SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
No. 1
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 10, 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/A No.1, dated January 10,
2001 (filed with the Securities and Exchange Commission on January 25, 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 December 31, 2000 ............................. F4
Pro Forma Income Statement
(Unaudited) for the year ended December 31, 2000 ................ F5
Notes to Pro Forma Financial Information ................................. F6
Report of Independent Auditors ........................................... F7
Statement of Revenues and Certain Expenses of One Park Avenue
for the year ended December 31, 2000 ............................ F8
Notes to Statement of Revenues and Certain Expenses ...................... F9
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: March 26, 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 December 31, 2000 has been prepared as if
the Company's acquisition of the fee and mortgage interests of One Park
Avenue ("One Park") had been consummated on December 31, 2000. The unaudited
pro forma consolidated income statement for the year ended December 31, 2000
is presented as if the Company's acquisition of One Park occurred on January
1, 2000 and the effect was carried forward through the year.
On September 29, 2000, the Company announced that it had signed an
agreement to acquire various ownership and mortgage interests in the 913,000
square foot, 20-story office building at One Park Avenue, New York, New York.
The purchase was consummated on January 10, 2001. The property One Park is
located between 32nd and 33rd Streets 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 One Park 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.
F3
SL GREEN REALTY CORP.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2000
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
SL GREEN REALTY CORP. PURCHASE OF COMPANY
HISTORICAL ONE PARK PRO FORMA
(A) (B) AS ADJUSTED
ASSETS:
Commerical real estate properties at cost:
Land and land interests $ 125,572 $ 46,768 $ 172,340
Buildings and improvements 618,637 187,074 805,711
Building leasehold 139,393 139,393
Property under capital lease 12,208 12,208
----------- ---------- -----------
895,810 233,842 1,129,652
Less accumulated depreciation (78,432) (78,432)
----------- ---------- -----------
817,378 233,842 1,051,220
Properties held for sale 10,895 10,895
Cash and cash equivalents 10,793 10,793
Restricted cash 86,823 86,823
Tenant and other receivables,
net of allowance of $1,723 7,580 7,580
Related party receivables 917 917
Deferred rents receivable, net of
allowance for tenant credit loss of $4,860 45,816 45,816
Investment in and advances to affiliates 6,373 6,373
Mortgage loans receivable and preferred
equity investment, net of $3,321 discount 51,293 51,293
Investments in unconsolidated joint ventures 65,031 65,031
Deferred costs, net 40,113 40,113
Other assets 18,142 18,142
----------- ---------- -----------
Total Assets $ 1,161,154 $ 233,842 $ 1,394,996
=========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $ 414,342 $ 150,000 $ 564,342
Revolving credit facilities 46,374 83,842 130,216
Accrued interest payable 2,349 2,349
Accounts payable and accrued expenses 24,818 24,818
Deferred compensation awards 2,833 2,833
Deferred revenue 1,112 1,112
Capitalized lease obligations 15,303 15,303
Deferred land lease payable 13,158 13,158
Dividend and distributions payable 12,678 12,678
Security deposits 19,014 19,014
----------- ---------- -----------
Total liabilities 551,981 233,842 785,823
Commitments and Contingencies
Minority interest in Operating Partnership 43,326 43,326
8% Preferred Income Equity
Redeemable SharesSM $0.01 par
value $25.00 mandatory liquidation
preference, 25,000 authorized and 4,600
outstanding at December 31, 2000 110,774 110,774
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value
100,000 shares authorized,
24,516 issued and outstanding at
December 31, 2000 246 246
Additional paid - in capital 428,698 428,698
Deferred compensation plans (5,037) (5,037)
Retained earnings in excess of earnings 31,166 31,166
----------- ---------- -----------
Total stockholders' equity 455,073 455,073
----------- ---------- -----------
Total liabilities and stockholders' equity $ 1,161,154 $ 233,842 $ 1,394,996
=========== ========== ===========
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 YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
SL GREEN REALTY ONE PARK PRO FORMA COMPANY
CORP HISTORICAL ACQUISITION ADJUSTMENTS PRO FORMA
(A) (B)
REVENUES
Rental revenue $ 189,048 $ 24,963 $ (499)(C) $ 213,512
Escalation and reimbursement revenues 24,732 5,610 30,342
Signage rent 2,137 2,137
Investment income 13,271 13,271
Other income 1,135 274 1,409
--------- ---------- ------------ ---------
Total revenues 230,323 30,847 (499) 260,671
--------- ---------- ------------ ---------
EXPENSES
Operating expenses including $4,644 to affiliates 54,644 6,751 61,395
Real estate taxes 28,850 4,380 33,230
Ground rent 12,660 12,660
Interest 40,431 16,474(D) 56,905
Depreciation and amortization 32,511 4,677(E) 37,188
Marketing, general and administrative 11,561 11,561
--------- ---------- ------------ ---------
Total expenses 180,657 11,131 21,151 212,939
--------- ---------- ------------ ---------
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 19,716 (21,650) 47,782
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) (1,696) 1,862(F) (7,264)
Extraordinary items, net of minority
interest of $81 (921) (921)
--------- ---------- ------------ ---------
Net income 86,217 18,020 (19,788) 84,449
Preferred stock dividends (9,200) (9,200)
Preferred stock accretion (426) (426)
--------- ---------- ------------ ---------
Net income available to common shareholders $ 76,591 $ 18,020 $ (19,788) $ 74,823
========= ========== ============ =========
BASIC EARNINGS PER SHARE:(G)
Net income before gain on sale and
extraordinary item $ 1.48 $ 1.41
Gain on sales 1.70 1.70
Extraordinary items (0.04) (0.04)
--------- ---------
Net income $ 3.14 $ 3.07
========= =========
DILUTED EARNINGS PER SHARE:(G)
Net income before gain on sale and
extraordinary item $ 1.66 $ 1.61
Gain on sales 1.30 1.30
Extraordinary items (0.03) (0.03)
--------- ---------
Net income $ 2.93 $ 2.88
========= =========
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
F5
SL GREEN REALTY CORP.
YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(A) To reflect the consolidated balance sheet of SL Green Realty Corp. as
reported on Form 10-K at December 31, 2000.
(B) To reflect the January 10, 2001 purchase price allocation for the
Company's acquisition of the property located at One Park as of
December 31, 2000 for $233.8 million. There was no independent
valuation performed on this property. The purchase was financed through
a $150 million mortgage note collateralized by One Park with the
remainder financed through the Company's revolving credit facility.
The mortgage interests have been recorded as a property since the
mortgage interest provides the Company with all the cash flow from
the property's operations.
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT
(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 One Park for the year ended
December 31, 2000.
(C) Rental income from One Park adjusted to reflect straight line amounts
as of January 1, 2000.
(D) To reflect the interest expense for borrowings under the mortgage note
financing secured by One Park ($150 million at 7.07%) and under the
Company's revolving credit facility ($83.8 million at 7.0%).
(E) To reflect straight line depreciation for One Park 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.
F6
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 One Park 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 and Young LLP
New York, New York
March 19, 2001
F7
ONE PARK AVENUE
STATEMENT OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
NOTE 1
YEAR ENDED DECEMBER 31, 2000
Revenues
Rental revenue $24,963
Escalations and reimbursement revenue 5,610
Other income 274
-------
Total revenues 30,847
-------
Certain expenses
Real estate taxes 4,380
Utilities 2,438
Payroll and expenses 286
Cleaning and service contracts 2,631
Management fees 185
Repairs and maintenance 314
Professional fees 144
Insurance 169
Other operating expenses 84
-------
Total certain expenses 11,131
-------
Revenues in excess of certain expenses $19,716
=======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS FINANCIAL STATEMENT.
F8
ONE PARK AVENUE
NOTES TO STATEMENT 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 One Park Avenue, in the Grand
Central sub-market, in the borough of Manhattan in New York City (the
"Property"). On January 10, 2001, SL Green Realty Corp. (the "Company")
acquired the fee interest in the Property, which is subject to a ground lease
position held by third-parties, and certain mortgage interests in the
property for approximately $233,800. As part of the transaction, SL Green
acquired an option to purchase the ground lease position.
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
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 interest expense, amortization and depreciation.
2. USE OF ESTIMATES
The preparation of the 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 recognized on a straight-line basis over the term of the lease. The
excess of amounts recognized over amounts due pursuant to the underlying
leases amounted to approximately $1,539 for the year ended December 31, 2000.
4. CONCENTRATION OF REVENUE
Approximately 69% of the Property's rental revenue for the year ended December
31, 2000 was derived from five tenants.
5. MANAGEMENT AGREEMENTS
During 2000, Insignia/ESG managed the Property. The management fees were based
on a fixed monthly fee collected for the year ended December 31, 2000.
The fee incurred for managing the Property for the year ended December 31, 2000
was approximately $185.
F9
ONE PARK AVENUE
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES (CONTINUED)
(DOLLARS IN THOUSANDS)
6. LEASE AGREEMENTS
The Property is being leased to tenants under operating leases with term
expiration dates ranging from 2000 to 2015. 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 $ 27,222
2002 26,604
2003 21,652
2004 21,992
2005 19,703
Thereafter 107,867
---------
$ 225,040
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F10