Partners' Capital of the Operating Partnership

12 Months Ended

Dec. 31, 2019

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 December 31, 2019, 79,202,322 shares of common stock and no shares of excess stock were issued and outstanding.

Share Repurchase Program

In August 2016, our Board of Directors approved a share repurchase program under which we can buy up to $1.0 billion of shares of our common stock. The Board of Directors has since authorized four separate $500.0 million increases to the size of the share repurchase program in the fourth quarter of 2017, second quarter of 2018, fourth quarter of 2018, and fourth quarter of 2019 bringing the total program size to $3.0 billion.

At December 31, 2019 repurchases executed under the program were as follows:



Period	Shares repurchased	Average price paid per share	Cumulative number of shares repurchased as part of the repurchase plan or programs
Year ended 2017	8,342,411	$101.64	8,342,411
Year ended 2018	9,744,911	$96.22	18,087,322
Year ended 2019	4,596,171	$83.62	22,683,493

At-The-Market Equity Offering Program

In March 2015, 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 our common stock. The Company did not make any sales of its common stock under the ATM program in the years ended December 31, 2019, 2018, or 2017.

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. 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 ("DRSPP")

In February 2018, 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 our common stock under the DRSPP. The DRSPP commenced on September 24, 2001.

The following table summarizes SL Green common stock issued, and proceeds received from dividend reinvestments and/or stock purchases under the DRSPP for the years ended December 31, 2019, 2018, and 2017, respectively (dollars in thousands):



	Year Ended December 31,
	2019		2018		2017
Shares of common stock issued	3,867		1,399		2,141
Dividend reinvestments/stock purchases under the DRSPP	$	334	$	136	$	223

Earnings per Share

We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-average number of common stock shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.

SL Green's earnings per share for the years ended December 31, 2019, 2018, and 2017 are computed as follows (in thousands):



	Year Ended December 31,
Numerator	2019			2018			2017
Basic Earnings:
Income attributable to SL Green common stockholders	$	255,484		$	232,312		$	86,424
Less: distributed earnings allocated to participating securities	(1,739		)	$	(552	)	$	(471	)
Net income attributable to SL Green common stockholders (numerator for basic earnings per share)	$	253,745		$	231,760		$	85,953
Add back: Dilutive effect of earnings allocated to participating securities	1,719			552			471
Add back: Effect of dilutive securities (redemption of units to common shares)	13,301			12,216			3,995
Income attributable to SL Green common stockholders (numerator for diluted earnings per share)	$	268,765		$	244,528		$	90,419



	Year Ended December 31,
Denominator	2019	2018	2017
Basic Shares:
Weighted average common stock outstanding	81,733	86,753	98,571
Effect of Dilutive Securities:
Operating Partnership units redeemable for common shares	4,275	4,562	4,556
Stock-based compensation plans	554	215	276
Diluted weighted average common stock outstanding	86,562	91,530	103,403

SL Green has excluded 1,252,670, 1,138,647 and 774,782 common stock equivalents from the diluted shares outstanding for the years ended December 31, 2019, 2018, and 2017 respectively, as they were anti-dilutive.

SL Green Operating Partnership

Stockholders' Equity

Partners' Capital of the Operating Partnership

The Company is the sole managing general partner of the Operating Partnership and at December 31, 2019 owned 79,202,322 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 December 31, 2019, limited partners other than SL Green owned 5.03%, or 4,195,875 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 years ended December 31, 2019, 2018, and 2017 respectively are computed as follows (in thousands):



	Year Ended December 31,
Numerator	2019			2018			2017
Basic Earnings:
Income attributable to SLGOP common unitholders	$	268,785		$	244,528		$	90,419
Less: distributed earnings allocated to participating securities	(1,739		)	$	(552	)	$	(471	)
Net Income attributable to SLGOP common unitholders (numerator for basic earnings per unit)	$	267,046		$	243,976		$	89,948
Add back: Dilutive effect of earnings allocated to participating securities	1,719			552			471
Income attributable to SLGOP common unitholders	$	268,765		$	244,528		$	90,419



	Year Ended December 31,
Denominator	2019	2018	2017
Basic units:
Weighted average common units outstanding	86,008	91,315	103,127
Effect of Dilutive Securities:
Stock-based compensation plans	554	215	276
Diluted weighted average common units outstanding	86,562	91,530	103,403

The Operating Partnership has excluded 1,252,670, 1,138,647, and 774,782 common unit equivalents from the diluted units outstanding for the years ended December 31, 2019, 2018, and 2017 respectively, as they were anti-dilutive.