SL Green Realty Corp. (the "Company") (NYSE: SLG) today reported
net income attributable to common stockholders for the quarter
ended June 30, 2021 of $105.3 million, or $1.51 per share, as
compared to net income of $56.4 million, or $0.76 per share, for
the same quarter in 2020. Net income attributable to common
stockholders for the second quarter of 2021 includes net gains
totaling $108.3 million, or $1.47 per share, recognized from the
sales of 635-641 Sixth Avenue and our interests in 605 West 42nd
Street, as compared to a net gain of $65.4 million, or $0.82 per
share, in the second quarter of 2020 recognized from the sale of
the retail condominium at 609 Fifth Avenue.
The Company also reported net income
attributable to common stockholders for the six months ended
June 30, 2021 of $97.9 million, or $1.40 per share, as
compared to net income of $171.2 million, or $2.28 per share, for
the same period in 2020. Net income attributable to common
stockholders for the six months ended June 30, 2021 includes
$94.1 million, or $1.27 per share, of net gains recognized from the
sale of real estate interests and non-cash fair value adjustments.
Net income for the six months ended June 30, 2020 included $137.5
million, or $1.69 per share, of net gains recognized from the sale
of real estate interests and non-cash fair value adjustments.
The Company reported FFO for the quarter ended
June 30, 2021 of $117.7 million, or $1.60 per share, as
compared to FFO for the same period in 2020 of $136.1 million, or
$1.70 per share. FFO for the second quarter of the prior year
included $12.4 million, or $0.15 per share, of lease termination
income as compared to just $1.1 million, or $0.02 per share, of
lease termination income included in the second quarter of
2021.
The Company also reported FFO for the six months
ended June 30, 2021 of $246.0 million, or $3.33 per share, as
compared to FFO of $308.1 million, or $3.79 per share, for the same
period in 2020. FFO for the six months ended June 30, 2020 included
$25.1 million, or $0.31 per share, of incremental income from
Credit Suisse at 1 Madison Avenue representing rent through
December 31, 2020.
All per share amounts are presented on a diluted
basis.
Operating and Leasing
Activity
For the quarter ended June 30, 2021, the
Company reported consolidated revenues and operating income of
$218.1 million and $88.7 million, respectively, compared to $253.7
million and $130.4 million, respectively, for the same period in
2020.
Same-store cash NOI, including our share of
same-store cash NOI from unconsolidated joint ventures, decreased
by 9.2% for the second quarter of 2021, and decreased 3.7%
excluding lease termination income, as compared to the same period
in 2020, an interim level that is consistent with our full-year
2021 goals and objectives.
Same-store cash NOI, including our share of
same-store cash NOI from unconsolidated joint ventures, decreased
by 5.4% for the six months June 30, 2021, and decreased 2.4%
excluding lease termination income, as compared to the same period
in 2020, an interim level that is consistent with our full-year
2021 goals and objectives.
During the second quarter of 2021, the Company
signed 42 office leases in its Manhattan office portfolio totaling
557,703 square feet. The average lease term on the Manhattan office
leases signed in the second quarter of 2021 was 4.7 years and
average tenant concessions were 2.4 months of free rent with a
tenant improvement allowance of $17.16 per rentable square foot,
excluding leases signed at One Vanderbilt Avenue. Twenty-five
leases comprising 265,798 square feet, representing office leases
on space that had been occupied within the prior twelve months, are
considered replacement leases on which mark-to-market is
calculated. Those replacement leases had average starting rents of
$84.12 per rentable square foot, representing a 1.1% decrease over
the previous fully escalated rents on the same office
spaces.
During the first six months of 2021, the Company
signed 63 office leases in its Manhattan office portfolio totaling
910,455 square feet. The average lease term on the Manhattan office
leases signed in the first six months of 2021 was 5.3 years and
average tenant concessions were 4.7 months of free rent with a
tenant improvement allowance of $39.76 per rentable square foot,
excluding leases signed at One Vanderbilt Avenue. Thirty-eight
leases comprising 453,124 square feet, representing office leases
on space that had been occupied within the prior twelve months, are
considered replacement leases on which mark-to-market is
calculated. Those replacement leases had average starting rents of
$72.98 per rentable square foot, representing a 1.7% decrease over
the previous fully escalated rents on the same office spaces.
Occupancy in the Company's Manhattan same-store
office portfolio was 93.6% as of June 30, 2021, inclusive of
53,962 square feet of leases signed but not yet commenced, as
compared to 94.1% at the end of the previous quarter.
Significant leases that were signed in the
second quarter included:
- Total of 227,670
square feet of leases signed at One Vanderbilt Avenue:
- New lease for
97,652 square feet, for 15.0 years;
- New lease with
MSD Partners for 35,567 square feet, for 15.0 years;
- New lease with
Mamoura Holdings (US), LLC for 28,448 square feet, for 10.0
years;
- Expansion lease
with TD Securities for 24,020 square feet, for 20.0 years, which
increases TD Securities' footprint in the building to 142,892
square feet;
- New lease with
Kyndrel for 22,531 square feet, for 9.0 years;
- New lease with
Nearwater Management LLC for 17,289 square feet, for 7.0 years;
and
- Expansion lease
with InTandem Capital Partners LLC and Sagewind Capital LLC for
2,163 square feet, for 7.0 years, which increases their joint
footprint in the building to 12,328 square feet;
- Early renewal
with Wells Fargo Bank N.A. for 103,803 square feet at 100 Park
Avenue, for 2.1 years;
- New lease with
GQG Partners, LLC for 8,936 square feet at 280 Park Avenue, for
15.0 years; and
- New retail lease
with Vashi for 11,777 square feet at 110 Greene Street, for 15.0
years.
Investment Activity
To date in 2021, the Company has
repurchased 3.4 million shares of its common stock and
redeemed 0.6 million units of its Operating Partnership, or OP
units, bringing total repurchases and redemptions to 34.9 million
shares of common stock and 1.6 million OP units for a combined
total of $3.1 billion under the previously announced $3.5
billion share repurchase program.
In June, the Company closed on the previously
announced sale of 635-641 Sixth Avenue for a gross sale price of
$325.0 million, equating to more than $1,200 per square foot.
The property is comprised of two adjoined buildings totaling eight
stories and 267,000 square feet, occupying the full western
block-front on Sixth Avenue from 19th Street to 20th Street in
Midtown South. The transaction generated net cash proceeds to the
Company of $313.2 million.
In June, the Company closed on the previously
announced sale of its 20.0% interest in 605 West 42nd Street, also
known as "Sky," for a gross asset valuation of $858.1 million.
The 71-story, 948,233 square foot luxury multifamily tower includes
295 affordable units of dedicated affordable housing and 68,000
square feet of retail space. The transaction generated net cash
proceeds to the Company of $54.5 million.
In June, the Company closed on the acquisition
of the fee interest in 461 Fifth Avenue for a gross purchase price
of $28.0 million pursuant to a purchase option under the
ground lease at the property, thereby consolidating a leasehold
position into 100% unencumbered fee ownership. The Company acquired
the leasehold interest in the property in 2003. The property
comprises 200,000 square feet on the corner of Fifth Avenue and
40th Street in East Midtown.
Debt and Preferred Equity Investment
Activity
The carrying value of the Company’s debt and
preferred equity ("DPE") portfolio was $1.11 billion at
June 30, 2021. The portfolio is comprised of $1.07 billion of
investments, which are classified in the debt and preferred equity
line item of the balance sheet, at a weighted average current yield
of 7.3%, or 9.0% excluding the effect of $238.7 million of
investments that are on non-accrual, and mortgage investments
aggregating $0.04 billion at a weighted average current yield of
3.6% that are included in other balance sheet line items for
accounting purposes.
During the second quarter, the Company acquired
a subordinate debt investment for $60.4 million, all of which
was retained, at a yield of 14.0%.
During the second quarter, the Company generated
$53.8 million of cash through the sale, at par, of one DPE
position.
Financing Activity
In June, the Company, along with its joint
venture partners, closed on the previously announced
$3.0 billion 10-year fixed-rate refinancing of One Vanderbilt
Avenue. The loan was securitized in a single asset, single borrower
(SASB) agented CMBS transaction. The new financing carries a stated
coupon of 2.855 percent, equivalent to a rate of 2.947 percent
inclusive of hedging costs, and replaces the previous
$1.75 billion construction facility that had an outstanding
balance of approximately $1.54 billion at the time of
repayment.
Dividends
In the second quarter of 2021, the Company
declared:
- Three monthly
dividends on its outstanding common stock of $0.3033 per share
which were paid on May 17, June 15, and July 15, 2021, equating to
an annualized dividend of $3.64 per share of common stock; and
- Quarterly
dividend on its outstanding 6.50% Series I Cumulative Redeemable
Preferred Stock of $0.40625 per share for the period April 15, 2021
through and including July 14, 2021, which was paid on July 15,
2021 and is the equivalent of an annualized dividend of $1.625 per
share.
Conference Call and Audio
Webcast
The Company's executive management team, led by
Marc Holliday, Chairman and Chief Executive Officer, will host a
conference call and audio webcast on Thursday, July 22, 2021, at
2:00 pm ET to discuss the financial results.
The supplemental data will be available prior to
the quarterly conference call in the Investors section of the SL
Green Realty Corp. website at www.slgreen.com under “Financial
Reports.”
The live conference call will be webcast in
listen-only mode in the Investors section of the SL Green Realty
Corp. website at www.slgreen.com under “Presentations &
Webcasts.” The conference may also be accessed by dialing toll-free
(877) 312-8765 or international (419) 386-0002, and using
conference ID 5177356.
A replay of the call will be available for 7
days after the call by dialing (855) 859-2056 using conference ID
1787091. A webcast replay will also be available in the Investors
section of the SL Green Realty Corp. website at
www.slgreen.com under “Presentations & Webcasts.”
Company Profile
SL Green Realty Corp., Manhattan's largest
office landlord, is a fully integrated real estate investment
trust, or REIT, that is focused primarily on acquiring, managing
and maximizing value of Manhattan commercial properties. As of
June 30, 2021, SL Green held interests in 77 buildings
totaling 35.3 million square feet. This included ownership
interests in 27.1 million square feet of Manhattan buildings and
7.4 million square feet securing debt and preferred equity
investments.
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 investor.relations@slgreen.com.
Disclaimers
Non-GAAP Financial
MeasuresDuring 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 StatementsThis
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 include risks and
uncertainties related to the on-going COVID-19 pandemic and the
duration and impact it will have on our business and the industry
as a whole and the other risks and uncertainties described in our
filings with the Securities and Exchange Commission. Except to the
extent required by law, we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a
result of future events, new information or otherwise.
|
SL GREEN REALTY CORP.CONSOLIDATED
STATEMENTS OF OPERATIONS(unaudited and in thousands,
except per share data) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
Revenues: |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
Rental revenue, net |
$ |
163,916 |
|
|
$ |
174,141 |
|
|
$ |
326,726 |
|
|
$ |
369,604 |
|
Escalation and
reimbursement |
20,695 |
|
|
21,745 |
|
|
45,974 |
|
|
48,913 |
|
Investment income |
20,107 |
|
|
39,943 |
|
|
39,380 |
|
|
78,476 |
|
Other income |
13,389 |
|
|
17,870 |
|
|
32,129 |
|
|
71,009 |
|
Total revenues |
218,107 |
|
|
253,699 |
|
|
444,209 |
|
|
568,002 |
|
Expenses: |
|
|
|
|
|
|
|
Operating expenses, including
related party expenses of $3,039 and $5,264 in 2021 and $2,739 and
$6,488 in 2020 |
43,883 |
|
|
40,897 |
|
|
86,167 |
|
|
94,763 |
|
Real estate taxes |
43,768 |
|
|
41,661 |
|
|
89,179 |
|
|
88,283 |
|
Operating lease rent |
6,707 |
|
|
7,831 |
|
|
13,446 |
|
|
15,198 |
|
Interest expense, net of
interest income |
18,960 |
|
|
30,070 |
|
|
42,348 |
|
|
67,564 |
|
Amortization of deferred
financing costs |
3,386 |
|
|
2,661 |
|
|
7,160 |
|
|
5,161 |
|
Depreciation and
amortization |
57,261 |
|
|
95,941 |
|
|
120,257 |
|
|
164,220 |
|
Loan loss and other investment
reserves, net of recoveries |
— |
|
|
6,813 |
|
|
— |
|
|
18,061 |
|
Transaction related costs |
3 |
|
|
373 |
|
|
25 |
|
|
438 |
|
Marketing, general and
administrative |
22,064 |
|
|
23,510 |
|
|
44,949 |
|
|
43,080 |
|
Total expenses |
196,032 |
|
|
249,757 |
|
|
403,531 |
|
|
496,768 |
|
|
|
|
|
|
|
|
|
Equity in net loss from
unconsolidated joint ventures |
(12,970 |
) |
|
(2,199 |
) |
|
(15,834 |
) |
|
(15,013 |
) |
Equity in net gain (loss) on
sale of interest in unconsolidated joint venture/real estate |
8,471 |
|
|
— |
|
|
(4,158 |
) |
|
— |
|
Purchase price and other fair
value adjustment |
(1,947 |
) |
|
— |
|
|
717 |
|
|
— |
|
Gain on sale of real estate,
net |
98,960 |
|
|
64,884 |
|
|
97,752 |
|
|
137,520 |
|
Depreciable real estate
reserves |
2,545 |
|
|
— |
|
|
(5,696 |
) |
|
— |
|
Net income |
117,134 |
|
|
66,627 |
|
|
113,279 |
|
|
193,741 |
|
Net income attributable to
noncontrolling interests in the Operating Partnership |
(6,282 |
) |
|
(3,070 |
) |
|
(5,806 |
) |
|
(9,272 |
) |
Net loss (income) attributable
to noncontrolling interests in other partnerships |
40 |
|
|
(1,023 |
) |
|
1,539 |
|
|
(730 |
) |
Preferred unit
distributions |
(1,823 |
) |
|
(2,353 |
) |
|
(3,669 |
) |
|
(5,019 |
) |
Net income attributable to SL
Green |
109,069 |
|
|
60,181 |
|
|
105,343 |
|
|
178,720 |
|
Perpetual preferred stock
dividends |
(3,737 |
) |
|
(3,737 |
) |
|
(7,475 |
) |
|
(7,475 |
) |
Net income attributable to SL Green common stockholders |
$ |
105,332 |
|
|
$ |
56,444 |
|
|
$ |
97,868 |
|
|
$ |
171,245 |
|
Earnings Per Share
(EPS) |
|
|
|
|
|
|
|
Net income per share (Basic)
(1) |
$ |
1.52 |
|
|
$ |
0.76 |
|
|
$ |
1.41 |
|
|
$ |
2.28 |
|
Net income per share (Diluted)
(1) |
$ |
1.51 |
|
|
$ |
0.76 |
|
|
$ |
1.40 |
|
|
$ |
2.28 |
|
|
|
|
|
|
|
|
|
Funds From Operations
(FFO) |
|
|
|
|
|
|
|
FFO per share (Basic) (1) |
$ |
1.60 |
|
|
$ |
1.75 |
|
|
$ |
3.35 |
|
|
$ |
3.90 |
|
FFO per share (Diluted)
(1) |
$ |
1.60 |
|
|
$ |
1.74 |
|
|
$ |
3.33 |
|
|
$ |
3.89 |
|
FFO per share (Pro forma)
(2) |
$ |
1.60 |
|
|
$ |
1.70 |
|
|
$ |
3.33 |
|
|
$ |
3.79 |
|
|
|
|
|
|
|
|
|
Basic ownership
interest |
|
|
|
|
|
|
|
Weighted average REIT common
shares for net income per share |
68,980 |
|
|
73,538 |
|
|
68,996 |
|
|
74,598 |
|
Weighted average partnership
units held by noncontrolling interests |
4,093 |
|
|
4,120 |
|
|
4,121 |
|
|
4,170 |
|
Basic weighted average
shares and units outstanding (1) |
73,073 |
|
|
77,658 |
|
|
73,117 |
|
|
78,768 |
|
|
|
|
|
|
|
|
|
Diluted ownership
interest |
|
|
|
|
|
|
|
Weighted average REIT common
share and common share equivalents |
69,634 |
|
|
73,946 |
|
|
69,778 |
|
|
75,038 |
|
Weighted average partnership
units held by noncontrolling interests |
4,093 |
|
|
4,120 |
|
|
4,121 |
|
|
4,170 |
|
Diluted weighted
average shares and units outstanding
(1) |
73,727 |
|
|
78,066 |
|
|
73,899 |
|
|
79,208 |
|
Pro forma adjustment (2) |
— |
|
|
2,153 |
|
|
— |
|
|
2,184 |
|
Pro forma diluted
weighted average shares and units outstanding
(2) |
73,727 |
|
|
80,219 |
|
|
73,899 |
|
|
81,392 |
|
(1) During the first quarter of 2021, the
Company completed a reverse stock split to mitigate the dilutive
impact of stock issued for a special dividend paid primarily in
stock. The 2020 basic and diluted weighted average common shares
outstanding have been retroactively adjusted to reflect the reverse
stock split.(2) During the first quarter of 2021, the Company
completed a reverse stock split to mitigate the dilutive impact of
stock issued for a special dividend paid primarily in stock. GAAP
requires the weighted average common shares outstanding to be
adjusted retroactively for all periods presented to reflect the
reverse stock split. To facilitate comparison between the periods
presented, the Company calculated Pro forma diluted weighted
average shares and units outstanding for the 2020 periods
presented, which adjusts the share counts back to the
originally-reported numbers.
|
SL GREEN REALTY CORP.CONSOLIDATED BALANCE
SHEETS(in thousands, except per share data) |
|
|
|
|
|
June 30, |
|
December 31, |
|
2021 |
|
2020 |
Assets |
(Unaudited) |
|
|
Commercial real estate
properties, at cost: |
|
|
|
Land and land interests |
$ |
1,403,399 |
|
|
$ |
1,315,832 |
|
Building and improvements |
4,088,659 |
|
|
4,168,193 |
|
Building leasehold and
improvements |
1,642,595 |
|
|
1,448,134 |
|
Right of use asset - financing
leases |
27,445 |
|
|
55,711 |
|
Right of use asset - operating
leases |
502,316 |
|
|
367,209 |
|
|
7,664,414 |
|
|
7,355,079 |
|
Less: accumulated
depreciation |
(2,008,438 |
) |
|
(1,956,077 |
) |
|
5,655,976 |
|
|
5,399,002 |
|
Assets held for sale |
— |
|
|
— |
|
Cash and cash equivalents |
218,337 |
|
|
266,059 |
|
Restricted cash |
98,164 |
|
|
106,736 |
|
Investment in marketable
securities |
32,339 |
|
|
28,570 |
|
Tenant and other
receivables |
40,147 |
|
|
44,507 |
|
Related party receivables |
36,430 |
|
|
34,657 |
|
Deferred rents receivable |
304,140 |
|
|
302,791 |
|
Debt and preferred equity
investments, net of discounts and deferred origination fees of
$7,922 and $11,232 and allowances of $13,213 and $13,213 in 2021
and 2020, respectively |
1,072,711 |
|
|
1,076,542 |
|
Investments in unconsolidated
joint ventures |
3,209,151 |
|
|
3,823,322 |
|
Deferred costs, net |
161,962 |
|
|
177,168 |
|
Other assets |
336,807 |
|
|
448,213 |
|
Total assets |
$ |
11,166,164 |
|
|
$ |
11,707,567 |
|
|
|
|
|
Liabilities |
|
|
|
Mortgages and other loans
payable |
$ |
1,874,592 |
|
|
$ |
2,001,361 |
|
Revolving credit facility |
— |
|
|
110,000 |
|
Unsecured term loan |
1,500,000 |
|
|
1,500,000 |
|
Unsecured notes |
1,251,404 |
|
|
1,251,888 |
|
Deferred financing costs,
net |
(26,820 |
) |
|
(34,521 |
) |
Total debt, net of deferred
financing costs |
4,599,176 |
|
|
4,828,728 |
|
Accrued interest payable |
13,771 |
|
|
14,825 |
|
Accounts payable and accrued
expenses |
126,929 |
|
|
151,309 |
|
Deferred revenue |
114,536 |
|
|
118,572 |
|
Lease liability - financing
leases |
124,808 |
|
|
152,521 |
|
Lease liability - operating
leases |
443,313 |
|
|
339,458 |
|
Dividend and distributions
payable |
24,407 |
|
|
149,294 |
|
Security deposits |
54,797 |
|
|
53,836 |
|
Liabilities related to assets
held for sale |
— |
|
|
— |
|
Junior subordinate deferrable
interest debentures held by trusts that issued trust preferred
securities |
100,000 |
|
|
100,000 |
|
Other liabilities |
196,966 |
|
|
302,798 |
|
Total liabilities |
5,798,703 |
|
|
6,211,341 |
|
|
|
|
|
Commitments and
contingencies |
— |
|
|
— |
|
Noncontrolling interest in the
Operating Partnership |
355,201 |
|
|
358,262 |
|
Preferred units |
198,503 |
|
|
202,169 |
|
|
|
|
|
Equity |
|
|
|
Stockholders’ equity: |
|
|
|
Series I Preferred Stock, $0.01 par value, $25.00 liquidation
preference, 9,200 issued and outstanding at both June 30, 2021 and
December 31, 2020 |
221,932 |
|
|
221,932 |
|
Common stock, $0.01 par value
160,000 shares authorized, 68,906 and 69,534 issued and outstanding
at June 30, 2021 and December 31, 2020, respectively (including
1,026 held in Treasury at both June 30, 2021 and December 31,
2020) |
690 |
|
|
716 |
|
Additional paid-in
capital |
3,823,290 |
|
|
3,862,949 |
|
Treasury stock at cost |
(124,049 |
) |
|
(124,049 |
) |
Accumulated other
comprehensive loss |
(66,863 |
) |
|
(67,247 |
) |
Retained earnings |
934,132 |
|
|
1,015,462 |
|
Total SL Green Realty Corp.
stockholders’ equity |
4,789,132 |
|
|
4,909,763 |
|
Noncontrolling interests in
other partnerships |
24,625 |
|
|
26,032 |
|
Total equity |
4,813,757 |
|
|
4,935,795 |
|
Total liabilities and
equity |
$ |
11,166,164 |
|
|
$ |
11,707,567 |
|
|
|
|
|
|
|
|
|
|
SL GREEN REALTY CORP.RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES(unaudited and in thousands,
except per share data) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
Funds From Operations
(FFO) Reconciliation: |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Net income attributable to SL Green common stockholders |
$ |
105,332 |
|
|
$ |
56,444 |
|
|
$ |
97,868 |
|
|
$ |
171,245 |
|
Add: |
|
|
|
|
|
|
|
Depreciation and amortization |
57,261 |
|
|
95,941 |
|
|
120,257 |
|
|
164,220 |
|
Joint venture depreciation and noncontrolling interest
adjustments |
59,485 |
|
|
45,107 |
|
|
115,187 |
|
|
101,425 |
|
Net income attributable to noncontrolling interests |
6,242 |
|
|
4,093 |
|
|
4,267 |
|
|
10,002 |
|
Less: |
|
|
|
|
|
|
|
Gain on sale of real estate, net |
98,960 |
|
|
64,884 |
|
|
97,752 |
|
|
137,520 |
|
Equity in net gain (loss) on sale of interest in unconsolidated
joint venture/real estate |
8,471 |
|
|
— |
|
|
(4,158 |
) |
|
— |
|
Purchase price and other fair value adjustments |
— |
|
|
— |
|
|
2,664 |
|
|
— |
|
Depreciable real estate reserves |
2,545 |
|
|
— |
|
|
(5,696 |
) |
|
— |
|
Depreciation on non-rental real estate assets |
672 |
|
|
609 |
|
|
1,199 |
|
|
1,259 |
|
FFO attributable to SL
Green common stockholders and unit holders |
$ |
117,672 |
|
|
$ |
136,092 |
|
|
$ |
245,998 |
|
|
$ |
308,113 |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
Operating income and
Same-store NOI Reconciliation: |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Net income |
$ |
117,134 |
|
|
$ |
66,627 |
|
|
$ |
113,279 |
|
|
$ |
193,741 |
|
Equity in net (gain) loss on
sale of interest in unconsolidated joint venture/real estate |
(8,471 |
) |
|
— |
|
|
4,158 |
|
|
— |
|
Purchase price and other fair
value adjustments |
1,947 |
|
|
— |
|
|
(717 |
) |
|
— |
|
Gain on sale of real estate,
net |
(98,960 |
) |
|
(64,884 |
) |
|
(97,752 |
) |
|
(137,520 |
) |
Depreciable real estate
reserves |
(2,545 |
) |
|
— |
|
|
5,696 |
|
|
— |
|
Depreciation and
amortization |
57,261 |
|
|
95,941 |
|
|
120,257 |
|
|
164,220 |
|
Interest expense, net of
interest income |
18,960 |
|
|
30,070 |
|
|
42,348 |
|
|
67,564 |
|
Amortization of deferred
financing costs |
3,386 |
|
|
2,661 |
|
|
7,160 |
|
|
5,161 |
|
Operating
income |
88,712 |
|
|
130,415 |
|
|
194,609 |
|
|
293,166 |
|
|
|
|
|
|
|
|
|
Equity in net loss from
unconsolidated joint ventures |
12,970 |
|
|
2,199 |
|
|
15,834 |
|
|
15,013 |
|
Marketing, general and
administrative expense |
22,064 |
|
|
23,510 |
|
|
44,949 |
|
|
43,080 |
|
Transaction related costs,
net |
3 |
|
|
373 |
|
|
25 |
|
|
438 |
|
Investment income |
(20,107 |
) |
|
(39,943 |
) |
|
(39,380 |
) |
|
(78,476 |
) |
Loan loss and other investment
reserves, net of recoveries |
— |
|
|
6,813 |
|
|
— |
|
|
18,061 |
|
Non-building revenue |
(8,027 |
) |
|
(192 |
) |
|
(12,488 |
) |
|
(3,982 |
) |
Net operating income
(NOI) |
95,615 |
|
|
123,175 |
|
|
203,549 |
|
|
287,300 |
|
|
|
|
|
|
|
|
|
Equity in net loss from
unconsolidated joint ventures |
(12,970 |
) |
|
(2,199 |
) |
|
(15,834 |
) |
|
(15,013 |
) |
SLG share of unconsolidated JV
depreciation and amortization |
58,537 |
|
|
46,217 |
|
|
113,812 |
|
|
92,091 |
|
SLG share of unconsolidated JV
interest expense, net of interest income |
34,274 |
|
|
32,714 |
|
|
67,701 |
|
|
68,491 |
|
SLG share of unconsolidated JV
amortization of deferred financing costs |
3,545 |
|
|
1,693 |
|
|
6,430 |
|
|
3,380 |
|
SLG share of unconsolidated JV
loss on early extinguishment of debt |
941 |
|
|
— |
|
|
941 |
|
|
— |
|
SLG share of unconsolidated JV
investment income |
(314 |
) |
|
(310 |
) |
|
(610 |
) |
|
(617 |
) |
SLG share of unconsolidated JV
non-building revenue |
(599 |
) |
|
(2,425 |
) |
|
(2,186 |
) |
|
(4,025 |
) |
NOI including SLG
share of unconsolidated JVs |
179,029 |
|
|
198,865 |
|
|
373,803 |
|
|
431,607 |
|
|
|
|
|
|
|
|
|
NOI from other
properties/affiliates |
(16,937 |
) |
|
(27,921 |
) |
|
(51,740 |
) |
|
(100,334 |
) |
Same-store
NOI |
162,092 |
|
|
170,944 |
|
|
322,063 |
|
|
331,273 |
|
|
|
|
|
|
|
|
|
Ground lease straight-line
adjustment |
244 |
|
|
245 |
|
|
489 |
|
|
533 |
|
Joint Venture ground lease
straight-line adjustment |
233 |
|
|
252 |
|
|
465 |
|
|
594 |
|
Straight-line and free
rent |
(7,884 |
) |
|
100 |
|
|
(11,264 |
) |
|
(2,800 |
) |
Amortization of acquired above
and below-market leases, net |
(100 |
) |
|
(858 |
) |
|
(195 |
) |
|
(2,428 |
) |
Joint Venture straight-line
and free rent |
(2,166 |
) |
|
(4,271 |
) |
|
(9,515 |
) |
|
(10,030 |
) |
Joint Venture amortization of
acquired above and below-market leases, net |
(4,824 |
) |
|
(3,807 |
) |
|
(9,135 |
) |
|
(7,630 |
) |
Same-store cash
NOI |
$ |
147,595 |
|
|
$ |
162,605 |
|
|
$ |
292,908 |
|
|
$ |
309,512 |
|
|
|
|
|
|
|
|
|
Lease termination income |
(1,095 |
) |
|
(10,570 |
) |
|
(1,100 |
) |
|
(10,590 |
) |
Joint Venture lease
termination income |
(247 |
) |
|
(172 |
) |
|
(254 |
) |
|
(179 |
) |
Same-store cash NOI
excluding lease termination income |
$ |
146,253 |
|
|
$ |
151,863 |
|
|
$ |
291,554 |
|
|
$ |
298,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SL GREEN REALTY
CORP.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 April
2002, and subsequently amended, defines FFO as net income (loss)
(computed in accordance with 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 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 the
Company's 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 pro-rata
adjustments from the Company'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 National Association of Real Estate Investment Trusts, or
NAREIT, which may not be comparable to EBITDAre reported by other
REITs that do not compute EBITDAre in accordance with the NAREIT
definition, or that interpret the NAREIT definition differently
than the Company does. The White Paper on EBITDAre approved by the
Board of Governors of NAREIT in September 2017 defines EBITDAre as
net income (loss) (computed in accordance with Generally Accepted
Accounting Principles, or GAAP), plus interest expense, plus income
tax expense, plus depreciation and amortization, plus (minus)
losses and gains on the disposition of depreciated property, plus
impairment write-downs of depreciated property and investments in
unconsolidated joint ventures, plus adjustments to reflect the
entity's share of EBITDAre of unconsolidated joint ventures.
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 the
amortization of acquired above and below-market leases 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 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 the Company's 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
CONTACTMatt DiLibertoChief Financial
Officer(212) 594-2700
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