SL Green Realty Corp. Reports Third Quarter 2013 FFO Of $1.34 Per Share; And EPS Of $0.40 Per Share

SL Green Realty Corp. (NYSE:SLG)

Financial and Operating Highlights
  • Third quarter FFO of $1.34 per diluted share compares with prior year third quarter FFO of $1.12 per diluted share. The current quarter results reflect a non-recurring, non-cash charge of $6.9 million, or $0.07 per diluted share, related to a former tenant.
  • Raising 2013 FFO guidance to $5.12 to $5.16 per share from $4.90 to $5.00 per share, and raising 2013 FAD guidance to $3.51 to $3.55 per share from $3.10 to $3.20 per share.
  • Increased the Company’s quarterly dividend by 52 percent to a new annual rate of $2.00 per share beginning with the fourth quarter dividend to be paid in January 2014.
  • Third quarter net income attributable to common stockholders of $0.40 per diluted share compares with prior year net income of $0.09 per diluted share.
  • Combined same-store cash NOI increased 1.6 percent for the third quarter and combined same-store cash NOI increased 2.8 percent for the first nine months of 2013.
  • Signed 52 Manhattan office leases totaling 441,338 square feet during the third quarter. The mark-to-market on replacement office leases signed in Manhattan was 1.0 percent higher in the third quarter than the previously fully escalated rents on the same office spaces, or 7.8 percent higher excluding one 17,320 square foot lease at 810 Seventh Avenue.
  • Signed 176 Manhattan office leases totaling 1,795,447 square feet during the first nine months of 2013. The mark-to-market on replacement office leases signed in Manhattan was 5.8 percent higher in the first nine months of 2013 than the previously fully escalated rents on the same office spaces.
  • Signed 28 Suburban office leases totaling 142,384 square feet during the third quarter. The mark-to-market on replacement office leases signed in the Suburban portfolio was 0.2 percent higher in the third quarter as compared to the previously fully escalated rents on the same office spaces.
  • Signed 108 Suburban office leases totaling 718,255 square feet during the first nine months of 2013. The mark-to-market on replacement office leases signed in the Suburban portfolio was 4.0 percent lower in the first nine months of 2013 than the previously fully escalated rents on the same office spaces.
  • Increased Manhattan same-store occupancy, inclusive of leases signed but not yet commenced, as of September 30, 2013 to 95.8 percent.

Investing Highlights
  • Entered into a contract to acquire a mixed-use residential and commercial property located at 315 West 33rd Street, New York, New York for $386.0 million. This transaction is expected to be completed in the fourth quarter of 2013, subject to customary closing conditions.
  • Closed on the sale of 333 West 34th Street in Manhattan for $220.3 million, or approximately $630 per square foot, resulting in a gain of $13.8 million.
  • Closed on the sale of two properties in the West Coast Office portfolio for $112.4 million. Since taking an equity ownership position in the portfolio in July 2012, three properties have been sold for a total of $224.3 million.
  • Closed on the sale of 300 Main Street in Stamford, Connecticut for $13.5 million.
  • Originated new debt investments totaling $180.8 million in the third quarter, of which we hold $70.8 million at a weighted average current yield of 12.4 percent, all of which are directly or indirectly collateralized by New York City commercial office properties.

Financing Highlights
  • Obtained an upgrade in ratings outlook from Stable to Positive from Fitch Ratings.
  • Closed on a $275.0 million mortgage financing of 220 East 42nd Street. The new seven-year, floating rate loan replaces the previous $183.5 million mortgage that was repaid in the third quarter of 2013.

Summary

SL Green Realty Corp. (NYSE: SLG) today reported funds from operations, or FFO, of $127.4 million, or $1.34 per diluted share, for the quarter ended September 30, 2013, compared to $104.8 million, or $1.12 per diluted share, for the same quarter in 2012. The current quarter results include a non-recurring, non-cash charge of $6.9 million, or $0.07 per diluted share, related to the accounting balances of a former tenant.

Net income attributable to common stockholders totaled $37.0 million, or $0.40 per diluted share, for the quarter ended September 30, 2013, compared to $7.7 million, or $0.09 per diluted share, for the same quarter in 2012.

Operating and Leasing Activity

For the third quarter of 2013, the Company reported revenues and operating income of $363.8 million and $205.3 million, respectively, compared to $357.0 million and $202.2 million, respectively, for the same period in 2012. The current quarter revenues reflect a non-recurring, non-cash charge of $6.9 million, or $0.07 per diluted share, related to a former tenant.

Same-store cash NOI on a combined basis increased by 1.6 percent to $176.6 million for the quarter ended September 30, 2013 as compared to the same period in 2012. Consolidated property same-store cash NOI increased by 1.4 percent to $152.1 million and unconsolidated joint venture property same-store cash NOI increased 2.8 percent to $24.5 million.

Same-store cash NOI on a combined basis increased by 2.8 percent to $538.7 million for the nine months ended September 30, 2013 as compared to the same period in 2012. Consolidated property same-store cash NOI increased by 3.0 percent to $466.4 million and unconsolidated joint venture property same-store cash NOI increased 1.9 percent to $72.3 million.

Manhattan same-store occupancy, inclusive of 370,113 square feet of leases signed but not yet commenced, increased to 95.8 percent as of September 30, 2013.

During the quarter, the Company signed 52 office leases in its Manhattan portfolio totaling 441,338 square feet. Twenty-five leases totaling 224,588 square feet represented office leases that replaced previous vacancy. Twenty-seven leases comprising 216,750 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 $56.52 per rentable square foot, representing a 1.0 percent increase over the previously fully escalated rents on the same office spaces. Excluding one lease for 17,320 square feet at 810 Seventh Avenue where a new 10.6 year lease was signed on space recently vacated by a tenant in bankruptcy, the mark-to-market on replacement office leases signed in the Manhattan portfolio during the third quarter was 7.8 percent higher than the previous fully escalated rents on the same office spaces. The average lease term on the Manhattan office leases signed in the third quarter was 9.4 years and average tenant concessions were 5.6 months of free rent with a tenant improvement allowance of $44.20 per rentable square foot.

During the first nine months of 2013, the Company signed 176 office leases in its Manhattan portfolio totaling 1,795,447 square feet. Eighty-one leases totaling 575,500 square feet represented office leases that replaced previous vacancy. Ninety-five leases comprising 1,219,947 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 $59.82 per rentable square foot, representing a 5.8 percent increase over the previously fully escalated rents on the same office spaces. The average lease term on the Manhattan office leases signed in the first nine months of 2013 was 7.1 years and average tenant concessions were 3.5 months of free rent with a tenant improvement allowance of $31.39 per rentable square foot.

Same-store occupancy for the Company’s Suburban portfolio, inclusive of 57,412 of leases signed but not yet commenced, increased to 81.2 percent as of September 30, 2013.

During the quarter, the Company signed 28 office leases in the Suburban portfolio totaling 142,384 square feet. Sixteen leases totaling 82,975 square feet represented office leases that replaced previous vacancy. Twelve leases comprising the remaining 59,409 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 $31.52 per rentable square foot, representing a 0.2 percent increase over the previously fully escalated rents on the same office spaces. The average lease term on the Suburban office leases signed in the third quarter was 8.0 years and average tenant concessions were 6.2 months of free rent with a tenant improvement allowance of $30.65 per rentable square foot.

During the first nine months of 2013, the Company signed 108 office leases in its Suburban portfolio totaling 718,255 square feet. Forty-eight leases totaling 271,231 square feet represented office leases that replaced previous vacancy. Sixty leases comprising 447,024 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 $30.40 per rentable square foot, representing a 4.0 percent decrease over the previously fully escalated rents on the same office spaces. The average lease term on the Suburban office leases signed in the first nine months of 2013 was 7.4 years and average tenant concessions were 5.1 months of free rent with a tenant improvement allowance of $21.50 per rentable square foot.

Significant leases that were signed during the third quarter included:

  • New lease on 56,794 square feet with Meister Seelig & Fein LLP for 15.0 years at 125 Park Avenue;
  • New lease on 47,763 square feet with Bloomingdales, Inc. for 10.8 years at 919 Third Avenue;
  • New lease on 27,231 square feet with Murphy & McGonigle, P.C. for 10.5 years at 1185 Avenue of the Americas;
  • New lease on 26,520 square feet with Shiseido for 13.0 years at The Meadows;
  • New lease on 22,437 square feet with Dragados USA, Inc. for 15.7 years at 810 Seventh Avenue; and
  • Early renewal on 22,393 square feet with AT&T Services, Inc. for 5.0 years at 810 Seventh Avenue bringing the remaining lease term to 5.7 years.

Marketing, general and administrative, or MG&A, expenses for the quarter ended September 30, 2013 were $20.9 million, or 4.9 percent of total revenues including the Company’s share of joint venture revenue compared to $20.6 million, or 5.0 percent for the quarter ended September 30, 2012.

Real Estate Investment Activity

In August 2013, the Company entered into a contract to acquire a mixed-use residential and commercial property located at 315 West 33 rd Street, New York, New York for $386.0 million. The 36-story, 492,987 square foot building, which was completed in 2012, includes 333 luxury rental apartments. The commercial space, which is 100 percent leased at below-market rental rates, consists of 270,000 square feet and includes a 14-screen movie theater, five ground-level retail stores, two office suites and a 250 space parking garage. This transaction is expected to be completed in the fourth quarter of 2013, subject to customary closing conditions.

In August 2013, the Company closed on the sale of a 345,400 square foot property located at 333 West 34 th Street in Manhattan for $220.3 million, or approximately $630 per square foot. The Company recognized a gain of $13.8 million on the transaction.

During the third quarter of 2013, the Company closed on the sale of two properties in the West Coast Office portfolio for $112.4 million. Since taking an equity ownership position in the portfolio in July 2012, three properties have been sold for a total of $224.3 million.

In September 2013, the Company closed on the sale of a 130,000 square foot property located at 300 Main Street in Stamford, Connecticut for $13.5 million.

Debt and Preferred Equity Investment Activity

The Company’s debt and preferred equity investment portfolio totaled $1.3 billion at September 30, 2013. During the third quarter, the Company originated new debt and preferred equity investments totaling $180.8 million, all of which are collateralized by New York City commercial office properties, and recorded $110.0 million of principal reductions from investments that were sold or repaid. The debt and preferred equity investment portfolio had a weighted average maturity of 2.2 years as of September 30, 2013 and had a weighted average yield during the quarter ended September 30, 2013 of 11.2 percent.

Financing and Capital Activity

In October 2013, Fitch Ratings upgraded the ratings outlook of the Company from Stable to Positive, citing the Company’s credit strengths including the high quality of its New York portfolio, manageable lease expirations and debt maturities, its growing unencumbered asset pool and improving credit metrics.

In October 2013, the Company closed on a new $275.0 million seven year, floating rate mortgage financing of 220 E 42 nd Street. The new mortgage, which bears interest at 160 basis points over the 30-day LIBOR, replaces the previous $183.5 million mortgage that was repaid in August 2013.

Guidance

Based on the Company’s performance for the first nine months of 2013 and its outlook for the remainder of 2013, the Company is raising its FFO guidance for 2013 to $5.12 to $5.16 per share from $4.90 to $5.00 per share. The Company is also raising its FAD guidance, a measure of operating cash flow, to $3.51 to $3.55 per share from $3.10 to $3.20 per share.

Annual Institutional Investor Conference

The Company will host its Annual Institutional Investor Conference on Monday, December 9, 2013 in New York City. To be added to the Conference's email distribution list or to pre-register, please email SLG2013@slgreen.com.

Conference Call and Audio Webcast

The Company's executive management team, led by Marc Holliday, Chief Executive Officer, will host a conference call and audio webcast on Thursday, October 24, 2013 at 2:00 pm ET to discuss the financial results.

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 877-280-4960 Domestic or 857-244-7317 International, using pass-code “SL Green.”

A replay of the call will be available through October 31, 2013 by dialing 888-286-8010 Domestic or 617-801-6888 International, using pass-code 14660908.

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 September 30, 2013, SL Green owned interests in 89 Manhattan properties totaling 42.3 million square feet. This included ownership interests in 23.9 million square feet of commercial properties and debt and preferred equity investments secured by 14.9 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 28 properties totaling 3.7 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 10 through 12 of this release and in the Company’s Supplemental Package.

Forward-looking Statement

This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements. Forward-looking statements are not guarantees of future performance and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms.

Forward-looking statements contained in this press release are subject to a number of risks and uncertainties, many of which are beyond our control, that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. Factors and risks to our business that could cause actual results to differ from those contained in the forward-looking statements are described in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.
       

SL GREEN REALTY CORP.

CONSOLIDATED STATEMENTS OF INCOME

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

Three Months

Nine Months

Ended

Ended
September 30, September 30,
2013     2012 2013     2012
Revenues:
Rental revenue, net $ 264,349 $ 277,676 $ 804,104 $ 798,271
Escalation and reimbursement 45,091 42,194 125,018 124,273
Investment and preferred equity income 44,448 27,869 143,887 87,655
Other income 9,877   9,272   21,369   25,931  
Total revenues 363,765   357,011   1,094,378   1,036,130  
Expenses:
Operating expenses (including approximately $4,876 and $13,345 (2013) and $4,670 and $12,914 (2012) paid to related parties) 77,272 82,351 218,901 221,670
Real estate taxes 55,511 53,293 161,625 156,746
Ground rent 10,127 8,874 29,767 26,570
Interest expense, net of interest income 82,973 85,659 247,420 247,789
Amortization of deferred financing costs 4,331 4,493 13,034 11,626
Depreciation and amortization 87,473 81,827 248,587 233,566
Loan loss and other investment reserves, net of recoveries 564
Transaction related costs, net of recoveries (2,349 ) 1,372 719 4,398
Marketing, general and administrative 20,869   20,551   63,450   61,469  
Total expenses 336,207   338,420   983,503   964,398  
Income from continuing operations before equity in net income from unconsolidated joint ventures, equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, gain (loss) on sale of investment in marketable securities, purchase price fair value adjustment, and loss on early extinguishment of debt 27,558 18,591 110,875 71,732
Equity in net income from unconsolidated joint ventures 2,939 11,658 4,251 80,988
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate (354 ) (4,807 ) (3,937 ) 17,776
Gain (loss) on sale of investment in marketable securities 2,237 (65 ) 2,237
Purchase price fair value adjustment (2,305 )
Loss on early extinguishment of debt     (18,523 )  
Income from continuing operations 30,143 27,679 90,296 172,733
Net income from discontinued operations 1,406 951 3,875 2,883
Gain on sale of discontinued operations 13,787     12,750   6,627  
Net income 45,336 28,630 106,921 182,243
Net income attributable to noncontrolling interests in the Operating Partnership (1,110 ) (567 ) (1,909 ) (4,876 )
Net income attributable to noncontrolling interests in other partnerships (2,901 ) (1,835 ) (8,806 ) (6,792 )
Preferred unit distributions (562 ) (571 ) (1,692 ) (1,533 )
Net income attributable to SL Green 40,763 25,657 94,514 169,042
Preferred stock redemption costs (10,010 ) (12,160 ) (10,010 )
Perpetual preferred stock dividends (3,738 ) (7,915 ) (18,144 ) (23,004 )
Net income attributable to SL Green common stockholders $ 37,025   $ 7,732   $ 64,210   $ 136,028  
 
Earnings Per Share (EPS)
Net income per share (Basic) $ 0.40 $ 0.09 $ 0.70 $ 1.53
Net income per share (Diluted) $ 0.40   $ 0.09   $ 0.70   $ 1.52  
 
Funds From Operations (FFO)
FFO per share (Basic) $ 1.34 $ 1.12 $ 3.78 $ 4.16
FFO per share (Diluted) $ 1.34   $ 1.12   $ 3.77   $ 4.14  
 
Basic ownership interest
Weighted average REIT common shares for net income per share 91,988 90,241 91,684 88,929
Weighted average partnership units held by noncontrolling interests 2,792   3,320   2,705   3,188  
Basic weighted average shares and units outstanding 94,780   93,561   94,389   92,117  
 
Diluted ownership interest
Weighted average REIT common share and common share equivalents 92,224 90,571 91,926 89,297
Weighted average partnership units held by noncontrolling interests 2,792   3,320   2,705   3,188  
Diluted weighted average shares and units outstanding 95,016   93,891   94,631   92,485  
 
       

SL GREEN REALTY CORP.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)
 
September 30,

2013
December 31,

2012
Assets (Unaudited)
Commercial real estate properties, at cost:
Land and land interests $ 2,868,833 $ 2,886,099
Building and improvements 7,440,543 7,389,766
Building leasehold and improvements 1,353,997 1,346,748
Properties under capital lease 50,332   40,340  

 

11,713,705

11,662,953
Less accumulated depreciation (1,574,002 ) (1,393,323 )
10,139,703 10,269,630
Assets held for sale 4,901
Cash and cash equivalents 209,098 189,984
Restricted cash 356,844 136,071
Investment in marketable securities 32,863 21,429
Tenant and other receivables, net of allowance of $22,383 and $21,652 in 2013 and 2012, respectively 51,354 48,544
Related party receivables 7,800 7,531
Deferred rents receivable, net of allowance of $29,508 and $29,580 in 2013 and 2012, respectively 374,615 340,747
Debt and preferred equity investments, net of discounts and deferred origination fees of $26,466 and $22,341 and allowance of and $4,000 and $7,000 in 2013 and 2012, respectively 1,315,551 1,348,434
Investments in unconsolidated joint ventures 1,109,815 1,032,243
Deferred costs, net 247,850 261,145
Other assets 729,426   718,326  
Total assets $ 14,574,919   $ 14,378,985  
 

Liabilities

 

Mortgages and other loans payable
$ 4,641,758 $ 4,615,464
Revolving credit facility 340,000 70,000
Term loan and senior unsecured notes 1,737,869 1,734,956
Accrued interest payable and other liabilities 69,359 73,769
Accounts payable and accrued expenses 167,719 159,598
Deferred revenue 293,393 312,995
Capitalized lease obligations 47,492 37,518
Deferred land leases payable 21,066 20,897
Dividend and distributions payable 34,749 37,839
Security deposits 54,824 46,253
Liabilities related to assets held for sale 136
Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities 100,000   100,000  
Total liabilities 7,508,229 7,209,425
 
Commitments and contingencies
Noncontrolling interest in the Operating Partnership 248,046 212,907
Series G preferred units, $25.00 liquidation preference, 1,902 issued and outstanding at both September 30, 2013 and December 31,2012 47,550 47,550
Series H preferred units, $25.00 liquidation preference, 80 issued and outstanding at both September 30, 2013 and December 31, 2012 2,000 2,000
 
Equity
SL Green Realty Corp. stockholders’ equity:
Series C Preferred stock, $0.01 par value, $25.00 liquidation preference, 7,700 issued and outstanding at December 31, 2012 180,340
Series I Preferred stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both September 30, 2013 and December 31, 2012 221,932 221,965
Common stock, $0.01 par value 160,000 shares authorized, 95,780 and 94,896 issued and outstanding at September 30, 2013 and December 31, 2012, respectively (inclusive of 3,566 and 3,646 shares held in Treasury at September 30, 2013 and December 31, 2012, respectively) 959 950
Additional paid-in capital 4,757,778 4,667,900
Treasury stock at cost (316,989 ) (322,858 )
Accumulated other comprehensive loss (19,249 ) (29,587 )
Retained earnings 1,636,584   1,701,092  
Total SL Green Realty Corp. stockholders’ equity 6,281,015 6,419,802
Noncontrolling interests in other partnerships 488,079   487,301  
Total equity 6,769,094   6,907,103  
Total liabilities and equity $ 14,574,919   $ 14,378,985  
 
       

SL GREEN REALTY CORP.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share data)
 
Three Months Ended

September 30,
Nine Months Ended

September 30,
2013     2012 2013     2012

FFO Reconciliation:
Net income attributable to common stockholders $ 37,025 $ 7,732 $ 64,210 $ 136,028

Add:
Depreciation and amortization 87,473 81,827 248,587 233,566
Discontinued operations depreciation adjustments 1,602 3,212 4,758
Joint venture depreciation and noncontrolling interest adjustments 12,720 6,669 37,867 22,176
Net income attributable to noncontrolling interests 4,011 2,402 10,715 11,668

Less:
Gain on sale of discontinued operations 13,787 14,900 6,627
Equity in net (loss) gain on sale of interest in joint venture/real estate (354 ) (4,807 ) (3,937 ) 11,987
Purchase price fair value adjustment (2,305 )
Depreciable real estate reserve, net of recoveries (2,150 ) 5,789
Depreciation on non-rental real estate assets 416   220   1,004   697
Funds From Operations $ 127,380   $ 104,819   $ 357,079   $ 383,096
 
         
Consolidated Properties SL Green’s share of Unconsolidated Joint Ventures Combined
Three Months Ended

September 30,
Three Months Ended

September 30,
Three Months Ended

September 30,

Operating income and Same-store NOI Reconciliation:
2013     2012 2013     2012 2013   2012
Income from continuing operations before equity in net income from unconsolidated joint ventures, equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, gain (loss) on sale of investment in marketable securities, purchase price fair value adjustment, and loss on early extinguishment of debt $ 27,558 $ 18,591

$

$
 
Equity in net income from unconsolidated joint ventures 2,939 11,658 2,939 11,658
Depreciation and amortization 87,473 81,827 21,203 15,347
Interest expense, net of interest income 82,973 85,659 20,031 19,901
Amortization of deferred financing costs 4,331 4,493 1,790 958
Loss on early extinguishment of debt       10,711  
Operating income $ 205,274   $ 202,228   $ 45,963   $ 58,575  
 
Marketing, general & administrative expense 20,869 20,551
Net operating income from discontinued operations 1,536 3,249
Loan loss and other investment reserves, net of recoveries
Transaction related costs, net of recoveries (2,349 ) 1,372 455
 
Non-building revenue (50,384 ) (31,877 ) (4,041 ) (4,350 )
Equity in net income from unconsolidated joint ventures (2,939 ) (11,658 )
Loss on early extinguishment of debt       (10,711 ) $ $
Net operating income (NOI) 172,007 183,865 41,922 43,969 213,929 227,834
 
 
NOI from discontinued operations (1,536 ) (3,249 ) (1,536 ) (3,249 )
NOI from other properties/affiliates (11,356 ) (16,181 ) (16,440 ) (18,995 ) (27,796 ) (35,176 )
Same-Store NOI $ 159,115   $ 164,435   $ 25,482   $ 24,974   $ 184,597   $ 189,409  
 
Ground lease straight-line adjustment 1,232 172 1,232 172
 
Straight-line and free rent (12,273 ) (12,006 ) (671 ) (795 ) (12,944 ) (12,801 )
Rental income – FAS 141 4,023   (2,557 ) (333 ) (366 ) 3,690   (2,923 )
Same-store cash NOI $ 152,097   $ 150,044   $ 24,478   $ 23,813   $ 176,575   $ 173,857  
 
    Consolidated Properties     SL Green’s share of Unconsolidated Joint Ventures   Combined

Nine Months

Nine Months

Nine Months

Ended

September 30,

Ended

September 30,

Ended

September 30,

Operating income and Same-store NOI Reconciliation:
2013     2012 2013     2012 2013   2012
Income from continuing operations before equity in net income from unconsolidated joint ventures, equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate, gain (loss) on sale of investment in marketable securities, purchase price fair value adjustment, and loss on early extinguishment of debt $ 110,875 $ 71,732

$

$
 
Equity in net income from unconsolidated joint ventures 4,251 80,988 4,251 80,988
Depreciation and amortization 248,587 233,566 63,459 47,197
Interest expense, net of interest income 247,420 247,789 59,419 64,728
Amortization of deferred financing costs 13,034 11,626 7,131 2,755
Loss on early extinguishment of debt (18,523 )     10,711  
Operating income $ 605,644   $ 645,701   $ 134,260   $ 206,379  
 
Marketing, general & administrative expense 63,450 61,469
Net operating income from discontinued operations 7,548 9,361
Loan loss and other investment reserves, net of recoveries 564
Transaction related costs, net of recoveries 719 4,398 15 654
 
Non-building revenue (152,165 ) (98,085 ) (12,254 ) (79,472 )
Equity in net income from unconsolidated joint ventures (4,251 ) (80,988 )
Loss on early extinguishment of debt 18,523       (10,711 ) $ $
Net operating income (NOI) 539,468 542,420 122,021 116,850 661,489 659,270
 
 
NOI from discontinued operations (7,548 ) (9,361 ) (7,548 ) (9,361 )
NOI from other properties/affiliates (31,064 ) (30,663 ) (45,211 ) (42,983 ) (76,275 ) (73,646 )
Same-Store NOI $ 500,856   $ 502,396   $ 76,810   $ 73,867   $ 577,666   $ 576,263  
 
Ground lease straight-line adjustment 4,353 516 4,353 516
 
Straight-line and free rent (36,815 ) (42,601 ) (2,285 ) (1,909 ) (39,100 ) (44,510 )
Rental income – FAS 141 (2,002 ) (7,455 ) (2,192 ) (971 ) (4,194 ) (8,426 )
Same-store cash NOI $ 466,392   $ 452,856   $ 72,333   $ 70,987   $ 538,725   $ 523,843  
 
         

SL GREEN REALTY CORP.

SELECTED OPERATING DATA-UNAUDITED
 
September 30,
2013     2012
Manhattan Operating Data: (1)
Net rentable area at end of period (in 000’s) 23,947 24,135
Portfolio percentage leased at end of period 94.4% 93.7%
Same-Store percentage leased at end of period 94.4% 93.9%
Number of properties in operation 35 35
 
Office square feet where leases commenced during quarter (rentable) 364,992 215,337
Average mark-to-market percentage-office (5.0)% (7.4)%
Average starting cash rent per rentable square foot-office $56.78 $48.73
 

(1) Includes wholly-owned and joint venture properties.
 

The following table reconciles estimated earnings per share (diluted) to FAD per share (diluted) for the year ending December 31, 2013.
    Year EndingDecember 31,
2013     2013
 
Net income attributable to SL Green common stockholders $

1.05
$ 1.08

Add:
Depreciation and amortization 3.52 3.52
Unconsolidated joint venture depreciation and noncontrolling interest adjustments 0.53 0.53
Net income attributable to noncontrolling interests 0.11 0.12

Less:
Gain on sale of discontinued operations 0.16 0.16
Equity in net gain on sale of interest in unconsolidated joint venture / real estate (0.04 ) (0.04 )
Purchase price fair value adjustment (0.02 ) (0.02 )
Depreciable real estate, net of recoveries (0.02 ) (0.02 )
Depreciation and amortization on non-rental real estate assets 0.01   0.01  
Funds from Operations $

5.12
  $ 5.16  
 
Non-cash adjustments
Second cycle capital   (1.61 )   (1.61 )
Funds Available for Distribution $

3.51
  $ 3.55  

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