SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
No. 1
CURRENT REPORT
------------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 7, 2001
SL GREEN REALTY CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND
(STATE OF INCORPORATION)
1-13199 13-3956775
(COMMISSION FILE NUMBER) (IRS EMPLOYER ID. NUMBER)
420 Lexington Avenue 10170
New York, New York (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(212) 594-2700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant herby amends the following items, financial statements, exhibits or
other portions of its Current Report on Form 8-K, dated June 7, 2001 (filed with
the Securities and Exchange Commission on June 18, 2001), as set forth in the
pages attached hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) and (b) FINANCIAL STATEMENTS OF PROPERTY ACQUIRED AND PRO FORMA FINANCIAL
INFORMATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Balance Sheet
(Unaudited) as of March 31, 2001............................... F4
Pro Forma Income Statement
(Unaudited) for the three months ended March 31, 2001.......... F5
Pro Forma Income Statement
(Unaudited) for the year ended December 31, 2000 .............. F6
Notes to Pro Forma Financial Information ............................... F7
Report of Independent Auditors.......................................... F8
Statements of Revenues and Certain Expenses of 317 Madison Avenue
for the three months ended March 31, 2001 (unaudited)
and the year ended December 31, 2000........................... F9
Notes to Statements of Revenues and Certain Expenses.................... F10
(c) EXHIBITS
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SL GREEN REALTY CORP.
By: /s/ Thomas E. Wirth
----------------------------
Thomas E. Wirth
Chief Financial Officer
Date: July 13, 2001
F2
SL GREEN REALTY CORP.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The unaudited pro forma consolidated balance sheet of SL Green Realty
Corp. (the "Company") as of March 31, 2001 has been prepared as if the Company's
acquisition of the fee interest in 317 Madison Avenue ("317 Madison") had been
consummated on March 31, 2001. The unaudited pro forma consolidated income
statements for the year ended December 31, 2000 and the three months ended March
31, 2001 are presented as if the Company's acquisition of 317 Madison occurred
on January 1, 2000 and the effect was carried forward through the year and the
three month period.
On June 7, 2001, the Company announced that it had acquired the 450,000
square foot, 22-story office building at 317 Madison, New York, New York. The
property 317 Madison is located at the Northeast corner of Madison Avenue and
42nd Street in the Grand Central sub-market of midtown Manhattan.
The pro forma consolidated financial statements do not purport to
represent what the Company's financial position or results of operations would
have been assuming the completion of the Company's acquisition of 317 Madison
had occurred on January 1, 2000 and period indicated, nor do they purport to
project the Company's financial position or results of operations at any future
date or for any future period. These pro forma consolidated financial statements
should be read in conjunction with the Company's 2000 Annual Report on Form 10-K
and the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2001.
F3
SL GREEN REALTY CORP.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2001
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
SL GREEN REALTY
CORP. PURCHASE OF COMPANY
HISTORICAL 317 MADISON PROFORMA ADJUSTED
(A) (B)
ASSETS:
Commerical real estate properties at cost:
Land and land interests $ 165,814 $ 21,120 $ 186,934
Buildings and improvements 785,280 84,480 869,760
Building leasehold 140,951 140,951
Property under capital lease 12,208 12,208
----------- ----------- -----------
1,104,253 105,600 1,209,853
Less accumulated depreciation (81,409) (81,409)
----------- ----------- -----------
1,022,844 105,600 1,128,444
Properties held for sale 82,153 82,153
Cash and cash equivalents 8,078 8,078
Restricted cash 43,445 43,445
Tenant and other receivables,
net of allowance of $2,141 8,940 8,940
Related party receivables 1,046 1,046
Deferred rents receivable, net of
allowance for tenant credit loss of $5,334 46,843 46,843
Investment in and advances to affiliates 6,919 6,919
Mortgage loans receivable and preferred
equity investment, net of $2,562 discount 92,982 92,982
Investments in unconsolidated joint ventures 72,673 72,673
Deferred costs, net 40,940 40,940
Other assets 16,650 16,650
----------- ----------- -----------
Total Assets $ 1,443,513 $ 105,600 $ 1,549,113
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $ 528,535 $ 528,535
Revolving credit facilities 211,926 $ 105,600 317,526
Derivative Instruments at fair value 2,814 2,814
Accrued interest payable 3,676 3,676
Accounts payable and accrued expenses 22,122 22,122
Deferred compensation awards 1,838 1,838
Deferred revenue 2,073 2,073
Capitalized lease obligations 15,369 15,369
Deferred land lease payable 13,512 13,512
Dividend and distributions payable 12,746 12,746
Security deposits 20,137 20,137
----------- ----------- -----------
Total liabilities 834,748 105,600 940,348
Commitments and Contingencies
Minority interest in Operating Partnership 43,062 43,062
8% Preferred Income Equity
Redeemable Shares(SM) $0.01 par
value $25.00 mandatory liquidation
preference, 25,000 authorized and 4,600
outstanding at March 31, 2001 110,888 110,888
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value
100,000 shares authorized,
24,705 issued and outstanding at
March 31, 2001 248 248
Additional paid - in capital 433,482 433,482
Deferred compensation plans (8,393) (8,393)
Officers' loans net (1,007) (1,007)
Accumulated other comprehensive loss (2,409) (2,409)
Retained earnings 32,894 32,894
----------- ----------- -----------
Total stockholders' equity 454,815 454,815
----------- ----------- -----------
Total liabilities and stockholders' equity $ 1,443,513 $ 105,600 $ 1,549,113
=========== =========== ===========
The accompanying notes are an integral part of these pro forma financial
statements.
F4
SL GREEN REALTY CORP.
PRO FORMA CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2001
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
SL GREEN REALTY 317 MADISON PRO FORMA COMPANY
CORP HISTORICAL ACQUISITION ADJUSTMENTS PRO FORMA
(A) (B)
REVENUES
Rental revenue $ 55,003 $ 2,856 $ (8)(C) $ 57,851
Escalation and reimbursement revenues 8,057 499 8,556
Signage rent 350 -- 350
Investment income 3,274 -- 3,274
Other income 310 43 353
-------- -------- -------- --------
Total revenues 66,994 3,398 (8) 70,384
-------- -------- -------- --------
EXPENSES
Operating expenses including $893 to affiliates 15,826 1,216 17,042
Real estate taxes 8,180 473 8,653
Ground rent 3,159 -- 3,159
Interest 13,897 -- 1,444 (D) 15,341
Depreciation and amortization 9,720 -- 528 (E) 10,248
Marketing, general and administrative 3,547 -- 3,547
-------- -------- -------- --------
Total expenses 54,329 1,689 1,972 57,990
-------- -------- -------- --------
Income before equity in net loss
from affiliates, equity in net income of
unconsolidated joint ventures, gain
on sale, minority interest and
extraordinary items 12,665 1,709 (1,980) 12,394
Equity in net loss from affiliates (269) (269)
Equity in net income of unconsolidated
joint ventures 1,513 1,513
Gain on sale of rental property 1,514 1,514
-------- -------- -------- --------
Income before minority interest,
extraordinary item and
cumulative effect adjustment 15,423 1,709 (1,980) 15,152
Minority interest in operating property (1,081) (145) 168 (F) (1,058)
-------- -------- -------- --------
Income before extraordinary item and
cumulative effect adjustment 14,342 1,564 (1,812) 14,094
Extraordinary items, net of minority interest of $8 (98) (98)
Cumulative effect of change in
accounting principle (532) (532)
-------- -------- -------- --------
Net income 13,712 1,564 (1,812) 13,464
Preferred stock dividends (2,300) (2,300)
Preferred stock accretion (114) (114)
-------- -------- -------- --------
Net income available to common shareholders $ 11,298 $ 1,564 $ (1,812) $ 11,050
======== ======== ======== ========
BASIC EARNINGS PER SHARE:(G)
Income before extraordinary item
and cumulative effect adjustment $ 0.48 $ 0.47
Extraordinary items -- --
Cumulative effect of change in accounting principle (0.02) (0.02)
-------- --------
Net income $ 0.46 $ 0.45
======== ========
DILUTED EARNINGS PER SHARE:(G)
Income before extraordinary item
and cumulative effect adjustment $ 0.47 $ 0.46
Extraordinary item -- --
Cumulative effect of change in accounting principle (0.02) (0.02)
-------- --------
Net income $ 0.45 $ 0.44
======== ========
Basic weighted average common shares outstanding 24,639 24,639
======== ========
Diluted weighted average common shares and
common share equivalents outstanding 27,403 27,403
======== ========
The accompanying notes are an integral part of these pro forma financial
statements
F5
SL GREEN REALTY CORP.
PRO FORMA CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
SL GREEN REALTY 317 MADISON PRO FORMA COMPANY
CORP HISTORICAL ACQUISITION ADJUSTMENTS PRO FORMA
(A) (B)
REVENUES
Rental revenue $ 189,048 $ 11,000 $ 416(C) $ 200,464
Escalation and reimbursement revenues 24,732 1,966 26,698
Signage rent 2,137 -- 2,137
Investment income 13,271 -- 13,271
Other income 1,135 188 1,323
--------- --------- --------- ---------
Total revenues 230,323 13,154 416 243,893
--------- --------- --------- ---------
EXPENSES
Operating expenses including $4,644 to affiliates 54,644 5,282 59,926
Real estate taxes 28,850 1,945 30,795
Ground rent 12,660 12,660
Interest 40,431 5,776(D) 46,207
Depreciation and amortization 32,511 2,112(E) 34,623
Marketing, general and administrative 11,561 11,561
--------- --------- --------- ---------
Total expenses 180,657 7,227 7,888 195,772
--------- --------- --------- ---------
Income before equity in net income
from affiliates, equity in net income of
unconsolidated joint ventures, gain
on sale, minority interest and
extraordinary items 49,666 5,927 (7,472) 48,121
Equity in net income from affiliates 378 378
Equity in net income of unconsolidated joint ventures 3,108 3,108
Equity in net gain on sale of joint venture property 6,025 6,025
Gain on sale of rental property/preferred
investment 35,391 35,391
Minority interest (7,430) (510) 643 (F) (7,297)
Extraordinary items, net of minority
interest of $81 (921) (921)
--------- --------- --------- ---------
Net income 86,217 5,417 (6,829) 84,805
Preferred stock dividends (9,200) (9,200)
Preferred stock accretion (426) (426)
--------- --------- --------- ---------
Net income available to common shareholders $ 76,591 $ 5,417 $ (6,829) $ 75,179
========= ========= ========= =========
BASIC EARNINGS PER SHARE:(G)
Net income before gain on sale and extraordinary item $ 1.48 $ 1.42
Gain on sales 1.70 1.70
Extraordinary item (0.04) (0.04)
--------- ---------
Net income $ 3.14 $ 3.08
========= =========
DILUTED EARNINGS PER SHARE:(G)
Net income before gain on sale and extraordinary item $ 1.66 $ 1.62
Gain on sales 1.30 1.30
Extraordinary item (0.03) (0.03)
--------- ---------
Net income $ 2.93 $ 2.89
========= =========
Basic weighted average common shares outstanding 24,373 24,373
========= =========
Diluted weighted average common shares and
common share equivalents outstanding 31,818 31,818
========= =========
The accompanying notes are an integral part of these pro forma financial
statements
F6
SL GREEN REALTY CORP.
THREE MONTHS ENDED
MARCH 31, 2001
(UNAUDITED)
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(A) To reflect the consolidated balance sheet of SL Green Realty Corp. as
reported on Form 10-Q at March 31, 2001.
(B) To reflect the June 7, 2001 purchase price allocation for the Company's
acquisition of the property located at 317 Madison Avenue as of March 31,
2001 for $105.6 million. There was no independent valuation performed on
this property. The purchase was financed through the Company's revolving
credit facility.
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT
THREE MONTHS ENDED MARCH 31, 2001
(A) To reflect the consolidated statement of income of SL Green Realty Corp.
for the three month period ended March 31, 2001 as reported on the
Company's Quarterly Report on Form 10-Q.
(B) To reflect the historical operations of 317 Madison Avenue for the three
months ended March 31, 2001.
(C) Rental income from 317 Madison Avenue adjusted to reflect straight
line amounts commencing as of January 1, 2000.
(D) To reflect the interest expense for borrowings under the Company's
revolving credit facility ($105.6 million at 5.47%).
(E) To reflect straight line depreciation for 317 Madison Avenue based on an
estimated useful life of 40 years.
(F) To reflect the minority shareholders interest of 8.5% in the operating
partnership.
(G) Basic income per common share is calculated based on 24,639 weighted
average common shares outstanding and diluted income per common share is
calculated based on 27,403 weighted average common shares and common share
equivalents outstanding.
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 2000
(A) To reflect the consolidated statement of income of SL Green Realty Corp.
for the year ended December 31, 2000 as reported on the Company's Annual
Report on Form 10-K
(B) To reflect the historical operations of 317 Madison Avenue for the year
ended December 31, 2000.
(C) Rental income from 317 Madison Avenue adjusted to reflect straight line
amounts as of January 1, 2000.
(D) To reflect the interest expense for borrowings under the Company's
revolving credit facility ($105.6 million at 5.47%).
(E) To reflect straight line depreciation for 317 Madison Avenue based on an
estimated useful life of 40 years.
(F) To reflect the minority shareholders interest of 8.6% in the operating
partnership.
(G) Basic income per common share is calculated based on 24,373 weighted
average common shares outstanding and diluted income per common share is
calculated based on 31,818 weighted average common shares and common share
equivalents outstanding.
F7
Report of Independent Auditors
To the Board of Directors of
SL Green Realty Corp.
We have audited the statement of revenues and certain expenses of the property
located at 317 Madison Avenue, as described in Note 1, for the year ended
December 31, 2000. The statement of revenues and certain expenses is the
responsibility of management of the Property. Our responsibility is to express
an opinion on the statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purposes of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Form 8-K/A of SL Green Realty Corp., and is
not intended to be a complete presentation of the Property's revenues and
expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses of
the Property, as described in Note 1 for the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
--------------------------
New York, New York
June 20, 2001
F8
317 Madison Avenue
Statements of Revenues and Certain Expenses
(Dollars in thousands)
Note 1
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
2000 2001
--------------- -----------------
(Unaudited)
Revenues
Rental revenue $11,000 $ 2,856
Escalations and reimbursement revenue 1,966 499
Other income 188 43
------- -------
Total revenues 13,154 3,398
------- -------
Certain Expenses
Property taxes 1,945 473
Utilities 1,592 378
Cleaning and service contracts 1,407 352
Payroll and expenses 472 129
Management fees (Note 5) 573 145
Repairs and maintenance 762 150
Professional fees 146 14
Insurance 85 24
Other operating expenses 245 24
------- -------
Total certain expenses 7,227 1,689
------- -------
Revenues in excess of certain expenses $ 5,927 $ 1,709
======= =======
SEE ACCOMPANYING NOTES.
F9
317 Madison Avenue
Notes to Statements of Revenues and Certain Expenses
(Dollars in thousands)
For the year ended December 31, 2000
1. BASIS OF PRESENTATION
Presented herein is the statement of revenues and certain expenses related to
the operations of the property, located at 317 Madison Avenue, located in the
Grand Central South sub-market, in the borough of Manhattan in New York City,
(the "Property"). On June 7, 2001, SL Green Realty Corp. (the "Company")
acquired the Property, for an aggregate purchase price of approximately
$105,600.
The accompanying statement of revenues and certain expenses has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for the acquisition of real estate properties. Accordingly,
the statement of revenues and certain expenses excludes certain revenues and
expenses that may not be comparable to those expected to be incurred by the
Company in the proposed future operations of the Property. Items excluded
consist of amortization and depreciation, interest expense, interest income on
the general partner's level, professional fees that relate to the Partnership
that owned the Property and the interest rate swap related to the loan.
2. USE OF ESTIMATES
The preparation of statement of revenues and certain expenses in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that effect the amounts reported in
the statement of revenues and certain expenses and accompanying notes. Actual
results could differ from those estimates.
3. REVENUE RECOGNITION
The Property is leased to tenants under operating leases. Minimum rental
income is generally recognized on a straight-line basis over the term of the
lease. The excess of amounts due pursuant to the underlying leases over
amounts recognized for the year ended December 31, 2000 and the three months
ended March 31, 2001, amounted to approximately $125 and $5 (unaudited),
respectively.
4. CONCENTRATION OF REVENUE
There are no tenants that comprise more than 10% of the Property's rental
revenue for the year ended December 31, 2000 and for the three months ended
March 31, 2001, respectively.
5. MANAGEMENT AGREEMENTS AND RELATED PARTY TRANSACTIONS
Until June 6, 2001, Williamson, Picket, Gross, Inc. managed the Property. The
management fees were based on 1.5% of gross rents collected, as defined in
the agreement. The fee incurred for managing the Property for the year ended
December 31, 2000 and the three months ended March 31, 2001 was approximately
$189 and $48 (unaudited), respectively.
F10
317 Madison Avenue
Notes to Statements of Revenues and Certain Expenses (continued)
(Dollars in thousands)
5. MANAGEMENT AGREEMENTS AND RELATED PARTY TRANSACTIONS (CONTINUED)
Pursuant to a separate agreement, the general partner performs supervisory and
administrative services for an annual compensation of 3% of rent income, as
defined in the agreement. The fee incurred for the year ended December 31, 2000
and the three months ended March 31, 2001 was approximately $384 and $97
(unaudited), respectively, and is included in management fees on the statement
of revenues and certain expenses.
An affiliate of the prior owner occupies an office in the Property, free of
rent.
6. LEASE AGREEMENTS
The Property is being leased to tenants under operating leases with term
expiration dates ranging from 2001 to 2010. The minimum rental amounts due under
the leases are generally subject to scheduled fixed increases. The leases
generally also require that the tenants reimburse the Property for increases in
certain operating costs and real estate taxes above their base year costs.
Approximate future minimum rents to be received over the next five years and
thereafter for non-cancelable operating leases as of December 31, 2000
(exclusive of renewal option periods) are as follows:
2001 $ 11,379
2002 10,698
2003 10,045
2004 8,300
2005 6,404
Thereafter 10,690
--------
$ 57,516
7. BENEFIT PLANS
The building employees are covered by multi-employer defined benefit pension
funds and post-retirement health and welfare plans. Contributions to these plans
amounted to $74 and $21 (unaudited) during the year ended December 31, 2000 and
the three months ended March 31, 2001, respectively. Separate actuarial
information regarding such plans, is not made available to the contributing
employers by the union administrators or trustees, since the plans do not
maintain separate records for each reporting unit.
8. INTERIM UNAUDITED FINANCIAL INFORMATION
The financial statement for the three months ended March 31, 2001 is unaudited,
however, in the opinion of management all adjustments (consisting solely of
normal recurring adjustments), necessary for a fair presentation of the
financial statement for the interim period have been included. The results of
the interim period are not necessarily indicative of the results to be obtained
for a full fiscal year.
F11