EX-99.1 2 a19q4earningsrelease.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1


CONTACT                        
Matt DiLiberto
Chief Financial Officer
(212) 594-2700

SL GREEN REALTY CORP. REPORTS
FOURTH QUARTER AND FULL YEAR 2019 EPS OF $0.22 AND $3.11 PER SHARE; AND FFO OF $1.75 AND $7.00 PER SHARE


Financial and Operating Highlights
•
Net income attributable to common stockholders of $0.22 per share for the fourth quarter and $3.11 for the full year 2019 as compared to net loss of $0.73 and net income of $2.67 per share for the same periods in 2018.
•
Funds from operations, or FFO, of $1.75 per share for the fourth quarter and $7.00 per share for the year ended December 31, 2019, as compared to $1.61 and $6.62 per share for the same periods in the prior year.
•
Same-store cash net operating income, or NOI, including our share of same-store cash NOI from unconsolidated joint ventures, increased 2.6% for the full year excluding lease termination income and free rent given to Viacom at 1515 Broadway, as compared to the prior year.
•
Signed 59 Manhattan office leases covering 1,283,470 square feet in the fourth quarter and 163 Manhattan leases covering 2,468,365 square feet for the full year. The mark-to-market on signed Manhattan office leases was 56.0% higher for the fourth quarter and 38.1% for the full year over the previous fully escalated rents on the same spaces.
•
Reached 65% leased at One Vanderbilt Avenue after signing a new lease with Oak Hill Advisors and expansions with The Carlyle Group and McDermott Will & Emery LLP during the fourth quarter.
•
Manhattan same-store occupancy was 96.2% as of December 31, 2019, inclusive of leases signed but not yet commenced, as compared to 95.3% at the end of the previous quarter.
Investing Highlights
•
Announced an increase to the size of the Company's share repurchase program by an additional $500 million, bringing the program to a total of $3.0 billion. To date the Company has repurchased a total of 22.7 million shares of its common stock under the program and redeemed 0.6 million common units of its Operating Partnership, or OP units. The average price of total share repurchases and OP Unit redemptions to date is $95.70 per share/unit.




•
Closed on the acquisition of 707 Eleventh Avenue for a gross purchase price of $90.0 million. The 160,000-square-foot property will be redeveloped into a modern, Class-A building, attracting companies across industries, including TAMI and boutique FIRE tenants.
•
Closed on the sale of 360 Hamilton Avenue in White Plains, New York and 100, 200 and 500 Summit Lake Drive in Valhalla, New York, reducing the Company’s combined debt by $228.7 million.
•
Closed on the sale of the development site at 562 Fifth Avenue for a sale price of $52.4 million. The transaction generated net cash proceeds to the Company of $50.9 million.
•
Closed on the sale of the development site at 1640 Flatbush Avenue in Brooklyn, for a sale price of $16.2 million. The transaction generated net cash proceeds to the Company of $15.6 million.
•
Closed on the sale of 1010 Washington Boulevard in Stamford, Connecticut, for a sale price of $23.1 million. The transaction generated net cash proceeds to the Company of $20.9 million.
Summary
New York, NY, January 22, 2020 - SL Green Realty Corp. (the "Company") (NYSE: SLG) today reported net income attributable to common stockholders for the quarter ended December 31, 2019 of $17.4 million, or $0.22 per share, as compared to net loss attributable to common stockholders of $61.2 million, or $0.73 per share, for the same quarter in 2018.
The Company also reported net income attributable to common stockholders for the year ended December 31, 2019 of $255.5 million, or $3.11 per share, as compared to net income attributable to common stockholders of $232.3 million, or $2.67 per share, for 2018. Net income attributable to common stockholders for the year ended December 31, 2019 includes $0.69 per share, of net gains recognized from the sale of real estate offset by $0.08 per share of depreciable real estate reserves.
The Company reported FFO for the quarter ended December 31, 2019 of $147.6 million, or $1.75 per share, as compared to FFO for the same period in 2018 of $142.7 million, or $1.61 per share.
The Company also reported FFO for the year ended December 31, 2019 of $605.7 million, or $7.00 per share, as compared to FFO for 2018 of $605.7 million, or $6.62 per share.
All per share amounts are presented on a diluted basis.
Operating and Leasing Activity
For the quarter ended December 31, 2019, the Company reported consolidated revenues and operating income of $308.1 million and $155.4 million, respectively, compared to $317.0 million and $158.2 million, respectively, for the same period in 2018.
Same-store cash NOI, including our share of same-store cash NOI from unconsolidated joint ventures increased by 2.0% for the fourth quarter and 2.6% for the year ended December 31, 2019, excluding lease termination income and free rent given to Viacom at 1515 Broadway.




During the fourth quarter, the Company signed 59 office leases in its Manhattan portfolio totaling 1,283,470 square feet. Thirty-nine leases comprising 941,150 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 $73.52 per rentable square foot, representing a 56.0% increase over the previous fully escalated rents on the same office spaces. The average lease term on the Manhattan office leases signed in the fourth quarter was 10.6 years and average tenant concessions were 7.9 months of free rent with a tenant improvement allowance of $64.56 per rentable square foot.
During 2019, the Company signed 163 office leases in its Manhattan portfolio totaling 2,468,365 square feet. One hundred sixteen leases comprising 1,761,686 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 $73.36 per rentable square foot, representing a 38.1% increase over the previously fully escalated rents on the same office spaces. The average lease term on the Manhattan office leases signed in 2019 was 10.7 years, or 11.1 years including the office leases signed at One Vanderbilt, and average tenant concessions were 6.8 months of free rent with a tenant improvement allowance of $63.38 per rentable square foot.
Occupancy in the Company's Manhattan same-store portfolio was 96.2% as of December 31, 2019, inclusive of 373,434 square feet of leases signed but not yet commenced, as compared to 95.3% as of September 30, 2019.
Significant leases that were signed in the fourth quarter included:
•
New lease with Amazon for 335,408 square feet at 410 10th Avenue, for 16.2 years;
•
Renewal with BMW of Manhattan, Inc. for 226,556 square feet at 555 West 57th Street, for 10.0 years;
•
New lease with Strategic Family, Inc. for 82,557 square feet at 711 Third Avenue, for 6.0 years;
•
New lease with Oak Hill Advisors for 45,954 square feet at One Vanderbilt Avenue, for 15.0 years;
•
New lease with West Monroe Partners, Inc. for 41,715 square feet at Worldwide Plaza, for 10.5 years;
•
New lease with RAD Entertainment Group for 39,436 square feet at 1515 Broadway, for 20.0 years; and
•
New lease with Greenberg Traurig for 38,098 square feet at 420 Lexington Avenue, for 15.0 years.
Investment Activity
In December, the Company announced that its Board of Directors authorized a $500 million increase to the size of its share repurchase program, bringing the program to a total of $3.0 billion. To date, the Company has acquired 22.7 million shares of its common stock under the program and redeemed 0.6 million common units of its Operating Partnership, or OP units, allowing the Company to save approximately $82.7 million of common dividends




and distributions on an annualized basis. The average price of total share repurchases and OP Unit redemptions to date is $95.70 per share/unit.
In January, the Company closed on the acquisition of 707 Eleventh Avenue for a gross purchase price of $90.0 million. The 160,000-square-foot property will be redeveloped into a modern, Class-A building, attracting companies across industries, including TAMI and boutique FIRE tenants.
In December, the Company closed on the sale of 360 Hamilton Avenue in White Plains, New York and 100, 200 and 500 Summit Lake Drive in Valhalla, New York, reducing the Company’s combined debt by $228.7 million.
In December, the Company closed on the sale of the development site at 562 Fifth Avenue for a sale price of $52.4 million. The transaction generated net cash proceeds to the Company of $50.9 million.
In December, the Company closed on the sale of the development site at 1640 Flatbush Avenue in Brooklyn, for a sale price of $16.2 million. The transaction generated net cash proceeds to the Company of $15.6 million.
In November, the Company closed on the previously announced sale of 1010 Washington Boulevard in Stamford, Connecticut, for a sale price of $23.1 million. The transaction generated net cash proceeds to the Company of $20.9 million.
Debt and Preferred Equity Investment Activity
The carrying value of the Company’s debt and preferred equity investment portfolio decreased to $1.61 billion at December 31, 2019, including $1.58 billion of investments at a weighted average current yield of 8.6% that are classified in the debt and preferred equity line item on the balance sheet, and mortgage investments aggregating $0.03 billion at a weighted average current yield of 6.5% that are included in other balance sheet line items for accounting purposes.
During the fourth quarter, the Company originated or acquired new subordinate debt and preferred equity investments totaling $150.0 million, all of which was retained and $86.8 million was funded, at a weighted average yield of 10.2%.
Dividends
In the fourth quarter of 2019, the Company declared quarterly dividends on its outstanding common and preferred stock as follows:
•
$0.885 per share of common stock, which was paid on January 15, 2020 to shareholders of record on the close of business on January 2, 2020; and
•
$0.40625 per share on the Company's 6.50% Series I Cumulative Redeemable Preferred Stock for the period October 15, 2019 through and including January 14, 2020, which was paid on January 15, 2020 to shareholders of record on the close of business on January 2, 2020, and reflects the regular quarterly dividend, which is the equivalent of an annualized dividend of $1.625 per share.




Conference Call and Audio Webcast
The Company's executive management team, led by Marc Holliday, Chairman and Chief Executive Officer, will host a conference call and audio webcast on Thursday, January 23, 2020 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 https://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 https://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 passcode 2796502.
A replay of the call will be available 7 days after the call by dialing (855) 859-2056 using passcode 2796502. A webcast replay will also be available in the Investors section of the SL Green Realty Corp. website at https://slgreen.com/ under “Presentations & Webcasts”.
Company Profile
SL Green Realty Corp., an S&P 500 company and New York City'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 December 31, 2019, SL Green held interests in 97 buildings totaling 44.0 million square feet. This included ownership interests in 26.5 million square feet of Manhattan buildings and 16.4 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 (212) 594-2700.





Disclaimers
Non-GAAP Financial Measures
During the quarterly conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. In addition, the Company has used non-GAAP financial measures in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found in this release and in the Company’s Supplemental Package.

Forward-looking Statements
This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate. Forward-looking statements are not guarantees of future performance and actual results or developments may differ materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms.

Forward-looking statements contained in this press release are subject to a number of risks and uncertainties, many of which are beyond our control, that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. Factors and risks to our business that could cause actual results to differ from those contained in the forward-looking statements are described in our filings with the 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 OPERATIONS
(unaudited and in thousands, except per share data)
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Rental revenue, net
$
218,495

 
$
216,477

 
$
863,061

 
$
864,978

Escalation and reimbursement
31,957

 
31,042

 
120,496

 
113,596

Investment income
42,423

 
57,952

 
195,590

 
201,492

Other income
15,207

 
11,565

 
59,848

 
47,326

        Total revenues
308,082

 
317,036

 
1,238,995

 
1,227,392

Expenses:
 
 
 
 
 
 
 
Operating expenses, including related party expenses of $4,531 and $18,106 in 2019 and $4,534 and $17,823 in 2018
58,814

 
56,476

 
234,676

 
229,347

Real estate taxes
47,756

 
46,563

 
190,764

 
186,351

Operating lease rent
8,297

 
6,304

 
33,188

 
32,965

Interest expense, net of interest income
44,724

 
51,974

 
190,521

 
208,669

Amortization of deferred financing costs
3,087

 
2,695

 
11,653

 
12,408

Depreciation and amortization
64,090

 
71,458

 
272,358

 
279,507

Loan loss and other investment reserves, net of recoveries
—

 
5,752

 
—

 
6,839

Transaction related costs
369

 
426

 
729

 
1,099

Marketing, general and administrative
25,575

 
26,030

 
100,875

 
92,631

        Total expenses
252,712

 
267,678

 
1,034,764

 
1,049,816

 

 

 
 
 
 
Equity in net (loss) income from unconsolidated joint ventures
(11,874
)
 
(2,398
)
 
(34,518
)
 
7,311

Equity in net gain on sale of interest in unconsolidated joint venture/real estate
—

 
167,445

 
76,181

 
303,967

Purchase price and other fair value adjustment
—

 
—

 
69,389

 
57,385

Loss on sale of real estate, net
(19,241
)
 
(36,984
)
 
(16,749
)
 
(30,757
)
Depreciable real estate reserves
—

 
(220,852
)
 
(7,047
)
 
(227,543
)
Loss on early extinguishment of debt
—

 
(14,889
)
 
—

 
(17,083
)
        Net income (loss)
24,255

 
(58,320
)
 
291,487

 
270,856

Net (income) loss attributable to noncontrolling interests in the Operating Partnership
(995
)
 
3,439

 
(13,301
)
 
(12,216
)
Net loss attributable to noncontrolling interests in other partnerships
635

 
241

 
3,159

 
6

Preferred unit distributions
(2,726
)
 
(2,842
)
 
(10,911
)
 
(11,384
)
Net income (loss) attributable to SL Green
21,169

 
(57,482
)
 
270,434

 
247,262

Perpetual preferred stock dividends
(3,737
)
 
(3,737
)
 
(14,950
)
 
(14,950
)
        Net income (loss) attributable to SL Green common stockholders
$
17,432

 
$
(61,219
)
 
$
255,484

 
$
232,312

 
 
 
 
 
 
 
 
Earnings Per Share (EPS)
 
 
 
 
 
 
 
Net income (loss) per share (Basic)
$
0.21

 
$
(0.73
)
 
$
3.10

 
$
2.67

Net income (loss) per share (Diluted)
$
0.22

 
$
(0.73
)
 
$
3.11

 
$
2.67

 
 
 
 
 
 
 
 
Funds From Operations (FFO)

 
 
 
 
 
 
FFO per share (Basic)
$
1.76

 
$
1.62

 
$
7.04

 
$
6.63

FFO per share (Diluted)
$
1.75

 
$
1.61

 
$
7.00

 
$
6.62

 
 
 
 
 
 
 
 
Basic ownership interest
 
 
 
 
 
 
 
Weighted average REIT common shares for net income per share
79,517

 
83,967

 
81,733

 
86,753

Weighted average partnership units held by noncontrolling interests
4,250

 
4,220

 
4,275

 
4,562

Basic weighted average shares and units outstanding
83,767

 
88,187

 
86,008

 
91,315

 
 
 
 
 
 
 
 
Diluted ownership interest
 
 
 
 
 
 
 
Weighted average REIT common share and common share equivalents
80,070

 
84,156

 
82,287

 
86,968

Weighted average partnership units held by noncontrolling interests
4,250

 
4,220

 
4,275

 
4,562

Diluted weighted average shares and units outstanding
84,320

 
88,376

 
86,562

 
91,530





SL GREEN REALTY CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
December 31,
 
December 31,
 
2019
 
2018
Assets
(Unaudited)
 
 
Commercial real estate properties, at cost:
 
 
 
Land and land interests
$
1,751,544

 
$
1,774,899

Building and improvements
5,154,990

 
5,268,484

Building leasehold and improvements
1,433,793

 
1,423,107

Right of use asset - financing leases
47,445

 
47,445

Right of use asset - operating leases
396,795

 
—

 
8,784,567

 
8,513,935

Less: accumulated depreciation
(2,060,560
)
 
(2,099,137
)
 
6,724,007

 
6,414,798

Assets held for sale
391,664

 
—

Cash and cash equivalents
166,070

 
129,475

Restricted cash
75,360

 
149,638

Investment in marketable securities
29,887

 
28,638

Tenant and other receivables
43,968

 
41,589

Related party receivables
21,121

 
28,033

Deferred rents receivable
283,011

 
335,985

Debt and preferred equity investments, net of discounts and deferred origination fees of $14,562 and $22,379 and allowances of $1,750 and $5,750 in 2019 and 2018, respectively
1,580,306

 
2,099,393

Investments in unconsolidated joint ventures
2,912,842

 
3,019,020

Deferred costs, net
205,283

 
209,110

Other assets
332,801

 
295,679

        Total assets
$
12,766,320

 
$
12,751,358

 
 
 
 
Liabilities
 
 
 
Mortgages and other loans payable
$
2,211,883

 
$
1,988,160

Revolving credit facility
240,000

 
500,000

Unsecured term loan
1,500,000

 
1,500,000

Unsecured notes
1,502,837

 
1,503,758

Deferred financing costs, net
(46,583
)
 
(50,218
)
Total debt, net of deferred financing costs
5,408,137

 
5,441,700

Accrued interest payable
22,148

 
23,154

Accounts payable and accrued expenses
166,905

 
147,061

Deferred revenue
114,052

 
94,453

Lease liability - financing leases
44,448

 
43,616

Lease liability - operating leases
381,671

 
3,603

Dividend and distributions payable
79,282

 
80,430

Security deposits
62,252

 
64,688

Junior subordinate deferrable interest debentures held by trusts that issued trust preferred securities
100,000

 
100,000

Other liabilities
177,080

 
116,566

        Total liabilities
6,555,975

 
6,115,271

 
 
 
 
Commitments and contingencies
—

 
—

Noncontrolling interest in the Operating Partnership
409,862

 
387,805

Preferred units
283,285

 
300,427

 
 
 
 
Equity
 
 
 
Stockholders’ equity:
 
 
 
Series I Preferred Stock, $0.01 par value, $25.00 liquidation preference, 9,200 issued and outstanding at both December 31, 2019 and December 31, 2018
221,932

 
221,932

Common stock, $0.01 par value 160,000 shares authorized, 80,258 and 84,739 issued and outstanding at December 31, 2019 and December 31, 2018, respectively (including 1,055 held in Treasury at both December 31, 2019 and December 31, 2018)
803

 
847

Additional paid-in capital
4,286,395

 
4,508,685

Treasury stock at cost
(124,049
)
 
(124,049
)
Accumulated other comprehensive (loss) income
(28,485
)
 
15,108

Retained earnings
1,084,719

 
1,278,998

Total SL Green Realty Corp. stockholders’ equity
5,441,315

 
5,901,521

Noncontrolling interests in other partnerships
75,883

 
46,334

        Total equity
5,517,198

 
5,947,855

Total liabilities and equity
$
12,766,320

 
$
12,751,358





SL GREEN REALTY CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited and in thousands, except per share data)

 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
Funds From Operations (FFO) Reconciliation:
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Net income (loss) attributable to SL Green common stockholders
$
17,432

 
$
(61,219
)
 
$
255,484

 
$
232,312

Add:
 
 
 
 
 
 
 
Depreciation and amortization
64,090

 
71,458

 
272,358

 
279,507

Joint venture depreciation and noncontrolling interest adjustments
47,224

 
46,348

 
192,426

 
187,147

Net income (loss) attributable to noncontrolling interests
360

 
(3,680
)
 
10,142

 
12,210

Less:
 
 
 
 
 
 
 
Loss on sale of real estate, net
(19,241
)
 
(36,984
)
 
(16,749
)
 
(30,757
)
Equity in net gain on sale of interest in unconsolidated joint venture/real estate
—

 
167,445

 
76,181

 
303,967

Purchase price and other fair value adjustments
—

 
—

 
69,389

 
57,385

Depreciable real estate reserves
—

 
(220,852
)
 
(7,047
)
 
(227,543
)
Depreciation on non-rental real estate assets
742

 
638

 
2,935

 
2,404

FFO attributable to SL Green common stockholders
$
147,605

 
$
142,660

 
$
605,701

 
$
605,720



 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
Operating income and Same-store NOI Reconciliation:
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Net income (loss)
$
24,255

 
$
(58,320
)
 
$
291,487

 
$
270,856

Equity in net gain on sale of interest in unconsolidated joint venture/real estate
—

 
(167,445
)
 
(76,181
)
 
(303,967
)
Purchase price and other fair value adjustments
—

 
—

 
(69,389
)
 
(57,385
)
Loss on sale of real estate, net
19,241

 
36,984

 
16,749

 
30,757

Depreciable real estate reserves
—

 
220,852

 
7,047

 
227,543

Depreciation and amortization
64,090

 
71,458

 
272,358

 
279,507

Interest expense, net of interest income
44,724

 
51,974

 
190,521

 
208,669

Amortization of deferred financing costs
3,087

 
2,695

 
11,653

 
12,408

Operating income
155,397

 
158,198

 
644,245

 
668,388

 
 
 
 
 
 
 
 
Equity in net loss (income) from unconsolidated joint ventures
11,874

 
2,398

 
34,518

 
(7,311
)
Marketing, general and administrative expense
25,575

 
26,030

 
100,875

 
92,631

Transaction related costs, net
369

 
426

 
729

 
1,099

Investment income
(42,423
)
 
(57,952
)
 
(195,590
)
 
(201,492
)
Loan loss and other investment reserves, net of recoveries
—

 
5,752

 
—

 
6,839

Non-building revenue
(9,392
)
 
(6,391
)
 
(31,860
)
 
(22,099
)
Loss on early extinguishment of debt
—

 
14,889

 
—

 
17,083

Net operating income (NOI)
141,400

 
143,350

 
552,917

 
555,138

 
 
 
 
 
 
 
 
Equity in net (loss) income from unconsolidated joint ventures
(11,874
)
 
(2,398
)
 
(34,518
)
 
7,311

SLG share of unconsolidated JV depreciation and amortization
46,429

 
46,939

 
189,290

 
187,962

SLG share of unconsolidated JV interest expense, net of interest income
37,168

 
37,266

 
153,151

 
144,663

SLG share of unconsolidated JV amortization of deferred financing costs
1,751

 
1,500

 
6,415

 
6,315

SLG share of unconsolidated JV loss on early extinguishment of debt
—

 
—

 
258

 
—

SLG share of unconsolidated JV investment income
(314
)
 
(2,751
)
 
(3,331
)
 
(12,014
)
SLG share of unconsolidated JV non-building revenue
(1,292
)
 
(725
)
 
(4,016
)
 
(3,636
)
NOI including SLG share of unconsolidated JVs
213,268

 
223,181

 
860,166

 
885,739

 
 
 
 
 
 
 
 
NOI from other properties/affiliates
(14,382
)
 
(17,877
)
 
(55,762
)
 
(84,595
)
Same-Store NOI
198,886

 
205,304

 
804,404

 
801,144

 
 
 
 
 
 
 
 
Ground lease straight-line adjustment
497

 
231

 
2,039

 
1,803

Joint Venture ground lease straight-line adjustment
107

 
258

 
680

 
1,031

Straight-line and free rent
(1,501
)
 
(6,036
)
 
(6,359
)
 
(15,429
)
Amortization of acquired above and below-market leases, net
(903
)
 
(1,185
)
 
(3,677
)
 
(5,420
)
Joint Venture straight-line and free rent
(359
)
 
(4,525
)
 
(46,125
)
 
(19,500
)
Joint Venture amortization of acquired above and below-market leases, net
(4,321
)
 
(4,225
)
 
(16,953
)
 
(15,841
)
Same-store cash NOI
$
192,406

 
$
189,822

 
$
734,009

 
$
747,788





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 our ability to make cash distributions.
Funds Available for Distribution (FAD)
FAD is a non-GAAP financial measure that is calculated as FFO plus non-real estate depreciation, allowance for straight line credit loss, adjustment for straight line operating lease rent, non-cash deferred compensation, and a pro-rata adjustment for FAD from SLG’s unconsolidated JVs, less straight line rental income, free rent net of amortization, second cycle tenant improvement and leasing costs, and recurring building improvements.
FAD is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined in accordance with GAAP. FAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company’s ability to fund its dividends. Because all companies do not calculate FAD the same way, the presentation of FAD may not be comparable to similarly titled measures of other companies. FAD does not represent cash flow from operating, investing and finance activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company’s financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company’s liquidity.
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)
EBITDAre is a non-GAAP financial measure. The Company computes EBITDAre in accordance with standards established by the 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 our reconciliations, provide investors with meaningful information regarding the operating performance of properties. When operating performance is compared across multiple periods, the investor is provided with information not immediately apparent from net income that is determined in accordance with GAAP. NOI and Cash NOI provide information on trends in the revenue generated and expenses incurred in operating our properties, unaffected by the cost of leverage, straight-line adjustments, depreciation, amortization, and other net income components. The Company uses these metrics internally as performance measures. None of these measures is an alternative to net income (determined in accordance with GAAP) and same-store performance should not be considered an alternative to GAAP net income performance.
Coverage Ratios
The Company presents fixed charge and debt service coverage ratios to provide a measure of the Company’s financial flexibility to service current debt amortization, interest expense and operating lease rent from current cash net operating income. These coverage ratios represent a common measure of the Company’s ability to service fixed cash payments; however, these ratios are not used as an alternative to cash flow from operating, financing and investing activities (determined in accordance with GAAP).
SLG EARN