Partners' Capital of the Operating Partnership

9 Months Ended

Sep. 30, 2015

Stockholders' Equity

Partners' Capital of the Operating Partnership

Stockholders’ Equity of the Company

Common Stock

Our authorized capital stock consists of 260,000,000 shares, $0.01 par value per share, consisting of 160,000,000 shares of common stock, $0.01 par value per share, 75,000,000 shares of excess stock, at $0.01 par value per share, and 25,000,000 shares of preferred stock, par value $0.01 per share. As of September 30, 2015, 99,659,376 shares of common stock and no shares of excess stock were issued and outstanding.

At-The-Market Equity Offering Program

In June 2014, the Company, along with the Operating Partnership, entered into an "at-the-market" equity offering program, or ATM Program, to sell an aggregate of $300.0 million of SL Green's common stock. During the three months ended March 31, 2015, we sold 895,956 shares of our common stock for aggregate net proceeds of $113.4 million comprising the remaining balance of this ATM Program. The net proceeds from these offerings were contributed to the Operating Partnership in exchange for 895,956 units of limited partnership interest of the Operating Partnership.

In March 2015, the Company, along with the Operating Partnership, entered into a new ATM Program to sell an aggregate of $300.0 million of SL Green's common stock. During the nine months ended September 30, 2015, we sold 91,180 shares of our common stock for aggregate net proceeds of $12.0 million. The net proceeds from these offerings were contributed to the Operating Partnership in exchange for 91,180 units of limited partnership interest of the Operating Partnership. As of September 30, 2015, $288.0 million remained available for issuance of common stock under the new ATM program.

Perpetual Preferred Stock

We have 9,200,000 shares of our 6.50% Series I Cumulative Redeemable Preferred Stock, or the Series I Preferred Stock, outstanding with a mandatory liquidation preference of $25.00 per share. The Series I Preferred stockholders receive annual dividends of $1.625 per share paid on a quarterly basis and dividends are cumulative, subject to certain provisions. We are entitled to redeem the Series I Preferred Stock at par for cash at our option on or after August 10, 2017. In August 2012, we received $221.9 million in net proceeds from the issuance of the Series I Preferred Stock, which were recorded net of underwriters' discount and issuance costs, and contributed the net proceeds to the Operating Partnership in exchange for 9,200,000 units of 6.50% Series I Cumulative Redeemable Preferred Units of limited partnership interest, or the Series I Preferred Units.

Dividend Reinvestment and Stock Purchase Plan

In February 2015, the Company filed a registration statement with the SEC for our dividend reinvestment and stock purchase plan, or DRSPP, which automatically became effective upon filing. The Company registered 3,500,000 shares of SL Green's common stock under the DRSPP. The DRSPP commenced on September 24, 2001.

During the nine months ended September 30, 2015, the Company issued 775,529 shares of SL Green's common stock and received net proceeds of $99.5 million of proceeds from dividend reinvestments and/or stock purchases under the DRSPP. DRSPP shares may be issued at a discount to the market price.

Earnings per Share

SL Green's earnings per share for the three and nine months ended September 30, 2015 and 2014 are computed as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
Numerator	2015		2014		2015		2014
Basic Earnings:
Income attributable to SL Green common stockholders	$	163,658	$	64,688	$	167,829	$	446,319
Effect of Dilutive Securities:
Redemption of units to common shares	6,468		2,636		6,634		16,010
Diluted Earnings:
Income attributable to SL Green common stockholders	$	170,126	$	67,324	$	174,463	$	462,329

	Three Months Ended September 30,		Nine Months Ended September 30,
Denominator	2015	2014	2015	2014
Basic Shares:
Weighted average common stock outstanding	99,621	95,734	99,205	95,437
Effect of Dilutive Securities:
Redemption of units to common shares	3,901	3,585	3,924	3,423
Stock-based compensation plans	407	387	480	462
Diluted weighted average common stock outstanding	103,929	99,706	103,609	99,322

SL Green has excluded 263,236, 233,586, 231,970 and 769,790 common stock equivalents from the diluted shares outstanding for the three and nine months ended September 30, 2015 and 2014, respectively, as they were anti-dilutive.

SL Green Operating Partnership

Stockholders' Equity

Partners' Capital of the Operating Partnership

Partners' Capital of the Operating Partnership

The Company is the sole general partner of the Operating Partnership and at September 30, 2015 owned 99,659,376 general and limited partnership interests in the Operating Partnership and 9,200,000 Series I Preferred Units. Partnership interests in the Operating Partnership are denominated as “common units of limited partnership interest” (also referred to as “OP Units”) or “preferred units of limited partnership interest” (also referred to as “Preferred Units”). All references to OP Units and Preferred Units outstanding exclude such units held by the Company. A holder of an OP Unit may present such OP Unit to the Operating Partnership for redemption at any time (subject to restrictions agreed upon at the issuance of OP Units to particular holders that may restrict such right for a period of time, generally one year from issuance). Upon presentation of an OP Unit for redemption, the Operating Partnership must redeem such OP Unit in exchange for the cash equal to the then value of a share of common stock of the Company, except that the Company may, at its election, in lieu of cash redemption, acquire such OP Unit for one share of common stock. Because the number of shares of common stock outstanding at all times equals the number of OP Units that the Company owns, one share of common stock is generally the economic equivalent of one OP Unit, and the quarterly distribution that may be paid to the holder of an OP Unit equals the quarterly dividend that may be paid to the holder of a share of common stock. Each series of Preferred Units makes a distribution that is set in accordance with an amendment to the partnership agreement of the Operating Partnership. Preferred Units may also be convertible into OP Units at the election of the holder thereof or the Company, subject to the terms of such Preferred Units.

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

Limited Partner Units

As of September 30, 2015, limited partners other than SL Green owned 3.74%, or 3,874,750 common units, of the Operating Partnership.

Preferred Units

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

Earnings per Unit

The Operating Partnership's earnings per unit for the three and nine months ended September 30, 2015 and 2014 are computed as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
Numerator	2015		2014		2015		2014
Basic and Diluted Earnings:
Income attributable to SLGOP common unitholders	$	170,125	$	67,324	$	174,463	$	462,329

	Three Months Ended September 30,		Nine Months Ended September 30,
Denominator	2015	2014	2015	2014
Basic units:
Weighted average common units outstanding	103,522	99,319	103,129	98,860
Effect of Dilutive Securities:
Stock-based compensation plans	407	387	480	462
Diluted weighted average common units outstanding	103,929	99,706	103,609	99,322

The Operating Partnership has excluded 263,236, 233,586, 231,970 and 769,790 common unit equivalents from the diluted units outstanding for the three and nine months ended September 30, 2015 and 2014, respectively, as they were anti-dilutive.

Accumulated Other Comprehensive Loss of the Operating Partnership

The following tables set forth the changes in accumulated other comprehensive income (loss) by component as of September 30, 2015 (in thousands):

	Net unrealized (loss) gain on derivative instruments(1)			SLGOP’s share of joint venture net unrealized (loss) gain on derivative instruments(2)			Unrealized gain (loss) on marketable securities			Total
Balance at December 31, 2014	$	(9,845	)	$	(100	)	$	2,689		$	(7,256	)
Other comprehensive loss before reclassifications	(15,537		)	(2,486		)	(337		)	(18,360		)
Amounts reclassified from accumulated other comprehensive income	8,221			949			—			9,170
Balance at September 30, 2015	$	(17,161	)	$	(1,637	)	$	2,352		$	(16,446	)

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(1) Amount reclassified from accumulated other comprehensive income (loss) is included in interest expense in the respective consolidated statements of operations. As of September 30, 2015 and December 31, 2014, the deferred net losses from these terminated hedges, which is included in accumulated other comprehensive loss relating to net unrealized loss on derivative instrument, was $10.7 million and $12.2 million, respectively.

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