Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information

Segment Information

17.  Segment Information

We are a REIT engaged in owning, managing, leasing, acquiring and repositioning commercial properties in the New York Metropolitan area and have two reportable segments, real estate and debt and preferred equity.  We evaluate real estate performance and allocate resources based on earnings contribution to income from continuing operations.

Our real estate portfolio is primarily located in the geographical markets of the New York Metropolitan area.  The primary sources of revenue are generated from tenant rents and escalations and reimbursement revenue.  Real estate property operating expenses consist primarily of security, maintenance, utility costs, real estate taxes and ground rent expense (at certain applicable properties).  See Note 5, “Debt and Preferred Equity Investments,” for additional details on our debt and preferred equity investments.

Selected results of operations for the three and six months ended June 30, 2013 and 2012, and selected asset information as of June 30, 2013 and December 31, 2012, regarding our operating segments are as follows (in thousands):

	Real Estate Segment			Debt and Preferred Equity Segment		Total Company
Total revenues
Three months ended:
June 30, 2013	$	318,414		$	46,731	$	365,145
June 30, 2012	311,087			33,448		344,535
Six months ended:
June 30, 2013	$	631,174		$	99,439	$	730,613
June 30, 2012	619,334			59,786		679,120
Income (loss) from continuing operations before equity in net gain on sale of unconsolidated joint venture/real estate
Three months ended:
June 30, 2013	$	(233	)	$	38,047	$	37,814
June 30, 2012	81,011			27,013		108,024
Six months ended:
June 30, 2013	$	(15,821	)	$	81,861	$	66,040
June 30, 2012	80,334			47,928		128,262
Total assets
As of:
June 30, 2013	$	13,163,696		$	1,238,229	$	14,401,925
December 31, 2012	13,021,095			1,357,890		14,378,985

Income from continuing operations represents total revenues less total expenses for the real estate segment and total investment income less allocated interest expense for the debt and preferred equity segment.  Interest costs for the debt and preferred equity segment are imputed assuming 100% leverage at our 2012 credit facility borrowing cost as well as the interest under the MRA.  We also allocate loan loss reserves, net of recoveries to the debt and preferred equity segment.  We do not allocate marketing, general and administrative expenses and transaction related costs (totaling approximately $23.2 million, $45.7 million, $22.7 million and $43.9 million for the three and six months ended June 30, 2013 and 2012, respectively) to the debt and preferred equity segment since we base performance on the individual segments prior to allocating marketing, general and administrative expenses.  All other expenses, except interest, relate entirely to the real estate assets.

There were no transactions between the above two segments.

The table below reconciles income from continuing operations to net income attributable to SL Green common stockholders for the three and six months ended June 30, 2013 and 2012 (in thousands):

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2013			2012			2013			2012
Income from continuing operations before equity in net gain on sale of interest in unconsolidated joint venture/real estate	$	37,814		$	108,024		$	66,040		$	128,262
Purchase price fair value adjustment	(2,305		)	—			(2,305		)	—
Equity in net (loss) gain on sale of interest in unconsolidated joint venture/real estate	(3,583		)	9,534			(3,583		)	16,794
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 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