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SL Green Realty Corp. Reports Second Quarter 2013 FFO Of $1.42 Per Share Before Transaction Costs And Non-Recurring Charges; And EPS Of $0.09 Per Share

The supplemental package will be available prior to the quarterly conference call on the Company's website, www.slgreen.com, under “Financial Reports” in the Investors section.

The live conference will be webcast in listen-only mode on the Company's website under “Event Calendar & Webcasts” in the Investors section and on Thomson's StreetEvents Network. The conference may also be accessed by dialing 866-318-8620 Domestic or 617-399-5139 International, using pass-code “SL Green.”

A replay of the call will be available through August 1, 2013 by dialing 888-286-8010 Domestic or 617-801-6888 International, using pass-code 74246184.

Company Profile

SL Green Realty Corp., New York City's largest office landlord, is the only 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, 2013, SL Green owned interests in 87 Manhattan properties totaling 42.8 million square feet. This included ownership interests in 24.3 million square feet of commercial properties and debt and preferred equity investments secured by 14.7 million square feet of properties. In addition to its Manhattan investments, SL Green holds ownership interests in 31 suburban assets totaling 5.4 million square feet in Brooklyn, Long Island, Westchester County, Connecticut and New Jersey, along with three development properties in the suburbs encompassing approximately 0.4 million square feet. The Company also has ownership interests in 30 properties totaling 4.1 million square feet in southern California.

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 on pages 11 and 12 of this release and in the Company’s Supplemental Package.

Forward-looking Statement

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. All forward-looking statements speak only as of the date of this press release. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others, the strength of the commercial office real estate markets in the New York Metropolitan area, reduced demand for office space, unanticipated increases in financing and other costs, competitive market conditions, unanticipated administrative costs, divergent interests from or the financial condition of our joint venture partners, timing of leasing income, general and local economic conditions, interest rates, capital market conditions, tenant bankruptcies and defaults, the availability and cost of comprehensive insurance, including coverage for terrorist acts, environmental, regulatory and/or safety requirements, and other factors, all of which are beyond the Company's control. Additional information or factors that could affect the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

       
SL GREEN REALTY CORP.
CONSOLIDATED STATEMENTS OF INCOME

(Unaudited and amounts in thousands, except per share data)

 
Three Months Ended

June 30,

Six Months Ended

June 30,

2013     2012   2013     2012  
Revenues:
Rental revenue, net $ 273,307 $ 263,838 $ 539,755 $ 520,595
Escalation and reimbursement 39,381 40,967 79,926 82,080
Investment and preferred equity income 46,731 33,448 99,439 59,786
Other income 5,726   6,282   11,493   16,659  
Total revenues 365,145   344,535   730,613   679,120  
Expenses:

Operating expenses (including approximately $4,319 and $8,469 (2013)and $4,773 and $8,244 (2012) paid to related parties)

69,432 67,434 141,630 139,319
Real estate taxes 52,710 52,256 106,114 103,453
Ground rent 8,649 8,890 19,640 17,696
Interest expense, net of interest income 83,276 82,159 164,447 162,130
Amortization of deferred financing costs 4,240 3,553 8,703 7,133
Depreciation and amortization 82,020 76,207 161,114 151,739
Loan loss and other investment reserves, net of recoveries 564
Transaction related costs 1,711 1,970 3,068 3,026
Marketing, general and administrative 21,514   20,721   42,582   40,917  
Total expenses 323,552  

313,190

  647,298   625,977  

Income from continuing operations before equity in net income ofunconsolidated joint ventures, noncontrolling interests anddiscontinued operations

41,593 31,345 83,315 53,143
Equity in net (loss) income from unconsolidated joint ventures (3,761 ) 70,890 1,313 69,330

Equity in net (loss) gain on sale of interest in unconsolidated jointventure/real estate

(3,583 ) 9,534 (3,583 ) 16,794
Loss on sale of investment in marketable securities (8 ) (65 )
Purchase price fair value adjustment (2,305 ) (2,305 )
Depreciable real estate reserves, net of recoveries 5,789 5,789
Loss on early extinguishment of debt (10 )   (18,523 )  
Income from continuing operations 31,926 117,558 60,152 145,056
Net (loss) income from discontinued operations (678 ) 899 320 1,931
Gain on sale of discontinued operations     1,113   6,627  
Net income 31,248 118,457 61,585 153,614
Net income attributable to noncontrolling interests in the Operating Partnership (244 ) (3,421 ) (799 ) (4,309 )
Net income attributable to noncontrolling interests in other partnerships (3,004 ) (3,887 ) (5,905 ) (4,958 )
Preferred unit distributions (565 ) (565 ) (1,130 ) (962 )
Net income attributable to SL Green 27,435 110,584 53,751 143,385
Preferred stock redemption costs (12,160 ) (12,160 )
Perpetual preferred stock dividends (6,999 ) (7,544 ) (14,406 ) (15,089 )
Net income attributable to SL Green common stockholders $ 8,276   $ 103,040   $ 27,185   $ 128,296  
 
Earnings Per Share (EPS)
Net income per share (Basic) $ 0.09 $ 1.15 $ 0.30 $ 1.45
Net income per share (Diluted) $ 0.09   $ 1.14   $ 0.30   $ 1.45  
 
Funds From Operations (FFO)
FFO per share (Basic) $ 1.28 $ 1.93 $ 2.44 $ 3.05
FFO per share (Diluted) $ 1.27   $ 1.92   $ 2.43   $ 3.03  
 
Basic ownership interest
Weighted average REIT common shares for net income per share 91,660 89,789 91,530 88,265
Weighted average partnership units held by noncontrolling interests 2,652   3,193   2,694   3,121  
Basic weighted average shares and units outstanding for FFO per share 94,312   92,982   94,224   91,386  
 
Diluted ownership interest
Weighted average REIT common share and common share equivalents 91,884 90,158 91,758 88,645
Weighted average partnership units held by noncontrolling interests 2,652   3,193   2,694   3,121  
Diluted weighted average shares and units outstanding 94,536   93,351   94,452   91,766  
 
       
SL GREEN REALTY CORP.
CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)

 

June 30,

2013

December 31,

2012

Assets (Unaudited)
Commercial real estate properties, at cost:
Land and land interests $ 2,866,048 $ 2,886,099
Buildings and improvements 7,393,930

 

7,389,766
Building leasehold and improvements 1,352,953 1,346,748

Properties under capital lease

50,332

  40,340  

11,663,263

11,662,953
Less accumulated depreciation (1,502,694 ) (1,393,323 )
10,160,569 10,269,630
Assets held for sale

207,665

4,901
Cash and cash equivalents 198,969 189,984
Restricted cash 130,483 136,071
Investment in marketable securities 26,266 21,429
Tenant and other receivables, net of allowance of $20,466 and $21,652 in 2013 and 2012, respectively 51,646 48,544
Related party receivables 6,845 7,531
Deferred rents receivable, net of allowance of $29,821 and $29,580 in 2013 and 2012, respectively 360,954 340,747

Debt and preferred equity investments, net of discounts and deferred origination fees of $27,107 and $22,341 andallowance of $7,000 both in 2013 and 2012, respectively

1,227,421 1,348,434
Investments in and advances to unconsolidated joint ventures 1,085,793 1,032,243
Deferred costs, net 246,058 261,145
Other assets 699,256   718,326  
Total assets $ 14,401,925   $ 14,378,985  
 

Liabilities

Mortgages and other loans payable $ 4,835,231 $ 4,615,464
Revolving credit facility 40,000 70,000
Term loan and senior unsecured notes 1,735,205 1,734,956
Accrued interest and other liabilities 72,415 73,769
Accounts payable and accrued expenses 138,029 159,598
Deferred revenue 296,930 312,995
Capitalized lease obligations 47,240 37,518
Deferred land leases payable 19,948 20,897
Dividend and distributions payable 34,740 37,839
Security deposits 53,604 46,253
Liabilities related to assets held for sale 11,894 136
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities 100,000   100,000  
Total liabilities 7,385,236 7,209,425
 
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 243,925 212,907

Series G preferred units, $0.01 par value, $25.00 liquidation preference, 1,902 issued and outstanding at bothJune 30, 2013 and December 31,2012

47,550 47,550

Series H preferred units, $0.01 par value, $25.00 liquidation preference, 80 issued and outstanding at both June 30, 2013and December 31, 2012

2,000

2,000
 
Equity
SL Green Realty Corp. stockholders’ equity:

Series C perpetual preferred shares, $0.01 par value, $25.00 liquidation preference, 7,700 issued and outstanding atDecember 31, 2012

180,340

Series I perpetual preferred shares, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at bothJune 30, 2013 and December 31, 2012

221,932 221,965

Common stock, $0.01 par value 160,000 shares authorized, 95,376 and 94,896 issued and outstanding at June 30, 2013and December 31, 2012, respectively (inclusive of 3,563 and 3,646 shares held in Treasury at June 30, 2013and December 31, 2012, respectively)

955 950
Additional paid-in capital 4,716,012 4,667,900
Treasury stock-at cost (316,768 ) (322,858 )
Accumulated other comprehensive loss (18,622 ) (29,587 )
Retained earnings 1,631,287   1,701,092  
Total SL Green Realty Corp. stockholders’ equity 6,234,796 6,419,802
Noncontrolling interests in other partnerships 488,418   487,301  
Total equity 6,723,214   6,907,103  
Total liabilities and equity $ 14,401,925   $ 14,378,985  
       
SL GREEN REALTY CORP.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)

 
Three Months Ended

June 30,

Six Months Ended

June 30,

2013     2012 2013     2012

FFO Reconciliation:

Net income attributable to common stockholders $ 8,276 $ 103,040 $ 27,185 $ 128,296

Add:

Depreciation and amortization 82,020 76,207 161,114 151,739
Discontinued operations depreciation adjustments 1,617 1,605 3,212 3,156
Joint venture depreciation and noncontrolling interest adjustments 17,620 6,366 25,148 15,507
Net income attributable to noncontrolling interests 3,248 7,308 6,704 9,267

Less:

Gain on sale of discontinued operations 1,113 6,627
Equity in net (loss) gain on sale of interest in joint venture/real estate (3,583 ) 9,534 (3,583 ) 16,794
Purchase price fair value adjustment (2,305 ) (2,305 )
Depreciable real estate reserve, net of recoveries (2,150 ) 5,789 (2,150 ) 5,789
Depreciation on non-rental real estate assets 343   209 588   476
Funds From Operations $ 120,476  

$

178,994

$ 229,700   $ 278,279
 
         
Consolidated Properties

SL Green’s share of Unconsolidated Joint Ventures

Combined
Three Months Ended

June 30,

Three Months Ended

June 30,

Three Months Ended

June 30,

Operating income and Same-store NOI Reconciliation:

2013     2012   2013     2012   2013     2012  

Income from continuing operations before equity in netincome from unconsolidated joint ventures, noncontrollinginterests and discontinued operations

$ 41,593 $ 31,345

$

$

 
Equity in net (loss) income from unconsolidated joint ventures (3,761 ) 70,890 (3,761 ) 70,890
Depreciation and amortization 82,020 76,207 26,246 15,807
Interest expense, net of interest income 83,276 82,159 19,846 21,407
Amortization of deferred financing costs 4,240 3,553 2,979 1,170
Loss on early extinguishment of debt (10 )      
Operating income $ 207,358   $ 264,154   $ 45,310   $ 109,274  

 

 
Marketing, general & administrative expense 21,514 20,721
Net operating income from discontinued operations 3,256 2,671
Loan loss and other investment reserves, net of recoveries
Transaction related costs 1,711 1,970 15 38
 
Non-building revenue (48,640 ) (35,320 ) (4,162 ) (71,487 )
Equity in net loss (income) from unconsolidated joint ventures 3,761 (70,890 )
Loss on early extinguishment of debt 10         $ $
Net operating income (NOI) 188,970 183,306 41,163 37,825 230,133 221,131
 
 
Net operating income from discontinued operations (3,256 ) (2,671 ) (3,256 ) (2,671 )
NOI from other properties/affiliates (10,030 ) (6,820 ) (15,159 ) (13,231 ) (25,189 ) (20,051 )
Same-Store NOI $ 175,684   $ 173,815   $ 26,004   $ 24,594   $ 201,688   $ 198,409  
 
 
Ground lease straight-line adjustment 1,232 172 1,232 172
 
Straight-line and free rent (13,238 ) (14,098 ) (546 ) (447 ) (13,784 ) (14,545 )
Rental income – FAS 141 (2,855 ) (2,881 ) (1,448 ) (352 ) (4,303 ) (3,233 )
Same-store cash NOI $ 160,823   $ 157,008   $ 24,010   $ 23,795  

$

184,833   $ 180,803  
 
         
Consolidated Properties

SL Green’s share of Unconsolidated Joint Ventures

Combined
Six Months Ended

June 30,

Six Months Ended

June 30,

Six Months Ended

June 30,

Operating income and Same-store NOI Reconciliation:

2013     2012   2013     2012   2013     2012  

Income from continuing operations before equity in netincome from unconsolidated joint ventures, noncontrollinginterests and discontinued operations

$ 83,315 $ 53,143

$

$

 
Equity in net income from unconsolidated joint ventures 1,313 69,330 1,313 69,330
Depreciation and amortization 161,114 151,739 42,256 31,863
Interest expense, net of interest income 164,447 162,130 39,388 44,827
Amortization of deferred financing costs 8,703 7,133 5,341 1,797
Loss on early extinguishment of debt (18,523 )      
Operating income $ 400,369   $ 443,475   $ 88,298   $ 147,817  
 
Marketing, general & administrative expense 42,582 40,917
Net operating income from discontinued operations 6,012 6,112
Loan loss and other investment reserves, net of recoveries 564
Transaction related costs 3,068 3,026 15 199
 

Non-building revenue

(101,784 ) (66,208 ) (8,404 ) (75,122 )
Equity in net income from unconsolidated joint ventures (1,313 ) (69,330 )
Loss on early extinguishment of debt 18,523         $ $
Net operating income (NOI) 367,457 358,556 79,909 72,894 447,366 431,450
 
 
Net operating income from discontinued operations (6,012 ) (6,112 ) (6,012 ) (6,112 )
NOI from other properties/affiliates (13,671 ) (8,874 ) (28,741 ) (24,154 ) (42,412 ) (33,028 )
Same-Store NOI $ 347,774   $ 343,570   $ 51,168   $ 48,740   $ 398,942   $ 392,310  
 
 
Ground lease straight-line adjustment 3,121 344 3,121 344
 
Straight-line and free rent (26,518 ) (31,569 ) (1,614 ) (1,115 ) (28,132 ) (32,684 )
Rental income – FAS 141 (6,024 ) (5,006 ) (1,859 ) (606 ) (7,883 ) (5,612 )

Same-store cash NOI

$ 318,353   $ 307,339   $ 47,695   $ 47,019   $ 366,048   $ 354,358  
 
     
SL GREEN REALTY CORP.
SELECTED OPERATING DATA-UNAUDITED
 
June 30,
  2013       2012  
Manhattan Operating Data: (1)
Net rentable area at end of period (in 000’s) 24,282 23,972
Portfolio percentage leased at end of period 94.2 % 93.7 %
Same-Store percentage leased at end of period 94.4 % 93.2 %
Number of properties in operation 36 34
 
Office square feet where leases commenced during quarter (rentable) 641,012 1,955,729
Average mark-to-market percentage-office 5.0 % 0.1 %
Average starting cash rent per rentable square foot-office $ 56.60 $ 50.18
      (1)   Includes wholly-owned and joint venture properties.




Stock quotes in this article: SLG 

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