SL Green Realty Corp. (the "Company") (NYSE: SLG) today reported
net loss attributable to common stockholders for the quarter ended
March 31, 2023 of $39.7 million and $0.63 per share as
compared to net income of $7.8 million and $0.11 per share for the
same quarter in 2021. Net loss attributable to common stockholders
for the first quarter of 2023 was net of $78.5 million, or $1.14
per share, of depreciation and amortization, as compared to $47.0
million, or $0.67 per share, of depreciation and amortization for
the same period in 2022.
The Company reported FFO for the quarter ended
March 31, 2023 of $105.5 million and $1.53 per share as
compared to FFO for the same period in 2022 of $115.8 million and
$1.65 per share.
FFO for the first quarter of 2023 is net of $6.9
million, or $0.10 per share, of reserves on one debt and preferred
equity investment and includes $20.3 million, or $0.29 per share,
representing the Company's net share of holdover rent, interest and
reimbursement of attorneys' fees collected by the joint venture
that owns 2 Herald Square from former tenant, Victoria's Secret
Stores LLC, and their guarantor, L Brands Inc., following the
completion of legal proceedings against the tenant and guarantor.
The Company's share of the judgment proceeds exceeded the amount
included in the Company's 2023 earnings guidance by $8.7 million,
or $0.13 per share.
All per share amounts are presented on a diluted
basis.
Operating and Leasing
Activity
Same-store cash NOI, including our share of
same-store cash NOI from unconsolidated joint ventures, increased
by 3.0% for the first quarter of 2023, or 5.3% excluding lease
termination income, as compared to the same period in 2022.
During the first quarter of 2023, the Company
signed 41 office leases in its Manhattan office portfolio totaling
504,682 square feet. The average rent on the Manhattan office
leases signed in the first quarter of 2023, excluding leases signed
at One Vanderbilt and One Madison, was $64.83 per rentable square
foot with an average lease term of 6.3 years and average tenant
concessions of 4.8 months of free rent with a tenant improvement
allowance of $42.71 per rentable square foot. Twenty-four leases
comprising 377,441 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
$65.08 per rentable square foot, representing a 5.3% increase over
the previous fully escalated rents on the same office spaces.
Occupancy in the Company's Manhattan same-store
office portfolio was 90.2% as of March 31, 2023, consistent
with the Company's expectations, inclusive of 290,491 square feet
of leases signed but not yet commenced, as compared to 92.0% at the
end of the previous quarter. The Company reaffirms its stated
objective to increase occupancy, inclusive of leases signed but not
yet commenced, in the Manhattan same-store office portfolio to
92.4% by December 31, 2023.
Significant leasing activity in the first
quarter includes:
- Early renewal
with CBS Broadcasting, Inc. for 184,367 square feet at 555 West
57th Street;
- Early renewal
with GNYHA Management Corporation for 56,372 square feet at 555
West 57th Street;
- Expansion lease
with TD Securities (USA) LLC for 25,171 square feet at 125 Park
Avenue;
- New lease with
Palo Alto Networks Inc. for a full tower floor at One Madison
Avenue;
- New lease with
Cohen Clair Lans Greifer & Simpson LLP for 17,586 square feet
at 919 Third Avenue;
- Early renewal
with IM Pro Makeup NY LLP for 17,258 square feet at 110 Greene
Street;
- Renewal and
expansion lease with Van Wagner Group, LLC for a total of 11,860
square feet at 800 Third Avenue;
- Early renewal
with Entertainment Software Association for 10,799 square feet at
420 Lexington Avenue; and
- Expansion lease
with Oxford 1 Asset Management USA Inc. for 10,392 square feet at
450 Park Avenue;
Investment Activity
In February, the Company, together with its
joint venture partner, closed on the previously announced sale of
the retail condominiums at 121 Greene Street for a gross sales
price of $14.0 million.
Debt and Preferred Equity Investment
Activity
The carrying value of the Company’s debt and
preferred equity ("DPE") portfolio was $626.8 million at
March 31, 2023, net of a $6.9 million loan loss reserve
recorded on one investment during the first quarter of 2023. The
portfolio had a weighted average current yield of 5.9%, or 10.7%
excluding the effect of $288.7 million of investments that are
on non-accrual. During the first quarter, the Company did not
originate or acquire any new investments.
ESG
The Company received a 2023 ENERGY STAR Partner
of the Year Sustained Excellence Award for the sixth consecutive
year. This award honors organizations across the United States that
have implemented distinguished corporate energy management
programs. Among thousands of ENERGY STAR partners, SL Green was one
of just 170 organizations to achieve the Sustained Excellence
distinction.
The Company was named to Newsweek's list of
America's Most Responsible Companies for 2023. This list honors 500
of the U.S.'s largest public corporations based on Newsweek's
partnering with global research and data firm, Statista, and
focuses on a holistic view of corporate responsibility that
considers all three pillars of ESG: environment, social and
corporate governance.
The Company earned a Great Place to Work
Certificate for 2023 for the second consecutive year. The Great
Place to Work Certification was the result of 85% of the Company's
employees stating that SL Green is a great place to work, as
compared to 57% at a typical company.
Dividends
In the first quarter of 2023, the Company
declared:
- Three monthly
ordinary dividends on its outstanding common stock of $0.2708 per
share, which were paid on February 15, March 15, and April 17,
2023, equating to an annualized dividend of $3.25 per share of
common stock; and
- A quarterly
dividend on its outstanding 6.50% Series I Cumulative Redeemable
Preferred Stock of $0.40625 per share for the period January 15,
2023 through and including April 14, 2023, which was paid on April
17, 2023 and 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, April 20, 2023,
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 www.slgreen.com under “Financial
Reports.”
The live conference call will be webcast in
listen-only mode and a replay will be available in the Investors
section of the SL Green Realty Corp. website at
www.slgreen.com under “Presentations & Webcasts.”
Research analysts who wish to participate in the
conference call must first register
at https://register.vevent.com/register/BI0a6778f7c67f4b2ab966ab929960a817.
Company Profile
SL Green Realty Corp., Manhattan'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
March 31, 2023, SL Green held interests in 60 buildings
totaling 33.1 million square feet. This included ownership
interests in 28.8 million square feet of Manhattan buildings and
3.4 million square feet securing debt and preferred equity
investments.
To obtain the latest news releases and other
Company information, please visit our website at
www.slgreen.com or contact Investor Relations at
investor.relations@slgreen.com.
Disclaimers
Non-GAAP Financial
MeasuresDuring 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 include risks and
uncertainties described in our filings with the Securities and
Exchange Commission. Except to the extent required by law, 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 |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
Rental revenue, net |
$ |
174,592 |
|
|
$ |
136,476 |
|
Escalation and
reimbursement |
|
20,450 |
|
|
|
19,555 |
|
Investment income |
|
9,057 |
|
|
|
19,888 |
|
Other income |
|
19,476 |
|
|
|
12,045 |
|
Total revenues |
|
223,575 |
|
|
|
187,964 |
|
Expenses: |
|
|
|
Operating expenses, including
related party expenses of $1 in 2023 and $2,523 in 2022 |
|
52,064 |
|
|
|
42,583 |
|
Real estate taxes |
|
41,383 |
|
|
|
30,747 |
|
Operating lease rent |
|
6,301 |
|
|
|
6,564 |
|
Interest expense, net of
interest income |
|
41,653 |
|
|
|
15,070 |
|
Amortization of deferred
financing costs |
|
2,021 |
|
|
|
1,948 |
|
Depreciation and
amortization |
|
78,548 |
|
|
|
46,983 |
|
Loan loss and other investment
reserves, net of recoveries |
|
6,890 |
|
|
|
— |
|
Transaction related costs |
|
884 |
|
|
|
28 |
|
Marketing, general and
administrative |
|
23,285 |
|
|
|
24,776 |
|
Total expenses |
|
253,029 |
|
|
|
168,699 |
|
|
|
|
|
Equity in net loss from
unconsolidated joint ventures |
|
(7,412 |
) |
|
|
(4,715 |
) |
Equity in net loss on sale of
interest in unconsolidated joint venture/real estate |
|
(79 |
) |
|
|
— |
|
Purchase price and other fair
value adjustment |
|
239 |
|
|
|
(63 |
) |
Loss on sale of real estate,
net |
|
(1,651 |
) |
|
|
(1,002 |
) |
Net (loss) income |
|
(38,357 |
) |
|
|
13,485 |
|
Net loss (income) attributable
to noncontrolling interests in the Operating Partnership |
|
2,337 |
|
|
|
(492 |
) |
Net loss attributable to
noncontrolling interests in other partnerships |
|
1,625 |
|
|
|
143 |
|
Preferred unit
distributions |
|
(1,598 |
) |
|
|
(1,647 |
) |
Net (loss) income attributable
to SL Green |
|
(35,993 |
) |
|
|
11,489 |
|
Perpetual preferred stock
dividends |
|
(3,738 |
) |
|
|
(3,738 |
) |
Net (loss) income attributable to SL Green common stockholders |
$ |
(39,731 |
) |
|
$ |
7,751 |
|
Earnings Per Share
(EPS) |
|
|
|
Net (loss) income per share
(Basic) |
$ |
(0.63 |
) |
|
$ |
0.12 |
|
Net (loss) income per share
(Diluted) |
$ |
(0.63 |
) |
|
$ |
0.11 |
|
|
|
|
|
Funds From Operations
(FFO) |
|
|
|
FFO per share (Basic) |
$ |
1.54 |
|
|
$ |
1.69 |
|
FFO per share (Diluted) |
$ |
1.53 |
|
|
$ |
1.65 |
|
|
|
|
|
Basic ownership
interest |
|
|
|
Weighted average REIT common
shares for net income per share |
|
64,079 |
|
|
|
64,349 |
|
Weighted average partnership
units held by noncontrolling interests |
|
4,103 |
|
|
|
4,121 |
|
Basic weighted average
shares and units outstanding |
|
68,182 |
|
|
|
68,470 |
|
|
|
|
|
Diluted ownership
interest |
|
|
|
Weighted average REIT common
share and common share equivalents |
|
64,671 |
|
|
|
66,107 |
|
Weighted average partnership
units held by noncontrolling interests |
|
4,103 |
|
|
|
4,121 |
|
Diluted weighted
average shares and units outstanding |
|
68,774 |
|
|
|
70,228 |
|
|
|
|
|
SL GREEN REALTY
CORP.CONSOLIDATED BALANCE SHEETS(in
thousands, except per share data)
|
March 31, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
Assets |
(Unaudited) |
|
|
Commercial real estate
properties, at cost: |
|
|
|
Land and land interests |
$ |
1,576,927 |
|
|
$ |
1,576,927 |
|
Building and improvements |
|
4,940,138 |
|
|
|
4,903,776 |
|
Building leasehold and
improvements |
|
1,700,376 |
|
|
|
1,691,831 |
|
Right of use asset - operating
leases |
|
1,026,265 |
|
|
|
1,026,265 |
|
|
|
9,243,706 |
|
|
|
9,198,799 |
|
Less: accumulated
depreciation |
|
(2,100,804 |
) |
|
|
(2,039,554 |
) |
|
|
7,142,902 |
|
|
|
7,159,245 |
|
Cash and cash equivalents |
|
158,937 |
|
|
|
203,273 |
|
Restricted cash |
|
198,325 |
|
|
|
180,781 |
|
Investment in marketable
securities |
|
10,273 |
|
|
|
11,240 |
|
Tenant and other
receivables |
|
36,289 |
|
|
|
34,497 |
|
Related party receivables |
|
26,794 |
|
|
|
27,352 |
|
Deferred rents receivable |
|
266,567 |
|
|
|
257,887 |
|
Debt and preferred equity
investments, net of discounts and deferred origination fees of
$1,689 and $1,811 in 2023 and 2022, respectively, and allowances of
$13,520 and $6,630 in 2023 and 2022, respectively |
|
626,803 |
|
|
|
623,280 |
|
Investments in unconsolidated
joint ventures |
|
3,164,729 |
|
|
|
3,190,137 |
|
Deferred costs, net |
|
117,602 |
|
|
|
121,157 |
|
Other assets |
|
592,898 |
|
|
|
546,945 |
|
Total assets |
$ |
12,342,119 |
|
|
$ |
12,355,794 |
|
|
|
|
|
Liabilities |
|
|
|
Mortgages and other loans
payable |
$ |
3,234,489 |
|
|
$ |
3,235,962 |
|
Revolving credit facility |
|
490,000 |
|
|
|
450,000 |
|
Unsecured term loan |
|
1,675,000 |
|
|
|
1,650,000 |
|
Unsecured notes |
|
100,000 |
|
|
|
100,000 |
|
Deferred financing costs,
net |
|
(22,275 |
) |
|
|
(23,938 |
) |
Total debt, net of deferred
financing costs |
|
5,477,214 |
|
|
|
5,412,024 |
|
Accrued interest payable |
|
16,049 |
|
|
|
14,227 |
|
Accounts payable and accrued
expenses |
|
150,873 |
|
|
|
154,867 |
|
Deferred revenue |
|
264,852 |
|
|
|
272,248 |
|
Lease liability - financing
leases |
|
104,544 |
|
|
|
104,218 |
|
Lease liability - operating
leases |
|
892,984 |
|
|
|
895,100 |
|
Dividend and distributions
payable |
|
21,768 |
|
|
|
21,569 |
|
Security deposits |
|
50,585 |
|
|
|
50,472 |
|
Junior subordinate deferrable
interest debentures held by trusts that issued trust preferred
securities |
|
100,000 |
|
|
|
100,000 |
|
Other liabilities |
|
282,958 |
|
|
|
236,211 |
|
Total liabilities |
|
7,361,827 |
|
|
|
7,260,936 |
|
|
|
|
|
Commitments and
contingencies |
|
— |
|
|
|
— |
|
Noncontrolling interest in the
Operating Partnership |
|
273,175 |
|
|
|
269,993 |
|
Preferred units |
|
177,943 |
|
|
|
177,943 |
|
|
|
|
|
Equity |
|
|
|
Stockholders’ equity: |
|
|
|
Series I Preferred Stock, $0.01 par value, $25.00 liquidation
preference, 9,200 issued and outstanding at both March 31, 2023 and
December 31, 2022 |
|
221,932 |
|
|
|
221,932 |
|
Common stock, $0.01 par value
160,000 shares authorized, 65,433 and 65,440 issued and outstanding
(including 1,060 and 1,060 held in Treasury) at March 31, 2023 and
December 31, 2022, respectively |
|
656 |
|
|
|
656 |
|
Additional paid-in
capital |
|
3,798,101 |
|
|
|
3,790,358 |
|
Treasury stock at cost |
|
(128,655 |
) |
|
|
(128,655 |
) |
Accumulated other
comprehensive income |
|
19,428 |
|
|
|
49,604 |
|
Retained earnings |
|
549,024 |
|
|
|
651,138 |
|
Total SL Green Realty Corp.
stockholders’ equity |
|
4,460,486 |
|
|
|
4,585,033 |
|
Noncontrolling interests in
other partnerships |
|
68,688 |
|
|
|
61,889 |
|
Total equity |
|
4,529,174 |
|
|
|
4,646,922 |
|
Total liabilities and
equity |
$ |
12,342,119 |
|
|
$ |
12,355,794 |
|
|
|
|
|
|
|
|
|
SL GREEN REALTY
CORP.RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(unaudited and in thousands, except per share
data)
|
Three Months Ended |
|
March 31, |
Funds From Operations (FFO) Reconciliation: |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net (loss) income attributable
to SL Green common stockholders |
$ |
(39,731 |
) |
|
$ |
7,751 |
|
Add: |
|
|
|
Depreciation and amortization |
|
78,548 |
|
|
|
46,983 |
|
Joint venture depreciation and noncontrolling interest
adjustments |
|
69,534 |
|
|
|
60,432 |
|
Net (income) loss attributable to noncontrolling interests |
|
(3,962 |
) |
|
|
349 |
|
Less: |
|
|
|
Loss on sale of real estate, net |
|
(1,651 |
) |
|
|
(1,002 |
) |
Equity in net loss on sale of interest in unconsolidated joint
venture/real estate |
|
(79 |
) |
|
|
— |
|
Depreciation on non-rental real estate assets |
|
634 |
|
|
|
721 |
|
FFO attributable to SL
Green common stockholders and unit holders |
$ |
105,485 |
|
|
$ |
115,796 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, |
Operating income and Same-store NOI
Reconciliation: |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net (loss)
income |
$ |
(38,357 |
) |
|
$ |
13,485 |
|
Equity in net loss on sale of
interest in unconsolidated joint venture/real estate |
|
79 |
|
|
|
— |
|
Purchase price and other fair
value adjustments |
|
(239 |
) |
|
|
63 |
|
Loss (gain) on sale of real
estate, net |
|
1,651 |
|
|
|
1,002 |
|
Depreciation and
amortization |
|
78,548 |
|
|
|
46,983 |
|
Interest expense, net of
interest income |
|
41,653 |
|
|
|
15,070 |
|
Amortization of deferred
financing costs |
|
2,021 |
|
|
|
1,948 |
|
Operating
income |
|
85,356 |
|
|
|
78,551 |
|
|
|
|
|
Equity in net loss from
unconsolidated joint ventures |
|
7,412 |
|
|
|
4,715 |
|
Marketing, general and
administrative expense |
|
23,285 |
|
|
|
24,776 |
|
Transaction related costs,
net |
|
884 |
|
|
|
28 |
|
Investment income |
|
(9,057 |
) |
|
|
(19,888 |
) |
Loan loss and other investment
reserves, net of recoveries |
|
6,890 |
|
|
|
— |
|
Non-building revenue |
|
(6,806 |
) |
|
|
(1,451 |
) |
Net operating income
(NOI) |
|
107,964 |
|
|
|
86,731 |
|
|
|
|
|
Equity in net loss from
unconsolidated joint ventures |
|
(7,412 |
) |
|
|
(4,715 |
) |
SLG share of unconsolidated JV
depreciation and amortization |
|
64,723 |
|
|
|
58,130 |
|
SLG share of unconsolidated JV
interest expense, net of interest income |
|
63,146 |
|
|
|
45,237 |
|
SLG share of unconsolidated JV
amortization of deferred financing costs |
|
3,062 |
|
|
|
2,890 |
|
SLG share of unconsolidated JV
investment income |
|
(313 |
) |
|
|
(303 |
) |
SLG share of unconsolidated JV
non-building revenue |
|
(2,298 |
) |
|
|
(438 |
) |
NOI including SLG
share of unconsolidated JVs |
|
228,872 |
|
|
|
187,532 |
|
|
|
|
|
NOI from other
properties/affiliates |
|
(54,761 |
) |
|
|
(12,816 |
) |
Same-store
NOI |
|
174,111 |
|
|
|
174,716 |
|
|
|
|
|
Ground lease straight-line
adjustment |
|
204 |
|
|
|
204 |
|
SLG share of unconsolidated JV
ground lease straight-line adjustment |
|
192 |
|
|
|
192 |
|
Straight-line and free
rent |
|
(4,784 |
) |
|
|
(1,943 |
) |
Amortization of acquired above
and below-market leases, net |
|
13 |
|
|
|
(61 |
) |
SLG share of unconsolidated JV
straight-line and free rent |
|
(8,824 |
) |
|
|
(16,592 |
) |
SLG share of unconsolidated JV
amortization of acquired above and below-market leases, net |
|
(4,433 |
) |
|
|
(4,530 |
) |
Same-store cash
NOI |
$ |
156,479 |
|
|
$ |
151,986 |
|
|
|
|
|
Lease termination income |
|
(511 |
) |
|
|
(168 |
) |
SLG share of unconsolidated JV
lease termination income |
|
(386 |
) |
|
|
(4,053 |
) |
Same-store cash NOI
excluding lease termination income |
$ |
155,582 |
|
|
$ |
147,765 |
|
|
|
|
|
|
|
|
|
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 in December 2018, 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 compensation 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 the
Company's 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 pro-rata
adjustments for these items from the Company's unconsolidated JVs,
less straight line rental income, free rent net of amortization,
second cycle tenant improvement and leasing costs, and recurring
capital expenditures.
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 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 the Company's 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
Grafico Azioni SL Green Realty (NYSE:SLG)
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Grafico Azioni SL Green Realty (NYSE:SLG)
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