Press Release Details
SL Green Realty Corp. Reports Third Quarter 2019 EPS of $0.40 Per Share; and FFO of $1.75 Per Share
Financial and Operating Highlights
-
Net income attributable to common stockholders of
$0.40 per share for the third quarter as compared to$1.03 per share for the same period in 2018. Net income attributable to common stockholders for the third quarter of 2019 includes$3.5 million , or$0.04 per share, of net gains recognized from the sale of real estate as compared to$68.4 million , or$0.76 per share, for the same period in 2018. -
Funds from operations, or FFO, of
$1.75 per share for the third quarter as compared to$1.66 per share for the same period in 2018. -
Same-store cash net operating income, or NOI, including our share of same-store cash NOI from unconsolidated joint ventures, increased 2.6% for the first nine months of 2019 excluding lease termination income and free rent given to
Viacom at1515 Broadway , as compared to the same period in the prior year. -
Signed 31 Manhattan office leases covering 268,349 square feet in the third quarter and 104 Manhattan leases covering 1,184,895 square feet in the first nine months of 2019. The mark-to-market on signed
Manhattan office leases for the first nine months of 2019 was 22.0% higher than the previous fully escalated rents on the same spaces. -
Topped out steel at
One Vanderbilt Avenue at 1,401 feet. Construction is more than three months ahead of schedule and$100 million under budget with an expected opening inAugust 2020 . -
Manhattan same-store occupancy was 95.3% as ofSeptember 30, 2019 , inclusive of leases signed but not yet commenced.
Investing Highlights
-
To date in 2019, the Company has repurchased a combined 2.7 million shares of common stock and common units of its
Operating Partnership , or OP units, under the previously announced$2.5 billion share repurchase plan, at an average price of$84.08 per share. Since inception of the program, the Company has repurchased a total of 20.6 million shares of its common stock and redeemed 0.6 million OP units. -
Entered into a contract to sell
220 East 42nd Street , also known asThe News Building , for total consideration of$815.0 million , or approximately$715 per square foot. Net proceeds from the sale will be available for share repurchases, debt repayment or new investments. Thismarks one of the highest valuations for an office building ever sold onSecond Avenue . The transaction is expected to close in the first quarter of 2020. -
Entered into a contract to acquire a six-story, 160,000-square-foot office property on the far west side of midtown
Manhattan for a gross purchase price of$90.0 million . The property will be redeveloped into a modern, Class-A building, attracting companies across industries, including TAMI and boutique FIRE tenants. The transaction is expected to close within 90 days. -
Entered into a contract to sell
1010 Washington Boulevard inStamford, Connecticut , for sale price of$23.1 million . The transaction is expected to generate cash proceeds of$21.6 million and close in the fourth quarter of 2019. -
Entered into a 25-year ground lease for the high street retail property at
712 Madison Avenue toGraff Diamonds . -
Sold a 49% interest in the prime retail condominium at
115 Spring Street in Soho at a gross asset valuation of$66.6 million . The property was acquired in 2014 for$52.0 million .
Financing Highlights
-
Together with our joint venture partner, closed on the refinancing of
55 West 46th Street , also known as Tower 46. The new$198.0 million mortgage replaces the previous$195.0 million mortgage, has a 3-year term, with two one-year extension options, and bears interest at a floating rate of 1.25% over LIBOR. -
Together with our joint venture partner, closed on a
$75.0 million upsize of our existing financing at2 Herald Square to$225.0 million and reduced the interest rate on the loan by 10 basis points to a floating rate of 1.45% over LIBOR.
Summary
The Company also reported net income attributable to common stockholders for the nine months ended
The Company reported FFO for the quarter ended
The Company also reported FFO for the nine months ended
All per share amounts are presented on a diluted basis.
Operating and Leasing Activity
For the quarter ended
Same-store cash NOI, including our share of same-store cash NOI from unconsolidated joint ventures increased by 1.5% for the third quarter and 2.6% for the nine months ended
During the third quarter, the Company signed 31 office leases in its
During the first nine months of 2019, the Company signed 104 office leases in its
Occupancy in the Company's
Significant leases that were signed in the third quarter included:
-
Renewal and expansion with
Kobre & Kim LLP for 67,230 square feet at800 Third Avenue , for 10.8 years; -
New lease with
IMG Worldwide Inc. for 36,077 square feet at304 Park Avenue South , for 8.1 years; -
New lease with
Chicago Title Insurance Company for 32,826 square feet at711 Third Avenue , for 10.5 years; and -
New retail lease with
Ulta Beauty, Inc. for 21,706 square feet at2 Herald Square , for 10.1 years.
Investment Activity
To date in 2019, the Company has repurchased a combined 2.7 million shares of common stock and common units of its
In October, the Company entered into a contract to acquire a six-story, 160,000-square-foot office property on the far west side of midtown
In October, the Company entered into a 25-year ground lease for the high street retail property at
In September, the Company entered into a contract to sell
In September, the Company entered into a contract to sell
In August, the Company sold a 49% interest in the 5,218 square foot prime retail condominium at
Debt and Preferred Equity Investment Activity
The carrying value of the Company’s debt and preferred equity investment portfolio decreased to
Financing Activity
In October, the Company, along with its joint venture partner, closed on a
In August, the Company, along with its joint venture partner, closed on the refinancing of
Dividends
In the third quarter of 2019, the Company declared quarterly dividends on its outstanding common and preferred stock as follows:
-
$0.85 per share of common stock, which was paid onOctober 15, 2019 to shareholders of record on the close of business onSeptember 30, 2019 ; and -
$0.40625 per share on the Company's 6.50% Series I Cumulative Redeemable Preferred Stock for the periodJuly 15, 2019 through and includingOctober 14, 2019 , which was paid onOctober 15, 2019 to shareholders of record on the close of business onSeptember 30, 2019 , and reflects the regular quarterly dividend, which is the equivalent of an annualized dividend of$1.625 per share.
Conference Call and Audio Webcast
The Company's executive management team, led by
The supplemental data will be available prior to the quarterly conference call in the Investors section of the
The live conference call will be webcast in listen-only mode in the Investors section of the
A replay of the call will be available 7 days after the call by dialing (855) 859-2056 using passcode 2683935. A webcast replay will also be available in the Investors section of the
Company Profile
To be added to the Company's distribution list or to obtain the latest news releases and other Company information, please visit our website at www.slgreen.com or contact Investor Relations at (212) 594-2700.
Disclaimers
Non-GAAP Financial Measures
During the quarterly conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. In addition, the Company has used non-GAAP financial measures in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found in this release and in the Company’s Supplemental Package.
Forward-looking Statements
This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements. 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 press release are subject to a number of risks and uncertainties, many of which are beyond our control, that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. Factors and risks to our business that could cause actual results to differ from those contained in the forward-looking statements are described in our filings with the
SL GREEN REALTY CORP.
|
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
September 30, |
|
September 30, |
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Rental revenue, net |
$ |
215,447 |
|
|
$ |
221,763 |
|
|
$ |
644,566 |
|
|
$ |
648,501 |
|
|
Escalation and reimbursement |
32,581 |
|
|
29,103 |
|
|
88,539 |
|
|
82,554 |
|
|||||
Investment income |
51,518 |
|
|
48,977 |
|
|
153,167 |
|
|
143,540 |
|
|||||
Other income |
14,088 |
|
|
7,702 |
|
|
44,641 |
|
|
35,761 |
|
|||||
Total revenues |
313,634 |
|
|
307,545 |
|
|
930,913 |
|
|
910,356 |
|
|||||
Expenses: |
|
|
|
|
|
|
|
|||||||||
Operating expenses, including related party expenses of $5,460 and $13,575 in 2019 and $4,790 and $13,289 in 2018 |
59,847 |
|
|
56,852 |
|
|
175,862 |
|
|
172,871 |
|
|||||
Real estate taxes |
49,626 |
|
|
48,805 |
|
|
143,008 |
|
|
139,788 |
|
|||||
Operating lease rent |
8,295 |
|
|
9,507 |
|
|
24,891 |
|
|
26,661 |
|
|||||
Interest expense, net of interest income |
48,112 |
|
|
55,168 |
|
|
145,797 |
|
|
156,695 |
|
|||||
Amortization of deferred financing costs |
3,112 |
|
|
2,630 |
|
|
8,566 |
|
|
9,713 |
|
|||||
Depreciation and amortization |
70,464 |
|
|
70,747 |
|
|
208,268 |
|
|
208,049 |
|
|||||
Loan loss and other investment reserves, net of recoveries |
— |
|
|
1,087 |
|
|
— |
|
|
1,087 |
|
|||||
Transaction related costs |
44 |
|
|
163 |
|
|
360 |
|
|
673 |
|
|||||
Marketing, general and administrative |
23,841 |
|
|
20,594 |
|
|
75,300 |
|
|
66,601 |
|
|||||
Total expenses |
263,341 |
|
|
265,553 |
|
|
782,052 |
|
|
782,138 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Equity in net (loss) income from unconsolidated joint ventures |
(9,864 |
) |
|
971 |
|
|
(22,644 |
) |
|
9,709 |
|
|||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
— |
|
|
70,937 |
|
|
76,181 |
|
|
136,522 |
|
|||||
Purchase price and other fair value adjustment |
3,799 |
|
|
(3,057 |
) |
|
69,389 |
|
|
57,385 |
|
|||||
Gain (loss) on sale of real estate, net |
3,541 |
|
|
(2,504 |
) |
|
2,492 |
|
|
6,227 |
|
|||||
Depreciable real estate reserves |
(7,047 |
) |
|
(6,691 |
) |
|
(7,047 |
) |
|
(6,691 |
) |
|||||
Loss on early extinguishment of debt |
— |
|
|
(2,194 |
) |
|
— |
|
|
(2,194 |
) |
|||||
Net income |
40,722 |
|
|
99,454 |
|
|
267,232 |
|
|
329,176 |
|
|||||
Net income attributable to noncontrolling interests in the Operating Partnership |
(1,719 |
) |
|
(4,797 |
) |
|
(12,306 |
) |
|
(15,656 |
) |
|||||
Net loss (income) attributable to noncontrolling interests in other partnerships |
624 |
|
|
136 |
|
|
2,524 |
|
|
(234 |
) |
|||||
Preferred unit distributions |
(2,732 |
) |
|
(2,846 |
) |
|
(8,185 |
) |
|
(8,542 |
) |
|||||
Net income attributable to SL Green |
36,895 |
|
|
91,947 |
|
|
249,265 |
|
|
304,744 |
|
|||||
Perpetual preferred stock dividends |
(3,738 |
) |
|
(3,738 |
) |
|
(11,213 |
) |
|
(11,213 |
) |
|||||
Net income attributable to SL Green common stockholders |
$ |
33,157 |
|
|
$ |
88,209 |
|
|
$ |
238,052 |
|
|
$ |
293,531 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings Per Share (EPS) |
|
|
|
|
|
|
|
|||||||||
Net income per share (Basic) |
$ |
0.40 |
|
|
$ |
1.03 |
|
|
$ |
2.87 |
|
|
$ |
3.34 |
|
|
Net income per share (Diluted) |
$ |
0.40 |
|
|
$ |
1.03 |
|
|
$ |
2.87 |
|
|
$ |
3.34 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Funds From Operations (FFO) |
|
|
|
|
|
|
|
|||||||||
FFO per share (Basic) |
$ |
1.75 |
|
|
$ |
1.66 |
|
|
$ |
5.26 |
|
|
$ |
5.01 |
|
|
FFO per share (Diluted) |
$ |
1.75 |
|
|
$ |
1.66 |
|
|
$ |
5.25 |
|
|
$ |
5.00 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic ownership interest |
|
|
|
|
|
|
|
|||||||||
Weighted average REIT common shares for net income per share |
82,292 |
|
|
85,566 |
|
|
82,855 |
|
|
87,692 |
|
|||||
Weighted average partnership units held by noncontrolling interests |
4,258 |
|
|
4,643 |
|
|
4,283 |
|
|
4,677 |
|
|||||
Basic weighted average shares and units outstanding |
86,550 |
|
|
90,209 |
|
|
87,138 |
|
|
92,369 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Diluted ownership interest |
|
|
|
|
|
|
|
|||||||||
Weighted average REIT common share and common share equivalents |
82,456 |
|
|
85,785 |
|
|
83,026 |
|
|
87,903 |
|
|||||
Weighted average partnership units held by noncontrolling interests |
4,258 |
|
|
4,643 |
|
|
4,283 |
|
|
4,677 |
|
|||||
Diluted weighted average shares and units outstanding |
86,714 |
90,428 |
|
87,309 |
92,580 |
|||||||||||
SL GREEN REALTY CORP.
|
||||||||
|
September 30, |
December 31, |
||||||
|
2019 |
2018 |
||||||
Assets |
(Unaudited) |
|
||||||
Commercial real estate properties, at cost: |
|
|
||||||
Land and land interests |
$ |
1,860,922 |
|
$ |
1,774,899 |
|
||
Building and improvements |
5,352,144 |
|
5,268,484 |
|
||||
Building leasehold and improvements |
1,431,183 |
|
1,423,107 |
|
||||
Right of use asset - financing leases |
47,445 |
|
47,445 |
|
||||
Right of use asset - operating leases |
396,795 |
|
— |
|
||||
|
9,088,489 |
|
8,513,935 |
|
||||
Less: accumulated depreciation |
(2,147,395 |
) |
(2,099,137 |
) |
||||
|
6,941,094 |
|
6,414,798 |
|
||||
Assets held for sale |
403,488 |
|
— |
|
||||
Cash and cash equivalents |
121,751 |
|
129,475 |
|
||||
Restricted cash |
94,793 |
|
149,638 |
|
||||
Investment in marketable securities |
30,208 |
|
28,638 |
|
||||
Tenant and other receivables |
44,950 |
|
41,589 |
|
||||
Related party receivables |
20,030 |
|
28,033 |
|
||||
Deferred rents receivable |
306,431 |
|
335,985 |
|
||||
Debt and preferred equity investments, net of discounts and deferred origination fees of $16,224 and $22,379 and allowances of $1,750 and $5,750 in 2019 and 2018, respectively |
1,954,556 |
|
2,099,393 |
|
||||
Investments in unconsolidated joint ventures |
2,923,595 |
|
3,019,020 |
|
||||
Deferred costs, net |
182,621 |
|
209,110 |
|
||||
Other assets |
271,467 |
|
295,679 |
|
||||
Total assets |
$ |
13,294,984 |
|
$ |
12,751,358 |
|
||
|
|
|
||||||
Liabilities |
|
|
||||||
Mortgages and other loans payable |
$ |
2,454,684 |
|
$ |
1,988,160 |
|
||
Revolving credit facility |
335,000 |
|
500,000 |
|
||||
Unsecured term loan |
1,500,000 |
|
1,500,000 |
|
||||
Unsecured notes |
1,503,072 |
|
1,503,758 |
|
||||
Deferred financing costs, net |
(56,988 |
) |
(50,218 |
) |
||||
Total debt, net of deferred financing costs |
5,735,768 |
|
5,441,700 |
|
||||
Accrued interest payable |
27,568 |
|
23,154 |
|
||||
Accounts payable and accrued expenses |
143,361 |
|
147,061 |
|
||||
Deferred revenue |
126,321 |
|
94,453 |
|
||||
Lease liability - financing leases |
44,251 |
|
43,616 |
|
||||
Lease liability - operating leases |
384,661 |
|
3,603 |
|
||||
Dividend and distributions payable |
78,541 |
|
80,430 |
|
||||
Security deposits |
62,166 |
|
64,688 |
|
||||
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities |
100,000 |
|
100,000 |
|
||||
Other liabilities |
140,899 |
|
116,566 |
|
||||
Total liabilities |
6,843,536 |
|
6,115,271 |
|
||||
|
|
|
||||||
Commitments and contingencies |
— |
|
— |
|
||||
Noncontrolling interest in the Operating Partnership |
401,863 |
|
387,805 |
|
||||
Preferred units |
286,285 |
|
300,427 |
|
||||
|
|
|
||||||
Equity |
|
|
||||||
Stockholders’ equity: |
|
|
||||||
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both September 30, 2019 and December 31, 2018 |
221,932 |
|
221,932 |
|
||||
Common stock, $0.01 par value 160,000 shares authorized, 82,570 and 84,739 issued and outstanding at September 30, 2019
|
826 |
|
847 |
|
||||
Additional paid-in capital |
4,407,667 |
|
4,508,685 |
|
||||
Treasury stock at cost |
(124,049 |
) |
(124,049 |
) |
||||
Accumulated other comprehensive (loss) income |
(40,132 |
) |
15,108 |
|
||||
Retained earnings |
1,225,904 |
|
1,278,998 |
|
||||
Total SL Green Realty Corp. stockholders’ equity |
5,692,148 |
|
5,901,521 |
|
||||
Noncontrolling interests in other partnerships |
71,152 |
|
46,334 |
|
||||
Total equity |
5,763,300 |
|
5,947,855 |
|
||||
Total liabilities and equity |
$ |
13,294,984 |
$ |
12,751,358 |
|
|||
SL GREEN REALTY CORP.
|
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
September 30, |
|
September 30, |
|||||||||||||
Funds From Operations (FFO) Reconciliation: |
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income attributable to SL Green common stockholders |
$ |
33,157 |
|
|
$ |
88,209 |
|
|
$ |
238,052 |
|
|
$ |
293,531 |
|
|
Add: |
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization |
70,464 |
|
|
70,747 |
|
|
208,268 |
|
|
208,049 |
|
|||||
Joint venture depreciation and noncontrolling interest adjustments |
47,674 |
|
|
45,485 |
|
|
145,202 |
|
|
140,799 |
|
|||||
Net income attributable to noncontrolling interests |
1,095 |
|
|
4,661 |
|
|
9,782 |
|
|
15,890 |
|
|||||
Less: |
|
|
|
|
|
|
|
|||||||||
Gain (loss) on sale of real estate, net |
3,541 |
|
|
(2,504 |
) |
|
2,492 |
|
|
6,227 |
|
|||||
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
— |
|
|
70,937 |
|
|
76,181 |
|
|
136,522 |
|
|||||
Purchase price and other fair value adjustments |
3,799 |
|
|
(3,057 |
) |
|
69,389 |
|
|
57,385 |
|
|||||
Depreciable real estate reserves |
(7,047 |
) |
|
(6,691 |
) |
|
(7,047 |
) |
|
(6,691 |
) |
|||||
Depreciation on non-rental real estate assets |
740 |
|
|
616 |
|
|
2,193 |
|
|
1,766 |
|
|||||
FFO attributable to SL Green common stockholders |
$ |
151,357 |
|
|
$ |
149,801 |
|
|
$ |
458,096 |
|
|
$ |
463,060 |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
September 30, |
|
September 30, |
|||||||||||||
Operating income and Same-store NOI Reconciliation: |
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ |
40,722 |
|
|
$ |
99,454 |
|
|
$ |
267,232 |
|
|
$ |
329,176 |
|
|
Equity in net gain on sale of interest in unconsolidated joint venture/real estate |
— |
|
|
(70,937 |
) |
|
(76,181 |
) |
|
(136,522 |
) |
|||||
Purchase price and other fair value adjustments |
(3,799 |
) |
|
3,057 |
|
|
(69,389 |
) |
|
(57,385 |
) |
|||||
(Gain) loss on sale of real estate, net |
(3,541 |
) |
|
2,504 |
|
|
(2,492 |
) |
|
(6,227 |
) |
|||||
Depreciable real estate reserves |
7,047 |
|
|
6,691 |
|
|
7,047 |
|
|
6,691 |
|
|||||
Depreciation and amortization |
70,464 |
|
|
70,747 |
|
|
208,268 |
|
|
208,049 |
|
|||||
Interest expense, net of interest income |
48,112 |
|
|
55,168 |
|
|
145,797 |
|
|
156,695 |
|
|||||
Amortization of deferred financing costs |
3,112 |
|
|
2,630 |
|
|
8,566 |
|
|
9,713 |
|
|||||
Operating income |
162,117 |
|
|
169,314 |
|
|
488,848 |
|
|
510,190 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Equity in net loss (income) from unconsolidated joint ventures |
9,864 |
|
|
(971 |
) |
|
22,644 |
|
|
(9,709 |
) |
|||||
Marketing, general and administrative expense |
23,841 |
|
|
20,594 |
|
|
75,300 |
|
|
66,601 |
|
|||||
Transaction related costs, net |
44 |
|
|
163 |
|
|
360 |
|
|
673 |
|
|||||
Investment income |
(51,518 |
) |
|
(48,977 |
) |
|
(153,167 |
) |
|
(143,540 |
) |
|||||
Loan loss and other investment reserves, net of recoveries |
— |
|
|
1,087 |
|
|
— |
|
|
1,087 |
|
|||||
Non-building revenue |
(6,055 |
) |
|
(2,531 |
) |
|
(22,468 |
) |
|
(15,708 |
) |
|||||
Loss on early extinguishment of debt |
— |
|
|
2,194 |
|
|
— |
|
|
2,194 |
|
|||||
Net operating income (NOI) |
138,293 |
|
|
140,873 |
|
|
411,517 |
|
|
411,788 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Equity in net (loss) income from unconsolidated joint ventures |
(9,864 |
) |
|
971 |
|
|
(22,644 |
) |
|
9,709 |
|
|||||
SLG share of unconsolidated JV depreciation and amortization |
46,557 |
|
|
45,839 |
|
|
142,861 |
|
|
141,023 |
|
|||||
SLG share of unconsolidated JV interest expense, net of interest income |
38,295 |
|
|
34,947 |
|
|
115,983 |
|
|
107,397 |
|
|||||
SLG share of unconsolidated JV amortization of deferred financing costs |
1,505 |
|
|
1,390 |
|
|
4,664 |
|
|
4,815 |
|
|||||
SLG share of unconsolidated JV loss on early extinguishment of debt |
258 |
|
|
— |
|
|
258 |
|
|
— |
|
|||||
SLG share of unconsolidated JV investment income |
(314 |
) |
|
(4,469 |
) |
|
(3,017 |
) |
|
(9,263 |
) |
|||||
SLG share of unconsolidated JV non-building revenue |
(798 |
) |
|
(901 |
) |
|
(2,724 |
) |
|
(2,911 |
) |
|||||
NOI including SLG share of unconsolidated JVs |
213,932 |
|
|
218,650 |
|
|
646,898 |
|
|
662,558 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
NOI from other properties/affiliates |
(7,362 |
) |
|
(14,097 |
) |
|
(26,408 |
) |
|
(52,295 |
) |
|||||
Same-Store NOI |
206,570 |
|
|
204,553 |
|
|
620,490 |
|
|
610,263 |
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Ground lease straight-line adjustment |
514 |
|
|
524 |
|
|
1,542 |
|
|
1,572 |
|
|||||
Joint Venture ground lease straight-line adjustment |
107 |
|
|
258 |
|
|
573 |
|
|
773 |
|
|||||
Straight-line and free rent |
(2,339 |
) |
|
(5,536 |
) |
|
(5,943 |
) |
|
(8,979 |
) |
|||||
Amortization of acquired above and below-market leases, net |
(902 |
) |
|
(1,320 |
) |
|
(2,770 |
) |
|
(4,241 |
) |
|||||
Joint Venture straight-line and free rent |
(15,739 |
) |
|
(3,878 |
) |
|
(45,765 |
) |
|
(14,975 |
) |
|||||
Joint Venture amortization of acquired above and below-market leases, net |
(4,122 |
) |
|
(4,065 |
) |
|
(12,632 |
) |
|
(11,616 |
) |
|||||
Same-store cash NOI |
$ |
184,089 |
|
|
$ |
190,536 |
|
|
$ |
555,495 |
|
|
$ |
572,797 |
|
|
NON-GAAP FINANCIAL MEASURES - DISCLOSURES
Funds from Operations (FFO)
FFO is a widely recognized non-GAAP financial measure of REIT performance. The Company computes FFO in accordance with standards established by 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
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 real estate related impairment charges, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, and interest costs, providing perspective not immediately apparent from net income. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs, including our ability to make cash distributions.
Funds Available for Distribution (FAD)
FAD is a non-GAAP financial measure that is calculated as FFO plus non-real estate depreciation, allowance for straight line credit loss, adjustment for straight line operating lease rent, non-cash deferred compensation, and a pro-rata adjustment for FAD from SLG’s unconsolidated JVs, less straight line rental income, free rent net of amortization, second cycle tenant improvement and leasing costs, and recurring building improvements.
FAD is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined in accordance with GAAP. FAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate FAD the same way, the presentation of FAD may not be comparable to similarly titled measures of other companies. FAD does not represent cash flow from operating, investing and finance activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company’s financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company’s liquidity.
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)
EBITDAre is a non-GAAP financial measure. The Company computes EBITDAre in accordance with standards established by the
The Company presents EBITDAre because the Company believes that EBITDAre, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of the Company’s ability to incur and service debt. EBITDAre should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company’s financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company’s liquidity.
Net Operating Income (NOI) and Cash NOI
NOI is a non-GAAP financial measure that is calculated as operating income before transaction related costs, gains/losses on early extinguishment of debt, marketing general and administrative expenses and non-real estate revenue. Cash NOI is also a non-GAAP financial measure that is calculated by subtracting free rent (net of amortization), straight-line rent, and amortization of acquired above and below-market leases, net from NOI, while adding operating lease straight-line adjustment and the allowance for straight-line tenant credit loss.
The Company presents NOI and Cash NOI because the Company believes that these measures, when taken together with the corresponding GAAP financial measures and our reconciliations, provide investors with meaningful information regarding the operating performance of properties. When operating performance is compared across multiple periods, the investor is provided with information not immediately apparent from net income that is determined in accordance with GAAP. NOI and Cash NOI provide information on trends in the revenue generated and expenses incurred in operating our properties, unaffected by the cost of leverage, straight-line adjustments, depreciation, amortization, and other net income components. The Company uses these metrics internally as performance measures. None of these measures is an alternative to net income (determined in accordance with GAAP) and same-store performance should not be considered an alternative to GAAP net income performance.
Coverage Ratios
The Company presents fixed charge and debt service coverage ratios to provide a measure of the Company’s financial flexibility to service current debt amortization, interest expense and operating lease rent from current cash net operating income. These coverage ratios represent a common measure of the Company’s ability to service fixed cash payments; however, these ratios are not used as an alternative to cash flow from operating, financing and investing activities (determined in accordance with GAAP).
SLG-EARN
View source version on businesswire.com: https://www.businesswire.com/news/home/20191016005877/en/
Source:
Matt DiLiberto
Chief Financial Officer
(212) 594-2700