of our share of annualized cash rent, no other tenant in our portfolio accounted for more than 5.0% of our share of annualized cash rent, including our share of joint venture annualized rent, at March 31, 2018. For the three months ended March 31, 2018, 7.3%, 7.3%, 6.3%, 5.8% and 5.7% of our annualized cash rent was attributable to 11 Madison Avenue, 1185 Avenue of the Americas, 420 Lexington Avenue, 1515 Broadway, and One Madison Avenue respectively. Annualized cash rent for all other consolidated properties was below 5.0%.

Reclassification

Certain prior year balances have been reclassified to conform to our current year presentation.

Accounting Standards Updates

In February 2018, the FASB issued Accounting Standard Update (ASU) No. 2018-03, Technical Corrections and Improvements to Financial Instruments- Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. These amendments provide additional guidance related to equity securities without a readily determinable fair value, forward contracts and options purchased on those equity securities and fair value option liabilities. The guidance will be effective for the Company in the interim period beginning after June 15, 2018. The Company has not yet adopted this new guidance and does not expect it to have a material impact on the Company’s consolidated financial statements when the new standard is implemented.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The amendments in the new standard will permit more flexibility in hedging interest rate risk for both variable rate and fixed rate financial instruments. The standard will also enhance the presentation of hedge results in the financial statements. The guidance is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company has not yet adopted the guidance, and does not expect a material impact on the Company’s consolidated financial statements when the new standard is implemented.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting. The guidance clarifies the changes to the terms or conditions of a share-based payment award that require an entity to apply modification accounting in Topic 718. The Company adopted the guidance on January 1, 2018 and it had no impact on the Company's consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. As a result, entities will no longer present transfers between these items on the statement of cash flows. The Company adopted the guidance on January 1, 2018 and has included the changes in restricted cash when reconciling the beginning-of-period and end-of-period total amounts on the statement of cash flows.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current ‘incurred loss’ model with an ‘expected loss’ approach. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted after December 15, 2018. The Company has not yet adopted this new guidance and is currently evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The guidance requires lessees to recognize lease assets and lease liabilities for those leases classified as operating leases under the previous standard. Depending on the lease classification, lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

leases. The accounting applied by a lessor is largely unchanged from that applied under the previous standard. However, the presentation and disclosure in the financial statements of non-lease components such as charges to tenants for a building’s operating expenses has been updated. In January 2018, the FASB issued an exposure draft, Leases (Topic 842) Targeted Improvements, which would provide lessors with a practical expedient to not separate non-lease components from the related lease component under certain conditions. At the March 2018 Board meeting, the Board approved an amendment to the practical expedient. We anticipate the majority of our leases would qualify for the amended practical expedient. We expect this amended guidance to be finalized in 2018 and, as a result, we would adopt the practical expedient. Another impact is the measurement and presentation of ground leases under which the Company is lessee. The Company is required to record a liability for the obligation to make payments under the lease and an asset for the right to use the underlying asset during the lease term and will also apply the new expense recognition requirements given the lease classification. The Company is currently quantifying these impacts. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The Company expects to adopt this guidance January 1, 2019 and will apply the modified retrospective approach.

In January 2016, the FASB issued ASU 2016-01 (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value through earnings, to record changes in instrument-specific credit risk for financial liabilities measured under the fair value option in other comprehensive income, use the exit price notion when measuring an instrument’s fair value for disclosure and to separately present financial assets and liabilities by measurement category and form of instrument on the balance sheet or in the notes to the financial statements. The Company adopted the guidance effective January 1, 2018, and it had no impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued a new comprehensive revenue recognition guidance which requires us to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services (ASU 2014-09). The FASB also issued implementation guidance in March 2016, April 2016 and May 2016 - ASU’s 2016-08, 2016-10 and 2016-12, respectively. The Company adopted this guidance on January 1, 2018. Since the Company’s revenue is related to leasing activities, the adoption of this guidance did not have a material impact on the consolidated financial statements. The new guidance is applicable to service contracts with joint ventures for which the Company earns property management fees, leasing commissions and development and construction fees. The adoption of this new guidance did not change the accounting for these fees as the pattern of recognition of revenue does not change with the new guidance. We will continue to recognize revenue over time on these contracts because the customer simultaneously receives and consumes the benefits provided by our performance.

In February 2017, the FASB issued ASU No. 2017-05 to clarify the scope of asset derecognition guidance in Subtopic 610-20, which also provided guidance on accounting for partial sales of nonfinancial assets. Subtopic 610-20 was issued in May 2014 as part of ASU 2014-09. The Company adopted this guidance on January 1, 2018, and applied the modified retrospective approach. The Company elected to adopt the practical expedient under ASC 606, Revenue from Contracts with Customers, which allows an entity to apply the guidance only to contracts with non-customers that are open based on ASU 360-20, Real Estate Sales, (i.e. failed sales) as of the adoption date. The Company had one open contract in 2017 with a non-customer that was evaluated under ASC 610-20. The Company entered into an agreement to sell a portion of their interest in an entity that held a controlling interest in the property at 1515 Broadway. Upon execution of the agreement in 2017, the transaction was evaluated under ASC 360-20, Real Estate Sales, and did not meet the criteria for sale accounting. Upon adoption of ASC 606, this contract met the criteria for sale accounting under ASC 610-20. Through the sale, the Company no longer retains a controlling interest, as defined in ASC 810, Consolidation, and the impact of this adjustment is a gain of $0.6 billion from the sale of the partial interest and related step-up in basis to fair value of the non-controlling interest retained. This was recorded in the first quarter of 2018 as an adjustment to beginning retained earnings.

3. Property Acquisitions

During the three months ended March 31, 2018, we did not acquire any properties from a third party.

4. Properties Held for Sale and Property Dispositions

Properties Held for Sale

During the three months ended March 31, 2018, we entered into agreements to sell the properties at 1-6 International Drive in Rye Brook, NY for a sale price of $55.0 million and the properties at 115-117 Stevens Avenue in Valhalla, New York, for a sales price of $12.0 million. We closed on the sale of 115-117 Stevens Avenue in May 2018.

As of March 31, 2018, 1-6 International Drive and 115-117 Stevens Avenue were classified as held for sale.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

In May 2018, we reached an agreement to sell the fee interest at 635 Madison Avenue for a sales price of $151 million. We expect to record a $14 million charge in connection with the sale, which will be included in depreciable real estate reserves. The transaction, subject to certain closing conditions, is expected to be completed during the third quarter of 2018.

Property Dispositions

The following table summarizes the properties sold during the three months ended March 31, 2018:

Property

Disposition Date

Property Type

Approximate Square Feet

Sales Price⁽¹⁾

(in millions)

Gain

(in millions)

600 Lexington Avenue⁽²⁾

January 2018

Fee Interest

303,515

305.0

23.8


(1)	Sales price represents the gross sales price for a property or the gross asset valuation for interests in a property.


(2)	Gain on sale amounts do not include adjustments for expenses recorded in subsequent periods.

5. Debt and Preferred Equity Investments

Below is the rollforward analysis of the activity relating to our debt and preferred equity investments for the three months ended March 31, 2018 and the twelve months ended December 31, 2017 (in thousands):



	March 31, 2018			December 31, 2017
Balance at beginning of period ⁽¹⁾	$	2,114,041		$	1,640,412
Debt investment originations/accretion ⁽²⁾	233,370			1,142,591
Preferred equity investment originations/accretion ⁽²⁾	2,074			144,456
Redemptions/sales/syndications/amortization ⁽³⁾	(263,614		)	(813,418		)
Balance at end of period ⁽¹⁾	$	2,085,871		$	2,114,041


(1)	Net of unamortized fees, discounts, and premiums.


(2)	Accretion includes amortization of fees and discounts and paid-in-kind investment income.


(3)	Certain participations in debt investments that were sold or syndicated did not meet the conditions for sale accounting are included in other assets and other liabilities on the consolidated balance sheets.

Debt Investments

As of March 31, 2018 and December 31, 2017, we held the following debt investments with an aggregate weighted average current yield of 9.19%, excluding our investment in Two Herald Square, at March 31, 2018 (in thousands):



Loan Type	March 31, 2018 Future Funding Obligations		March 31, 2018 Senior Financing		March 31, 2018 Carrying Value ⁽¹⁾		December 31, 2017 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Fixed Rate Investments:
Mortgage/Jr. Mortgage Loan⁽³⁾	$	—	$	—	$	250,464	$	250,464	April 2017
Mortgage Loan⁽⁴⁾	—		—		26,380		26,366		February 2019
Mortgage Loan	—		—		201		239		August 2019
Mezzanine Loan^(5a)	—		1,160,000		206,230		204,005		March 2020
Mezzanine Loan	—		15,000		3,500		3,500		September 2021
Mezzanine Loan	—		147,000		24,918		24,913		April 2022
Mezzanine Loan	—		280,000		35,074		34,600		August 2022
Mezzanine Loan	—		86,580		12,701		12,699		November 2023
Mezzanine Loan^(5b)	—		115,000		12,934		12,932		June 2024
Mezzanine Loan	—		95,000		30,000		30,000		January 2025
Mezzanine Loan	—		340,000		15,000		15,000		November 2026
Mezzanine Loan	—		1,657,500		55,250		55,250		June 2027
Total fixed rate	$	—	$	3,896,080	$	672,652	$	669,968
Floating Rate Investments:
Mezzanine Loan⁽⁶⁾	—		40,000		19,999		19,982		April 2018

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)



Loan Type	March 31, 2018 Future Funding Obligations		March 31, 2018 Senior Financing		March 31, 2018 Carrying Value ⁽¹⁾		December 31, 2017 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Mezzanine Loan⁽⁶⁾	—		75,014		23,346		34,947		April 2018
Mezzanine Loan	523		20,523		10,952		10,934		August 2018
Mortgage/Mezzanine Loan	—		—		19,965		19,940		August 2018
Mezzanine Loan	—		65,000		14,973		14,955		August 2018
Mortgage/Mezzanine Loan	—		—		16,980		16,969		September 2018
Mezzanine Loan	—		37,500		14,908		14,855		September 2018
Mortgage/Mezzanine Loan	391		—		23,609		23,609		October 2018
Mezzanine Loan	2,325		45,025		34,975		34,879		October 2018
Mezzanine Loan^(5c)	—		85,000		15,327		15,381		December 2018
Mezzanine Loan^(5d)	—		65,000		14,816		14,869		December 2018
Mezzanine Loan	—		33,000		26,947		26,927		December 2018
Mezzanine Loan	—		175,000		59,797		59,723		December 2018
Mezzanine Loan	—		45,000		12,192		12,174		January 2019
Mezzanine Loan	4,493		27,852		9,457		8,550		January 2019
Mezzanine Loan^(5e)(7)	795		—		15,150		15,148		March 2019
Mezzanine Loan	—		38,000		21,951		21,939		March 2019
Mezzanine Loan	—		175,000		37,307		37,250		April 2019
Mezzanine Loan	—		265,000		24,862		24,830		April 2019
Mortgage/Jr. Mortgage Participation Loan	24,587		208,094		74,944		71,832		August 2019
Mezzanine Loan	2,034		189,829		37,867		37,851		September 2019
Mortgage/Mezzanine Loan	22,570		—		146,517		143,919		September 2019
Mezzanine Loan	—		350,000		34,773		34,737		October 2019
Mortgage/Mezzanine Loan	1,792		—		66,026		—		December 2019
Mortgage/Mezzanine Loan	21,303		—		48,245		43,845		January 2020
Mezzanine Loan	1,592		568,461		77,927		75,834		January 2020
Mortgage Loan	16,038		—		83,465		—		February 2020
Mezzanine Loan	5,993		294,036		48,490		—		March 2020
Mezzanine Loan	6,654		35,112		11,539		11,259		July 2020
Mezzanine Loan	47,557		326,552		79,477		75,428		November 2020
Mortgage and Mezzanine Loan	40,798		—		90,789		88,989		December 2020
Mortgage and Mezzanine Loan	—		—		35,179		35,152		December 2020
Jr. Mortgage Participation/Mezzanine Loan	—		60,000		15,642		15,635		July 2021
Mortgage/Mezzanine Loan⁽⁸⁾	—		—		—		162,553		—
Mezzanine Loan⁽⁸⁾	—		—		—		74,755		—
Total floating rate	$	199,445	$	3,223,998	$	1,268,393	$	1,299,650
Total	$	199,445	$	7,120,078	$	1,941,045	$	1,969,618


(1)	Carrying value is net of discounts, premiums, original issue discounts and deferred origination fees.


(2)	Represents contractual maturity, excluding any unexercised extension options.

(3)

These loans were purchased at par in April and May 2017 and were in maturity default at the time of acquisition. At the time the loans were purchased, the Company expected to collect all contractually required payments, including interest. In August 2017, the Company determined that it was probable that the loans would not be repaid in full and therefore, the loans were put on non-accrual status. No impairment was recorded as the Company believes that the fair value of the property exceeds the carrying amount of the loans. As of March 31, 2018, the loans had an outstanding principal balance of $250.5 million and an accrued interest balance of $7.7 million.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)


(4)	In September 2014, we acquired a $26.4 million mortgage loan at a $0.2 million discount and a $5.7 million junior mortgage participation at a $5.7 million discount. The junior mortgage participation was a nonperforming loan at acquisition, is currently on non-accrual status and has no carrying value.


(5)	Carrying value is net of the following amounts that were sold or syndicated, which are included in other assets and other liabilities on the consolidated balance sheets as a result of the transfers not meeting the conditions for sale accounting: (a) $1.3 million, (b) $12.0 million, (c) $14.6 million, (d) $14.1 million, and (e) $5.1 million.


(6)	This loan was extended in April 2018.


(7)	This loan was extended in March 2018.


(8)	This loan was repaid in February 2018.

Preferred Equity Investments

As of March 31, 2018 and December 31, 2017, we held the following preferred equity investments with an aggregate weighted average current yield of 6.97% at March 31, 2018 (in thousands):



Type	March 31, 2018 Future Funding Obligations		March 31, 2018 Senior Financing		March 31, 2018 Carrying Value ⁽¹⁾		December 31, 2017 Carrying Value ⁽¹⁾		Maturity Date ⁽²⁾
Preferred Equity	$	—	$	272,000	$	144,826	$	144,423	April 2021
Total	$	—	$	272,000	$	144,826	$	144,423


(1)	Carrying value is net of deferred origination fees.


(2)	Represents contractual maturity, excluding any unexercised extension options.

At March 31, 2018 and December 31, 2017, all debt and preferred equity investments were performing in accordance with the terms of the relevant investments, with the exception of a mortgage and junior mortgage participation that were purchased in maturity default in May 2017 and April 2017, respectively, as discussed in subnote 3 of the Debt Investments table above and a junior mortgage participation acquired in September 2014, which was acquired for zero and has a carrying value of zero, as discussed in subnote 4 of the Debt Investments table above.

We have determined that we have one portfolio segment of financing receivables at March 31, 2018 and 2017 comprising commercial real estate which is primarily recorded in debt and preferred equity investments. Included in other assets is an additional amount of financing receivables totaling $88.0 million and $65.5 million at March 31, 2018 and December 31, 2017, respectively. No financing receivables were 90 days past due at March 31, 2018, with the exception of a mortgage and junior mortgage participation purchased in maturity default in May 2017 and April 2017, respectively, as discussed in subnote 3 of the Debt Investments table above.

6. Investments in Unconsolidated Joint Ventures

We have investments in several real estate joint ventures with various partners. As of March 31, 2018 and December 31, 2017, 800 Third Avenue, 21 East 66th Street, 605 West 42^nd Street, 333 East 22nd Street, One Vanderbilt, and certain properties within the Stonehenge Portfolio are VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $631.4 million and $606.2 million as of March 31, 2018 and December 31, 2017, respectively. Our maximum loss is limited to the amount of our equity investment in these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies". All other investments below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity method of accounting.

The table below provides general information on each of our joint ventures as of March 31, 2018:

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)



Property	Partner	Ownership Interest⁽¹⁾	Economic Interest⁽¹⁾	Unaudited Approximate Square Feet	Acquisition Date⁽²⁾	Acquisition Price⁽²⁾(in thousands)
100 Park Avenue	Prudential Real Estate Investors	49.90%	49.90%	834,000	February 2000	$	95,800
717 Fifth Avenue	Jeff Sutton/Private Investor	10.92%	10.92%	119,500	September 2006	251,900
800 Third Avenue	Private Investors	60.52%	60.52%	526,000	December 2006	285,000
919 Third Avenue⁽³⁾	New York State Teacher's Retirement System	51.00%	51.00%	1,454,000	January 2007	1,256,727
1745 Broadway⁽⁴⁾	Ivanhoe Cambridge, Inc.	56.87%	56.87%	674,000	April 2007	520,000
Jericho Plaza⁽⁵⁾	Onyx Equities/Credit Suisse	11.67%	11.67%	640,000	April 2007	210,000
11 West 34th Street	Private Investor/ Jeff Sutton	30.00%	30.00%	17,150	December 2010	10,800
3 Columbus Circle⁽⁶⁾	The Moinian Group	48.90%	48.90%	741,500	January 2011	500,000
280 Park Avenue	Vornado Realty Trust	50.00%	50.00%	1,219,158	March 2011	400,000
1552-1560 Broadway⁽⁷⁾	Jeff Sutton	50.00%	50.00%	57,718	August 2011	136,550
724 Fifth Avenue	Jeff Sutton	50.00%	50.00%	65,010	January 2012	223,000
10 East 53rd Street	Canadian Pension Plan Investment Board	55.00%	55.00%	354,300	February 2012	252,500
521 Fifth Avenue	Plaza Global Real Estate Partners LP	50.50%	50.50%	460,000	November 2012	315,000
21 East 66th Street⁽⁸⁾	Private Investors	32.28%	32.28%	13,069	December 2012	75,000
650 Fifth Avenue⁽⁹⁾	Jeff Sutton	50.00%	50.00%	69,214	November 2013	—
121 Greene Street	Jeff Sutton	50.00%	50.00%	7,131	September 2014	27,400
175-225 Third Street Brooklyn, New York⁽¹⁰⁾	KCLW 3rd Street LLC/LIVWRK LLC	95.00%	95.00%	—	October 2014	74,600
55 West 46th Street	Prudential Real Estate Investors	25.00%	25.00%	347,000	November 2014	295,000
Stonehenge Portfolio⁽¹¹⁾	Various	Various	Various	1,439,016	February 2015	36,668
131-137 Spring Street	Invesco Real Estate	20.00%	20.00%	68,342	August 2015	277,750
605 West 42nd Street	The Moinian Group	20.00%	20.00%	927,358	April 2016	759,000
11 Madison Avenue	PGIM Real Estate	60.00%	60.00%	2,314,000	August 2016	2,605,000
333 East 22nd Street	Private Investors	33.33%	33.33%	26,926	August 2016	—
400 E 57th Street⁽¹²⁾	BlackRock, Inc and Stonehenge Partners	51.00%	41.00%	290,482	October 2016	170,000
One Vanderbilt⁽¹³⁾	National Pension Service of Korea/Hines Interest LP	71.01%	71.01%	—	January 2017	3,310,000
Mezzanine Loan⁽¹⁴⁾	Private Investors	33.33%	33.33%	—	May 2017	15,000
Worldwide Plaza	RXR Realty / New York REIT / Private Investor	24.35%	24.35%	2,048,725	October 2017	1,725,000
1515 Broadway⁽¹⁵⁾	Allianz Real Estate of America	56.87%	56.87%	1,750,000	November 2017	1,950,000


(1)	Ownership interest and economic interest represent the Company's interests in the joint venture as of March 31, 2018. Changes in ownership or economic interests within the current year are disclosed in the notes below.


(2)	Acquisition date and price represent the date on which the Company initially acquired an interest in the joint venture and the actual or implied gross purchase price for the joint venture on that date. Acquisition date and price are not adjusted for subsequent acquisitions or dispositions of interest.

(3)

In January 2018, the partnership agreement for our investment was modified resulting in the Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January 1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the consolidated statement of operations. This fair value was allocated to the assets and liabilities, including identified intangibles of the property.


(4)	In April 2018, the Company entered into an agreement to sell its interest in 1745 Broadway. The transaction is expected to close in the second quarter of 2018.


(5)	In April 2018, the Company entered into an agreement to sell its interest in Jericho Plaza. The transaction is expected to close in the second quarter of 2018.


(6)	As a result of the sale of a condominium interest in September 2012, Young & Rubicam, Inc., or Y&R, owns floors three through eight at the property. Because the joint venture has an option to repurchase these floors, the gain associated with this sale was deferred.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)


(7)	The purchase price represents only the purchase of the 1552 Broadway interest which comprised approximately 13,045 square feet. The joint venture also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.


(8)	We hold a 32.28% interest in three retail and two residential units at the property and a 16.14% interest in three residential units at the property.

(9)

The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue. In connection with the ground lease obligation, SLG provided a performance guaranty and our joint venture partner executed a contribution agreement to reflect its pro rata obligation. In the event the property is converted into a condominium unit and the landlord elects the purchase option, the joint venture shall be obligated to acquire the unit at the then fair value.


(10)	In April 2018, the Company, together with its joint venture partners, closed on the sale of this property.


(11)	In February and March 2018, the Company, together with its joint venture partner, closed on the sale of two properties from the Stonehenge Portfolio. These sales are further described under Sale of Joint Venture Interest of Properties below.

(12)

In October 2016, the Company sold a 49% interest in this property to an investment account managed by BlackRock, Inc. The Company's interest in the property was sold within a consolidated joint venture owned 90% by the Company and 10% by Stonehenge. The transaction resulted in the deconsolidation of the venture's remaining 51% interest in the property. The Company's joint venture with Stonehenge remains consolidated resulting in the combined 51% interest being shown within investments in unconsolidated joint ventures on the Company's balance sheet.


(13)	The partners have committed aggregate equity totaling no less than $525 million and their ownership interest in the joint venture is based on their capital contributions, up to an aggregate maximum of 29.0%. At March 31, 2018 the total of the two partners' ownership interests based on equity contributed was 6.84%.

(14)

In May 2017, the Company contributed a mezzanine loan secured by a commercial property in midtown Manhattan to a joint venture and retained a 33.33% interest in the venture. The carrying value is net of $10.0 million that was sold, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfers not meeting the conditions for sale accounting. The loan matures in November 2018.

(15)

In November 2017, the Company sold a 30% interest in 1515 Broadway to affiliates of Allianz Real Estate. The sale did not meet the criteria for sale accounting and as a result the property was accounted for under the profit sharing method at December 31, 2017. The Company achieved sale accounting upon adoption of ASC 610-20 in January 2018 and recorded a $0.6 billion gain from the sale of the partial interest and related step-up in basis to fair value of the retained non-controlling interest as an adjustment to beginning retained earnings based on the application of the modified retrospective adoption approach. The Company closed on the sale of an additional 13% interest in the property to Allianz in February 2018.

Acquisition, Development and Construction Arrangements

Based on the characteristics of the following arrangements, which are similar to those of an investment, combined with the expected residual profit of not greater than 50%, we have accounted for these debt and preferred equity investments under the equity method. As of March 31, 2018 and December 31, 2017, the carrying value for acquisition, development and construction arrangements were as follows (in thousands):



Loan Type	March 31, 2018		December 31, 2017		Maturity Date
Mezzanine Loan⁽¹⁾	$	44,751	$	44,823	February 2022
Mezzanine Loan⁽²⁾	27,628		26,716		July 2036
Mezzanine Loan and Preferred Equity⁽³⁾	—		100,000
	$	72,379	$	171,539


(1)	We have an option to convert our loan to an equity interest subject to certain conditions. We have determined that our option to convert the loan to equity is not a derivative financial instrument pursuant to GAAP.


(2)	The Company has the ability to convert this loan into an equity position starting in 2021 and the borrower is able to force this conversion in 2024.


(3)	The mezzanine loan was repaid and the preferred equity interest was redeemed in March 2018.

Sale of Joint Venture Interests or Properties

The following table summarizes the investments in unconsolidated joint ventures sold during the three months ended March 31, 2018:



Property	Ownership Interest	Disposition Date	Type of Sale	Gross Asset Valuation (in thousands)⁽¹⁾		Loss on Sale (in thousands)⁽²⁾
1274 Fifth Avenue⁽³⁾	9.83%	February 2018	Property	$	44,100	$	(362	)
1515 Broadway⁽⁴⁾	13.00%	February 2018	Ownership Interest	1,950,000		—
Stonehenge Village⁽³⁾	5.00%	March 2018	Property	287,000		(5,701		)


(1)	Represents implied gross valuation for the joint venture or sales price of the property.


(2)	Represents the Company's share of the loss.


(3)	Property was part of the Stonehenge Portfolio.


(4)	Our investment in 1515 Broadway was marked to fair value on January 1, 2018 upon adoption of ASC 610-20.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Joint Venture Mortgages and Other Loans Payable

We generally finance our joint ventures with non-recourse debt. In certain cases we have provided guarantees or master leases for tenant space, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The first mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at March 31, 2018 and December 31, 2017, respectively, are as follows (amounts in thousands):



Property	Economic Interest ⁽¹⁾		Maturity Date	Interest Rate ⁽²⁾			March 31, 2018			December 31, 2017
Fixed Rate Debt:
521 Fifth Avenue	50.50	%	November 2019		3.73	%	$	170,000		$	170,000
717 Fifth Avenue ⁽³⁾	10.92	%	July 2022		4.45	%	300,000			300,000
717 Fifth Avenue ⁽³⁾	10.92	%	July 2022		5.50	%	355,328			355,328
650 Fifth Avenue ⁽⁴⁾	50.00	%	October 2022		4.46	%	210,000			210,000
650 Fifth Avenue ⁽⁴⁾	50.00	%	October 2022		5.45	%	65,000			65,000
21 East 66th Street	32.28	%	April 2023		3.60	%	12,000			12,000
919 Third Avenue	51.00	%	June 2023		5.12	%	500,000			—
3 Columbus Circle	48.90	%	March 2025		3.61	%	350,000			350,000
1515 Broadway	56.87	%	March 2025		3.93	%	868,309			872,528
11 Madison Avenue	60.00	%	September 2025		3.84	%	1,400,000			1,400,000
800 Third Avenue	60.52	%	February 2026		3.37	%	177,000			177,000
400 East 57th Street	41.00	%	November 2026		3.00	%	100,000			100,000
Worldwide Plaza	24.35	%	November 2027		3.98	%	1,200,000			1,200,000
Stonehenge Portfolio ⁽⁵⁾	Various		Various		4.25	%	306,990			357,282
Total fixed rate debt							$	6,014,627		$	5,569,138
Floating Rate Debt:
175-225 Third Street ⁽⁶⁾	95.00	%	June 2018	Prime+	1.00	%	$	40,000		$	40,000
Jericho Plaza ⁽⁷⁾	11.67	%	March 2019	L+	4.15	%	81,922			81,099
724 Fifth Avenue ⁽⁸⁾	50.00	%	April 2019	L+	2.42	%	275,000			275,000
280 Park Avenue	50.00	%	September 2019	L+	1.73	%	1,200,000			1,200,000
121 Greene Street	50.00	%	November 2019	L+	1.50	%	15,000			15,000
1745 Broadway ⁽⁹⁾	56.87	%	January 2020	L+	1.85	%	345,000			345,000
10 East 53rd Street	55.00	%	February 2020	L+	2.25	%	170,000			170,000
131-137 Spring Street	20.00	%	August 2020	L+	1.55	%	141,000			141,000
1552 Broadway	50.00	%	October 2020	L+	2.65	%	195,000			195,000
55 West 46th Street ⁽¹⁰⁾	25.00	%	November 2020	L+	2.13	%	172,511			171,444
11 West 34th Street	30.00	%	January 2021	L+	1.45	%	23,000			23,000
100 Park Avenue	49.90	%	February 2021	L+	1.75	%	360,000			360,000
One Vanderbilt ⁽¹¹⁾	71.01	%	September 2021	L+	3.50	%	375,000			355,535
605 West 42nd Street	20.00	%	August 2027	L+	1.44	%	550,000			550,000
21 East 66th Street	32.28	%	June 2033	1 Year Treasury+	2.75	%	1,628			1,648
Stonehenge Portfolio	Various		January 2021	L+	1.40	%	38,000			55,340
Total floating rate debt							$	3,983,061		$	3,979,066
Total joint venture mortgages and other loans payable							$	9,997,688		$	9,548,204
Deferred financing costs, net							(120,809		)	(136,103		)
Total joint venture mortgages and other loans payable, net							$	9,876,879		$	9,412,101


(1)	Economic interest represents the Company's interests in the joint venture as of March 31, 2018. Changes in ownership or economic interests, if any, within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)


(2)	Interest rates as of March 31, 2018, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated interest rate spread over 30-day LIBOR, unless otherwise specified.


(3)	These loans are comprised of a $300.0 million fixed rate mortgage loan and $355.3 million mezzanine loan. The mezzanine loan is subject to accretion based on the difference between contractual interest rate and contractual pay rate.


(4)	These loans are comprised of a $210.0 million fixed rate mortgage loan and $65.0 million fixed rate mezzanine loan.


(5)	Amount is comprised of $136.4 million and $170.6 million in fixed-rate mortgages that mature in August 2019 and June 2024, respectively.


(6)	In April 2018, along with our joint venture partner, we closed on the sale of the property.


(7)	The property secures a two year $100.0 million loan, of which $81.9 million is currently outstanding. In March 2018, we exercised a 12-month extension option.


(8)	In April 2018, we exercised a 12-month extension option.


(9)	This loan has a committed amount of $375.0 million, of which $30.0 million was unfunded as of March 31, 2018.


(10)	This loan has a committed amount of $195.0 million, of which $22.5 million was unfunded as of March 31, 2018.


(11)	This loan is a $1.5 billion construction facility, which bears interest at 350 basis points over 30-day LIBOR, with reductions based on meeting certain conditions, and has an initial five-year term with two one-year extension options. Advances under the loan are subject to incurred costs, funded equity, loan to value thresholds, and entering into construction contracts.

We act as the operating partner and day-to-day manager for all our joint ventures, except for Worldwide Plaza, 800 Third Avenue, Jericho Plaza, 280 Park Avenue, 3 Columbus Circle, 21 East 66th Street, 175-225 Third Street, 605 West 42nd Street, 400 East 57th Street, and the Stonehenge Portfolio. We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $3.8 million and $5.4 million from these services, net of our ownership share of the joint ventures, for the three months ended March 31, 2018 and 2017, respectively. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.

The combined balance sheets for the unconsolidated joint ventures, at March 31, 2018 and December 31, 2017 are as follows (in thousands):



	March 31, 2018		December 31, 2017
Assets ⁽¹⁾
Commercial real estate property, net	$	14,652,483	$	12,822,133
Cash and restricted cash	452,648		494,909
Tenant and other receivables, related party receivables, and deferred rents receivable, net of allowance	359,396		349,944
Debt and preferred equity investments, net	103,379		202,539
Other assets	2,361,367		1,407,806
Total assets	$	17,929,273	$	15,277,331
Liabilities and equity ⁽¹⁾
Mortgages and other loans payable, net	$	9,876,879	$	9,412,101
Deferred revenue/gain	1,911,564		985,648
Other liabilities	493,369		411,053
Members' equity	5,647,461		4,468,529
Total liabilities and members' equity	$	17,929,273	$	15,277,331
Company's investments in unconsolidated joint ventures	$	3,034,596	$	2,362,989


(1)	The combined assets, liabilities and equity for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

The combined statements of operations for the unconsolidated joint ventures, for the three months ended March 31, 2018 and 2017, are as follows (in thousands):



	Three Months Ended March 31,
	2018			2017
Total revenues	$	320,941		$	216,521
Operating expenses	59,773			38,794
Ground rent	4,393			4,251
Real estate taxes	57,027			34,939
Interest expense, net of interest income	89,741			55,328
Amortization of deferred financing costs	5,116			6,505
Transaction related costs	—			89
Depreciation and amortization	105,080			71,164
Total expenses	321,130			211,070
Net (loss) income before gain on sale ⁽¹⁾	$	(189	)	$	5,451
Company's equity in net income from unconsolidated joint ventures ⁽¹⁾	$	4,036		$	6,614


(1)	The combined statements of operation and the Company's equity in net income for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.

7. Deferred Costs

Deferred costs at March 31, 2018 and December 31, 2017 consisted of the following (in thousands):



	March 31, 2018			December 31, 2017
Deferred leasing costs	$	415,824		$	443,341
Less: accumulated amortization	(220,267		)	(217,140		)
Deferred costs, net	$	195,557		$	226,201

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

8. Mortgages and Other Loans Payable

The first mortgages and other loans payable collateralized by the respective properties and assignment of leases or debt investments at March 31, 2018 and December 31, 2017, respectively, were as follows (amounts in thousands):



Property	Maturity Date	Interest Rate ⁽¹⁾			March 31, 2018			December 31, 2017
Fixed Rate Debt:
Unsecured Loan	June 2018		4.81	%	$	16,000		$	16,000
One Madison Avenue	May 2020		5.91	%	477,843			486,153
762 Madison Avenue	February 2022		5.00	%	771			771
100 Church Street	July 2022		4.68	%	216,240			217,273
420 Lexington Avenue	October 2024		3.99	%	300,000			300,000
400 East 58th Street ⁽²⁾	November 2026		3.00	%	40,000			40,000
Landmark Square	January 2027		4.90	%	100,000			100,000
485 Lexington Avenue	February 2027		4.25	%	450,000			450,000
1080 Amsterdam ⁽³⁾	February 2027		3.58	%	36,300			36,363
315 West 33rd Street	February 2027		4.17	%	250,000			250,000
Series J Preferred Units ⁽⁴⁾	April 2051		3.75	%	4,000			4,000
919 Third Avenue ⁽⁵⁾					—			500,000
Total fixed rate debt					$	1,891,154		$	2,400,560
Floating Rate Debt:
183, 187 Broadway & 5-7 Dey Street	May 2018	L+	2.70	%	$	58,000		$	58,000
2017 Master Repurchase Agreement	June 2018	L+	2.23	%	189,883			90,809
719 Seventh Avenue	February 2019	L+	3.05	%	42,143			41,622
220 East 42nd Street	October 2020	L+	1.60	%	275,000			275,000
Total floating rate debt					$	565,026		$	465,431
Total fixed rate and floating rate debt					$	2,456,180		$	2,865,991
Mortgages reclassed to liabilities related to assets held for sale					—			—
Total mortgages and other loans payable					$	2,456,180		$	2,865,991
Deferred financing costs, net of amortization					(22,186		)	(28,709		)
Total mortgages and other loans payable, net					$	2,433,994		$	2,837,282


(1)	Interest rate as of March 31, 2018, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated interest rate spread over 30-day LIBOR, unless otherwise specified.


(2)	The loan carries a fixed interest rate of 300 basis points for the first five years and is prepayable without penalty at the end of year five.


(3)	The loan is comprised of a $35.5 million mortgage loan and $0.9 million subordinate loan with a fixed interest rate of 350 basis points and 700 basis points, respectively, for the first five years and is prepayable without penalty at the end of year five.

(4)

In connection with the acquisition of a commercial real estate property, the Operating Partnership issued $4.0 million, 3.75% Series J Preferred Units of limited partnership interest, or the Series J Preferred Units, with a mandatory liquidation preference of $1,000 per unit. The Series J Preferred Units are accounted for as debt because they can be redeemed in cash by the Operating Partnership on the earlier of (i) the date of the sale of the property or (ii) April 30, 2051 or at the option of the unitholders as provided for in the related agreement.


(5)	Our investment in the property was deconsolidated as of January 1, 2018. See Note 6, "Investments in Unconsolidated Joint Ventures".

At March 31, 2018 and December 31, 2017, the gross book value of the properties and debt and preferred equity investments collateralizing the mortgages and other loans payable, not including assets held for sale, was approximately $3.5 billion and $4.8 billion, respectively.

Master Repurchase Agreements

The Company has entered into two Master Repurchase Agreements, or MRAs, known as the 2016 MRA and 2017 MRA, which provide us with the ability to sell certain debt investments with a simultaneous agreement to repurchase the same at a certain date or on demand. We seek to mitigate risks associated with our repurchase agreement by managing the credit quality of our assets, early repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facilities permit valuation adjustments based on capital markets activity, and are not limited to collateral-specific credit marks. To

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

monitor credit risk associated with our debt investments, our asset management team regularly reviews our investment portfolio and is in contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with potential margin calls is further mitigated by our ability to recollateralize the facility with additional assets from our portfolio of debt investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity through the 2017 credit facility, as defined below.

In June 2017, we entered into the 2017 MRA, with a maximum facility capacity of $300.0 million. In April 2018, we increased the maximum facility capacity to $400.0 million. The facility bears interest on a floating rate basis at a spread to 30-day LIBOR based on the pledged collateral and advance rate and has an initial one year term, with two one year extension options. At March 31, 2018, the facility had an outstanding balance of $189.5 million, net of deferred financing costs.

In July 2016, we entered into a restated 2016 MRA, with a maximum facility capacity of $300.0 million. The facility bears interest ranging from 225 and 400 basis points over 30-day LIBOR depending on the pledged collateral and has an initial two-year term, with a one year extension option. Since December 6, 2015, we have been required to pay monthly in arrears a 25 basis point fee on the excess of $150.0 million over the average daily balance during the period when the average daily balance is less than $150.0 million. At March 31, 2018, the facility had no outstanding balance and a carrying value of $(0.6) million, representing deferred financing costs presented within other liabilities.

9. Corporate Indebtedness

2017 Credit Facility

In November 2017, we entered into an amendment to the credit facility, referred to as the 2017 credit facility, that was originally entered into by the Company in November 2012, or the 2012 credit facility. As of March 31, 2018, the 2017 credit facility consisted of a $1.5 billion revolving credit facility, a $1.3 billion term loan (or "Term Loan A"), and a $200.0 million term loan (or "Term Loan B") with maturity dates of March 31, 2022, March 31, 2023, and November 21, 2024, respectively. The revolving credit facility has two six-month as-of-right extension options to March 31, 2023. We also have an option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions.

As of March 31, 2018, the 2017 credit facility bore interest at a spread over 30-day LIBOR ranging from (i) 82.5 basis points to 155 basis points for loans under the revolving credit facility, (ii) 90 basis points to 175 basis points for loans under Term Loan A, and (iii) 150 basis points to 245 basis points for loans under Term Loan B, in each case based on the credit rating assigned to the senior unsecured long term indebtedness of the Company.

At March 31, 2018, the applicable spread was 100 basis points for the revolving credit facility, 110 basis points for Term Loan A, and 165 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long term indebtedness of the Company. As of March 31, 2018, the facility fee was 20 basis points.

As of March 31, 2018, we had $11.8 million of outstanding letters of credit, zero drawn under the revolving credit facility and $1.5 billion outstanding under the term loan facilities, with total undrawn capacity of $1.5 billion under the 2017 credit facility. At March 31, 2018 and December 31, 2017, the revolving credit facility had a carrying value of $(9.2) million and $30.3 million, respectively, net of deferred financing costs. The March 31, 2018 carrying value represents deferred financing costs and is presented within other liabilities. At March 31, 2018 and December 31, 2017, the term loan facilities had a carrying value of $1.5 billion and $1.5 billion, respectively, net of deferred financing costs.

The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2017 credit facility. ROP is a guarantor under the 2017 credit facility.

The 2017 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Senior Unsecured Notes

The following table sets forth our senior unsecured notes and other related disclosures as of March 31, 2018 and December 31, 2017, respectively, by scheduled maturity date (amounts in thousands):



Issuance	March 31, 2018 Unpaid Principal Balance		March 31, 2018 Accreted Balance			December 31, 2017 Accreted Balance			Coupon Rate ⁽¹⁾		Initial Term (in Years)	Maturity Date
August 5, 2011 ⁽²⁾	$	250,000	$	249,972		$	249,953		5.00	%	7	August 2018
March 16, 2010 ⁽²⁾	250,000		250,000			250,000			7.75	%	10	March 2020
October 5, 2017 ⁽³⁾	500,000		499,514			499,489			3.25	%	5	October 2022
November 15, 2012 ⁽⁴⁾	300,000		304,920			305,163			4.50	%	10	December 2022
December 17, 2015 ⁽²⁾	100,000		100,000			100,000			4.27	%	10	December 2025
	$	1,400,000	$	1,404,406		$	1,404,605
Deferred financing costs, net			(8,086		)	(8,666		)
	$	1,400,000	$	1,396,320		$	1,395,939


(1)	Interest on the senior unsecured notes is payable semi-annually with principal and unpaid interest due on the scheduled maturity dates.


(2)	Issued by the Company, the Operating Partnership and ROP, as co-obligors.


(3)	Issued by the Operating Partnership with the Company and ROP as guarantors.


(4)	In October 2017, the Company, the Operating Partnership and ROP, as co-obligors, issued an additional $100.0 million of 4.50% senior unsecured notes due December 2022. The notes were priced at 105.334%.

Restrictive Covenants

The terms of the 2017 credit facility and certain of our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to continue to qualify as a REIT for Federal income tax purposes. As of March 31, 2018 and 2017, we were in compliance with all such covenants.

Junior Subordinated Deferrable Interest Debentures

In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly-owned subsidiary of the Operating Partnership. The securities mature in 2035 and bear interest at a floating rate of 125 basis points over the three-month LIBOR. Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance sheets and the related payments are classified as interest expense.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Principal Maturities

Combined aggregate principal maturities of mortgages and other loans payable, 2017 credit facility, trust preferred securities, senior unsecured notes and our share of joint venture debt as of March 31, 2018, including as-of-right extension options and put options, were as follows (in thousands):



	Scheduled Amortization		Principal		Revolving Credit Facility		Unsecured Term Loans		Trust Preferred Securities		Senior Unsecured Notes		Total		Joint Venture Debt
Remaining 2018	$	28,555	$	74,000	$	—	$	—	$	—	$	250,000	$	352,555	$	45,477
2019	42,271		42,143		—		—		—		—		84,414		262,460
2020	23,466		869,414		—		—		—		250,000		1,142,880		471,714
2021	11,638		—		—		—		—		—		11,638		454,571
2022	9,430		198,555		—		—		—		800,000		1,007,985		220,759
Thereafter	16,591		1,140,117		—		1,500,000		100,000		100,000		2,856,708		2,878,381
	$	131,951	$	2,324,229	$	—	$	1,500,000	$	100,000	$	1,400,000	$	5,456,180	$	4,333,362

Consolidated interest expense, excluding capitalized interest, was comprised of the following (in thousands):



	Three Months Ended March 31,
	2018			2017
Interest expense before capitalized interest	$	54,918		$	72,422
Interest capitalized	(6,686		)	(6,279		)
Interest income	(316		)	(521		)
Interest expense, net	$	47,916		$	65,622

10. Related Party Transactions

Cleaning/ Security/ Messenger and Restoration Services

Alliance Building Services, or Alliance, and its affiliates are partially owned by Gary Green, a son of Stephen L. Green, the chairman of our board of directors, and provide services to certain properties owned by us. Alliance’s affiliates include First Quality Maintenance, L.P., or First Quality, Classic Security LLC, Bright Star Couriers LLC and Onyx Restoration Works, and provide cleaning, extermination, security, messenger, and restoration services, respectively. In addition, First Quality has the non-exclusive opportunity to provide cleaning and related services to individual tenants at our properties on a basis separately negotiated with any tenant seeking such additional services. The Service Corporation has entered into an arrangement with Alliance whereby it will receive a profit participation above a certain threshold for services provided by Alliance to certain tenants at certain buildings above the base services specified in their lease agreements.

Income earned from the profit participation, which is included in other income on the consolidated statements of operations, was $1.0 million and $0.8 million for the three months ended March 31, 2018 and 2017, respectively.

We also recorded expenses, inclusive of capitalized expenses, of $4.0 million and $4.5 million for the three months ended March 31, 2018 and 2017, respectively, for these services (excluding services provided directly to tenants).

Management Fees

S.L. Green Management Corp., a consolidated entity, receives property management fees from an entity in which Stephen L. Green owns an interest. We received management fees from this entity of $0.1 million and $0.1 million for the three months ended March 31, 2018 and 2017, respectively.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

One Vanderbilt Investment

In December 2016, we entered into agreements with entities owned and controlled by Marc Holliday and Andrew Mathias, pursuant to which they agreed to make an investment in our One Vanderbilt project at the appraised fair market value for the interests acquired. This investment entitles these entities to receive approximately 1.50% - 1.80% and 1.00% - 1.20%, respectively, of any profits realized by the Company from its One Vanderbilt project in excess of the Company’s capital contributions. The entities have no right to any return of capital. Accordingly, subject to previously disclosed repurchase rights, these interests will have no value and will not entitle these entities to any amounts (other than limited distributions to cover tax liabilities incurred) unless and until the Company has received distributions from the One Vanderbilt project in excess of the Company’s aggregate investment in the project. In the event that the Company does not realize a profit on its investment in the project (or would not realize a profit based on the value at the time the interests are repurchased), the entities owned and controlled by Messrs. Holliday and Mathias will lose the entire amount of their investment. The entities owned and controlled by Messrs. Holliday and Mathias paid $1.4 million and $1.0 million, respectively, which equal the fair market value of the interests acquired as of the date the investment agreements were entered into as determined by an independent third party appraisal that we obtained.

Other

We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures as further described in Note 6, "Investments in Unconsolidated Joint Ventures." Amounts due from joint ventures and related parties at March 31, 2018 and December 31, 2017 consisted of the following (in thousands):



	March 31, 2018		December 31, 2017
Due from joint ventures	$	21,972	$	15,025
Other	9,333		8,014
Related party receivables	$	31,305	$	23,039

11. Noncontrolling Interests on the Company's Consolidated Financial Statements

Noncontrolling interests represent the common and preferred units of limited partnership interest in the Operating Partnership not held by the Company as well as third party equity interests in our other consolidated subsidiaries. Noncontrolling interests in the Operating Partnership are shown in the mezzanine equity while the noncontrolling interests in our other consolidated subsidiaries are shown in the equity section of the Company’s consolidated financial statements.

Common Units of Limited Partnership Interest in the Operating Partnership

As of March 31, 2018 and December 31, 2017, the noncontrolling interest unit holders owned 5.02%, or 4,715,338 units, and 4.58%, or 4,452,979 units, of the Operating Partnership, respectively. As of March 31, 2018, 4,715,338 shares of our common stock were reserved for issuance upon the redemption of units of limited partnership interest of the Operating Partnership.

Noncontrolling interests in the Operating Partnership is recorded at the greater of its cost basis or fair market value based on the closing stock price of our common stock at the end of the reporting period.

Below is the rollforward analysis of the activity relating to the noncontrolling interests in the Operating Partnership for the three months ended March 31, 2018 and the twelve months ended December 31, 2017 (in thousands):



	March 31, 2018			December 31, 2017
Balance at beginning of period	$	461,954		$	473,882
Distributions	(3,841		)	(14,266		)
Issuance of common units	15,448			25,723
Redemption of common units	—			(21,574		)
Net income	5,272			3,995
Accumulated other comprehensive income allocation	619			(94		)
Fair value adjustment	(3,645		)	(5,712		)
Balance at end of period	$	475,807		$	461,954

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Preferred Units of Limited Partnership Interest in the Operating Partnership

The Operating Partnership has 1,902,000 4.50% Series G Preferred Units of limited partnership interest, or the Series G Preferred Units outstanding, with a liquidation preference of $25.00 per unit, which were issued in January 2012 in conjunction with an acquisition. The Series G Preferred unitholders receive annual dividends of $1.125 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series G Preferred Units are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $88.50. The common units of limited partnership interest in the Operating Partnership may be redeemed in exchange for our common stock on a 1-to-1 basis. The Series G Preferred Units also provide the holder with the right to require the Operating Partnership to repurchase the Series G Preferred Units for cash before January 31, 2022.

The Operating Partnership has 60 Series F Preferred Units outstanding with a mandatory liquidation preference of $1,000.00 per unit.

The Operating Partnership has authorized up to 700,000 3.50% Series K Preferred Units of limited partnership interest, or the Series K Preferred Units, with a liquidation preference of $25.00 per unit. In August 2014, the Company issued 563,954 Series K Preferred Units in conjunction with an acquisition. The Series K Preferred unitholders receive annual dividends of $0.875 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series K Preferred Units can be redeemed at any time, at the option of the unitholder, either for cash or are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $134.67.

The Operating Partnership has authorized up to 500,000 4.00% Series L Preferred Units of limited partnership interest, or the Series L Preferred Units, with a liquidation preference of $25.00 per unit. In August 2014, the Company issued 378,634 Series L Preferred Units in conjunction with an acquisition. The Series L Preferred unitholders receive annual dividends of $1.00 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series L Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.

The Operating Partnership has authorized up to 1,600,000 3.75% Series M Preferred Units of limited partnership interest, or the Series M Preferred Units, with a liquidation preference of $25.00 per unit. In February 2015, the Company issued 1,600,000 Series M Preferred Units in conjunction with the acquisition of ownership interests in and relating to certain residential and retail real estate properties. The Series M Preferred unitholders receive annual dividends of $0.9375 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series M Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.

The Operating Partnership has authorized up to 552,303 3.00% Series N Preferred Units of limited partnership interest, or the Series N Preferred Units, with a liquidation preference of $25.00 per unit. In June 2015, the Company issued 552,303 Series N Preferred Units in conjunction with an acquisition. The Series N Preferred unitholders receive annual dividends of $0.75 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series N Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.

The Operating Partnership has authorized an aggregate of one 6.25% Series O Preferred Unit of limited partnership interest, or the Series O Preferred Unit. In June 2015, the Company issued the Series O Preferred Unit in connection with an acquisition.

The Operating Partnership has authorized up to 200,000 4.00% Series P Preferred Units of limited partnership interest, or the Series P Preferred Units, with a liquidation preference of $25.00 per unit. In July 2015, the Company issued 200,000 Series P Preferred Units in conjunction with an acquisition. The Series P Preferred unitholders receive annual dividends of $1.00 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series P Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.

The Operating Partnership has authorized up to 268,000 3.50% Series Q Preferred Units of limited partnership interest, or the Series Q Preferred Units, with a liquidation preference of $25.00 per unit. In July 2015, the Company issued 268,000 Series Q Preferred Units in conjunction with an acquisition. The Series Q Preferred unitholders receive annual dividends of $0.875 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series Q Preferred Units can be redeemed at any time, at the option of the unitholder, either for cash or are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $148.95.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

The Operating Partnership has authorized up to 400,000 3.50% Series R Preferred Units of limited partnership interest, or the Series R Preferred Units, with a liquidation preference of $25.00 per unit. In August 2015, the Company issued 400,000 Series R Preferred Units in conjunction with an acquisition. The Series R Preferred unitholders receive annual dividends of $0.875 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series R Preferred Units can be redeemed at any time, at the option of the unitholder, either for cash or are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $154.89.

The Operating Partnership has authorized up to 1,077,280 4.00% Series S Preferred Units of limited partnership interest, or the Series S Preferred Units, with a liquidation preference of $25.00 per unit. In August 2015, the Company issued 1,077,280 Series S Preferred Units in conjunction with an acquisition. The Series S Preferred unitholders receive annual dividends of $1.00 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series S Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.

The Operating Partnership has authorized up to 230,000 2.75% Series T Preferred Units of limited partnership interest, or the Series T Preferred Units, with a liquidation preference of $25.00 per unit. In March 2016, the Company issued 230,000 Series T Preferred Units in conjunction with an acquisition. The Series T Preferred unitholders receive annual dividends of $0.6875 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Series T Preferred Units can be redeemed at any time at par, at the option of the unitholder, either for cash or are convertible into a number of common units of limited partnership interest in the Operating Partnership equal to (i) the liquidation preference plus accumulated and unpaid distributions on the conversion date divided by (ii) $119.02.

The Operating Partnership has authorized up to 680,000 4.50% Series U Preferred Units of limited partnership interest, or the Series U Preferred Units, with a liquidation preference of $25.00 per unit. In March 2016, the Company issued 680,000 Series U Preferred Units in conjunction with an acquisition. The Series U Preferred unitholders initially receive annual dividends of $1.125 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The annual dividend is subject to reduction upon the occurrence of certain circumstances set forth in the terms of the Series U Preferred Units. The minimum annual dividend is $0.75 per unit. The Series U Preferred Units can be redeemed at any time at par for cash at the option of the unitholder.

Through a consolidated subsidiary, we have authorized up to 109,161 3.50% Series A Preferred Units of limited partnership interest, or the Subsidiary Series A Preferred Units, with a liquidation preference of $1,000.00 per unit. In August 2015, the Company issued 109,161 Subsidiary Series A Preferred Units in conjunction with an acquisition. The Subsidiary Series A Preferred unitholders receive annual dividends of $35.00 per unit paid on a quarterly basis and dividends are cumulative, subject to certain provisions. The Subsidiary Series A Preferred Units can be redeemed at any time, at the option of the unitholder, either for cash or are convertible on a one-for-one basis, into the Series B Preferred Units of limited partnership interest, or the Subsidiary Series B Preferred Units. The Subsidiary Series B Preferred Units can be converted at any time, at the option of the unitholder, into a number of common stock equal to 6.71348 shares of common stock for each Subsidiary Series B Preferred Unit. As of March 31, 2018, no Subsidiary Series B Preferred Units have been issued.

Below is the rollforward analysis of the activity relating to the preferred units in the Operating Partnership for the three months ended March 31, 2018 and the twelve months ended December 31, 2017 (in thousands):



	March 31, 2018			December 31, 2017
Balance at beginning of period	$	301,735		$	302,010
Issuance of preferred units	—			—
Redemption of preferred units	(150		)	(275		)
Balance at end of period	$	301,585		$	301,735

12. Stockholders’ Equity of the Company

Common Stock

Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000 shares of preferred stock, par value $0.01 per share. As of March 31, 2018, 89,135,009 shares of common stock and no shares of excess stock were issued and outstanding.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Stock Repurchase Program

In August 2016, our board of directors approved a stock repurchase plan under which we can buy up to $1.0 billion of shares of our common stock. In December 2017, our board of directors authorized an increase to the size of this plan by an additional $500 million of our common stock, bringing it to a total of $1.5 billion of shares of our common stock.

At March 31, 2018, repurchases under the plan were as follows:



Period	Shares repurchased	Average price paid per share	Cumulative number of shares repurchased as part of the repurchase plan or programs	Maximum approximate dollar value of shares that may yet be repurchased under the plan (in millions)⁽¹⁾
2017	8,342,411	$101.64	8,342,411	$652.0
First quarter 2018 ⁽²⁾	3,653,928	$97.07	11,996,339	$297.2


(1)	Reflective of $1.5 billion plan maximum as of March 31, 2018.


(2)	Includes 142,004 shares of common stock repurchased by the Company in March 2018 that were settled in April 2018.

Perpetual Preferred Stock

We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock, outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are entitled to redeem the Series I Preferred Stock at par for cash at our option. In August 2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I Preferred Units.

Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

In February 2018, the Company filed a registration statement with the SEC for our dividend reinvestment and stock purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of our common stock under the DRSPP. The DRSPP commenced on September 24, 2001.

Earnings per Share

SL Green's earnings per share for the three months ended March 31, 2018 and 2017 are computed as follows (in thousands):



	Three Months Ended March 31,
Numerator	2018		2017
Basic Earnings:
Income attributable to SL Green common stockholders	$	101,766	$	11,351
Effect of Dilutive Securities:
Redemption of units to common shares	5,272		476
Diluted Earnings:
Income attributable to SL Green common stockholders	$	107,038	$	11,827



	Three Months Ended March 31,
Denominator	2018	2017
Basic Shares:
Weighted average common stock outstanding	90,520	100,643
Effect of Dilutive Securities:
Operating Partnership units redeemable for common shares	4,683	4,607
Stock-based compensation plans	53	304
Diluted weighted average common stock outstanding	95,256	105,554

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

SL Green has excluded 1,210,802 and 1,025,419 common stock equivalents from the diluted shares outstanding for the three months ended March 31, 2018 and 2017, respectively, as they were anti-dilutive.

13. Partners' Capital of the Operating Partnership

The Company is the sole general partner of the Operating Partnership and at March 31, 2018 owned 89,135,009 general and limited partnership interests in the Operating Partnership and 9,200,000 Series I Preferred Units. Partnership interests in the Operating Partnership are denominated as “common units of limited partnership interest” (also referred to as “OP Units”) or “preferred units of limited partnership interest” (also referred to as “Preferred Units”). All references to OP Units and Preferred Units outstanding exclude such units held by the Company. A holder of an OP Unit may present such OP Unit to the Operating Partnership for redemption at any time (subject to restrictions agreed upon at the issuance of OP Units to particular holders that may restrict such right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, the Operating Partnership must redeem such OP Unit in exchange for the cash equal to the then value of a share of common stock of the Company, except that the Company may, at its election, in lieu of cash redemption, acquire such OP Unit for one share of common stock. Because the number of shares of common stock outstanding at all times equals the number of OP Units that the Company owns, one share of common stock is generally the economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the quarterly dividend that may be paid to the holder of a share of common stock. Each series of Preferred Units makes a distribution that is set in accordance with an amendment to the partnership agreement of the Operating Partnership. Preferred Units may also be convertible into OP Units at the election of the holder thereof or the Company, subject to the terms of such Preferred Units.

Net income (loss) allocated to the preferred unitholders and common unitholders reflects their pro rata share of net income (loss) and distributions.

Limited Partner Units

As of March 31, 2018, limited partners other than SL Green owned 5.02%, or 4,715,338 common units, of the Operating Partnership.

Preferred Units

Preferred units not owned by SL Green are further described in Note 11, “Noncontrolling Interests on the Company’s Consolidated Financial Statements - Preferred Units of Limited Partnership Interest in the Operating Partnership.”

Earnings per Unit

The Operating Partnership's earnings per unit for the three months ended March 31, 2018 and 2017, respectively, are computed as follows (in thousands):



	Three Months Ended March 31,
Numerator	2018		2017
Basic and Diluted Earnings:
Income attributable to SLGOP common unitholders	$	107,038	$	11,827



	Three Months Ended March 31,
Denominator	2018	2017
Basic units:
Weighted average common units outstanding	95,203	105,250
Effect of Dilutive Securities:
Stock-based compensation plans	53	304
Diluted weighted average common units outstanding	95,256	105,554

The Operating Partnership has excluded 1,210,802 and 1,025,419 common unit equivalents from the diluted units outstanding for the three months ended March 31, 2018 and 2017, respectively, as they were anti-dilutive.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

14. Share-based Compensation

We have stock-based employee and director compensation plans. Our employees are compensated through the Operating Partnership. Under each plan, whenever the Company issues common or preferred stock, the Operating Partnership issues an equivalent number of units of limited partnership interest of a corresponding class to the Company.

Fourth Amended and Restated 2005 Stock Option and Incentive Plan

The Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the Company's board of directors in April 2016 and its stockholders in June 2016 at the Company's annual meeting of stockholders. The 2005 Plan authorizes the issuance of stock options, stock appreciation rights, unrestricted and restricted stock, phantom shares, dividend equivalent rights, cash-based awards and other equity-based awards. Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000 fungible units may be granted under the 2005 Plan. Currently, different types of awards count against the limit on the number of fungible units differently, with (1) full-value awards (i.e., those that deliver the full value of the award upon vesting, such as restricted stock) counting as 3.74 Fungible Units per share subject to such awards, (2) stock options, stock appreciation rights and other awards that do not deliver full value and expire five years from the date of grant counting as 0.73 fungible units per share subject to such awards, and (3) all other awards (e.g., ten-year stock options) counting as 1.0 fungible units per share subject to such awards. Awards granted under the 2005 Plan prior to the approval of the fourth amendment and restatement in June 2016 continue to count against the fungible unit limit based on the ratios that were in effect at the time such awards were granted, which may be different than the current ratios. As a result, depending on the types of awards issued, the 2005 Plan may result in the issuance of more or less than 27,030,000 shares. If a stock option or other award granted under the 2005 Plan expires or terminates, the common stock subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. Shares of our common stock distributed under the 2005 Plan may be treasury shares or authorized but unissued shares. Currently, unless the 2005 Plan has been previously terminated by the Company's board of directors, new awards may be granted under the 2005 Plan until June 2, 2026, which is the tenth anniversary of the date that the 2005 Plan was most recently approved by the Company's stockholders. As of March 31, 2018, 7.3 million fungible units were available for issuance under the 2005 Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors' Deferral Program and LTIP Units.

Options are granted under the plan with an exercise price at the fair market value of the Company's common stock on the date of grant and, subject to employment, generally expire five or ten years from the date of grant, are not transferable other than on death, and generally vest in one to five years commencing one year from the date of grant. We have also granted Class O LTIP Units, which are a class of LTIP Units in the Operating Partnership structured to provide economics similar to those of stock options. Class O LTIP Units, once vested, may be converted, at the election of the holder, into a number of common units of the Operating Partnership per Class O LTIP Unit determined by the increase in value of a share of the Company’s common stock at the time of conversion over a participation threshold, which equals the fair market value of a share of the Company’s common stock at the time of grant. Class O LTIP Units are entitled to distributions, subject to vesting, equal per unit to 10% of the per unit distributions paid with respect to the common units of the Operating Partnership.

The fair value of each stock option or LTIP Unit granted is estimated on the date of grant using the Black-Scholes option pricing model based on historical information with the following weighted average assumptions for grants during the three months ended March 31, 2018 and the year ended December 31, 2017.



	March 31, 2018		December 31, 2017
Dividend yield	2.85	%	2.51	%
Expected life	3.5 years		4.4 years
Risk-free interest rate	2.48	%	1.73	%
Expected stock price volatility	22.00	%	28.10	%

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

A summary of the status of the Company's stock options as of March 31, 2018 and December 31, 2017, and changes during the three months ended March 31, 2018 and year ended December 31, 2017 are as follows:



	March 31, 2018					December 31, 2017
	Options Outstanding			Weighted Average Exercise Price		Options Outstanding			Weighted Average Exercise Price
Balance at beginning of period	1,548,719			$	101.48	1,737,213			$	98.44
Granted	6,000			97.91		174,000			105.66
Exercised	(4,000		)	88.91		(292,193		)	81.07
Lapsed or canceled	(18,799		)	111.39		(70,301		)	121.68
Balance at end of period	1,531,920			$	101.37	1,548,719			$	101.48
Options exercisable at end of period	1,040,103			$	98.25	800,902			$	94.33
Total fair value of options granted during the period	$	84,068				$	3,816,652

All options were granted with strike prices ranging from $20.67 to $137.18. The remaining weighted average contractual life of the options outstanding was 3.4 years and the remaining average contractual life of the options exercisable was 2.9 years.

During the three months ended March 31, 2018 and 2017, we recognized compensation expense for these options of $1.6 million and $2.0 million, respectively. As of March 31, 2018, there was $6.7 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.2 years.

Stock-based Compensation

Effective January 1, 1999, the Company implemented a deferred compensation plan, or the Deferred Plan, where shares issued under the Deferred Plan were granted to certain employees, including our executives and vesting will occur annually upon the completion of a service period or our meeting established financial performance criteria. Annual vesting occurs at rates ranging from 15% to 35% once performance criteria are reached.

A summary of the Company's restricted stock as of March 31, 2018 and December 31, 2017 and charges during the three months ended March 31, 2018 and the year ended December 31, 2017, are as follows:



	March 31, 2018			December 31, 2017
Balance at beginning of period	3,298,216			3,202,031
Granted	33,450			96,185
Canceled	(4,550		)	—
Balance at end of period	3,327,116			3,298,216
Vested during the period	91,014			95,736
Compensation expense recorded	$	3,134,975		$	9,809,749
Total fair value of restricted stock granted during the period	$	3,237,006		$	9,905,986

The fair value of restricted stock that vested during the three months ended March 31, 2018 and the year ended December 31, 2017 was $9.7 million and $9.4 million, respectively. As of March 31, 2018 there was $18.1 million of total unrecognized compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 2.0 years.

For the three months ended March 31, 2018 and 2017, $1.6 million and $1.6 million, respectively, was capitalized to assets associated with compensation expense related to our long-term compensation plans, restricted stock and stock options.

We granted LTIP Units, which include bonus, time-based and performance based awards, with a fair value of $20.6 million and $20.5 million as of March 31, 2018 and December 31, 2017, respectively. The grant date fair value of the LTIP Unit awards was calculated in accordance with ASC 718. A third party consultant determined the fair value of the LTIP Units to have a discount from our common stock price. The discount was calculated by considering the inherent uncertainty that the LTIP Units will reach parity with other common partnership units and the illiquidity due to transfer restrictions. As of March 31, 2018, there was $9.7 million of total unrecognized compensation expense related to the time-based and performance based awards, which is expected to be recognized over a weighted average period of 1.2 years.

Table of Contents

SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

During the three months ended March 31, 2018 and 2017, we recorded compensation expense related to bonus, time-based and performance based awards of $6.9 million and $10.0 million, respectively.

2014 Outperformance Plan

In August 2014, the compensation committee of the Company's board of directors approved the general terms of the SL Green Realty Corp. 2014 Outperformance Plan, or the 2014 Outperformance Plan. Participants in the 2014 Outperformance Plan could earn, in the aggregate, up to 610,000 LTIP Units in our Operating Partnership based on our total return to stockholders for the three-year period beginning September 1, 2014. Under the 2014 Outperformance Plan, two-thirds of the LTIP Units were subject to performance based vesting based on the Company’s absolute total return to stockholders and one-third of the LTIP Units were subject to performance based vesting based on relative total return to stockholders compared to the constituents of the MSCI REIT Index. LTIP Units earned under the 2014 Outperformance Plan were to be subject to continued vesting requirements, with 50% of any awards earned vesting on August 31, 2017 and the remaining 50% vesting on August 31, 2018, subject to continued employment with us through such dates. Participants were not entitled to distributions with respect to LTIP Units granted under the 2014 Outperformance Plan unless and until they are earned. If LTIP Units were earned, each participant would have been entitled to the distributions that would have been paid had the number of earned LTIP Units been issued at the beginning of the performance period, with such distributions being paid in the form of cash or additional LTIP Units. Thereafter, distributions were to be paid currently with respect to all earned LTIP Units, whether vested or unvested.

Based on our performance, none of the LTIP Units granted under the 2014 Outperformance Plan were earned pursuant to the terms of the 2014 Outperformance Plan, and all units issued were forfeited in 2017.

The cost of the 2014 Outperformance Plan ($27.9 million, subject to forfeitures), based on the portion of the 2014 Outperformance Plan granted prior to termination, was amortized into earnings through December 31, 2017. We recorded no compensation expense for the three months ended March 31, 2018 and compensation expense of $2.1 million for the three months ended March 31, 2017 related to the 2014 Outperformance Plan.

Deferred Compensation Plan for Directors

Under our Non-Employee Director's Deferral Program, which commenced July 2004, the Company's non-employee directors may elect to defer up to 100% of their annual retainer fee, chairman fees, meeting fees and annual stock grant. Unless otherwise elected by a participant, fees deferred under the program shall be credited in the form of phantom stock units. The program provides that a director's phantom stock units generally will be settled in an equal number of shares of common stock upon the earlier of (i) the January 1 coincident with or the next following such director's termination of service from the Board of Directors or (ii) a change in control by us, as defined by the program. Phantom stock units are credited to each non-employee director quarterly using the closing price of our common stock on the first business day of the respective quarter. Each participating non-employee director is also credited with dividend equivalents or phantom stock units based on the dividend rate for each quarter, which are either paid in cash currently or credited to the director’s account as additional phantom stock units.

During the three months ended March 31, 2018, 10,211 phantom stock units and 9,266 shares of common stock were issued to our board of directors. We recorded compensation expense of $2.2 million and $1.9 million during the three months ended March 31, 2018 and 2017, respectively, related to the Deferred Compensation Plan.

As of March 31, 2018, there were 110,064 phantom stock units outstanding pursuant to our Non-Employee Director's Deferral Program.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Employee Stock Purchase Plan

In 2007, the Company's board of directors adopted the 2008 Employee Stock Purchase Plan, or ESPP, to encourage our employees to increase their efforts to make our business more successful by providing equity-based incentives to eligible employees. The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code, and has been adopted by the board to enable our eligible employees to purchase the Company's shares of common stock through payroll deductions. The ESPP became effective on January 1, 2008 with a maximum of 500,000 shares of the common stock available for issuance, subject to adjustment upon a merger, reorganization, stock split or other similar corporate change. The Company filed a registration statement on Form S-8 with the SEC with respect to the ESPP. The common stock is offered for purchase through a series of successive offering periods. Each offering period will be three months in duration and will begin on the first day of each calendar quarter, with the first offering period having commenced on January 1, 2008. The ESPP provides for eligible employees to purchase the common stock at a purchase price equal to 85% of the lesser of (1) the market value of the common stock on the first day of the offering period or (2) the market value of the common stock on the last day of the offering period. The ESPP was approved by our stockholders at our 2008 annual meeting of stockholders. As of March 31, 2018, 107,193 shares of our common stock had been issued under the ESPP.

15. Accumulated Other Comprehensive Income

The following tables set forth the changes in accumulated other comprehensive income (loss) by component as of March 31, 2018 (in thousands):



	Net unrealized gain on derivative instruments ⁽¹⁾		SL Green’s share of joint venture net unrealized gain on derivative instruments ⁽²⁾		Net unrealized gain on marketable securities			Total
Balance at December 31, 2017	$	12,542	$	5,020	$	1,042		$	18,604
Other comprehensive (loss) income before reclassifications	6,859		3,114		(315		)	9,658
Amounts reclassified from accumulated other comprehensive income	310		1		—			311
Balance at March 31, 2018	$	19,711	$	8,135	$	727		$	28,573

(1)

Amount reclassified from accumulated other comprehensive income (loss) is included in interest expense in the respective consolidated statements of operations. As of March 31, 2018 and December 31, 2017, the deferred net losses from these terminated hedges, which is included in accumulated other comprehensive loss relating to net unrealized loss on derivative instrument, was $2.7 million and $3.2 million, respectively.


(2)	Amount reclassified from accumulated other comprehensive income (loss) is included in equity in net income from unconsolidated joint ventures in the respective consolidated statements of operations.

16. Fair Value Measurements

We are required to disclose fair value information with regard to our financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practical to estimate fair value. The FASB guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. We measure and/or disclose the estimated fair value of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used when little or no market data is available. We follow this hierarchy for our assets and liabilities measured at fair value on a recurring and nonrecurring basis. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The following tables set forth the assets and liabilities that we measure at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at March 31, 2018 and December 31, 2017 (in thousands):

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)



	March 31, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	28,252	$	—	$	28,252	$	—
Interest rate cap and swap agreements (included in other assets)	$	23,629	$	—	$	23,629	$	—



	December 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Marketable securities	$	28,579	$	—	$	28,579	$	—
Interest rate cap and swap agreements (included in other assets)	$	16,692	$	—	$	16,692	$	—

We determine other than temporary impairment in real estate investments and debt and preferred equity investments, including intangibles primarily utilizing cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of which are classified as Level 3 inputs.

As of March 31, 2018, we held notes receivable with an outstanding principal balance of $250.5 million and an accrued interest balance of $7.7 million, which were purchased at par, and were in maturity default at the time of acquisition. In August 2017, the Company determined that it was probable that the loans would not be repaid in full and therefore, the loans were put on non-accrual status. The Company has initiated proceedings to foreclose on the property, and expects to take control of the property unless the buyer is able to repay the principal and interest, including default interest and fees, on the notes receivable in full prior to the completion of the foreclosure process. We believe the collateral value is sufficient to recover the carrying amounts of the notes receivable.

In January 2018, the partnership agreement for our investment in 919 Third Avenue was modified resulting in the Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January 1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the consolidated statement of operations. This fair value was determined using a third party valuation which primarily utilized cash flow projections that apply, among other things, estimated revenue and expense growth rates, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. All of which are classified as Level 3 inputs.

Marketable securities classified as Level 1 are derived from quoted prices in active markets. The valuation technique used to measure the fair value of marketable securities classified as Level 2 were valued based on quoted market prices or model driven valuations using the significant inputs derived from or corroborated by observable market data. Marketable securities in an unrealized loss position are not considered to be other than temporarily impaired. We do not intend to sell these securities and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost bases.

The fair value of derivative instruments is based on current market data received from financial sources that trade such instruments and are based on prevailing market data and derived from third party proprietary models based on well-recognized financial principles and reasonable estimates about relevant future market conditions, which are classified as Level 2 inputs.

The financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, debt and preferred equity investments, mortgages and other loans payable and other secured and unsecured debt. The carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses reported in our consolidated balance sheets approximates fair value due to the short term nature of these instruments. The fair value of debt and preferred equity investments, which is classified as Level 3, is estimated by discounting the future cash flows using current interest rates at which similar loans with the same maturities would be made to borrowers with similar credit ratings. The fair value of borrowings, which is classified as Level 3, is estimated by discounting the contractual cash flows of each debt instrument to their present value using adjusted market interest rates, which is provided by a third-party specialist.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

The following table provides the carrying value and fair value of these financial instruments as of March 31, 2018 and December 31, 2017 (in thousands):



	March 31, 2018				December 31, 2017
	Carrying Value⁽¹⁾		Fair Value		Carrying Value⁽¹⁾		Fair Value

Debt and preferred equity investments	$	2,085,871	⁽²⁾		$	2,114,041	⁽²⁾

Fixed rate debt	$	3,795,560	$	3,840,843	$	4,305,165	$	4,421,866
Variable rate debt	1,665,026		1,673,313		1,605,431		1,612,224
	$	5,460,586	$	5,514,156	$	5,910,596	$	6,034,090


(1)	Amounts exclude net deferred financing costs.


(2)	At both March 31, 2018 and December 31, 2017, debt and preferred equity investments had an estimated fair value ranging between $2.1 billion and $2.3 billion.

Disclosure about fair value of financial instruments was based on pertinent information available to us as of March 31, 2018 and December 31, 2017. Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

17. Financial Instruments: Derivatives and Hedging

In the normal course of business, we use a variety of commonly used derivative instruments, such as interest rate swaps, caps, collar and floors, to manage, or hedge interest rate risk. We hedge our exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on existing debt. We recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedge asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. Reported net income and equity may increase or decrease prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. Currently, all of our designated derivative instruments are effective hedging instruments.

The following table summarizes the notional value at inception and fair value of our consolidated derivative financial instruments at March 31, 2018 based on Level 2 information. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks (amounts in thousands).



	Notional Value		Strike Rate		Effective Date	Expiration Date	Balance Sheet Location	Fair Value
Interest Rate Swap	$	200,000	1.131	%	July 2016	July 2023	Other Assets	$	14,149
Interest Rate Swap	100,000		1.161	%	July 2016	July 2023	Other Assets	6,927
Interest Rate Cap	137,500		4.000	%	September 2017	September 2019	Other Assets	19
Interest Rate Swap	100,000		1.928	%	December 2017	November 2020	Other Assets	1,273
Interest Rate Swap	100,000		1.934	%	December 2017	November 2020	Other Assets	1,260
								$	23,628

During the three months ended March 31, 2018, we recorded a loss on the changes in the fair value of $0.2 million, which is included in interest expense in the consolidated statements of operations. During the three months ended March 31, 2017, we recorded a loss on the changes in the fair value of $0.1 million, which is included in interest expense in the consolidated statements of operations.

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of March 31, 2018, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was zero. As of March 31, 2018, the Company

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of zero at March 31, 2018.

Gains and losses on terminated hedges are included in accumulated other comprehensive income, and are recognized into earnings over the term of the related mortgage obligation. Over time, the realized and unrealized gains and losses held in accumulated other comprehensive income will be reclassified into earnings as an adjustment to interest expense in the same periods in which the hedged interest payments affect earnings. We estimate that $1.3 million of the current balance held in accumulated other comprehensive income will be reclassified into interest expense and $1.0 million of the portion related to our share of joint venture accumulated other comprehensive income will be reclassified into equity in net income from unconsolidated joint ventures within the next 12 months.

The following table presents the effect of our derivative financial instruments and our share of our joint ventures' derivative financial instruments that are designated and qualify as hedging instruments on the consolidated statements of operations for the three months ended March 31, 2018 and 2017, respectively (in thousands):



	Amount of Gain (Loss) Recognized in Other Comprehensive Loss (Effective Portion)					Location of (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)				Location of (Loss) Recognized in Income on Derivative	Amount of (Loss) Recognized into Income (Ineffective Portion)
	Three Months Ended March 31,						Three Months Ended March 31,					Three Months Ended March 31,
Derivative	2018		2017				2018		2017			2018			2017
Interest Rate Swaps/Caps	$	7,282	$	(3,137	)	Interest expense	$	329	$	979	Interest expense	$	(9	)	$	(8	)
Share of unconsolidated joint ventures' derivative instruments	3,313		341			Equity in net income from unconsolidated joint ventures	1		399		Equity in net income from unconsolidated joint ventures	(89		)	(95		)
	$	10,595	$	(2,796	)		$	330	$	1,378		$	(98	)	$	(103	)

18. Commitments and Contingencies

Legal Proceedings

As of March 31, 2018, the Company and the Operating Partnership were not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined could have a material adverse impact on us.

Environmental Matters

Our management believes that the properties are in compliance in all material respects with applicable Federal, state and local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

Capital and Ground Leases Arrangements

The following is a schedule of future minimum lease payments under capital leases and non-cancellable operating leases with initial terms in excess of one year as of March 31, 2018 (in thousands):



	Capital lease			Non-cancellable operating leases
Remaining 2018	$	1,790		$	23,286
2019	2,411			31,066
2020	2,620			31,437
2021	2,794			31,628
2022	2,794			29,472
2023	2,794			27,166
Thereafter	817,100			676,088
Total minimum lease payments	$	832,303		$	850,143
Amount representing interest	(789,274		)
Capital lease obligations	$	43,029

19. Segment Information

The Company has two reportable segments, real estate and debt and preferred equity investments. We evaluate real estate performance and allocate resources based on earnings contribution to income from continuing operations.

The primary sources of revenue are generated from tenant rents and escalations and reimbursement revenue. Real estate property operating expenses consist primarily of security, maintenance, utility costs, insurance, real estate taxes and ground rent expense (at certain applicable properties). See Note 5, "Debt and Preferred Equity Investments," for additional details on our debt and preferred equity investments.

Selected consolidated results of operations for the three months ended March 31, 2018 and 2017, and selected asset information as of March 31, 2018 and December 31, 2017, regarding our operating segments are as follows (in thousands):



	Real Estate Segment		Debt and Preferred Equity Segment		Total Company
Total revenues
Three months ended:
March 31, 2018	$	256,405	$	45,290	$	301,695
March 31, 2017	337,082		40,299		377,381
Net income before equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities
Three months ended:
March 31, 2018	$	14,024	$	33,425	$	47,449
March 31, 2017	13,807		37,513		51,320
Total assets
As of:
March 31, 2018	$	11,144,740	$	2,236,130	$	13,380,870
December 31, 2017	11,643,261		2,339,643		13,982,904

Net income before equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities represents total revenues less total expenses for the real estate segment and total investment income less allocated interest expense for the debt and preferred equity segment. Interest costs for the debt and preferred equity segment

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SL Green Realty Corp. and SL Green Operating Partnership, L.P.

Notes to Consolidated Financial Statements (cont.)

March 31, 2018

(unaudited)

includes actual costs incurred for borrowings on the 2016 MRA and 2017 MRA. Interest is imputed on the investments that do not collateralize the 2016 MRA or 2017 MRA using our corporate borrowing cost. We also allocate loan loss reserves, net of recoveries, and transaction related costs to the debt and preferred equity segment. We do not allocate marketing, general and administrative expenses to the debt and preferred equity segment since the use of personnel and resources is dependent on transaction volume between the two segments and varies period over period. In addition, we base performance on the individual segments prior to allocating marketing, general and administrative expenses. For the three months ended March 31, 2018, and 2017, marketing, general and administrative expenses totaled $23.5 million, and $24.1 million respectively. All other expenses, except interest, relate entirely to the real estate assets.

There were no transactions between the above two segments.

The table below reconciles net income before equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities to net income for the three months ended March 31, 2018 and 2017 (in thousands):



	Three Months Ended March 31,
	2018			2017
Net income before equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, purchase price and other fair value adjustments, gain on sale of real estate, net, depreciable real estate reserves, and gain on sale of investment in marketable securities	$	47,449		$	51,320
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(6,440		)	2,047
Purchase price and other fair value adjustments	49,293			—
Gain on sale of real estate, net	23,521			567
Depreciable real estate reserves	—			(56,272		)
Gain on sale of investment in marketable securities	—			3,262
Net income	$	113,823		$	924

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

SL Green Realty Corp., which is referred to as SL Green or the Company, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Company is a self-managed real estate investment trust, or REIT, engaged in the acquisition, development, ownership, management and operation of commercial and residential real estate properties, principally office properties, located in the New York metropolitan area. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.

Reckson Associates Realty Corp., or Reckson, and Reckson Operating Partnership, L.P. or ROP, are wholly-owned subsidiaries of the SL Green Realty Corp.

The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements appearing in this Quarterly Report on this Form 10-Q and in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2017.



		Consolidated			Unconsolidated		Total
Location	Property Type	Number of Properties		Approximate Square Feet (unaudited)	Number of Properties	Approximate Square Feet (unaudited)	Number of Properties	Approximate Square Feet (unaudited)	Weighted Average Occupancy(1) (unaudited)
Commercial:
Manhattan	Office	20		12,387,091	11	12,165,164	31	24,552,255	94.2	%
	Retail	4	(2)	302,583	9	347,970	13	650,553	94.2	%
	Development/Redevelopment	8		318,985	3	416,214	11	735,199	44.4	%
	Fee Interest	1		176,530	1	—	2	176,530	100.0	%
		33		13,185,189	24	12,929,348	57	26,114,537	92.8	%
Suburban	Office	20	(3)	3,013,200	2	640,000	22	3,653,200	83.1	%
	Retail	1		52,000	—	—	1	52,000	100.0	%
	Development/Redevelopment	1		1,000	1	—	2	1,000	—	%
		22		3,066,200	3	640,000	25	3,706,200	83.3	%
Total commercial properties		55		16,251,389	27	13,569,348	82	29,820,737	91.6	%
Residential:
Manhattan	Residential	3	(2)	472,105	10	2,156,751	13	2,628,856	88.9	%
Suburban	Residential	—		—	—	—	—	—	—	%
Total residential properties		3		472,105	10	2,156,751	13	2,628,856	88.9	%
Total portfolio		58		16,723,494	37	15,726,099	95	32,449,593	91.4	%


(1)	The weighted average occupancy for commercial properties represents the total occupied square feet divided by total square footage at acquisition. The weighted average occupancy for residential properties represents the total occupied units divided by total available units.

(2)


(3)	Includes the properties at 115-117 Stevens Avenue in Valhalla, New York, and 1-6 International Drive in Rye Brook, New York which are classified as held for sale at March 31, 2018.

As of March 31, 2018, we also managed an approximately 336,000 square foot (unaudited) office building owned by a third party and held debt and preferred equity investments with a book value of $2.1 billion, including $0.1 billion of debt and preferred equity investments and other financing receivables that are included in other balance sheet line items other than the Debt and Preferred Equity Investments line item.

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Critical Accounting Policies

Refer to the 2017 Annual Report on Form 10-K of the Company and the Operating Partnership for a discussion of our critical accounting policies, which include investment in commercial real estate properties, investment in unconsolidated joint ventures, revenue recognition, allowance for doubtful accounts, reserve for possible credit losses and derivative instruments. There have been no changes to these accounting policies during the three months ended March 31, 2018.

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Reconciliation of Net Income to Same-Store Operating Income

We present Same-Store Operating Income because we believe that this measure, when taken together with the corresponding GAAP financial measures and our reconciliation, provides investors with meaningful information regarding the operating performance of our properties. When operating performance is compared across multiple periods, the investor is provided with information not immediately apparent from net income that is determined in accordance with GAAP. Same-Store Operating Income provides information on trends in the revenue generated and expenses incurred in operating our properties, unaffected by the cost of leverage, depreciation, amortization, and other net income components. We use this metric internally as a performance measure. This measure is not 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.

For properties owned since January 1, 2017 and still owned and operated at March 31, 2018, Same-Store Operating Income is determined as follows (in millions):



	Three months ended
	March 31,
(in millions)	2018			2017
Net income	$	113.8		$	0.9
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	6.4			(2.0		)
Purchase price and other fair value adjustments	(49.3		)	—
Gain on sale of real estate, net	(23.5		)	(0.6		)
Depreciable real estate reserves	—			56.3
Gain on sale of investment in marketable securities	—			(3.3		)
Depreciation and amortization	69.4			94.1
Interest expense, net of interest income	47.9			65.6
Amortization of deferred financing costs	3.5			4.8
Operating income	168.2			215.8
Less: Operating income from other properties/affiliates	(36.1		)	(83.4		)
Same-store operating income	$	132.1		$	132.4

Results of Operations

Comparison of the three months ended March 31, 2018 to the three months ended March 31, 2017

The following comparison for the three months ended March 31, 2018, or 2018, to the three months ended March 31, 2017, or 2017, makes reference to the effect of the following:


i.	“Same-Store Properties,” which represents all operating properties owned by us at January 1, 2017 and still owned by us in the same manner at March 31, 2018 (Same-Store Properties totaled 48 of our 58 consolidated properties),


ii.	“Acquisition Properties,” which represents all properties or interests in properties acquired in 2018 and 2017 and properties that are under development, redevelopment


iii.	"Disposed Properties" which represents all properties sold as well as interests in properties sold or partially sold in 2018 and 2017, and


iv.	“Other,” which represents properties that were partially sold resulting in deconsolidation and corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc.

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	Same-Store									Disposed				Other					Consolidated
(in millions)	2018		2017		$ Change			% Change		2018		2017		2018			2017		2018			2017			$ Change			% Change
Rental revenue	$	208.7	$	209.1	$	(0.4	)	(0.2	)%	$	0.5	$	17.2	$	6.2		$	55.0	$	215.4		$	281.3		$	(65.9	)	(23.4	)%
Escalation and reimbursement	26.8		25.8		1.0			3.9	%	—		1.4		(0.4		)	17.0		26.4			44.2			(17.8		)	(40.3	)%
Investment income	—		—		—			—	%	—		—		45.3			40.3		45.3			40.3			5.0			12.4	%
Other income	3.9		1.0		2.9			290.0	%	—		0.2		10.7			10.4		14.6			11.6			3.0			25.9	%
Total revenues	239.4		235.9		3.5			1.5	%	0.5		18.8		61.8			122.7		301.7			377.4			(75.7		)	(20.1	)%

Property operating expenses	107.3		103.5		3.8			3.7	%	0.3		6.4		6.1			34.0		113.7			143.9			(30.2		)	(21.0	)%
Transaction related costs	—		—		—			—	%	—		—		0.2			0.1		0.2			0.1			0.1			100.0	%
Marketing, general and administrative	—		—		—			—	%	—		—		23.5			24.1		23.5			24.1			(0.6		)	(2.5	)%
	107.3		103.5		3.8			3.7	%	0.3		6.4		29.8			58.2		137.4			168.1			(30.7		)	(18.3	)%

Operating income before equity in net income from unconsolidated joint ventures	$	132.1	$	132.4	$	(0.3	)	(0.2	)%	$	0.2	$	12.4	$	32.0		$	64.5	$	164.3		$	209.3		$	(45.0	)	(21.5	)%

Other income (expenses):
Interest expense and amortization of deferred financing costs, net of interest income																			(51.5		)	(70.4		)	18.9			(26.8	)%
Depreciation and amortization																			(69.4		)	(94.1		)	24.7			(26.2	)%
Equity in net income from unconsolidated joint ventures																			4.0			6.6			(2.6		)	(39.4	)%
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate																			(6.4		)	2.0			(8.4		)	(420.0	)%
Purchase price and other fair value adjustments																			49.3			—			49.3			100.0	%
Gain on sale of real estate, net																			23.5			0.6			22.9			3,816.7	%
Depreciable real estate reserves																			—			(56.3		)	56.3			(100.0	)%
Gain on sale of investment in marketable securities																			—			3.3			(3.3		)	(100.0	)%
Net income																			$	113.8		$	1.0		$	112.8		11,280.0	%

Rental, Escalation and Reimbursement Revenues

Rental revenues decreased primarily as a result of the effect of the deconsolidation of 919 Third Avenue ($23.9 million), the partial sale and deconsolidation of 1515 Broadway ($23.3 million), the sale of 600 Lexington Avenue ($4.5 million), the sale of 885 Third Avenue ($3.6 million) and the sale of 16 Court Street ($3.3 million).

Escalation and reimbursement revenue decreased primarily as a result of the partial sale and deconsolidation of 1515 Broadway ($10.0 million), and the effect of the deconsolidation of 919 Third Avenue ($5.1 million), partially offset by higher recoveries at our Same-Store properties ($1.0 million).

The following table presents a summary of the commenced leasing activity for the three months ended March 31, 2018 in our Manhattan and Suburban portfolio:

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	Usable SF		Rentable SF	New Cash Rent (per rentable SF) ⁽¹⁾		Prev. Escalated Rent (per rentable SF) ⁽²⁾		TI/LC per rentable SF		Free Rent (in months)	Average Lease Term (in years)
Manhattan
Space available at beginning of the period	1,502,238
Property no longer in redevelopment	79,192
Sold Vacancies	(28,347	)
Property in redevelopment	(51,583	)
Space which became available during the period ⁽³⁾
• Office	275,294
• Retail	133
• Storage	1,546
	276,973
Total space available	1,778,473
Leased space commenced during the period:
• Office⁽⁴⁾	315,506		341,857	$	67.91	$	61.78	$	71.00	8.1	9.8
• Retail	25,982		26,252	$	71.48	$	285.37	$	196.08	11.4	14.6
• Storage	4,330		5,412	$	31.28	$	30.31	$	—	—	9.3
Total leased space commenced	345,818		373,521	$	67.63	$	63.46	$	78.76	8.2	10.0

Total available space at end of period	1,432,655

Early renewals
• Office	97,309		103,773	$	92.44	$	80.79	$	84.05	8.8	11.8
Total early renewals	97,309		103,773	$	92.44	$	80.79	$	84.05	8.8	11.8

Total commenced leases, including replaced previous vacancy
• Office			445,630	$	73.62	$	67.55	$	80.72	8.3	10.2
• Retail			26,252	$	71.48	$	285.37	$	196.08	11.4	14.6
• Storage			5,412	$	31.28	$	30.31	$	—	—	4.0
Total commenced leases			477,294	$	73.02	$	68.67	$	86.15	8.3	10.4

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	Usable SF	Rentable SF	New Cash Rent (per rentable SF) ⁽¹⁾		Prev. Escalated Rent (per rentable SF) ⁽²⁾		TI/LC per rentable SF		Free Rent (in months)	Average Lease Term (in years)
Suburban
Space available at beginning of period	655,672
Space which became available during the period⁽³⁾
• Office	70,350
• Storage	2,806
	73,156
Total space available	728,828
Leased space commenced during the period:
• Office⁽⁵⁾	37,201	36,578	$	32.94	$	32.28	$	19.64	3.9	5.0
• Storage	905	984	$	14.71	$	13.43	$	—	—	4.7
Total leased space commenced	38,106	37,562	$	32.46	$	31.58	$	19.13	3.8	5.0

Total available space at end of the period	690,722

Early renewals
• Office	61,179	61,581	$	32.50	$	38.11	$	29.76	10.9	8.1
Total early renewals	61,179	61,581	$	32.50	$	38.11	$	29.76	10.9	8.1

Total commenced leases, including replaced previous vacancy
• Office		98,159	$	32.66	$	36.89	$	25.99	8.3	6.9
• Storage		984	$	14.71	$	13.43	$	—	—	4.7
Total commenced leases		99,143	$	32.48	$	36.70	$	25.73	8.2	6.9


(1)	Annual initial base rent.


(2)	Escalated rent is calculated as total annual income less electric charges.


(3)	Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over.


(4)	Average starting office rent excluding new tenants replacing vacancies was $63.25 per rentable square feet for 238,439 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $72.10 per rentable square feet for 342,212 rentable square feet.


(5)	Average starting office rent excluding new tenants replacing vacancies was $33.03 per rentable square feet for 16,324 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $32.61 per rentable square feet for 77,905 rentable square feet.

Investment Income

For the three months ended March 31, 2018, investment income increased primarily as a result of a larger weighted average balance compared to the three months ended March 31, 2017. For the three months ended March 31, 2018, the weighted average debt and preferred equity investment balance outstanding and weighted average yield were $2.0 billion and 9.2%, excluding our investments in Two Herald Square which were put on non-accrual in August 2017, respectively, compared to $1.6 billion and 9.4%, respectively, for the same period in 2017. As of March 31, 2018, the debt and preferred equity investments had a weighted average term to maturity of 2.1 years, excluding extension options and our investments in Two Herald Square.

Other Income

Other income increased primarily as a result of greater lease termination income recognized at the Same-Store properties ($2.9 million).

Property Operating Expenses

Property operating expenses decreased primarily due to the partial sale and deconsolidation of 1515 Broadway and deconsolidation of 919 Third Avenue ($27.5 million), and the sale of 600 Lexington Avenue ($2.2 million) which was partially offset by increased operating expenses at our Same-Store Properties ($3.8 million).

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Marketing, General and Administrative Expenses

Marketing, general and administrative expenses for the three months ended March 31, 2018 were $23.5 million, or 5.3% of total combined revenues, including our share of joint venture revenues, and an annualized 50 basis points of total combined assets, including our share of joint venture assets compared to $24.1 million, or 5.2% of total revenues including our share of joint venture revenues, and 51 basis points of total assets including our share of joint venture assets for 2017.

Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income

Interest expense and amortization of deferred financing costs, net of interest income, decreased primarily as a result of the the partial sale and deconsolidation of 1515 Broadway ($9.0 million), the deconsolidation of 919 Third Avenue ($6.6 million) in the first quarter of 2018, and repayment of senior unsecured notes ($2.6 million), partially offset by a higher weighted average balance of the 2017 term loan facility ($3.3 million). The weighted average consolidated debt balance outstanding was $5.5 billion for the three months ended March 31, 2018 compared to $6.7 billion for the three months ended March 31, 2017. The consolidated weighted average interest rate was 3.99% for the three months ended March 31, 2018 as compared to 4.08% for the three months ended March 31, 2017.

Depreciation and Amortization

Depreciation and amortization decreased primarily as a result of the the deconsolidation of 919 Third Avenue and partial sale and deconsolidation of 1515 Broadway ($14.5 million), 5-7 Dey Street and 183 & 187 Broadway which were moved to development ($4.6 million), and the sale of 600 Lexington Avenue ($3.4 million).

Equity in Net Income in Unconsolidated Joint Ventures

Equity in net income from unconsolidated joint ventures decreased primarily as a result of the repayment of a debt position held in an unconsolidated joint venture ($1.5 million) in 2017. 919 Third Avenue and 1515 Broadway, which were deconsolidated in the first quarter of 2018, contributed $1.2 million to equity in net income from unconsolidated joint ventures.

Purchase price and other fair value adjustments

In January 2018, the partnership agreement for our investment in 919 Third Avenue was modified resulting in our partner now having substantive participating rights in the venture and the Company no longer having a controlling interest in this investment. As a result the investment in this property was deconsolidated as of January 1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the consolidated statement of operations. This fair value was allocated to the assets and liabilities, including identified intangibles of the property.

Equity in Net Gain on Sale of Interest in Unconsolidated Joint Ventures/Real Estate

During the three months ended March 31, 2018, we recognized a gain on sale related to our interest in 600 Lexington Avenue ($23.8 million).

Depreciable Real Estate Reserves

During the three months ended March 31, 2017, we recorded a $56.3 million charge in connection with 520 White Plains Road in Tarrytown, NY, and 680/750 Washington Boulevard in Stamford, Connecticut.

Liquidity and Capital Resources

We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for working capital, acquisitions, development or redevelopment of properties, tenant improvements, leasing costs, common stock repurchases, repurchases or repayments of outstanding indebtedness (which may include exchangeable debt) and for debt and preferred equity investments may include:


(1)	Cash flow from operations;


(2)	Cash on hand;


(3)	Net proceeds from divestitures of properties and redemptions, participations and dispositions of debt and preferred equity investments;


(4)	Borrowings under the 2017 credit facility;


(5)	Other forms of secured or unsecured financing; and


(6)	Proceeds from common or preferred equity or debt offerings by the Company, the Operating Partnership (including issuances of units of limited partnership interest in the Operating Partnership and Trust preferred securities) or ROP.

Cash flow from operations is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants and the level of operating

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and other costs. Additionally, we believe that our debt and preferred equity investment program will continue to serve as a source of operating cash flow.

The combined aggregate principal maturities of our property mortgages and other loans payable, corporate obligations and our share of joint venture debt, including as-of-right extension options, as of March 31, 2018 were as follows (in thousands):



	Remaining 2018		2019		2020		2021		2022		Thereafter		Total
Property mortgages and other loans	$	102,555	$	84,414	$	702,997	$	11,638	$	207,985	$	1,156,708	$	2,266,297
Master Repurchase Agreements	—		—		189,883		—		—		—		189,883
Corporate obligations	250,000		—		250,000		—		800,000		1,700,000		3,000,000
Joint venture debt-our share	45,477		262,460		471,714		454,571		220,759		2,878,381		4,333,362
Total	$	398,032	$	346,874	$	1,614,594	$	466,209	$	1,228,744	$	5,735,089	$	9,789,542

As of March 31, 2018, we had $317.1 million of consolidated cash on hand, inclusive of $28.3 million of marketable securities. We expect to generate positive cash flow from operations for the foreseeable future. We may seek to divest of properties or interests in properties or access private and public debt and equity capital when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential refinancing opportunities for secured debt, will allow us to satisfy our debt obligations, as described above, upon maturity, if not before.

We also have investments in several real estate joint ventures with various partners who we consider to be financially stable and who have the ability to fund a capital call when needed. Most of our joint ventures are financed with non-recourse debt. We believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.

Cash Flows

The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 1. Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below.

Cash, cash equivalents, and restricted cash were $378.3 million and $539.3 million at March 31, 2018 and 2017, respectively, representing a decrease of $161.0 million. The decrease was a result of the following changes in cash flows (in thousands):



	Three Months Ended March 31,
	2018			2017		Increase (Decrease)
Net cash provided by operating activities	$	94,546		$	113,149	$	(18,603	)
Net cash provided by investing activities	$	456,002		$	17,321	$	438,681
Net cash (used in) provided by financing activities	$	(422,309	)	$	38,813	$	(461,122	)

Our principal source of operating cash flow is related to the leasing and operating of the properties in our portfolio. Our properties provide a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund quarterly dividend and distribution requirements. Our debt and preferred equity investments and joint venture investments also provide a steady stream of operating cash flow to us.

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Cash is used in investing activities to fund acquisitions, development or redevelopment projects and recurring and nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development, leasing, financing and property management skills and invest in existing buildings that meet our investment criteria. During the three months ended March 31, 2018, when compared to the three months ended March 31, 2017, we used cash primarily for the following investing activities (in thousands):



Acquisitions of real estate property	$	(1,276	)
Additions to land, buildings and improvements	49,459
Acquisition deposits and deferred purchase price	(3,020		)
Investments in unconsolidated joint ventures	(43,158		)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	104,883
Net proceeds from disposition of real estate/joint venture interest	406,867
Proceeds from sale or redemption of marketable securities	(54,363		)
Other investments	(43,408		)
Origination of debt and preferred equity investments	173,025
Repayments or redemption of debt and preferred equity investments	(150,328		)
Increase in net cash provided by investing activities	$	438,681

Funds spent on capital expenditures, which are comprised of building and tenant improvements, decreased from $101.1 million for the three months ended March 31, 2017 to $51.6 million for the three months ended March 31, 2018. The decrease in capital expenditures relates primarily to lower costs incurred in connection with the redevelopment of properties.

We generally fund our investment activity through the sale of real estate, property-level financing, our credit facilities, our MRA facilities, senior unsecured notes, convertible or exchangeable securities, and construction loans. From time to time, the Company may issue common or preferred stock, or the Operating Partnership may issue common or preferred units of limited partnership interest.

During the three months ended March 31, 2018, when compared to the three months ended March 31, 2017, we used cash for the following financing activities (in thousands):



Proceeds from mortgages and other loans payable	$	(679,330	)
Repayments of mortgages and other loans payable	671,166
Proceeds from revolving credit facility and senior unsecured notes	177,200
Repayments of revolving credit facility and senior unsecured notes	(217,200		)
Proceeds from stock options exercised and DRIP issuance	(8,037		)
Repurchase of common stock	(382,577		)
Redemption of preferred stock	(150		)
Distributions to noncontrolling interests in other partnerships	193
Contributions from noncontrolling interests in other partnerships	(31,790		)
Distributions to noncontrolling interests in the Operating Partnership	(304		)
Dividends paid on common and preferred stock	2,450
Tax withholdings related to restricted share awards	(26		)
Deferred loan costs and capitalized lease obligation	7,283
Decrease in net cash used by financing activities	$	(461,122	)

Capitalization

Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000 shares of preferred stock, $0.01 par value per share. As of March 31, 2018, 89,135,009 shares of common stock and no shares of excess stock were issued and outstanding.

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Stock Repurchase Program

At March 31, 2018 repurchases under the plan were as follows:



Period	Shares repurchased	Average price paid per share	Cumulative number of shares repurchased as part of the repurchase plan or programs	Maximum approximate dollar value of shares that may yet be repurchased under the plan (in millions)⁽¹⁾
2017	8,342,411	$101.64	8,342,411	$652.0
First quarter 2018 ⁽²⁾	3,653,928	$97.07	11,996,339	$297.2


(1)	Reflective of $1.5 billion plan maximum as of March 31, 2018.


(2)	Includes 142,004 shares of common stock repurchased by the Company in March 2018 that were settled in April 2018.

Dividend Reinvestment and Stock Purchase Plan ("DRSPP")

The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments and/or stock purchases under the DRSPP for the three months ended March 31, 2018 and 2017, respectively (dollars in thousands):



	Three Months Ended March 31,
	2018		2017
Shares of common stock issued	447		521
Dividend reinvestments/stock purchases under the DRSPP	$	42	$	56

Fourth Amended and Restated 2005 Stock Option and Incentive Plan

The Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the 2005 Plan, was approved by the Company's board of directors in April 2016 and its stockholders in June 2016 at the Company's annual meeting of stockholders. Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000 fungible units may be granted as options, restricted stock, phantom shares, dividend equivalent rights and other equity-based awards under the 2005 Plan. As of March 31, 2018, 7.3 million fungible units were available for issuance under the 2005 Plan after reserving for shares underlying outstanding restricted stock units, phantom stock units granted pursuant to our Non-Employee Directors' Deferral Program and LTIP Units.

2014 Outperformance Plan

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Deferred Compensation Plan for Directors

As of March 31, 2018, there were 110,064 phantom stock units outstanding pursuant to our Non-Employee Director's Deferral Program.

Market Capitalization

At March 31, 2018, borrowings under our mortgages and other loans payable, 2017 credit facility, senior unsecured notes, trust preferred securities and our share of joint venture debt represented 50.5% of our combined market capitalization of $19.4 billion (based on a common stock price of $96.83 per share, the closing price of our common stock on the NYSE on March 31, 2018). Market capitalization includes our consolidated debt, common and preferred stock and the conversion of all units of limited partnership interest in the Operating Partnership, and our share of joint venture debt.

Indebtedness

The table below summarizes our consolidated mortgages and other loans payable, 2017 credit facility, senior unsecured notes and trust preferred securities outstanding at March 31, 2018 and December 31, 2017, (amounts in thousands).



Debt Summary:	March 31, 2018			December 31, 2017
Balance
Fixed rate	$	3,295,560		$	3,805,165
Variable rate—hedged	500,000			500,000
Total fixed rate	3,795,560			4,305,165
Total variable rate	1,665,026			1,605,431
Total debt	$	5,460,586		$	5,910,596

Debt, preferred equity, and other investments subject to variable rate	1,293,934			1,325,166
Net exposure to variable rate debt	371,092			280,265

Percent of Total Debt:
Fixed rate	69.5		%	72.8		%
Variable rate	30.5		%	27.2		%
Total	100.0		%	100.0		%
Effective Interest Rate for the Year:
Fixed rate	4.38		%	4.31		%
Variable rate	3.08		%	2.76		%
Effective interest rate	3.99		%	4.00		%

The variable rate debt shown above generally bears interest at an interest rate based on 30-day LIBOR (1.88% and 1.56% at March 31, 2018 and December 31, 2017, respectively). Our consolidated debt at March 31, 2018 had a weighted average term to maturity of 5.05 years.

Certain of our debt and equity investments and other investments, with a carrying value of $1.3 billion at March 31, 2018, are variable rate investments which mitigate our exposure to interest rate changes on our unhedged variable rate debt.

2017 Credit Facility

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Restrictive Covenants

Interest Rate Risk

We are exposed to changes in interest rates primarily from our variable rate debt. Our exposure to interest rate fluctuations are managed through either the use of interest rate derivative instruments and/or through our variable rate debt and preferred equity investments. A hypothetical 100 basis point increase in interest rates along the entire interest rate curve for 2018 would increase our consolidated annual interest cost, net of interest income from variable rate debt and preferred equity investments, by $3.5 million and would increase our share of joint venture annual interest cost by $17.3 million. At March 31, 2018, 60.8% of our $2.1 billion debt and preferred equity portfolio is indexed to LIBOR.

We recognize most derivatives on the balance sheet at fair value. Derivatives that are not hedges are adjusted to fair value through income. If a derivative is considered a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings.

Our long-term debt of $3.8 billion bears interest at fixed rates, and therefore the fair value of these instruments is affected by changes in the market interest rates. Our variable rate debt and variable rate joint venture debt as of March 31, 2018 bore interest based on a spread of LIBOR plus 110 basis points to LIBOR plus 415 basis points.

Contractual Obligations

Refer to our 2017 Annual Report on Form 10-K for a discussion of our contractual obligations. There have been no material changes, outside the ordinary course of business, to these contractual obligations during the three months ended March 31, 2018.

Off-Balance Sheet Arrangements

We have off-balance sheet investments, including joint ventures and debt and preferred equity investments. These investments all have varying ownership structures. Substantially all of our joint venture arrangements are accounted for under the equity method of accounting as we have the ability to exercise significant influence, but not control, over the operating and financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated financial statements.

Capital Expenditures

We estimate that for the remainder of the year ending December 31, 2018, we expect to incur $149.8 million of recurring capital expenditures and $48.6 million of development or redevelopment expenditures, net of loan reserves, (including tenant improvements and leasing commissions) on existing consolidated properties, and our share of capital expenditures at our joint venture properties, net of loan reserves, will be $389.1 million. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs. We expect to fund these capital expenditures with operating cash flow, existing liquidity, or incremental borrowings. We expect our capital needs over the next twelve months and thereafter will be met through a combination of cash on hand, net cash provided by operations, potential asset sales, borrowings or additional equity or debt issuances.

Dividends/Distributions

We expect to pay dividends to our stockholders based on the distributions we receive from our Operating Partnership primarily from property revenues net of operating expenses or, if necessary, from working capital.

To maintain our qualification as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT taxable income, determined before taking into consideration the dividends paid deduction and net capital gains. We intend to continue to pay regular quarterly dividends to our stockholders. Based on our current annual dividend rate of $3.25 per share, we would pay $289.7 million in dividends to our common stockholders on an annual basis. Before we pay any dividend, whether for Federal income tax purposes or otherwise, which would only be paid out of available cash to the extent permitted under the 2012 credit facility and senior unsecured notes, we must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.

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Insurance

We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR")), within three property insurance programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain assets, such as the development of One Vanderbilt. Additionally, our captive insurance company, Belmont Insurance Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger, although if Belmont is required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of Belmont's required payment. As of March 31, 2018, our second captive insurance company, Ticonderoga Insurance Company, or Ticonderoga, reinsures the NBCR risk that was retained by Belmont. However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants requiring us to maintain insurance and we could default under debt our instruments if the cost and/or availability of certain types of insurance make it impractical or impossible to comply with such covenants relating to insurance. Belmont provides coverage solely on properties owned by the Company or its affiliates.

Furthermore, with respect to certain of our properties, including properties held by joint ventures, or subject to triple net leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be maintained or adequately cover our risk of loss.

Funds from Operations

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 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.

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FFO for the three months ended March 31, 2018 and 2017 are as follows (in thousands):



	Three Months Ended March 31,
	2018			2017
Net income attributable to SL Green common stockholders	$	101,766		$	11,351
Add:
Depreciation and amortization	69,388			94,134
Joint venture depreciation and noncontrolling interest adjustments	48,006			24,282
Net income (loss) attributable to noncontrolling interests	5,470			(17,015		)
Less:
Gain on sale of real estate, net	23,521			567
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(6,440		)	2,047
Purchase price and other fair value adjustments	49,293			—
Depreciation on non-rental real estate assets	566			516
Depreciable real estate reserves	—			(56,272		)
Funds from Operations attributable to SL Green common stockholders	$	157,690		$	165,894
Cash flows provided by operating activities	$	94,546		$	113,149
Cash flows provided by (used in) investing activities	$	456,002		$	17,321
Cash flows (used in) provided by financing activities	$	(422,309	)	$	38,813

Inflation

Substantially all of our office leases provide for separate real estate tax and operating expense escalations as well as operating expense recoveries based on increases in the Consumer Price Index or other measures such as porters' wage. In addition, many of the leases provide for fixed base rent increases. We believe that inflationary increases will be at least partially offset by the contractual rent increases and expense escalations described above.

Accounting Standards Updates

The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies-Accounting Standards Updates" in the accompanying consolidated financial statements.

Forward-Looking Information

This report 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 report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York metropolitan area markets, business strategies, expansion and growth of our operations and other similar matters, are forward-looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.

Forward-looking statements are not guarantees of future performance and actual results or developments may differ materially, 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 report are subject to a number of risks and uncertainties 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. These risks and uncertainties include:


•	the effect of general economic, business and financial conditions, and their effect on the New York City real estate market in particular;


•	dependence upon certain geographic markets;


•	risks of real estate acquisitions, dispositions, developments and redevelopment, including the cost of construction delays and cost overruns;

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•	risks relating to debt and preferred equity investments;


•	availability and creditworthiness of prospective tenants and borrowers;


•	bankruptcy or insolvency of a major tenant or a significant number of smaller tenants;


•	adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy, and increasing availability of sublease space;


•	availability of capital (debt and equity);


•	unanticipated increases in financing and other costs, including a rise in interest rates;


•	our ability to comply with financial covenants in our debt instruments;


•	our ability to maintain its status as a REIT;


•	risks of investing through joint venture structures, including the fulfillment by our partners of their financial obligations;


•	the threat of terrorist attacks;


•	our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of our insurance coverage, including as a result of environmental contamination; and,


•	legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other similar laws and regulations.

Other factors and risks to our business, many of which are beyond our control, are described in other sections of this report and in our other filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

For quantitative and qualitative disclosure about market risk, see Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operation - Market Risk" in this Quarterly Report on Form 10-Q for the three months ended March 31, 2018 for the Company and the Operating Partnership and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Market Rate Risk" in the Annual Report on Form 10-K for the year ended December 31, 2017 for the Company and the Operating Partnership. Our exposures to market risk have not changed materially since December 31, 2017.

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ITEM 4. CONTROLS AND PROCEDURES

SL GREEN REALTY CORP.

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e) of the Exchange Act. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports. Also, the Company has investments in certain unconsolidated entities. As the Company does not control these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those the Company maintains with respect to its consolidated subsidiaries.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation as of the end of the period covered by this report, the Company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.

Changes in Internal Control over Financial Reporting

There have been no significant changes in the Company's internal control over financial reporting during the quarter ended March 31, 2018 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

SL GREEN OPERATING PARTNERSHIP, L.P.

Evaluation of Disclosure Controls and Procedures

Changes in Internal Control over Financial Reporting

There have been no significant changes in the Operating Partnership's internal control over financial reporting during the quarter ended March 31, 2018 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

As of March 31, 2018 there have been no material changes to the Risk Factors disclosed in "Part I. Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2018 the Operating Partnership issued no units of limited partnership interest in connection with an acquisition. SL Green may satisfy redemption requests for the units issued in the transaction described above with shares of SL Green’s common stock, on a one-for-one basis, pursuant to the Operating Partnership agreement. The units were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

At March 31, 2018 repurchases made under the stock repurchase plans were as follows:



Period	Shares repurchased	Average price paid per share	Total number of shares repurchased as part of the repurchase plan or programs	Maximum approximate dollar value of shares that may yet be repurchased under the plan (in millions)
2017	8,342,411	$101.64	8,342,411	$652.0
First quarter 2018	3,653,928	$97.07	11,996,339	$297.2

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

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ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS



31.1		Certification by the Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2		Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.3		Certification by the Chief Executive Officer of the Company, the sole general partner of the Operating Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.4		Certification by the Chief Financial Officer of the Company, the sole general partner of the Operating Partnership pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1		Certification by the Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2		Certification by the Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.3		Certification by the Chief Executive Officer of the Company, the sole general partner of the Operating Partnership pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.4		Certification by the Chief Financial Officer of the Company, the sole general partner of the Operating Partnership pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
101.10		The following financial statements from SL Green Realty Corp. and SL Green Operating Partnership L.P.’s Quarterly Report on Form 10-Q for the three months ended September 30, 2017, formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statement of Equity (unaudited), (v) Consolidated Statement of Capital (unaudited) (vi) Consolidated Statements of Cash Flows (unaudited), and (vii) Notes to Consolidated Financial Statements (unaudited), detail tagged and filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




	SL GREEN REALTY CORP.
	By:	SL Green Realty Corp.

		/s/ Matthew J. DiLiberto
Dated: May 10, 2018	By:	Matthew J. DiLiberto Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:



Signatures	Title	Date

/s/ Stephen L. Green	Chairman of the Board of Directors of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
Stephen L. Green		May 10, 2018

/s/ Marc Holliday	Chief Executive Officer and Director of SL Green, the sole general partner of the Operating Partnership (Principal Executive Officer)	May 10, 2018
Marc Holliday		May 10, 2018

/s/ Andrew W. Mathias	President and Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
Andrew W. Mathias		May 10, 2018

/s/ Matthew J. DiLiberto	Chief Financial Officer of SL Green, the sole general partner of the Operating Partnership (Principal Financial and Accounting Officer)	May 10, 2018
Matthew J. DiLiberto		May 10, 2018

/s/ John H. Alschuler, Jr.	Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
John H. Alschuler, Jr.		May 10, 2018

/s/ Edwin T. Burton, III	Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
Edwin T. Burton, III		May 10, 2018

/s/ John S. Levy	Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
John S. Levy		May 10, 2018

/s/ Craig M. Hatkoff	Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
Craig M. Hatkoff		May 10, 2018

/s/ Betsy S. Atkins	Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
Betsy S. Atkins		May 10, 2018

/s/ Lauren B. Dillard	Director of SL Green, the sole general partner of the Operating Partnership	May 10, 2018
Lauren B. Dillard		May 10, 2018

SIGNATURES




	SL GREEN OPERATING PARTNERSHIP, L.P.

	By:	/s/ Matthew J. DiLiberto
Dated: May 10, 2018		Matthew J. DiLiberto Chief Financial Officer

Exhibit

Exhibit 31.1

CERTIFICATION

I, Marc Holliday, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of SL Green Realty Corp. (the “registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 10, 2018

	/s/ Marc Holliday
Name:	Marc Holliday
Title:	Chief Executive Officer

Exhibit

Exhibit 31.2

CERTIFICATION

I, Matthew J. DiLiberto, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of SL Green Realty Corp. (the “registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 10, 2018

	/s/ Matthew J. DiLiberto
Name:	Matthew J. DiLiberto
Title:	Chief Financial Officer

Exhibit

Exhibit 31.3

CERTIFICATION

I, Marc Holliday, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of SL Green Operating Partnership, L.P. (the “registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 10, 2018

	/s/ Marc Holliday
Name:	Marc Holliday
Title:	Chief Executive Officer
	of SL Green Realty Corp., the
	general partner of the registrant

Exhibit

Exhibit 31.4

CERTIFICATION

I, Matthew J. DiLiberto, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of SL Green Operating Partnership, L.P. (the “registrant”);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ Matthew J. DiLiberto
Name:	Matthew J. DiLiberto
Title:	Chief Financial Officer
	of SL Green Realty Corp., the
	general partner of the registrant

May 10, 2018

Exhibit

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SL Green Realty Corp. (the “Company”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Holliday, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and


2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Marc Holliday
Name:	Marc Holliday
Title:	Chief Executive Officer

May 10, 2018

Exhibit

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SL Green Realty Corp. (the “Company”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew J. DiLiberto, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and


2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Matthew J. DiLiberto
Name:	Matthew J. DiLiberto
Title:	Chief Financial Officer

May 10, 2018

Exhibit

Exhibit 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SL Green Operating Partnership, L.P. (the “Operating Partnership”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Holliday, Chief Executive Officer of SL Green Realty Corp, the sole general partner of the Operating Partnership, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and


2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.



	/s/ Marc Holliday
Name:	Marc Holliday
Title:	Chief Executive Officer
	of SL Green Realty Corp., the
	general partner of the Operating Partnership

May 10, 2018

Exhibit

Exhibit 32.4

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SL Green Operating Partnership, L.P. (the “Operating Partnership”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew J. DiLiberto, Chief Financial Officer of SL Green Realty Corp, the sole general partner of the Operating Partnership, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and


2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.



	/s/ Matthew J. DiLiberto
Name:	Matthew J. DiLiberto
Title:	Chief Financial Officer
	of SL Green Realty Corp., the
	general partner of the Operating Partnership

May 10, 2018